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                           MARCH 31, 1998
                              --------------------------------------------------

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 incorporation or organization) (I.R.S. Employer
                                                             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  March 31, 1998:  1,090,052
Shares  of  Series  B  Common  Stock   Outstanding   as  of  March  31,  1998:
1,000



                        PART I - FINANCIAL INFORMATION

                         ITEM 1. FINANCIAL STATEMENTS

                       PROPERTY RESOURCES EQUITY TRUST

                                BALANCE SHEETS
                     MARCH 31, 1998 AND DECEMBER 31, 1997
                                 (Unaudited)


(Dollars in thousands, except per share amounts)            1998          1997
-------------------------------------------------------------------------------
ASSETS:
Real estate:
  Land                                                    $1,702        $1,702
  Buildings and improvements                               4,132         4,132
  Tenant improvements                                        160           157
-------------------------------------------------------------------------------
                                                           5,994         5,991

  Less: accumulated depreciation                           1,444         1,409
-------------------------------------------------------------------------------
Real estate, net                                           4,550         4,582

Cash and cash equivalents                                    523           461
Mortgage-backed securities, available for sale                 -             -
Deferred rent receivable                                      63            57
Note receivable                                              712           717
Other assets, net                                            256           268
-------------------------------------------------------------------------------
   Total assets                                           $6,104        $6,085
===============================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY:
Note payable                                              $2,819        $2,827
Tenants' deposits and other liabilities                       37            24
Distributions payable                                         65             -
-------------------------------------------------------------------------------
   Total liabilities                                       2,921         2,851
-------------------------------------------------------------------------------

Stockholders' equity:
Common stock, Series A, without par value, stated
  value $10 per share; 10,000,000 shares authorized;       9,384         9,384
  1,090,052  shares issued and outstanding  in
1998 and 1997
Common stock, Series B, without par value, stated
  Value $10 per share; 1,000 shares authorized,
  issued and outstanding in 1998and 1997                      10            10
Unrealized loss on mortgage-backed securities                                -
Accumulated distributions in excess of net income        (6,211)       (6,160)
-------------------------------------------------------------------------------

   Total stockholders' equity                              3,183         3,234
-------------------------------------------------------------------------------

   Total liabilities and stockholders' equity             $6,104        $6,085
===============================================================================



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



                       PROPERTY RESOURCES EQUITY TRUST

                           STATEMENTS OF OPERATIONS
              FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
                                  (Unaudited)




(Dollars in thousands, except            1998        1997
per share amounts)
----------------------------------------------------------

REVENUE:

  Rent                                   $176        $172
  Interest                                 13          24
  Dividends                                 6          10
----------------------------------------------------------
    Total revenue                         195         206
----------------------------------------------------------

EXPENSES:

  Interest                                 68          46
  Depreciation  and amortization           39          60
  Operating                                30          47
  Related party                            13          20
  General and administrative               31          27
----------------------------------------------------------
    Total expenses                        181         200
----------------------------------------------------------

Operating income before gain on            14           6
sale of property

Gain on sale of property                    -         370

==========================================================
NET INCOME                                $14        $376
==========================================================



Net income per share of Series A         $.01        $.35
common stock
==========================================================


Dividends per share of Series A          $.06        $.09
common stock
==========================================================















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



                       PROPERTY RESOURCES EQUITY TRUST

                           STATEMENTS OF CASH FLOWS
          FOR THE THREE MONTH PERIODS ENDED MARCH 31, 1998 AND 1997
                                 (Unaudited)




(Dollars in thousands)                                      1998          1997
-------------------------------------------------------------------------------
Cash flows from operating activities:

Net income                                                   $14          $376
-------------------------------------------------------------------------------

Adjustments to reconcile net income to net cash
 provided by operating activities:
   Depreciation and amortization                              45            61
   (Increase) decrease in deferred rent                      (6)            35
receivable
   Decrease (increase) in other assets                         3          (58)
   Increase (decrease) in tenants' deposits and               13          (32)
other liabilities
   Gain on sale of rental property                             -         (370)
-------------------------------------------------------------------------------
                                                              55         (364)
-------------------------------------------------------------------------------

Net cash provided by operating activities                     69            12
-------------------------------------------------------------------------------

Cash flow from investing activities:
   Principal received on note receivable                       5             5
   Improvements to rental property                           (4)             -
   Proceeds from sale of rental property                       -         2,093
   Disposition of mortgage-backed securities                   -             1
-------------------------------------------------------------------------------
Net cash provided by investing activities                      1         2,099
-------------------------------------------------------------------------------

Cash flow from financing activities:
   Origination of note payable                                 -         2,850
   Borrowings under notes payable                              -             -
   Principal payments on note payable                        (8)       (2,750)
   Distributions paid                                          -          (98)
-------------------------------------------------------------------------------
Net cash (used in) provided by financing                     (8)             2
activities
-------------------------------------------------------------------------------

Net  increase in cash and cash equivalents                    62         2,113

Cash and cash equivalents, beginning of period               461           772

===============================================================================
Cash and cash equivalents, end of period                    $523        $2,885
===============================================================================





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





                       PROPERTY RESOURCES EQUITY TRUST

                        NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 1998


NOTE 1- BASIS OF PRESENTATION

The accompanying  unaudited interim financial statements of Property Resources
Equity  Trust  (the  "Fund")  have  been  prepared  in  accordance   with  the
instructions  to Form  10-Q  pursuant  to the  rules  and  regulations  of the
Securities  and  Exchange   Commission.   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.  In the opinion of  management,  all
appropriate  adjustments  necessary to a fair  presentation  of the results of
operations  have been made for the periods  shown.  All  adjustments  are of a
normal  recurring  nature.  Certain prior year amounts have been  reclassified
to conform to current year  presentations.  These financial  statements should
be read in conjunction  with the Fund's audited  financial  statements for the
year ended December 31, 1997.

NOTE 2 - BUSINESS ACTIVITY

As of March 31, 1998,  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 has  commenced  marketing  activity.  At
March 31, 1998,  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  three-month  period ended March 31, 1998,  interest  paid amounted to
$61,754.

NOTE 6 - SUBSEQUENT EVENT

On April 16, 1998, the note receivable,  $712,000  collateralized by the Agora
building was paid in full. The proceeds will be  distributed  to  shareholders
in the second quarter.



                       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 THREE-MONTH PERIODS ENDED MARCH 31, 1998 AND 1997

Net income for the three-month  period decreased $362,000 primarily due to the
gain related to the sale of Graham Court in 1997.

Total  revenue for the  three-month  period  ended  March 31,  1998  decreased
$11,000 or 5% due a decline in interest  and  dividend  revenue.  The decrease
of $15,000 in these accounts from the comparable  period in the prior year was
attributable  to lower  average  investment  balances in the  current  period.
Good Guys Plaza  experienced a 3% increase in rental revenues in 1998 compared
to the prior year and a tenant  reimbursement made in 1997 was not repeated in
the first  quarter of 1998.  These two  factors  led to an  increase in rental
revenues of $4,000 over the  corresponding  period in the prior year,  despite
the sale of Graham Court in March 1997.

Total expenses for the three-month  period decreased $20,000 or 10% due to the
sale of  Graham  Court  in  March  1997.  Operating  expense,  related  party,
depreciation and general and administrative  expenses decreased as a result of
the sale,  however interest expense  increased $21,000 due to the refinance of
the Good Guys note in March 1997.


LIQUIDITY AND CAPITAL RESOURCES

At March 31, 1998, cash and cash equivalents  aggregated  $523,000,  which the
Fund believes is adequate to meet its short-term operating cash requirements.

Net cash provided by operating  activities  increased $57,000 when compared to
the same period in 1997. The increase in cash flow from  operating  activities
is  attributable  the improved  occupancy and higher rents charged at the Good
Guys Plaza.

Cash flows provided by investing  activities decreased $2,098,000 in 1998 as a
result of  proceeds  received  from the sale of  Graham  Court  Business  that
occurred in 1997.


                       PROPERTY RESOURCES EQUITY TRUST


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

LIQUIDITY AND CAPITAL RESOURCES (Continued)

Cash  flows  used  in  financing  activities  decreased  $10,000  due  to  the
refinancing of the note payable in 1997.

As of March 31, 1998,  the Fund had one remaining  property in its  portfolio.
Management is currently  marketing the property for sale, and a sale may occur
in 1998.  At March 31,  1998,  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.

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  three-month  period  ended  March  31,  1998,  the Fund  declared
distributions totaling $65,403.





                       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 March 31, 1998.









                                  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
                                       Chief Executive Officer


                                    Date:    MAY 13, 1998