SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

                   QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarter ended March 31, 1997              Commission file number 0-13693


                       VININGS INVESTMENT PROPERTIES TRUST
                                AND SUBSIDIARIES

               (Exact name of registrant as specified in charter)


         Massachusetts                                            13-6850434
         -------------                                            ----------
(State or other jurisdiction of                                 (I.R.S. Employer
incorporation or organization)                               Identification No.)



              3111 Paces Mill Road, Suite A-200, Atlanta, GA 30339
              (Address of principal executive offices) (Zip Code)


       Registrant's telephone number, including area code: (770) 984-9500
                                 --------------







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___
            --


      Shares of Beneficial Interest outstanding at May 12, 1997: 1,080,516



<PAGE>

                       VININGS INVESTMENT PROPERTIES TRUST
                                AND SUBSIDIARIES

                         INDEX OF FINANCIAL INFORMATION


PART I   FINANCIAL INFORMATION                                              PAGE

Item 1   Financial Statements

         Consolidated Balance Sheets at March 31, 1997 (unaudited)
         and December 31, 1996                                                 3

         Consolidated Statements of Operations (unaudited) for the
         three months ended March 31, 1997 and 1996                            4

         Consolidated Statements of Shareholders' Equity for the
         year ended December 31, 1996 and the three months
         ended March 31, 1997 (unaudited)                                      5

         Consolidated Statements of Cash Flows (unaudited)
         for the three months ended March 31, 1997 and 1996                    6

         Notes to Consolidated Financial Statements                            7

Item 2   Management's Discussion and Analysis of Financial
         Condition and Results of Operations                                  14

PART II  OTHER INFORMATION/SIGNATURE

Item 6   Exhibits and Reports on Form 8-K                                     19

         Signature                                                            20



<PAGE>

<TABLE>



                       VININGS INVESTMENT PROPERTIES TRUST
                                AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                   (unaudited)
<CAPTION>
                                                               March 31,       December 31,
                                                                 1997             1996
                                                           --------------      ----------
<S>                                                        <C>                    <C>

ASSETS

Real estate assets:
    Land .................................................   $  1,470,500    $  1,470,500
    Buildings and improvements ...........................      9,268,912       9,218,263
    Furniture, fixtures & equipment ......................        794,553         783,691
     Less:  accumulated depreciation .....................       (719,823)       (613,918)
                                                             ------------    ------------
         Net real estate assets ..........................     10,814,142      10,858,536


Cash and cash equivalents ................................        217,928         171,736
Cash escrows .............................................        171,946         192,611
Receivables and other assets .............................         61,518          86,002
Deferred financing costs, less accumulated amortization
    of $29,252 and $ 19,502 at March 31, 1997
    and December 31, 1996, respectively ..................        195,174         204,925

Deferred leasing costs, less accumulated amortization of
    $29,409 and $28,470 at March 31, 1997 and
    December 31, 1996, respectively ......................          9,752           5,659
                                                             ------------    ------------

Total Assets .............................................   $ 11,470,460    $ 11,519,469
                                                             ============    ============


LIABILITIES AND SHAREHOLDERS' EQUITY

Mortgage note payable ....................................   $  7,359,109    $  7,371,676
Line of credit ...........................................      1,568,104       1,568,104
Accounts payable and accrued liabilities .................        362,577         347,141
                                                             ------------    ------------

       Total Liabilities .................................      9,289,790       9,286,921
                                                             ------------    ------------

Contingencies (Note 11)

Shareholders' Equity:
    Shares of beneficial interest, without par value,
      unlimited shares authorized, 1,080,517 and 1,080,528
      shares issued and outstanding at March, 31, 1997 and
      December 31, 1996, respectively ....................     18,731,705      18,731,763

    Cumulative earnings ..................................     37,827,494      37,879,314

    Cumulative distributions .............................    (54,378,529)    (54,378,529)
                                                             ------------    ------------
       Total Shareholders' Equity ........................      2,180,670       2,232,548
                                                             ------------    ------------

Total Liabilities and Shareholders' Equity ...............   $ 11,470,460    $ 11,519,469
                                                             ============    ============



The accompanying notes are an integral part of these financial statements.
</TABLE>

<PAGE>

                       VININGS INVESTMENT PROPERTIES TRUST
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (unaudited)


                                                The three months ended March 31,
                                                --------------------------------
                                                         1997            1996
                                                    ------------      ---------
REVENUES

     Rental revenues .............................   $   576,505    $   151,731
     Other property revenues .....................        18,986          9,249
     Interest income .............................           873         91,264
     Other income ................................          --          141,229
                                                     -----------    -----------
                                                         596,364        393,473
                                                     -----------    -----------

EXPENSES

     Property operating and maintenance ..........       256,563         55,054
     Depreciation and amortization ...............       106,844         20,749
     Amortization of deferred financing costs ....         9,751           --
     Interest expense ............................       199,710           --
     General and administrative ..................        75,316        365,080
     Investment advisor's fees ...................             0        333,461
                                                     -----------    -----------
                                                         648,184        774,344
                                                     -----------    -----------

       Loss before loss on real estate investments       (51,820)      (380,871)

     Loss on real estate investments .............          --          (26,800)
                                                     -----------    -----------

       Net loss ..................................   $   (51,820)   $  (407,671)
                                                     ===========    ===========

EARNINGS PER SHARE

     Loss before loss on real estate investments .   $     (0.05)   $     (0.36)
     Loss on real estate investments .............          --            (0.02)
                                                     -----------    -----------

       Net loss ..................................   $     (0.05)   $     (0.38)
                                                     ===========    ===========

WEIGHTED AVERAGE SHARES OUTSTANDING ..............     1,080,517      1,080,625
                                                     ===========    ===========




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






<PAGE>
<TABLE>


                       VININGS INVESTMENT PROPERTIES TRUST
                                AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
 For the year ended December 31, 1996 and the three months ended March 31, 1997
                                   (unaudited)


<CAPTION>
                                           Shares of                                            Total
                                           beneficial       Cumulative       Cumulative     shareholders'
                                            interest         earnings      distributions       equity
                                         --------------    ------------    -------------    -------------
<S>                                                        <C>                <C>                 <C>  
BALANCE AT DECEMBER 31, 1995 ...........   $ 36,973,249    $ 38,689,392    $(54,378,529)   $ 21,284,112

Net Loss ...............................           --          (810,078)           --          (810,078)

Retirement of Shares ...................           (536)           --              --              (536)

Distributions to shareholders
     ($16.88 per share return of capital
     for federal income tax purposes) ..    (18,240,950)           --              --       (18,240,950)
                                           ------------    ------------    ------------    ------------

BALANCE AT DECEMBER 31, 1996 ...........     18,731,763      37,879,314     (54,378,529)      2,232,548

Net Loss ...............................           --           (51,820)           --           (51,820)

Retirement of Shares ...................            (58)           --              --               (58)
                                           ------------    ------------    ------------    ------------

BALANCE AT MARCH 31, 1997 ..............   $ 18,731,705    $ 37,827,494    $(54,378,529)   $  2,180,670
                                           ============    ============    ============    ============



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

</TABLE>

<PAGE>
<TABLE>

                       VININGS INVESTMENT PROPERTIES TRUST
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<CAPTION>

                                                                  For the three months ended March 31,
                                                                  ------------------------------------

                                                                            1997           1996
                                                                       ------------    ------------
<S>                                                                    <C>             <C> 
CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss ...........................................................   $    (51,820)   $   (407,671)

Adjustments to reconcile net loss to net cash provided by
   (used in) operating activities:

        Depreciation and amortization ..............................        106,844          20,749
        Amortization of deferred financing costs ...................          9,751            --
        Loss on real estate investments ............................           --            26,800
        Changes in assets and liabilities:
          Cash escrows .............................................         20,665            --
          Receivables and other assets .............................         24,484         141,168
          Capitalized leasing costs ................................         (5,032)         (5,639)
          Accounts payable, accrued liabilities and due to affiliate         15,436        (454,953)
                                                                       ------------    ------------

        Total adjustments ..........................................        172,148        (271,875)
                                                                       ------------    ------------

Net cash provided by (used in) operating activities ................        120,328        (679,546)
                                                                       ------------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES:

The Thicket capital expenditures ...................................        (61,511)           --
Peachtree capital expenditures .....................................           --            (9,077)
Sales proceeds from real estate investments ........................           --           673,200
                                                                       ------------    ------------

Net cash provided by (used in) investing activities ................        (61,511)        664,123
                                                                       ------------    ------------

CASH FLOWS FROM FINANCING ACTIVITIES:

Principal repayments on mortgage payable ...........................        (12,567)           --
Purchase of retired shares .........................................            (58)           --
Distributions to shareholders ......................................           --       (18,240,950)
                                                                       ------------    ------------

Net cash used in financing activities ..............................        (12,625)    (18,240,950)
                                                                       ------------    ------------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ...............         46,192     (18,256,373)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD ...................        171,736      18,470,031
                                                                       ------------    ------------

CASH AND CASH EQUIVALENTS AT END OF PERIOD .........................   $    217,928    $    213,658
                                                                       ============    ============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Interest paid ......................................................   $    199,710    $       --
                                                                       ============    ============


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

</TABLE>

<PAGE>


                       VININGS INVESTMENT PROPERTIES TRUST
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 1997
                                   (unaudited)

NOTE 1 - FORMATION AND ORGANIZATION
-----------------------------------

         Vinings  Investment  Properties  Trust  ("Vinings"  or the "Trust") was
         organized  on  December 7, 1984 under the laws of the  Commonwealth  of
         Massachusetts as a twenty-year finite-life real estate investment trust
         ("REIT")  under  the  Internal  Revenue  Code  of  1986.   Vinings  was
         originally  organized for the purpose of making real estate investments
         consisting  primarily of mortgage loans and was to liquidate at the end
         of approximately ten years in accordance with its Declaration of Trust,
         provided,  however,  that the Trustees have the absolute  discretion to
         determine in good faith such  termination  date as would be in the best
         interests of the  shareholders.  On January 3, 1996, the final asset to
         be liquidated was sold and final liquidating dividends were declared.

         On  January  31,  1996,  Vinings  Investment  Properties,   Inc.  ("the
         Purchaser")  commenced a tender offer for a minimum of a majority and a
         maximum  of 85% of the  issued  and  outstanding  shares of  beneficial
         interest  without par value of the Trust (the "Shares"),  at a purchase
         price of $0.47 per share ($3.76 per share adjusted for the Share Split,
         as hereinafter  defined) (the "Tender Offer"). The Tender Offer expired
         in accordance  with its terms on February 28, 1996,  and, in connection
         therewith,  the  Purchaser  accepted an aggregate  of 6,337,279  Shares
         (792,159 Shares adjusted for the Share Split, as hereinafter  defined),
         representing approximately 73.3% of the outstanding Shares, for a total
         acquisition  price of $2,978,521.  The remaining assets of Vinings were
         Peachtree  Business  Center and  approximately  $163,000  in cash.  The
         purpose of the Tender Offer was for the Purchaser to acquire control of
         Vinings  and to  rebuild  the  Trust's  assets  by  expanding  into the
         multifamily  property  markets.  In connection with the consummation of
         the  Tender  Offer,  all of the  Trustees  and  officers  of the  Trust
         resigned and were replaced with designees of the Purchaser. The name of
         the  Trust  was  changed  from  Mellon  Participating  Mortgage  Trust,
         Commercial Properties Series 85/10 to Vinings. In addition, Vinings was
         an  externally  advised  REIT  for  which it paid  advisory  fees to an
         unrelated third party (the "Advisor").  Upon consummation of the Tender
         Offer,  the  relationship  with the Advisor was  terminated and Vinings
         became self-administered.

         On June 11, 1996, Vinings Investment  Properties,  L.P. (the "Operating
         Partnership"),  a Delaware limited partnership,  was organized. Vinings
         is the sole general  partner and a 98% limited partner in the Operating
         Partnership.  Through  its  ownership  of  Vinings  Holdings,  Inc.,  a
         Delaware corporation and wholly-owned subsidiary of the Trust, which is
         also a limited partner in the Operating Partnership, Vinings was a 100%
         economic owner of the Operating  Partnership  at March 31, 1997.  (This
         structure is commonly  referred to as an umbrella  partnership  REIT or
         "UPREIT.")


<PAGE>


         Vinings currently owns The Thicket Apartments  ("Thicket"),  a 254-unit
         apartment  complex  located  in  Atlanta,   Georgia,   through  Thicket
         Apartments,   L.P.,  a  Delaware  limited  partnership,  of  which  the
         Operating  Partnership is a 99% limited  partner and Thicket  Holdings,
         Inc., a Delaware corporation and wholly-owned subsidiary of Vinings, is
         the sole general partner.  Vinings also owns Peachtree  Business Center
         ("Peachtree"),   an  approximately  75,000  square  foot,  single-story
         business  park located in Atlanta,  Georgia,  through its  wholly-owned
         subsidiary, PBC Acquisition, Inc.

         On July 1, 1996,  Vinings  effected a 1-for-8  reverse share split (the
         "Share  Split") of its 8,645,000  outstanding  Shares.  Pursuant to the
         Share Split,  shareholders who tendered their Shares received one Share
         for every eight Shares  owned.  Vinings has  purchased and continues to
         purchase any fractional Shares resulting from the Share Split at a cost
         of $5.50 per share.  As of March 31,  1997,  a total of 108  fractional
         Shares  had been  repurchased  and  retired  leaving  1,080,517  Shares
         outstanding.  All share and per share data included in the accompanying
         financial  statements  and notes  thereto have been restated to reflect
         the Share Split.

NOTE 2 - BASIS OF PRESENTATION
------------------------------

         The consolidated  financial statements have been prepared in accordance
         with generally  accepted  accounting  principles for interim  financial
         information  and with the  instructions  to Form 10-Q and Article 10 of
         Regulation S-X. Accordingly, they do not include all of the information
         and footnotes required by generally accepted accounting  principles for
         complete  financial  statements.  In the  opinion  of  management,  all
         adjustments necessary (consisting only of normal recurring adjustments)
         for a fair presentation  have been included.  Operating results for the
         three month period ended March 31, 1997 are not necessarily  indicative
         of the results  that may be expected  for the year ending  December 31,
         1997.

         The   accompanying   consolidated   financial   statements  of  Vinings
         Investment  Properties  Trust  include  the  consolidated  accounts  of
         Vinings   Investment   Properties  Trust  and  its  subsidiaries.   All
         significant intercompany balances and transactions have been eliminated
         in consolidation.  The term "Vinings" or the "Trust" hereinafter refers
         to Vinings Investment Properties Trust and its subsidiaries,  including
         the Operating Partnership.

         These financial  statements should be read in conjunction with Vinings'
         audited   consolidated   financial  statements  and  footnotes  thereto
         included  in  Vinings'  Annual  Report on Form 10-K for the year  ended
         December 31, 1996, as amended.

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
---------------------------------------------------

         Income Taxes
         ------------

         Vinings  has elected to be taxed as a REIT under the  Internal  Revenue
         Code of 1986,  as  amended  (the  "Code").  As a result,  Vinings  will
         generally not be subject to federal income  taxation on that portion of
         its income that qualifies as REIT taxable income to the extent the

<PAGE>


         REIT distributes at least 95% of its taxable income to its shareholders
         and satisfies certain other requirements. Accordingly, no provision for
         federal income taxes has been included in the accompanying consolidated
         financial statements.

         Cash and Cash Equivalents
         -------------------------

         Vinings  considers  all highly  liquid  investments  purchased  with an
         original maturity of three months or less to be cash equivalents.

         Cash Escrows
         ------------

         Cash escrows consist of real estate tax, insurance, replacement reserve
         and repair  escrows held by the  mortgagee.  These funds are restricted
         accounts  and  released  solely  for the  purpose  for which  they were
         established.

         Use of Estimates
         ----------------

         The  preparation of financial  statements in conformity  with generally
         accepted  accounting  principles  requires  management  to make certain
         estimates and  assumptions  that affect the reported  amounts of assets
         and liabilities, the disclosure of contingent assets and liabilities at
         the  date of the  financial  statements  and the  reported  amounts  of
         revenues and expenses during the reporting period. Actual results could
         differ from those estimates.

         Real Estate Assets
         ------------------

         Real estate assets are stated at depreciated cost. Ordinary repairs and
         maintenance   are  expensed  as  incurred.   Major   improvements   and
         replacements  are  capitalized  and  depreciated  over their  estimated
         useful  lives when they extend the useful  life,  increase  capacity or
         improve efficiency of the related asset.  Depreciation is computed on a
         straight-line  basis over the useful  lives of the real  estate  assets
         (buildings  and  improvements,  5-40  years;  furniture,  fixtures  and
         equipment, 5 years; and tenant improvements, generally over the life of
         the related lease.)

         Revenue Recognition
         -------------------

         All leases are  classified as operating  leases and rental income
         is  recognized  when  earned  which  materially  approximates  revenue
         recognition on a  straight-line  basis.  Deferred  Financing Costs and
         Amortization

         Deferred  financing  costs  include  fees and costs  incurred to obtain
         financing  and are  capitalized  and  amortized  over  the  term of the
         related debt.

         Earnings (Loss) Per Share
         -------------------------

         Earnings  (loss) per share is computed  based on the  weighted  average
         number of shares  outstanding  during the period. All references in the
         accompanying financial statements and notes to the financial statements
         to the weighted  average number of shares  outstanding  and to earnings
         (loss) per share have been restated to reflect the Share Split.


<PAGE>


         Recent Accounting Pronouncements
         --------------------------------

         In February  1997,  the  Financial  Accounting  Standards  Board issued
         Statement of Financial  Accounting  Standards  No. 128,  "Earnings  per
         Share"  ("SFAS  128"),  which  supersedes  the  current   authoritative
         literature  and related  interpretations  for  earnings per share under
         Accounting  Principles  Board  Opinion  No.  15.  SFAS 128 will have no
         immediate  financial statement impact on Vinings since it currently has
         a simple  capital  structure and earnings per share will continue to be
         computed by dividing net income (loss) by the weighted  average  number
         of common shares  outstanding during the reporting period. For entities
         with   complex   capital   structures,   SFAS  128  will  require  dual
         presentation of basic and diluted earnings per share.  SFAS 128 becomes
         effective for financial  statements for both interim and annual periods
         ending after December 15, 1997.  Earlier  application is not permitted.
         Vinings  will adopt SFAS 128 during its  quarter and fiscal year ending
         December 31, 1997.

         Reclassification
         ----------------

         Certain 1996 financial  statement  amounts have been reclassified
         to conform with the current year presentation.

NOTE 4 - REAL ESTATE ASSETS
---------------------------

         The Thicket Apartments
         ----------------------

         On June 28,  1996,  Vinings  acquired  Thicket for a purchase  price of
         $8,650,000.  The  acquisition  was  financed by a mortgage  loan on the
         property in the amount of $7,392,000 and borrowings  from Vinings' line
         of credit.

         Peachtree Business Center
         -------------------------

         The Trust acquired  Peachtree  through a deed-in-lieu of foreclosure on
         April 12, 1990.  Peachtree was recorded at $1,700,000,  its fair market
         value,  which  was  less  than  the book  value  of  Vinings'  mortgage
         investment at the date of foreclosure.  Subsequent to the  acquisition,
         approximately $1,062,000 of improvements have been capitalized.

NOTE 5 - REAL ESTATE INVESTMENTS
--------------------------------

         Hawthorne Note
         --------------

         On March 30, 1995,  Vinings  sold  Hawthorne  Research and  Development
         Complex for $5,095,000 of which  $3,500,000 was paid at closing and the
         balance of $1,595,000 was payable  pursuant to a non-recourse  purchase
         money  note  (the  "Hawthorne  Note")  which was  subordinate  to first
         mortgage liens totaling $10,360,000.

         In connection with the  liquidation of assets,  Vinings entered into an
         agreement  with the first  mortgage  lien holder to sell the  Hawthorne
         Note for $700,000. At December 31, 1995, the

<PAGE>
         Trust established a valuation  allowance of $895,000 to reflect its net
         realizable value of $700,000. On January 3, 1996, Vinings closed on the
         sale of the Hawthorne Note and recorded commissions and fees for a loss
         on the sale of $26,800.

NOTE 6 - NOTES PAYABLE
----------------------

         Mortgage Note Payable
         ---------------------

         At March 31,  1997,  Vinings had a 9.04%  mortgage  note payable in the
         original principal amount of $7,392,000,  which is secured by a Thicket
         and which  matures on July 1, 2003.  Principal and interest are payable
         in monthly  installments of $59,691. At March 31, 1997, the outstanding
         principal balance was $7,359,109.  Scheduled maturities of the mortgage
         note payable as of March 31, 1997, are as follows:


                  1997                  $   39,441
                  1998                      56,909
                  1999                      62,272
                  2000                      68,140
                  2001                      74,562
                  Thereafter             7,057,786
                                       -----------
                     Total              $7,359,110
                                       ===========


         Line of Credit
         --------------

         Vinings  obtained a one year line of credit in the amount of $2,000,000
         which bears interest at the bank's base rate which approximates  prime.
         At March 31,  1997,  the interest  rate was 8.25%.  Interest is payable
         monthly with the entire  principal  balance due on June 28,  1997.  The
         line of  credit  is  secured  by  Peachtree.  At March  31,  1997,  the
         outstanding balance of the line of credit was $1,568,104.

NOTE 7 - RELATED PARTY TRANSACTIONS
-----------------------------------

         During 1996,  Vinings entered into a management  agreement with Vinings
         Properties, Inc. for property management services for Thicket for a fee
         equal to five percent of gross revenues plus a fee for data  processing
         which, for the period ended March 31, 1997, totaled $22,471 and $3,810,
         respectively.  Vinings  Properties,  Inc.  is an  affiliate  of certain
         officers and trustees of the Trust.

         In  addition,  as a  commitment  to the  rebuilding  of the Trust,  The
         Vinings Group, Inc., the parent corporation of Vinings Properties, Inc.
         (collectively,  "The Vinings Group"),  has provided  numerous  services
         relating to administration, acquisition, and capital and asset advisory
         services at little or no cost to the Trust. Vinings does not anticipate
         that these

<PAGE>
         services will continue to be provided free of charge, and certain costs
         paid on Vinings'  behalf  have been  reimbursed  to The Vinings  Group.
         Vinings has reimbursed The Vinings Group for investor relation services
         for the sole benefit of the Trust which totaled  $11,250 for the period
         ended March 31, 1997.  The officers did not receive  compensation  from
         the Trust for their services for the first quarter of 1997.

         Vinings has entered  into an  agreement  dated  February  28, 1997 with
         Northshore  Communications,  Inc., a company affiliated with one of the
         Trustees,  for the design and production of Vinings' 1996 annual report
         for a total of $20,500.

         In connection with Vinings proposed  acquisition of Windrush Apartments
         (see  Note  12  -  Subsequent  Events)  MFI  Realty,  Inc.,  an  entity
         affiliated with the officers and certain  trustees of Vinings,  will be
         paid a financial  advisor fee in the amount of $75,500  from the seller
         upon the closing of the acquisition.

NOTE 8 - ADVISORY AGREEMENT
---------------------------

         Prior to the consummation of the Tender Offer,  Vinings had engaged the
         Advisor  to  provide  investment  advisory  services  and  act  as  the
         administrator  of Trust  operations.  The  agreement  with the Advisor,
         which was terminated upon  consummation  of the Tender Offer,  provided
         for the payment of administrative, asset management and other servicing
         fees to the Advisor for services  rendered in administering the Trust's
         operations.  The  Advisor  earned  administrative,   asset  management,
         special services, and mortgage servicing fees aggregating $333,461, for
         the first quarter of 1996.

NOTE 9 - DISTRIBUTIONS
----------------------

         Vinings  paid cash  dividends  of  $16,857,750  ($15.60  per share) and
         $1,383,200  ($1.28 per share) on February  2, 1996,  and March 8, 1996,
         respectively.  The  entire  $18,240,950  was a return  of  capital  for
         federal income tax purposes.

NOTE 10 - LEASING ACTIVITY
--------------------------

         The following is a schedule of future minimum rents due under operating
         leases that have  initial or  remaining  noncancellable  lease terms in
         excess of one year as of March 31, 1997, at Peachtree:

                               1997       $   391,674
                               1998           528,599
                               1999           481,152
                               2000           368,898
                               2001           318,864
                               Thereafter     132,860
                                          ===========
                                Total     $ 2,222,047
                                          ===========

         One tenant  generated 58% of Peachtree's  revenues for the period ended
         March 31, 1997. The same tenant  accounts for 74% of the future minimum
         lease payments. While this tenant's lease does not expire until May 31,
         2002,  it contains a 90-day  cancellation  clause which  management  is
         currently negotiating to extend to one year.
<PAGE>
NOTE 11 - CONTINGENCIES
-----------------------

         Vinings is, from time to time,  subject to various claims that arise in
         the ordinary course of business. These matters are generally covered by
         insurance.  While the  resolution of these matters  cannot be predicted
         with  certainty,  management  believes  that the final  outcome of such
         matters  would not have a  material  adverse  effect  on the  financial
         position or results of operations of Vinings.

NOTE 12 - DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
--------------------------------------------------------------

         Based on interest rates and other  pertinent  information  available to
         Management as of March 31, 1997,  Vinings  estimates  that the carrying
         value of cash and cash equivalents, the mortgage note payable, the line
         of credit,  and other  liabilities  approximate  their fair values when
         compared to instruments of similar type, terms and maturity. Disclosure
         about  fair  value of  financial  instruments  is  based  on  pertinent
         information  available to  management  as of March 31,  1997.  Although
         management is not aware of any factors that would significantly  affect
         its  estimated  fair  value   amounts,   such  amounts  have  not  been
         comprehensively  revalued  for purposes of these  financial  statements
         since March 31, 1997.

NOTE 13 - SUBSEQUENT EVENTS
---------------------------

         On April 1, 1997, the Operating  Partnership  entered into an agreement
         with  Windrush   Partners,   Ltd.   ("Windrush")  to  acquire  Windrush
         Apartments,  a 202-unit  apartment  community in metropolitan  Atlanta,
         Georgia.  The  general  partner  of  Windrush  is an  affiliate  of the
         officers  and  certain  Trustees  of  Vinings.  The  transaction  is  a
         contribution  of  property  in  exchange  for  units  in the  Operating
         Partnership  and is subject to the approval of the limited  partners of
         Windrush and the  assumption of the existing  mortgage loan, as well as
         certain   customary   conditions    including,    without   limitation,
         satisfactory due diligence review.


<PAGE>


                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

Overview
--------

Vinings Investment  Properties Trust ("Vinings" or the "Trust") was organized on
December  7,  1984  under the laws of the  Commonwealth  of  Massachusetts  as a
twenty-year finite-life real estate investment trust ("REIT") under the Internal
Revenue Code of 1986. Vinings was originally organized for the purpose of making
real  estate  investments  consisting  primarily  of  mortgage  loans and was to
liquidate  at the  end  of  approximately  ten  years  in  accordance  with  its
Declaration  of Trust,  provided,  however,  that the Trustees have the absolute
discretion to determine in good faith such  termination  date as would be in the
best  interests of the  shareholders.  On January 3, 1996, the final asset to be
liquidated was sold and final liquidating dividends were declared.

On January 31, 1996,  Vinings  Investment  Properties,  Inc.  ("the  Purchaser")
commenced a tender offer for a minimum of a majority and a maximum of 85% of the
issued and outstanding  shares of beneficial  interest  without par value of the
Trust (the  "Shares"),  at a purchase  price of $0.47 per share ($3.76 per share
adjusted for the Share Split, as hereinafter  defined) (the "Tender Offer"). The
Tender Offer expired in accordance  with its terms on February 28, 1996, and, in
connection  therewith,  the Purchaser  accepted an aggregate of 6,337,279 Shares
(792,159  Shares  adjusted  for  the  Share  Split,  as  hereinafter   defined),
representing  approximately  73.3%  of  the  outstanding  Shares,  for  a  total
acquisition price of $2,978,521.  The remaining assets of Vinings were Peachtree
Business Center ("Peachtree") and approximately $163,000 in cash. The purpose of
the Tender  Offer was for the  Purchaser  to acquire  control of Vinings  and to
rebuild the Trust's assets by expanding into the multifamily  property  markets.
In connection with the consummation of the Tender Offer, all of the Trustees and
officers  of  the  Trust  resigned  and  were  replaced  with  designees  of the
Purchaser.  The name of the Trust was changed from Mellon Participating Mortgage
Trust,  Commercial Properties Series 85/10 to Vinings. In addition,  Vinings was
an externally advised REIT for which it paid advisory fees to an unrelated third
party (the "Advisor").  Upon  consummation of the Tender Offer, the relationship
with the Advisor was terminated and Vinings became self-administered.

The purpose of the Tender  Offer was for  Management  to acquire  control of the
Vinings and to rebuild its assets by expanding into the multifamily  real estate
markets through the acquisition of garden style apartment  communities which are
leased to middle-income  residents.  Management  believes that these investments
will  provide  attractive  sources  of income  to  Vinings  which  will not only
increase net income and provide cash  available  for future  distributions,  but
will increase the value of the Trust's real estate portfolio as well.

On  June  11,  1996,  Vinings  Investment   Properties,   L.P.  (the  "Operating
Partnership"),  a Delaware limited  partnership,  was organized.  Vinings is the
sole general  partner and a 98% limited  partner in the  Operating  Partnership.
Through its  ownership of Vinings  Holdings,  Inc., a Delaware  corporation  and
wholly-owned  subsidiary  of the Trust,  which is also a limited  partner in the
Operating  Partnership,  Vinings  was a 100%  economic  owner  of the  Operating
Partnership  at March 31, 1997.  (This  structure is commonly  referred to as an
umbrella partnership REIT or "UPREIT.")



<PAGE>
Management  believes that  conducting  its business and  operations  through the
Operating  Partnership  will have  certain  strategic  advantages  over  Vinings
previous  structure,  which  allowed  investment  in Vinings  only  through  the
purchase  of Shares of the  Trust.  In  particular,  the  Operating  Partnership
structure   will  provide   Vinings  with   greater   flexibility,   in  certain
circumstances, in facilitating future acquisitions by permitting the issuance of
partnership  units on a tax advantaged basis to owners of real estate properties
who contribute such properties to the Operating Partnership.  The overall effect
of this structure,  Management believes,  will be an enhanced ability of Vinings
to access the real estate and capital markets.

On July 1, 1996,  Vinings  effected a 1-for-8  reverse  share  split (the "Share
Split")  of its  8,645,000  outstanding  Shares.  Pursuant  to the  Share  Split
shareholders who tendered their Shares received one Share for every eight Shares
owned.  Vinings has purchased and continues to purchase any fractional Shares at
a cost of $5.50 per  share.  As of March  31,  1997,  a total of 108  fractional
Shares had been repurchased and retired leaving 1,080,517 Shares outstanding.

As a result of the Tender Offer,  much of Management's  efforts during 1996 were
focused  on  Vinings   organizational   structure   and   preparing   the  Trust
strategically for future  acquisitions.  The Thicket Apartments  ("Thicket"),  a
254-unit apartment community in Atlanta,  Georgia, was acquired on June 28, 1996
as Vinings' only acquisition for the year.

The following  discussion and analysis of the financial condition and results of
operations  should be read in  conjunction  with the  accompanying  consolidated
financial statements of Vinings and the notes thereto.

This Form 10-Q contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. Vinings' actual results could differ materially from those set forth in
the  forward-looking  statements.  Certain  factors  that  might  cause  such  a
difference  include  the  following:   the  inability  of  Vinings  to  identify
properties  within  existing   multifamily   property   portfolios  of  entities
affiliated with management  which will have a strategic fit with the Trust,  the
inability of Vinings to identify  unaffiliated  properties for acquisition,  the
less than  satisfactory  performance  of any property which might be acquired by
the Trust, the inability to access the capital markets in order to fund Vinings'
present growth and expansion  strategy,  the cyclical  nature of the real estate
market generally and locally in Georgia and the surrounding southeastern states,
the national  economic  climate,  the local economic  climate in Georgia and the
surrounding  southeastern  states,  and the local  real  estate  conditions  and
competition in Georgia and the surrounding  southeastern states. There can be no
assurance  that,  as a result of the  foregoing  factors,  Vinings'  growth  and
expansion  strategy will be  successful  or that the business and  operations of
Vinings will not be adversely affected thereby.

Results of Operations
---------------------

Net loss for the three months ended March 31, 1997 decreased  $355,851,  or 87%,
from a net loss of $407,671  for the three  months ended March 31, 1996 to a net
loss of $51,820 for the same period in 1997.


<PAGE>
Total  revenues  increased  $202,891,  or  52%,  and  total  expenses  decreased
$126,160, or 16%, for the three month period ended March 31, 1997 as compared to
the three month period ended March 31, 1996.

Rental and Other property  revenues  increased  $434,511,  from $160,980 for the
three  months  ended March 31, 1996 to $595,491 for the three months ended March
31, 1997.  This increase is due to the income  generated  from Thicket which was
not in Vinings' portfolio during the first quarter of 1996. For the three months
ended  March 31,  1996,  $160,980  was  generated  from  Peachtree,  compared to
$142,693  for the same period in 1997.  The decrease in revenues at Peachtree is
due to vacancies in the first quarter of 1997.

Interest  income of $873 was earned for the three  months  ended  March 31, 1997
compared to $91,264 for the same period in 1996. The decrease in interest income
from 1996 to 1997 is due to the large  cash  balances  earning  interest  at the
beginning of 1996.  Approximately  $18.5 million was held in cash equivalents at
January 1, 1996, of which $18.24 million was paid in dividends  during  February
and March 1996. Cash balances at January 1, 1997 were substantially less.

There was no Other income for the three  months  ended March 31, 1997.  However,
Other  income of $141,229  for the three  months ended March 31, 1996 was due to
proceeds from the termination of the  receivership  for the Hall Street Property
in February 1996.

Property operating and maintenance  expense increased by $201,509,  from $55,054
for the three months ended March 31, 1996 to $256,563 for the three months ended
March 31,  1997.  This  increase  was due to  property  expenses  related to the
operation of Thicket.  All of the property operating and maintenance expense for
the three  months  ended March 31, 1996 was related to  Peachtree as compared to
$50,845 for the same period in 1997.

Depreciation  and  amortization  increased by $86,095 from $20,749 for the three
months  ended March 31, 1996 to $106,844 as compared to the same period in 1997.
This  increase  is  directly  attributable  to the  acquisition  of The  Thicket
Apartments  on June 28,  1996.  Depreciation  and  amortization  from  Peachtree
remained fairly constant.

Interest  expense for the three  months  ended March 31, 1997 is interest on the
mortgage  payable as well as the line of credit,  both of which were incurred in
connection with the acquisition of Thicket.  General and administrative  expense
decreased  $289,764,  from $365,080 for the three months ended March 31, 1996 to
$75,316 for the three months ended March 31, 1997. These expenses include legal,
accounting and other  professional  fees,  directors'  and officers'  insurance,
shareholder  expenses,  trustee fees and expenses,  annual  reporting  costs and
other miscellaneous general and administrative  expenses. The decrease from 1996
to 1997 was attributable to the following: a decrease of $200,641 in legal fees;
a decrease of $40,074 in trustee fees and  expenses;  a decrease in tender offer
costs of $31,780; a decrease of $8,995 in state franchise tax; and a decrease of
$8,085 in  directors'  & officers'  insurance.  All of these cost savings were a
direct result of the Tender Offer occurring in the first quarter of 1996.

<PAGE>
There are no investment advisor's fees for the three months ended March 31, 1997
as compared to $331,461 for the same period in 1996. During the first quarter of
1996,  the prior  Advisor  was paid  various  fees for asset  management,  asset
liquidation  and the  successful  completion  of the  Tender  Offer.  Since  the
consummation of the Tender Offer, Vinings has not paid advisor's fees.

Liquidity and Capital Resources
-------------------------------

Operating  activities  of Vinings  provided  net cash of $120,328  for the three
months ended March 31, 1997 as compared to net cash used in operating activities
of $679,546 for the same period in 1996.  This is due to the fact that  Vinings'
previous  management  was in the process of  liquidating  the Trust's assets and
Peachtree was the only revenue  producing asset held during the first quarter of
1996. In addition,  the Tender Offer  occurred  during the first quarter of 1996
from which Vinings incurred a number of nonrecurring expenses.

Vinings used cash in investing  activities  for the three months ended March 31,
1997 by  incurring  $61,511 in capital  expenditures  at Thicket as  compared to
$9,077 in capital  expenditures  at  Peachtree  for the same period in 1996.  In
addition,  for the three months ended March 31, 1996,  $673,200 in sale proceeds
was generated from the sale of the Hawthorne Note on January 3, 1996.

Net cash was used in financing  activities for the first quarter of 1996 to make
principal  repayments  of $12,567 on the  mortgage  note  payable.  In addition,
during 1997, $58 was used to retire shares of beneficial  interest in the Trust.
Distributions  to shareholders in the first quarter of 1996 totaled  $18,240,950
as a result of the liquidation of investments.

Net cash  increased  by $46,192 for the three  months  ended March 31, 1997
compared to net cash used of $18,256,373 for the same period in 1996.

The cash held by  Vinings  plus the cash flow from  Peachtree  and  Thicket  are
expected to provide  sources of liquidity  to meet  Vinings'  current  operating
obligations.  Vinings  also has a secured  line of credit  totaling  $2,000,000,
which bears interest at the bank's base rate which approximates  prime. At March
31, 1997 the interest rate was 8.25% and the outstanding balance was $1,568,104.
The remaining  balance of $431,896 may be drawn for working capital needs or for
acquisition  funding. It is anticipated that the line of credit, which is due in
June 1997,  will be renewed or refinanced.  In addition,  management  intends to
seek new capital sources,  both public and private, as well as explore financing
alternatives  so as to allow  Vinings to expand  and grow its  income  producing
investments.

Recent Accounting Pronouncements
--------------------------------

In February 1997, the Financial  Accounting  Standards Board issued Statement of
Financial Accounting Standards No. 128, "Earnings per Share" ("SFAS 128"), which
supersedes the current authoritative  literature and related interpretations for
earnings per share under  Accounting  Principles  Board Opinion No. 15. SFAS 128
will have no immediate  financial statement impact on Vinings since it currently
has a simple  capital  structure  and  earnings  per share will  continue  to be
computed

<PAGE>
by dividing net income  (loss) by the weighted  average  number of common shares
outstanding  during the  reporting  period.  For entities  with complex  capital
structures,  SFAS 128 will  require  dual  presentation  of  basic  and  diluted
earnings per share. SFAS 128 becomes effective for financial statements for both
interim and annual periods ending after December 15, 1997.  Earlier  application
is not permitted. Vinings will adopt SFAS 128 during its quarter and fiscal year
ending December 31, 1997.

Impact of Inflation
-------------------

Substantially  all of the  residential  leases at Thicket are for periods of one
year or less which will enable Vinings to seek  increased  rents upon renewal of
existing  leases or upon  commencement  of new leases.  Although there can be no
assurance that rental increases may be obtained,  the short term nature of these
leases  generally serves to reduce the risk to Vinings of the adverse effects of
inflation.

Substantially all of the tenant leases at Peachtree have remaining terms of five
years or less and contain clauses which require the tenants to pay their prorata
share of operating  expenses,  including  common area  maintenance,  real estate
taxes,  and  insurance.  This serves to reduce the risk of  increased  costs and
operating  expenses  resulting  from  inflation.  In addition,  Vinings may seek
increased base rents upon renewal of existing leases or upon commencement of new
leases in order to offset any adverse effects of inflation.  However,  there can
be no assurance that rental increases may be obtained.




<PAGE>


                                     PART II



                                OTHER INFORMATION


Item 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits

         27 - Financial Data Schedule

(b)      Reports on Form 8-K

         No reports on Form 8-K were filed  during the three  months ended March
         31, 1997.



<PAGE>



                                    SIGNATURE


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

                                        Vinings Investment Properties
                                        Trust
 

                                        By:  /s/ Stephanie A. Reed
                                            ----------------------
                                             Stephanie A. Reed
                                             Vice President and Treasurer



Dated:  May 15, 1997