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, 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  June  30,  1998:
1,090,052
Shares  of  Series  B  Common   Stock   Outstanding   as  of  June  30,  1998:
1,000



                        PART I - FINANCIAL INFORMATION

                         ITEM 1. FINANCIAL STATEMENTS

                       PROPERTY RESOURCES EQUITY TRUST

                                BALANCE SHEETS
                     JUNE 30, 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                           1,480         1,409
-------------------------------------------------------------------------------
Real estate, net                                           4,514         4,582

Cash and cash equivalents                                    349           461
Deferred rent receivable                                      68            57
Note receivable                                                -           717
Other assets, net                                            248           268
-------------------------------------------------------------------------------
   Total assets                                           $5,179        $6,085
===============================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY:
Note payable                                              $2,811        $2,827
Tenants' deposits and other liabilities                       26            24
-------------------------------------------------------------------------------
   Total liabilities                                       2,837         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
Accumulated distributions in excess of net income        (7,052)       (6,160)
-------------------------------------------------------------------------------

   Total stockholders' equity                              2,342         3,234
-------------------------------------------------------------------------------

   Total liabilities and stockholders' equity             $5,179        $6,085
===============================================================================



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

                       PROPERTY RESOURCES EQUITY TRUST

          CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
                                  (Unaudited)



                                      THREE MONTHS ENDED       SIX MONTHS ENDED
                                     JUNE 30,      June      JUNE 30,   June 30,
                                                      30,
(Dollars in thousands, except            1998        1997        1998      1997
per share amounts)
--------------------------------------------------------------------------------

REVENUE:

  Rent                                   $182        $199        $358      $371
  Interest                                 15          23          28        47
  Dividends                                 4          29          10        39
--------------------------------------------------------------------------------
    Total revenue                         201         251         396       457
--------------------------------------------------------------------------------

EXPENSES:

  Interest                                 68          83         136       129
  Depreciation  and amortization           39          39          78        99
  Operating                                25          33          55        80
  Related party                            20          44          36        69
  General and administrative               17          12          45        34
--------------------------------------------------------------------------------
    Total expenses                        169         211         350       411
--------------------------------------------------------------------------------

Operating income before gain on            32          40          14        46
sale of property

Gain on sale of property                    -           -           -       370

================================================================================
NET INCOME                                $32         $40         $46      $416
================================================================================



Net income per share of Series A         $.03        $.04        $.04      $.38
common stock
================================================================================


Dividends per share of Series A          $.80       $2.38        $.86     $2.47
common stock
================================================================================



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


                       PROPERTY RESOURCES EQUITY TRUST

                           STATEMENTS OF CASH FLOWS
               FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
                                 (Unaudited)




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

Net income                                                   $46          $416
-------------------------------------------------------------------------------

Adjustments to reconcile net income to net cash
 provided by operating activities:
   Depreciation and amortization                              71           106
   (Increase) decrease in deferred rent                     (11)            30
receivable
   Decrease (increase) in other assets                        20          (73)
   Increase in tenants' deposits and other                     2             6
liabilities
   Gain on sale of rental property                             -         (370)
-------------------------------------------------------------------------------
                                                              82         (301)
-------------------------------------------------------------------------------

Net cash provided by operating activities                    128           115
-------------------------------------------------------------------------------

Cash flow from investing activities:
   Principal received on note receivable                     717            10
   Improvements to rental property                           (3)           (5)
   Proceeds from sale of rental property                       -         2,093
   Disposition of mortgage-backed securities                   -             2
-------------------------------------------------------------------------------
Net cash provided by investing activities                    714         2,100
-------------------------------------------------------------------------------

Cash flow from financing activities:
   Origination of note payable                                 -         2,850
   Principal payments on note payable                       (16)       (2,757)
   Distributions paid                                      (938)       (2,692)
-------------------------------------------------------------------------------
Net cash (used in) provided by financing                   (954)       (2,599)
activities
-------------------------------------------------------------------------------

Net  (decrease) in cash and cash equivalents               (112)         (384)

Cash and cash equivalents, beginning of period               461           772

===============================================================================
Cash and cash equivalents, end of period                    $349          $388
===============================================================================





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




                       PROPERTY RESOURCES EQUITY TRUST
                        NOTES TO FINANCIAL STATEMENTS
                                JUNE 30, 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  have been  prepared on a going  concern
basis,  which  contemplates  the realization of assets and the satisfaction of
liabilities in the normal course of business.  Management have decided to sell
the Fund's remaining  property,  Good Guys Shopping Center,  and liquidate the
Fund. A form 8-K  statement  announcing  this  intention was filed on April 22
1998.  No sale of the  remaining  Property  had  occurred  at June  30,  1998,
however  management is currently actively seeking a buyer of the Property (see
Note 5 below).  Accordingly  it is possible that the Fund will not continue as
a going concern for a reasonable period of time.

The  financial  statements  do not  include  any  adjustments  relating to the
recoverability  and  classification  of liabilities that might be necessary if
the Fund will not continue as a going  concern.  Management  believes that the
market value of the Partnership's  remaining property is at least equal to its
book value.  Accordingly  management does not expect any material losses to be
undertaken in the event of the liquidation of the Fund. 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.

These  financial  statements  should be read in  conjunction  with the  Fund's
audited financial statements for the year ended December 31, 1997.

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  six-month  period  ended June 30,  1998,  interest  paid  amounted to
$124,446.

NOTE 5 - SUBSEQUENT EVENT

On July 10, 1998,  Management  entered into a contract to sell Good Guys Plaza
Shopping  Center  to  an  unaffiliated  third  party  for  a  sales  price  of
$5,211,000,  subject to  contingencies.  On July 28,  1998,  the  majority  of
those  contingencies  were removed and although  some remain,  the sale may be
finalized  before December 31, 1998;  however,  no assurance can be given that
the sale will be finalized at this price, or that a sale will occur at all.

                       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 SIX-MONTH PERIODS ENDED JUNE 30, 1998 AND 1997

Total  revenue  for the  three  and  six-month  period  ended  June  30,  1998
decreased $50,000,  or 20%, and $61,000, or 13%,  respectively,  when compared
to the same periods in 1997. The decrease in dividend and interest  income was
attributable  to lower  average  investment  balances in the current  periods.
Rental income decreased  because of the sale of Graham Court in March 1997 and
also a  tenant  reimbursement  made in 1997  was not  repeated  in the  second
quarter of 1998.

Total  expenses  for the  three  and  six-month  period  ended  June 30,  1998
decreased $42,000,  or 20%, and $61,000, or 15%,  respectively,  when compared
to the same periods in 1997.  The Fund sold the Graham Court property in March
1997.  Operating  expense,   related  party,   depreciation  and  general  and
administrative  expenses  decreased as a result of the sale.  Interest expense
decreased  by $15,000 or 18% for the  three-month  period  ended June 30, 1998
compared to the same period in 1997  primarily as a result of the  refinancing
of the Good Guys note in March 1997.

Net income for the three and  six-month  period ended June 30, 1998  decreased
$8,000, or 20%, and $370,000, or 89%, respectively,  when compared to the same
periods in 1997.  This was due to changes in revenue and expenses as discussed
above  and the gain on sale of the  Graham  Court  property  in March  1997 as
discussed in note 4 to the financial statements.



LIQUIDITY AND CAPITAL RESOURCES

At June 30, 1998, cash and cash  equivalents  aggregated  $349,000,  which the
Fund believes is adequate to meet its short-term operating cash requirements.

Net cash provided by operating  activities  increased $13,000 when compared to
the same period in 1997.  This was  primarily due to the results of operations
as discussed above.

Cash flows provided by investing  activities decreased $1,386,000 in 1998 as a
result of proceeds  received  from the sale of Graham  Court that  occurred in
1997 as offset by the principal amount received on a note receivable in 1998.



                       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 $1,645,000 primarily due to
a decrease in the distribution paid.

As of June 30, 1998, the Fund had one remaining property in its portfolio.  As
discussed  in  note 1 to the  financial  statements  management  is  currently
marketing the property for sale, and a sale may occur in 1998.

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  June  30,  1998,  the  Fund  declared
distributions totaling $872,041.

YEAR 2000
Management  is in the process of  assessing  the impact of Year 2000 issues on
its computer systems and applications.  At this time, management believes that
the costs  associated  with  resolving  these  issues will not have a material
effect on the Company's financial statements.




                       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

Current  Report on Form 8-K dated April 17, 1998,  was filed on April 22, 1998
attaching  Registrant's  letter to  shareholders  of the Fund dated  April 17,
1998 under Item 5.




                                  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:

                                       David P. Goss
                                       Chief Executive Officer


                                    Date:, 1998