SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

              /X/ Quarterly Report Pursuant to Section 13 OR 15(d)
                     of the Securities Exchange Act of 1934

                  For the quarterly period ended June 30, 1998

                                       OR

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

                         Commission file number: 0-28354

                                Great Lakes REIT

             (Exact name of Registrant as specified in its Charter)

              Maryland                           36-4238056
         (State or other jurisdiction     (I.R.S. employer identification no.)
          of incorporation or organization)


           823 Commerce Drive, Suite 300, Oak Brook, IL      60523
          (Address of principal executive offices)          (Zip Code)


                                (630) 368 - 2900
              (Registrant's telephone number, including area code)


     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 X No


     Number  of  shares  of the  registrant's  common  stock,  $.01  par  value,
outstanding as of August 10, 1998: 17,413,951



<PAGE>




                                Great Lakes REIT
                               Index to Form 10-Q
                                  June 30, 1998

                                                             Page Number

Part I - Financial Information

         Item 1.      Financial Statements (unaudited):

                      Consolidated Balance Sheets
                      as of June 30, 1998
                      and December 31, 1997                        2

                      Consolidated Statements of Income
                      for the three months
                      ended June 30, 1998 and 1997                 3

                      Consolidated Statements of Income
                      for the six months
                      ended June 30, 1998 and 1997                 4

                      Consolidated Statement of Changes
                      in Stockholders' Equity
                      for the six months ended June 30, 1998       5

                      Consolidated Statements of Cash Flows
                      for the six months
                      ended June 30, 1998 and 1997                 6

                      Notes to Consolidated Financial Statements   7

         Item 2.      Management's Discussion and Analysis of Results of
                      Operations and Financial Condition           9

         Item 3.      Qualitative and Quantitative Disclosures 
                      about Market Risk                           14

Part II - Other Information

         Item 2.      Changes in Securities                       15

         Item 6.      Exhibits and Reports on Form 8-K            16

                                       1
<PAGE>
<TABLE>





Great Lakes REIT
Consolidated Balance Sheets (unaudited)
(Dollars in Thousands)
<CAPTION>
                                                                                             June 30,       December 31,
                                                                                        -----------------------------------
                                                                                              1998             1997
Assets
Properties:
<S>                                                                                          <C>               <C>    
Land                                                                                             $55,010           $46,044
Buildings, improvements, and equipment                                                           356,274           251,353
                                                                                        -----------------------------------
                                                                                                 411,284           297,397
Less accumulated depreciation                                                                     16,066            11,456
                                                                                        ----------------------------------
                                                                                                 395,218           285,941
Cash and cash equivalents                                                                          2,616             1,437
Real estate tax escrows                                                                              305               332
Rents receivable                                                                                   3,915             3,279
Deferred financing and leasing costs, net of accumulated amortization                              4,832             3,444
Goodwill, net of accumulated amortization                                                          1,322             1,359
Other assets                                                                                       1,184             1,345
                                                                                        -----------------------------------

Total assets                                                                                    $409,392          $297,137
                                                                                        ===================================

Liabilities and Stockholders' Equity

Bank loan payable                                                                               $149,385           $72,500
Mortgage loans payable                                                                            29,805            17,568
Bonds payable                                                                                      4,800             5,030
Accounts payable and accrued liabilities                                                           5,105             3,464
Accrued real estate taxes                                                                          9,294             7,777
Prepaid rent                                                                                       3,690             2,781
Security deposits                                                                                    997               925
Distributions/dividends payable                                                                       14
                                                                                        -----------------------------------

Total liabilities                                                                                203,090           110,045
                                                                                        -----------------------------------

Common stock ($0.01 par value, 60,000,000 authorized; 17,435,735 and                                 174               159
15,862,811 shares issued in 1998 and 1997 respectively)
Paid-in-capital                                                                                  223,649           196,431
Retained earnings (deficit)                                                                       (6,342)           (4,501)
Employee stock loans                                                                             (10,851)           (4,654)
Deferred compensation                                                                                (58)              (73)
Treasury stock, at cost (21,784 shares)                                                             (270)             (270)
                                                                                        -----------------------------------

Total stockholders' equity                                                                       206,302           187,092
                                                                                        -----------------------------------

Total liabilities and stockholders' equity                                                      $409,392          $297,137
                                                                                        ===================================
</TABLE>


The accompanying notes are an integral part of these financial statements.


                                       2
<PAGE>

<TABLE>


Great Lakes REIT
Consolidated Statements of Income (unaudited)
(Dollars in Thousands, except per share data)
<CAPTION>


                                                                            Three months ended June 30,
                                                                       ------------------------------------
                                                                             1998              1997

Revenues:
<S>                                                                        <C>                 <C>   
Rental                                                                          $15,174             $8,418
Reimbursements                                                                    4,082              2,447
Interest and other                                                                  234                209
                                                                       ------------------------------------

Total revenues                                                                   19,490             11,074
                                                                       ------------------------------------

Expenses:
Real estate taxes                                                                 3,012              1,839
Other property operating                                                          5,105              2,727
General and administrative                                                        1,152                745
Interest                                                                          2,878              1,320
Depreciation and amortization                                                     3,182              2,139
                                                                       ------------------------------------

Total expenses                                                                   15,329              8,770
                                                                       ------------------------------------

Net income                                                                       $4,161             $2,304
                                                                       ====================================

Earnings per common share - basic                                                 $0.24              $0.19
                                                                       ====================================

Weighted average common shares outstanding - basic                           17,267,562         12,350,523
                                                                       ====================================

Diluted earnings per common share                                                 $0.24              $0.18
                                                                       ====================================

Weighted average common shares outstanding - diluted                         17,499,578         12,482,805
                                                                       ====================================

</TABLE>

The accompanying notes are an integral part of these financial statements.


                                       3
<PAGE>


<TABLE>

Great Lakes REIT
Consolidated Statements of Income (unaudited)
(Dollars in Thousands, except per share data)
<CAPTION>


                                                                                Six months ended June 30,
                                                                       ----------------------------------
                                                                                   1998             1997

Revenues:
<S>                                                                        <C>              <C>    
Rental                                                                          $28,038          $16,297
Reimbursements                                                                    7,847            5,141
Interest and other                                                                  408              279
                                                                       ----------------------------------

Total revenues                                                                   36,293           21,717
                                                                       ----------------------------------

Expenses:
Real estate taxes                                                                 5,740            3,709
Other property operating                                                          9,340            5,460
General and administrative                                                        2,250            1,675
Interest                                                                          4,913            2,924
Depreciation and amortization                                                     5,921            3,837
                                                                       ----------------------------------

Total expenses                                                                   28,164           17,605
                                                                       ----------------------------------

Net income                                                                       $8,129           $4,112
                                                                       ==================================

Earnings per common share - basic                                                 $0.49            $0.38
                                                                       ==================================

Weighted average common shares outstanding - basic                           16,563,941       10,717,689
                                                                       ==================================

Diluted earnings per common share                                                 $0.48            $0.38
                                                                       ==================================

Weighted average common shares outstanding - diluted                         16,820,069       10,849,971
                                                                       ==================================

</TABLE>

The accompanying notes are an integral part of these financial statements.

                                       4
<PAGE>



Great Lakes REIT
Consolidated Statement of Changes in Stockholders' Equity (unaudited)
For the Six Months Ended June 30, 1998
(Dollars in Thousands)

                                                                    1998
-------------------------------------------------------------------------
Common Stock
Balance at beginning of period                                      $158
Net proceeds from the sale of common stock                            12
Exercise of stock options                                              4
Restricted stock awards                                               --
Issuance of shares for property acquisitions                          --
-------------------------------------------------------------------------
Balance at end of period                                             174

Paid-in capital
Balance at beginning of period                                   196,431
Net proceeds from the sale of common stock                        21,013
Exercise of stock options                                          6,205
Restricted stock awards                                               --
Issuance of shares for property acquisitions                          --
-------------------------------------------------------------------------
Balance at end of period                                         223,649

Retained earnings (deficit)
Balance at beginning of period                                    (4,501)
Net income                                                         8,129
Distributions/dividends                                           (9,970)
-------------------------------------------------------------------------
Balance at end of period                                          (6,342)

Employee stock loans
Balance at beginning of period                                    (4,654)
Exercise of stock options                                         (6,197)
-------------------------------------------------------------------------
Balance at end of period                                         (10,851)

Deferred compensation
Balance at beginning of period                                       (72)
Restricted stock award                                                --
Amortization of deferred compensation                                 14
-------------------------------------------------------------------------
Balance at end of period                                             (58)

Treasury stock
Balance at beginning of period                                      (270)
Purchase of treasury stock                                            --
-------------------------------------------------------------------------
Balance at end of period                                            (270)
-------------------------------------------------------------------------
Total stockholders' equity                                      $206,302
=========================================================================


The accompanying notes are an integral part of these financial statements.

                                       5
<PAGE>

<TABLE>

Great Lakes REIT
Consolidated Statements of Cash Flows (unaudited)
(Dollars in Thousands)
<CAPTION>


                                                                    Six Months Ended June 30,
                                                                -------------------------------
                                                                          1998           1997


CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                  <C>             <C>   
Net income                                                              $8,129          $4,112
Adjustments to reconcile net income to cash
     flows from operating activities
   Depreciation and amortization                                         5,935           4,001
Net changes in assets and liabilities:
   Rents receivable                                                       (636)           (863)
   Real estate tax escrows and other assets                                287             967
   Accounts payable, accrued expenses and other liabilities              1,733           1,403
   Accrued real estate taxes                                             1,518             (68)
   Payment of deferred leasing costs                                    (1,347)           (453)
                                                                -------------------------------
Net cash provided by operating activities                               15,619           9,099
                                                                -------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of properties                                                 (96,475)         (5,096)
Additions to buildings, improvements and equipment                      (5,825)         (2,901)
Other investing activities                                               1,210
                                                                -------------------------------
Net cash used by investing activities                                 (101,090)         (7,997)
                                                                -------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of common stock                                      22,500         101,603
Payment of stock offering costs                                         (1,475)         (8,564)
Proceeds from exercise of stock options                                     12             270
Proceeds from bank and mortgage loans payable                          149,385          10,800
Distributions / dividends                                               (9,970)         (7,329)
Payment of bank and mortgage loans and bonds                           (72,927)        (89,334)
Payment of deferred financing costs                                       (875)           (216)
                                                                -------------------------------
Net cash provided by financing activities                               86,650           7,230
                                                                -------------------------------
Net increase (decrease) in cash and cash equivalents                     1,179           8,332
Cash and cash equivalents, beginning of year                             1,437           1,688
                                                                ===============================
Cash and cash equivalents, end of quarter                               $2,616         $10,020
                                                                ===============================

Supplemental disclosure of cash flow:
Interest paid                                                           $4,442          $2,859
                                                                ===============================

Non cash financing transactions:
Employee stock loans                                                    $6,197            $351
                                                                ===============================
Issuance of shares and units to acquire properties                        $887          $1,848
                                                                ===============================
Mortgages assumed to acquire properties                                $12,435          $2,989
                                                                ===============================

</TABLE>

The accompanying notes are an integral part of these financial statements.


                                       6
<PAGE>



                                Great Lakes REIT
                   Notes to Consolidated Financial Statements
                                   (Unaudited)

1.       Basis of Presentation

Great  Lakes REIT,  a Maryland  real estate  investment  trust,  formed in 1998,
successor  to Great Lakes REIT,  Inc., a Maryland  corporation,  formed in 1992,
owns a limited partnership interest and the sole general partnership interest in
Great Lakes REIT, L.P. (the "Operating  Partnership")  totaling more than 99% of
the outstanding partnership  interests  of the  Operating  Partnership.  Great 
Lakes  REIT,  its subsidiaries and the Operating  Partnership are referred to 
herein  collectively as the "Company".

The  accompanying  consolidated  financial  statements  have  been  prepared  in
accordance with the instructions to Form 10-Q and do not include all information
and footnotes necessary for a fair presentation of financial  position,  results
of operations and cash flows in conformity  with generally  accepted  accounting
principles.  These  statements  should be read in conjunction with the Company's
most recent year-end audited financial statements. In the opinion of management,
the accompanying  financial statements contain all adjustments (which are normal
and  recurring)  necessary  for a fair  statement of  financial  results for the
interim periods.  For further information,  refer to the consolidated  financial
statements  and notes thereto  included in the  Company's  Annual Report on Form
10-K for the year ended December 31, 1997.

2.       Properties Acquired in 1998

In January 1998, the Company  acquired a 196,105 square foot building located in
Columbus,  Ohio  for a total  acquisition  cost of  $21,939,000.  Funds  for the
purchase came from a borrowing under the Company's unsecured line of credit.

In April 1998,  the  Company  acquired a 370,000  square  foot  office  building
located in Milwaukee,  Wisconsin for a contract price of $46,700,000.  Funds for
the purchase came from a borrowing under the Company's unsecured line of credit.

In May 1998, the Company acquired two office  buildings  totaling 389,000 square
feet in Englewood,  Colorado for a contract price of $41,900,000.  Funds for the
purchase came from a borrowing  under the Company's  unsecured line of credit as
well as the assumption of a long-term mortgage loan of $12,435,000 with interest
at 7.11% per  annum  maturing  in  December  2007,  and the  issuance  of 48,447
operating partnership units valued at $887,000.

The unaudited pro forma information presents the results of operations as if the
newly acquired Columbus,  Ohio, Milwaukee,  Wisconsin,  and Englewood,  Colorado
properties  were  acquired at the  beginning  of 1997,  after  giving  effect to
certain adjustments,  including increased depreciation and interest expense. The
unaudited pro forma summary information does not necessarily reflect the results
of  operations  as they  would  have  been if the  Company  had  acquired  these
properties on January 1, 1997.

                                      7
<PAGE>


<TABLE>

<CAPTION>

                                                 Six months ended              Six months ended
                                                    June 30, 1998                 June 30, 1997
                                                                                               

<S>                                                 <C>                            <C>        
         Revenues                                    $40, 845,115                   $39,249,213
         Net income                                   $ 7,847,336                   $ 7,213,879

         Earnings per common share-basic                    $0.47                         $0.44
         Diluted earnings per common share                  $0.47                         $0.43

</TABLE>

3.       Financing Activities



On January 6, 1998, the Company entered into a $35 million  unsecured  revolving
loan agreement with a commercial  bank. In June 1998, the Company entered into a
$60 million unsecured credit facility which refinanced the $35 million unsecured
revolving  loan  agreement.  Amounts  due mature on  December  28, 1998 and bear
interest  at LIBOR  plus  1.45% per  annum.  At June 30,  1998,  $2,166,000  was
outstanding on the loan.

On April 6, 1998,  the Company  entered  into a $150  million  unsecured  credit
facility with a group of banks, which refinanced its $75 million secured line of
credit. Amounts due mature in April 2001 and bear interest at LIBOR plus 1.1% to
1.3%, depending on overall Company leverage. At June 30, 1998,  $147,219,000 was
outstanding on the loan.

On April 24, 1998, the Company closed the sale of common stock to a newly-formed
registered unit investment  trust.  The Company sold 1,184,211  shares of common
stock with net proceeds of approximately  $21.0 million,  all of which were used
to repay a portion of its bank lines of credit.

4.       Subsequent Events

On  July  27,  1998,  the  Company  completed  its  conversion  from a  Maryland
corporation  to a Maryland  real  estate  investment  trust as  approved  by the
Company's shareholders at the Annual Meeting held July 17, 1998.

On July 30, 1998, the Company  acquired Court  International I, a 120,734 square
foot  interest  in the  northern  half of floors two  through  four of the Court
International  building for a contract  price of $9,750,000,  consolidating  the
ownership  of the  property  located in St.  Paul,  Minnesota.  The  Company had
previously acquired the rest of the four-story building (200,114 square feet) in
December 1996.

                                       8
<PAGE>


     ITEM 2.  Management's  Discussion and Analysis of Results of Operations and
Financial Condition

Year 2000 Issues

In response to issues  relating to the Year 2000,  the Company is in the process
of evaluating its computerized  business systems and the technology  embedded in
various systems forming a part of the Company's operations. The Company believes
that its primary  financial  software is Year 2000 compliant.  In addition,  the
Company has  initiated  a program to  communicate  with its  vendors  (including
operators of heating and  air-conditioning  control systems,  building  security
systems,  elevator  operating  software,  and alarm monitoring  systems),  other
service providers and tenants to determine whether they are actively involved in
projects  to  ensure  that  their  products,   business  systems,  and  embedded
technology will be Year 2000 compliant in a timely manner.  The inability of the
Company or its material  vendors,  service  providers,  or tenants to effectuate
solutions to their  respective  Year 2000 issues on a timely and  cost-effective
basis could have a material adverse effect on the Company.

The  following  is a  discussion  and  analysis  of the  consolidated  financial
condition and results of operations  for the three and six months ended June 30,
1998.  The  following  should  be  read in  conjunction  with  the  consolidated
financial  statements  and  related  notes  appearing  elsewhere  herein and the
consolidated  financial  statements and related notes contained in the Company's
1997 Form 10-K.

Overview

Great  Lakes  REIT,  a Maryland  real estate  investment  trust  formed in 1998,
successor to Great Lakes REIT, Inc., a Maryland corporation, formed in 1992 owns
a limited  partnership  interest  and the sole general  partnership  interest in
Great Lakes REIT, L.P. (the "Operating  Partnership")  totaling more than 99% of
the outstanding partnership interests of the Operating Partnership.  Great Lakes
REIT,  its  subsidiaries  and the Operating  Partnership  are referred to herein
collectively as the "Company".

The  primary  business  of the Company is the  ownership,  management,  leasing,
renovation,  and acquisition of suburban  office  properties  generally  located
within a 500 mile radius of Chicago.  At June 30,  1998,  the Company  owned and
operated  properties located in suburban areas of Chicago,  Detroit,  Milwaukee,
Cincinnati, Columbus, Minneapolis/St. Paul, and Denver. The Company leases space
to over 600 tenants in a variety of businesses.

The Company has expanded its real estate  portfolio  through the  acquisition of
suburban office and office/service  center properties.  The Company has financed
its growth by the issuance of its common shares and short and long-term debt.

Growth in net  income  and  funds  from  operations  (FFO) for the three and six
months  ended  June 30,  1998 as  compared  to June  30,  1997  resulted  from a
combination of improved operations of the Company's properties and the inclusion
of the operating results of properties  acquired in 1997 and 1998 from the dates
of their respective acquisitions.

Three months ended June 30, 1998 compared to three months ended June 30, 1997

     In analyzing the operating  results for the quarter ended June 30, 1998 the
changes in rental  income,  real estate taxes and property  operating  expenses,
from 1997 are due  principally to three  factors:  (1) the addition of operating
results from properties  acquired  subsequent to June 30, 1997; (2) the addition
of a full quarter of operating  results in 1998 from properties  acquired in the
second quarter of 1997 as compared to the partial  quarter of operating  results
from the  dates of  their  respective  acquisitions  in 1997,  and (3)  improved
operations of properties during 1998 as compared to 1997.

The Company  acquired  three  properties  during the second quarter of 1998. The
operating  results of these properties were included in the Company's  financial
statements from the date of their acquisition. In 1997 the Company acquired nine
properties including six properties subsequent to June 30, 1997 and one property
during the second  quarter of 1997.  In 1998 a full  quarter of  operations  for
these properties is included in the Company's financial statements.

                                       9
<PAGE>

A summary of these changes as they impact rental income,  real estate taxes, and
property operating expenses follows:

<TABLE>
<CAPTION>

                                            Rental and          Real estate       Property
                                         reimbursement                taxes      operating
                                               income                             expenses

<S>                                        <C>                 <C>          <C>  
Increase due to inclusion
 of results of properties
 acquired in 1997                           $4,456,000             $681,000    $ 1,296,000

Increase due to 1998 acquisitions            3,146,000              422,000      1,031,000
Property dispositions in 1998                  (56,000)              (1,000)        (1,000)
Improved operations in 1998
 compared to 1997                              845,000               71,000         52,000
                                               -------               ------         ------
Total increase in 1998                      $8,391,000           $1,173,000     $2,378,000
                                            ==========           ==========     ==========
</TABLE>


Interest  expense during the quarter ended June 30, 1998 increased by $1,558,000
as the Company had greater  amounts of debt  outstanding in 1998.  This debt was
used to finance a portion of the cost of properties  acquired subsequent to June
30, 1997.

General and  administrative  expenses  increased  by $407,000  due  primarily to
increased  compensation  costs  ($110,000),  certain  costs  associated  with an
abandoned  property  acquisition  ($40,000),  increased  costs  associated  with
operating as a public company ($115,000), increased professional fees ($64,000),
and increases in other office costs  ($78,000)  related to the increased size of
the Company.

Depreciation  and  amortization  increased in 1998 by  $1,043,000 as the Company
incurred  these  expenses on 37 properties as of June 30, 1998 as compared to 28
properties as of June 30, 1997.

Six months ended June 30, 1998 compared to six months ended June 30, 1997.

     In analyzing the operating  results for the six months ended June 30, 1998,
the changes in rental income, real estate taxes, and property operating expenses
are due principally to three factors: (1) the addition of operating results from
properties  acquired subsequent to June 30, 1997; (2) the addition of a full six
months of operating  results in 1998 from  properties  acquired in the first six
months of 1997 as compared to the partial  period of the operating  results from
the dates of their respective  acquisitions in 1997; and (3) improved operations
of properties during 1998 as compared to 1997.

During the six months ended June 30, 1998, the Company acquired four properties.
The operating  results of these  properties  have been included in the Company's
financial  statements from the date of their acquisitions.  In 1997, the Company
acquired nine properties  including six properties  subsequent to June 30, 1997.
In 1998 six months of operations for these  properties have been included in the
Company's financial statements.

                                       10
<PAGE>

A summary of these changes as they impact rental income,  real estate taxes, and
property operating expenses follows:
<TABLE>
<CAPTION>

                                              Rental and       Real estate        Property
                                           reimbursement             taxes       operating
                                                  income                          expenses

<S>                                        <C>               <C>              <C>    
Increase due to inclusion
 of results of properties
 acquired in 1997                            $9,100,000        $1,465,000       $2,529,000

Increase due to 1998 acquisitions             3,946,000           544,000        1,261,000
Property dispositions in 1998                  (112,000)           11,000            5,000
Improved operations in 1998
 compared to 1997                             1,513,000            11,000           85,000
                                              ---------            ------           ------
Total increase in 1998                      $14,447,000        $2,031,000       $3,880,000
                                            ===========        ==========       ==========
</TABLE>


Interest  expense  during  the six  months  ended  June 30,  1998  increased  by
$1,989,000 as the Company had greater amounts of debt outstanding in 1998.

General and  administrative  expenses  increased  by $575,000  due  primarily to
increased  compensation  costs  ($196,000),   costs  associated  with  abandoned
property acquisitions ($55,000),  increased costs associated with operating as a
public company ($194,000),  increased professional fees ($33,000), and increases
in other office costs ($97,000) related to the increased size of the Company.

Depreciation  and  amortization  increased in 1998 by  $2,084,000 as the Company
incurred  these  expenses on 37 properties as of June 30, 1998 as compared to 28
properties as of June 30, 1997.

Liquidity and Capital Resources

Cash and cash  equivalents as of June 30, 1998 were  $2,616,000,  an increase of
$1,179,000  as compared to December 31, 1997.  The increase is primarily  due to
increased  cash flow from  operating  activities in 1998 as compared to 1997 and
increased net cash provided by financing activities in 1998 as compared to 1997.

The Company expects to meet its short-term  liquidity  requirements  principally
through its working capital and net cash provided by operating  activities.  The
Company  considers its cash  provided by operating  activities to be adequate to
meet  operating  requirements  and to fund the payment of  dividends in order to
comply with certain  federal income tax  requirements  applicable to real estate
investment trusts ("REITs").

The Company expects to meet its short-term  liquidity  requirements for property
acquisitions and significant capital improvements through additional  borrowings
on its  existing $60 million and $150  million  unsecured  lines of credit which
mature in December 1998 and April 2001, respectively.

The Company expects the lines of credit to be sufficient to provide the required
funds until such time as the short-term  debt is replaced with long-term debt or
is repaid with the proceeds of additional equity  offerings.  So far in 1998 the
Company  has   acquired  or  committed  to  acquire  $140  million  of  property
acquisitions.  The ability of the Company to  continue to make  acquisitions  at
this pace is  predicated  upon the  Company's  ability  to access the public and
private equity and debt markets at acceptable prices and rates.

The  Company  expects  to meet its  long-term  liquidity  requirements  (such as
scheduled  mortgage debt  maturities,  property  acquisitions,  and  significant
capital  improvements)  through long-term  collateralized  and  uncollateralized
borrowings, the issuance of debt or additional equity securities in the Company,
and targeted property dispositions.

                                       11
<PAGE>

On July 17, 1998, the Company's  Board  approved a plan to sell six  properties.
These properties include five office properties and one industrial building. The
specific properties, all in suburban Chicago are:

                           Property                              Location

                  o        565 Lakeview Parkway                  Vernon Hills
                  o        2800 River Road                       Des Plaines
                  o        1251 Plum Grove Road                  Schaumburg
                  o        Kensington Corporate Center           Mount Prospect
                  o        Court Office Center                   Markham
                  o        1675 Holmes Road                      Elgin

The Company  expects to generate  proceeds  from the sale of these assets in the
range of $30 to $35 million, and plans to formally commence marketing efforts in
September 1998.  These proposed  dispositions  are consistent with the Company's
strategy to seek to enhance  shareholder value through  strategic  dispositions.
The Company currently plans to use the proceeds from sale to reduce  outstanding
lines of credit, to acquire additional  investment  properties,  and for working
capital.

Funds from Operations (FFO)

     The White Paper on Funds From Operations approved by the Board of Governors
of the National Association of Real Estate Investment Trusts ("NAREIT") in March
1995  (the  "White  Paper")  defines  FFO  as net  income  (loss)  (computed  in
accordance with generally accepted  accounting  principles),  excluding gains or
losses  from  debt  restructuring  and  sales  of  property,  plus  real  estate
depreciation  and  amortization   and  after   adjustments  for   unconsolidated
partnerships and joint ventures. Management considers FFO an appropriate measure
of performance of an equity REIT because it is predicated on cash flow analyses.
The Company  computes FFO in accordance with standards  established by the White
Paper  (except  for  the  amortization  of  deferred   compensation  related  to
restricted  stock awards) which may differ from the  methodology for calculating
FFO utilized by other equity REITs and  accordingly,  may not be  comparable  to
other such REITs.  FFO should not be considered as an  alternative to net income
(determined in accordance with generally accepted  accounting  principles) as an
indicator of the Company's financial  performance or to cash flow from operating
activities   (determined  in  accordance  with  generally  accepted   accounting
principles)  as a measure of the  Company's  liquidity,  nor is it indicative of
funds available to fund the Company's cash needs,  including its ability to make
distributions.  FFO for the  three  months  ended  June 30,  1998 and 1997 is as
follows (Dollars in Thousands):
                                         1998                     1997
Net income                            $ 4,161                  $ 2,304
Depreciation and amortization           2,981                    1,664
Loan prepayment costs                       0                      644
                                          ---                      --- 
FFO                                    $7,142                   $4,612
                                       ======                   ======

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<PAGE>

     FFO for the six months ended June 30, 1998 and 1997 is as follows  (Dollars
in Thousands):

                                         1998                     1997
Net income                            $ 8,129                  $ 4,112
Depreciation and amortization           5,443                    3,219
Loan prepayment costs                       0                      644
                                          ---                      ---
FFO                                   $13,572                   $7,975
                                      =======                   ======


Forward-Looking Statements

Certain  statements in this  document  constitute  "forward-looking  statements"
within the meaning of Section 27A of the  Securities Act of 1933 and Section 21E
of the  Securities  Exchange  Acts of 1934,  and the Company  intends  that such
"forward-looking statements" be subject to the safe harbors created thereby. The
words  "believe",  "expect" and "anticipate"  and similar  expressions  identify
forward-looking  statements.  In addition,  statements  regarding  the Company's
expectations with respect to its short-term and long-term liquidity requirements
and related  sources and  compliance  with Year 2000 issues are  forward-looking
statements.  These forwardlooking statements reflect the Company's current views
with respect to future events and financial performance, but are subject to many
uncertainties  and factors  relating to the  Company's  operations  and business
environment  that may cause the actual  results of the Company to be  materially
different from any future results  expressed or implied by such  forward-looking
statements.  Examples  of such  uncertainties  include,  but are not limited to,
changes in interest rates, changes in the equity value of the Company, increased
competition  for  acquisition  of new  properties,  availability  of alternative
financing sources,  unanticipated expenses and delays in acquiring properties or
increasing  occupancy rates,  regional economic and business  conditions and the
ability of the Company,  its vendors,  and its tenants to identify and remediate
Year 2000 issues on a timely and cost-effective basis.

                                       13
<PAGE>

Item 3.           Qualitative and Quantitative Disclosures about Market Risk.

Not applicable.

                                       14
<PAGE>

Part II Other Information

Item 2. Changes in Securities

During the quarter ended June 30, 1998,  the Company  issued  330,833  shares of
common  stock  pursuant to the  exercise of  outstanding  stock  options with an
aggregate  exercise  price  of  $5,285,142.  These  shares  were  issued  to the
optionholders  pursuant to exemptions from the registration  requirements of the
Securities  Act of 1933, as amended (the "Act")  provided by Section 4(2) of the
Act or Rule 701 thereunder.


                                       15
<PAGE>

Item 6.           Exhibits and Reports on Form 8-K

(a)      Exhibits

The following exhibits are attached hereto:

Exhibit
Number                                               Description of Document

27.1                                                 Financial Data Schedule


(b)      Reports on Form 8-K:

         The following  reports on Form 8-K and Form 8-K/A were filed during the
quarter ended June 30, 1998:

         Current Report on Form 8-K dated April 20, 1998 reporting the following
item:

                  Item 2.  Acquisition or Disposition of Assets

                  Item 5.  Other Events

                  Item 7.  Financial Statements, Pro Forma Financial Information
                           and Exhibits

         Current Report on Form 8-K dated April 24, 1998 reporting the following
item:

                  Item 5.  Other Events

                  Item 7.  Financial Statements, Pro Forma Financial Information
                           and Exhibits


         Current  Report on Form 8-K dated June 4, 1998  reporting the following
item:

                  Item 2.  Acquisition or Disposition of Assets

         Current  Report  on Form  8-K/A  dated  June  19,  1998  reporting  the
following item:

                  Item 7.  Financial Statements, Pro Forma Financial Information
                           and Exhibits


SIGNATURES

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


                                                 Great Lakes REIT
                                                   (Registrant)



Date: August 13, 1998                        /s/ James Hicks
                                              Senior Vice President &
                                              Chief Financial Officer
                                             (Principal Financial and
                                               Accounting Officer)





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