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

                                    FORM 10-Q

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

                  For the Quarterly Period ended June 30, 1997

                                       OR

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


                         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


     Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 12, 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 filin
g requirements for the past 90 days. Yes X No
                                        ---    ---
<PAGE>
 
                                    PART I
                                    ------
                             FINANCIAL INFORMATION


ITEM 1.  FINANCIAL STATEMENTS.

                     NATIONAL PROPERTIES INVESTMENT TRUST

                                     INDEX


   Accountants' Review Report
   
   Comparative Balance Sheet as of June 30, 1997 and December 31, 1996

   Comparative Statement of Operations for the Six Months Ended June 30, 1997
   and 1996
   
   Comparative Statement of Changes in Shareholders' Equity for the Six Months
   Ended June 30, 1997 and 1996
   
   Comparative Statement of Cash Flows for the Six Months Ended June 30, 1997
   and 1996
   
   Notes to the Financial Statements
<PAGE>
 
          [LETTERHEAD OF BERNARDI, ALFIN & KOOS, L.L.C. APPEARS HERE]




                                 July 29, 1997

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

We have reviewed the accompanying balance sheet of National Properties
Investment Trust as of June 30, 1997 and the related statements of operations,
changes in shareholders' equity and cash flows for the six months ended June 30,
1997 and 1996, included in the accompanying Securities and Exchange Commission
Form 10-Q for the period ended June 30, 1996 in accordance with Statements on
Standards for Accounting and Review Services issued by the American Institute of
Certified Public Accountants. All information included in these financial
statements is the representation of the management of National Properties
Investment Trust.

A review of interim financial information consists principally of inquiries of
company personnel and analytical procedures applied to financial data. It is
substantially less in scope than an audit conducted in accordance with generally
accepted auditing standards, the objective of which is the expression of an
opinion regarding the financial statements taken as a whole. Accordingly, we do
not express such an opinion.

Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements for them to be in conformity
with generally accepted accounting principles.

We have previously audited, in accordance with generally accepted auditing
standards, the balance sheet as of December 31, 1996, and the related statements
of operations, shareholders' equity and cash flows for the year then ended (not
presented herein). In our report dated March 18, 1997, we expressed an
unqualified opinion on those financial statements. In our opinion, the
information set forth in the accompanying balance sheet as of December 31, 1996
is fairly stated in all material respects in relation to the balance sheet from
which it has been derived.


                                    Respectfully submitted,

                                    BERNARDI, ALFIN & KOOS, L.L.C.
                                    Certified Public Accountants
<PAGE>
 
                     NATIONAL PROPERTIES INVESTMENT TRUST
                     ------------------------------------
                          CANTON CENTER, CONNECTICUT
                          --------------------------
                           COMPARATIVE BALANCE SHEET
                           -------------------------
                        See Accountants' Review Report

<TABLE> 
<CAPTION> 
                                                            June 30,        December 31,
                                                              1997             1996
                                                              ----             ----
<S>                                                     <C>               <C> 
ASSETS:
-------
   Investments in real estate and personal property     $  1,011,235      $    948,583
   Cash and cash equivalents                                  10,616            44,403
   Receivables                                                23,659            18,248
   Other assets                                               27,097            39,633
                                                         -----------       -----------
TOTAL ASSETS                                            $  1,072,607      $  1,050,867
------------                                             ===========       ===========

LIABILITIES:
------------
   Accounts payable and accrued expenses                $     37,343      $     53,107
   Security deposits & prepaid rent                           25,471            20,821
   Mortgage payable                                          557,029           571,258
                                                         -----------       -----------
      Total Liabilities                                      619,843           645,186
                                                         -----------       -----------

SHAREHOLDERS' EQUITY:
---------------------
   Shares of beneficial interest, no par value, 
    unlimited authorization, shares issued and 
    outstanding were 749,276 in 1997 and 718,860
    in 1996                                               11,772,347        11,735,447
   Accumulated deficit                                   (11,319,583)      (11,329,766)
                                                         -----------       -----------
      Total Shareholders' Equity                             452,764           405,681
                                                         -----------       -----------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY              $  1,072,607      $  1,050,867
------------------------------------------               ===========       ===========
</TABLE> 

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

<PAGE>
 
                     NATIONAL PROPERTIES INVESTMENT TRUST
                     ------------------------------------
                          CANTON CENTER, CONNECTICUT
                          --------------------------
                      COMPARATIVE STATEMENT OF OPERATIONS
                      -----------------------------------
                        See Accountants' Review Report

<TABLE> 
<CAPTION> 

                                                        For the Six Months Ended
                                                                June 30,
                                                                -------- 
                                                            1997        1996
                                                            ----        ----
<S>                                                      <C>         <C> 
PROPERTY OPERATIONS:
--------------------
  Gross rental income                                    $ 175,687   $ 178,437
  Rental expenses                                          119,962     122,364
                                                         ---------   ---------
     Net Income from Property Operations                    55,725      56,284
                                                         ---------   ---------

OTHER INCOME (EXPENSE):
-----------------------
  Interest income                                              397       1,033
  General and administrative expenses                      (45,938)    (52,043)
                                                         ---------   ---------
     Total Other Income (Expense)                          (45,541)    (51,010)
                                                         ---------   ---------

NET INCOME
----------                                               $  10,184   $   5,274
                                                         =========   =========

INCOME PER SHARE OF BENEFICIAL INTEREST                  $    0.01   $    0.01
---------------------------------------                  =========   =========

AVERAGE NUMBER OF SHARES OF BENEFICIAL INTEREST            738,915     718,860
-----------------------------------------------          =========   =========
</TABLE> 
<PAGE>
 
                     NATIONAL PROPERTIES INVESTMENT TRUST
                     ------------------------------------
                          CANTON CENTER, CONNECTICUT
                          --------------------------
           COMPARATIVE STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
           --------------------------------------------------------
                        See Accountants' Review Report


<TABLE> 
<CAPTION> 
                                               For the Six Months Ended       For the Six Months Ended  
                                                       June 30,                       June 30,
                                                       --------                       -------- 
                                                         1997                           1996
                                             ----------------------------   ----------------------------
                                               Shares            Amount       Shares            Amount 
                                               ------            ------       ------            ------
<S>                                          <C>            <C>             <C>            <C>  
SHARES OF BENEFICIAL INTEREST                                            
-----------------------------                                            
   Balance - Beginning of the Period          718,860       $  11,735,447    718,860       $  11,735,447 
                                                                         
   Shares issued                               30,416              36,900       -                   -
                                             --------        ------------   --------        ------------
   Balance - End of the Period                749,276       $  11,772,347    718,860       $  11,735,447
                                             ========        ============   ========        ============

ACCUMULATED DEFICIT
-------------------
   Balance - Beginning of the Period                        $ (11,329,767)                 $ (11,274,829)

   Net income                                                      10,184                          5,274

   Dividends paid                                                    -                           (36,339)
                                                             ------------                   ------------
   Balance - End of the Period                              $ (11,319,583)                 $ (11,305,894)
                                                             ============                   ============
</TABLE> 

   The accompanying notes are an integral part of the financial statements.
<PAGE>
 
                     NATIONAL PROPERTIES INVESTMENT TRUST
                     ------------------------------------
                          CANTON CENTER, CONNECTICUT
                          --------------------------
                      COMPARATIVE STATEMENT OF CASH FLOWS
                      -----------------------------------
               Increase (Decrease) in Cash and Cash Equivalents
                        See Accountants' Review Report


<TABLE> 
<CAPTION> 
                                                                    For the Six Months Ended
                                                                            June 30,
                                                                            --------
                                                                       1997          1996
                                                                       ----          ----
<S>                                                              <C>            <C> 
CASH FLOWS FROM OPERATING ACTIVITIES:
-------------------------------------
   Net income                                                    $    10,184    $     5,274
                                                                   ---------      ---------
   Adjustments to reconcile net income to net cash
    provided by operating activities
       Depreciation and amortization                                  27,157         24,482

       Changes in Assets and Liabilities:
         Receivables                                                  (5,411)       (12,014)
         Other assets                                                  8,048          2,777
         Accounts payable and accrued expenses                       (15,764)        (1,444)
         Security deposits & prepaid rent                              4,650          -
                                                                   ---------      ---------
            Total Adjustments                                         18,680         13,801
                                                                   ---------      ---------
   Net Cash Provided By Operating Activities                          28,864         19,075
                                                                   ---------      ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
-------------------------------------
   Purchase of personal property                                     (85,322)       (13,186)
                                                                   ---------      ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
-------------------------------------
   Principal payments on debt                                        (14,229)       (13,236)
   Proceeds from the issuance of shares                               36,900          -
   Dividends paid                                                      -            (36,339)
                                                                   ---------      ---------
       Net Cash Provided By (Used In) Financing Activities            22,671        (49,575)
                                                                   ---------      ---------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                 (33,787)       (43,686)
----------------------------------------------------

CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD                    44,403        108,081
--------------------------------------------------                 ---------      ---------

CASH AND CASH EQUIVALENTS, END OF THE PERIOD                     $    10,616    $    64,395
============================================                       =========      =========
</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 (approximately four to seven years). The Trust currently
         owns a single property located in central Florida. The results of the
         Trust's operations depend upon the Trust's property's competitive
         position in its respective leasing market. The Shoppes at Lake Mary, a
         strip shopping center located in Lake Mary, Florida, is the Trust's
         sole remaining property.

         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.

         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 June 30, 1997
         and June 30, 1996. However, the Trust is subject to state income taxes,
         where applicable.

         E.  Depreciation:
             ------------
             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.

         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.
<PAGE>
 
                      NATIONAL PROPERTIES INVESTMENT TRUST
                          NOTES TO FINANCIAL STATEMENTS

NOTE 1 - Organization and Summary of Accounting Policies: (Continued)
         -----------------------------------------------
         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 has entered into a temporary management agreement with
         the Managing Trustee for a one-year term. The agreement calls for the
         Managing Trustee to be paid $4,000 per month plus Trust related
         expenses. The Trust paid the Managing Trustee $24,000 as compensation
         for managing the Trust property for the six months ended June 30, 1997.
         In addition, the Trust offices are located at premises owned by the
         Managing Trustee. No rent was charged to the Trust in the six months
         ended June 30, 1997, however, the Trust paid utility bills for the
         office of $1,136 in the six months ended June 30, 1997.

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

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.
<PAGE>
                     NATIONAL PROPERTIES INVESTMENT TRUST
                         NOTES TO FINANCIAL STATEMENTS

 
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
                                                                          June 30,                December 31,
                                                                            1997                     1996
                                                                            ----                     ----
<S>                                                                    <C>                       <C> 
Land                                                                   $    307,273              $   230,299
Buildings                                                                 1,147,584                1,147,584
Tenant Improvements                                                         219,090                  210,742
Furnishings and Equipment                                                    19,544                   19,544
                                                                          ---------                ---------
   Total                                                                  1,693,491                1,608,169
Less: Accumulated Depreciation                                             (682,256)                (659,586)
                                                                          ---------                ---------
Net Investment in Real Estate
and Personal Property                                                   $ 1,011,235              $   948,583
                                                                          =========                =========
NOTE 5- Receivables:
        ------------
            Receivables consist of the following:

                                                                            6/30/97                 12/31/96
                                                                          ---------                ---------
            Tenant Receivables                                          $    23,659              $    18,248
            Allowance for Doubtful Accounts                                     -                        -
                                                                          ---------                ---------
            Tenant Receivables net of Allowance                         $    23,659              $    18,248
                                                                          =========                =========

NOTE 6 - Mortgages Payable:
         ------------------
                                                                            6/30/97                 12/31/96
                                                                          ---------                ---------
            Mortgage payable in monthly installments of principal 
            of $7,201 plus interest 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.                                               $   557,029              $   571,258
                                                                          =========                =========


            The following sets forth the principal payments due on the mortgages payable:

                                   June 30, 1998                             30,734
                                   June 30, 1999                            526,295
</TABLE> 
<PAGE>
 
                     NATIONAL PROPERTIES INVESTMENT TRUST
                         NOTES TO FINANCIAL STATEMENTS

 NOTE 7- Tenant Leases:
         -------------
            The Trust has entered into operating lease agreements with tenants
         of its rental property, which have various termination dates. Certain
         leases also contain provisions for inflationary increases and the pass
         through of a portion of operating expenses under specified
         circumstances. Future minimum lease payments under noncancellable
         operating leases are as follows:
<TABLE> 
                       <S>                   <C> 
                       1998                  $ 262,782
                       1999                    187,996
                       2000                    125,157
                       2001                     25,201
                                               -------
                       Total                 $ 601,136
                                               =======
</TABLE> 

NOTE 8- 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 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 has 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 need 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 with out 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 defined the powers and limitations on the
        "Officers", and "Board of Directors" of the Trust. A group of Trustee's
        has not been appointed to serve as the "Board of Directors" to oversee
        the management of the Trust by the Managing Trustee.
<PAGE>
 
                     NATIONAL PROPERTIES INVESTMENT TRUST
                         NOTES TO FINANCIAL STATEMENTS


NOTE 8- Contingencies: (Continued)
        -------------

            As of July 29,1997, the Trust is near the completion of negotiations
        for the sale of the real estate of the Trust to a new entity REIT. The
        sale will be an exchange of the real estate for stock in the new REIT,
        with the Trust receiving one share of the new REIT's stock for each
        share of beneficial interest held by the Trust's shareholders, with a
        projected value for each share of $2.25. The new REIT will have 10
        properties at its inception, 9 to be contributed from the merger
        partner, one from the Trust. All shareholders of the Trust will receive
        a distribution of a portion of the new REIT stock and the remaining new
        REIT stock will be held by the Trust. The total of the shares
        distributed plus the shares received by the Trust will equal the total
        of the shares received by the real estate on a one-to-one basis.

            Two documents, the first a proxy, and the second a contribution and
        exchange agreement, have gone through three drafts up to now and are
        being worked on in a attempt to have a final draft done by August 15,
        1997. Once completed, copies will be sent to all of the Trust's
        shareholders for review and for a vote on the sale and "merger" itself.
        Within these documents are all the details of the parties involved, the
        properties that are being placed into the new REIT, the individuals that
        will run the new REIT, the shares that each of the participating people
        involved with the new REIT will get, the warrants/options, if any, that
        are being made available, and to whom, and all the other details of the
        transaction.

            The Board of Trustees of the Trust has taken a very active role in
        these negotiations and the drafting of the documents. The board believes
        that the approach being taken is in the best interest of the
        shareholders since they will participate in. a new REIT that will 1. be
        listed on a stock exchange, thereby giving the shareholders liquidity,
        2. pay dividends, 3. have growth potential, and 4. require no additional
        funds from any of the shareholders unless additional shares are
        purchased. At this time, it is projected that two of the Trustees, Jay
        Goldman and Peter Stein are to receive the following compensation
        package from the "merger" partner at the time of the completion of this
        transaction; a) $250,000 worth of new REIT stock, and b) warrants for
        200,000 shares at a price $1.00 below the net asset value of the shares
        at the time of closing.

            It is contemplated that this transaction will be completed by the
        end of October/November, 1997, with December 31, 1997 as the final
        fallback date for a closing.

            By agreement, the names of the participants are not allowed to be
        disclosed at this time. They will be disclosed in the proxy and
        contribution and exchange agreement being drafted.
<PAGE>
 
                     NATIONAL PROPERTIES INVESTMENT TRUST
                         NOTES TO FINANCIAL STATEMENTS

NOTE 8- Contingencies: (Continued)
        -------------

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


NOTE 9- Supplemental Disclosure of Cash Flow Information:
        ------------------------------------------------

<TABLE> 
<CAPTION> 
                                                                                6-30-97            6-30-96
                                                                               --------           --------
<S>                                                                            <C>                <C> 
Cash paid during the year -
    Income taxes                                                               $      -           $      -
    Interest                                                                   $ 28,976           $ 30,945
</TABLE> 
<PAGE>
 
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS.

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. The Trust considers its business to be
operating in one industry segment, investment in real property.

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

The Trust's primary cash requirements are for capital expenditures and operating
expenses, including utilities, insurance, sales taxes, maintenance and
management costs. Historically, the Trust's primary sources of cash have been
from operations and bank borrowings.

At June 30, 1997 the Trust has cash of approximately $10,616, which is comprised
almost entirely of net income from operations.

               As of July 29,1997, the Trust is near the completion of
          negotiations for the sale of the real estate of the Trust to a new
          entity REIT. The sale will be an exchange of the real estate for stock
          in the new REIT, with the Trust receiving one share of the new REIT's
          stock for each share of beneficial interest held by the Trust's
          shareholders, with a projected value for each share of $2.25. The new
          REIT will have 10 properties at its inception, 9 to be contributed
          from the merger partner, one from the Trust. All shareholders of the
          Trust will receive a distribution of a portion of the new REIT stock
          and the remaining new REIT stock will be held by the Trust. The total
          of the shares distributed plus the shares received by the Trust will
          equal the total of the shares received by the real estate on a one-to-
          one basis.

               Two documents, the first a proxy, and the second a contribution
          and exchange agreement, have gone through three drafts up to now and
          are being worked on in a attempt to have a final draft done by August
          15, 1997. Once completed, copies will be sent to all of the Trust's
          shareholders for review and for a vote on the sale and "merger"
          itself. Within these documents are all the details of the parties
          involved, the properties that are being placed into the new REIT, the
          individuals that will run the new REIT, the shares that each of the
          participating people involved with the new REIT will get, the
          warrants/options, if any, that are being made available, and to whom,
          and all the other details of the transaction.
<PAGE>
 
               The Board of Trustees of the Trust has taken a very active role
          in these negotiations and the drafting of the documents. The board
          believes that the approach being taken is in the best interest of the
          shareholders since they will participate in. a new REIT that will 1.
          be listed on a stock exchange, thereby giving the shareholders
          liquidity, 2. pay dividends, 3. have growth potential, and 4. require
          no additional funds from any of the shareholders unless additional
          shares are purchased. At this time, it is projected that two of the
          Trustees, Jay Goldman and Peter Stein are to receive the following
          compensation package from the "merger" partner at the time of the
          completion of this transaction; a) $250,000 worth of new REIT stock,
          and b) warrants for 200,000 shares at a price $1.00 below the net
          asset value of the shares at the time of closing.


It is contemplated that this transaction will be completed by the end of
October/November, 1997, with December 31, 1997 as the final fallback date for a
closing.

By agreement, the names of the participants are not allowed to be disclosed at
this time. They will be disclosed in the proxy and contribution and exchange
agreement being drafted.

The principal assets of the Trust consist of an equity position in an income
producing commercial property and cash.

Inflation
---------

Inflation has been consistently low during the periods presented in these
financial statements and, as a result, has not had a significant effect on the
operations of the Trust.


Competition
-----------

The Trust's remaining property investment is subject to competition from similar
types of properties in the vicinity in which it is located. While the market in
which the property operates is experiencing a recovery, the property values
generally remain below the highs realized in the mid-1980's. The properties
current 100% occupancy rate, and the Trust's holding of several long-term leases
with automatic escalation clauses, are indicators that the Trust is not
currently facing heavy competition for tenants.
<PAGE>
 
Results of Operations
---------------------

For the six months ended June 30, 1997, the Trust reported net income from
property operations (before General and Administrative expenses) of $55,725 as
compared to net income from property operations of $56,284 for the six months
ended June 30, 1996. This decrease is related to increased repairs and
maintenance and insurance costs. Also, the Trust experienced a net income from
operations of $10,184 for the six months ended June 30, 1997, compared to a
income of $5,274 for the six months ended June 30, 1996. The difference is
primarily due to the decrease in costs associated with operational expenses, and
the travel and related costs incurred with evaluating new investments.

The Managing Trustee was paid $24,000 for the six months ended June 30, 1997. In
addition, the Trust offices are located at premises owned by the Managing
Trustee. No rent was charged to the Trust in the six months ended June 30, 1997,
however, the Trust paid utility bills for the office of $1,136 in the six months
ended June 30, 1997.
<PAGE>
 
                                    PART II
                                    -------

                               OTHER INFORMATION
                               

ITEM 1.    LEGAL PROCEEDINGS.

             NONE


ITEM 2.    CHANGES IN SECURITIES.

             NONE


ITEM 3.    DEFAULTS UPON SENIOR SECURITIES.

             NOT APPLICABLE


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

             NONE


ITEM 5.    OTHER INFORMATION.

             The Trust filed a Form 10-K/A, Amendment No. 1 to the Annual Report
             pursuant to Section 13 or 15(d) of the Securities and Exchange Act
             of 1934.

             On June 16, 1997, a Trustee meeting was held and the Trustees
             acknowledged that the Trust was operating with out 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 defined the powers and limitations on
             the "Officers", and "Board of Directors" of the Trust.

             On June 16, 1997 Robert Reibstein was appointed as Trustee
             of the Trust.


ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K.

             NONE FILED FOR THE QUARTER
<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:                       By:   
      -------------------         ----------------------------------
                                  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:

<TABLE> 
<CAPTION> 

Signature                       Title                          Date
<S>                           <C>                             <C> 

                              Managing Trustee              
---------------------------                                   --------------
Peter M. Stein


                              Trustee                          
---------------------------                                   --------------
Jay W. Goldman


                              Trustee                       
---------------------------                                   --------------
Robert Reibstein

</TABLE>