UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

            [x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                 SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
                   For the Fiscal Year ended December 31, 1997
                                       OR

                TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
            OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

                         Commission File Number 2-95449
                      NATIONAL PROPERTIES INVESTMENT TRUST
                   Formerly Richard Roberts Real Estate Growth
                Trust I (Exact name of registrant as specified in
                                  its charter)

         Massachusetts                                              06-6290322
         -------------                                              ----------
(State or Other Jurisdiction of                                (I.R.S. Employer
Incorporation or Organization)                            Identification Number)
  
    P.O. Box 148 Canton Center,  CT                                 06020
    -------------------------------                                 -----
(Address of Principal Executive Offices)                        (Zip Code)

        Registrant's Telephone Number, Including Area Code: (860) 693-9624

Securities registered pursuant to Section 12(b) of the Act:      None
Securities registered pursuant to Section 12(g) of the Act:Shares of Beneficial 
                                                          Interest No Par Value

     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
filing requirements for the past 90 days. Yes X No

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

     State the aggregate market value of the voting stock held by non-affiliates
of the Registrant as of March 15, 1998:  Shares of Beneficial  Interest  without
par value $309,164 *

     Documents Incorporated by Reference: None

     Indicate  the  number of  shares  outstanding  of each of the  registrant's
classes of common stock, as of the latest practicable date: Not Applicable

     * As no established  public  trading market exists,  a value of $1.768 (the
approximate  Net Asset Value as of December 31, 1997) has been  ascribed for the
purpose of this calculation.



<PAGE>




                                     PART I


ITEM 1.     BUSINESS.

NATIONAL PROPERTIES  INVESTMENT TRUST (the "Trust") was organized on January 16,
1985, as a Massachusetts Business Trust. On July 23, 1993, the Trust changed its
name from Richard  Roberts Real Estate Growth Trust I to its current  name.  The
Trust has made for 1996 and  prior  years,  and  intends  to make for  1997,  an
election to file as a real estate  investment  trust "REIT" under the provisions
of the Internal  Revenue Code and intends to maintain  this status as long as it
will benefit the Trust's shareholders.

Since  inception,  the Trust has invested  directly in equity  interests in five
commercial   properties  in  the  United  States,  which  have  income-producing
capabilities,  four of which have been lost to foreclosure and the last property
was sold on December 31, 1997. The Trust has  experienced  income of $1,067,259,
loss of $18,598 and income of $33,452 for fiscal years ended  December 31, 1997,
1996 and 1995, respectively. The Trust considers its business to be operating in
one industry segment, investment in real property.

On  December  31,  1997,  the  Trust,  sold  its sole  real  estate  asset  (the
"Property")  to a newly formed real estate  investment  trust  company,  Philips
International Realty Corp., a Maryland corporation ("New REIT"), in exchange for
32,000 shares of the common stock of the New REIT pursuant to a Contribution and
Exchange  Agreement,  dated August 11, 1997,  as amended,  among the Trust,  the
Board of Trustees of the Trust, New REIT and certain affiliated  partnerships or
limited  liability  companies   associated  with  a  private  real  estate  firm
controlled  by Philip  Pilevsky and certain  partners  and members  thereof (the
"Contribution  and Exchange  Agreement").  The New REIT will  indirectly own ten
shopping  center  properties  in the New  England,  Mid-Atlantic  and  Southeast
regions of the United States.  New REIT is not affiliated  with the Trust or the
Trustees  of the Trust and the sale price for the  Property  was  determined  by
arm's-length  negotiations between the parties. The Property is an approximately
38,125 square foot shopping center located in Lake Mary,  Florida and, as of the
date  of  sale,  was  100%  occupied.   The  consummation  of  the  transactions
contemplated by the Contribution and Exchange  Agreement,  including the sale of
the Property, was approved by a majority of the shareholders of the Trust at its
special  meeting  held on  December  30,  1997.  499,097 of the  747,522  shares
entitled to vote at such meeting approved the transaction proposal,  with 13,219
opposed and 10,624 abstaining.

The Trust exchanged its sole real estate holding for 32,000 shares of the Common
Stock of New REIT plus the assumption of its first  mortgage.  The total selling
price was $2,161,940, resulting in a gain of $1,106,368. 3,744 shares of the New
REIT Common Stock were  distributed  to the Trust  shareholders  on December 31,
1997 and  approximately  20,256 of such  shares  were  distributed  to the Trust
shareholders on January 7, 1998 (representing in the aggregate not less than 75%
of the Common Stock received by the Trust). The remaining 8,000 shares are to be
retained by the Trust and any  distributions  on the shares or net proceeds from
the sale of the  shares  will be  available  to the  Trust for  working  capital
purposes. The Trust is contingently liable on the first mortgage.

<PAGE>

The  Trust's  sole  remaining  substantial  asset  is  an  interest  in  Philips
International  Realty  Corp.  The Trust  does not  currently  own any  operating
assets. The Trust is contractually  bound to operate for one year until December
31,  1998.  The  Trustees of the Trust plan to  investigate  new  properties  as
possible acquisitions for the Trust. No potential properties are currently under
investigation.  Should the Trust be unable to acquire a new property(ies) by the
end of 1998,  the Trustees will evaluate  their options as to the best course of
action for the Trust.



ITEM 2.     PROPERTIES.

The Shoppes at Lake Mary (Lake Mary, Florida)

On March 31, 1986, the Trust purchased The Shoppes at Lake Mary, a 38,125 square
foot  neighborhood  strip  shopping  center located on 4.7 acres of land in Lake
Mary,  Florida,  from an unaffiliated entity for $3,200,000 in cash. The Shoppes
at Lake Mary is a two-story  shopping center and office  facility  consisting of
three buildings and a parking lot with 191 parking spaces.  Lake Mary is located
in Seminole County, Florida, slightly north and to the east of Orlando.

On  December  31,  1997,  the  Trust,  sold  its sole  real  estate  asset  (the
"Property")  to a newly formed real estate  investment  trust  company,  Philips
International Realty Corp., a Maryland corporation ("New REIT"), in exchange for
32,000  shares of the common stock of New REIT  pursuant to a  Contribution  and
Exchange  Agreement,  dated August 11, 1997,  as amended,  among the Trust,  the
Board of Trustees of the Trust, New REIT and certain affiliated  partnerships or
limited  liability  companies   associated  with  a  private  real  estate  firm
controlled  by Philip  Pilevsky and certain  partners  and members  thereof (the
"Contribution  and Exchange  Agreement").  The New REIT will  indirectly own ten
shopping  center  properties  in the New  England,  Mid-Atlantic  and  Southeast
regions of the United States.  New REIT is not affiliated  with the Trust or the
trustees  of the Trust and the sale price for the  Property  was  determined  by
arm's-length negotiations between the parties.

The  Trust's  sole  remaining  substantial  asset  is  an  interest  in  Philips
International  Realty  Corp.  The Trust  does not  currently  own any  operating
assets. The Trust is contractually  bound to operate for one year until December
31,  1998.  The  Trustees of the Trust plan to  investigate  new  properties  as
possible acquisitions for the Trust. No potential properties are currently under
investigation.  Should the Trust be unable to acquire a new property(ies) by the
end of 1998,  the Trustees will evaluate  their options as to the best course of
action for the Trust.
<PAGE>

ITEM 3.     LEGAL PROCEEDINGS.

A lawsuit has been  brought by a successor of the former  Advisor  ("Former
Advisor")  in the State of  Connecticut  against  the  Trust,  Peter  Stein (the
Managing Trustee of the Trust)  individually,  and First Investment  Properties,
Inc.  (a former  Advisor of the Trust) for  $105,000  plus  interest,  costs and
attorney's  fees.  The suit  contends  that the Trust  assumed and  ratified the
contract between First Investment  Properties,  Inc., which succeeded the Former
Advisor as Advisor.  The Trust  contends it was never party to the  contract and
intends to vigorously  defend these actions which it considers  groundless.  The
ultimate  resolution  of these  matters is not  ascertainable  at this time.  No
provision  has been made in the  financial  statements  related to these claims.
Peter  Stein,   the  Managing   Trustee,   has  put  2,100  shares  of  Phillips
International  Realty  Corp.  stock,  owned by him  individually,  in  escrow as
collateral pending a judicial outcome in Florida.




ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF HOLDERS OF BENEFICIAL INTEREST.

A  special  meeting  was  held  on  December  30,  1997.  At this  meeting,  the
shareholders  of the Trust voted to approve the acceptance of the  "Contribution
and Exchange Agreement" between National Properties Investment Trust and the New
REIT,  which agreement had been approved by the Trustees of the Trust in August,
1997 for the sale of the Lake Mary  property and approve  certain  amendments to
the Restated  Declaration of Trust of National Properties  Investment Trust, and
both  proposals  were approved by a majority of the  shareholders  of the Trust.
499,097 of the 747,522  shares  entitled to vote at such  meeting  approved  the
transaction proposal, with 13,219 opposed and 10,624 abstaining. .

An annual meeting of the  shareholders was not held during 1997. The Declaration
of Trust of National  Properties  Investment Trust requires an annual meeting to
be held within six months of the Trust's year end.




                                     PART II


ITEM 5.     MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
              STOCKHOLDER MATTERS.

The Trust was engaged in a public offering through April 30, 1987. The Trust has
the  authority  to issue  unlimited  number of shares  of  Beneficial  Interest,
without par value. There is no established public trading market for the Trust's
shares. The Trust had 747,553 shareholders of record at March 15, 1998.

The  Trusts  old  CUSIP  number  was  763-077-104  and its new  CUSIP  number is
637-255-100.
<PAGE>

On December 31, 1997, National  Properties  Investment Trust, sold its sole real
estate asset (the  "Property")  to a newly formed real estate  investment  trust
company,  the Philips  International  Realty Corp., a Maryland corporation ("New
REIT"),  in exchange for 32,000  shares of the Common Stock of New REIT pursuant
to a  Contribution  and Exchange  Agreement,  dated August 11, 1997, as amended,
among the  Trust,  the Board of  Trustees  of the  Trust,  New REIT and  certain
affiliated partnerships or limited liability companies associated with a private
real estate firm controlled by Philip Pilevsky and certain  partners and members
thereof  (the  "Contribution  and  Exchange  Agreement").   The  New  REIT  will
indirectly own ten shopping center  properties in the New England,  Mid-Atlantic
and Southeast regions of the United States.  New REIT is not affiliated with the
Trust or the  Trustees  of the Trust and the sale  price  for the  Property  was
determined by arm's-length  negotiations between the parties. The Property is an
approximately  38,125 square foot shopping center located in Lake Mary,  Florida
and, as of the date of sale, was 100% occupied.

The Trust exchanged its sole real estate holding for 32,000 shares of the Common
Stock of New REIT plus the assumption of its first  mortgage.  The total selling
price was $2,161,940, resulting in a gain of $1,106,368. 3,744 shares of the New
REIT Common Stock were  distributed  to the Trust  shareholders  on December 31,
1997 and 20,256 of such shares were  distributed  to the Trust  shareholders  on
January 7, 1998  (representing  in the aggregate not less than 75% of the Common
Stock received by the Trust).  The remaining  8,000 shares are to be retained by
the Trust and any  distributions  on the shares or net proceeds from the sale of
the shares will be available to the Trust for working capital purposes.

The  Trust's  sole  remaining  substantial  asset  is  an  interest  in  Philips
International  Realty  Corp.  The Trust  does not  currently  own any  operating
assets. The Trust is contractually  bound to operate for one year until December
31,  1998.  The  Trustees of the Trust plan to  investigate  new  properties  as
possible acquisitions for the Trust. No potential properties are currently under
investigation.  Should the Trust be unable to acquire a new property(ies) by the
end of 1998,  the Trustees will evaluate  their options as to the best course of
action for the Trust.

The Trust declared and paid cash  distributions on a monthly basis from February
1986 through  September  1988. On April 11, 1989,  the Trustees voted to suspend
the quarterly shareholders' dividend indefinitely,  effective with the scheduled
distribution  for the first quarter of 1989.  This decision was predicated  upon
the desire to direct all available  funds into property  operations.  A one-time
dividend  was  declared  in January  1996,  paid in  February  1996,  payable to
shareholders  of record as of  September  30,  1995,  of $0.05 per  share.  This
dividend was a return of capital to the shareholders.  The dividend was declared
by the sole vote of the Managing  Trustee  (See Item 13 - Certain  Relationships
and Related  Transactions).  The Trust declared and paid a property  dividend on
December 31, 1997, payable to the shareholders of record as of December 4, 1997,
of 3,744 shares Philips  International  Realty Corp.  common stock. The dividend
had an  approximate  value of $0.25 per  share.  The Trust  declared  and paid a
property  dividend on January 7, 1998,  payable to the shareholders of record as
of December 4, 1997, of 20,256 shares Philips  International Realty Corp. common
stock. The dividend had an approximate value of $1.35 per share.
<PAGE>

The Trust has made for prior years, and intends to make for 1997, an election to
file as a real estate  investment trust (REIT) for federal tax purposes,  and if
so  qualified,  will not be  taxed  on  earnings  distributed  to  shareholders.
Dividends to shareholders  will be taxable dividends to the extent the Trust has
taxable  income.  Dividends  in excess  of  taxable  income  will be a return of
capital to the shareholders.





<PAGE>

ITEM 6.     SELECTED FINANCIAL DATA.

The following table summarizes certain selected financial data for the Trust for
the years ended December 31, 1997, 1996, 1995, 1994 and 1993, and should be read
in conjunction with the accompanying financial statements.
<TABLE>
<CAPTION>

-------------------------------------   -----------    -----------    ----------   -----------    -----------
Statement of Operations: ............          1997           1996          1995          1994           1993
-------------------------------------   -----------    -----------    ----------   -----------    -----------

<S>                                     <C>            <C>            <C>          <C>            <C>        
Gross Rental Income .................   $   350,302    $   340,768    $  311,383   $   293,882    $   306,916


Net Income From
Property Operations (2&3) ...........       (39,765)       (20,187)       32,192      (272,220)      (161,071)

Interest Income .....................           656          1,589         1,260         --               170 

Gain (Loss) Due to
Disposition of Assets &
Loss Revenue (5) ....................     1,106,368           --            --            --             --

Net Income (Loss) ...................     1,067,259        (18,598)       33,452      (272,220)      (160,901)

Per Share Data:

Net Income (Loss) (1) ...............          1.45          (0.03)         0.05         (0.39)         (0.24)

Distributions Declared ..............          0.25           0.05          0.00          0.00           0.00

Weighted Average Number
of Shares of Beneficial
Interest Outstanding (1) ............       735,288        718,496       718,649       693,436        684,395

Balance Sheet:

Total Assets (2,3,4&5) ..............     1,452,115      1,050,867     1,102,288     1,014,331      1,209,933

Mortgage Loans Payable
(2,3&5) .............................          --          571,258       598,353       398,606        400,000

Shareholder's Equity ................     1,321,964        405,681       460,618       386,800        629,020
-------------------------------------   -----------    -----------    ----------   -----------    -----------
</TABLE>

[FN]

(1)   Earnings (Loss) per Share of Beneficial Interest are computed based on the
      weighted  average  number  of Shares of  Beneficial  Interest  outstanding
      during the period.
(2)   On November  30,  1993,  the Trust  borrowed  $400,000 to  extinguish  old
      payables, pay delinquent real estate taxes and accumulate working capital.
      The Shoppes at Lake Mary were pledged as collateral for this loan.
(3)   On May 4, 1994, the Trust borrowed $25,000 to accumulate  working capital.
      The Shoppes at Lake Mary were pledged as collateral for this loan.
(4)   On October  26,  1995,  the Trust  borrowed  $600,000  to  extinguish  the
      mortgage  payable,  make capital and tenant  improvements,  pay delinquent
      real estate taxes,  accumulate working capital and to provide funds to pay
      a one-time  dividend.  The Shoppes at Lake Mary were pledged as collateral
      for this loan.
(5)   On December 31, 1997,  the Trust sold its sole  remaining real property in
      exchange for 32,000 shares of Philips  International  Realty Corp.  common
      stock and the assumption of the 1st mortgage of $546,940.
</FN>







<PAGE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
               CONDITION AND RESULTS OF OPERATIONS.

Liquidity and Capital Resources

At December  31, 1997,  the Trust has cash of  approximately  $32,171,  which is
comprised almost entirely of net income from operations.

During  1995,  the cash flow from the  operation of The Shoppes at Lake Mary has
included  funds  received  pursuant  to  refinancing  of the  first  and  second
mortgages  on  the  Trust's  property.  The  Advisor  (See  Item  13  -  Certain
Relationships  and Related  Transactions)  of the Trust refinanced the first and
second  mortgages on the Trust's real property for $600,000 on October 26, 1995.
The  proceeds  were used to repay the first and second  mortgages,  in which the
first  mortgage  was due in December  1996,  pay the prior year and current year
property taxes,  provide working capital to perform tenant  improvements for two
new tenants, provide capital to install sewer lines mandated by the Town of Lake
Mary, and to provide funds to issue a shareholder dividend.

On  December  31,  1997,  the  Trust,  sold  its sole  real  estate  asset  (the
"Property") to a newly formed real estate investment trust company,  the Philips
International Realty Corp., a Maryland corporation ("New REIT"), in exchange for
32,000  shares of the Common Stock of New REIT  pursuant to a  Contribution  and
Exchange  Agreement,  dated August 11, 1997,  as amended,  among the Trust,  the
Board of Trustees of the Trust, New REIT and certain affiliated  partnerships or
limited  liability  companies   associated  with  a  private  real  estate  firm
controlled  by Philip  Pilevsky and certain  partners  and members  thereof (the
"Contribution  and Exchange  Agreement").  The New REIT will  indirectly own ten
shopping  center  properties  in the New  England,  Mid-Atlantic  and  Southeast
regions of the United States.  New REIT is not affiliated  with the Trust or the
Trustees  of the Trust and the sale price for the  Property  was  determined  by
arm's-length  negotiations between the parties. The Property is an approximately
38,125 square foot shopping center located in Lake Mary,  Florida and, as of the
date of sale, was 100% occupied.

The Trust exchanged its sole real estate holding for 32,000 shares of the Common
Stock of New REIT plus the assumption of its first  mortgage.  The total selling
price was $2,161,940, resulting in a gain of $1,106,368. 3,744 shares of the New
REIT Common Stock were  distributed  to the Trust  shareholders  on December 31,
1997 and  approximately  20,256 of such  shares  were  distributed  to the Trust
shareholders on January 7, 1998 (representing in the aggregate not less than 75%
of the Common Stock received by the Trust). The remaining 8,000 shares are to be
retained by the Trust and any  distributions  on the shares or net proceeds from
the sale of the  shares  will be  available  to the  Trust for  working  capital
purposes. The Trust continues to be contingently liable on the first mortgage.
<PAGE>

The  Trust's  sole  remaining  substantial  asset  is  an  interest  in  Philips
International  Realty  Corp.  The Trust  does not  currently  own any  operating
assets. The Trust is contractually  bound to operate for one year until December
31,  1998.  The  Trustees of the Trust plan to  investigate  new  properties  as
possible acquisitions for the Trust. No potential properties are currently under
investigation.  Should the Trust be unable to acquire a new property(ies) by the
end of 1998,  the Trustees will evaluate  their options as to the best course of
action for the Trust.

The principal assets of the Trust consists of an equity position in Philips
International Realty Corp. and cash.



Results of Operations

         Year Ended December 31, 1997 compared to Year Ended December 31, 1996

For the year  ended  December  31,  1997,  the  Trust  reported  a net loss from
property operations of $39,765, as compared to net loss from property operations
of $20,187 for the year ended December 31, 1996. Significant variances from 1996
are as follows;  the increase in gross rental income for the year ended December
31, 1997 is the result of  decreases  in  vacancies  resulting in an increase of
gross  rental of $5,641 and rent  escalations  resulting in an increase of gross
rental  income of $10,586  and a  decrease  in gross  rental  income due to rent
concessions of $6,693.  Rental expenses  increased by $23,774 for the year ended
December  31,  1997 as a result of the  write-off  of the  remaining  balance of
capitalized loan origination costs of $7,478, increase in depreciation of $4,133
as a result of the new sewer  construction  and  improvements,  an  increase  in
property taxes of $7,104 over the prior year, and the write-off of the remaining
balance of capitalized leasing commissions of $5,531. General and administrative
expenses  increased by $5,338 for the year ended December 31, 1997 over the year
ended  December  31, 1996 due to  increases  in expenses  related to the Trust's
preparation   for  the  proposed  sale  of  $3,831,   decreases  in  travel  and
entertainment of $3,571,  and increases in health insurance  premiums of $6,095.
Also,  the Trust had net income of  $1,067,259  for the year ended  December 31,
1997,  compared to a net loss of $18,598 for the year ended  December  31, 1996.
The increase is the result of a gain on the sale of real estate of $1,106,368 on
December 31, 1997.

On  December  31,  1997,  the  Trust,  sold  its sole  real  estate  asset  (the
"Property") to a newly formed real estate investment trust company,  the Philips
International Realty Corp., a Maryland corporation ("New REIT"), in exchange for
32,000  shares of the Common Stock of New REIT plus the  assumption of its first
mortgage.  The total  selling  price was  $2,161,940,  resulting  in a gain of $
1,106,368.  3,744  shares of the New REIT Common Stock were  distributed  to the
Trust shareholders on December 31, 1997 and approximately  20,256 of such shares
were distributed to the Trust  shareholders on January 7, 1998  (representing in
the aggregate not less than 75% of the Common Stock received by the Trust).  The
remaining 8,000 shares are to be retained by the Trust and any  distributions on
the shares or net proceeds  from the sale of the shares will be available to the
Trust for working capital purposes.
<PAGE>

The  Trust's  sole  remaining  substantial  asset  is  an  interest  in  Philips
International  Realty  Corp.  The Trust  does not  currently  own any  operating
assets. The Trust is contractually  bound to operate for one year until December
31,  1998.  The  Trustees of the Trust plan to  investigate  new  properties  as
possible acquisitions for the Trust. No potential properties are currently under
investigation.  Should the Trust be unable to acquire a new property(ies) by the
end of 1998,  the Trustees will evaluate  their options as to the best course of
action for the Trust.

Currently,  there is no agreement with regards to  compensation  of the Managing
Trustee  (See Item 13 - Certain  Relationships  and  Related  Transactions)  and
compensation  paid to the  Managing  Trustee  was  $48,000  for the  year  ended
December 31, 1997.


         Year Ended December 31, 1996 compared to Year Ended December 31, 1995

For the year  ended  December  31,  1996,  the  Trust  reported  a net loss from
property  operations  of  $20,187,  as  compared  to net  income  from  property
operations  of  $32,192  for the  year  ended  December  31,  1995.  Significant
variances from 1995 are as follows; repairs and maintenance expenses were higher
due to repairs  to the  sprinkler  system,  septic  system and air  conditioning
systems;  interest  expense  increased  due to the  refinancing  and  additional
borrowing on October 25, 1995;  property  management  costs  increased  due to a
monthly  Trustee fee paid to the Managing  Trustee as a result of the conversion
of  the  REIT  to a  self-managed  REIT;  Telephone  expenses  increased  due to
increased contact with  shareholders,  contact with contractors in Florida,  and
contacts by the Managing  Trustee when he is traveling;  and revenues  increased
due to increased occupancy and rent escalations.


         Year Ended December 31, 1995 compared to Year Ended December 31, 1994

For the year ended  December  31,  1995,  the Trust  reported  net  income  from
property  operations  of  $32,192,  as  compared  to a net  loss  from  property
operations  of  $272,220  for the year  ended  December  31,  1994.  Significant
variances  from 1994 are as follows:  general and  administrative  expenses were
reduced  due to the  waiving  of the  advisor  fees  by the  advisor  due to the
limitation of operating expenses per the Declaration of the Trust (See Item 13 -
Certain  Relationships  and  Related  Transactions)  and a  reduction  in travel
expenses and costs  related to the  evaluation of new  investments;  repairs and
maintenance  expenses were lower due to  substantial  reductions in the costs of
contracted services and less than average repairs were performed;  promotion and
administration   expense   variances   are  the  result  of  different   expense
classifications  between years;  interest expense  increased due to increases in
the  interest  rates and due to the  refinancing  and  additional  borrowing  on
October 25, 1995;  and revenues  increased  due to increased  occupancy and rent
escalations.
<PAGE>

On  October  27,  1995,   the  Trust  changed  its  operating   structure  to  a
self-administered  trust.  The  Advisor  and the  Managing  Trustee  have made a
concerted effort to reduce the operating expenses and general and administrative
expenses of the Trust.  They have terminated the lease for their  administrative
offices  located in Connecticut  and are operating out of an office  provided by
the  Managing  Trustee  (See  Item  13  -  Certain   Relationships  and  Related
Transactions).  The travel and  investigative  expenses have been curtailed to a
level which the  Managing  Trustee  feels will be  supported by the Trust's Cash
Flow. The Trust had entered into a new leasing  contract with a local  (Florida)
real estate  company to find new tenants,  and the leasing  commission  is to be
paid on an annual  basis,  rather than entirely up front.  This contract  should
reduce the strain on cash flow due to substantial prepaid fees.

There was no agreement with regards to compensation of the Managing Trustee (See
Item 13 - Certain  Relationships  and Related  Transactions) and no compensation
was provided for the period of October 27, 1995 to December 31, 1995.


<PAGE>



ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.





                      NATIONAL PROPERTIES INVESTMENT TRUST

                                      INDEX




        Independent Auditors' Reports

        Comparative Balance Sheet as of December 31, 1997 and 1996

        Comparative Statement of Operations for the Years Ended December 31, 
        1997, 1996 and 1995

        Comparative  Statement of Changes in Shareholders'  Equity for the Years
        Ended December 31, 1997, 1996 and 1995

        Comparative Statement of Cash Flows for the Years Ended December 31, 
        1997, 1996 and 1995

        Comparative Schedule of Rental Expenses for the Years Ended December 31,
        1997, 1996 and 1995

        Notes to the Financial Statements

          Supplemental Financial Statement Schedules:

        None



         ---------------

         Schedules Not Filed:
         All schedules except,  those indicated above, have been omitted because
         either the required information is not applicable or the information is
         shown in the financial statements or notes thereto.


<PAGE>



                 [LETTERHEAD OF BERNARDI, ALFIN & KOOS, L.L.C.]
                        


Trustees
National Properties Investment Trust
P.O. Box 148
Canton Center, Connecticut  06020

We have audited the accompanying balance sheet of National Properties Investment
Trust  as of  December  31,  1997  and  1996,  and  the  related  statements  of
operations,  changes in shareholders' equity, and cash flows for the years ended
December  31,  1997,  1996  and  1995.   These  financial   statements  are  the
responsibility of the company's management.  Our responsibility is to express an
opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards  require that we plan and perform the audit to obtain reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of National Properties Investment
Trust as of December 31, 1997 and 1996 and the results of its operations and its
cash flows for the years ended  December 31, 1997,  1996 and 1995 in  conformity
with  generally  accepted  accounting  principles.  Also  in  our  opinion,  the
financial  statement  schedules,  when  considered  in  relation  to  the  basic
financial  statements,  presents fairly in all material respects the information
shown therein.

March 4, 1998                               Respectfully submitted,


                                            /s/ Bernardi, Alfin & Koos, L.L.C.


                                            BERNARDI, ALFIN & KOOS, L.L.C.
                                            Certified Public Accountants


<PAGE>
<TABLE>
<CAPTION>
                      NATIONAL PROPERTIES INVESTMENT TRUST
                           CANTON CENTER, CONNECTICUT
                            COMPARATIVE BALANCE SHEET

                                                              December 31,
                                                          1997           1996
                                                          ----           ----

ASSETS
<S>                                                   <C>            <C>
  Investments in real estate and personal property    $    4,287     $  948,583
  Cash and cash equivalents                               32,171         44,403
  Receivables                                              1,314         18,248
  Investments                                          1,412,800           --
  Prepaid expenses                                          --           21,019
  Deposits                                                 1,543          2,160
  Deferred expenses                                         --           16,454
                                                       ---------       --------

TOTAL ASSETS                                          $1,452,115     $1,050,867
                                                      ==========     ==========


LIABILITIES:
  Accounts payable                                      $ 16,146       $ 17,307
  Accrued expenses                                        15,609         35,800
  Prepaid rent and security deposits                       8,575         20,821
  Note payable                                            89,821           --
  Mortgage payable                                          --          571,258
                                                       ---------      ---------

   Total Liabilities                                     130,151        645,186
                                                       ---------      ---------

SHAREHOLDERS' EQUITY:
  Shares of beneficial interest, no par value, unlimited
    authorization, shares issued and outstanding were
    747,553 in 1997 and 718,496 in 1996               11,791,190     11,754,966
  Accumulated deficit                                (10,469,226)   (11,349,285)
                                                       ---------      ---------

     Total Shareholders' Equity                        1,321,964        405,681
                                                       ---------      ---------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY           $ 1,452,115    $ 1,050,867
                                                     ===========    ===========
</TABLE>
  The accompanying notes are an integral part of the financial statements.
<PAGE>


<TABLE>
<CAPTION>


                      NATIONAL PROPERTIES INVESTMENT TRUST
                           CANTON CENTER, CONNECTICUT
                       COMPARATIVE STATEMENT OF OPERATIONS


                                               For the Years Ended December 31,
                                                  1997       1996        1995
                                                  ----       ----        ----

INCOME (LOSS) FROM OPERATIONS OF DISCONTINUED
      LAKE MARY REAL ESTATE:
<S>                                             <C>        <C>        <C>
 Gross rental income                            $ 350,302  $ 340,768  $ 311,383
 Rental expenses                                 (265,552)  (241,778)  (214,790)
 General and administrative expenses             (124,515)  (119,177)   (64,401)
                                              ----------- ----------  ---------
   Net Income (Loss) from Property Operations     (39,765)   (20,187)    32,192


OTHER INCOME:
 Interest income                                      656      1,589      1,260

GAIN ON DISPOSAL OF LAKE MARY REAL ESTATE (LESS
  APPLICABLE INCOME TAXES OF $15,609)           1,106,368       --         --
                                              ----------- ----------  ---------



NET INCOME (LOSS)                             $ 1,067,259 $  (18,598) $  33,452
                                              =========== ==========  =========



INCOME (LOSS) PER SHARE OF BENEFICIAL INTEREST   $   1.45 $    (0.03) $    0.05
                                              =========== ==========  =========
AVERAGE NUMBER OF SHARES OF BENEFICIAL
  INTEREST                                        735,288    718,496    718,649
                                              =========== ==========  =========
</TABLE>
  The accompanying notes are an integral part of the financial statements.
<PAGE>
<TABLE>
<CAPTION>


                      NATIONAL PROPERTIES INVESTMENT TRUST
                           CANTON CENTER, CONNECTICUT
            COMPARATIVE STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY


                                                                 For the Years Ended December 31,

                                          1997                             1996                          1995
                                          ----                             ----                          ----

                                   Shares       Amount            Shares         Amount            Shares        Amount
                                   -------    ------------        -------    ------------        --------    ------------
SHARES OF BENEFICIAL INTEREST

<S>                    <C>         <C>        <C>                  <C>        <C>                  <C>        <C>
     Balance - January 1,          718,496    $ 11,754,966         718,860    $ 11,754,966         714,395    $ 11,714,600


     Shares issued                  30,416          36,900            --              --               847             847
                                                                               

     Contributed capital              --              --              --              --              --            39,519
                                                                                                                   

     Redemption of shares           (1,185)           (676)           --              --              --             --            
                                                                                                   

     Corrections of errors            (174)           --             (364)            --             3,618           -- 

                                   -------    ------------         -------    ------------        --------    ------------

     Balance - December 31,        747,553    $ 11,791,190         718,496    $ 11,754,966         718,860    $ 11,754,966
                                   =======    ============         =======    ============        ========    ============




ACCUMULATED DEFICIT

     Balance - January 1,                     $(11,349,285)                   $(11,294,348)                   $(11,327,800)

     Net income (loss)                           1,067,259                         (18,598)                         33,452

     Dividends paid                               (187,200)                        (36,339)
                                              ------------                    ------------                      ----------

     Balance - December 31,                   $(10,469,226)                   $(11,349,285)                   $(11,294,348)
                                              ============                    ============                    ============
</TABLE>
  The accompanying notes are an integral part of the financial statements.
<PAGE>

<TABLE>
<CAPTION>



                      NATIONAL PROPERTIES INVESTMENT TRUST
                           CANTON CENTER, CONNECTICUT
                       COMPARATIVE STATEMENT OF CASH FLOWS
                Increase (Decrease) in Cash and Cash Equivalents

                                              For the Years Ended December 31,
                                               1997         1996         1995
                                           -----------  -----------  -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                        <C>         <C>          <C>
  Net income (loss)                        $ 1,067,259 $   (18,598) $    33,452
                                            ----------     -------      -------

  Adjustments to reconcile net income
   (loss) to net cash  provided by
   (used in) operating activities
      Depreciation and amortization             62,510      50,899       46,131
      Gain on sale of asset                 (1,106,368)       --           --
      Changes in  Assets and Liabilities:
         Receivables                            16,934      (4,337)       1,510
         Prepaid expenses                       21,019       1,753       13,188
         Deferred expenses                        --          --        (26,927)
         Deposits                                  617        (360)      12,957
         Accounts payable                       (1,161)     (1,589)     (57,119)
         Accrued expenses                      (35,800)     29,575          414
         Prepaid rent and security deposits    (12,246)      2,625       (3,056)
         Due to Advisor                           --          --        (85,481)
                                            ----------     -------      -------

          Total Adjustments                 (1,054,495)     78,566      (98,383)
                                            ----------     -------      -------

Net Cash Provided By (Used In)
  Operating Activities                          12,764      59,968      (64,931)
                                            ----------     -------      -------


CASH FLOWS FROM INVESTING ACTIVITIES:
  Closing costs paid on the sale of assets     (10,000)       --           --
  Purchase of personal property               (131,723)    (60,212)     (30,113)
                                            ----------     -------      -------

Net Cash Flows Used In Investing Actvities    (141,723)    (60,212)     (30,113)
                                            ----------     -------      -------


CASH FLOWS FROM FINANCING ACTIVITIES:
  Principal payments on debt                   (24,318)    (27,095)    (400,253)
  Mortgage proceeds                               --          --        600,000
  Proceeds from the issuance of shares          36,900        --           --
  Redemption of shares                            (676)       --           --
  Dividends paid                                  --       (36,339)        --
  Proceeds from note                           104,821        --           --
                                            ----------     -------      -------

Net Cash Provided by (Used In)
   Financing Activities                        116,727     (63,434)     199,747
                                            ----------     -------      -------


NET INCREASE (DECREASE) IN CASH
 AND CASH EQUIVALENTS                          (12,232)    (63,678)     104,703

CASH AND CASH EQUIVALENTS, BEGINNING
 OF THE YEAR                                    44,403     108,081        3,378
                                            ----------     -------      -------


CASH AND CASH EQUIVALENTS, END
  OF THE YEAR                              $    32,171 $    44,403  $   108,081
                                            ==========     =======      =======
</TABLE>
  The accompanying notes are an integral part of the financial statements.
<PAGE>
<TABLE>
<CAPTION>



                      NATIONAL PROPERTIES INVESTMENT TRUST
                           CANTON CENTER, CONNECTICUT
                     COMPARATIVE SCHEDULE OF RENTAL EXPENSES

                                               For the Years Ended December 31,
                                               1997         1996         1995
                                               ----         ----         ----
RENTAL EXPENSES:
<S>                                          <C>          <C>         <C>
Promotion and administration                 $ 23,507     $ 21,170    $ 21,193
Property management                              --           --        15,569
Leasing commissions                            18,244       12,713      12,688
Utilities                                      23,715       21,264      18,596
Maintenance and repair                         22,870       26,234      11,811
Insurance                                      12,672       13,309       9,451
Property taxes                                 43,000       35,896      33,339
Interest expense and late charges              59,034       60,293      46,012
Amortization                                   16,454        8,976       7,481
Depreciation                                   46,056       41,923      38,650
                                               ------       ------      ------

           Total Rental Expenses            $ 265,552    $ 241,778   $ 214,790
                                            =========    =========   =========
</TABLE>
  The accompanying notes are an integral part of the financial statements.
<PAGE>

                      NATIONAL PROPERTIES INVESTMENT TRUST
                          NOTES TO FINANCIAL STATEMENTS


NOTE 1 - Organization and Summary of Accounting Policies:
              A.  Organization:
                  National Properties Investment Trust (formerly Richard Roberts
              Real Estate Growth Trust I) (the "Trust") was organized on January
              16, 1985 as a  Massachusetts  Business  Trust.  The Trust  invests
              directly in equity  interests  in  commercial,  industrial  and/or
              residential   properties   in  the   United   States   which  have
              income-producing  capabilities  and intends to hold its properties
              for long-term investment.

                  On December 31, 1997,  National  Properties  Investment Trust,
              sold its sole real estate asset (the "Property") to a newly formed
              real estate  investment trust company,  the Philips  International
              Realty Corp., a Maryland corporation ("New REIT"), in exchange for
              32,000  shares  of the  Common  Stock  of New REIT  pursuant  to a
              Contribution  and Exchange  Agreement,  dated August 11, 1997,  as
              amended,  among the Trust, the Board of Trustees of the Trust, New
              REIT and  certain  affiliated  partnerships  or limited  liability
              companies associated with a private real estate firm controlled by
              Philip  Pilevsky  and certain  partners  and members  thereof (the
              "Contribution  and  Exchange   Agreement").   The  New  REIT  will
              indirectly own ten shopping center  properties in the New England,
              Mid-Atlantic and Southeast regions of the United States.  New REIT
              is not affiliated  with the Trust or the Trustees of the Trust and
              the sale price for the Property  was  determined  by  arm's-length
              negotiations between the parties. The Property is an approximately
              38,125 square foot shopping  center located in Lake Mary,  Florida
              and, as of the date of sale, was 100% occupied.  The  consummation
              of the transactions  contemplated by the Contribution and Exchange
              Agreement,  including the sale of the Property,  was approved by a
              majority of the  shareholders  of the Trust at its special meeting
              held on December 30, 1997.  499,097 of the 747,522 shares entitled
              to vote at such meeting  approved the transaction  proposal,  with
              13,219 opposed and 10,624 abstaining.

                  3,744 shares of the New REIT Common Stock were  distributed to
              the Trust  shareholders  on  December  31, 1997 and 20,256 of such
              shares were  distributed to the Trust  shareholders  on January 7,
              1998  (representing  in the  aggregate  not  less  than 75% of the
              Common Stock  received by the Trust).  The remaining  8,000 shares
              are to be  retained  by the  Trust  and any  distributions  on the
              shares  or net  proceeds  from  the  sale  of the  shares  will be
              available to the Trust for working capital purposes.

              B. Method of  Accounting:  
                    The financial  statements of the Trust have been prepared on
               the accrual basis of accounting.

              C.  Cash Equivalents:
                  For  financial  statement  purposes,  the Trust  considers all
              highly liquid investments with original maturities of three months
              or less to be cash equivalents.

<PAGE>

NOTE 1 - Organization and Summary of Accounting Policies: (Continued)


              D.  Income Taxes:
                  The Trust has made for prior  years,  and  intends to make for
              1997, an election to file as a real estate investment trust (REIT)
              for federal tax purposes,  and if so qualified,  will not be taxed
              on earnings distributed to shareholders. Accordingly, no provision
              for  federal  income  taxes  has been made for the  periods  ended
              December 31, 1996 and 1995. However, the Trust is subject to state
              income taxes, where applicable.

              E.  Real Estate Assets and Depreciation:
                  On January 1, 1996,  the  Company  adopted the  provisions  of
              Statement  of  Financial  Accounting  Standards  ("SFAS") No. 121"
              Accounting  for  the  Impairment  of  Long-Lived  Assets  and  for
              Long-Lived  Assets  to be  Disposed  of." The  statement  requires
              impairment  losses to be recognized  for long-lived  assets,  on a
              property by property basis,  used in operations when indicators of
              impairment are present and the undiscounted  future cash flows are
              not  sufficient  to recover the assets,  carrying  value.  If such
              indicators are present,  an impairment loss is recognized based on
              the excess of the carrying  amount of the impaired  asset over its
              fair value.

                  For long-lived assets to be disposed of, impairment losses are
              recognized  when the fair value of the asset,  less the  estimated
              cost to  sell,  is less  than  the  carrying  value  of the  asset
              measured  at the time  management  commits to a plan to dispose of
              the asset.  Assets are classified as assets to be disposed of when
              management  has  committed to sell and is actively  marketing  the
              property.  Assets to be  disposed  of are  carried at the lower of
              carrying  value or fair value less cost to dispose,  determined on
              an asset by asset basis.  Depreciation  is not recorded during the
              period in which assets are held for  disposal  and gains  (losses)
              from initial and  subsequent  adjustments to the carrying value of
              the assets, if any, are recorded as a separate component of income
              from continuing operations. Adoption of this standard did not have
              a material impact on the Company's  financial  position or results
              of operations.

                  Depreciation was computed using the straight-line  method over
              an estimated  depreciable  life of 40 years for real  property,  7
              years  for  personal  property,  and over the life of the  related
              lease for  tenant  improvements.  The only  property  owned by the
              Trust was written  down to its  realizable  value at December  31,
              1991.
<PAGE>

              F.   Accumulated Deficit:
                  The   accumulated   deficit,   reported  as  a  reduction   of
              Shareholders'   Equity,   includes  net  losses   recognized   and
              distributions   made  to  Shareholders  as  a  return  of  capital
              invested.

             G.  Use of Estimates:
                  The  preparation  of financial  statements in conformity  with
              generally accepted  accounting  principles  requires management to
              make  estimates  and  assumptions  that  affect  certain  reported
              amounts and disclosures.  Accordingly, actual results could differ
              from those estimates.

NOTE 2 - Related Party Transactions:
                  The Trust paid the  Managing  Trustee  $48,000  and $46,000 as
              compensation  for managing the Trust  property for the years ended
              December 31, 1997 and 1996, respectively.  In addition,  Effective
              in November  1995, the Trust offices are located at premises owned
              by the Managing Trustee.  No rent was charged to the Trust in 1997
              and 1996, however,  the Trust paid utility bills for the office of
              $2,325 in 1997 and $1,647 in 1996.

                  In 1997, the Trust paid health  insurance  premiums of $17,269
              on behalf of two Trustees. The Trust paid $11,727 to a credit card
              account  of  the  Managing  Trustee  for  reimbursement  of  Trust
              expenses.  The Trust  reimbursed  two  Trustees  $3,391 for travel
              expenses.

                  The  Trust  had  entered  into  an  agreement  (the  "Advisory
              Agreement")   with  First   Investment   Properties,   Inc.,  (the
              "Advisor"),  a  Connecticut  Corporation,  pursuant  to which  the
              Advisor was acting as an investment  advisor and  administrator of
              the Trust's day-to-day affairs. Peter Stein, the Managing Trustee,
              was the manager of First Investment Properties,  Inc. The Advisory
              Agreement  expired on October  27, 1995 and was not renewed by the
              Trust.

                  Under the terms of the Advisory  Agreement,  the Trust pays to
              the Advisor: (a) a reimbursement for organizational,  offering and
              selling  expenses  advanced on behalf of the Trust by the Advisor;
              (b) an annual  Advisory  Fee  equals to 2.5% of all cash  receipts
              from operations in the ordinary course of business after deducting
              payments   for   operating   expenses,   debt   service,   capital
              expenditures  with respect to real property  investments,  amounts
              set  aside  for  reserves,  after the  reimbursement  of  expenses
              incurred in the  performance of advisory duties  described  below,
              which is subordinate to an annual  cumulative (but not compounded)
              return to the investors of 10% per annum on the original Price Per
              Share to the public in the offering, less all distributions of the
              net  proceeds  from  the  sale  or   refinancing  of  the  Trust's
              properties  (the "Adjusted  Price Per Share");  (c) an Acquisition
              Fee  equal  to 6% of  the  purchase  price  of any  real  property
              acquired by the Trust,  from which fee, the Advisor,  will pay all
              real estate and mortgage commissions due to unaffiliated  parties;
              (d) a  Disposition  Fee  equal to 15% of any net  proceeds  from a
              sale, refinancing or other capital transaction with respect to any
              of its investments,  after the Shareholders have received a return
              of their capital plus a cumulative (but not compounded)  return of
              10%  per  annum  on  the  Adjusted  Price  Per  Share,   of  which
              Disposition   Fee,  the  Advisor,   may  pay  up  to  10%  to  any
              consultants;

<PAGE>

NOTE 2 - Related Party Transactions: (Continued)

              and (e) a Real Estate  Brokerage  Commission  upon the sale of any
              Trust  real  property  investments,  equal to 3% of the gross sale
              price.  The Trust will also reimburse the Advisor for any expenses
              attributable  to the  performance  of its duties  pursuant  to the
              Advisory  Agreement.  The Advisor  will refund to the Trust within
              120 days  after the end of the  fiscal  year,  the  greater of the
              amount,  if any, by which the Operating  Expenses of the Trust (as
              defined  in the  Prospectus)  exceeded  either  (a) 2% of the Book
              Value of Invested Assets (as defined in the Prospectus) or (b) 25%
              of net income of the Trust, whichever is greater, or (c) 2% of the
              Trust's  base  assets  defined  as total  assets of the Trust less
              cash,  cash  items  and  unsecured  indebtedness.  The  Trust  had
              Operating Expenses in excess of the above limits of $85,481 during
              1995 which were applied to a note payable due to the Advisor.

                    The prior financial  statements referred to the note payable
               to the Advisor as a Due to Consultant.  This liability arose as a
               result of the costs  associated  from replacing the prior Advisor
               and  Trustees  in 1993.  The  contract  with the  consultant  was
               entered into with First Investment Properties, Inc. and the Trust
               was not a party to the  agreement.  The  Declaration of the Trust
               prohibits the Trust from directly paying third party  contractors
               of the  Advisor,  but  instructs  the  Trust  to pay the  Advisor
               directly  and the  Advisor  is  responsible  for paying the third
               party.  The  Trust  has no  liability  to the  consultant.  First
               Investment  Properties,  Inc. is solely liable to the consultant.
               First Investment  Properties,  Inc. has received $85,481 directly
               and indirectly as payment of this note. The remaining $19,519 due
               to the Advisor has been forgiven by First Investment  Properties,
               Inc. and recorded as  contributed  capital.  Additionally,  First
               Investment  Properties,  Inc.  has waived all rights to  Advisory
               fees  accrued  in 1995 of $32,607  and any fees  accrued in prior
               years,  which are not payable until such time as the shareholders
               receive a cumulative,  but not  compounded  ten percent return on
               their investment. First Investment Properties, Inc. has agreed to
               this waiver due to the fact they  recognize that such a condition
               will never be met.

                  In March  1995,  the Trust  issued  847  shares of  Beneficial
              Interest to Gretchen Stein, spouse of Peter Stein, in exchange for
              the note payable at $1 per share per the agreement  with the Trust
              in 1994.  The remaining  $20,000  balance was  contributed  to the
              Trust as capital.

                  On March 3, 1997, the Trust issued 30,416 shares of beneficial
              interest to a Profit Sharing  Retirement Plan for the benefit of a
              Trustee  of the Trust.  The shares  were  issued for  $1.2132  per
              share, totaling $36,900.
<PAGE>

NOTE 2 - Related Party Transactions: (Continued)

                  As part of their  compensation  for their  involvement  in the
              sale of the real  estate  by the  Trust to  Philips  International
              Realty  Corp.,  two  Trustees  received a total of 5,000 shares of
              Philips   International  Realty  corp.  common  stock,  valued  at
              $250,000.  In  addition  the two  Trustees  received  warrants  to
              purchase  an  additional  8,000  shares of  Philips  International
              Realty Corp. common stock.


NOTE 3 - Earnings Per Share:
                  Earnings per Share of Beneficial  Interest are computed on the
              weighted   average   number  of  Shares  of  Beneficial   Interest
              outstanding during the period.


NOTE 4 - Investment in Real Estate and Personal Property:
                  The Trust  purchased The Shoppes at Lake Mary, a 38,125 square
              foot  shopping  center  located in Lake May,  Florida on March 31,
              1986 for  $3,200,000.  Pursuant  to the  purchase  agreement,  the
              seller  guaranteed  that the  revenues  generated  by the  project
              during  the  first two  years of its  operation  would be at least
              equal to the aggregate of all expenses incurred in connection with
              the use and  operation  of the project  during each such year plus
              $360,000.  The seller placed  $300,000 of the purchase price in an
              interest bearing escrow account as security for the guarantee.  On
              September  26,  1986,  the  Trust  released  the  seller  from the
              guarantee in consideration for the funds held in escrow. The funds
              held in escrow were forwarded to the Trust on October 2, 1986. The
              basis of the  property  acquired  has been  reduced  by the amount
              received under the terms of the cash flow  guarantee.  On December
              31,  1991 the Trust  reduced  the book value of real  property  by
              $1,677,901 to its net realizable value .

                  All of the Trust's  property are recorded at historical  cost,
              except for it's real property  which is recorded at its historical
              cost,  less $310,762 for the reduction in basis due to the release
              of funds escrowed at closing,  and less $1,677,901 loss reserve to
              reduce the property value to its net realizable value.

                  On December 31, 1997,  National  Properties  Investment Trust,
              sold its sole real  estate  asset to a newly  formed  real  estate
              investment trust company, the Philips  International Realty Corp.,
              a Maryland corporation.
<PAGE>


NOTE 4 - Investment in Real Estate and Personal Property: (Continued)

                  The Trust's property and equipment are as follows:
<TABLE>
<CAPTION>

                                          The Shoppes at Lake Mary
                                            1997         1996
                                            ----         ----
<S>                                       <C>        <C>       
Land                                      $ --       $  230,299
Buildings                                   --        1,147,584
Tenant Improvements                         --          210,742
Furnishings and Equipment                  6,545         19,544
                                           -----         ------
   Total                                   6,545      1,608,169
Less: Accumulated Depreciation           ( 2,258)    (  659,586)
                                           -----        ------- 
Net Investment in Real Estate
and Personal Property                     $4,287     $  948,583
                                          ======     ==========
</TABLE>



NOTE 5- Receivables:
      Receivables consist of the following:

<TABLE>
<CAPTION>
                                             1997           1996
                                             ----           ----
<S>                                         <C>           <C>    
Tenant Receivables                          $1,314        $18,248
Allowance for Doubtful Accounts               --             --
                                             -----         ------
Tenant Receivables net of Allowance         $1,314        $18,248
                                            ======        =======
</TABLE>



NOTE 6 - Accrued Expenses:
                  Accrued Expenses consist of the following:

<TABLE>
<CAPTION>
                                        1997              1996
                                        ----              ----
<S>                                    <C>              <C>    
Accrued real estate taxes              $  --            $35,800
Accrued corporation taxes               15,609             --
                                        ------           ------ 
Accrued Expenses                       $15,609          $35,800
                                       =======          =======
</TABLE>

NOTE 7 Note Payable:

                    As part of the sale of the Lake  Mary  property,  the  Trust
               entered into a secured non-recourse note agreement for settlement
               adjustments  in favor of the  purchaser.  The note  balance as of
               December  31,  1997 was  $89,821.  The note is  secured  by 4,000
               shares of Phillips International Realty Corp. stock.





<PAGE>

NOTE 8 - Mortgage Payable:

<TABLE>
<CAPTION>
                                                 1997        1996
                                                 ----        ----

<S>                                         <C>          <C>
Mortgage  payable in monthly  installments
 of $7,201 of principal plus interest,
at 10.25% charged at 2% over prime on 
the  outstanding  balance.  The balance of
principal & interest is due in full in 
October,  1998.  The loan is secured by a
first mortgage lien on the Shoppes at Lake 
Mary. The Trust is contingently liable for 
this mortgage                                 $  --       $ 571,258
                                               ======       ======= 
</TABLE>


NOTE 9- Going Concern:

                    The Trust's sole remaining  substantial asset is an interest
               in  Philips   International  Realty  Corp.  The  Trust  does  not
               currently own any operating  assets.  The Trust is  contractually
               bound to  operate  for one year  until  December  31,  1998.  The
               Trustees  of the Trust  plan to  investigate  new  properties  as
               possible  acquisitions for the Trust. No potential properties are
               currently  under  investigation.  Should  the  Trust be unable to
               acquire a new property(ies) by the end of 1998, the Trustees will
               evaluate  their  options as to the best  course of action for the
               Trust.

NOTE 10- Sale of Lake Mary Property:

                  The Trust  exchanged  its sole real estate  holding for 32,000
              shares of the Common Stock of New REIT,  valued at $1,600,000 plus
              the assumption of its first mortgage.  The total selling price was
              $2,161,940,  resulting in a gain of $1,106,368.  The Trust remains
              contingently liable on the first mortgage.

                  The value of the Philips  International Realty Corp. stock and
              the value of the Lake Mary real  property  were  determined  based
              upon the  opinions of the each  parties  financial  advisors.  The
              relative valuations of the Partnership Properties, and the Trust's
              Property,  were considered  independently by the Philips Group and
              the Trust, and negotiated on an arm's-length  basis. The Trust and
              the Philips  Group are not related  parties and retained  separate
              legal   counsel  and   financial   advisors.   The  terms  of  the
              Contribution and Exchange Agreement were the result
<PAGE>

NOTE 10- Sale of Lake Mary Property: (Continued)

              of lengthy negotiations. However, no third-party appraisals of the
              Properties  or any other  assets were used to value such  property
              for purposes of the Transaction.

                  Accordingly,  no assurance  can be given that the valuation of
              Philips   International   Realty  Corp.   implied  by  the  market
              capitalization  of Philips  International  Realty  Corp.  does not
              exceed the aggregate  value of the Properties that might have been
              obtained from an independent  appraisal,  or that the common stock
              received by the Trust in the Transactions  reflects the fair value
              of the Trust's Property.


NOTE 11- Dividends Paid to Shareholders:

                  The Trust  declared and paid cash dividends on a monthly basis
              from February 1986 through  September 1988. On April 11, 1989, the
              Trustees  voted to suspend the  quarterly  shareholders'  dividend
              effective with the scheduled distribution for the first quarter of
              1989.

                  A one-time  dividend  was  declared in January  1996,  paid in
              February  1996,  and  payable  to  shareholders  of  record  as of
              September 30, 1995, of $0.05 per share. This dividend was a return
              of capital to the  shareholders.  The dividend was declared by the
              sole vote of the Managing Trustee.

                  A  specific   date  of   re-establishment   of  the  quarterly
              shareholders' dividend has not yet been determined.  Distributions
              made by the Trust are at the  discretion of the  Trustees.  Future
              distributions,  if any,  will be  dependent  upon the earnings and
              cash flow of the Trust, its financial condition and other relevant
              factors.

                  Dividends declared per share, are based upon the actual number
              of shares  outstanding on the date of declaration and not upon the
              weighted  average number of shares  outstanding  during the period
              used in computing earnings per share.

                  The Trust declared a property  dividend of 3,744 shares of the
              New REIT common stock  distributed  to the Trust  shareholders  on
              December  31,  1997 to the  shareholders  of record on December 4,
              1997 and  declared a property  dividend  of 20,256 of such  shares
              distributed  to the Trust  shareholders  on January 7, 1998 to the
              shareholders  of record on December 4, 1997  (representing  in the
              aggregate  not less than 75% of the Common  Stock  received by the
              Trust). The remaining 8,000 shares are to be retained by the Trust
              and any  distributions on the shares or net proceeds from the sale
              of the shares will be available  to the Trust for working  capital
              purposes.
<PAGE>

NOTE 12- Contingencies:

                  Salvatore R. Carabetta,  an Independent  Trustee,  resigned on
              June 30, 1996. A successor  Trustee was not  appointed  until June
              16, 1997,  which is greater than the 60 day period required by the
              Declaration of Trust for the  appointment of a successor  Trustee.
              The  Declaration  of  the  Trust  requires  a  new  Trustee  to be
              appointed  within 60 days.  On June 16, 1997 Robert  Reibstein was
              appointed as Trustee of the Trust.

                  On January 6, 1996 the Managing Trustee, Peter Stein, declared
              a dividend  without the express  approval  of Mr.  Carabetta.  Mr.
              Stein  believes that the request for a vote sent to Mr.  Carabetta
              twice  by  certified  mail and not  responded  to,  constitutes  a
              presence  at a vote and  abstention  from the  vote.  Additionally
              until June 25, 1996 when Jay Goldman was elected as Trustee of the
              Trust,  Peter  Stein,  the  Managing  Trustee,  had been acting on
              behalf of the Trust  without the express  approval of the majority
              of the Trustees. Peter Stein and Salvatore Carabetta were the sole
              remaining  Trustees  and since a majority of  Trustees  need to be
              present to have a vote, both Trustees needed to be present to hold
              a vote.  On June 16,  1997,  a  Trustee  meeting  was held and the
              Trustees  acknowledged  that the Trust was  operating  without the
              full  complement of Trustees and approved and ratified all actions
              carried out by the officers of the Trust.

                  On June 16, 1997, the Trustees adopted an Amended and Restated
              Declaration of Trust,  which provides that the Trust may choose to
              elect  officers,  including a President  who shall act as Managing
              Trustee,  and which further  defines the powers and limitations of
              the officers of the Trust.  As of September  30, 1997, no officers
              of the Trust have been  appointed to oversee the management of the
              Trust.

                  In  July  1993,   the  then  trustees  of  Trust  amended  the
              Declaration  of Trust,  without  seeking or obtaining  shareholder
              approval,  to, among other things,  create an open-end  trust such
              that National would have an infinite life.  Since the date of such
              amendment, National and its trustees have been acting at all times
              in a manner  consistent  with such infinite life status.  Although
              the current Trustees believe that such trustees acted within their
              discretionary  authority under the original  Declaration of Trusts
              in effecting such amendment without seeking  shareholder  approval
              and that such  amendment  was  properly  adopted,  there can be no
              assurance  that one or more  shareholders  of the  Trust  will not
              challenge  the validity of such  amendment  premised upon the need
              for such  shareholder  approval  under the  terms of the  original
              Declaration of Trust or seek damages for breach of the contractual
              provisions  of  the  original  Declaration  of  Trust.  If  such a
              challenge  was  successfully  brought,  Trust may be  required  to
              obtain shareholder approval of such amendment in order to maintain
              its infinite life status (as opposed to liquidating one year after
              the completion of the Formation Transactions), and there can be no
              assurances that such shareholder approval,  if required,  would be
              obtained.


<PAGE>

NOTE 12- Contingencies: (Continued)

                    A lawsuit  has been  brought  by a  successor  of the former
               Advisor  ("Former  Advisor") in the State of Connecticut  against
               the  Trust,  Peter  Stein  (the  Managing  Trustee  of the Trust)
               individually,  and First  Investment  Properties,  Inc. (a former
               Advisor of the  Trust)  for  $105,000  plus  interest,  costs and
               attorney's  fees.  The suit  contends  that the Trust assumed and
               ratified the contract between First Investment Properties,  Inc.,
               which succeeded the Former Advisor as Advisor. The Trust contends
               it was never  party to the  contract  and  intends to  vigorously
               defend these actions which it considers groundless.  The ultimate
               resolution of these matters is not ascertainable at this time. No
               provision  has been made in the financial  statements  related to
               these claims.  Peter Stein, the Managing  Trustee,  has put 2,100
               shares of Phillips International Realty Corp. stock, owned by him
               individually,  in escrow as collateral pending a judicial outcome
               in Florida.



                  Management is unable to determine the effects the above events
              will have on the financial condition of the Trust, if any.

NOTE 13- Supplemental Disclosure of Cash Flow Information:
<TABLE>
<CAPTION>

                                              1997         1996         1995
                                              ----         ----         ----
Cash paid during the year -
<S>                                      <C>          <C>         <C>       
     Income taxes                        $       --   $       --  $       --
     Interest                            $     59,034 $     60,293$     46,012

Non-cash transactions -
     Issuance of shares of beneficial interest
         in exchange for debt            $       --   $       --  $        847
     Cancellation of indebtedness on
         Due to Advisor                  $       --   $       --  $     19,519
     Conversion of note payable to
         contributed capital             $       --   $       --  $     20,000
     32,000 shares of Philips International
         Realty Corp. common stock received
         in exchange for real estate     $  1,600,000 $       --  $       --
     Assumption of 1st mortgage by
         Philips International Realty Corp.
                                         $    546,940 $       --  $       --
     3,733 share of Philips international
         Realty Corp. common stock
         distributed as a dividend       $    187,200 $       --  $       --
     Income taxes to be paid by Philips
         International Realty Corp. as a
         condition of the sale of the real
         estate                          $     15,000 $       --  $       --

</TABLE>
<PAGE>

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                   ACCOUNTING AND FINANCIAL DISCLOSURE.

                  NONE


ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

     The Trustees  collectively have ultimate control over the management of the
Trust and the conduct of its affairs.  Peter Stein, the Managing  Trustee,  (See
Item 13 -  Certain  Relationships  and  Related  Transactions)  administers  the
day-to-day operations of the Trust.

     Under the  Declaration of Trust,  the Trustees or their nominees hold legal
title to the  property  of the  Trust.  Independent  Trustees  will at all times
comprise a majority of the Trustees in office.  The Trustees serve for a term of
one year or until their  successors  are elected and  qualified.  Trustees  were
re-elected at the annual  meeting.  The Declaration of Trust calls for a minimum
of three Trustees,  and a majority of the Trustees must be independent Trustees.
Should a trustee resign and there are less than three  trustees,  then the Trust
may operate as if it has the required  minimum  Trustees  until a new Trustee is
appointed,  which shall be done within sixty days. A Trustee may be removed with
cause by all the remaining Trustees,  or with or without cause by the holders of
a majority of the outstanding Shares. The independent  Trustees do not serve the
Trust on a  full-time  basis and will  devote  only so much of their time to the
Trust as is necessary or required for the conduct of the Trust's business.  Each
of the  independent  Trustees  has,  and  will  continue  to have,  a  principal
occupation  and/or  source  of  income  other  than  that of the Trust and it is
contemplated  that they will not devote a  substantial  portion of their time to
the discharge of their duties as Trustees.

The Trustees are as follows:

PETER M. STEIN

     Mr.  Stein,  who is 46 years old, has a 24-year  involvement  in investment
real  estate,  being  involved in over 55  investment  programs.  Mr.  Stein has
directed  his own firm since  graduating  from  Lafayette  College  in 1973.  As
Managing Trustee (See Item 13 - Certain  Relationships and Related Transactions)
of the Trust, Mr. Stein oversees the  administration  of the Trust, and as such,
is empowered to implement the intentions of the Trustees.
<PAGE>

JAY GOLDMAN

     Jay Goldman, a lawyer in Boston,  Massachusetts,  received a B.A. from Lake
Forrest  College,  a J.D.  from  Boston  University  Law  School,  and a  L.L.M.
(Taxation)  from Boston  University Law School.  He has extensive  experience in
various segments of the real estate industry including development, finance, and
tax related syndications.

     In addition to his decades of real estate experience,  Mr. Goldman has been
involved in a broad range of investment  banking and financial advisory services
for principals and joint venture partners,  including such services for start up
and  emerging  companies.  Mr.  Goldman  has also been  active in  international
merchant banking transactions.

ROBERT H. REIBSTEIN

     Robert  H.  Reibstein  graduated  from  Boston  University  with a B.A.  in
Economics in 1978 and a Masters in Business  Administration with a concentration
in  Finance  in 1984.  He began  working in the real  estate  industry  in 1984,
acquiring   commercial  and  multi-family   properties  for  growth  and  income
syndication  funds.  Since 1988,  Mr.  Reibstein  has  provided  consulting  and
advisory services to private and institutional real estate companies and pension
funds.  Currently, he is involved with analysis and valuation of commercial debt
and equity  portfolios  for  portfolio  management  purposes.  Mr.  Reibstein is
experienced in structuring portfolios and managing the due diligence process for
commercial mortgage backed security transactions.


     Salvatore R. Carabetta, an Independent Trustee,  resigned on June 30, 1996.
A successor Trustee was not appointed until June 16, 1997, which is greater than
the 60 day period  required by the Declaration of Trust for the appointment of a
successor  Trustee.  The  Declaration  of the Trust requires a new Trustee to be
appointed  within 60 days.  On June 16, 1997 Robert  Reibstein  was appointed as
Trustee  of  the  Trust.  (See  Item  13 -  Certain  Relationships  and  Related
Transactions).


ITEM 11.   EXECUTIVE COMPENSATION.

     Under the Declaration of Trust,  the  Independent  Trustees are entitled to
receive  reasonable  compensation  for their services as Trustees (See Item 13 -
Certain  Relationships and Related  Transactions).  In addition,  the Trust will
reimburse the Trustees (including those who are affiliates) for travel and other
expenses incurred in connection with their duties as Trustees.

     The Managing  Trustee was paid $48,000 in 1997 as compensation for managing
the Trust's property.

     As part of their compensation for their involvement in the sale of the real
estate by the Trust to Philips International Realty Corp., two Trustees received
a total of 5,000  shares of Philips  International  Realty Corp.  common  stock,
valued at $250,000.  In addition the two Trustees  received warrants to purchase
an additional 8,000 shares of Philips International Realty Corp. common stock.
<PAGE>

     Management does not anticipate any management fees or other trustee fees to
be paid to any trustee unless the Trust is able to acquire new real property.




ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                  MANAGEMENT.

     To the best knowledge of the Trust,  on March 15, 1998, one  shareholder of
record owned more than five percent of its Shares of  Beneficial  Interest.  The
following Trustees hold shares of beneficial interest of the Trust.

<TABLE>
<CAPTION>

Name of                    Amount and Nature
Beneficial                   Of Beneficial                 Percentage
   Owner                    Ownership                      Ownership

<S>                        <C>                                <C>   
Gretchen Stein..........   46,109 Shares                      6.1680
Peter Stein ............   Indirectly - 46,109 Shares         6.1680
                           (same shares as above)
Jay Goldman ............   Indirectly - 50,679 Shares         6.7793
</TABLE>



ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     The Trust paid the Managing Trustee $48,000 and $46,000 as compensation for
managing  the Trust  property  for the years ended  December  31, 1997 and 1996,
respectively.  In addition,  Effective in November  1995,  the Trust offices are
located at premises  owned by the Managing  Trustee.  No rent was charged to the
Trust in 1997 and 1996, however,  the Trust paid utility bills for the office of
$2,325 in 1997 and $1,647 in 1996.

     In 1997 the Trust paid  health  insurance  premiums of $17,269 on behalf of
two  Trustees.  The Trust paid  $11,727 to a credit card account of the Managing
Trustee for  reimbursement of Trust expenses.  The Trust reimbursed two Trustees
$3,391 for travel expenses.

     The Trust had entered into an agreement  (the  "Advisory  Agreement")  with
First Investment Properties,  Inc. (the "Advisor"),  a Connecticut  Corporation,
pursuant  to  which  the  Advisor  was  acting  as  an  investment  advisor  and
administrator  of the Trust's  day-to-day  affairs.  Peter  Stein,  the Managing
Trustee of the Trust, was the manager of First Investment  Properties,  Inc. The
Advisory  Agreement, which was renewed  annually at the Meeting of Shareholders,
expired  October 26, 1995 and was not renewed.  For a description of the Trust's
former Advisory Agreement, See Note 2 to the Financial Statements.
<PAGE>

     Jay Goldman was  elected by the  shareholders  of the Trust as a Trustee of
the Trust on June 25, 1996 at a Special Meeting of the shareholders.

     Salvatore R. Carabetta, an Independent Trustee,  resigned on June 30, 1996.
A successor Trustee was not appointed until June 16, 1997, which is greater than
the 60 day period  required by the Declaration of Trust for the appointment of a
successor  Trustee.  The  Declaration  of the Trust requires a new Trustee to be
appointed  within 60 days.  On June 16, 1997 Robert  Reibstein  was appointed as
Trustee of the Trust.

     George Knude, a Trustee, resigned on November 13, 1995. A successor Trustee
was appointed June 25, 1996.

     On January 6, 1996 the Managing Trustee,  Peter Stein,  declared a dividend
without the express  approval of Mr.  Carabetta.  Mr.  Stein  believes  that the
request  for a vote  sent to Mr.  Carabetta  twice  by  certified  mail  and not
responded  to,  constitutes a presence at a vote and  abstention  from the vote.
Additionally  until June 25, 1996 when Jay Goldman was elected as Trustee of the
Trust, Peter Stein, the Managing Trustee, had been acting on behalf of the Trust
without the express  approval of the majority of the  Trustees.  Peter Stein and
Salvatore  Carabetta  were the sole  remaining  Trustees and since a majority of
Trustees need to be present to have a vote,  both Trustees  needed to be present
to hold a vote.  On June 16, 1997,  a Trustee  meeting was held and the Trustees
acknowledged  that the  Trust  was  operating  without  the full  complement  of
Trustees and  approved  and ratified all actions  carried out by the officers of
the Trust.

     On June 16, 1997, the Trustees adopted an Amended and Restated  Declaration
of Trust, which provides that the Trust may choose to elect officers,  including
a President who shall act as Managing  Trustee,  and which  further  defines the
powers and  limitations of the officers of the Trust.  As of September 30, 1997,
no officers of the Trust have been  appointed to oversee the  management  of the
Trust.

     In July 1993, the then trustees of Trust amended the  Declaration of Trust,
without  seeking or obtaining  shareholder  approval,  to,  among other  things,
create an open-end trust such that National  would have an infinite life.  Since
the date of such  amendment,  National and its trustees  have been acting at all
times in a manner  consistent  with such  infinite  life  status.  Although  the
current  Trustees  believe that such trustees  acted within their  discretionary
authority  under the original  Declaration of Trusts in effecting such amendment
without  seeking  shareholder  approval  and that such  amendment  was  properly
adopted,  there can be no assurance that one or more  shareholders  of the Trust
will not  challenge  the validity of such  amendment  premised upon the need for
such shareholder  approval under the terms of the original  Declaration of Trust
or seek  damages  for  breach  of the  contractual  provisions  of the  original
Declaration of Trust. If such a challenge was successfully brought, Trust may be
required to obtain  shareholder  approval of such amendment in order to maintain
its  infinite  life  status  (as  opposed  to  liquidating  one year  after  the
completion of the Formation  Transactions),  and there can be no assurances that
such shareholder approval, if required, would be obtained.
<PAGE>

     The Advisor was paid $50,286 for reimbursement for compensation and related
fringe  benefits  paid  to  the  employees  of the  Advisor  in  1995.  Due to a
limitation of the Operating Expenses allowed under the Declaration of the Trust,
none of the  reimbursements  are deductible by the Trust and are due back to the
Trust from the Advisor. In addition, due to the limitation of Operating Expenses
contained in the  Declaration of the Trust,  an additional  $35,195 was due from
the Advisor totaling  $85,481.  In 1994 the Independent  Trustees voted to waive
the limitation on Operating  Expenses due to the  Declaration of the Trust being
written on the premise that a substantially  larger  investment  portfolio would
support  the  general  and  administrative  expense  base.  Due to  the  current
composition  of the Trust's  portfolio,  the Trust has a  necessary,  but unfair
burden of absorbing  administrative expenses in excess of the limits provided in
the  Declaration  of the Trust.  No waiver has been  provided for the  Operating
Expenses incurred in excess of the limitation in 1995 due to the Trust's lack of
a Trustee's  meeting.  The  Managing  Trustee  believes  all of the expenses are
necessary  to the  operation  of the Trust and would have been  allowed  had the
Independent  Trustees voted on such expenses.  Peter Stein, the Managing Trustee
and the manager of First Investment  Properties,  Inc., the former Advisor, will
not ask the Independent Trustees to waive the excess expenses,  but instead will
apply such  amounts  paid or deemed paid to the Advisor as payments  towards the
note  payable  due  to  the  Advisor.  Mr.  Stein  believes  under  the  current
circumstances,  this action would be in the best interests of the  shareholders,
the  Trustees,  and any new  Trustees.  If such waiver were to be approved,  the
Trust  would  have had a net loss of  $53,289  for 1995  compared  to  income of
$32,192.


     The prior financial  statements referred to the note payable to the Advisor
as a Due to Consultant. This liability arose as a result of the costs associated
from  replacing  the prior  Advisor and Trustees in 1993.  The contract with the
consultant was entered into with First Investment Properties, Inc. and the Trust
was not a party to the agreement.  The  Declaration  of the Trust  prohibits the
Trust from directly paying third party contractors of the Advisor, but instructs
the Trust to pay the Advisor  directly and the Advisor is responsible for paying
the third party. The Trust has no liability to the consultant.  First Investment
Properties,   Inc.  is  solely  liable  to  the  consultant.   First  Investment
Properties, Inc. has received $85,481 directly and indirectly as payment of this
note.  The  remaining  $19,519  due to the  Advisor  has been  forgiven by First
Investment Properties, Inc. Additionally,  First Investment Properties, Inc. has
waived  all rights to  Advisory  fees  accrued  in 1995 of $32,607  and any fees
accrued  in  prior  years,  which  are  not  payable  until  such  time  as  the
shareholders  receive a cumulative,  but not  compounded  ten percent  return on
their investment.  First Investment  Properties,  Inc. has agreed to this waiver
due to the fact they recognize that such a condition will never be met.

     In March  1995,  the Trust  issued 847  shares of  Beneficial  Interest  to
Gretchen  Stein,  spouse of Peter Stein,  in exchange for the note payable at $1
per share per the agreement  with the Trust in 1994.  The remaining  $20,000 was
contributed as capital.  Mr. Stein filed the required Forms 4 and 5 on March 22,
1996 to the Trust and the Securities and Exchange  Commission,  which was not in
compliance  with Section 16(a) of the Exchange Act.  These were the only Reports
not filed on a timely basis.
<PAGE>

     In December 1994, the Trust issued 30,000 shares of beneficial  interest at
$1 per share to the shareholders of the Advisor in lieu of cash remuneration.

     On March 3, 1997, the Trust issued 30,416 shares of beneficial  interest to
a Profit Sharing  Retirement Plan for the benefit of a Trustee of the Trust. The
shares were issued for $1.2132 per share, totaling $36,900.

     As part of their compensation for their involvement in the sale of the real
estate by the Trust to Philips International Realty Corp., two Trustees received
a total of 5,000  shares of Philips  International  Realty Corp.  common  stock,
valued at $250,000. In addition,  the two Trustees received warrants to purchase
an additional 8,000 shares of Philips International Realty Corp. common stock.



<PAGE>




ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
                  FORM 8-K.

(a)      The following documents are enclosed:

     (1) Financial  Statements (See index to financial  statements filed as part
of Item 8).


     (2)  Supplemental  Financial  Statement  Schedules  (See index to financial
statements filed as part of Item 8).

     (3) Exhibits:

     3.1 Amended and Restated  Declaration of Trust of the  Registrant  (Exhibit
3.1 to Amendment No. 2 Filed on April 10, 1985 to the Registrant's  Registration
Statement on Form S-ll, File No. 2-95449, is incorporated herein by reference).

     3.2. Trustee's  Regulations of the Registrant (Exhibit 3.2 to Amendment No.
1 filed on March 14, 1985, to the  Registrant's  Registration  Statement on Form
S-ll, File No. 2-95449, is incorporated herein by reference).

     10.1  Advisory  Agreement  between  the  Registrant  and  First  Investment
Properties, Inc. (Exhibit 10.1 to Amendment No. 2 filed on August 3, 1993 to the
Registrant's Registration Statement on Form S-ll, File No. 2-95449, incorporated
herein by reference).

     10.2 Dividend  Reinvestment  Plan (Exhibit 10.2 to Amendment No. 2 filed on
April 10, 1985 to the Registrant's Registration Statement on Form S-ll, file No.
2-95449, is incorporated herein by reference).

     The Trust filed a Form  10-Q/A,  Amendment  No. 1 to the  Quarterly  Report
pursuant to Section 13 or 15(d) of the  Securities  and Exchange Act of 1934 for
the quarter ended September 30, 1997.

     The Trust filed a Form  10-Q/A,  Amendment  No. 2 to the  Quarterly  Report
pursuant to Section 13 or 15(d) of the  Securities  and Exchange Act of 1934 for
the quarter ended September 30, 1997.

(b) The  following  Reports on Form 8-K  ("Reports")  were filed during the last
quarter of the fiscal period.

                 None.



<PAGE>



Signatures

Pursuant to the  requirements of Section 13 of 15(d) 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.

NATIONAL PROPERTIES INVESTMENT TRUST



Date:   3/23/98                    By:   /s/ Peter M. Stein
                                                     Peter M. Stein
                                                     Managing Trustee

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  Registrant and
in the capacities and on the date indicated:


 Signature                            Title                   Date



 /s/ Preter M. Stein              Managing Trustee           3/23/98
 Peter M. Stein



 /s/ Jay Goldman                  Trustee                    3/28/98
 Jay Goldman



 /s/ Robert Reibstein             Trustee                    3/28/98
 Robert Reibstein