As filed with the Securities and Exchange Commission on October 17, 1997

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

                                   FORM 10-Q/A

(Mark One)
[ X ]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
         OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 1997

                                       OR

[     ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
         OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to _______________

Commission File Number:             1-8063

                     California Real Estate Investment Trust
             (Exact name of registrant as specified in its charter)

            California                               94-6181186
 (State or other jurisdiction of                 (I.R.S. Employer
  incorporation or organization)                 Identification No.)

131 Steuart Street, Suite 200, San Francisco, CA           94105
    (Address of principal executive offices)            (Zip Code)

                                 (415) 905-0288
              (Registrant's telephone number, including area code)

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

Yes [ X ]         No [    ]



                      APPLICABLE ONLY TO CORPORATE ISSUERS:

     Indicate the number of shares  outstanding of each of the issuer's  classes
of common stock as of the close of the latest practical date.

               Class                             Outstanding at March 31, 1997
Common Shares of Beneficial Interest
$1.00 par value ("Common Shares")                         9,137,335

629215.3

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

                     CALIFORNIA REAL ESTATE INVESTMENT TRUST
-------------------------------------------------------------------------------

INDEX                                                                PAGE

Part I.  Financial Information

         Item 1:  Financial Statements

                  Consolidated Balance Sheets -
                      March 31, 1997 and December 31, 1996            1

                  Consolidated Statements of Operations -
                      For the Three Months Ended
                      March 31, 1997 and 1996                         2

                  Consolidated Statements of Cash Flows -
                      For the Three Months Ended
                      March 31, 1997 and 1996                         3

                  Notes to Consolidated Financial Statements          4



629215.3

<PAGE>



                          PART I. FINANCIAL INFORMATION
-------------------------------------------------------------------------------
Item 1.  Financial Statements
-------------------------------------------------------------------------------


                     CALIFORNIA REAL ESTATE INVESTMENT TRUST
                                 AND SUBSIDIARY
                           Consolidated Balance Sheets

<TABLE>
<CAPTION>

                                                                            March 31,         December 31,
                                                                               1997               1996
                                                                           (Unaudited)         (Audited)
         ASSETS

<S>                                                                       <C>                <C>
Investments, Generally Held for Sale:
     Rental properties                                                    $         --       $  8,585,000
     Notes receivable, net of valuation allowances and deferred gains
         of $6,127,000 at March 31, 1997 and December 31, 1996               2,658,000          1,576,000
     Marketable securities available for sale                               13,141.000         14,115,000
                                                                           -----------       ------------
                                                                            15,799,000         24,276,000

Cash                                                                         8,330,000          4,698,000
Receivables, net of allowance of $1,126,000 and $1,001,000
     at March 31, 1997 and December 31, 1996, respectively                     687,000            707,000
Other assets                                                                   208,000            355,000
                                                                           -----------       ------------

              Total Assets                                                $ 25,024,000       $ 30,036,000
                                                                           ===========        ===========

         LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
     Long-term notes payable, collateralized by deeds of trust
         on rental properties                                             $    880,000       $  5,169,000
     Accounts payable and accrued expenses                                     113,000            326,000
     Other liabilities                                                              --             70,000
                                                                           -----------        -----------

              Total Liabilities                                                993,000          5,565,000
                                                                           -----------        -----------

Shareholders' Equity:
     Shares of beneficial interest, par value $1 a share; unlimited
         authorization, 9,137,000 shares outstanding at
         March 31, 1997 and December 31, 1996                                9,137,000          9,137,000
     Additional paid-in capital                                             55,145,000         55,118,000
     Unrealized holding income (loss) on marketable securities                  19,000           (22,000)
     Accumulated deficit                                                   (40,270,000)       (39,762,000)
                                                                           -----------        ----------- 

              Total Shareholders' Equity                                    24,031,000         24,471,000
                                                                           -----------        -----------

              Total Liabilities and Shareholders' Equity                  $ 25,024,000       $ 30,036,000
                                                                           ===========        ===========

</TABLE>


           See accompanying notes to consolidated financial statements.

629215.3

<PAGE>



                     CALIFORNIA REAL ESTATE INVESTMENT TRUST
                                 AND SUBSIDIARY
                      Consolidated Statements of Operations
                                   (Unaudited)

                                                       Three Months Ended
                                                           March 31,
                                                     1997              1996
                                                     ----              ----

Revenues:
     Rent                                        $  236,000         $ 569,000
     Interest                                       323,000           302,000
     Other                                           54,000                --
                                                   --------          --------
                                                    613,000           871,000
                                                    -------          --------

Expenses:
     Operating expenses                             123,000           148,000
     Property management                             14,000            27,000
     Depreciation and amortization                   21,000             5,000
     Interest                                        99,000           137,000
     General and administrative                     432,000           413,000
                                                    -------          --------
                                                    689,000           730,000
                                                    -------          --------

         Income (loss) before gain (loss) on
              sale of investments                   (76,000)          141,000

Gain (loss) on sale of investments                 (432,000)          299,000
                                                 -----------         --------

         Net income (loss)                      $  (508,000)        $ 440,000
                                                 ===========         ========

Net income (loss) per share of
   beneficial interest                          $     (0.06)        $    0.05
                                                 ===========         ========




          See accompanying notes to consolidated financial statements.


629215.3

<PAGE>



                     CALIFORNIA REAL ESTATE INVESTMENT TRUST
                                 AND SUBSIDIARY
                      Consolidated Statements of Cash Flows
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                              Three Months Ended
                                                                                  March 31,
                                                                           1997              1996
                                                                           ----              ----

<S>                                                                   <C>               <C>
Cash flows from operating activities:
     Net income (loss)                                                $   (508,000)     $   440,000
                                                                       -----------       ----------
     Adjustments to reconcile net income to net
        cash provided by operating activities:
         Depreciation and amortization                                      21,000            5,000
         Loss (gain) on sale of investments                                432,000         (299,000)
     Changes in assets and liabilities:
         Decrease (increase) in receivables, net                            20,000           (9,000)
         (Increase) in other assets                                        147,000          (59,000)
         (Decrease) increase in accounts payable
              and accrued expenses                                        (213,000)         258,000
         (Decrease) increase in other liabilities                          (70,000)           2,000
                                                                       -----------       ----------
              Total adjustments to net (loss) income                       337,000         (102,000)
                                                                       -----------       ----------
              Net cash (used) provided by operating activities            (171,000)         338,000
                                                                       -----------       ----------

Cash flows from investing activities:
     Proceeds from sale of investments                                   7,306,000               --
     Improvements to rental properties                                     (64,000)         (45,000)
     Principal collections on notes receivable                               8,000           12,000
     Principal collections on marketable securities                      1,015,000               --
                                                                       -----------       ----------
              Net cash provided by (used in) investing activities        8,265,000          (33,000)
                                                                       -----------       ----------

Cash flows from financing activities:
     Principal payments on long-term notes payable                      (4,289,000)         (23,000)
     Additional paid-in capital                                             27,000               --
                                                                       -----------       ----------
         Net cash used in financing activities                          (4,262,000)         (23,000)
                                                                       -----------       ----------

              Net increase in cash                                       3,832,000          282,000
     Cash, beginning of period                                           4,698,000        4,778,000
                                                                       -----------       ----------

     Cash, end of period                                              $  8,530,000      $ 5,060,000
                                                                       ===========       ==========
</TABLE>


          See accompanying notes to consolidated financial statements.

629215.3

<PAGE>



                     CALIFORNIA REAL ESTATE INVESTMENT TRUST
                                 AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   ----------

1.   Organization and Basis of Presentation:
     --------------------------------------

                                  Organization
                                  ------------

     California  Real Estate  Investment  Trust (the "Trust" or  "CalREIT")  was
     organized  under  the  laws  of  the  State  of  California  pursuant  to a
     Declaration of Trust dated September 15, 1966.

     The Trust became a partner of Totem Square,  L. P. ("Totem"),  a Washington
     Limited Partnership in which the Trust owns a 59% interest, on November 30,
     1990. The Trust also formed CalREIT Totem Square, Inc. ("Cal- CORP") to act
     as general partner of Totem. Cal-CORP has a 1% interest in Totem, and Totem
     Square Associates, an unrelated party, has the remaining 40%.

     In 1994 the Trust  operated as a subsidiary  of The  Peregrine  Real Estate
     Trust ("Peregrine"),  which then held 76% of the Trust's outstanding Common
     Shares.  In April 1994,  Peregrine  replaced the CalREIT  Board of Trustees
     with a slate of its own  Trustees.  In 1995,  the Board was  expanded  from
     three to five Trustees, two of whom were independent. In 1996, the Board of
     Trustees  was  comprised  of two  independent  Trustees,  one  Trustee  who
     concurrently served on the Board of Trustees of Peregrine, a former officer
     of the Trust, and the then Chief Executive Officer of the Trust.

     On January 3, 1997, Peregrine sold its entire 76%-ownership interest in the
     Trust  to  CalREIT  Investors  Limited  Partnership   ("CRIL"),  an  entity
     controlled  by  Samuel  Zell.   Simultaneous   with  the  closing  of  this
     Transaction,  the Board of  Trustees  was  expanded to seven  members;  one
     Trustee, who also served on the Peregrine Board of Trustees,  resigned; and
     three additional Trustees, nominated by CRIL, were appointed to the Board.

     As of March  31,  1997,  the Trust  had sold its two  remaining  commercial
     rental  properties,  Fulton  Square  Shopping  Center  and Totem  Square in
     Sacramento,  California and in Kirkland,  Washington,  respectively. At the
     end of the first quarter, the Trust owned a mortgage note portfolio of four
     notes encompassing approximately $8,785,000 in loans with an aggregate book
     value of approximately $2,658,000.  These loans bear interest at an overall
     effective rate of approximately 8%. They are collateralized by mortgages on
     real property.  Three of the  investments in the four loans were originated
     by the Trust in connection with the disposition of Trust  properties  prior
     to  1996.  The  remaining  note,  in  the  face  amount  of   approximately
     $1,090,000, was made in conjunction with the sale of Fulton Square Shopping
     Center in February 1997.

     Additionally,  as of March 31, 1997 the Trust had approximately $13,141,000
     invested in liquid mortgage-backed securities.


629215.3

<PAGE>



                     CALIFORNIA REAL ESTATE INVESTMENT TRUST
                                 AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   ----------

1.   Organization and Basis of Presentation, continued:
     --------------------------------------

                              Basis of Presentation
                              ---------------------

     The accompanying  financial  statements are unaudited;  however,  they have
     been prepared in accordance with generally accepted  accounting  principles
     for interim  financial  information  and in conjunction  with the rules and
     regulations of the Securities and Exchange Commission. Accordingly, they do
     not  include  all  of  the  disclosures   required  by  generally  accepted
     accounting principles for complete financial statements.  In the opinion of
     management, all adjustments (consisting solely of normal recurring matters)
     necessary for a fair  presentation  of the financial  statements  for these
     interim  periods  have been  included.  The results for the interim  period
     ended March 31, 1997, are not  necessarily  indicative of the results to be
     obtained for the full fiscal year.  These  financial  statements  should be
     read  in  conjunction  with  the  December  31,  1996,   audited  financial
     statements  and notes  thereto,  included  in the  California  Real  Estate
     Investment  Trust Annual Report on Form 10-K.  The  accompanying  unaudited
     consolidated  financial  statements  of California  Real Estate  Investment
     Trust include the accounts of the Trust, Cal-CORP and Totem.

                            Stock-Based Compensation
                            ------------------------

     As of March 31,  1997 and  December  31,  1996 there were no stock  options
     outstanding nor stock option plans in place.

2.   Investments in Notes Receivable:

     As of March 31, 1997 and December 31, 1996,  the Trust had long-term  notes
     receivable,  collateralized by deeds of trust (before valuation  allowances
     and deferred gains) of $8,785,000 and $7,703,000,  respectively.  The notes
     are collateralized by real estate properties in California and Arizona.  In
     conjunction  with the Trust's plan to monetize  assets,  its mortgage  note
     investments are classified for accounting  purposes as "held for sale." The
     notes bear  interest  at rates  ranging  from 7.63% to 9.5% as of March 31,
     1997.  For the quarter ended March 31, 1997 the overall  effective rate was
     approximately 8%.





629215.3

<PAGE>



                     CALIFORNIA REAL ESTATE INVESTMENT TRUST
                                 AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   ----------

3.   Investments in Marketable Securities:

     At  March  31,  1997,  the  Trust  had   $13,141,000   invested  in  liquid
     mortgage-backed securities classified as "available-for-sale."

     Statement  of  Financial  Accounting  Standards  No. 115,  "Accounting  for
     Certain  Investments in Debt and Equity  Securities,"  (SFAS 115) issued in
     May 1993 requires  that at the date of  acquisition  and at each  reporting
     date,  debt and equity  securities  be  classified  as  "held-to-maturity,"
     "trading," or "available for sale." Investments in debt securities in which
     the Trust has the  positive  intent  and  ability to hold to  maturity  are
     required  to  be  classified  as   "held-to-maturity."   "Held-to-maturity"
     securities are required to be stated at cost and adjusted for  amortization
     of premiums and discounts to maturity in the  consolidated  balance  sheet.
     Investments  in debt  and  equity  securities  that are not  classified  as
     "held-to-maturity"  and equity  securities  that have readily  determinable
     fair values are to be classified as "trading" or  "available-for-sale"  and
     are measured at fair value in the  consolidated  balance sheet.  Securities
     that are bought and held principally for the purpose of selling them in the
     near term are classified as "trading."  Unrealized holding gains and losses
     for "trading" securities are included in earnings.

     Investments  that are not  classified  as  "held-to-maturity"  or "trading"
     securities are classified as "available-for-sale." Unrealized holding gains
     and losses for  "available-for-sale"  securities are excluded from earnings
     and  reported  as  a  separate  component  of  shareholders'  equity  until
     realized.

     In  accordance  with  SFAS  115,  the  Trust   determines  the  appropriate
     classification  at the time of purchase and reevaluates such designation at
     each balance sheet date.


629215.3

<PAGE>



                     CALIFORNIA REAL ESTATE INVESTMENT TRUST
                                 AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   ----------

3.   Investments in Marketable Securities, continued:
     ------------------------------------

     At March 31, 1997, the Trust's "available-for-sale" securities consisted of
     the following:
<TABLE>
<CAPTION>

                                                                        (In thousands)
                                                                Unrealized            Estimated
                                                   Cost      Gains      Losses       Fair Value

<S>                                              <C>         <C>         <C>          <C>
     Federal National Mortgage
       Association, adjustable rate interest
       currently at 7.842%, due April 1, 2024    $  2,681    $    --     $  (17)      $  2,664

     Federal Home Loan Mortgage
       Corporation, adjustable rate interest
       currently at 7.666%, due June 1, 2024          908         --         (3)           905

     Federal National Mortgage
       Association, adjustable rate interest
       currently at 7.311%, due April 1, 2025         656         --         (5)           651

     Federal National Mortgage
       Association, adjustable rate interest
       currently at 6.147%, due May 1, 2026         3,089         17         --          3,106

     Federal National Mortgage
       Association, adjustable rate interest
       currently at 6.156%, due June 1, 2026        5,788         27         --          5,815
                                                  -------     ------      -----        -------

                                                 $ 13,122    $    44     $  (25)      $ 13,141
                                                  =======     ======      =====        =======
</TABLE>

     The  maturity  dates  above  are not  necessarily  indicative  of  expected
     maturities as principal is often prepaid on such instruments.

4.   Long-Term Notes Payable:

     The Trust has one note payable to John Alden Life Insurance Company with an
     interest  rate of 9.25% per  annum.  Principal  and  interest  are  payable
     monthly until August 7, 2017 when the entire unpaid  principal  balance and
     any unpaid interest are due.




629215.3

<PAGE>



                     CALIFORNIA REAL ESTATE INVESTMENT TRUST
                                 AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   ----------

5.   Income Taxes:

     The Trust has elected to be taxed as a real estate  investment trust and as
     such,  is not  taxed  on  that  portion  of its  taxable  income  which  is
     distributed to shareholders,  provided that at least 95% of its real estate
     trust taxable income is distributed  and that the Trust meets certain other
     REIT requirements.

6.   Related-Party Transactions:

     Pursuant to an oral agreement  with  Peregrine,  costs for certain  general
     administrative services, including executive services, accounting services,
     treasury services,  financial reporting and internal bookkeeping  services,
     shareholder  relations,  and directors and officers  insurance  were shared
     with Peregrine.  The shared costs were allocated to the Trust and Peregrine
     based  upon  their   respective  asset  values  (real  property  and  notes
     receivable),  subject to annual negotiation. At March 31, 1997 and December
     31, 1996, the Trust had $9,000, and $31,000,  respectively due to Peregrine
     pursuant  to  the  cost   allocation   arrangement.   The  cost  allocation
     arrangement  between the Trust and Peregrine  was  terminated on January 7,
     1997.

7.   Statements of Cash Flows Supplemental Information:

     In  connection  with the sale and  foreclosure  of  properties,  the  Trust
     entered into various non-cash transactions as follows:

                                           For the Three Months Ended

                                          March 31,          March 31,
                                            1997               1996
                                          --------           --------

     Sales price less selling costs     $ 8,396,000       $  1,033,000
     Amount due from Buyer                1,090,000         (1,033,000)
                                         ----------        -----------

     Net cash received                  $ 7,306,000       $         --
                                         ==========        ===========

     Cash  paid  for  interest  on  the  Trust's  outstanding  debt  during  the
     three-month  periods  ended  March  31,  1997 and  1996,  was  $99,000  and
     $139,000, respectively.


629215.3

<PAGE>



                     CALIFORNIA REAL ESTATE INVESTMENT TRUST
                                 AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   ----------

8.   Per Share Data:
     --------------

     Per share data is for the  three-month  periods  ended March 31, 1997,  and
     March 31,  1996,  based on the  weighted  average  number of Common  Shares
     outstanding  during each period. The weighted average number of shares used
     in the computation was 9,137,000.

9.   Gain (loss) on Sale of Investments:
     ----------------------------------

     Components  of the gain  (loss)  on the sale of  investments  for the three
     months ended March 31, 1997, and March 31, 1996,  were as follows:

                                                          For the
                                                     Three Months Ended
                                                         March 31,
                                                      1997           1996
                                                      ----           ----

     Sale of Redfield Commercial Center          $      --       $  299,000
     Sale of Fulton Square Shopping Center          (34,000)             --
     Sale of Totem Square                          (398,000)             --
                                                  ----------      ---------

                                                 $ (432,000)     $  299,000
                                                  ==========      =========

10.  Changes in and  Disagreements  with Accountants on Accounting and Financial
     ---------------------------------------------------------------------------
     Disclosure
     ----------

     On April 14, 1997,  the Board of Trustees  adopted a resolution  (i) not to
     retain Coopers & Lybrand LLP ("C&L") as the Trust's auditors for the fiscal
     year ending  December  31, 1997 and (ii) to engage Ernst & Young LLP as the
     Trust's independent auditors for the fiscal year ending December 31, 1997.

     The reports of C&L on the Trust's  consolidated  financial statements as of
     and for the two years ended December 31, 1996 and December 31, 1995 did not
     contain an adverse opinion or a disclaimer  opinion nor were they qualified
     or modified as to uncertainty, audit scope or accounting principles.

     During the Trust's two most recent  fiscal  years ended  December 31, 1996,
     there were no disagreements with C&L on any matter of accounting principles
     or  practices,   financial  statement  disclosure,  or  auditing  scope  or
     procedure, which disagreements, if not resolved to the satisfaction of C&L,
     would have caused them to make reference  thereto in their report(s) on the
     Trust's  financial  statements for such fiscal year(s),  nor were there any
     "reportable  events" within the meaning of Item  304(a)(1)(v) of Regulation
     S-K promulgated under the Exchange Act.


629215.3

<PAGE>


                                   SIGNATURES


Pursuant  to the  requirement  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.


                                        CALIFORNIA REAL ESTATE INVESTMENT TRUST



October 17, 1997                        /s/ John R. Klopp
----------------                        -----------------------
     Date                               John R. Klopp
                                        Chief Executive Officer

629215.3

<PAGE>