UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C.  20549
                      ----------------------------------

                                   FORM 10-Q


    X       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

               FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 1996

                                      OR

            TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
               SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

            For the transition period from           to          .


                            Commission File Number    :  0-10995



                      PAINE WEBBER GROWTH PROPERTIES LP
            (Exact name of registrant as specified in its charter)



            Delaware                                        04-2772109
(State or other jurisdiction of                           (I.R.S. Employer
incorporation or organization)                              Identification No.)



265 Franklin Street, Boston, Massachusetts                           02110
(Address of principal executive offices)                           (Zip Code)

Registrant's telephone number, including area code  (617) 439-8118


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 for 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 .


<PAGE>

                      PAINE WEBBER GROWTH PROPERTIES LP

                         CONSOLIDATED BALANCE SHEETS
               December 31, 1996 and March 31, 1996 (Unaudited)
                                (In thousands)


                                     ASSETS
                                                       December 31   March 31
                                                       -----------   --------

Operating investment property, at cost:
   Land                                                 $   2,029   $   2,029
   Buildings, improvements and equipment                   13,940      13,827
                                                        ---------   ---------
                                                           15,969      15,856
   Less accumulated depreciation                           (6,778)     (6,263)
                                                        ---------   ---------
                                                            9,191       9,593
Investments in unconsolidated joint
  ventures, at equity                                         886         987
Cash and cash equivalents                                   1,482       1,323
Real estate tax and insurance escrow deposits                 203         247
Capital improvement and replacement escrow                    239         271
Accounts receivable                                             3           1
Deferred loan costs, net                                      483         496
Other assets                                                   24          61
                                                        ---------   ---------
                                                        $  12,511   $  12,979
                                                        =========   =========


                      LIABILITIES AND PARTNERS' CAPITAL

Accounts payable and accrued expenses                   $     209   $     266
Accrued interest payable                                      253         211
Advances from consolidated venture                              -         250
Tenant security deposits                                       16          18
Other liabilities                                              25          27
Mortgage note payable                                       6,832       6,890
Partners' capital                                           5,176       5,317
                                                        ---------   ---------
                                                        $  12,511   $  12,979
                                                        =========   =========




                           See accompanying notes.
<PAGE>
                        PAINE WEBBER GROWTH PROPERTIES LP

                      CONSOLIDATED STATEMENTS OF OPERATIONS
   For the three and nine months ended December 31, 1996 and 1995 (Unaudited)
                      (In thousands, except per Unit data)

                                     Three Months Ended     Nine  Months Ended
                                        December 31             December 31,
                                     ------------------     ------------------
                                      1996        1995         1996     1995
                                      ----        ----         ----     ----

Revenues:
   Rental income                   $  521     $   514     $ 1,523    $  1,511
   Reimbursements from affiliates      39          50         127         146
   Interest and other income           43          79         112         195
                                   ------     -------     -------    --------
                                      603         643       1,762       1,852

Expenses:
   Property operating expenses        235         267         720         815
   Depreciation                       181         169         515         506
   Interest expense                   144         146         435         438
   Real estate taxes                   49          56         161         167
   Management fees                      8           8          24          26
   General and administrative          39          73         139         271
                                  -------     -------     -------    --------
                                      656         719       1,994       2,223
                                  -------     -------     -------    --------

Operating loss                        (53)        (76)       (232)       (371)

Venture partner's share of
   consolidated venture's operations    -           1           2           3

Partnership's share of unconsolidated
    ventures' income                  162          41         327         170
                                   ------    --------     -------    --------

Net income (loss)                  $  109    $    (34)    $    97    $   (198)
                                   ======    ========     =======    ========

Net income (loss) per
  Limited Partnership Unit         $3.69      $(0.91)      $3.28      $(6.71)
                                   =====      ======       =====      ======

Cash distributions per
  Limited Partnership Unit         $2.69      $ 3.01       $8.07      $99.30
                                   =====      ======       =====      ======

The above net income (loss) and cash distributions per Limited  Partnership Unit
are based upon the  29,194  Units of Limited  Partnership  Interest  outstanding
during each period.








                           See accompanying notes.
<PAGE>

                        PAINE WEBBER GROWTH PROPERTIES LP

        CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
        For the nine months ended December 31, 1996 and 1995 (Unaudited)
                                 (In thousands)

                                                   General          Limited
                                                   Partners         Partners
                                                   --------         --------

Balance at March 31, 1995                          $      -        $  8,610
Cash distributions                                       (3)         (2,889)
Net loss                                                 (2)           (196)
                                                   --------        --------
Balance at December 31, 1995                       $     (5)       $  5,525
                                                   ========        ========

Balance at March 31, 1996                          $     (6)       $  5,323
Cash distributions                                       (2)           (236)
Net income                                                1              96
                                                   --------        --------
Balance at December 31, 1996                       $     (7)       $  5,183
                                                   ========        ========









                           See accompanying notes.


<PAGE>


                        PAINE WEBBER GROWTH PROPERTIES LP

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
        For the nine months ended December 31, 1996 and 1995 (Unaudited)
                Increase (Decrease) in Cash and Cash Equivalents
                                 (In thousands)

                                                         1996         1995
                                                         ----         ----
Cash flows from operating activities:
  Net income (loss)                                  $      97    $    (198)
  Adjustments to reconcile net income (loss) 
    to net cash used in operating activities:
   Reimbursements from affiliates                         (127)        (146)
   Venture partner's share of consolidated
      venture's operations                                  (2)          (3)
   Partnership's share of unconsolidated
      ventures' income                                    (327)        (170)
   Depreciation                                            515          506
   Amortization of deferred loan costs                      13           13
   Changes in assets and liabilities:
     Real estate tax and insurance escrow deposit           44           34
     Accounts receivable                                    (2)          (5)
     Other assets                                           37           16
     Accounts payable and accrued expenses                 (57)         (85)
     Accrued interest payable                               42           42
     Advances from consolidated venture                   (250)           -
     Other liabilities                                       -           (4)
     Tenant security deposits                               (2)          (5)
                                                      --------    ---------
         Total adjustments                                (116)         193
                                                      --------    ---------
         Net cash used in operating activities             (19)          (5)
                                                      --------    ---------

Cash flows from investing activities:
   Contributions to unconsolidated joint ventures           (1)           -
   Distributions from unconsolidated joint ventures        556          580
   Net withdrawals from capital
     improvement and replacement escrow                     32           46
   Additions to operating investment property             (113)         (70)
                                                      --------     --------
         Net cash provided by investing activities         474          556
                                                      --------     --------

Cash flows from financing activities:
   Principal payments on mortgage note payable             (58)         (53)
   Distributions to partners                              (238)      (2,892)
                                                     ---------    ---------
         Net cash used in financing activities            (296)      (2,945)
                                                     ---------    ---------

Net increase (decrease) in cash and cash equivalents       159       (2,394)

Cash and cash equivalents, beginning of period           1,323        3,493
                                                      --------    ---------

Cash and cash equivalents, end of period              $  1,482     $  1,099
                                                      ========     ========

Cash paid during the period for interest             $     380    $     383
                                                     =========    =========





                           See accompanying notes.


<PAGE>


                      PAINE WEBBER GROWTH PROPERTIES LP
                  Notes to Consolidated Financial Statements
                                 (Unaudited)

1.  General

        The accompanying  financial statements,  footnotes and discussion should
    be read in conjunction with the financial statements and footnotes contained
    in the Partnership's Annual Report for the year ended March 31, 1996. In the
    opinion of management, the accompanying financial statements, which have not
    been  audited,  reflect  all  adjustments  necessary  to present  fairly the
    results for the interim period. All of the accounting  adjustments reflected
    in the accompanying  interim financial  statements are of a normal recurring
    nature.

        The accompanying  financial statements have been prepared on the accrual
    basis  of  accounting  in  accordance  with  generally  accepted  accounting
    principles which requires  management to make estimates and assumptions that
    affect the reported  amounts of assets and  liabilities  and  disclosures of
    contingent assets and liabilities as of December 31, 1996 and March 31, 1996
    and  revenues and  expenses  for each of the three- and  nine-month  periods
    ended  December  31, 1996 and 1995.  Actual  results  could  differ from the
    estimates and assumptions used.

2.  Investments in Unconsolidated Joint Ventures

        The Partnership has investments in four unconsolidated joint ventures at
    December 31, 1996 and 1995. Three of the  unconsolidated  joint ventures own
    and operate  residential  apartment  complexes.  As discussed further in the
    Annual Report,  one unconsolidated  joint venture  (Parkwoods) had owned and
    operated a residential  apartment  complex until the property was completely
    destroyed by a fire in October of 1991. On April 15, 1994, this venture sold
    the  land  at the  former  site of the  Parkwoods  apartment  complex  to an
    affiliate of the Partnership's  co-venture  partner for $4,750,000.  Despite
    the sale of the remaining real property, the Parkwoods joint venture has not
    been liquidated to date due to certain  outstanding legal matters related to
    the aforementioned fire.

        On December 23, 1994, Austin  Northcastle  Partners,  a joint venture in
    which  the  Partnership  had an  interest,  sold the  property  known as the
    Northcastle  Apartments,  located in Austin,  Texas,  to an unrelated  third
    party for  $6,100,000.  Final  approval  of the  sale,  which  involved  the
    assumption of the  outstanding  first mortgage loan secured by the property,
    was received from the  Department of Housing and Urban  Development on April
    26, 1995.  After  transaction  costs and the  assumption of the  outstanding
    first mortgage  loan, the joint venture  received net proceeds of $1,620,000
    from the sale. The Partnership's  share of such proceeds was $1,581,000,  in
    accordance with the terms of the joint venture agreement.  On June 15, 1995,
    the Partnership made a special distribution of $2,627,000,  or $90 per unit,
    to the Limited Partners which included the net proceeds from the Northcastle
    sale and certain excess Partnership reserves.

        The unconsolidated joint ventures are accounted for on the equity method
    in the Partnership's  financial  statements because the Partnership does not
    have a voting control  interest in these  ventures.  Under the equity method
    the investments are carried at cost adjusted for the Partnership's  share of
    the venture's earnings,  losses and distributions.  The Partnership's policy
    is to recognize its share of ventures' operations three months in arrears.


<PAGE>


        Summarized  operations of the  unconsolidated  joint  ventures,  for the
    periods indicated, are as follows:

                    CONDENSED COMBINED SUMMARY OF OPERATIONS
         For the three and nine months ended September 30, 1996 and 1995
                                 (in thousands)

                                   Three Months Ended      Nine Months Ended
                                       September 30,          September 30,
                                   ------------------      ------------------
                                     1996        1995        1996       1995
                                     ----        ----        ----       ----
     Rental revenues and
       expense recoveries          $1,199      $1,175     $ 3,544     $ 3,483
     Interest and other income         33          37          83          99
                                   ------      ------     -------     -------
                                    1,232       1,212       3,627       3,582

     Property operating expenses      581         571       1,626       1,596
     Interest expense                 265         395       1,050       1,188
     Depreciation                     224         216         632         648
                                  -------      ------     -------     -------
                                    1,070       1,182       3,308       3,432
                                  -------      ------     -------     -------

     Net income                   $   162      $   30     $   319     $   150
                                  =======      ======     =======     =======

     Net income:
      Partnership's share of
        combined income (losses)  $   162      $   41     $   327     $   170
      Co-venturers' share of
        combined income (losses)        -         (11)         (8)        (20)
                                  -------      ------     -------     -------
                                  $   162      $   30     $   319     $   150
                                  =======      ======     =======     =======

3.  Operating Investment Property

        The  Partnership  has a controlling  interest in one joint venture,  Nob
    Hill Partners,  which owns Nob Hill Apartments, a 368-unit apartment complex
    located in San Antonio,  Texas.  As explained  further in the Annual Report,
    during fiscal 1993 the  Partnership  assumed control over the affairs of the
    joint venture as a result of the  withdrawal of the  co-venture  partner and
    the  assignment  of its  remaining  interest to First PW Growth  Properties,
    Inc., the Managing  General  Partner of the  Partnership.  Accordingly,  the
    accompanying financial statements present the financial position, results of
    operations and cash flows of this joint venture on a consolidated basis. The
    joint  venture  had a year-end  of  December  31 for both tax and  financial
    reporting purposes.  Accordingly,  the Partnership's policy is to report the
    consolidated results of the joint venture on a three-month lag.

        During the quarter  ended June 30, 1996,  a purchase and sale  agreement
    was  signed  with a  prospective  third-party  buyer  to sell  the Nob  Hill
    Apartments  for a price of $10 million.  In October  1996,  the terms of the
    agreement  were amended to reflect a reduction in the purchase price to $9.5
    million.  The transaction closed subsequent to the end of the third quarter,
    on February 7, 1997.  While the transaction has been executed and control of
    the property has been transferred to the buyer, the sale remains  contingent
    upon receiving the consent of the Secretary of Housing and Urban Development
    ("HUD") to the sale and the  assumption of the loan by the  purchaser.  Such
    final approval has not been received to date,  but  management  expects such
    approval  to be  forthcoming  by early April 1997.  The sale  generated  net
    proceeds  of  approximately  $2.3  million  which  was  distributed  to  the
    Partnership,  to be held pending receipt of the formal approval  referred to
    above. In addition the venture had excess working  capital of  approximately
    $214,000 at the time of the sale. All of the net proceeds and excess working
    capital  are due to the  Partnership  under the terms of the Nob Hill  joint
    venture   agreement.   The   Partnership  is  expected  to  make  a  special
    distribution of $100 per original $1,000 investment  subsequent to receiving
    the final HUD approval.  Of this amount,  approximately  $84 would represent
    the net  proceeds  from the sale of the Nob Hill  Apartments  and $16  would
    represent a  distribution  of  Partnership  reserves  which exceed  expected
    future requirements.
<PAGE>
        The  following  is a summary  of  property  operating  expenses  for the
    consolidated  Nob Hill joint  venture  for the three and nine  months  ended
    September 30, 1996 and 1995 (in thousands):

                                     Three Months Ended    Nine Months Ended
                                         September 30,       September 30,
                                      -----------------    ----------------
                                     1996        1995        1996       1995
                                     ----        ----        ----       ----

        Repairs and maintenance     $  32       $  81      $  110      $  228
        Utilities                      29          39          99         103
        Management fees                21          22          63          63
        Insurance                      15          15          46          44
        Administrative and other      138         110         402         377
                                    -----       -----      ------      ------
                                    $ 235       $ 267      $  720      $  815
                                    =====       =====      ======      ======

4.  Related Party Transactions

        The Partnership accrues as income reimbursements due from certain of the
    joint   ventures  for  the   Partnership's   management   fees  and  certain
    out-of-pocket  expenses,  as  specified  in  the  respective  joint  venture
    agreements.  Such reimbursements totalled $127,000 and $146,000 for the nine
    months ended December 31, 1996 and 1995, respectively.

        The Adviser  earns  management  fees equal to  approximately  10% of the
    Distributable  Cash  generated by the  Partnership,  as defined,  subject to
    certain  limitations.  Such management fees totalled $24,000 and $26,000 for
    the nine months ended December 31, 1996 and 1995, respectively.

        Included  in general  and  administrative  expenses  for the nine months
    ended  December  31,  1996 and 1995 is $64,000  and  $70,000,  respectively,
    representing  reimbursements to an affiliate of the Managing General Partner
    for  providing  certain  financial,  accounting  and investor  communication
    services to the Partnership.

        The  Partnership  uses the services of Mitchell  Hutchins  Institutional
    Investors,  Inc.  ("Mitchell  Hutchins")  for the  managing of cash  assets.
    Mitchell  Hutchins is a subsidiary of Mitchell  Hutchins  Asset  Management,
    Inc., an independently operated subsidiary of PaineWebber. Mitchell Hutchins
    earned fees of $3,000 and $5,000  (included  in general  and  administrative
    expenses) for managing the Partnership's  cash assets during the nine months
    ended December 31, 1996 and 1995, respectively.

5.  Mortgage Note Payable

        Mortgage  note payable at December 31, 1996 and March 31, 1996  consists
    of the following debt of Nob Hill Partners,  the Partnership's  consolidated
    joint venture (in thousands):

                                                       December 31  March 31
                                                       -----------  --------

    7.375%   mortgage  note  payable
    secured    by   the   Nob   Hill
    operating  property.   The  fair
    value  of  the   mortgage   note
    payable     approximated     its
    carrying  value as of  September
    30,   1996  and   December   31,
    1996.                                               $6,832      $6,890

        The above debt obligation represents a nonrecourse mortgage note payable
    to a third  party and  insured by the U.S.  Department  of Housing and Urban
    Development  (HUD). The principal and interest on the note are to be paid in
    monthly  installments of approximately  $49,000 commencing December 1, 1993,
    until maturity on November 1, 2023. In addition, the property is required to
    submit monthly escrow deposits of approximately $29,000 for taxes, insurance
    and a replacement  reserve  required  under the terms of the HUD  regulatory
    agreement.  As  discussed  further in Note 3,  subsequent  to the end of the
    third  quarter  of  fiscal  1997,  Nob  Hill  Partners  sold  its  operating
    investment property, subject to the assumption of the mortgage indebtedness,
    and distributed the net proceeds to the Partnership.

6.  Contingencies

         As  discussed  in more  detail in the Annual  Report for the year ended
     March 31, 1996, the  Partnership  is involved in certain legal actions.  At
     the present time, the Managing  General Partner is unable to determine what
     impact,   if  any,  the  resolution  of  these  matters  may  have  on  the
     Partnership's financial statements, taken as a whole.




<PAGE>

                      PAINE WEBBER GROWTH PROPERTIES LP

                     MANAGEMENT'S DISCUSSION AND ANALYSIS
               OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Liquidity and Capital Resources
-------------------------------

        As previously  reported,  during the first  quarter of fiscal 1997,  the
Partnership signed a purchase and sale agreement with a prospective  third-party
buyer to sell the Nob Hill  Apartments  for a price of $10  million.  In October
1996,  the terms of the  agreement  were  amended to reflect a reduction  in the
purchase  price to $9.5 million as a result of certain  required  repair work at
the property. The transaction closed subsequent to the end of the third quarter,
on February 7, 1997, and the Partnership  received net proceeds from the sale of
approximately $2.3 million. In addition,  the venture had excess working capital
of  approximately  $214,000 at the time of the sale.  All of the  proceeds  were
distributed  to the  Partnership  in  accordance  with the terms of the Nob Hill
joint  venture  agreement,  to be held  pending  receipt of the formal  approval
referred to below. The Partnership's  original  investment in the Nob Hill joint
venture totalled  approximately $5 million.  Despite  receiving less than 50% of
the Partnership's  original investment,  management believes that the sale price
is reflective of the market value of the property and that it was an appropriate
time to sell  the  investment  property.  While  the Nob Hill  property  was 93%
occupied for the quarter ended  December 31, 1996,  development of a significant
number of new multi-family units was underway at the time of the sale. Increased
competition  had begun to result in pressure to reduce  rental rates or use rent
concessions as leasing incentives to maintain occupancy levels and market share.
In addition,  despite the recent extensive  capital  improvement  program at the
property,  the property's age required that ongoing capital expenditures be made
to  maintain  the  property's  competitive  condition.  As  a  result  of  these
circumstances, management believed that the value of this 25-year-old, 368-unit,
San  Antonio,  Texas  apartment  complex was at or near its peak for the current
market  cycle.  While the sale has been executed and control of the property has
been  transferred to the buyer,  the sale remains  contingent upon receiving the
consent of the Secretary of Housing and Urban Development ("HUD") to the sale of
the  property  and the  assumption  of the  loan by the  purchaser.  Such  final
approval,  which should be a mere formality,  has not been received to date, but
management  expects such  approval to be  forthcoming  by early April 1997.  The
Partnership is expected to make a special  distribution to the Limited  Partners
of $2.9 million, or $100 per original $1,000 investment, subsequent to receiving
the final HUD approval.  Of this amount,  approximately  $84 would represent the
net proceeds from the sale of the Nob Hill  Apartments and $16 would represent a
distribution of Partnership reserves which exceed expected future requirements.

        Distributions  for the third fiscal quarter are $4.04 per Unit, which is
equivalent to a 3% annualized rate of return on the $538 remaining portion of an
original  $1,000  investment.  This is an increase  from the 2% annual rate paid
last  quarter and is the result of the  improved  operating  performance  of the
properties in the Partnership's  portfolio and a reduction in debt service costs
achieved  from the August 1996  refinancing  of the Tantra Lake  mortgage  loan.
Subsequent to the expected distribution of the Nob Hill sale proceeds and excess
Partnership  reserves  discussed further above, the  Partnership's  distribution
rate is expected to increase to 4.25% per annum on the $438 remaining portion of
an original $1,000 investment.

        The sale of the Nob Hill Apartments has positioned the Partnership for a
possible liquidation within the next 2-to-3 years. The Partnership has ownership
interests  in three  remaining  apartment  properties  located in the markets of
Boulder,  Colorado  (Tantra Lake),  greater Dallas,  Texas (Chisholm  Place) and
Stockton,  California  (Grouse Run).  The Boulder  market  remains strong at the
present time due to a history of healthy  population growth, a stable employment
base and an established public policy to limit new apartment  construction.  The
Partnership has received some unsolicited  interest from prospective  buyers for
the Tantra Lake  Apartments.  Management  expects to explore the potential for a
sale of the property during calendar 1997.  Despite a fairly  significant amount
of new  construction  coming  on-line in the greater Dallas market during fiscal
1997, the  performance of the Chisholm Place  Apartments has remained strong due
to  the   property's   larger  unit  sizes,   its  excellent   location  and  is
well-maintained  physical  appearance.  Management  is currently  analyzing  the
potential for near term appreciation in the value of the Chisholm Place property
to  determine  the  appropriate  timing  for  the  disposition  of  this  asset.
Management  has been able to maintain high  occupancy  levels at Grouse Run (94%
for the quarter ended December 31, 1996) by offering various rental  concessions
in recent  years.  As a result  of the  difficult  local  market  conditions  in
Stockton,  which continue to affect the Grouse Run property,  the disposition of
this  investment  will likely depend mostly on the timing of the sales of Tantra
Lake and  Chisholm  Place.  Management's  hold  versus  sell  decisions  for its
remaining  investments  will continue to be based upon an assessment of the best
expected overall returns to the Limited Partners. <PAGE>
        The  $8.5  million  first  mortgage  loan  secured  by the  Tantra  Lake
Apartments was scheduled to mature on July 1, 1996. As discussed  further in the
Annual Report,  management's  goal was to structure a replacement  loan with the
flexibility  to  permit  a  future  sale of the  property  in the  event  that a
liquidation  of the  Partnership  is  pursued  over the next  2-to-3  years,  as
discussed further above. On August 6, 1996, the Partnership closed on a new loan
for the Tantra  Lake joint  venture and the  existing  first  mortgage  loan was
repaid in full.  The new mortgage  loan, in the principal  amount of $8,850,000,
bears interest at 7.68% per annum,  requires  interest-only  payments throughout
its term and is scheduled  to mature on September 1, 2001.  The terms of the new
loan reduce  Tantra  Lake's  required  annual debt service by more than $300,000
which  has  significantly  improved  cash  flow  to the  Partnership  from  this
investment.  In addition,  the new loan is assumable  upon a sale and allows for
prepayment  in  full  at  any  time.  A  penalty  tied  to a  yield  maintenance
calculation  would be charged for any  prepayment  in the first two years of the
term.  Thereafter,  a penalty equal to 1% of the outstanding  principal  balance
would be due in conjunction with any prepayment transaction.

        As discussed  further in the Annual  Report,  management had filed for a
refund of  approximately  $450,000  in costs  incurred  to secure the  necessary
building  permits which were obtained  prior to the sale of the land  underlying
the  former  Parkwoods   Apartments  from  a  federal  agency   responsible  for
administering federal aid in connection with the 1991 Oakland fire. An agreement
was reached during the second  quarter of fiscal 1996 to a release  schedule for
money  previously  funded by the  Parkwoods  joint  venture to pay for  building
permits.  The joint venture received a partial refund of such expenses totalling
approximately  $146,000  in  December  1995.  However,  the  federal  agency has
subsequently  denied  the joint  venture's  claim for a refund of the  remaining
$300,000  in costs  incurred.  Management  believes  that the joint  venture  is
entitled to a full refund of the costs  incurred  and  continues  to  vigorously
pursue the refund.  Presently,  there are no assurances that any amounts will be
recovered.
        At December 31, 1996, the Partnership and its consolidated joint venture
had available cash and cash equivalents of approximately  $1,482,000.  Such cash
and cash  equivalents,  along  with  future  cash  flow  distributions  from the
Partnership's  operating properties,  will be used for the working capital needs
of the  Partnership,  for the  funding  of the  Partnership's  share of  capital
improvements or operating deficits of the investment  properties,  if necessary,
and for  distributions  to the  partners.  The  source of future  liquidity  and
distributions to the partners is expected to be through  proceeds  received from
the sales or refinancings of the remaining investment  properties.  Such sources
of  liquidity  are expected to be adequate to cover the  Partnership's  needs on
both a short-term and long-term basis.

Results of Operations
Three Months Ended December 31, 1996
------------------------------------

      The Partnership reported net income of $109,000 for the three-month period
ended December 31, 1996 as compared to a net loss of $34,000 for the same period
in the prior year. This $143,000  favorable  change in net operating  results is
due  to a  $121,000  increase  in  the  Partnership's  share  of  unconsolidated
ventures' income and a $23,000 decrease in the Partnership's operating loss. The
Partnership's  share of unconsolidated  ventures' income increased mainly due to
increases  of $84,000  and  $57,000  in the net  income of the  Tantra  Lake and
Chisholm  Place  joint  ventures,  respectively.  The  increase in net income at
Tantra Lake can be  primarily  attributed  to a decrease in interest  expense of
$129,000,  when compared to the same period in the prior year.  Interest expense
decreased as a result of the August 1996  refinancing  discussed  further above.
Small increases in utilities, depreciation,  insurance, and maintenance expenses
partially offset the decrease in Tantra Lake's interest  expense.  Net income at
Chisholm Place increased mainly due to decreases in maintenance expense and real
estate  taxes of $31,000 and  $11,000,  respectively,  and an increase in rental
income of $13,000.  Rental income at Chisholm Place increased due to an increase
in average rental rates.

      The  Partnership's  operating  loss  decreased  mainly due to  declines in
general and  administrative  expenses of $34,000 and property operating expenses
of $32,000.  General and administrative expenses decreased due to a reduction in
certain required professional services,  when compared to the same period in the
prior year.  Property  operating  expenses of the  consolidated Nob Hill venture
decreased mainly due to the extensive capital maintenance program implemented at
the Nob Hill  Apartments in the prior year to prepare the property for sale. The
decreases in general and administrative expenses and property operating expenses
were  partially  offset by a decline in  interest  and other  income of $36,000.
Other income decreased mainly due to certain insurance  proceeds received in the
prior year  relating  to repair  costs  incurred at the  Northcastle  Apartments
during 1993.
<PAGE>
Nine Months Ended December 31, 1996
-----------------------------------

      The Partnership  reported net income of $97,000 for the nine-month  period
ended  December  31, 1996 as  compared  to a net loss of  $198,000  for the same
period  in the prior  year.  This  $295,000  favorable  change in net  operating
results  is  due  to  a  $157,000  increase  in  the   Partnership's   share  of
unconsolidated  ventures'  income and a $139,000  decrease in the  Partnership's
operating  loss. The  Partnership's  share of  unconsolidated  ventures'  income
increased  mainly due to  increases of $136,000 and $53,000 in the net income at
the Tantra Lake and Chisholm Place joint ventures, respectively. The increase in
net income at Tantra Lake can be primarily  attributed to a decrease in interest
expense  of  $135,000,  when  compared  to the same  period in the  prior  year.
Interest expense decreased as a result of the August 1996 refinancing  discussed
further  above.  Net income at Chisholm  Place  increased  mainly as a result of
declines in real estate  taxes and  maintenance  expense of $34,000 and $15,000,
respectively,  and an increase in rental  income of  $32,000.  Rental  income at
Chisholm Place increased due to an increase in the rental rates. Small increases
in utilities and insurance  expenses  partially offset the favorable  changes in
Chisholm Place's net income.

      The  Partnership's  operating  loss  decreased  mainly due to  declines in
general and administrative  expenses of $132,000 and property operating expenses
of  $95,000.  General and  administrative  expenses  decreased  largely due to a
reduction in certain  required  professional  services when compared to the same
period in the prior year.  Property  operating  expenses of the consolidated Nob
Hill joint venture  decreased  mainly due to the extensive  capital  maintenance
program  implemented at the Nob Hill Apartments in the prior year to prepare the
property  for sale.  The  decreases in general and  administrative  expenses and
property  operating  expenses were partially offset by a decline in interest and
other income of $83,000.  Other income decreased mainly due to certain insurance
proceeds  received in the prior year  relating to repair  costs  incurred at the
Northcastle  Apartments  during 1993.  Interest income decreased mainly due to a
significant  decrease in the Partnership's  average outstanding cash balance for
the current  nine-month  period due to the temporary  investment of the proceeds
from the sale of the Northcastle property during the prior year.




<PAGE>



                                     PART II

                                Other Information
Item 1. Legal Proceedings

     As discussed in prior  quarterly  and annual  reports,  in November  1994 a
series of purported class actions (the "New York Limited  Partnership  Actions")
were filed in the United States District Court for the Southern  District of New
York concerning  PaineWebber  Incorporated's  sale and sponsorship of 70 limited
partnership  investments,  including  those  offered  by  the  Partnership.  The
lawsuits were brought against  PaineWebber  Incorporated  and Paine Webber Group
Inc.  (together   "PaineWebber"),   among  others,  by  allegedly   dissatisfied
partnership investors.  In March 1995, after the actions were consolidated under
the title In re  PaineWebber  Limited  Partnership  Litigation,  the  plaintiffs
amended their complaint to assert claims against a variety of other  defendants,
including First PW Growth Properties, Inc. and Properties Associates,  which are
the General  Partners of the Partnership  and affiliates of PaineWebber.  On May
30, 1995, the court certified  class action  treatment of the claims asserted in
the litigation.

     In January 1996,  PaineWebber signed a memorandum of understanding with the
plaintiffs in the New York Limited Partnership Actions outlining the terms under
which the parties have agreed to settle the case. Pursuant to that memorandum of
understanding,  PaineWebber  irrevocably  deposited  $125 million into an escrow
fund under the  supervision of the United States District Court for the Southern
District of New York to be used to resolve the  litigation in accordance  with a
definitive  settlement  agreement  and plan of  allocation.  On July  17,  1996,
PaineWebber and the class plaintiffs submitted a definitive settlement agreement
which has been preliminarily approved by the court and provides for the complete
resolution of the class action  litigation,  including  releases in favor of the
Partnership  and the General  Partners,  and the  allocation of the $125 million
settlement  fund among  investors  in the various  partnerships  at issue in the
case.  As part of the  settlement,  PaineWebber  also  agreed to  provide  class
members with certain financial  guarantees relating to some of the partnerships.
The details of the settlement are described in a notice mailed directly to class
members at the  direction of the court.  A final  hearing on the fairness of the
proposed  settlement  was held in December  1996, and a ruling by the court as a
result of this final hearing is currently pending.

      With regard to the Abbate  action  described in the Annual  Report on Form
10-K for the year ended March 31, 1996, in September  1996, the court  dismissed
many of the plaintiffs'  claims as barred by applicable  securities  arbitration
regulations.  Mediation  with respect to the Abbate  action was held in December
1996. As a result of such mediation,  a tentative settlement between PaineWebber
and the  plaintiffs  was reached which would provide for complete  resolution of
such action. PaineWebber anticipates that releases and dismissals with regard to
this action will be received by February 1997.

    Under certain limited  circumstances,  pursuant to the Partnership Agreement
and other contractual  obligations,  PaineWebber affiliates could be entitled to
indemnification  for expenses and  liabilities in connection with the litigation
discussed above. However, PaineWebber has agreed not to seek indemnification for
any amounts it is required to pay in connection  with the  settlement of the New
York Limited  Partnership  Actions.  At the present time,  the General  Partners
cannot estimate the impact, if any, of the potential  indemnification  claims on
the  Partnership's  financial  statements,  taken  as a whole.  Accordingly,  no
provision  for any  liability  which could result from the  eventual  outcome of
these  matters has been made in the  accompanying  financial  statements  of the
Partnership.

Item 2. through 5. NONE

Item 6. Exhibits and Reports on Form 8-K

(a)  Exhibits:    NONE

(b)  Reports  on Form  8-K:  No  reports  on Form  8-K  have  been  filed by the
registrant during the quarter for which this report is filed.


<PAGE>





                        PAINE WEBBER GROWTH PROPERTIES LP


                                   SIGNATURES


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.


                                    PAINE WEBBER GROWTH PROPERTIES LP

                                    By: FIRST PW GROWTH PROPERTIES, INC.
                                          Managing General Partner





                                    By: /s/ Walter V. Arnold
                                        --------------------
                                        Walter V. Arnold
                                        Senior Vice President and
                                        Chief Financial Officer



Date:  February 12, 1997