SECURITIES AND EXCHANGE COMMISSION

                            WASHINGTON, D.C. 20549

                                  FORM 10-Q

(Mark One)

(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

For the transition period from                 TO
                               -------------------------------------------------

Commission file number                0-15880
                     -----------------------------------------------------------

                           PROPERTY RESOURCES EQUITY TRUST
--------------------------------------------------------------------------------
            (Exact name of registrant as specified in its charter)

          CALIFORNIA                                       95-3959770
--------------------------------------------------------------------------------
(State or other jurisdiction of                             (I.R.S. Employer
incorporation or organization)                              Identification No.)

 P. O. BOX 7777,  SAN MATEO, CALIFORNIA                 94403-7777
--------------------------------------------------------------------------------
             (Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code   (650) 312-2000
                                                  ------------------------------

                                        N/A
--------------------------------------------------------------------------------
   Former name, former address and former fiscal year, if changed since last
                                    report

   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 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 Series A Common Stock Outstanding as of June 30, 1997:  1,090,055
Shares of Series B Common Stock Outstanding as of June 30, 1997:      1,000


                        PART I - FINANCIAL INFORMATION

                         ITEM 1. FINANCIAL STATEMENTS

                       PROPERTY RESOURCES EQUITY TRUST

                                BALANCE SHEETS

                     JUNE 30, 1997 AND DECEMBER 31, 1996

                                 (Unaudited)

(Dollars in thousands, except per share amounts)              1997        1996
-------------------------------------------------------------------------------
ASSETS:
Rental property:

  Land                                                      $1,702      $2,099
  Buildings and improvements                                 4,181       6,215
  Tenant improvements                                          107         135
-------------------------------------------------------------------------------
                                                             5,990       8,449

  Less: accumulated depreciation                             1,337       1,995
-------------------------------------------------------------------------------
                                                             4,653       6,454

Cash and cash equivalents                                      388         772
Mortgage-backed securities, available for sale                 173         173
Deferred rent receivable                                        47          77
Note receivable                                                726         736
Other assets                                                   212         162
-------------------------------------------------------------------------------

   Total assets                                             $6,199      $8,374
===============================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY:

Note payable                                                $2,843      $2,750
Tenants' deposits and other liabilities                         65          59
-------------------------------------------------------------------------------

   Total liabilities                                         2,908       2,809
-------------------------------------------------------------------------------

Stockholders' equity:

Common stock, Series A, without par value,
 stated value $10 per share; 10,000,000
 shares authorized; 1,090,055 shares issued
 and outstanding in 1997 and 1996                            9,384       9,384

Common stock, Series B, without par value,
 stated value $10 per share; 1,000 shares
 authorized, issued and outstanding in 1997
 and 1996                                                       10          10

Unrealized loss on mortgage-backed securities                  (9)        (11)
Retained earnings (deficit)                                (6,094)     (3,818)
-------------------------------------------------------------------------------

   Total stockholders' equity                                3,291       5,565
-------------------------------------------------------------------------------

   Total liabilities and
    stockholders' equity                                    $6,199      $8,374
===============================================================================



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



                       PROPERTY RESOURCES EQUITY TRUST

                           STATEMENTS OF OPERATIONS

                                  (Unaudited)

                                           THREE MONTHS ENDED   SIX MONTHS ENDED
                                            JUNE 30   June 30   JUNE 30  June 30

(Dollars in thousands,
 except per share amounts)                   1997      1996       1997     1996
--------------------------------------------------------------------------------

REVENUE:

  Rent                                       $199      $258       $371     $539
  Interest                                     23        17         47       27
  Dividends                                    29         1         39        2
  Gain on sale of rental property               -        88        370       88
--------------------------------------------------------------------------------

    Total revenue                             251       364        827      656
--------------------------------------------------------------------------------

EXPENSES:

  Interest                                     83        46        129       89
  Depreciation and amortization                39        70         99      130
  Operating                                    33        68         80      154
  Related party                                44        23         69       46
  General and administrative                   12        21         34       37
--------------------------------------------------------------------------------

    Total expenses                            211       228        411      456
--------------------------------------------------------------------------------

NET INCOME                                    $40      $136       $416     $200
================================================================================



Net income per share of
 Series A common stock                       $.04      $.12       $.38     $.18
================================================================================


Dividends per share of
 Series A common stock                      $2.38      $.09      $2.47    $ .18
================================================================================





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




                       PROPERTY RESOURCES EQUITY TRUST

                           STATEMENTS OF CASH FLOWS

            FOR THE SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1996

                                 (Unaudited)

(Dollars in thousands)                                          1997      1996
-------------------------------------------------------------------------------
Cash flows from operating activities:

Net income                                                      $416      $200
-------------------------------------------------------------------------------

Adjustments to reconcile net income to net cash
 provided by operating activities:

   Depreciation and amortization                                 106       132
   Decrease in deferred rent receivable                           30         2
   (Increase) decrease in other assets                          (73)        35
   Increase in tenants' deposits
    and other liabilities                                          6        53
   Gain on sale of rental property                             (370)      (88)
-------------------------------------------------------------------------------
                                                               (301)       134
-------------------------------------------------------------------------------
Net cash provided by operating activities                        115       334
-------------------------------------------------------------------------------

Cash flow from investing activities:

   Origination of note payable                                 2,850         -
   Origination of note receivable                                  -     (750)
   Principal received on note receivable                          10         5
   Improvements to rental property                               (5)       (7)
   Proceeds from sale of rental property                       2,093       643
   Disposition of mortgage-backed securities                       2         2
-------------------------------------------------------------------------------

Net cash provided by (used in)
 investing activities                                          4,950     (107)
-------------------------------------------------------------------------------

Cash flow from financing activities:

   Principal payments on note payable                        (2,757)         -
   Distributions paid                                        (2,692)      (98)
-------------------------------------------------------------------------------

Net cash used in financing activities                        (5,449)      (98)
-------------------------------------------------------------------------------

Net (decrease) increase in cash
 and cash equivalents                                          (384)       129

Cash and cash equivalents,
 beginning of period                                             772       612
-------------------------------------------------------------------------------
Cash and cash equivalents,
 end of period                                                  $388      $741
===============================================================================

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



                       PROPERTY RESOURCES EQUITY TRUST

                        NOTES TO FINANCIAL STATEMENTS

                              JUNE 30, 1997

NOTE 1- BASIS OF PRESENTATION

The accompanying  financial statements of Property Resources Equity Trust (the
"Fund") have been prepared in accordance  with generally  accepted  accounting
principles  applicable to interim  financial  information  and pursuant to the
rules  and   regulations   of  the   Securities   and   Exchange   Commission.
Accordingly,  certain information and footnote  disclosures  normally included
in  financial  statements  prepared  in  accordance  with  generally  accepted
accounting  principles  have been condensed or omitted  pursuant to such rules
and  regulations.  However,  in the opinion of  management,  all  adjustments,
consisting  only  of  normal  recurring  adjustments,  necessary  for  a  fair
presentation  have been included.  The Fund presumes that users of the interim
financial  information  herein  have  read  or  have  access  to  the  audited
financial  statements  for the preceding  fiscal year and that the adequacy of
additional  disclosure  needed for a fair  presentation  may be  determined in
that  context.  Accordingly,  footnote  disclosure  which would  substantially
duplicate  the  disclosure  contained in the Fund's 1996 Annual Report on Form
10-K has been omitted.

Certain  1996  amounts  have  been   reclassified   to  conform  to  the  1997
presentation.  Such  reclassifications  had no effect on  previously  reported
results.

NOTE 2 - BUSINESS ACTIVITY

As of June 30, 1997,  the Fund had one  remaining  property in its  portfolio,
Good Guys  Shopping  Center.  Management  currently  intends to dispose of the
Good Guys Plaza  Shopping  Center  and,  in that  regard,  expects to commence
marketing  activity in 1998. At June 30, 1997,  management  estimates that the
net  realizable  value  of  the  property  approximates  its  carrying  value;
however,  there  can be no  assurance  that the  eventual  sales  price of the
property will not result in a loss or that a sale will be consummated.

NOTE 3 - NOTE PAYABLE

On March 3,  1997,  the note  payable  collateralized  by the Good Guys  Plaza
Shopping  Center was repaid from the proceeds of a new note  payable.  The new
note  payable,  which is also  collateralized  by the  property and matures in
2022,  requires monthly payments of principal and interest at 8.8% until 2007,
at  which  time  the  interest  rate  increases  to at  least  13.8%  under an
adjustment formula defined in the note agreement.

NOTE 4 - SALE OF RENTAL PROPERTY

On  March  4,  1997,  the  Fund  sold the  Graham  Court  Business  Park to an
unaffiliated  buyer for a total sales  price of  $2,200,000  resulting  in net
cash  proceeds to the Fund of  $2,093,000.  In connection  with the sale,  the
Fund recognized a gain of $370,000.

NOTE 5 - SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

For the six month  period  ended June 30,  1997,  interest  paid  amounted  to
$122,000.



                       PROPERTY RESOURCES EQUITY TRUST

ITEM 2.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF  FINANCIAL  CONDITION  AND
RESULTS OF OPERATIONS

INTRODUCTION

Management's  discussion  and analysis of financial  condition  and results of
operations  should be read in  conjunction  with the Financial  Statements and
Notes thereto.

RESULTS OF OPERATIONS

COMPARISON OF THE SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1996

Total revenue for the six month period ended June 30, 1997 increased  $171,000
or 26%,  from  $656,000  in 1996 to $827,000  in 1997.  The  increase in total
revenue was  primarily  due to gain on sale of rental  property as a result of
the  sale  of the  Graham  Court  Office  Building.  Rental  revenue  for  the
remaining  property of the Fund increased  $12,000 compared to the same period
in 1996 which  resulted from an increase in the average  occupancy rate at the
Good Guys Plaza.  The average  occupancy rate at the Good Guys Plaza increased
from 94% in 1996 to 96% in  1997.  For the six  month  period  ended  June 30,
1997 interest income increased  $20,000 compared to the same period in 1996 as
a result  of the note  receivable  relating  to the sale of the  Agora  Office
Building.  Dividend  income  increased  $37,000 in 1997 when  compared  to the
same  period  in 1996 as a result of an  increase  in the  average  investment
balance.  The  increase  in the  average  investment  balance  was  due to the
proceeds  received  from the sale of the Graham Court  Business Park in March,
1997.

Total  expenses  for the six  month  period  ended  June  30,  1997  decreased
$45,000,  or 10%, from  $456,000 in 1996 to $411,000 in 1997.  The decrease in
total  expenses was  primarily  due to a decrease in  operating  expenses as a
result of the sale of the Agora  Office  Building  and Graham  Court  Business
Park.  The decrease was  partially  offset by an increase in interest  expense
resulting  from the  refinancing  of the note  payable for Good Guys  Shopping
Center.

Net income for the six month period ended June 30, 1997 increased  $216,000 as
compared  to  the  same  period  in  1996.  The  increase  in net  income  was
primarily due to the gain  recognized  on sale of rental  property of $280,000
partially   offset  by  a  $63,000   decrease  in  net  income   (decrease  in
depreciation  and  amortization  of  $26,000,  operating  expenses of $74,000,
general  and   administrative  of  $5,000  and  rental  revenue  of  $168,000)
primarily  resulting from the sale of the Agora Office  Building in April 1996
and Graham Court Business Park, in March 1997.

LIQUIDITY AND CAPITAL RESOURCES

At June 30, 1997, cash and cash  equivalents  totaled $388,000 and investments
in mortgage-backed securities totaled $173,000.

As of June 30, 1997,  the Fund had one  remaining  property in its  portfolio,
Good Guys  Shopping  Center.  Management  currently  intends to dispose of the
Good Guys Plaza  Shopping  Center  and,  in that  regard,  expects to commence
marketing  activity in 1998. At June 30, 1997,  management  estimates that the
net  realizable  value  of  the  property  approximates  its  carrying  value;
however,  there  can be no  assurance  that the  eventual  sales  price of the
property will not result in a loss or that a sale will be consummated.

The Fund's principal  sources of capital for the acquisition and renovation of
property and for working capital  reserves have been proceeds from the initial
offering   of  its  common   stock  and  from  cash  flow  after   payment  of
distributions.

On March 3,  1997,  the note  payable  collateralized  by the Good Guys  Plaza
Shopping  Center was repaid from the proceeds of a new note  payable.  The new
note  payable,  which is also  collateralized  by the  property and matures in
2022,  requires monthly payments of principal and interest at 8.8% until 2007,
at  which  time  the  interest  rate  increases  to at  least  13.8%  under an
adjustment formula defined in the note agreement.



                       PROPERTY RESOURCES EQUITY TRUST

ITEM 2.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF  FINANCIAL  CONDITION  AND
RESULTS OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES (Continued)

In the short-term and in the  long-term,  management  believes that the Fund's
current  sources of capital  will  continue  to be  adequate  to meet both its
operating requirements and the payment of distributions.

IMPACT OF INFLATION

The Fund's policy of negotiating  leases which  incorporate  operating expense
"pass-through"  provisions  is intended to protect the Fund against  increased
operating costs resulting from inflation.

CASH DISTRIBUTION POLICY

Distributions  are  declared  quarterly  at the  discretion  of the  Board  of
Directors.  The Fund's  present  distribution  policy is to at least  annually
evaluate  the  current  distribution  rate  in  light  of  anticipated  tenant
turnover over the next two or three years,  the estimated  level of associated
improvements and leasing commissions,  planned capital expenditures,  any debt
service  requirements  and the  Fund's  other  working  capital  requirements.
After balancing these considerations,  and considering the Fund's earnings and
cash flow, the level of its liquid  reserves and other relevant  factors,  the
Fund seeks to establish a distribution rate which:

       i)   provides a stable  distribution  which is  sustainable
            despite  short  term   fluctuations  in  property  cash
            flows;

       ii)  maximizes   the  amount  of  cash  flow  paid  out  as
            distributions   consistent   with  the   above   listed
            objective; and

       iii) complies with the Internal  Revenue Code  requirement
            that a REIT annually pay out as distributions  not less
            than 95% of its taxable income.

During  the  six-month   period  ended  June  30,  1997,   the  Fund  declared
distributions totaling $2,692,000.




                       PROPERTY RESOURCES EQUITY TRUST

                         PART II - OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)   Not applicable

(b)   Reports on Form 8-K

      No reports on Form 8-K were filed by the  Registrant  during the quarter
ended June 30, 1997.



                                  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.

                                    PROPERTY RESOURCES EQUITY TRUST

                                     By:   /S/ DAVID P. GOSS

                                          David P. Goss
                                          Chief Executive Officer

                                    Date:    AUGUST 13, 1997