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 March 31, 1999

                                       OR

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

                         Commission file number: 1-14307

                                Great Lakes REIT

             (Exact name of Registrant as specified in its Charter)

                   Maryland                       36-4238056
         (State or other jurisdiction    (IRS 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 shares of beneficial interest, $.01
par value, outstanding as of May 12, 1999: 16,418,760


<PAGE>



                                Great Lakes REIT
                               Index to Form 10-Q
                                 March 31, 1999

                                                                   Page Number

Part I - Financial Information
         Item 1.      Financial Statements (unaudited):

                      Consolidated Balance Sheets
                      as of March 31, 1999
                      and December 31, 1998                             4

                      Consolidated Statements of Income
                      for the three months
                      ended March 31, 1999 and 1998                     5

                      Consolidated Statements of Cash Flows
                      for the trhee months
                      ended March 31, 9999 and 1998                     6

                      Consolidated Statement of Changes
                      in Shareholders' Equity
                      for the three months ended March 31, 1999         7

                      Notes to Consolidated Financial Statements        8

         Item 2.      Management's Discussion and Analysis of Results 
                      of Operations and Financial Condition            11

         Item 3.      Quantitative and Qualitative Disclosures 
                      about Market Risk

Part II - Other Information

         Item 2.      Changes in Securities                            16

         Item 6.      Exhibits and Reports on Form 8-K                 17


<PAGE>
<TABLE>
<CAPTION>

Great Lakes REIT
Consolidated Balance Sheets (unaudited)
(Dollars in Thousands)                                                                            March 31,        December 31,
                                                                                              -------------------------------------
                                                                                                     1999              1998
Assets
<S>                                                                                              <C>               <C>
Properties:
Land                                                                                                     $60,960           $60,960
Buildis, improvements, and equipment                                                                     391,698           388,068
                                                                                              -------------------------------------
                                                                                                         452,658           449,028
Less aumulated depreciation                                                                               25,417            22,166
                                                                                              -------------------------------------
                                                                                                         427,241           426,862
Cash and cash equivalents                                                                                  2,241             2,466
Real estate tax escrows                                                                                      640               619
Rents receivable                                                                                           4,789             5,021
Deferred financing and leasing costs, net of accumulated amortization                                      6,153             6,067
Goodwill, net of accumulated amortization                                                                  1,266             1,284
Other assets                                                                                               1,596             1,370
                                                                                              -------------------------------------
Total assets                                                                                            $443,926          $443,689
                                                                                              =====================================
Liabilities and shareholders' equity
Bank loan payable                                                                                        $91,566           $84,291
Mortgage loans payable                                                                                   103,955           104,532
Bonds payable                                                                                              4,800             4,800
Accounts payable and accrued liabilities                                                                   4,253             4,338
Accrued real estate taxes                                                                                  9,709            11,149
Prepaid rent                                                                                               4,213             3,220
Security deposits                                                                                          1,203             1,107
                                                                                               ------------------------------------

Total liabilities                                                                                        219,699           213,437
                                                                                              -------------------------------------

Minority interests                                                                                           926             1,165
                                                                                              -------------------------------------

Preferred shares of beneficial interest ($0.01 par value,                                                 37,500            37,500
 10,000,000 shares authorized; 1,500,000 9 3/4% Series A
 Cumulative Redeemable shares, with a $25.00 per share
 Liquidation Preference, issued and outstanding in 1999 and 1998)
Common shares of beneficial interest ($0.01 par value,                                                       175               175
 60,000,000 shares authorized; 17,548,245 and 17,513,578
 shares issued in 1999 and 1998, respectively)
Paid-in-capital                                                                                          223,847           223,414
Retained earnings (deficit)                                                                              (10,179)           (8,790)
Employee share loans                                                                                     (12,399)          (11,967)
Deferred compensation                                                                                        (37)              (44)
Treasury shares, at cost (1,030,985 and 743,184 shares in                                                (15,606)          (11,201)
1999 and 1998, respectively)
                                                                                              -------------------------------------

Total shareholders' equity                                                                               223,301           229,087
                                                                                              -------------------------------------

Total liabilities and shareholders' equity                                                              $443,926          $443,689
                                                                                              =====================================

</TABLE>

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

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

                                                                               Three months ended March 31,
                                                                                1999                   1998

Revenues:
<S>                                                                                   <C>                    <C>    
Rental                                                                                $17,524                $12,928
Reimbursements                                                                          4,968                  3,765
Interest and other                                                                        246                    110
                                                                                          ---                    ---

Total revenues 
                                                                                       22,738                 16,803
                                                                                       ------                 ------
Expenses:
Real estate taxes                                                                       3,625                  2,728
Other property operating                                                                6,124                  4,230
General and administrative                                                              1,163                  1,097
Interest                                                                                3,276                  2,035
Depreciation and amortization                                                           3,721                  2,739
                                                                                        -----                  -----
Total expenses                                                                         17,909                 12,829
                                                                                       ------                 ------
Income before allocation to minority interests                                          4,829                  3,974

Minority interests                                                                         16                      6
                                                                                           --                      -
Net income                                                                              4,813                  3,968
Income allocated to preferred shareholders                                                914
                                                                                          ---                    ---
Net income applicable to common shares                                                 $3,899                 $3,968
                                                                                       ======                 ======
                                                                                       
Earnings per common share - basic                                                       $0.24                  $0.25
                                                                                        =====                  =====

Weighted average common shares outstanding - basic                                 16,574,149             15,860,320
                                                                                   ==========             ==========

Diluted earnings per common share                                                       $0.23                  $0.25
                                                                                        =====                  =====

Weighted average common shares outstanding - diluted                               16,658,601             16,145,417
                                                                                   ==========             ==========
</TABLE>

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


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

                                                                                         Three Months Ended March 31,
                                                                                          1999                   1998
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                                              <C>                    <C>   
Net income                                                                                       $4,813                 $3,968
Adjustments to reconcile net income to cash
     flows from operating activities
   Depreciation and amortization                                                                  3,721                  2,739
   Other non cash items                                                                              23                     13
Net changes in assets and liabilities:
   Rents receivable                                                                                 232                    161
   Real estate tax escrows and other assets                                                         (46)                    46
   Accounts payable, accrued expenses and other liabilities                                         862                   (199)
   Accrued real estate taxes                                                                     (1,440)                  (443)
   Payment of deferred leasing costs                                                               (495)                  (717)
                                                                                                   ----                   ---- 
Net cash provided by operating activities                                                         7,670                  5,568
                                                                                                  -----                  -----
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of properties                                                                                                 (21,939)
Additions to buildings, improvements and equipment                                               (3,660)                (3,767)
Other investing activities                                                                         (200)                 1,610
                                                                                                   ----                  -----
Net cash used by investing activities                                                            (3,860)               (24,096)
                                                                                                 ------                ------- 
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of share options                                                               1
Proceeds from bank and mortgage loans payable                                                     7,275                 21,066
Distributions / dividends paid                                                                   (6,060)
Purchase of minority interests                                                                     (256)
Purchase of treasury shares                                                                      (4,405)
Payment of bank and mortgage loans and bonds                                                       (577)                   (83)
Payment of deferred financing costs                                                                 (13)                   (82)
                                                                                                    ---                    --- 
Net cash provided by (used in) financing activities                                              (4,035)                20,901
                                                                                                 ------                 ------
Net increase (decrease) in cash and cash equivalents                                               (225)                 2,373
Cash and cash equivalents, beginning of year                                                      2,466                  1,437
                                                                                                  -----                  -----
Cash and cash equivalents, end of quarter                                                        $2,241                 $3,810
                                                                                                 ======                 ======
Supplemental disclosure of cash flow:
Interest paid                                                                                    $3,310                 $1,840
                                                                                                 ======                 ======
Non cash financing transactions:
Employee share loans                                                                               $433                   $923
                                                                                                   ====                   ====
Increase in preferred dividends payable                                                            $142                     
                                                                                                   ====                     
</TABLE>
The accompanying notes are an integral part of these financial statements.

<PAGE>
Great Lakes REIT
Consolidated Statement of Changes in Shareholders' Equity (unaudited)
For the Three Months Ended March 31, 1999
(Dollars in Thousands)

                                                                   1999
-----------------------------------------------------------------------------
Preferred Shares
Balance at beginning of period                                       $37,500
Proceeds from the sale of preferred shares
-----------------------------------------------------------------------------
Balance at end of period                                              37,500

Common Shares
Balance at beginning of period                                           175
Exercise of share options
-----------------------------------------------------------------------------
Balance at end of period                                                 175

Paid-in capital
Balance at beginning of period                                       223,414
Exercise of share options                                                433
-----------------------------------------------------------------------------
Balance at end of period                                             223,847

Retained earnings (deficit)
Balance at beginning of period                                        (8,790)
Net income                                                             4,813
Distributions/dividends                                               (6,202)
-----------------------------------------------------------------------------
Balance at end of period                                             (10,179)

Employee share loans
Balance at beginning of period                                       (11,967)
Exercise of share options                                               (432)
-----------------------------------------------------------------------------
Balance at end of period                                             (12,399)

Deferred compensation
Balance at beginning of period                                           (44)
Amortization of deferred compensation                                      7
-----------------------------------------------------------------------------
Balance at end of period                                                 (37)

Treasury shares
Balance at beginning of period                                       (11,201)
Purchase of treasury shares                                           (4,405)
-----------------------------------------------------------------------------
Balance at end of period                                             (15,606)
-----------------------------------------------------------------------------
Total shareholders' equity                                          $223,301
=============================================================================


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

<PAGE>

                                Great Lakes REIT
                   Notes to Consolidated Financial Statements
                   Dollars in thousands except per share data
                                   (Unaudited)

1.       Basis of Presentation

Great  Lakes  REIT,   (the   "Company"),   was  formed  in  1992  to  invest  in
income-producing  real  property.  In  1998,  the  Company  changed  its form of
organization  from a Maryland  corporation to a Maryland real estate  investment
trust.  The  principal  business  of the Company is the  ownership,  management,
leasing,  renovation  and  acquisition  of suburban  office and  service  center
properties  primarily  located in the Midwest.  At March 31,  1999,  the Company
owned and operated 40 properties primarily located in suburban areas of Chicago,
Detroit, Milwaukee, Columbus,  Minneapolis,  Denver, and Cincinnati. The Company
leases office, service center and industrial properties to over 550 tenants in a
variety of businesses.  The Company conducts substantially all of its operations
through Great Lakes REIT, L.P. of which the Company is the sole general partner.

The consolidated  financial  statements  include the accounts of the Company and
its wholly-owned subsidiaries and controlled partnership.  Intercompany accounts
and transactions have been eliminated in consolidation.

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  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, 1998.

2.       Segment Information

The Company has three  reportable  segments  distinguished by property type. The
property  types  are  office,  with  87% (as  measured  by  square  feet) of the
Company's overall portfolio,  office/service  center (11%), and industrial (2%),
and are primarily  located in the Midwest.  As of March 31, 1999, the properties
were leased to more than 550 tenants,  no single tenant  accounted for more than
5% of the aggregate  annualized base rent of the Company's portfolio and only 20
tenants individually  represented more than 1% of such aggregate annualized base
rent.

The Company  evaluates  performance  and allocates  resources  based on property
revenues (rental and reimbursement  income) less property operating expenses and
real  estate  taxes to  arrive  at net  operating  income - a widely  recognized
industry measure of a property's performance.

Following is a summary report of segment  information for the three months ended
March 31, 1999 and 1998.

                                      For the three months ended March 31,
                                   -----------------------------------------
                                          1999                1998
Revenues
Office                                         $20,661             $14,546
Office/service center                            1,619               1,812
Industrial                                         139                  75
Deferred rental revenues                            73                 260
Interest and other                                 246                 110
                                                   ---                 ---
 Total                                         $22,738             $16,803
                                               =======             =======
                                   

Net operating income
Office                                         $11,652              $8,237
Office/service center                              914               1,212
Industrial                                         104                  26
                                                   ---                  --
 Total                                         $12,670              $9,475
                                               =======              ======
                                   

Depreciation
and amortization
Office                                          $3,281              $2,199
Office/service center                              298                 263
Industrial                                          26                  23
Other                                              116                 254
                                                   ---                 --- 
  Total                                         $3,721              $2,739
                                                ======              ======
                                   

Interest expense
Office                                          $2,890              $1,747
Office/service center                              332                 239
Industrial                                          54                  49
                                                    --                  --
  Total                                         $3,276              $2,035
                                                ======              ======
                                   



Additions to properties
Office                                          $3,418             $25,342
Office/service center                              189                 333
Industrial                                          36
Other                                               17                  31
                                                    --                  --
  Total                                         $3,660             $25,706
                                                ======             =======
                                   
Income before allocation to minority interests
Office                                          $5,481              $4,291
Office/service center                              284                 710
Industrial                                          24                (46)
Deferred rental revenues                            73                 260
Interest and other income                          246                 110
General and administrative                      (1,163)             (1,097)
Other depreciation                                (116)               (254)
                                                  ----                ---- 
                                   
 Income before allocation
  to minority interests                         $4,829              $3,974
                                                ======              ======
                                   

Following  is a summary of segment  assets at March 31,  1999 and  December  31,
1998:
                                   March 31,             December 31,
                                   ----------------------------------------
                                          1999                1998
Assets
Office                                        $393,740            $394,607
Office/service center                           31,769              31,841
Industrial                                       3,979               3,949
Other                                           14,438              13,292
                                   ----------------------------------------
Total                                         $443,926            $443,689
                                   ========================================


3.       Subsequent Events

On April 21, 1999, the Company sold its Elgin,  Illinois property for a contract
price of $4,700 (including the assumption of $2,083 of mortgage debt).

On May 11, 1999, the Company  acquired  Burlington  Office Center located in Ann
Arbor,  Michigan for a contract  price of $19,650.  The property  contains three
multi-story office buildings totaling 190,000 square feet.

ITEM 2.  Management's  Discussion  and  Analysis  of Results of  Operations  and
Financial Condition (Dollars in thousands)

The  following  is a  discussion  and  analysis  of the  consolidated  financial
condition and results of  operations  for the three months ended March 31, 1999.
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  1998 Form
10-K.

Overview

The principal  business of the Company is the  ownership,  management,  leasing,
renovation,  and acquisition of suburban office properties  located primarily in
the Midwest.  At March 31, 1999,  the Company  owned and operated 40  properties
primarily located in suburban areas of Chicago,  Detroit,  Milwaukee,  Columbus,
Minneapolis, Denver and Cincinnati. The Company leases space to over 550 tenants
in a variety of businesses.

The Company  expanded its real estate  portfolio in 1998 through the acquisition
of  suburban  office and  office/service  center  properties.  The  Company  has
financed its growth by the issuance of common and preferred shares and short and
long-term  debt.  Growth in net income and funds from  operations  (FFO) for the
three  months ended March 31, 1999 as compared to March 31, 1998 has been due to
a  combination  of  improved  operations  of the  Company's  properties  and the
inclusion of the operating results of properties acquired in 1998 from the dates
of their respective acquisitions.

Three months ended March 31, 1999 compared to three months ended March 31, 1998

In  analyzing  the  operating  results for the quarter  ended March 31, 1999 the
changes in rental and  reimbursement  income,  real  estate  taxes and  property
operating  expenses,  from  1998 are due  principally  to two  factors:  (1) the
addition of operating results from properties  acquired  subsequent to March 31,
1998 and (2) improved operations of properties during 1999 as compared to 1998.

The  Company  acquired  one  property  during the first  quarter of 1998 and six
properties  subsequent  to  March  31,  1998.  The  operating  results  of these
properties  have been included in the Company's  financial  statements  from the
dates of their  acquisitions.  A summary of these  changes as they impact rental
and reimbursement  income,  real estate taxes, and property  operating  expenses
follows:


<TABLE>
<CAPTION>


                                                                    Rental and       Real estate taxes    Property
                                                               reimbursement income                       operating
                                                                                                          expenses
<S>                                                                          <C>                  <C>          <C>   
Increase due to inclusion of results of  properties  acquired                $5,279               $755         $2,101
in 1998
Improved operations in 1999 as compared to 1998                                 520                142          (207)
                                                               --------------------- ------------------ --------------
Total                                                                        $5,799               $897         $1,894
                                                               ===================== ================== ==============
</TABLE>

Interest  expense  during the quarter ended March 31, 1999 increased by $1,241 
as the Company had greater  amounts of debt  outstanding in 1999.

Depreciation and amortization  increased in 1999 by $982 as the Company incurred
these  expenses  on 40  properties  as of  March  31,  1999  as  compared  to 34
properties as of March 31, 1998.

Liquidity and Capital Resources

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 liquidity requirements for property acquisitions
and  significant  capital  improvements  through  additional  borrowings  on its
existing $150,000 unsecured line of credit, which matures in April 2001 and with
proceeds from the sale of properties.

In 1998, the Company completed  approximately $142,000 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.  In light of the recent market
price of the  Company's  common  shares,  the Company  expects  its  acquisition
activity will be reduced.

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.

In 1998, the Company  announced a 1,000,000 common share repurchase plan. During
the quarter ended March 31, 1999,  the Company  purchased  278,600 common shares
and  completed  this plan.  In March 1999,  the Company  announced a new 500,000
common share  repurchase  plan.  During the quarter  ended March 31,  1999,  the
Company repurchased 9,201 common shares as part of the new plan. Share purchases
totaled  $4,405  for the  quarter  ended  March  31,  1999.  Funds for the share
purchases  came from  borrowings  on its  unsecured  line of credit and  working
capital.

The Company has marketed five properties for sale, all in suburban Chicago:
                                 Property                           Location

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

The Company  expects to generate  proceeds  from the sale of these assets in the
range of $20,000 to $24,000. These proposed dispositions are consistent with the
Company's  strategy  to seek  to  enhance  shareholder  value  in  part  through
strategic dispositions. The Company currently plans to use the proceeds from the
sale to reduce outstanding balance on its unsecured credit facility,  to acquire
additional investment properties and for working capital.

In April 1999,  the Company  sold its Elgin,  Illinois  property  for a contract
price of $4,700  (including  assumption  of $2,083 of mortgage debt).

The  Company  has  signed a  contract  to sell its 1251 Plum Grove Road and 2800
River Road properties for a contract price of $11,800.  The Company  anticipates
the closings of these  transactions will occur in the second or third quarter of
1999.

At March 31, 1999,  the Company has committed to fund $2,312 for the  renovation
of its Ann Arbor, Michigan property.  The Company also has committed to acquire,
upon completion,  an office building under  construction in Pewaukee,  Wisconsin
for a maximum  contract  price of  $11,400.  The  Company  expects to close this
acquisition in November 1999.

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 to be 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 equity 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  March 31,  1999 and 1998 is as
follows (Dollars in Thousands):

                                                         1999            1998
Net income applicable to common shares                  $3,899         $3,968
Depreciation and amortization                            3,580          2,462
Minority interests                                          16              6
                                              ----------------- --------------
FFO                                                     $7,495         $6,436
                                              ================= ==============

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,  statements  regarding the anticipated  timing and proceeds
related to planned property  dispositions and  expenditures  regarding  property
acquisitions are forward-looking  statements.  These forward-looking  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 delays
in property sales,  adverse  changes in the market value of properties  selected
for  sale,   unanticipated  expenses  and  delays  in  acquiring  properties  or
increasing  occupancy rates and regional  economic and business  conditions.  In
addition,  many of the  statements  below with  respect to Year 2000  issues and
status are  forward-looking  statements  and are  subject  to the  uncertainties
expressed below.

Year 2000 Issues and Status

The Company  recognizes the importance of the Year 2000 issues and has initiated
a program of  evaluation,  remediation  and testing of the systems and equipment
serving its  businesses for Year 2000  readiness.  The Company is also assessing
the readiness of external parties,  including its suppliers,  vendors,  bankers,
insurers and other  service  providers as well as its  tenants.  The  evaluation
phase is intended to determine the  readiness of internal  systems and equipment
as well as the  readiness  of third  parties.  The  remediation  phase  includes
computer  software,  hardware and  operating  equipment  as well as  identifying
solutions to possible  third party  noncompliance.  The testing  phase  includes
integrated testing of all systems which are modified.

Amounts  incurred  to date for  remediation  costs have not been  material.  The
current status of the Company's state of readiness and expected completion dates
for  evaluation,  remediation  and  testing  related  to Year  2000  issues  are
summarized below:

Financial  software:  The evaluation of the Company's financial software is 100%
complete and since the Company believes this software is Year 2000 compliant, no
remediation  is required.  The Company has not yet tested  whether the financial
items are in fact Year 2000  compliant  but expects to begin such testing in the
second quarter of 1999. Costs associated with the testing phase are not expected
to be material.

Networking  software:  In the first  quarter of 1999 the Company  completed  the
upgrade of its internal  computer  networking  software and hardware to a system
that is Year 2000 compliant. Total costs incurred were $16.

Building systems:  Building systems include heating and air-conditioning control
systems,  elevator  operating  software,  building security  systems,  telephone
systems, and alarm monitoring systems. The Company has contacted its significant
vendors  related to these  systems in order to  evaluate  Year 2000  issues with
respect to embedded  technology  related to these building systems.  The Company
has requested that its vendors for these systems  indicate their compliance with
Year 2000 issues.  Most vendors have been reluctant to disclose their  readiness
with respect to Year 2000 issues.

The Company has identified several building systems in certain of its properties
that will need  modification  or  replacement to be Year 2000  compliant.  Total
costs for these  upgrades,  which are expected to occur in 1999, are expected to
be $250. Costs incurred during the quarter ended March 31, 1999, were $34.

Tenants:  The Company is  developing a plan to contact its tenants to inquire as
to whether the tenant's  accounts  payable systems will be able to make required
payments for the Year 2000 on a timely  basis.  The Company  expects to complete
its evaluation of this issue by June 1999 and to develop  contingency  plans, if
necessary, beginning in July 1999.

The Company  believes  that in the most likely,  worst case  scenario,  internal
remediation  and testing of  financial  and  networking  technology  systems and
building  systems will be  completed  as  indicated  above and will have minimal
unfavorable  impact on the results of operations and financial  condition of the
Company.  If any or all of these efforts are delayed,  there could be disruption
of the  financial,  networking,  and  building  systems.  Critical  third  party
vendors,  suppliers and service  providers have been contacted to evaluate their
Year 2000 readiness.  However, external parties providing materials and services
to the Company have been  reluctant to fully  disclose  information  about their
readiness.  Accordingly,  the  Company  cannot  be  assured  there  will  be  no
disruption  of operations  because of vendors and service  providers who are not
fully Year 2000 compliant. Contingency plans will be developed, where necessary,
as part of the  remediation  phases  indicated  above, in an effort to provide a
continued  supply of  building  services.  The Company is  developing  a plan to
contact significant tenants to determine their compliance with Year 2000 issues.
However,  the Company has not completed these  evaluations and cannot  determine
whether there are vendors,  suppliers and tenants who will not be compliant on a
timely basis or whether the failure of any of these entities to become compliant
could have a material  adverse  effect on the Company's  business,  consolidated
results of operations and consolidated financial position.

ITEM 3. MARKET RISK (Dollars in thousands)

The Company's  interest  income is sensitive to changes in the general levels of
U.S. short-term interest rates.

The Company's  interest  expense is sensitive to changes in the general level of
U.S.  short-term and long-term  interest  rates as the Company has  indebtedness
outstanding at fixed and variable rates.

The  Company's  variable  rate debt bears  interest at LIBOR plus 1% to 1.3% per
annum  depending  on overall  Company  leverage.  Increases in LIBOR rates would
increase the Company's  interest  expense and reduce its cash flow.  Conversely,
declines in LIBOR rates would  decrease  its  interest  expense and increase its
cash flow.  At March 31,  1999,  the  Company  has not hedged  (i.e.,  fixed the
interest rate) on its variable rate debt. The Company may, in the future,  enter
into  interest  rate swaps,  interest  rate caps or other  derivative  financial
instruments  to fix  interest  rates on its  variable  rate  debt.  The  Company
generally  operates with variable rate debt  representing less than 50% of total
long-term debt.

At March 31, 1999, the Company had $103,955 of fixed rate debt outstanding at an
average  rate of 6.92%.  If the general  level of  interest  rates in the United
States  were to fall,  the  Company  would not likely  have the  opportunity  to
refinance  this  fixed  rate  debt at lower  interest  rates  due to  prepayment
restrictions and penalties on its fixed rate debt.

In general,  the Company  believes  long-term fixed rate debt is preferable as a
financing  vehicle for its  operations  due to the long-term  fixed  contractual
rental income the Company  receives from its tenants.  As a result,  the Company
has 52% of its long-term debt outstanding at March 31, 1999, at fixed rates. The
Company may, as market  conditions  warrant,  enter into  additional  fixed rate
long-term debt instruments on either a secured or unsecured basis.

A tabular presentation of interest rate sensitivity is as follows:
<TABLE>

                            Interest Rate Sensitivity
                      Principal Amount by Expected Maturity
                              Average Interest Rate
<CAPTION>

                                            1999(1)        2000       2001      2002       2003   Thereafter
<S>                                         <C>          <C>        <C>      <C>       <C>           <C>
Liabilities:
Fixed Rate
     Mortgage loans payable                  $1,813      $2,566     $2,749    $2,947    $13,964      $79,916
     Average interest rate                    7.00%       7.00%      7.01%     7.01%      7.06%        6.97%
Variable Rate
     Bank loan payable                                             $91,566
     Average interest rate(2)
     Bonds payable                             $250         280        310       340        375        3,245
     Average interest rate                      (3)         (3)        (3)       (3)        (3)          (3)
</TABLE>

(1) For the period April 1, 1999 to December 31, 1999.

(2) The current interest rate on this debt is LIBOR + 1.3%.

(3) The interest rate on the bonds payable is reset weekly.  After  factoring in
credit  enhancement  costs for the bonds, the average interest rate in the first
quarter of 1999 was 4.63%.




<PAGE>



Part II Other Information

Item 2. Changes in Securities (Dollars in thousands)

During the quarter ended March 31, 1999, the Company issued 24,000 common shares
of beneficial  interest  pursuant to the exercise of  outstanding  share options
with an  aggregate  exercise  price of $294.  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.

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:

                  None


<PAGE>



                                   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: May 12, 1999                              /s/ James Hicks
                                                Chief Financial Officer 
                                                and Treasurer
                                                (Principal Financial and
                                                 Accounting Officer)