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, 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  (415) 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, 1997:  1,090,064
Shares of Series B Common Stock Outstanding as of March 31, 1997:      1,000



                         PART I - FINANCIAL INFORMATION

                          Item 1. Financial Statements

                         PROPERTY RESOURCES EQUITY TRUST

                                 BALANCE SHEETS
                      MARCH 31, 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                                             102       135
  Furniture and fixtures                                            -         -
--------------------------------------------------------------------------------
                                                                5,985     8,449

  Less: accumulated depreciation                                1,301     1,995
--------------------------------------------------------------------------------
                                                                4,684     6,454

Cash and cash equivalents                                       2,885       772
Mortgage-backed securities, available for sale                    171       173
Deferred rent receivable                                           42        77
Note receivable                                                   731       736
Other assets                                                      206       162
--------------------------------------------------------------------------------

   Total assets                                                $8,719    $8,374
================================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY:
Note payable                                                   $2,850    $2,750
Tenants' deposits and other liabilities                            27        59
--------------------------------------------------------------------------------

   Total liabilities                                            2,877     2,809
--------------------------------------------------------------------------------

Stockholders' equity:
Common  stock,  Series  A,  without  par  value,
  stated  value  $10 per  share;
 10,000,000 shares authorized; 1,090,064 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                   (12)      (11)
Retained earnings (deficit)                                  (3,540)   (3,818)
--------------------------------------------------------------------------------

   Total stockholders' equity                                  5,842     5,565
--------------------------------------------------------------------------------

   Total liabilities and stockholders' equity                 $8,719    $8,374
================================================================================




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





                         PROPERTY RESOURCES EQUITY TRUST

                            STATEMENTS OF OPERATIONS
                                   (Unaudited)



                                                            Three Months Ended
                                                            March 31   March 31
(Dollars in thousands,  except per share amounts)              1997       1996
--------------------------------------------------------------------------------

Revenue:

  Rent                                                         $172       $281
  Interest                                                       24         10
  Dividends                                                      10          1
  Gain on sale of rental property                               370          -
--------------------------------------------------------------------------------

    Total revenue                                               576        292
--------------------------------------------------------------------------------

Expenses:

  Interest                                                       45         41
  Depreciation and amortization                                  61         62
  Operating                                                      47         86
  Related party                                                  25         23
  General and administrative                                     22         16
--------------------------------------------------------------------------------

    Total expenses                                              200        228
--------------------------------------------------------------------------------

Net income                                                     $376        $64
================================================================================



Net income per share of Series A common stock                  $.35       $.06
================================================================================


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



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





                         PROPERTY RESOURCES EQUITY TRUST

                            STATEMENTS OF CASH FLOWS
            FOR THE THREE MONTH PERIODS ENDED MARCH 31, 1997 AND 1996
                                   (Unaudited)




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

Net income                                                  $376           $64
--------------------------------------------------------------------------------

Adjustments to reconcile net income to net
 cash  provided  by  operating
  activities:
   Depreciation and amortization                              61            62
   (Increase) decrease in deferred
     rent receivable                                          35            (4)
   Increase in other assets                                  (58)          (23)
   Increase (decrease) in tenants'
     deposits and other liabilities                          (32)           23
   Gain on sale of rental property                          (370)            -
--------------------------------------------------------------------------------

                                                            (364)           58
--------------------------------------------------------------------------------

Net cash provided by operating activities                     12           122
--------------------------------------------------------------------------------

Cash flow from investing activities:
   Origination of note payable                             2,850             -
   Principal received on note receivable                       5             -
   Improvements to rental property                             -            (7)
   Proceeds from sale of rental property                   2,093             -
   Disposition of mortgage-backed
     securities                                                1             1
--------------------------------------------------------------------------------

Net cash provided by (used in)
  investing activities                                     4,949            (6)
--------------------------------------------------------------------------------

Cash flow from financing activities:
   Principal payments on note payable                    (2,750)             -
   Distributions paid                                       (98)           (98)
--------------------------------------------------------------------------------

Net cash used in financing activities                    (2,848)           (98)
--------------------------------------------------------------------------------

Net increase in cash and cash equivalents                  2,113            18

Cash and cash equivalents,
 beginning of period                                         772           612
--------------------------------------------------------------------------------

Cash and cash equivalents,
 end of period                                            $2,885          $630
================================================================================



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





                         PROPERTY RESOURCES EQUITY TRUST

                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 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 Company
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

NOTE 2 - 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 3 - 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 4 - SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

For the three month  period  ended March 31,  1997,  interest  paid  amounted to
$45,000.




                         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 three month periods ended March 31, 1997 and 1996

Total revenue for the three month period ended March 31, 1997 increased $284,000
or 97%, from $292,000 in 1996 to $576,000 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 at the remaining  property of
the Fund decreased $6,000 compared to the same period in 1996 as a result of the
refund of the  prior  year  property  taxes,  insurance  and  operating  expense
reimbursements.  For the three month period ended March 31, 1997 interest income
increased  $14,000  compared  to the same period in 1996 as a result of the note
receivable relating to the sale of the Agora Office Building.

Total  expenses  for the three  month  period  ended  March 31,  1997  decreased
$28,000,  or 12%,  from  $228,000 in 1996 to $200,000 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 to a refund of prior year property
taxes at the Good Guys Plaza.  The  decrease was offset by increases in interest
and accounting expenses.

Net income for the three month period ended March 31, 1997 increased $312,000 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 $370,000 and interest
income earned on the note  receivable of $14,000  partially  offset by a $70,000
decrease in net income  (decrease  in  operating  expenses of $39,000 and rental
revenue  of  $109,000)  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 March 31, 1997, cash and cash equivalents  totaled $2,885,000 and investments
in mortgage-backed securities totaled $171,000.

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.




                         PROPERTY RESOURCES EQUITY TRUST


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

Liquidity and Capital Resources (Continued)


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,  1997,  the  Fund  declared
distributions totaling $98,000.




                         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

     During the quarter  ended March 31,  1997,  the  Registrant  filed a report
dated March 19, 1997, (date of earliest event reported) on Form 8-K with respect
to the sale of the Graham Court Business Park.



                                    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: May 14, 1997