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  SEPTEMBER 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
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             (Exact name of registrant as specified in its charter)


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


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


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


                                      N/A
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    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 September 30, 1997: 1,090,052 

Shares of Series B Common Stock Outstanding as of September 30, 1997: 1,000




                         PART I - FINANCIAL INFORMATION

                          ITEM 1. FINANCIAL STATEMENTS

                         PROPERTY RESOURCES EQUITY TRUST

                                 BALANCE SHEETS
                    SEPTEMBER 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
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                                                                5,990    8,449

  Less: accumulated depreciation                                1,373    1,995
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                                                                4,617    6,454

Cash and cash equivalents                                         327      772
Mortgage-backed securities, available for sale                    138      173
Deferred rent receivable                                           53       77
Note receivable                                                   722      736
Other assets                                                      268      162
--------------------------------------------------------------------------------

   Total assets                                                $6,125   $8,374
================================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY:
Note payable                                                   $2,837   $2,750
Tenants' deposits and other liabilities                            47       59
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   Total liabilities                                            2,884    2,809
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Stockholders' equity:
Common stock, Series A, without par value,
 stated value $10 per share; 10,000,000
 shares authorized; 1,090,052 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                     (8)     (11)
Retained earnings (deficit)                                   (6,145)  (3,818)
--------------------------------------------------------------------------------

   Total stockholders' equity                                   3,241    5,565
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   Total liabilities and stockholders' equity                  $6,125   $8,374
================================================================================




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




                         PROPERTY RESOURCES EQUITY TRUST

                            STATEMENTS OF OPERATIONS
                                   (Unaudited)



                                     THREE MONTHS ENDED      NINE MONTHS ENDED
                                  SEPTEMBER   September  SEPTEMBER   September
                                        30,         30,        30,         30,
(Dollars in thousands,
 except per share amounts)             1997        1996       1997        1996
-------------------------------------------------------------------------------

REVENUE:

  Rent                                 $160        $264       $531        $803
  Interest                               19          23         66          50
  Dividends                               -           3         39           5
  Gain on sale of rental property         -           -        370          88
-------------------------------------------------------------------------------

    Total revenue                       179         290      1,006         946
-------------------------------------------------------------------------------

EXPENSES:

  Interest                               70          49        199         136
  Depreciation and amortization          39          58        138         190
  Operating                              31           8        111         162
  Related party                          19          23         88          69
  General and administrative              5           5         39          42
-------------------------------------------------------------------------------

    Total expenses                      164         143        575         599
-------------------------------------------------------------------------------

NET INCOME                              $15        $147       $431        $347
===============================================================================



Net income per share
 of Series A common stock              $.02        $.13       $.40        $.32
===============================================================================


Dividends per share
 of Series A common stock              $.06        $.09      $2.53        $.27
===============================================================================




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




                         PROPERTY RESOURCES EQUITY TRUST

                            STATEMENTS OF CASH FLOWS
          FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 1997 AND 1996
                                   (Unaudited)



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

Net income                                                          $431  $347
--------------------------------------------------------------------------------

Adjustments to reconcile net income to net cash
 provided by operating activities:
   Depreciation and amortization                                     151   190
   Decrease in deferred rent receivable                               24   (2)
   (Increase) decrease in other assets                             (138)  (30)
   Increase in tenants' deposits and other liabilities              (12)  (34)
   Gain on sale of rental property                                 (370)  (88)
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                                                                   (345)    36
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Net cash provided by operating activities                             86   383
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Cash flow from investing activities:
   Origination of note receivable                                      - (750)
   Principal received on note receivable                              14     9
   Improvements to rental property                                   (5)   (7)
   Proceeds from sale of rental property                           2,093   812
   Disposition of mortgage-backed securities                          38     3
--------------------------------------------------------------------------------

Net cash provided by investing activities                          2,140    67
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Cash flow from financing activities:
   Borrowings under notes payable                                  2,850     -
   Principal payments on note payable                            (2,763)     -
   Distributions paid                                            (2,758) (294)
--------------------------------------------------------------------------------

Net cash used in financing activities                            (2,671) (294)
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Net (decrease) increase in cash and cash equivalents               (445)   156

Cash and cash equivalents, beginning of period                       772   612
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Cash and cash equivalents, end of period                            $327  $768
================================================================================




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




                         PROPERTY RESOURCES EQUITY TRUST

                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1997


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, 1996.

NOTE 2 - BUSINESS ACTIVITY

As of September 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 September  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 nine month period ended  September  30, 1997,  interest paid amounted to
$186,000.

NOTE 6 - SUBSEQUENT EVENTS

On November 12, 1997, the board of directors of the Fund held a special  meeting
to discuss  certain offers for the purchase of Good Guys Plaza  Shopping  Center
and an offer to tender for the shares of the Fund. The board of directors  voted
to commence negotiations with the entity proposing the tender offer. There is no
assurance that the negotiations will result in a completed transaction.




                         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- AND NINE-MONTH  PERIODS ENDED  SEPTEMBER 30, 1997 AND
1996

Total revenue for the three-month  period decreased $111,000 or 38% primarily as
a result of a decrease  in rental  revenue  due to the sale of the Graham  Court
Business  Park in March,  1997.  Total revenue for the  nine-month  period ended
September 30, 1997  increased  $60,000 or 6% when compared to the same period in
1996  primarily  due to the gain on sale of rental  property  as a result of the
sale of the Graham Court  Business Park.  Interest and dividend  revenue for the
three-month  period ended September 30, 1997 decreased slightly when compared to
the same period in 1996 as a result of lower average investment balances for the
period. For the nine month period ended September 30, 1997 interest and dividend
revenue  increased  $50,000  compared  to the same period in 1996 as a result of
interest earned on the note receivable  relating to the sale of the Agora Office
Building  in April 1996 and  dividends  earned  from an  increase in the average
investment  balance as a result of proceeds received from the sale of the Graham
Court  Business  Park in  March,  1997.  The  sale  proceeds  were  subsequently
distributed to the shareholders in June 1997.

Total expenses for the three-month period increased $21,000, or 15% primarily as
a result of an increase in interest as a result of the  refinancing  of the note
payable collateralized by the property Good Guys Shopping Center and an increase
in operating  expenses due to a refund of prior year property  taxes at the Good
Guys Plaza in 1996. Total expenses for the nine month period ended September 30,
1997  decreased  $24,000,  or 4%, from $599,000 in 1996 to $575,000 in 1997. The
decrease in total expenses was primarily due to a decrease in operating expenses
and  depreciation  and  amortization 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  three-month  period  decreased  $132,000  primarily due to a
decrease in rental revenue as a result of the sale of Graham Court Business Park
in March 1997.  Net income for the nine month  period ended  September  30, 1997
increased  $84,000 as compared to the same period in 1996  primarily as a result
of the recognized gain on sale of Graham Court Business Park which was partially
offset by an increase in interest expense  resulting from the refinancing of the
note payable for Good Guys Shopping Center.

LIQUIDITY AND CAPITAL RESOURCES

At September 30, 1997, cash and cash equivalents  aggregated  $327,000 which the
Fund believes is adequate to meet its short-term operating cash requiremnets.

Net cash provided by operating  activities  decreased  $297,000 when compared to
the same period in 1996. The decrease in cash flow from operating  activities is
attributable  to the Fund having one remaining  property in its portfolio  after
the sale the sale of the Agora  Office  Building in April 1996 and Graham  Court
Business Park in March 1997.

Cash flows provided by investing  activities  increased $2,073,000 when compared
to the same period in 1996  primarily as a result of proceeds  received from the
sale of Graham Court Business Park.




                         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  increased  $2,377,000  primarily as a
result of cash  distributions  paid to  shareholders  from the sale  proceeds of
Graham Court Business Park.

As of September 30, 1997, the Fund had one remaining  property in its portfolio.
At September 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.

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  nine-month  period  ended  September  30,  1997,  the Fund  declared
distributions totaling $2,758,000.




                         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 September 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:   NOVEMBER 13, 1997