UNITED STATES
                                 SECURITIES AND EXCHANGE COMMISSION
                                     Washington, D.C. 20549

                                             FORM 10-K
(Mark One)

X   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE 
    ACT OF 1934 [FEE REQUIRED]
               For the fiscal year ended October 31, 1996

    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 No. 1-6309

                                  HRE PROPERTIES
              (Exact name of registrant as specified in its charter)

             MASSACHUSETTS                         04-2458042
                                                                 
    (State or other jurisdiction of            (I.R.S. Employer
    incorporation or organization)            Identification No.)

          321 RAILROAD AVENUE                          
        GREENWICH, CONNECTICUT                       06830
                                                                 
(Address of principal executive offices)          (Zip code)

 Registrant's telephone number, including area code: (203) 863-8200

Securities registered pursuant to Section 12(b) of the Act:
                                                 Name of each exchange
         Title of each class                     on which registered

         Common Shares, without par value        New York Stock Exchange

         Preferred Share Purchase Rights         New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:  None

  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   

  Indicate by check mark if disclosure of delinquent filers pursuant to 
Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of the Registrant's knowledge, in 
definitive proxy or information statements incorporated by reference 
in Part III of this Form 10-K or any amendment to this Form 10-K.  x

  The aggregate market value of the voting stock held by non-affiliates of 
the Registrant as of January 6, 1997: Common Shares, without par 
value - $67,606,000.

  Indicate the number of shares outstanding of each of the Registrant's 
classes of common stock, as of the latest practicable
date: 5,346,081 Common Shares, without par value, as of January 6, 1997.

                      DOCUMENTS INCORPORATED BY REFERENCE
  Proxy Statement for Annual Meeting of Shareholders to be held on March 12, 
1997 (certain parts as indicated herein) (PartIII). 
                      

TABLE OF CONTENTS
                                                                 Form 10-K
Item No.                                                        Report Page

                                  PART I

1.    Business. . . . . . . . . . . . . . . . . . . . . . . . . .. . . . .3

2.    Properties. . . . . . . . . . . . . . . . . . . . . . . . .. . . . .8

3.    Legal Proceedings . . . . . . . . . . . . . . . . . . . . .. . . . 10

4.    Submission of Matters to a Vote of Security Holders . . . .. . . . 10


                                  PART II

5.    Market for the Registrant's Common Equity and Related Shareholder 
      Matters . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . 10

6.    Selected Financial Data . . . . . . . . . . . . . . . . . .. . . . 12

7.    Management's Discussion and Analysis of 
      Financial Condition and Results of Operations . . . . . . .. . . . 13

8.    Financial Statements and Supplementary Data . . . . . . . .. . . . 18

9.    Changes in and Disagreements with Accountants
        on Accounting and Financial Disclosure. . . . . . . . . .. . . . 18


                                 PART III

10.   Directors and Executive Officers of the Registrant. . . . .. . . . 18

11.   Executive Compensation. . . . . . . . . . . . . . . . . . .. . . . 19

12.   Security Ownership of Certain Beneficial Owners and Management.. . 19

13.   Certain Relationships and Related Transactions. . . . . . .. . . . 19


                                  PART IV

14.   Exhibits, Financial Statements, Schedules and Reports on Form 8-K . 20  

Item I.   Business.

     HRE Properties (the "Trust") was organized on July 7, 1969 as an 
unincorporated business trust under the laws of the Commonwealth of 
Massachusetts pursuant to a Declaration of Trust dated July 7, 1969, as 
amended.  

     The Trust has qualified and has elected to be taxed as a real estate 
investment trust under Sections 856-860 of the Internal Revenue Code of 1986, 
as amended (the "Code").  Pursuant to such provisions of the Code, a trust 
which distributes at least 95% of its real estate investment trust taxable 
income to its shareholders each year and which meets certain other 
conditions will not be taxed on that portion of its taxable income which is 
distributed to its shareholders.  The Trust intends to continue to qualify 
as a real estate investment trust for federal income tax purposes.   

     Description of Business 

     The Trust's sole business is the ownership of real estate investments 
which consist principally of equity investments in income-producing 
properties, with primary emphasis on properties in the northeastern part of 
the United States.  The Trust's core properties consist of 
community shopping centers in the northeastern part of the United
States.  The remaining properties include office and retail buildings and 
industrial properties.  The Trust also seeks to identify desirable properties 
for acquisitions which it acquires in the normal course of business.  
In addition, the Trust regularly reviews its portfolio and from time to time 
considers and effects the sale of certain properties.

     At October 31, 1996, the Trust owned or had an equity interest in e
ighteen properties comprised of shopping centers, single tenant 
retail stores, office buildings and service and distribution facilities 
located in twelve states throughout the United States, containing 
a total of 2,798,000 square feet of gross leasable area.  For a 
description of the Trust's individual investments, see Item 2.

     The Trust intends to continue to invest substantially all of its assets 
in income producing real estate, with a primary emphasis on shopping centers, 
although the Trust will retain the flexibility to invest in other types of 
real property.  While the Trust is not limited to any geographical location, 
the Trust's current strategy is to invest primarily in properties 
located in the Northeastern United States.  

     Investment and Operating Strategy

     The Trust's investment objective is to increase cash flow, current 
income and consequently the value of its existing portfolio of properties, 
and to seek continued growth through (i) the strategic re-tenanting, 
renovation and expansion of its existing properties, and (ii) the 
selective acquisitions of income-producing real estate properties,
primarily neighborhood and community shopping centers, in the geographic 
region, where the Trust presently operates.

     These neighborhood and community shopping center properties are 
designed to attract local area customers and would typically be anchored by a 
supermarket, discount department store or drugstore tenant offering
day-to-day necessities rather than high-priced luxury items.

     Core Properties

     The Trust considers those properties which are directly managed by the 
Trust, located close to the Trust's headquarters and concentrated in the 
community shopping center sector to be core properties.  Of the eighteen 
properties in the Trust's portfolio, ten properties are considered core 
properties consisting of seven community shopping centers,
one mixed-use (retail/office) property and two office buildings (including 
the Trust's executive headquarters).  The properties contain in the aggregate 
1,225,000 square feet of gross leasable area.  The Trust's core retail 
properties collectively had 158 tenants providing a wide range of retail 
products and services.  Tenants include national supermarkets, discount 
department stores, a regional electronic store and local retailers.  
At October 31, 1996, the core properties were 91% leased.

     A substantial portion of the Trust's operating lease income from retail 
tenants consists of rent received under short- and intermediate-term leases.  
Most of the leases provide for the payment of fixed base rentals monthly in 
advance and for the payment by tenants of a pro-rata share of the real 
estate taxes, insurance, utilities and common area
maintenance expenses incurred in operating the shopping centers.

     Non-Core Properties

     In fiscal 1995, the Board of Trustees expanded and refined the strategic
objectives of the Trust to refocus the real estate portfolio into one of 
self-managed retail properties located in the Northeast and authorized a 
plan to sell the non-core properties of the Trust in the normal course of 
business over the next several years.  The Trust believes
that economic conditions in the real estate markets where the Trust's 
non-core properties are located have improved and that opportunities to 
sell those properties over the next several years have also improved.  
At October 31, 1996, the non-core properties total eight properties, 
having an aggregate net book value of $32,986,000 ($46,212,000 at October
31, 1995) and comprise the Trust's office (with the exception of the Trust's 
headquarters), distribution and service facilities, and certain retail 
properties located outside of the northeast region of the United States. 
As a result of this change in investment strategy, the Trust 
recorded a non-cash charge of $7,000,000 in fiscal 1995, to writedown the
carrying value of two of the non-core properties to their respective 
estimated net realizable values.  The Trust expects that the ultimate sales of 
the non-core properties over the next several years will result in net gains 
to the Trust.

     At October 31, 1996, the Trust's non-core properties consisted of one 
office building, containing 212,000 square feet of gross leasable area (GLA), 
three retail properties totaling 440,000 square feet and four industrial 
properties with a total of 921,000 square feet of GLA. The non-core 
properties were 98% leased at October 31, 1996.  

     The office property has four tenants which offer a range of services, 
including insurance, engineering and management.

     The four service and distribution facilities are 100% occupied and 
consist of  two automobile and truck parts distribution warehouses, 
one truck sales and service center and one automobile tire distribution 
facility.  The service and distribution facilities are net leased under 
long-term lease arrangements whereby the tenants pay all taxes,insurance, 
maintenance and other operating costs of the property during the term of 
the lease.

     The three retail properties consist of a 231,000 square foot shopping 
center located in Clearwater, Florida containing 44 tenants and two single 
tenant properties located in Tempe and Mesa, Arizona totaling 209,000 square 
feet of GLA.

     On November 22, 1996, the Trust formed a limited partnership with 
certain shareholders of the Trust to own, manage and redevelop the Trust's 
shopping center in Clearwater, Florida.  The Trust, as the general partner, 
contributed the shopping center at its net carrying amount 
(which amount approximates its fair value of $13 million), and the limited
partners, including Kimco Realty Corp. which will manage the property, 
contributed 600,000 common shares of the Trust to the limited partnership.

     At October 31, 1996, the Trust also owned a portfolio of mortgage notes 
receivable consisting of fixed rate mortgages aggregating $3,706,000.  
The fixed rate mortgages are secured by retail properties sold by the Trust 
in prior years.

     During the five year period ended October 31, 1996, the Trust acquired 
eight properties totalling 834,000 square feet of gross leasable space at an 
aggregate cost of $71.7 million.  The properties were acquired with cash and 
$36 million of non-recourse first mortgage loans.  In the same period, 
the Trust spent nearly $9.1 million to expand, renovate, improve and lease 
its existing properties.  Such activities were funded from available cash.  
During the five year period ended October 31, 1996, the Trust has sold or 
disposed of twelve properties totalling 1,566,000 square feet
of gross leasable area which the Trust determined no longer fit into its 
strategic plans. 

     Recent Developments

     In November 1996, the Trust negotiated a settlement proposal with one 
of its tenants to recover, among other things, unpaid additional percentage 
rents including interest totalling $3.25 million.  In accordance with the 
terms of its lease, the tenant was required to aggregate the sales of all 
its stores in a specified radius when computing percentage rent due the 
Trust.  The settlement proposal, including certain other modifications to 
the lease, is expected to be completed and recorded as income in the Trust's 
first quarter of fiscal 1997.
     
     During fiscal 1996, the Trust acquired one property comprising 30,700 
square feet of gross leasable area at a purchase price of $880,000 and sold 
three non-core properties totalling 324,000 square feet of gross leasable 
space for net proceeds of $18 million.  In addition, the Trust spent $5.6 
million for leasing costs and capital improvements to properties it 
already  owns.  Substantially all such capital improvements were incurred in 
connection with the Trust's retail leasing activities.  The Trust also leased 
or renewed 75,000 square feet of gross leasable area in fiscal 1996,
compared to 153,000 square feet of GLA in the prior year.  The square footage 
leased or renewed in fiscal 1996 comprised 7% of the total gross 
leasable area of the Trust's core properties.  


     Matters Relating to the Real Estate Business

     The Trust is subject to certain business risks arising in connection 
with owning real estate which include, among others, (1) the bankruptcy or 
insolvency of, or a downturn in the business of, any of its major tenants, 
(2) the possibility that such tenants will not renew their leases as they 
expire, (3) vacated anchor space affecting the entire shopping 
center because of the loss of the departed anchor tenant 's customer drawing 
power, (4) risks relating to leverage, including uncertainty 
that the Trust will be able to refinance its indebtedness, and the risk of 
higher interest rates, (5) potential liability for unknown or future 
environmental matters, and (6) the risk of uninsured losses.  Unfavorable 
economic conditions could also result in the inability of tenants in certain 
retail sectors to meet their lease obligations and otherwise could adversely 
affect the Trust's ability to attract and retain desirable
tenants.  The Trust believes that its shopping centers are relatively well 
positioned to withstand adverse economic conditions since they typically 
are anchored by grocery stores, drug stores and discount department stores 
that offer day-to-day necessities rather than luxury goods.

     Compliance with Governmental Regulations

     The Trust, like others in the commercial real estate industry, is 
subject to numerous environmental laws and regulations.  Although potential 
liability could exist for unknown or future environmental matters, the Trust 
believes that its tenants are operating in accordance with current laws and 
regulations and has established procedures to monitor these operations.

     Competition

     The real estate investment business is highly competitive.  The Trust 
competes for real estate investments with investors of all types, including 
domestic and foreign corporations, financial institutions, other real estate
investment trusts and individuals.  In addition, the Trust's properties are 
subject to local competitors from the surrounding areas.  The Trust does not 
consider its real estate business to be seasonal in nature.

     The Trust's shopping centers compete for tenants with other regional, 
community or neighborhood shopping centers in the respective areas where Trust 
retail properties are located.  The Trust's office buildings compete for tenants
principally with office buildings throughout the respective areas in which 
they are located.  In most areas where the Trust's office buildings are 
located, competition for tenants is intense.  Leasing space to prospective 
tenants is generally determined on the basis of, among other things, rental 
rates, location, physical quality of the property and availability of space. 

     Since the Trust's industrial properties are all net leased under 
long-term lease arrangements which are not due to expire in the near future, 
the Trust does not currently face any competitive pressures with respect to 
such properties.

     Property Management

     The Trust actively manages and supervises the operations and leasing at 
all of its core properties.  Six of the Trust's non-core properties 
are net leased to single tenants under long-term lease arrangements, in 
which case, management is provided by the tenants.  The Trust's two 
remaining non-core properties are managed by independent property 
management firms retained by the Trust.  The Trust closely supervises the 
property management firms it engages to manage its properties.

     Employees

     The Trust's executive offices are located at 321 Railroad Avenue, 
Greenwich, Connecticut.  It occupies approximately 5,000 square feet in a two 
story office building owned by the Trust.

     The Trust has 15 employees, eight of whom oversee the management of the 
Trust's real estate portfolio, or analyze potential acquisition properties 
and determine which properties, if any, to sell.  The Trust's remaining 
employees serve in various professional, executive and administrative 
capacities.

Item II.  Properties.

          Core Properties
<TABLE>
<S>                        <C>        <C>       <C>       <C>     <C>          <C>       <C>
     The following table sets forth information concerning each core property at October
31, 1996.  All core properties are 100% owned by the Trust.

                                                Gross Leasable
                            Year      Year      Square            Number
Location                    Completed Acquired  Feet       Acres  of Tenants  Leased    Principal Tenant

Meriden, Connecticut        1989      1993      300,000    29.2   20          94%       ShopRite Supermarket

Springfield, Massachusetts  1970      1970      293,000    26.0   18          88%       Great Atlantic &Pacific Tea Co.

Danbury, Connecticut        1989      1995      193,000    19.3   24         100%       Barnes & Noble

Carmel, New York            1983      1995      126,000    19.0   11          58%       ShopRite Supermarket

Newington, New Hampshire    1975      1979      102,000    14.3   10         100%       Sears Roebuck 

Wayne, New Jersey           1959      1992      102,000     9.0   44          98%       Great Atlantic &Pacific Tea Co.

Farmingdale, New York       1981      1993       70,000     5.6   12          95%       King Kullen Supermarket

Somers, New York            1989      1992       19,000     4.9   12         100%       Putnam County Savings Bank

Greenwich, Connecticut      1983      1993       10,000      .2    3         100%       HRE Properties

Greenwich, Connecticut      1983      1994        9,700      .2    4         100%       Rogers &Goffigon             



</TABLE>

     Non-Core Properties
<TABLE>
<S>                        <C>       <C>            <C>         <C>   <C>      <C>      <C>         <C>

     The following table sets forth information concerning each non-core property in which
the Trust owned an equity interest at October 31, 1996.  Except as otherwise noted, non-
core properties are 100% owned by the Trust.

                                                    Rentable
                            Year      Year          Square             Number
Location                    Completed Acquired      Feet      Acres    of Tenants   Leased    Principal Tenant

Southfield, Michigan(1)     1973      1983          212,000   7.8      4            100%      Giffels Associates

Clearwater, Florida(2)      1983      1985          231,000  21.5     44             89%      Albertson's Supermarket

Mesa, Arizona               1971      1971           92,000   7.6      1            100%      Mervyn's 

Tempe, Arizona              1970      1970          117,000   8.6      2            100%      Mervyn's 

Albany, Georgia             1972      1972          476,000  51.3      1            100%      Firestone

Dallas, Texas               1970      1970          253,000  14.5      1            100%      Chrysler Corporation

St. Louis, Missouri         1970      1970          163,000  16.0      1            100%      Chrysler Corporation

Syracuse, New York          1973      1973           29,000  10.0      1            100%      Navistar International


(1) The Trust owns an 85% partnership interest in this property.
(2) The Trust has a general partner interest in this property, effective 
    November 22,1996.

</TABLE>



Item III. Legal Proceedings.

     No legal proceedings are required to be reported under this Item.

Item IV.  Submission of Matters to a Vote of Security Holders.

     No matter was submitted to a vote of security holders during
     the fourth quarter of the fiscal year ended October 31,1996.


          Item Pursuant to Instruction 3 of Item 401 (b) of
          Regulation S-K: Executive Officers of the Trust.
     
     For information regarding Executive Officers of the Trust--See Item X.


                             PART II

Item V.   Market for the Registrant's Common Equity and Related
Shareholder Matters.

(a) Price Range of Common Shares

     The Common Shares of the Trust are traded on the New York
Stock Exchange under the symbol "HRE".  The following table sets
forth the high and low closing sales prices for the Trust's
Common Shares during the fiscal years ended October 31, 1996 and
October 31, 1995 as reported on the New York Stock Exchange:

                       Fiscal Year            Fiscal Year
                         Ended                   Ended
                    October 31, 1996        October 31, 1995

                   High          Low        High       Low
Fourth Quarter     $16       -  $14-1/4   $14-3/8   - $13-3/8
Third Quarter       16       -   14        14-3/8   -  13-3/8
Second Quarter      15-5/8   -   13-1/2    13-7/8   -  13
First Quarter       14-1/8   -   13-1/8    14-1/4   -  13-1/4

(b) Approximate Number of Equity Security Holders

     At December 31, 1996 (latest date available), there were
2,568 shareholders of record of the Trust's Common Shares.


(c) Dividends Declared on Common Shares and Tax Status

     The following table sets forth the dividends declared per
Common Share and tax status for Federal income tax purposes of
the dividends paid during the fiscal years ended October 31, 1996 and 1995:

                             Portion of Dividend Designated as:

Fiscal Year Ended          Gross Dividend        Income          Capital Gain
October 31, 1996:          Paid Per Share        Distribution    Distribution
Fourth Quarter             $ .31                $ .26             $ .05
Third Quarter              $ .31                $ .26             $ .05
Second Quarter             $ .31                $ .26             $ .05
First Quarter              $ .29                $ .24             $ .05
                           $1.22                $1.02             $ .20

                             Portion of Dividend Designated as:

Fiscal Year Ended           Gross Dividend        Income
October 31, 1995:           Paid Per Share        Distribution

Fourth Quarter             $ .29                $ .29
Third Quarter              $ .29                $ .29
Second Quarter             $ .28                $ .28
First Quarter              $ .28                $ .28
                           $1.14                $1.14

     The Trust made distributions to shareholders aggregating
$1.22 per Common Share during the fiscal year ended October 31,
1996.  The Trust has paid quarterly dividends on its Common Shares 
since it commenced operations as a real estate investment trust in 1969.

     Although the Trust intends to continue to declare quarterly
dividends on its Common Shares, no assurances can be made as to
the amounts of any future dividends.  The declaration of any
future dividends by the Trust is within the discretion of the
Board of Trustees, and will be dependent upon, among other
things, the earnings, financial condition and capital
requirements of the Trust, as well as any other factors deemed
relevant by the Board of Trustees.  Two principal factors in
determining the amounts of dividends are (i) the requirement of
the Code that a real estate investment trust distribute to
shareholders at least 95% of its real estate investment trust
taxable income, and (ii) the amount of the Trust's funds from operations.

     The Trust has a Dividend Reinvestment and Share Purchase
Plan which allows shareholders to acquire additional shares by
automatically reinvesting dividends.  Shares are acquired
pursuant to the Plan at a price equal to the higher of 95% of the
market price of such shares on the dividend payment date or 100%
of the average of the daily high and low sales prices for the
five trading days ending on the day of purchase without payment
of any brokerage commission or service charge.  Approximately 14%
of the Trust's eligible shareholders currently participate in the Plan.






Item VI.     Selected Financial Data.
(In thousands, except per share data)


Year Ended October 31,       1996        1995       1994       1993     1992
                          
Total Assets              $132,160    $149,099   $142,559   $119,330  $137,855
                          
Mortgage Notes Payable    $ 39,798    $ 57,212   $ 46,386   $ 24,227  $ 31,226

Revenues                  $ 24,432    $ 22,853   $ 18,969   $ 16,162  $ 16,942

Operating Income (Loss)   $  3,930    $( 3,703)  $  1,262   $( 7,293) $  1,588

Gains on Sales of 
 Properties               $  6,341    $  7,567   $     82   $  2,330  $     --

Net Income (Loss)         $ 10,271    $  3,864   $  1,344   $ (4,963) $  1,588

Funds from Operations*    $  9,525    $  8,510   $  7,653   $  6,748  $  6,631


Per Share Data:

Net Income (Loss)            $1.91      $  .72      $ .26     $ (.94)     $.30

Cash Dividends               $1.22      $ 1.14     $ 1.10     $ 1.08    $ 1.16





*Defined as net income (computed in accordance with
generally accepted accounting principles), excluding gains
(or losses) from debt restructuring and sales of properties,
plus depreciation, amortization, and the elimination of
significant non-recurring charges and credits.  In 1996, the
Trust adopted the revised definition of Funds from
Operations suggested by the National Association of Real
Estate Investment Trusts (NAREIT).  1995 and prior year
amounts have been restated to conform to the new NAREIT definition.

ITEM VII.   Management's Discussion and Analysis of
            Financial Condition and Results of Operations.


Liquidity and Capital Resources

The Trust's liquidity and capital resources include its cash
and cash equivalents, funds available from bank borrowings
and long-term mortgage debt and sales of real estate
investments.  The Trust meets its liquidity requirements
primarily by generating cash from the operations of its
properties and collection of principal and interest on its
mortgage notes receivable.  Payments of expenses related to
real estate operations, capital improvement programs, debt
service, management and professional fees, and dividend
requirements place demands on the Trust's liquidity.

The Trust believes that the financial resources currently
available to it are sufficient to meet all of its known
obligations and commitments and to make additional real
estate investments when appropriate opportunities arise.  At
October 31, 1996, the Trust had cash and cash equivalents of
$1.8 million compared to $7.1 million in 1995 and $8.7
million in 1994.  The Trust also expects to receive a cash
settlement of $3.25 million in the first quarter of fiscal
1997 for unpaid percentage rent from one of its tenants. 
The Trust also has available $15 million in unsecured lines
of credit with two major commercial banks.  The credit lines
are available to finance the acquisition, management or
development of commercial real estate and for working
capital purposes. The credit lines expire at various
periods in 1997 and outstanding borrowings, if any, may be
repaid from proceeds of debt financings or sales of
properties.  At October 31, 1996, there were no outstanding
borrowings under existing lines of credit.  It is the
Trust's intent to renew these credit lines as they expire in
1997.  Long-term debt consists of mortgage notes payable
totalling $39.8 million, of which $3.1 million in principal
payments are due in fiscal 1997 (including a mortgage note
of $2.4 million, which matures in February, 1997).  The
mortgage loans bear interest at fixed rates that range from
7.5% to 9.75%.  The Trust has received a commitment for $2
million to refinance the $2.4 million mortgage note and
expects to use available cash for the difference between the
current mortgage and the commitment amount.

Since 1992, the Trust has selectively sold or disposed of
properties which were determined to no longer fit into its
strategic plan and employed the proceeds of sales, available
cash  and long-term mortgage debt to acquire nearly $75
million of properties during this same period.  In fiscal
1995, the Board of Trustees expanded and refined the
strategic objectives of the Trust to refocus the real estate
portfolio into one of self-managed retail properties located
in the Northeast and authorized a plan to sell the non-core
properties of the Trust in the normal course of business
over the next several years.  The non-core properties
comprise all of the Trust's offices (except its
headquarters), distribution and service facilities, and
certain retail properties located outside of the Northeast
region of the United States.  As a result of this change in
investment strategy, the Trust recorded a charge of
$7,000,000 in fiscal 1995, to writedown the carrying value
of two of the non-core properties to their estimated net
realizable values.  The Trust believes that economic
conditions in the real estate markets where the Trust's non-core 
properties are located have improved and that
opportunities to sell those properties over the next several
years have also improved.  The Trust expects the ultimate
sales of the non-core properties over the next several years
to result in net gains to the Trust.  During fiscal 1996,
the Trust sold three non-core properties for aggregate sales
proceeds of $20 million and realized net gains on the sales
of the properties of $6,341,000.  The proceeds from these
sales were used principally to reduce outstanding mortgage
indebtedness by approximately $19 million.  At October 31,
1996, the non-core properties total eight properties having
an aggregate net book value of $32,986,000.  

The Trust expects to make additional real estate investments
periodically.  The funds for such investments may come from
existing liquid assets, line of credit arrangements,
proceeds from property sales, financing of acquired or
existing properties or the sale of mortgage notes
receivable.  In 1996, the Trust acquired Southern Plaza, a
30,700 square foot shopping center in Tempe, Arizona for a
purchase price of $880,000.  The Trust also invests in its
existing properties and, during fiscal 1996, spent
approximately $5.6 million on its properties for capital
improvement and leasing costs.

In fiscal 1996, the Trust's Board of Trustees authorized a
program to purchase up to one million of the Trust's common
shares over the next two to three years.  The Trust expects
to finance the purchase of such common shares from available
cash or proceeds from the sales of its non-core assets.  The
repurchase program is subject to postponement or termination
at any time in light of prevailing market conditions and
other factors.  In fiscal 1996, the Trust repurchased 40,700
shares at an aggregate cost of $631,000.

Funds from Operations

Funds from Operations is defined as net income (computed in
accordance with generally accepted accounting principles),
excluding gains (or losses) from debt restructuring and
sales of properties, plus depreciation and amortization, and
the elimination of significant non-recurring charges and
credits.  In fiscal 1996, the Trust adopted the revised
definition of Funds from Operations suggested by the
National Association of Real Estate Investment Trusts
(NAREIT), which eliminated the adjustment for amortization
of non-real estate assets.  The Trust believes the level of
Funds from Operations to be an appropriate supplemental
financial measure of its operating performance.  Funds from
Operations does not represent cash flows from operations as
defined by generally accepted accounting principles, is not
indicative that cash flows are adequate to fund all cash
needs and is not considered to be an alternative to net
income.  The Trust considers recoveries of investment in
properties which are subject to financing leases to be
analogous to amortization for purposes of calculating Funds
from Operations.  In fiscal 1996, Funds from Operations
increased 12% to $9,525,000 from $8,510,000 in 1995, and
$7,653,000 in 1994.  The improvement in fiscal 1996 is
primarily the result of the positive effect of the Trust's
recent property acquisitions and new leasing at certain of
the Trust's core retail properties.





Results of Operations

Fiscal 1996 vs. Fiscal 1995

Revenues

Total revenues increased 6.9% to $24,432,000 in fiscal 1996
compared to $22,853,000 in fiscal 1995.  Operating lease
revenues, which comprise more than 90% of the Trust's total
revenues, increased by $2,767,000 or 14% resulting from the
additional rents of two retail properties acquired in fiscal
1995 and new leasing at certain of the Trust's core
properties.  The Trust also sold two office properties and
one retail property during fiscal 1996.  In fiscal 1996, the
Trust leased or renewed 75,000 square feet of retail space. 
Overall, the Trust's portfolio was 94% leased at year end. 
When adjusted to exclude properties acquired and sold in
1995 and 1996, rental income increased by 9% in fiscal 1996
from additional leasing of vacant space.  At the end of
fiscal 1996, more than 85% of the Trust's real estate
portfolio consisted of retail properties.

Other income in fiscal 1995 included $600,000 of non-
recurring contract extension and other fees earned in
connection with the sale of a property.

Finance lease income decreased in fiscal 1996 as a result of
the sale of four distribution properties in fiscal 1995
which were accounted for as direct finance leases.

During 1996, the outlook for the retail industry improved. 
However, certain retailers continued to report sluggish
sales, intense competition for consumer dollars and lower
profit margins.  Recently, there have been a number of
retailer bankruptcies and others are anticipated.  As of
October 31, 1996, two discount retailers occupying space at
two of the Trust's retail properties are in various stages
of bankruptcy.  In one instance, the lease has been
reassigned to a credit worthy tenant who continues on the
lease and has met all of its obligations under the lease. 
In the second instance, the tenant has historically reported
good store sales and currently pays a modest rent.  A third
tenant closed its store and rejected its lease in
bankruptcy.  The Trust has obtained control of the lease and
is actively seeking to re-tenant the space.  While the Trust
cannot predict the ultimate outcomes, it is optimistic and
will monitor events in fiscal 1997.

The gains on sales of properties in 1996 resulted from the
sales of two office properties in Denver, Colorado and
Houston, Texas and one retail property in Manassas,Virginia.

Expenses

Total expenses were $20,502,000 in fiscal 1996 compared to
$26,556,000 in fiscal 1995.  Included in fiscal 1995
expenses were write-downs in the carrying value of
investments of $7,000,000 to  the carrying values of two of
the Trust's non-core properties to their estimated net
realizable values.  (See discussion under Liquidity and
Capital Resources).  Property expenses totalled $8,780,000 
in fiscal 1996, compared to $7,691,000 in fiscal 1995.  For
properties owned during both 1996 and 1995, expenses in
fiscal 1996 increased by 12% principally from higher snow
removal costs, real estate taxes, and repairs. 
The increase in property expenses related to properties
acquired or sold during fiscal 1996 and 1995 amounted to
$370,000 in fiscal 1996.

Interest expense in fiscal 1996 decreased from the repayment
of outstanding borrowings under the Trust's credit lines and
approximately $16.6 million in mortgage notes payable.  The
credit lines and mortgage notes payable were repaid from
proceeds of sales of properties.

Depreciation and amortization increased to $5,132,000 in
fiscal 1996 from $4,804,000 in fiscal 1995 from the addition
of two properties acquired in fiscal 1995 and capital
expenditures for tenant improvements and deferred charges.

General and administrative expenses decreased in fiscal 1996
principally from the absence of rental expense incurred
under a lease agreement which expired in December 1995 for
the Trust's former executive office space.  The Trust
currently occupies space in one of its office properties.


Fiscal 1995 vs. Fiscal 1994

Revenues

Total revenues increased 20.5% to $22,853,000 in fiscal 1995
compared to $18,969,000 in fiscal 1994.  Rental income,
including the income portion of rentals received in respect
of direct finance leases, comprised 93% of total revenues
(94% in fiscal 1994).  Rental income from retail properties
increased 25.9% to $14.5 million from $11.5 million in
fiscal 1994.  Most of the increase was attributable to two
retail properties acquired during fiscal 1995 which
increased rental income by $2.1 million.  During the year,
the Trust leased or renewed 153,400 square feet of retail
space (9% of the Trust's gross retail leasable space). 
Gross rents from office properties increased nearly 10% to
$5.4 million compared to $4.9 million in fiscal 1994 from
higher occupancy and rent levels.

Other income in fiscal 1995 included $600,000 of non-
recurring contract extension and other fees earned in
connection with the sale of a department store property.

Expenses

Total expenses were $26,556,000 in fiscal 1995, compared to
$17,707,000 in fiscal 1994. Included in expenses in fiscal
1995 and 1994 were write-downs in the carrying values of
investments of $7,000,000(see discussion under Liquidity and 
Capital Resources) and $1,086,000, respectively.  The $1,086,000 
write-down reflects a charge to record a $4,836,000 mortgage note
receivable held by the Trust and collateralized by an office
building at its net realizable value.   The Trust had
previously determined that the long term economic prospects
for the building had declined and decided to offer the
mortgage note for sale.  The mortgage note was subsequently
sold at its net realizable value.  

Property expenses increased 7% to $7,691,000 in fiscal 1995,
from $7,185,000 in fiscal 1994.  The increase in property
expenses was primarily the result of the addition of new
properties.  The level of property expenses in 1995 for
properties owned during both 1995 and 1994 decreased by 2%. 
Interest expense rose by $1,506,000 from the addition of
$30.7 million of new mortgage notes payable in fiscal 1995
and late 1994.  Also, interest expense on credit line
borrowings rose from increases in the prime rate and LIBOR
during the period.

General and administrative expenses increased in fiscal 1995
principally from professional fees incurred in connection
with the Trust's proxy and other filings during the year,
and costs and expenses related to the relocation of the
Trust to its new headquarters.

Depreciation and amortization increased to $4,804,000 in
fiscal 1995 from $4,075,000 in fiscal 1994 from the addition
of three properties acquired at an aggregate cost of $52.6
million in fiscal 1995 and 1994 and capital expenditures for
tenant improvements and deferred charges.

Item VIII.  Financial Statements and Supplementary Data.

  The consolidated financial statements required by this Item,
together with the report of the Trust's independent public
accountants thereon and the supplementary financial information
required by this Item are included under Item XIV of this Annual
Report. 

Item IX.          Changes in and Disagreements With Accountants
                  on Accounting and Financial Disclosure.

  No information is required to be reported under this Item.

                            PART III

Item X.Directors and Executive Officers of the Registrant.

  The Trust has filed with the Securities and Exchange
Commission its definitive Proxy Statement for its Annual Meeting
of Shareholders to be held on March 12, 1997.  The additional
information required by this Item is included under the caption
"ELECTION OF TRUSTEES" of such Proxy Statement and is
incorporated herein by reference.

         Executive Officers of the Registrant.

  The following sets forth certain information regarding the
executive officers of the Trust:

     Name                  Age     Offices Held

     Charles J. Urstadt    68      Chairman and Chief Executive
                                   Officer (since September 1989)

     Willing L. Biddle     35      President and Chief Operating
                                   Officer (since December,
                                   1996); Executive Vice
                                   President and Chief Operating
                                   Officer (since March, 1996);
                                   Senior Vice President -
                                   Management  (since June,
                                   1995); Vice President - Retail
                                   (June, 1994 to June, 1995);
                                   Vice President - Asset
                                   Management (April 1993 to
                                   1994); Vice President, Levites
                                   Realty Management Corp (1989
                                   to 1993); prior to 1989,
                                   Second Vice President, Chase
                                   Manhattan Bank

     James R. Moore        48      Executive Vice President and
                                   Chief Financial Officer (since
                                   March, 1996); Senior Vice
                                   President and Chief Financial
                                   Officer (since September
                                   1989); Secretary (since April
                                   1987) and Treasurer (since
                                   December 1987); Vice
                                   President-Finance and
                                   Administration (April 1987 to
                                   September 1989); prior to
                                   April 1987, Senior Manager,
                                   Ernst & Young


     Raymond P. Argila     48      Senior Vice President and
                                   Chief Legal Officer (since
                                   June 1990); formerly Senior
                                   Counsel, Cushman & Wakefield,
                                   Inc., (September 1987 to May
                                   1990) and associated with
                                   Finley, Kumble, Wagner, Heine,
                                   Underberg, Manley, Myerson &
                                   Casey (from March to June
                                   1987); Vice President and
                                   Chief Legal Officer, Pearce,
                                   Urstadt, Mayer & Greer Realty
                                   Corp. from (January 1984 to
                                   March 1987.)



     Officers of the Trust are elected annually by the Trustees.

     Mr. Urstadt has been the Chairman of the Trustees since
1986, and a Trustee since 1975.  Mr. Urstadt also serves as the
President of Urstadt Property Company, Inc. (formerly Pearce,
Urstadt, Mayer & Greer Inc.) and has served in such capacity for
more than five years.

Item XI. Executive Compensation.

  The Trust has filed with the Securities and Exchange
Commission its definitive Proxy Statement for its Annual Meeting
of Shareholders to be held on March 12, 1997.  The information
required by this Item is included under the caption "ELECTION OF
TRUSTEES - Compensation and Transactions with Management and
Others of such Proxy Statement and is incorporated herein by reference. 

Item XII.  Security Ownership of Certain
           Beneficial Owners and Management.

  The Trust has filed with the Securities and Exchange
Commission its definitive Proxy Statement for its Annual Meeting
of Shareholders to be held on March 12, 1997.  The information
required by this Item is included under the caption ELECTION OF
TRUSTEES - Security Ownership of Certain Beneficial Owners and
Management of such Proxy Statement and is incorporated herein by reference.

Item XIII. Certain Relationships and Related Transactions.

  The Trust has filed with the Securities and Exchange
Commission its definitive Proxy Statement for its Annual Meeting
of Shareholders to be held on March 12, 1997.  The information
required by this Item is included under the caption ELECTION OF
TRUSTEES - Compensation and Transactions with Management and
Others of such Proxy Statement and is incorporated herein by reference.
 
                            PART IV

Item XIV.  Exhibits, Financial Statements,Schedules and Reports on Form 8-K.

  A.   Financial Statements and Financial Statement Schedules

    1.   Financial Statements --

       The consolidated financial statements listed in the
       accompanying index to financial statements on Page 23 are
       filed as part of this Annual Report. 

    2.   Financial Statement Schedules --

       The financial statement schedules required by this Item
       are filed with this report and are listed in the
       accompanying index to financial statements on Page 23. 
       All other financial statement schedules are inapplicable.
       

  B.   Reports on Form 8-K

    No reports on Form 8-K were filed by the Registrant during
    the last quarter of the fiscal year ended October 31, 1996.

  C.   Exhibits.

    Listed below are all Exhibits filed as part of this report. 
    Certain Exhibits are incorporated by reference from
    documents previously filed by the Trust with the Securities
    and Exchange Commission pursuant to Rule 12b-32 under the
    Securities Exchange Act of 1934, as amended.

Exhibit

(3)    Articles of Incorporation and By-laws.

  3.1  Fourth Amended and Restated Declaration of Trust of the
       Trust, as amended, (incorporated by reference to Exhibit
       3.1 of the Registrant's Quarterly Report on Form 
       10-Q for the quarter ended April 30, 1995).

  3.2  By-laws of the Trust, as amended (incorporated by
       reference to Exhibit 4.2 of the Registrant's Registration
       Statement on Form S-8 (No. 33-41408)).

(4)    Instruments Defining the Rights of
       Security Holders, Including Indentures.

  4.1  Common Shares:  See Exhibit 3.1 hereto.

  4.2  Preferred Shares:  See Exhibit 3.1 hereto.

  4.3  Preferred Share Purchase Rights:  See Exhibits 3.1, 10.3
       and 10.3.1 hereto.

(10)   Material Contracts.

     10.1     Form of Indemnification Agreement entered into
              between the Registrant and each of its Trustees and
              for future use with Trustees and officers of the
              Trust (incorporated herein by reference to Exhibit
              10.1 of the Registrant's Annual Report on Form 10-K
              for the year ended October 31, 1989).*

     10.2     Amended and Restated Change of Control Agreement
              between the Registrant and James R. Moore dated
              November 15, 1990 (incorporated herein by reference
              to Exhibit 10.3 of the Registrant's Annual Report
              on Form 10-K for the year ended October 31, 1990).*

     10.3     Rights Agreement between the Trust and The First
              National Bank of Boston, as Rights Agent, dated as
              of October 28, 1988 (incorporated herein by
              reference to Exhibit 1 of the Registrant's Current
              Report on Form 8-K dated October 28, 1988).

     10.3.1   Amendment No. 1 dated May 14, 1996 to the Rights
              Agreement, dated as of October 28, 1988
              (incorporated herein by reference to Exhibit 4 of
              the Registrant's Current Report on Form 8-K dated
              May 2, 1996).

     10.4     Change of Control Agreement dated as of June 12,
              1990 between the Registrant and Raymond P. Argila
              (incorporated herein by reference to Exhibit 10.7
              of the Registrant's Annual Report on Form 10-K for
              the year ended October 31, 1990).*

     10.4.1   Agreement dated December 19, 1991 between the
              Registrant and Raymond P. Argila amending the
              Change of Control Agreement dated as of June 12,
              1990 between the Registrant and Raymond P. Argila
              (incorporated herein by reference to Exhibit 10.6.1
              of the Registrant's Annual Report on Form 10-K for
              the year ended October 31, 1991).* 

     10.5     Change of Control Agreement dated as of December
              20, 1990 between the Registrant and Charles J.
              Urstadt (incorporated herein by reference to
              Exhibit 10.8 of the Registrant's Annual Report on
              Form 10-K for the year ended October 31, 1990).*

     10.6     Amended and Restated HRE Properties Stock Option
              Plan (incorporated herein by reference to Exhibit
              10.8 of the Registrant's Annual Report on Form 10-K
              for the year ended October 31, 1991).*

     10.6.1   Amendments to HRE Properties Stock Option Plan
              dated June 9, 1993 (incorporated by reference to
              Exhibit 10.6.1 of the Registrant's Annual Report on
              Form 10-K for the year ended October 31, 1995).* 

     10.7     Amended and Restated Change of Control Agreement
              dated as of November 6, 1996 between the Registrant
              and Willing L. Biddle*.

     10.8     Countryside Square Limited Partnership Agreement of
              Limited Partnership dated as of November 22, 1996
              between HRE Properties, as General Partner and the
              persons whose names are set forth on Exhibit A of
              the Agreement, as Limited Partners (incorporated by
              reference to Exhibit I of the Registrant's Current
              Report on Form 8-K dated November 22, 1996).

(21) Subsidiaries.

     21.1     List of Trust's subsidiaries (incorporated by
              reference to Exhibit 22.1 of the
              Registrant's Annual Report on Form 10-K for the
              year ended October 31, 1988).

(23) Consents of Experts and Counsel.

     23.1     The consent of Arthur Andersen LLP to the
              incorporation by reference of their reports
              included or incorporated by reference herein in the
              Registrant's Registration Statements on Form S-3
              (No.33-57119), Form S-8 (No.2-93146) and Form S-8
              (No. 33-41408) is filed herewith as part of this report.

(27) Financial Data Schedule.
     
     27.1     Financial Data Schedule


*Management contract, compensatory plan or arrangement required
to be filed as an exhibit to this Annual Report on Form 10-K
pursuant to Item 14(c).


                         HRE PROPERTIES

Item XIVa.     INDEX TO FINANCIAL STATEMENTS AND 
                  FINANCIAL STATEMENT SCHEDULES



                                                                     Page

         Consolidated Balance Sheets at October 31, 1996 and 1995     24

         Consolidated Statements of Income for each of the 
          three years ended October 31, 1996                          25
         
         Consolidated Statements of Cash Flows for each of the
          three years ended October 31, 1996                          26

         Consolidated Statements of Shareholders' Equity
          for each of the three years ended October 31, 1996          27

         Notes to Consolidated Financial Statements                   28-35

         Report of Independent Public Accountants                     36

Schedule.

The following consolidated financial statement schedules of HRE
Properties are included in Item XIV(d):

III      Real Estate and Accumulated Depreciation - October 31,1996   37

IV       Mortgage Loans on Real Estate - October 31, 1996             41

All other schedules for which provision is made in the applicable
accounting regulation of the Securities and Exchange 
Commission are not required under the related instructions 
or are inapplicable and therefore have been omitted.


CONSOLIDATED BALANCE SHEETS                      
(In thousands, except share data)
                                                    
                                                              October 31,       
 ASSETS                                                   1996          1995   

Real Estate Investments:
  Properties owned - at cost, net of accumulated
  depreciation                                         $ 88,280       $ 85,966
  Properties available for sale - at cost, net of
  accumulated depreciation and recoveries                32,986         46,212 
  Mortgage notes receivable                               3,706          3,937
                                                        124,972        136,115

Cash and cash equivalents                                 1,819          7,097
Interest and rent receivable                              2,795          2,691
Deferred charges, net of accumulated amortization         1,592          1,913
Other assets                                                982          1,283
                                                       $132,160       $149,099
LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:
 Bank loan                                             $      -     $    2,500
 Mortgage notes payable                                  39,798         57,212 
 Accounts payable and accrued expenses                      774          1,014
Deferred trustees' fees                                     470            436
Other liabilities                                         1,152          1,355 
 
                                                         42,194         62,517


Shareholders' Equity:
  Preferred shares, without par value; 2,000,000 shares
  authorized; none issued                             
  Common shares, without par value; unlimited shares
  authorized; 5,565,129 and 5,545,574 issued in 1996 
  and 1995, respectively                                124,126        123,844
  Less 219,048 and 178,348 common shares held in 
  treasury, at cost, respectively                        (3,492)        (2,861)
  Distributions in excess of accumulated net income     (30,668)       (34,401)
                                                         89,966         86,582
                                                       $132,160       $149,099




 The accompanying notes to consolidated financial statements
are an integral part of these balance sheets.



CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)

                                        Year Ended October 31, 
                                          1996   1995   1994
Revenues:
  Operating leases                    $ 22,770  $20,003  $16,498
  Financing leases                         612    1,165    1,392
  Interest and other                     1,050    1,685    1,079
  
                                        24,432   22,853   18,969

 Operating Expenses:
  Property expenses                      8,780    7,691    7,185
  Interest                               4,867    5,281    3,775
  Depreciation and amortization          5,132    4,804    4,075
  General and administrative expenses    1,545    1,610    1,423
  Trustees' fees and expenses              178      170      163
  Write-downs in carrying value of 
  investments                                -    7,000    1,086
  
                                        20,502   26,556   17,707


 Operating Income (Loss)                 3,930   (3,703)   1,262

 Gains on Sales of Properties            6,341    7,567       82

 Net Income                            $10,271  $ 3,864  $ 1,344
 
 Net Income Per Common Share            $ 1.91    $ .72    $ .26         
 Weighted Average Number of Common 
  Shares Outstanding                     5,365    5,349    5,330






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


CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)                                
                                                      Year Ended October 31,    
                                                      1996      1995      1994
Operating Activities:
  Net income                                       $10,271   $ 3,864   $ 1,344
  Adjustments to reconcile net income to 
         net cash provided by operating activities:
   Depreciation and amortization                     5,132     4,924     4,151
   Recovery of investment in properties owned
         subject to financing leases                   954     1,355     1,471
   Minority interests in results of consolidated 
         jointventure                                   --        --       (20)
   Gains on sales of properties                     (6,341)   (7,567)      (82)
   Write-downs in carrying value of investments         --     7,000     1,086
   (Increase) in interest and rent receivable         (104)     (348)   (1,039)
   Increase (decrease) in accounts payable and 
          accrued expenses                            (206)      (95)       97
   (Increase) decrease in other assets and other
           liabilities, net                             95       (98)     (619)

   Net Cash Provided by Operating Activities         9,801     9,035     6,389
                                                            
 Investing Activities:
  Acquisitions of properties                          (880)  (26,809)  (25,816)
  Improvements to existing properties owned and 
           deferred charges                         (5,617)   (2,959)   (1,764)
  Proceeds from sale of mortgage note receivable        --     3,750        -- 
  Net proceeds from sale of investment in 
           unconsolidated joint venture                 --         --      250
  Net proceeds from sales of properties             17,988     12,822      454
  Contract deposit received                             --         --      500
  Payments received on mortgage notes receivable       231         76       68
  Miscellaneous                                         --       (119)      (4)

  Net Cash Provided by (Used in) 
  Investing Activities                              11,722    (13,239) (26,312)

 Financing Activities:
  Proceeds from bank loans                           5,250         --    5,000 
  Proceeds from mortgage notes                       6,000     11,250   22,500
  Dividends paid                                    (6,538)    (6,100)  (5,861)
  Proceeds from sales of common shares                 282        337      302
  Purchases of common shares for treasury             (631)        --       --
  Payments on mortgage notes payable and bank loan (31,164)    (2,924)    (341)

  Net Cash Provided by (Used in) 
  Financing Activities                             (26,801)     2,563   21,600

 Net Increase (Decrease) In Cash and 
 Cash Equivalents                                   (5,278)    (1,641)   1,677
 Cash and Cash Equivalents at Beginning of Year      7,097      8,738    7,061

 Cash and Cash Equivalents at End of Year         $  1,819    $ 7,097  $ 8,738


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





<TABLE>
<S>                                            <C>        <C>      <C>      <C>           <C>
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(In thousands, except shares and per share data)
                                                             
                                        Common Shares                      (Distributions
                                                                Treasury   In Excess of 
                                         Outstanding     Issued  Shares,   Accumulated
                                              Number     Amount  at Cost   Net Income)  Total

Balances - October 31, 1993                5,320,106   $123,205  $(2,861)  $(27,648)  $92,696
 Net income                                       --         --       --      1,344     1,344
 Cash dividends paid ($1.10 per share)            --         --       --     (5,861)   (5,861)
 Sale of additional common shares under 
    dividend reinvestment plan                18,048        261       --         --       261
 Common shares issued upon exercise of 
   stock options                               3,542         41       --         --        41

 Balances - October 31, 1994               5,341,696    123,507   (2,861)   (32,165)   88,481
  Net income                                      --         --       --      3,864     3,864
  Cash dividends paid ($1.14 per share)           --         --       --     (6,100)   (6,100)
  Sale of additional common shares under
   dividend reinvestment plan                 18,862        260       --         --       260
  Common shares issued upon exercise of 
   stock options                               6,668         77       --         --        77

Balances - October 31, 1995                5,367,226    123,844   (2,861)   (34,401)   86,582
 Net income                                      --         --       --      10,271    10,271
 Cash dividends paid ($1.22 per share)           --         --       --      (6,538)   (6,538)
 Sale of additional common shares under
  dividend reinvestment plan                 19,555         282      --          --      282
 Purchases of common shares held in 
  treasury                                  (40,700)        --      (631)        --     (631)


Balances - October 31, 1996                5,346,081   $124,126   (3,492)  $(30,668)  $89,966
</TABLE>
 
The accompanying notes to consolidated financial statements are an
integral part of these statements.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business
HRE Properties, a real estate investment trust, is engaged
in the acquisition, ownership and management of commercial
real estate, primarily neighborhood and community shopping
centers in the northeastern part of the United States.  
Other assets include office and retail buildings and
industrial properties.  The Trust's major tenants include
supermarket chains and other retailers who sell basic
necessities and multi-national industrial corporations.

Principles of Consolidation
The consolidated financial statements include the accounts
of HRE Properties (the Trust), its wholly-owned subsidiary,
and a joint venture in which the Trust has the ability to
control the affairs of the venture. All significant
intercompany transactions and balances have been eliminated
in consolidation.

Accounting for Leases
The Trust accounts for its leases of real property in
accordance with the provisions of Financial Accounting
Standards Statement No. 13, "Accounting for Leases," as
amended. This Statement sets forth specific criteria for
determining whether a lease should be accounted for as an
operating lease or a direct financing lease. In general, the
financing lease method applies where property is under
long-term lease to a creditworthy tenant and the present
value of the minimum required lease payments at the
inception of a lease is at least 90% of the market value of
the property leased. Other leases are accounted for as operating leases.

Federal Income Taxes
The Trust believes it qualifies and intends to continue to
qualify as a real estate investment trust under Sections
856-860 of the Internal Revenue Code.  Under those sections,
a trust, among other things, that distributes at least 95%
of its real estate trust taxable income will not be taxed on
that portion of its taxable income which is distributed. The
Trust has distributed all of its taxable income for the
fiscal years through 1996. Accordingly, no provision has
been made for Federal income taxes in the accompanying
consolidated financial statements.

Taxable income of the Trust prior to the dividends paid
deduction for the years ended October 31, 1996, 1995 and
1994 was approximately $5,200,000, $3,600,000, and
$2,200,000, respectively. Taxable income in fiscal 1996 and
1995 was reduced through the utilization of available
capital loss carry-overs of $2,600,000 and $2,900,000,
respectively.  The difference between net income for
financial reporting purposes and taxable income results
from, among other things, differences in adjusted bases for
capital gains and losses and different methods of accounting
for leases and depreciable lives related to the properties owned.

Depreciation and Amortization
The Trust uses the straight-line method for depreciation and
amortization. Properties owned and properties available for
sale are depreciated over the estimated useful lives of the
properties, which range from 30 to 45 years. Furniture and
equipment are depreciated over their estimated useful lives,
which range from 3 to 20 years. Tenant improvements,
deferred leasing costs and leasehold improvements are
amortized over the life of the related leases. All other
deferred charges are amortized over the terms of the
agreements to which they relate.

Properties Available for Sale
A property is classified as available for sale upon
determination by the Trustees that the property is to be
marketed for sale in the normal course of business over the
next several years.

In March 1995, the Financial Accounting Standards Board
issued Statement No. 121 (the "Statement") on accounting for
the impairment of long-lived assets, certain identifiable
intangibles, and goodwill related to assets to be held and
used.  The Statement also establishes accounting standards
for long-lived assets and certain identifiable intangibles
to be disposed of.  The Trust is required and plans to adopt 
the Statement on November 1, 1996.  The Statement requires,
among other things, that assets to be disposed of be carried
at the lower of cost or fair value less costs to dispose. 
Management does not expect the impact on the consolidated
financial statements resulting from the adoption of the
provisions of this Statement to be material.  

Capitalization
The Trust capitalizes all direct costs relating to the
acquisition of real estate investments and costs relating to
improvements to properties.  The Trust also capitalizes all
direct costs relating to its successful leasing activities.

Income Recognition
Revenues from operating and finance leases include revenues
from properties owned and properties available for sale. 
Rental income is generally recognized based on the terms of
leases entered into with tenants.  Rental income from leases
with scheduled rent increases is recognized on a straight-
line basis over the lease term.  Additional rents which are
provided for in leases, are recognized as income when earned
and their amounts can be reasonably estimated.  Interest
income is recognized as it is earned.  Gains and losses on
sales of properties are recorded when the criteria for
recognizing such gains or losses under generally accepted
accounting principles have been met.

Statements of Cash Flows
The Trust considers short-term investments with original
maturities of 90 days or less to be cash equivalents. 

Use of Estimates
The preparation of financial statements requires management
to make use of estimates and assumptions that affect amounts
reported in the financial statements as well as certain
disclosures.  Actual results could differ from those estimates.

Allowance For Possible Investment Losses
The Trust's real estate investments are recorded at the
lower of depreciated historical cost or estimated net
realizable values.  The Trust periodically reviews each of
its investments for declines in net realizable values, to
amounts below recorded balances, based on its present
investment strategies.  Future changes in such investment
strategies and other circumstances may affect estimates of
net realizable values and therefore the carrying amount of investments.

Net Income Per Common Share
Computations of net income per common share are based on the
weighted average number of common shares outstanding during
the respective periods. The additional shares issuable upon
exercise of stock options (see Note 8) have not been
included in the computations since their effect is immaterial.


(2) REAL ESTATE INVESTMENTS

The Trust's investments in real estate were composed of the
following at October 31, 1996 and 1995 
(in thousands):
                                 
                                   Properties      Mortgage
                     Properties     Available        Notes     1996     1995
                          Owned      for Sale     Receivable  Totals    Totals

Retail                $  86,469      $ 16,553      $ 3,706 $ 106,728 $ 105,330
Office                    1,507         7,864           --     9,371    20,945
Distribution and Service     --         7,769           --     7,769     8,736
Undeveloped Land            304           800           --     1,104     1,104

                       $ 88,280      $ 32,986      $ 3,706 $ 124,972  $136,115

The Trust's investments at October 31, 1996, consisted of equity
interests in 18 properties which are located in various regions
throughout the United States and mortgage notes. The following is a
summary of the geographic locations of the Trust's investments at
October 31, 1996 and 1995 (in thousands):

                                              1996         1995
Northeast                                  $90,649      $89,211
Southeast                                   14,137       15,153
Midwest                                     10,418       10,910
Rocky Mountain                                 800        8,916
Southwest                                    7,015        9,909
Pacific Coast and Northwest                  1,953        2,016
                                          $124,972     $136,115

(3) PROPERTIES OWNED

The components of properties owned  were as follows (in thousands):

                                         1996          1995
Land                               $   17,068      $ 17,068
Buildings and improvements             84,034        79,165
                                      101,102        96,233
Accumulated depreciation              (12,822)      (10,267)

                                   $   88,280      $ 85,966

Space at properties owned by the Trust is generally leased to
various individual tenants under short and intermediate term leases
which are accounted for as operating leases. 

Minimum rental payments on noncancellable operating leases become
due as follows:  1997 - $15,373,000; 1998 - $14,436,000; 1999 -
$13,007,000; 2000 - $11,664,000; 2001 - $8,685,000; and thereafter
- $62,415,000.

In addition to minimum rental payments, certain tenants are
required to pay additional rental amounts based on increases in
property operating expenses and/or their share of the costs of
maintaining common areas. Certain of the Trust's leases provide for
the payment of additional rent based on a percentage of the
tenant's revenues. Such additional rents are included in rental
income and aggregated approximately $281,000, $483,000, and
$515,000 in 1996, 1995 and 1994, respectively.


(4) PROPERTIES AVAILABLE FOR SALE 

In fiscal 1995, the Board of Trustees authorized a plan to sell all
of the non-core properties of the Trust over the next several
years.  The non-core properties consist of all of the Trust's
distribution and service properties, the Trust's office properties
(with the exception of its headquarters), and certain retail
properties located outside of the Northeast region of the United
States.  These properties, having a net carrying amount of
$32,986,000 at October 31, 1996, have been classified as Properties
Available for Sale in the accompanying consolidated financial
statements.  As a result of this change in investment strategy, the
Trust recorded a charge of $7,000,000 in the 1995 consolidated
statement of income to write-down the carrying value of the
properties available for sale to their respective estimated net
realizable values.

At October 31, 1996 and 1995, properties available for sale
consisted of the following (in thousands):
                                                   1996        1995
                                                                    
Properties available for sale subject to:
  Operating leases                             $ 25,832     $38,104
  Direct financing leases                         7,154       8,108
                                               $ 32,986     $46,212

Operating Leases
The components of properties available for sale subject to
operating leases were as follows (in thousands):

                                                   1996        1995 
                                                                    
Land                                           $  6,675     $ 8,898
Buildings and improvements                       32,871      48,874
                                                 39,546      57,772
Accumulated depreciation                        (13,714)    (19,668)
                                               $ 25,832     $38,104


Direct Financing Leases
The components of properties available for sale subject to direct
financing leases were as follows (in thousands):

                                                                1996      1995
                                                                    
Total  minimum lease payments to be received                 $ 5,900   $ 7,431
Assumed residual values of leased property                     2,404     2,412
Unearned income                                               (1,150)   (1,735)

Investment in property subject to direct financing leases    $ 7,154   $ 8,108

Original cost of property subject to direct financing leases $16,276   $16,276 

Assumed residual values are based upon a depreciated cost concept
using estimated useful lives and thus do not contain an element of
appreciation which may result by reason of inflation or other factors.

Minimum lease payments receivable on direct financing leases become
due at a rate of $1,468,000 in 1997, $1,468,000 in 1998, $1,468,000
in 1999, $1,299,000 in 2000 and $197,000 in 2001.

In fiscal 1996, the Trust acquired one retail property at a
purchase price of $880,000.  The property is located adjacent to
property already owned by the Trust.

Sales of Properties

In fiscal 1996, the Trust sold three properties for a net gain on
sales of properties of $6,341,000.

In fiscal 1995 the Trust sold four industrial properties for gains
on sales of properties of $7,567,000.

In fiscal 1994, the Trust sold an industrial property for a gain on
sale of property of $82,000.



(5) WRITE-DOWNS IN CARRYING VALUE OF INVESTMENTS 

In connection with the Trust's change in investment strategy and
plan to sell its non-core properties, the Trust recorded a charge
of $7,000,000 in fiscal 1995 to write-down the carrying value of
the properties available for sale to their respective estimated net
realizable values. (See Note 4)

The Trust held a participating mortgage in the principal amount of
$4,836,000.  The participating mortgage note was collateralized by
an office property and entitled the Trust to a fixed rate of
interest plus a participation in increases in the property's income
and market value.   In fiscal 1994,the Trust determined that the
long-term outlook for the property had declined due to, among other
things, significant tenant turnover.  As a result of these
circumstances, the Trust changed its investment strategy with
respect to this asset and offered the mortgage loan for sale and,
in December 1994, the mortgage loan was sold for net proceeds of
$3,750,000.  As a result, the Trust recorded a charge of $1,086,000
in fiscal 1994, to write down the carrying value of the mortgage
loan to its selling price, which charge is reflected in "Write-
downs in carrying value of investments" in the 1994 consolidated
statement of income.  


(6) MORTGAGE NOTES RECEIVABLE

The Trust's mortgage notes receivable consist of fixed rate
mortgages.  The components of the mortgage notes receivable at
October 31, 1996 and 1995 were as follows (in thousands):

                                                     1996      1995

Remaining principal balance                       $ 4,690   $ 4,977
                                                         
Unamortized discounts to reflect market interest 
rates at time of acceptance of notes               (  984)   (1,040)

                                                  $ 3,706   $ 3,937

At October 31, 1996, principal payments on mortgage notes
receivable become due as follows:

1997 - $158,000; 1998 - $172,000; 1999 - $189,000; 2000 - $206,000;
2001 - $160,000; thereafter - $ 3,805,000.

At October 31, 1996, the remaining principal balance was due from
two borrowers. The amount due from the largest individual borrower
at October 31, 1996 was $2,346,000.  The contractual interest rates
on mortgage notes receivable range from 12% to 14%.


(7)  MORTGAGE NOTES PAYABLE AND  LINES OF CREDIT

At October 31, 1996 the Trust had seven nonrecourse mortgage notes
payable totalling $39,798,000 ($51,606,000 at October 31, 1995)
which are due in installments over various  terms extending to the
year 2002 and which bear interest at rates ranging from 7.5% to
9.75%.  The mortgage notes payable are collateralized by real
estate investments having a net carrying value of $68.4 million as
of October 31, 1996.

Scheduled principal payments during the next five years are as
follows:  1997 - $ 3,089,000; 1998 - $24,267,000; 1999 - $257,000;
2000 - $2,236,000; 2001 - $4,309,000; and thereafter -  $5,640,000.

The Trust also has available $15 million in unsecured lines of
credit.  Extensions of credit under one of the lines of credit in
the amount of $10 million is subject to the bank's satisfaction of
certain conditions, including the intended use of proceeds.  The
lines of credit expire in fiscal 1997 and bear interest at rates
tied to the prime rate or LIBOR.  A condition for one of the credit
lines in the amount of $5 million requires the Trust to maintain a
compensating balance of $525,000.  The Trust had no outstanding
borrowings under either line of credit at October 31, 1996
($2,500,000 at October 31, 1995).

Interest paid for the years ended October 31, 1996, 1995 and 1994
was $4,945,000, $5,304,000, and $3,668,000 respectively.


(8) STOCK OPTIONS AND SHAREHOLDER RIGHTS PLAN

At October 31, 1996, 453,665 shares of the Trust's authorized but
unissued stock were reserved for issuance to key employees of the
Trust and certain non-employee trustees under the Trust's stock
option plan. Options are granted at fair market value on the date
of the grant and are generally exercisable in installments over a
maximum period of four years from the date of grant. A summary of
stock options at October 31, 1996 and 1995 is as follows:


                                               Number  Option Price
                                            of Shares     Per Share
Outstanding at October 31,
  1996                                        440,082  $11.38-$25.50
  1995                                        376,248  $11.38-$25.50
  Exercisable at October 31, 1996             285,330  $11.38-$25.50

No accounting recognition is given to stock options until they are
exercised, at which time the proceeds 
are credited to shareholders' equity. During the year ended October
31, 1995, options to purchase 6,668 common shares were exercised. 
There were no options exercised in fiscal 1996.

Stock appreciation rights may be issued in tandem with the stock
options, in which case, either the option or the right can be
exercised. Such rights entitle the grantee to payment in cash or a
combination of common shares and cash equal to the increase in the
value of the shares covered by the option to which the stock
appreciation right is related. The plan limits the value of the
stock appreciation rights to 150% of the option price for the
related shares. The excess of the market price of the shares over
the exercise price of vested options is charged to expense. For the
years ended October 31, 1996, 1995 and 1994, there were no amounts
charged to expense.

The Board of Trustees adopted a Preferred Share Purchase Rights
Plan in 1988 and declared a dividend distribution of one preferred
share purchase right for each outstanding common share.  The Plan
was amended in 1996 to increase the beneficial ownership threshold
which triggers the exercisability of the rights. The rights, which
expire on November 13, 1998, are not currently exercisable. When
they are exercisable, the holder will be entitled to purchase from
the Trust one one-hundredth of a share of a newly-established
Series A Participating Preferred Stock at a price of $65 per one
one-hundredth of a preferred share, subject to certain adjustments.
The rights will become exercisable 10 days after a person or group
either acquires 25% ("acquiring person") or more of the Trust's
shares, or announces an offer the consummation of which would
result in such person or group owning 30% or more of the shares.
Following any such 25% acquisition, shareholders other than the
acquiring person will be entitled to use the rights to purchase
common shares of the Trust at 50% of market value.

If the Trust is involved in a merger or other business combination
at any time after the rights become exercisable, the rights will be
modified to entitle a holder other than the acquiring person to
purchase a number of shares of common stock of the acquiring
company having a market value of twice the exercise price of each right.


(9) OTHER MATTERS

In a prior year, as a part of a real property transfer and mortgage
transaction, the Trust negotiated an option to purchase a 117,500
square foot retail property upon the occurrence of certain events,
for one dollar.  The property is triple net leased to a single
tenant under a long-term lease arrangement.  In fiscal 1996, the
Trust exercised its option.  However, the property's owner of
record has contested the option and has commenced an action against
the Trust to declare the option unenforceable.  The Trust has
counterclaimed, and intends to vigorously pursue the litigation. 
There is a $2 million mortgage lien recorded against the property,
the priority of which is being evaluated.

In March 1996, the Trust's Board of Trustees authorized a program
to purchase up to one million of the Trust's common shares
periodically.  The Trust purchased 40,700 common shares in fiscal
1996 which are held in treasury.


(10)  DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

The following disclosures of estimated fair value were determined
by management using available market information and appropriate
valuation methodologies.  Considerable judgement is necessary to
interpret market data and develop estimated fair value. 
Accordingly, the estimates presented herein are not necessarily
indicative of the amounts the Trust could realize on disposition of
the financial instruments.  The use of different market assumptions
and/or estimation methodologies may have a material effect on the
estimated fair value amounts. 

Cash and cash equivalents, rents receivable, interest receivable,
accounts payable and accrued expenses and other liabilities are
carried at amounts which reasonably approximate their fair values. 

The estimated fair value of mortgage notes receivable
collateralized by real property is based on discounting the future
cash flows at a year-end risk adjusted lending rate that the Trust
would utilize for loans of similar risk and duration.  At October
31, 1996, the estimated aggregate fair value of the mortgage notes
receivable is $3,900,000.

Mortgage notes payable with an aggregate carrying value of
$39,798,000 have an estimated aggregate fair value of $40,000,000
at October 31, 1996.  Estimated fair value is based on discounting
the future cash flows at a year-end risk adjusted lending rate
currently available to the Trust for issuance of debt with similar
terms and remaining maturities.  

Although management is not aware of any factors that would
significantly affect the estimated fair value amounts, such amounts
have not been comprehensively revalued for purposes of these
financial statements since that date and current estimates of fair
value may differ significantly from the amounts presented herein.


(11) QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

The unaudited quarterly results of operations for the years ended
October 31, 1996 and 1995 are as follows
(in thousands, except per share data):
<TABLE>
<S>                              <C>       <C>    <C>      <C>             <C>     <C>       <C>       <C>
                                 Year Ended October 31, 1996              Year Ended October 31, 1995  
                                        Quarter Ended                            Quarter Ended                 
                               Jan 31  Apr 30  July 31    Oct 31        Jan 31    Apr 30   July 31  Oct 31

Revenues                      $ 6,154 $ 6,076  $ 5,955  $  6,247       $ 5,169   $ 5,606  $  5,815  $6,263

Income (loss) before gains
 on sales of properties (1)   $   778 $   914  $1,053   $ 1,185        $   575   $   668  $ (6,252) $1,306
Gains (losses) on sales of
  properties                    6,252      --     389      (300)            --     5,502        --   2,065

Net Income (loss)             $ 7,030 $   914  $1,442   $   885        $   575   $ 6,170  $ (6,252) $3,371

Per share:

Net Income (loss)             $  1.31  $   .17  $ .26   $   .17        $   .11   $   1.15   $ (1.17) $ .63
</TABLE>

(1)  Quarter ended October 31, 1995 results include other income of $600,000 
     earned in connection with the contract for sale of one of the Trust's 
     properties.

     Quarter ended July 31, 1995 results include a charge of $7,000,000 to 
     reflect the carrying values of two properties available for sale at 
     their net realizable values.

(12) SUBSEQUENT EVENTS

In December 1996, subject to shareholder approval, the Board of
Trustees approved a plan of reorganization of the Trust from a
Massachusetts business trust to a corporation organized in Maryland
to, among other things, provide for enhanced flexibility in the
conduct of its business in carrying out the strategic objectives of
the Trust.  The plan of reorganization will be effected by means of
a merger of the Trust into a Maryland corporation wholly owned by
the Trust under which each outstanding common share of the Trust
will be converted into one share of common stock of the
corporation.  The plan of reorganization is subject to, among other
things, approval of the shareholders of the Trust at its annual
meeting in March, 1997.

In December 1996, the Trust obtained a commitment from a bank for a
$2 million non recourse first mortgage loan secured by a retail
property having a book value of approximately $3.1 million.

In December 1996, the Trust purchased approximately 85 acres of
land in Carmel, New York at a cost of $275,000.

In November 1996, the Trust negotiated a settlement proposal with
one of its tenants to recover, among other things, unpaid
additional percentage rents including interest totalling $3.25
million.  In accordance with the terms of its lease, the tenant
will be required to aggregate the sales of all its stores in a
specified radius when computing percentage rent due the Trust.  The
settlement proposal, including certain other modifications to the
lease is expected to be completed and recorded as income in the Trust's 
first quarter of fiscal 1997.

On November 22, 1996, the Trust formed a limited partnership with
certain shareholders of the Trust.  The purpose of the partnership
is to own, manage and redevelop the Trust's Countryside Square
shopping center in Clearwater, Florida, a property available for
sale in the accompanying Consolidated Balance Sheet at October 31,
1996.  The Trust, as the general partner, contributed the shopping
center at its net carrying amount (which amount approximates its
fair value of $13 million), and the limited partners, including
Kimco Realty Corp. who will manage the property, contributed
600,000 common shares of the Trust to the limited partnership.  The
partnership agreement provides for the limited partners to receive
an annual cash preference from available cash of the partnership,
as defined.  Upon liquidation, proceeds from the sale of the
partnership assets are to be distributed to the partners as
follows:  first, $12 million to the limited partners, next, $25
million to the Trust and the balance to the partners in proportion
to the respective partnership interests.  The property may be sold
at any time after the third year of operation and the Trust has a
right of first refusal on the sale of the property.

The partners are not obligated to make any additional capital
contributions, however, to the extent that there is a shortfall in
cash available for distributions, the general partner may elect to
sell the common shares of the Trust held by the partnership in an
amount equal to the shortfall amount, or contribute such shortfall
amount to the partnership.

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Shareholders of HRE Properties:

We have audited the accompanying consolidated balance sheets of HRE
Properties (the Trust), a Massachusetts voluntary association, 
and subsidiary as of October 31, 1996 and 1995, and the 
related consolidated statements of income, cash flows and shareholders'
equity for each of the three years in the period ended October 31, 1996. 
These financial statements are the responsibility of the Trust's management. 
Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of HRE
Properties and subsidiary as of October 31, 1996 and 1995, and the
results of their operations and their cash flows for each of the
three years in the period ended October 31, 1996 in conformity with
generally accepted accounting principles.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedules listed in the accompanying
index to financial statements are presented for purposes of complying with the
Securities and Exchange Commission's rules and are not part of the basic
financial statements. These schedules have been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in
our opinion, fairly state in all material respects the financial data required
to be set forth therein in relation to the basic financial statements taken
as a whole.

                                   ARTHUR ANDERSEN LLP




New York, New York
December 18, 1996

HRE PROPERTIES
OCTOBER 31, 1996
SCHEDULE III- REAL ESTATE AND ACCUMULATED DEPRECIATION
-----------------------------------------------------
(In thousands)
<TABLE>
<S>                         <C>      <C>      <C>          <C>       <C>          <C>   <C>          <C>    <C>         <C>         
COL. A                    COL. B        COL. C                  COL. D                   COL. E            COL. F      COL. G/H 
                                                         Costs Capitalized Sub.   Amount at which Carried  
                                  Initial Cost to Trust      to Acquisition         at Close of Period    Accumulated  Date 
Description                                Building &    Carrying  Building &         Building &          Depreciation Constructed
and Location          Encumbrances  Land  Improvements    Costs   Improvements  Land Improvements  Total  Note(b)      or Acquired
------------------------------------------------------------------------------------------------------------------------------------
REAL ESTATE SUBJECT TO OPERATING 
LEASES (Note (a) ):                                                       
-----------------------------------

OFFICE BUILDINGS:                                                    
  Greenwich, Connecticut      $575    $199        $795       $0         $45      $199     $840    $1,039      $76        1993  31.5
  Greenwich, Connecticut         0     111         444        0          21       111      465       576       33        1994  31.5
  Southfield, Michigan           0   1,000      10,280        0         833     1,000   11,113    12,113    4,249        1983  35
                               575   1,310      11,519        0         899     1,310   12,418    13,728    4,358

SHOPPING CENTERS:                                
  Clearwater, Florida            0   3,689     17,273         0       2,881     3,689   15,354    19,043   6,439   1985      40
  Springfield, Massachusetts     0   1,372      3,656         0      12,147     1,372   15,803    17,175   5,397   1970      40    
  Farmingdale, New York      2,575   1,029      4,174         0         106     1,029    4,280     5,309     437   1993      31.5   
  Somers, New York           2,458     821      2,600         0          30       821    2,630     3,451     325   1992      31
  Wayne, New Jersey          9,100   2,492      9,966         0         273     2,492   10,239    12,731   1,056   1992      31    
  Meriden, Connecticut      14,722   5,000     20,309         0         467     5,000   20,776    25,776   1,910   1993      31.5
  Danbury, Connecticut       5,940   3,850     15,811         0         597     3,850   16,408    20,258     782   1994      31.5
  Tempe, Arizona                 0     114        766         0           0       114      766       880      14   1996      40  
  Carmel, New York               0   1,470      5,973         0          26     1,470    5,999     7,469     163   1995      31.5 
                            34,795  19,837     80,528         0      16,527    19,837   92,255   112,092  16,523                  

DEPARTMENT STORES:                            
  Tempe, Arizona                 0     378      1,518         0         970       378    2,488     2,866   1,387   1970      40
  Mesa, Arizona                  0     440      1,631         0         989       440    2,620     3,060   1,457   1971      40
                                 0     818      3,149         0       1,959       818    5,108     5,926   2,844  

INDUSTRIAL SERVICE CENTER:
  Syracuse, New York             0     253        530         0           0       253      530      783     168    1973      40 

                                 0     253        530         0           0       253      530      783     168


MIXED USE FACILITY: RETAIL/OFFICE:

  Newington, New Hampshire   4,428     421      1,997         0       4,597       421    6,594    7,015   2,643    1979      40


LAND:

  Newington, New Hampshire        0    305          0         0          0        305        0      305       0    1981       -
  Denver, Colorado                0    799          0         0          0        799        0      799       0    1988       -


TOTAL REAL ESTATE 
  SUBJECT TO OPERATING 
  LEASES...                 $39,798 $23,743    $97,723       $0    $23,982    $23,743 $116,905 $140,648 $26,536

</TABLE>
                                                     






HRE PROPERTIES
OCTOBER 31, 1996
SCHEDULE III- REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED
------------------------------------------------------------------
(In thousands)
<TABLE>
<S>                 <C>           <C>      <C>           <C>         <C>          <C>           <C>      <C>       <C>              
COL. A             COL. B               COL. C                  COL. D                         COL. E             COL. F
                                                                                                                 Net Investment 
                                                                                Remaining                        in  Properties
Description                              Building &    Carrying   Building &   Minimum Lease Residual  Unearned  Subject to
and Location    Encumbrances     Land   Improvements     Costs   Improvements   Payments      Value    Income     Financin

REAL ESTATE SUBJECT TO FINANCING
LEASES (Notes (c) and (e) ):
-----------------------------------

INDUSTRIAL DISTRIBUTION CENTERS:   
(Leased to Chrysler Corporation)

  St. Louis, Missouri     0       523      2,253            0          2,363     1,585         1,167     (333)      2,419   1970
  Dallas, Texas           0       193      2,266            0          4,195     2,547           841     (482)      2,906   1970
  Deferred Lease
    Renewal Rights        0         0          0            0            296         0           296        0         296   1981
                          0       716      4,519            0          6,854     4,132         2,304     (815)      5,621


INDUSTRIAL DISTRIBUTION CENTER:
(Leased to Firestone Tire and
  Rubber Company):

  Albany, Georgia         0       835      3,343            0              0     1,768           100     (335)      1,533   1972


TOTAL REAL ESTATE 
  SUBJECT TO FINANCING 
  LEASES...              $0    $ 1,551    $ 7,862         $ 0        $ 6,854    $5,900        $2,404  ($1,150)     $7,154

</TABLE>
                                                     

HRE PROPERTIES
OCTOBER 31, 1996
SCHEDULE III- REAL ESTATE AND ACCUMULATED DEPRECIATION -CONTINUED
-----------------------------------------------------------------
(In thousands)
<TABLE>
<S>                                                             <C>       <C>       <C>  
NOTES:                                                         1996      1995      1994
                      
  (a) RECONCILIATION OF PROPERTIES OWNED SUBJECT TO OPERATING 
        LEASES               

       Balance at beginning of year                         $154,005 $132,085  $105,926

   Property improvements during the year                       5,263    1,816       907

   Property acquired during the year                             880   27,104    25,816

   Writedown in carrying value of properties                      --   (7,000)       --

   Property sold or disposed of during the year              (19,500)      --      (564)

 Balance at end of year                                     $140,648 $154,005  $132,085


  (b) RECONCILIATION OF ACCUMULATED DEPRECIATION

 Balance at beginning of year                                $29,935  $26,173   $22,837

   Provision during the year charged to income                 4,454    4,099     3,531

   Property sold during the year                              (7,853)    (337)     (195)

 Balance at end of year                                      $26,536  $29,935   $26,173


  (c) RECONCILIATION OF PROPERTIES OWNED SUBJECT TO
        FINANCING LEASES-


 Balance at beginning of year                                $ 8,108  $14,719    $16,190

   Recovery of investment in property owned subject to
    financing leases                                          (  954)  (1,355)    (1,471)

   Property sold during the year                                  --   (5,256)        --

 Balance at end of year                                       $7,154  $ 8,108    $14,719

</TABLE>

  (d)Tenant improvement costs are depreciated over the life of
the related leases, which range from 3 to 25 years.

  (e)The difference between the initial costs tothe Trust 
and costs capitalized subsequent to acquisition and the amount
at which carried at close of period represents accumulated
depreciation for the period prior to classification of these 
the period thereafter.

   (f)The aggregate cost basis of real estate for Federal income tax 
purposes at October 31,1996 is $173,040,000.

HRE PROPERTIES
OCTOBER 31, 1996
SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
-------------------------------------------
<TABLE>

<S>                              <C>           <C>               <C>                <C>               <C>
       COL. A                   COL.B         COL. C            COL. D              COL. E           COL. F    
                                                                                 Face Amount    Carrying Amount
                                                                                of Mortgages      of Mortgages
                            Interest Rate   Final Maturity      Periodic         (Note (b) )     (Note (a) )
     Description           Coupon Effective     Date          Payment Terms     (In Thousands)   (In Thousands)

I. FIRST MORTGAGE LOANS ON BUSINESS PROPERTIES (NOTES (c) and (d):                        

Retail Store:
  Fall River, Massachusetts      9%   14%  04-01-2013     Payable in monthly        $1,225       $918 
                                                          Installments of $11,920.          


Retail Store:                                    
  Erie, Pennsylvania              9%   14%  07-01-2013     Payable in monthly        1,119        835
                                                           Installments of $10,787.          
Retail Store:                               
  Riverside, California           9%   12%  01-15-2013     Payable in quarterly      2,050      1,673
                                                           Installments of $54,313.          
                                            
Total First Mortgage Loans                                                           4,394      3,426 

                        
II. SECOND MORTGAGE LOAN ON BUSINESS PROPERTY (Notes (c) and (e) ):                       
                        
Retail Store:                               
  Riverside, California            9%   12%  01-15-2001     Payable in quarterly      
                                                            Installments of $21,135.   296        280

TOTAL MORTGAGE LOANS ON REAL ESTATE                                                 $4,690     $3,706
          
</TABLE>
             

SCHEDULE IV- MORTGAGE LOANS ON REAL ESTATE (CONTINUED)                    
                   
NOTES TO SCHEDULE IV
<TABLE>
<S>                                                   <C>           <C>         <C>
                                                        Year Ended October 31,  
Reconciliation of Mortgage Loans on Real Estate       
-------------------------------------------------     
                                                    1996            1995       1994 
                                              ------------      ----------     ------    
(a) Balance at beginning of period:               $3,937         $7,763    $8,917          
                   
                   
     Deductions during current period:                              
                   
     Prepayment of Mortgage Loan                    (143)           ----      ----     
     Sale of Mortgage                               ----          (3,750)     ----     
                   
     Collections of principal and                          
     amortization of discounts                        (88)           (76)      (68)     
                   
     Writedown in carrying value of Mortgage Loan    -----          -----    (1,086)
                                                                     
     Balance at close of period:                   $3,706         $3,937    $ 7,763          

                   
(b)  The aggregate cost basis for Federal income tax purposes is equal to the 
     face amount of the mortgages.  
(c)  At October 31, 1996 no mortgage loans were delinquent in payment of 
     currently due principal or interest. 
(d)  There are no prior liens for any of the First Mortgage Loans on Real 
     Estate.         
(e)  The First Mortgage Loan on this property is held by the Trust.             
                   




                                             SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) 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.

               HRE PROPERTIES      



               By:  /S/ CHARLES J. URSTADT                     
                    Charles J. Urstadt
                   Chairman and Chief Executive Officer








Dated: January 22, 1997



















                                                 

     Pursuant to the requirements of the Securities Exchange Act of 1934, 
this Report has been signed below by the following persons on behalf of the 
Registrant and in the capacities and on the date indicated.


/s/ CHARLES J. URSTADT                                       January 22, 1997
Charles J. Urstadt
Chairman and Trustee
(Principal Executive Officer)



/s/ JAMES R. MOORE                                            January 22, 1997
James R. Moore
Executive Vice President - Chief
  Financial Officer
(Principal Financial Officer
and Principal Accounting Officer)



/s/ E. VIRGIL CONWAY                                          January 22, 1997
E. Virgil Conway
Trustee



/s/ ROBERT R. DOUGLASS                                        January 22, 1997
Robert R. Douglass 
Trustee



/s/ PETER HERRICK                                             January 22, 1997
Peter Herrick
Trustee



/s/ GEORGE H. C. LAWRENCE                                     January 22, 1997
George H. C. Lawrence
Trustee



/s/ PAUL D. PAGANUCCI                                         January 22, 1997
Paul D. Paganucci
Trustee


/s/ JAMES O. YORK                                             January 22, 1997
James O. York
Trustee

                                                 





                      CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS



As independent public accountants, we hereby consent to the incorporation of 
our report included in this Annual Report on Form 10-K for the year 
ended October 31,1996 of HRE Properties, into its previously filed Registration 
Statement on Form S-3 (No.33-57119) and its previously filed Registration 
Statements on Form S-8 (No.2-93146 and No. 33-41408), and to the reference to 
our Firm under the caption"Experts" in said Registration Statements.  




                                   ARTHUR ANDERSEN LLP





New York, New York
January 22, 1997

</TABLE>