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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

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

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

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

          Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).

          State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter.

          All voting and non-voting common equity is held by affiliates.

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ANNUAL REPORT ON FORM 10-K

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002

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PART I

General

          The Company is a self-managed real estate investment trust (“REIT”) that owns, acquires, develops, manages and leases health care properties. The Company’s business currently consists of investments, made either directly or through joint ventures, in medical office buildings (“MOB”), assisted living facilities (“ALF”) and skilled nursing facilities (“SNF”).  All of the Company’s assets are held by, and all of its operations are conducted through, G&L Realty Partnership, L.P. (the “Operating Partnership”) and G&L Senior Care Partnership, L.P. (the “Senior Care Partnership”) or their subsidiaries.  The Company was incorporated in Maryland on September 15, 1993.

          On October 29, 2001, the Company completed a merger with G & L Acquisition, LLC, a Maryland limited liability company, substantially on the terms provided for in the Agreement and Plan of Merger, dated as of May 10, 2001, as amended, by and between the Company and G & L Acquisition, LLC (the “Merger”).  The Company was the survivor of the Merger.  G & L Acquisition, LLC was owned by Daniel M. Gottlieb and Steven D. Lebowitz, Chief Executive Officer and President, respectively, of the Company.  Upon completion of the Merger, each outstanding share of the Company’s Common Stock, other than a portion of the shares held by Messrs. Gottlieb and Lebowitz, was converted into the right to receive $13.00 in cash, without interest. After completion of the Merger, the Company’s Common Stock was delisted from the New York Stock Exchange.

Description of Business

          The MOB business strategy is to acquire, develop, manage and lease a portfolio of medical office buildings. The Company currently seeks growth opportunities mainly in Southern California through acquisition and development of additional MOBs directly or through strategic joint ventures. The MOB portfolio currently consists of approximately 857,000 rentable square feet. The Company directly owns 19 high quality MOBs, an adjacent parking facility, a research and development building and two retail facilities and indirectly owns three additional MOBs (collectively, the “MOB Properties”).  All of the MOB Properties are located in California.  Several of the MOB Properties include retail space on the ground level.  As of January 31, 2003, the MOB Properties were 97.5% leased.  On February 23, 2003, a joint venture, in which the Company held a 50% interest, sold a 23,000 square foot MOB located in Aliso Viejo, California for $7.3 million.  The joint venture recognized a gain of approximately $3 million from the sale.  The Company received net proceeds of $1.2 million from the sale. 

          The ALF and SNF business strategy is to capitalize on consolidation opportunities in the assisted living and skilled nursing facility industry by making selected equity investments in ALFs and SNFs.  The Company directly and indirectly owns four ALFs, eight SNFs and two senior resident apartment complexes, including one under development (collectively, the “ALF and SNF Properties”).  All of the ALFs are located in Southern California.  Four of the SNFs are located in Massachusetts, one in California, one in Arizona, one in Maryland and one in Washington.  The two senior resident apartment complexes are located in Arizona and Southern California, respectively.  The ALF and SNF Properties have an aggregate of 1,364 beds or units.  On February 28, 2003, a joint venture, in which the Company held a 50% interest, sold an ALF located in Omaha, Nebraska for $11.1 million.  The joint venture recognized a gain of approximately $4 million from the sale.  The Company received net proceeds of $1.8 million from the sale.

          See Note 14 of the Notes to the Consolidated Financial Statements for financial information about the Company’s three main business segments: investments in (i) MOBs, (ii) ALFs and (iii) SNFs. 

          As part of its overall business strategy, the Company develops MOBs, ALFs and SNFs, either directly or through joint ventures.  The Company has a long history of successful developments and believes that it can maximize growth through a combination of development and acquisition.  In March 2002, the Company completed the development of a 50,000 square foot, 92-bed ALF located in Yorba Linda, California.  The ALF in Yorba Linda

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          In addition to the Company’s investments in its existing MOB Properties, the Company also seeks to make selective acquisitions of MOBs. From time to time hospital owners sell their Mobs to raise capital. These sales create opportunities for the Company to acquire Mobs on attractive terms. Because hospitals will often seek a buyer with the operating skills necessary to meet the needs of the medical practitioners located in the building, the Company believes that its successful history of operating Mobs provides it with a competitive advantage in the acquisition, development, redevelopment and management of Mobs

          Through its ALF and SNF Properties, the Company seeks to selectively acquire ownership interests in ALFs and SNFs that have characteristics consistent with the Company’s growth strategy.  The Company believes that the aging population in the United States has increased the demand for efficiently operated ALFs and SNFs.  The Company believes that it is in a position to capitalize on this increased demand by selectively acquiring ownership interests in attractively situated ALFs and SNFs.  The Company also believes that there is potential for the Company to make additional acquisitions of ALFs and SNFs.

          Financing for new acquisitions of MOBs, ALFs and SNFs may be provided through existing or new joint ventures with third parties or third-party financing in the form of secured or unsecured debt.  The Company’s capacity to obtain debt financing facilitates its ability to acquire ownership interests in additional MOBs, ALFs and SNFs.  However, notwithstanding any business policies or objectives of the Company, no assurance can be given that the Company, or its investment affiliates, will be able to make acquisitions on favorable terms or that such properties will be profitably operated.  In addition, the Company and its investment affiliates will likely incur additional indebtedness in connection with future acquisitions.

Property Management

          The Company provides a full range of management services for the operation of MOBs.  The ability of the Company to manage MOBs to meet the unique needs of medical practitioners has been critical to its success to date.  The Company has experienced lease renewal rates of approximately 85.9%, 83.0%, and 85.2% for the years ended December 31, 2002, 2001 and 2000, respectively, with respect to medical office space in the MOB Properties based on the medical office space leases available for renewal in these periods.  Developing and managing MOBs differs from developing and managing general office properties due to the special requirements of the tenants and their patients.  MOBs generally have higher maintenance requirements in the public areas due to heavy foot traffic, many short appointments which increase demand on parking facilities, the use of sophisticated medical equipment requiring increased plumbing and electrical capacity and expanded environmental regulations that impose more stringent restrictions on the disposal of medical waste.  The management of MOBs also generally requires experience in specialized tenant improvements and higher levels of responsiveness required by medical practitioners.  Additional important management functions include the placement of tenants within MOBs to accommodate increased space needs and managing the tenant mix at properties so that referrals by practitioners with different specialties within the building are facilitated.  The Company stresses meeting these and other special demands of medical property tenants.

Tax Status

          The Company believes that it has operated in such a manner as to qualify for taxation as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”), commencing with its

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taxable year ended December 31, 1993, and the Company intends to continue to operate in such a manner.  As long as the Company qualifies for taxation as a REIT under the Code, the Company generally will not be taxed at the corporate level.  If the Company fails to qualify as a REIT in any taxable year, the Company will be subject to federal income tax (including any applicable alternative minimum tax) on its taxable income at regular corporate rates.  Even if the Company qualifies for taxation as a REIT, the Company may be subject to certain state and local taxes on its income and property and to federal income and excise taxes on its undistributed income.

Employees

          As of March 28, 2003, the Company (including the Operating Partnership) employed 30 persons, 12 of whom are on-site building employees who provide maintenance services for the MOB Properties and 8 of whom are professional employees engaged in leasing, asset management and administration.

Dependence on Key Tenants

          The Company’s MOBs typically consist of several smaller tenants rather than one or two large tenants.  As of December 31, 2002, no MOB tenant accounted for more than 10% of the Company’s total revenues.  Although no MOB tenant accounts for more than 10% of the Company’s total revenues, the risks associated with smaller tenants include (i) less creditworthiness, (ii) greater tenant turnover and (iii) greater property management needs.

          The ALFs and SNFs are either leased to senior care companies or managed by senior care companies that operate the facilities.  During 2000, the Company replaced lease agreements at four of its facilities with management contracts.  Because the Company replaced these leases with management contracts, all of the revenues and expenses relating to the operations of these facilities are reflected in the consolidated financial statements of the Company. Although all of the Company’s ALF and SNF properties are currently leased or under management contracts, finding experienced senior care managers is a time-consuming and difficult task.  During 2002, revenue from the Company’s three SNFs in Hampden, Massachusetts accounted for approximately 39% of the Company’s total revenues.   Should these three facilities or any of the Company’s other ALFs or SNFs require a change in lessee or manager, the Company’s financial results could be materially impacted despite the fact that no other ALF or SNF tenant or manager accounts for more than 10% of the Company’s total revenues.

Government Regulation

          Environmental Matters.   Under various federal, state and local laws, ordinances and regulations, an owner or operator of real estate is liable for the costs of removal or remediation of certain hazardous or toxic substances on or in its property.  These laws impose liability without regard to whether the owner knew of, or was responsible for, the presence of any hazardous or toxic substances.  The presence of such substances, or the failure to properly remediate these substances, may adversely affect the owner’s ability to borrow using the real estate as collateral and may subject the owner to material remediation costs.  All of the MOB Properties, ALFs and SNFs have been subject to Phase I environmental assessments (which involve inspection of the subject property, but no soil sampling or groundwater analysis) by independent environmental consultants.  Although restricted in scope, these independent assessments revealed no material evidence of existing environmental liability, and the Company has not been notified by any governmental authority of any noncompliance by, liability for, or other claim against the Company in connection with environmental matters related to the MOB Properties, ALFs or SNFs.  While the Company is not aware of any environmental liability that it believes would have a material adverse effect on its business, assets or results of operations, no assurance can be given that the environmental assessments revealed all potential environmental liabilities or that a prior owner did not create any material environmental condition not known to the Company or that future uses or conditions (including changes in applicable environmental laws and regulations) will not result in imposition of environmental liability.

          The independent environmental assessments include selective sampling for asbestos where the age of the buildings or the types of materials warranted such sampling.  Limited quantities of non-friable asbestos are present in some of the Company’s properties.

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Management believes that it has undertaken adequate measures to ensure that the asbestos will remain undisturbed and that it does not pose a current health risk.  Management plans to continue to monitor this situation.

          Physicians generate medical waste in the normal course of their practice.  The Company’s leases require the individual tenants to make arrangements for the disposal of medical waste and require all tenants to provide proof that they have contracted with a third party service to remove waste from the premises each night.  The handling and disposal of this waste is the responsibility of the tenants; however, the Company remains responsible as the owner of the property.  There can be no assurance that all such medical waste will be properly handled and disposed of or that the Company will not incur costs in connection with improper disposal of medical waste by its tenants.

          Healthcare Industry Regulation.    Physicians and senior care operators are subject to heavy government regulation including the determination of the level of reimbursements for medical costs incurred and services provided under government programs.  Changes in government regulations regarding medical reimbursements and other regulations affecting the healthcare industry can have a dramatic impact on the operations of medical practitioners or senior care operators under government programs.  Both the federal government and many state governments are exploring numerous reforms concerning the healthcare industry that could have a significant impact on many healthcare-related businesses.  If legislation were enacted that decreased the level of government medical reimbursements or increased the degree of regulatory oversight, thereby increasing the expenses of healthcare businesses, the Company’s tenant base could be adversely affected.  This, in turn, could negatively impact the ability of the Company to make distributions.

          Americans with Disabilities Act.   All of the MOB Properties and ALF and SNF Properties are required to comply with the Americans with Disabilities Act (“ADA”).  The ADA generally requires that buildings be made accessible to people with disabilities.  Compliance with the ADA requirements could require removal of access barriers and noncompliance could result in imposition of fines by the federal government or an award of damages to private litigants.  The Company believes it is in substantial compliance with the ADA and that it will not be required to make substantial capital expenditures to address the requirements of the ADA.  If required changes involve a greater expenditure than the Company currently anticipates, the Company’s ability to make distributions could be adversely affected.

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          The MOB Properties consist of 19 high quality MOBs directly owned by the Company, three MOBs indirectly-owned by the Company, an adjacent parking facility, a research and development building and two retail facilities.  The ALF and SNF Properties consist of four ALFs, eight SNFs and two senior resident apartment complexes. As of January 31, 2003, the MOB Properties were 97.5% leased to 426 tenants and the ALF and SNF Properties were 100% leased to operators or under contracts with management companies.  The Company’s MOB tenants are primarily established medical practitioners representing a cross section of medical practices.

Description of the MOB Properties and ALF and SNF Properties

MOB Properties

          The Company, through its MOB operations, acquires, develops, manages and leases MOBs, a research and development building a parking facility and two retail facilities.  Developing and managing MOBs differs from developing and managing conventional office buildings due to the special requirements of physicians and their patients.  Because doctors now perform a variety of medical procedures in their offices, many MOBs have become sophisticated ambulatory centers that allow for outpatient surgery and procedures.  In addition, MOBs generally have higher maintenance requirements in the public areas due to heavy foot traffic, many short appointments that increase demand on parking facilities, the use of sophisticated medical equipment requiring increased plumbing and electrical capacity and expanded environmental regulations that impose more stringent restrictions on the disposal of medical waste.  The management of MOBs also generally requires experience in specialized tenant improvements and higher levels of responsiveness required by medical practitioners.  Additional important management functions include the placement of tenants to accommodate increased space needs and managing the tenant mix at properties to facilitate referrals by practitioners with different specialties within the building.  The Company stresses meeting these and other special demands of MOB tenants.

ALF and SNF Properties

          The Company, as part of its overall strategy, acquires, develops and leases ALFs and SNFs.  The Company typically leases its ALFs and SNFs to third party senior care operators.  The operation of ALFs and SNFs requires a high level of experience and expertise due to the specific needs of the residents and the complex administrative functions surrounding the admission and care of residents and the administering of government programs.  The operators of ALFs and SNFs must also maintain a positive relationship with local hospitals and other medical providers in order to attract new residents.  The Company considers all of the above factors when leasing its facilities to third party operators or hiring managers to operate its facilities.

          The health care industry is facing various challenges, including increased government and private payor pressure to reduce medical delivery costs.  Substantially all of the Company’s tenants are in the medical profession and could be or have been adversely affected by the new Medicare prospective payment system, cost containment and other health care reform proposals.  In the past two years, the Company has changed managers at two of its ALFs  and six of its SNFs in response to financial difficulties encountered by the managers or dissatisfaction with the operating results of the managers.  Any future proposals that limit access to medical care or reduce reimbursement for physicians’ services may also impact the ability of the Company’s tenants to pay rent.  However, the Company believes that the aging population in the United States, combined with other recent trends in the health care industry, such as the performance of non-acute procedures outside of hospitals, could spur increased demand for space in full service MOBs that contain surgery centers and out-patient facilities, such as those owned by the Company.

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          The following tables set forth certain information regarding each of the MOB Properties and ALF and SNF Properties as of January 31, 2003.  All of the MOB Properties and ALF and SNF Properties are held in fee by the Company or, in the case of jointly-owned properties, by the joint venture property partnership or limited liability company.  Except as noted below, the Company owns 100% of each property.

MOB Properties—Summary Data

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ALF and SNF Properties—Summary Data

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MOB Properties 

          Six of the MOB Properties are located on North Bedford and North Roxbury Drives in the ‘‘Golden Triangle’’ area of Beverly Hills, California, near three major hospitals—Cedars Sinai Medical Center, Century City Hospital and UCLA Medical Center.  The buildings feature high quality interior improvements, including rich wood paneling and brass hardware appointments, both in the common areas and in most of the doctors’ offices.  These six MOB Properties include twenty-one operating rooms.  The 405, 416 and 436 North Bedford Drive buildings each have emergency back-up generators.  Parking for these six MOB Properties is provided in the 415 North Bedford garage and in subterranean parking at 436 North Bedford and 435 North Roxbury Drives.  Each of these MOBs has copper insulated pipe with sufficient capacity for medical use, electrical systems designed for extra load requirements and extensive security systems.

     405 North Bedford Drive, Beverly Hills

          The 405 North Bedford Drive MOB, built in 1947 and extensively remodeled in 1987, consists of approximately 42,000 rentable square feet in four stories plus a penthouse and a basement.  The reinforced brick building, with ground floor retail space, features cherry wood paneled walls and brass hardware in the common areas and decorative concrete trim on the exterior.

     415 North Bedford Drive, Beverly Hills

          The 415 North Bedford Drive building is a four-level parking structure with approximately 5,700 square feet of ground floor retail space for seven tenants.  The parking structure contains 316 spaces and is valet operated.

     416 North Bedford Drive, Beverly Hills

          The 416 North Bedford Drive property is a four-story, approximately 40,000 rentable square foot reinforced brick MOB with a basement and ground floor retail space.  Built in 1946 and extensively remodeled in 1986, the building features oak paneled walls and moldings, brass hardware, tinted concrete borders on the exterior, and fourth floor skylights that provide an open, airy atmosphere in the hallway and in some of the suites.

     435 North Bedford Drive, Beverly Hills

          The 435 North Bedford Drive property is a four-story, approximately 54,000 rentable square foot reinforced brick and masonry MOB with a penthouse, basement, and ground floor retail space.  Built in 1950 and extensively remodeled in 1984, the building features oak molding, wall sconces and paneling in the hallways plus stained runner boards and built-in stained hardwood cabinets in some of the medical office suites.

     435 North Roxbury Drive, Beverly Hills

          The 435 North Roxbury Drive property is a four-story, approximately 41,000 rentable square foot MOB with a penthouse, subterranean parking and retail space on the ground floor.  The building, which was built in 1956 and

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extensively remodeled in 1983, features a reinforced brick and masonry exterior and raised, oak-stained paneling and molding in the hallways.

     436 North Bedford Drive, Beverly Hills

          The 436 North Bedford Drive property is a three-story, approximately 74,000 rentable square foot MOB with three levels of subterranean parking.  Built in 1987, the building features ground floor retail and office space surrounding a central courtyard and balconies at selected locations on the second and third floors.  The exterior is clad in rose color sandstone with cast stone and granite trim.  The central courtyard features a cascading waterfall sculpture and stone pavers with intricate marble and stone patterns.  Cherry wood paneled walls also line the elevator lobbies on all floors and portions of the hallways.

     Sherman Oaks Medical Plaza, Sherman Oaks

          The Sherman Oaks Medical Plaza is a seven-story, approximately 68,000 rentable square foot MOB, constructed in 1969, that is adjacent to the Sherman Oaks Hospital and Health Center, a 156-bed hospital which includes the major burn center for the San Fernando Valley.  A $1 million capital improvement program renovating the building systems and common areas of the Sherman Oaks Medical Plaza was completed in 1993.  The Company also owns the adjacent air rights and three-level parking structure behind the property which provides a total of 426 parking spaces.  The land beneath the parking structure is owned by Sherman Oaks Hospital which also leases 150 parking spaces in the structure.

     Irwindale Building, Irwindale

          The Irwindale Building in Irwindale, California is a two-story, approximately 48,000 square foot research and development building, constructed in 1992, on a site that provides two parking areas with a total of 244 spaces.  The Company converted this building from an MOB to an R&D building in 2001.  Prior to 2001, this property was 100% leased to Cigna Healthcare of California (“Cigna”).  After Cigna bought out their lease, the Company converted the building to an R&D facility in order to re-lease the building to Autronics Corporation, a British-based electronics company.  The lease with Autronics Corporation commenced on July 1, 2001 and expires on June 30, 2008.  The lease is guaranteed by Curtiss-Wright Corporation, the parent company of Autronics Corporation.

     Coronado Plaza

          Coronado Plaza is a three-story, approximately 40,000 rentable square foot office and retail complex located in Coronado, California.  The building is located on the beach across the street from the Hotel Del Coronado and the majority of the second and third floor suites have unobstructed ocean views.  The building has subterranean parking for 96 vehicles plus street parking surrounding the entire property.

     Holy Cross Medical Plaza, Mission Hills

          The Holy Cross Medical Plaza is situated on approximately 2.6 acres of the 15-acre campus of Holy Cross Medical Plaza, a 316-bed hospital.  The campus also includes the Villa de la Santa Cruz SNF, another MOB, a magnetic resonance imaging center, and an outpatient diagnostic center.  Built in 1985, the Holy Cross Medical Plaza is a three-story, approximately 71,000 square foot MOB occupied primarily by medical and dental practitioners.  A two-story parking structure and an open asphalt-paved lot can accommodate a total of 333 vehicles.  The surrounding site is landscaped with grass, trees, shrubs and planter boxes.

     St. Joseph’s Professional Building, Burbank

          The St. Joseph’s Professional Building is a steel frame, brick-facade building, constructed in 1987, that features approximately 26,000 rentable square feet in two floors of office space over three levels of subterranean parking which can accommodate up to 100 vehicles.  The building is located one-quarter of a mile from St. Joseph’s Hospital and is directly across the street from the Walt Disney Company’s world headquarters campus.  Saint

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Joseph’s Hospital includes 658 beds and is owned by the Sisters of Providence, an organization which owns other hospitals throughout North America. 

     Lyons Avenue Medical Building

          The Lyons Avenue Medical Building is a two-story, approximately 49,000 rentable square foot MOB located in Valencia, California only ½ mile from the Henry Mayo Newhall Memorial Hospital.  The building has subterranean parking and a two-story atrium entry.   The building’s excellent market position provides first class medical space for those doctors that do not need an association with the hospital.

     Tustin—MOB I

          The 14591 Newport Avenue building in Tustin, California is a two-story, approximately 18,000 rentable square foot MOB that was constructed in 1969 on a 1.2-acre site.  The site is landscaped with grass lawns, shrubs, and trees and includes an asphalt-paved parking lot with approximately 105 parking spaces, representing a parking ratio of 5.8 parking spaces per 1,000 square feet of building area.

     Tustin—MOB II

          The 14642 Newport Avenue building in Tustin, California is a four-story, approximately 49,000 rentable square foot MOB, developed in 1985, that features a surgery center with three operating rooms, a pharmacy, and an industrial clinic on the first floor.  Medical offices are located on all of the other floors.

     Regents Medical Center, La Jolla

          The Regents Medical Center is a three-story, approximately 67,000 rentable square foot MOB situated on approximately 2.6 acres in the University Town Center area of San Diego, near the University of California, San Diego.  The building, which was constructed in 1989, has ground level retail spaces, two upper floors of medical offices, and subterranean and ground level parking that can accommodate a total of 285 vehicles.

     Pier One Retail Center

          The Pier One Retail Center is a one-story, 9,100 rentable square foot retail facility built by the Company in 1998 in Aliso Viejo, California.  The building is 100% leased to Pier One Imports, Inc. for ten years on a triple net basis.  The lease provides for monthly rent of $15,000.

     San Pedro Medical Plaza

          The San Pedro Medical Plaza in San Pedro, California is an approximately 61,000 rentable square foot complex consisting of three MOBs.  The buildings are located across the street from the San Pedro Peninsula Hospital and are situated on 7.85 acres incorporating a 383 space surface parking lot. 

     1095 Irvine Boulevard, Tustin

          The 1095 Irvine Boulevard building in Tustin, California consists of approximately 10,000 rentable square feet and was redeveloped in 1995 as a primary health care center for physicians who are part of the St. Joseph Hospital of Orange health care network.  The property is leased to St. Joseph Hospital, Inc. under a net lease with a 15-year term, which began in August 1995, and provides for annual cost of living rent escalations limited to 3%.  The lease provides for monthly rent of $18,000 and expires on July 31, 2010.

     Santa Clarita Valley Medical Center

          The Santa Clarita Valley Medical Center in Valencia, California is an approximately 42,000 square foot complex consisting of four one-story MOBs and one two-story MOB.  The buildings are located on the Henry Mayo Newhall Memorial Hospital Campus, the only regional hospital in the area.  The campus includes a 241-bed medical

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center and another MOB. An adjacent parking lot can accommodate up to 435 vehicles.  The buildings are subject to a 60-year ground lease which includes payments of $11,000 per month. 

     Santa Clarita Valley Medical Center, Bldg F

          Building F at the Santa Clarita Valley Medical Center is a two-story, approximately 44,000 square foot MOB built by the Company in 1999.  The building is located on the Henry Mayo Newhall Memorial Hospital Campus and is adjacent to the other five MOBs owned by the Company on the Hospital Campus.  Building F is the premier medical office building in the Santa Clarita Valley area.  The building is subject to a 60-year ground lease that includes payments of $11,000 per month.

ALF and SNF Properties

Southern California Properties

Pacific Gardens Santa Monica

          Pacific Gardens Santa Monica is a 92-unit, approximately 61,000 square foot, four-story ALF located in Santa Monica, California just two blocks from the beach.  The building contains a 3-story, subterranean parking garage for 112 vehicles.  The facility features a kitchen, 150-seat dining room, community room, TV lounges, library, beauty parlor and guest laundry areas on each floor.  The facility is in close proximity to nearby shopping, restaurants and entertainment.  Two major hospitals, Santa Monica Hospital Medical Center and St. John’s Hospital are located within two miles of the property.

     The Arbors at Rancho Penasquitos

          The Arbors at Rancho Penasquitos is a 92-unit, approximately 52,000 square foot, three-story ALF located in Rancho Penasquitos, California.  The building was originally built in 1988 as a Ramada Hotel.  In 1998, the Company, in joint venture with Parsons House, LLC, purchased the property and converted it into The Arbors at Rancho Penasquitos.  The facility opened in March 1999.

          Each unit contains approximately 360 square feet and includes a small kitchenette. The facility contains a kitchen, dining room, activity room and a lounge.  The 2.07-acre property also has a parking lot that can accommodate up to 114 cars.

     Pacific Gardens Tarzana

          Pacific Gardens Tarzana is a two-story, 80-unit, approximately 44,000 square foot ALF located in Tarzana, California.  The facility features a formal dining room, two living rooms, pharmaceutical services, daily maid service and personal laundry service.

     Prestige Assisted Living at Yorba Linda

          Prestige Assisted Living at Yorba Linda is a two story, 80-unit, approximately 50,000 square foot ALF located in Yorba Linda, California.  The project is a joint venture between the Company and Prestige Care Inc., an experienced ALF operator.  Construction began on the facility in October 1999 and was completed in the first quarter of 2002.  

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Arizona Properties

     Maryland Gardens

          Maryland Gardens is a 98-bed SNF located in Phoenix.  The facility is situated on approximately 1.84 acres and consists of a 60-bed SNF and a 38-unit Alzheimers unit.  The facility is leased to Senior Management Resources, LLC, a Phoenix, Arizona-based operator of SNFs.

     Maryland Gardens II

          Maryland Gardens II is a 20-unit, approximately 30,000 square foot apartment complex acquired by the Company in May 1998.  The building is located on a 1.0-acre lot adjacent to the Maryland Gardens SNF.  The building, named the Winter Gardens Apartments, currently consists of residential tenants.  The property also includes a 1.0-acre vacant parcel of land and a duplex building.

Maryland Properties

          St. Thomas More Nursing and Rehabilitation Center is a 220-bed SNF located in Hyattsville, Maryland.  The Company acquired the property in January 2002.  The Company previously held a first deed of trust on the property.  The property has been managed by FutureCare, Inc., a Maryland-based owner and operator of SNFs, since 1997. 

Massachusetts Properties

     Hampden Properties

          G&L Hampden, LLC, a wholly owned subsidiary of the Company, acquired three nursing home properties in Massachusetts on October 28, 1997 from Hampden Nursing Homes, Inc. (“HNH”), a nonprofit corporation.  Lenox Healthcare, Inc. (“Lenox”) managed the three facilities from October 1998 through December 1999.  In November 1999, Lenox filed for bankruptcy protection.  The Company immediately moved to replace Lenox as the manager of the nursing homes.  In January 2000, the Company received the bankruptcy court’s permission to replace Lenox as the manager and a new management firm, a subsidiary of Roush & Associates (“Roush”), was immediately retained. Since acquiring the properties from HNH, HNH has held the licenses necessary to operate the facilities.  In March 2000, the Company successfully transferred the licenses to G&L Massachusetts, LLC, a subsidiary of the Operating Partnership.  G&L Massachusetts, LLC subsequently leased the three facilities from the Company while Roush continued to manage them.  The lease requires monthly payments of $175,000 net of property taxes, insurance and costs to maintain the facilities.  

Riverdale Gardens

          Riverdale Gardens Nursing Home, located in West Springfield, Massachusetts, is a 168-bed nursing facility currently licensed for 84 skilled care and 84 intermediate care beds with 16 private and 76 double occupancy rooms.  Constructed in various stages between 1957 and 1975, the property consists of a single story 54,451 square foot building on approximately 3.85 acres as well as a 3,366 square foot single family residence on an adjacent 30,000 square foot lot.

Chestnut Hill

          Chestnut Hill Nursing Home, located in East Longmeadow, Massachusetts, is a 123 bed nursing home consisting of 82 skilled nursing and 41 intermediate care beds with 15 private and 54 double occupancy rooms.  The facility is a 49,198 square foot single story building constructed in 1984 on approximately 11.9 acres of land.

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Mary Lyon

          Mary Lyon Nursing Home, located in Hampden, Massachusetts, occupies a 28,940 square foot building situated on 3.7 acres and was originally constructed in 1959 and renovated in 1986.  The facility is licensed for 100 beds of which 40 are skilled nursing and 60 are intermediate care beds with ten private rooms, 39 double occupancy rooms and three quadruple occupancy rooms.

Ring East Nursing Home

          Ring East Nursing Home, located in Springfield, Massachusetts, occupies an approximately 58,000 square foot building, was constructed in 1987 and opened in 1988.  The facility is licensed for 120 beds and residents include both short-stay post-acute patients as well as long-term care residents. 

Washington Property

     Pacific Care Center

          Pacific Care Center is a 112-bed SNF located in Hoquiam.  Prestige Care, inc. a Vancouver, Washington-based owner and operator of ALFs, has managed this facility since April 1, 2000.  On December 1, 2000, after obtaining the license to operate the facility, Prestige Care, Inc. signed a five-year lease with the Company.

Leases

     MOB Properties

          As of January 31, 2003, the MOB Properties were approximately 97.5% leased.  New leases and extensions are normally granted for a minimum of three to five years and provide for annual rent increases.  Office tenants generally have gross leases whereby rents may be adjusted for a tenant’s proportionate share of any increases in the cost of operating the building.  However, the Company has recently been leasing office space with provisions for the tenants to pay all utility costs directly.  Most retail tenants have net leases and pay their share of all operating expenses including property taxes and insurance.  The following is a lease expiration table setting forth the number, square feet and associated annual rent for those leases expiring in future years.

MOB Properties—Lease Expirations

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          The Company was successful in obtaining lease renewals, achieving a weighted average renewal rate of approximately 85.9% on MOB leases that expired during 2002.  Although there can be no assurance that this renewal level will be maintained, the Company believes this high renewal rate is due in part to the tendency of medical practitioners to continue to practice in the same space over a number of years.  Also, the Company’s tenants frequently invest large sums of money in equipment and fixtures for their offices.  Furthermore, relocating a doctor’s office can be disruptive to the patients who are familiar with the doctor’s office location.

Senior Care Loans

     Lending Operations

          From 1995 through 1999, the Company was in the business of originating loans secured by healthcare properties. Since 1999, the Company has made no secured loans and has exited the business of originating loans. As of December 31, 2002, the Company had seven loans outstanding that total approximately $6.3 million before reserves of $4.5 million.   The seven loans are described in the following paragraphs.

          In October 1999, the Company provided $1.65 million of bridge financing for a $9.0 million apartment complex located in Tulsa, Oklahoma.  The borrower sold the apartment complex in December 1999 through a tax-exempt bond offering to NVHF Park Chase, LLC (“NVHF”), a not-for-profit company.  As part of its loan repayment, the Company received approximately $380,000 in cash.  For the remaining balance, the Company received $1.26 million in tax-exempt, subordinated B-bonds from the offering.  The tax-exempt bonds are due in December 2029 and bear interest at 8.75% per annum.  In addition, the Company received a 10-year, 10%, $560,000 unsecured note from NVHF Affiliates, LLC, the parent company of NVHF.  The Company is also the guarantor on a $300,000 letter of credit in favor of NVHF Affiliates, LLC.

          In December 1997, the Company funded $4.6 million into an escrow, to be loaned to Aspen Paso Robles, Inc. (“Aspen”) for the purchase of (i) a 59-bed nursing and rehabilitation center in Chico, California; (ii) a 38-bed SNF in Paso Robles, California; and (iii) a 57-bed intermediate care center in Beaumont, California.  The loan closed on February 25, 1998 although the funds for the Beaumont facility remained in escrow until October 1998 at which time the Company secured the return of those funds and applied them to pay down the loan balance to $3.6 million.  The borrower subsequently filed a Chapter 11 proceeding under the U.S. Bankruptcy Code. As of December 31, 1999, the remaining $3.6 million loan balance was in default and the two facilities securing the loan were closed.  In March 2000, the Company obtained title to the two SNFs from the bankruptcy court.  In May 2002, the Company sold the Paso Robles facility for $0.3 million.  As of December 31, 2002, the outstanding loan balance was fully reserved.  The Company is currently pursuing legal action against the borrower and other parties involved in the transaction in order to recover the remaining outstanding balance.

          In addition to the notes discussed above, the Company had six other loans outstanding at December 31, 2002, with an aggregate face value of $6.8 million, excluding approximately $0.4 million of additional accrued, unpaid interest.  The following is a summary of the four other loans as of December 31, 2002:

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          As of December 31, 2002, the Company had reserves of $4.5 million for doubtful notes receivable. Management believes that $4.5 million is appropriate in relation to the status of the loans in the Company’s portfolio as of March 31, 2003.

Notes Receivable from Stockholders

          In addition to the seven loans discussed above, the Company also has two unsecured promissory notes totaling $5,240,000 due on October 31, 2011 with interest payable at 30-day LIBOR plus 7.5% per annum. The borrowers on these two notes are Daniel M. Gottlieb and Steven D. Lebowitz, the Company’s chief executive officer and president, respectively. These notes were issued in connection with the Company’s acquisition of its outstanding common stock on October 29, 2001. The Company used a portion of the proceeds from its $35 million loan from GMAC Commercial Mortgage Corp. to fund these notes. Messrs. Gottlieb & Lebowitz used these proceeds to fund a $3.5 million tender offer for the Company’s Series A and Series B Preferred Stock and repay $1.7 million of personal debt. See Management’s Discussion and Analysis of Financial Condition and Results of Operations and Note 11 of the Notes to the Consolidated Financial Statements for more information regarding these notes.

     GLN

          GLN was formed with Nomura Asset Capital Corp. (“Nomura”) for the purpose of making short-term loans to third parties to purchase senior care facilities.  As of December 31, 2002, GLN had no loans outstanding.  In May 1997, GLN funded a secured loan of approximately $1.5 million to a limited partnership created to acquire a recreational vehicle (“RV”) park in Florida for approximately $1.2 million.  This loan bore interest at a rate of approximately 9.0% per annum and matured on May 1, 1999.  The loan provided for monthly payments of interest only.  In January 2002, the borrower sold the property for approximately $1.8 million and repaid GLN in full.  GLN distributed the net proceeds to Nomura and the Company and is in the process of dissolving.

Insurance

          The Company carries comprehensive liability, fire, flood, extended coverage and rental loss insurance with respect to the MOB Properties and certain ALF and SNF Properties.  There are certain types of losses that may either be uninsurable or not economically insurable; moreover, there can be no assurance that policies maintained by the Company will be adequate in the event of a loss.  The Company carries earthquake and flood insurance for coverage of losses up to $35 million on the MOB Properties and certain ALF and SNF Properties located in California and Arizona, which amount represents approximately 25% of the net book value of these properties.  This coverage is subject to a 10% deductible up to the amount of insured loss. The ALF and SNF Properties located in Washington and Massachusetts do not carry earthquake or flood insurance.  Thirty-one of the 39 properties directly or indirectly owned by the Company are located in Southern California, which has a history of seismic activity, including the 1994 Northridge earthquake that damaged the Holy Cross Medical Plaza property.  Two ALF and SNF Properties owned by the Company are located in Phoenix, Arizona, in an area with a history of flood activity.  Where the Company does not directly insure against casualty or liability, the Company requires the lessees or operators of its ALF and SNF Properties to maintain such insurance and name the Company and its subsidiaries as additional insured with full rights of a direct beneficiary in the event of loss.  Should an uninsured loss occur, the Company could lose its investment in, and anticipated earnings and cash flow from, a property.

          There is no material pending litigation to which the Company or its consolidated or unconsolidated subsidiaries is a defendant or to which any of their properties is subject other than routine litigation arising in the ordinary course of business, most, if not all, of which is expected to be covered by insurance, 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 the State of California, County of Orange, claiming that Landmark is entitled to

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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 under a lease for a MOB in Irwindale, California.  Due to this settlement, the Company recorded lease termination income of $2.6 million in the first quarter of 2001.

          There are a number of putative 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 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.  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, with Lukoff designated as the lead action. No trial date has been set. The Morse action has been stayed pending the conclusion of the California class actions.

          In addition, a group of four former stockholders of the Company filed an individual suit against the Company and its directors arising from the same conduct alleged in the putative class actions and asserting claims for breach of fiduciary duty and usurpation of corporate opportunity. This suit, Lyle Weisman, et al. v. G & L Realty Corp., et al, case number BC 271401, was filed in the Superior Court of California, County of Los Angeles, on April 4, 2002. The Weisman plaintiffs also assert claims for intentional and negligent interference with prospective economic advantage against the individual defendants on the theory that they interfered with the Weisman plaintiffs’ purported proposals to acquire the Company. On January 17, 2003, the Company and Messrs. Gottlieb and Lebowitz jointly filed a cross-complaint against the Weisman plaintiffs alleging that their acquisition proposals were made with no real intent to acquire the Company, but simply to disrupt the Company’s existing merger agreement with Messrs. Gottlieb and Lebowitz. The cross-complaint asserts causes of action for intentional interference with contract and prospective economic advantage, fraud, negligent misrepresentation and unfair competition. The Weisman suit has been consolidated with the Lukoff class actions for purposes of discovery. No trial date has been set.

          All of these lawsuits are covered by $5 million of directors and officer’s liability insurance.

None.

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PART II

          Until October 29, 2001, the Company’s Common Stock was listed on the New York Stock Exchange under the symbol GLR. On October 29, 2001, the Company completed a merger with G & L Acquisition, LLC, a Maryland limited liability company, substantially on the terms provided for in the Agreement of Plan and Merger, dated as of May 10, 2001, as amended, by and between the Company and G & L Acquisition, LLC (the “Merger”).  G & L Acquisition, LLC is owned by Daniel M. Gottlieb and Steven D. Lebowitz, Chief Executive Officer and President, respectively, of the Company.  Upon completion of the Merger, each outstanding share of the Company’s Common Stock, other than a portion of the shares held by Messrs. Gottlieb and Lebowitz, was converted into the right to receive $13.00 in cash, without interest.  After completion of the Merger, the Company’s Common Stock was delisted from the New York Stock Exchange.  There is no established public trading market for the Company’s common stock.  As of March 28, 2003, the Company had two holders of its Common Stock.

          The table below sets forth the high and low sales prices of the Company’s stock for each full quarterly period from January 1, 2001 to October 29, 2001 as reported by the New York Stock Exchange.  The table also includes, on a per share basis, the quarterly cash distribution declared and paid to holders of the Company’s Common Stock and Units for each of the last two fiscal years.

          The Company also paid monthly dividends to holders of the Company’s Series A and Series B Preferred Stock on the fifteenth day of each month. Dividends are paid monthly at the rate of $2.56 and $2.45 per annum on shares of the Company’s Series A and Series B Preferred Stock, respectively.  Distributions on the Company’s Series A and Series B Preferred Stock are senior to all classes of the Company’s Common Stock.  Subsequent to the Merger, the Company’s Series A and Series B Preferred Stock is still outstanding and traded on the New York Stock Exchange. 

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          The following table sets forth consolidated selected financial and operating information for the Company for each of the years ended December 31, 2002, 2001, 2000, 1999 and 1998.  The following information should be read in conjunction with all of the financial statements and notes thereto included in this Form 10-K.  This data also should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this Form 10-K.  The consolidated selected financial and operating data as of December 31, 2002, 2001, 2000, 1999 and 1998 and for each of the years ended December 31, 2002, 2001, 2000, 1999 and 1998 have been derived from audited financial statements.

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