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                                                                   EXHIBIT 10.42


                     FIRST AMENDMENT TO EMPLOYMENT AGREEMENT


        This AMENDMENT TO EMPLOYMENT AGREEMENT (this "Amendment") is made and
entered into as of September 25, 1998, by and between Excel Realty Trust, Inc.,
a Maryland corporation (the "Company"), and Gary B. Sabin ("Executive") with
respect to that certain Employment Agreement between the Company and Executive
dated as of May 14, 1998 (the "Employment Agreement"). Capitalized terms used
and not otherwise defined herein are used with the meanings attributed thereto
in the Employment Agreement.

                                    RECITALS

        A.      The Company and Executive entered into the Employment Agreement
dated as of May 14, 1998.

        B.      The Company and Executive now desire to amend certain terms and
provisions of the Employment Agreement as set forth herein.

                                    AGREEMENT

        IN CONSIDERATION of the premises and the mutual covenants set forth
below, the parties hereby agree as follows:

        1.      Relation to Employment Agreement. Except as hereby amended, the
Employment Agreement shall continue in full force and effect.

        2.      Compensation and Related Matters. Section 5(c) of the Employment
Agreement is hereby amended by deleting the current Section 5(c) in its entirety
and replacing it with the following:

        "(c) Stock Options. Effective as of the Effective Time, Executive shall
be awarded (i) stock options (which shall be incentive stock options to the
extent such treatment is available under applicable law) to purchase 186,500
shares of Common Stock of the Company, par value $.01 per share (the "Common
Stock"), which options shall vest pro-rata over the remaining time period for
the outstanding stock options in New Plan Realty Trust held by Arnold Laubich
but in no event shall such options vest less favorably to Executive than on the
first, second, third and fourth anniversaries of the date of grant in equal
installments (collectively, the "Stock Options"); and (ii) stock options to be
awarded in the future at the times, in the amounts and on the terms awarded to
Arnold Laubich. Each share of Common Stock subject to the Stock Options shall
have an exercise price equal to the closing price of a share of Common Stock on
the date the Effective Time occurs. The Stock Options shall be subject to the
terms and conditions of the Company's 1993 Stock Option Plan (as amended, the
"Company Option Plan"). The Company hereby represents and warrants to Executive
that, at the time of grant: (a) the Company Option Plan will have sufficient
shares available to effect the grant and exercise of the Stock Options and the
Company Option Plan has been approved by its shareholders, (b) the Stock Options
will 


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be properly authorized and approved by the Board and/or its compensation
committee, (c) the Common Stock underlying the Stock Options will be registered
on Form S-8 and (d) the Common Stock underlying the Stock Options will be listed
on the New York Stock Exchange."

        3.      Miscellaneous. This Amendment shall be governed and construed on
the same basis as the Employment Agreement, as set forth therein.

        IN WITNESS WHEREOF, the parties hereto have executed this Amendment on
the date first above written.

                              EXCEL REALTY TRUST, INC.,
                              a Maryland corporation


                              By: /s/ Richard B. Muir
                                  ----------------------------------------------
                              Name: Richard B. Muir
                              Title: Executive Vice President


                              /s/ Gary B. Sabin                          
                                  ----------------------------------------------
                              GARY B. SABIN


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