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


                          FORM 10-Q


     Quarterly Report Pursuant to Section 13 or 15(d) of
             the Securities Exchange Act of 1934



    For the quarter ended June 30, 1998    Commission file number 0-7589



            USP  REAL  ESTATE  INVESTMENT  TRUST
   (Exact name of registrant as specified in its charter)



                   Iowa                               42-6149662
     (State or other jurisdiction of     (I.R.S. Employer Identification No.)
      incorporation or organization)                    


   4333 Edgewood Road N.E., Cedar Rapids, IA              52499
   (Address of principal executive offices)            (Zip Code)


Registrant's telephone number, including area code:  (319) 398-8975


                             N/A
(Former name, address and fiscal year, if changed since last report)

Indicate by check-mark whether the registrant  (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or 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


The number of shares of beneficial interest of the registrant
outstanding at August 4, 1998 was 3,880,000.

PART 1.  FINANCIAL INFORMATION

Item 1.  Financial Statements.

USP REAL ESTATE INVESTMENT TRUST                                               
Balance Sheets                                                                 
(unaudited)                                                                    
<TABLE>
    <S>                                                     <C>             <C>               <C>
                                                                               
                                                                  June 30,                December 31,
                                                             1998            1997            1997
                                                                                                     
ASSETS                                                                                               
  Real estate                                                                                        
    Land, buildings and improvements at cost        $    40,722,496      40,493,090        40,694,216
    Less accumulated depreciation                       (12,540,113)    (11,722,681)      (12,122,752)
                                                         28,182,383      28,770,409        28,571,464
  Mortgage loans receiveable, net of deferred gain            -           1,246,348            -
     Real estate and mortgage loans receivable           28,182,383      30,016,757        28,571,464
  Cash and cash equivalents                               2,137,965         845,581         1,606,427
  Rents and other receivables                               260,827         298,664           421,637
  Prepaid and deferred expenses                             288,524         355,956           351,874
  Taxes held in escrow                                      197,359         165,423           153,016
                                                                                                     
                                                    $    31,067,058      31,682,381        31,104,418
                                                                                                     
                                                                                                     
LIABILITIES AND SHAREHOLDERS' EQUITY                                                                 
  Liabilities                                                                                        
    Mortgage loans payable                          $    13,925,439      14,578,979        14,140,584
    Accounts payable and accrued expenses                   742,177         683,640           560,917
    Due to affiliates                                        93,279          54,371            97,473
    Distribution declared                                   310,400         310,400           310,400
    Tenant deposits                                          81,457          76,473            80,818
    Other                                                    44,637          54,534            44,278
                                                         15,197,389      15,758,397        15,234,470
                                                                                                     
  Shareholders' Equity                                                                               
    Shares of beneficial interest,                                                                   
      $1 par value, 20,000,000                                                                       
      shares authorized, 3,880,000                                                                   
      shares issued and outstanding                       3,880,000       3,880,000         3,880,000
    Additional paid-in capital                           11,989,669      12,018,890        11,989,948
    Undistributed net earnings                                -              25,094            -
                                                         15,869,669      15,923,984        15,869,948
                                                                                                     
                                                    $    31,067,058      31,682,381        31,104,418
</TABLE>

USP REAL ESTATE INVESTMENT TRUST                                        
Statements of Earnings                                                     
(Unaudited)                                                                  
<TABLE>
  <S>                                                     <C>          <C>           <C>         <C>
                                                                               
                                                        Three Months Ended          Six Months Ended
                                                              June 30,                   June 30,
                                                         1998         1997          1998          1997
REVENUE                                                                                                 
  Rents                                             $  1,236,203    1,184,094     2,833,110    2,403,266
  Interest                                                30,500       52,224        56,379      110,474
                                                       1,266,703    1,236,318     2,889,489    2,513,740
                                                                                                        
EXPENSES                                                                                                
  Property expenses:                                                                                    
    Real estate taxes                                    152,955      170,571       305,910      350,136
    Repairs and maintenance                              111,739       73,637       184,869      188,930
    Utilities                                             22,617       33,440        49,302       69,005
    Management fee                                        56,668       52,943       131,874      111,237
    Insurance                                             10,757       11,129        22,797       22,982
    Other                                                 19,798       37,941       113,995       72,910
  Property expenses, excluding depreciation              374,534      379,661       808,747      815,200
    Depreciation                                         208,638      203,131       417,361      406,262
  Total property expenses                                583,172      582,792     1,226,108    1,221,462
  Interest                                               346,425      362,431       695,499      727,709
  Administrative fee                                      63,909       64,320       127,818      127,794
  Other administrative                                   164,933       60,473       219,543      107,253
                                                       1,158,439    1,070,016     2,268,968    2,184,218
                                                                                                        
Net earnings                                        $    108,264      166,302       620,521      329,522
                                                                                                        
Basic and diluted net earnings per share            $        .03          .04           .16          .08
                                                                                                        
Distributions to shareholders                       $    310,400      310,400       620,800      620,800
                                                                                                        
Distributions to shareholders per share             $        .08          .08           .16          .16
</TABLE>

USP REAL ESTATE INVESTMENT TRUST                                         
Statements of Cash Flows                                                 
(unaudited)                                                                
<TABLE>
  <S>                                                                    <C>            <C>
                                                                                
                                                                           Six Months Ended
                                                                                 June 30,
                                                                         1998            1997   
                                                                                              
CASH FLOWS FROM OPERATING ACTIVITIES:                                                          
  Rents collected                                                  $  2,994,176       2,542,813
  Interest received                                                      56,379         118,011
  Payments for operating expenses                                      (970,433)     (1,168,889)
  Interest paid                                                        (693,816)       (726,026)
    Net cash provided by operating activities                         1,386,306         765,909
                                                                                              
CASH FLOWS FROM INVESTING ACTIVITIES:                                                          
  Principal collections on mortgage loans receivable                         -           14,578
  Capital expenditures                                                  (28,280)       (809,811)
  Other, net                                                              9,457           2,565
    Net cash used by investing activities                               (18,823)       (792,668)
                                                                                              
CASH FLOWS FROM FINANCING ACTIVITIES:                                                          
  Principal portion of scheduled                                                    
    mortgage loan payments                                             (215,145)       (240,500)
  Distributions paid to shareholders                                   (620,800)       (620,800)
    Net cash used by financing activities                              (835,945)       (861,300)
                                                                                              
Net increase (decrease) in cash and cash equivalents                    531,538        (888,059)
Cash and cash equivalents at beginning of period                      1,606,427       1,733,640
Cash and cash equivalents at end of period                         $  2,137,965         845,581
                                                                                              
RECONCILIATION OF NET EARNINGS TO NET CASH                                                     
  PROVIDED BY OPERATING ACTIVITIES:                                                            
Net earnings                                                       $    620,521         329,522
Add (deduct) reconciling adjustments:                                                          
  Depreciation                                                          417,361         406,262
  Amortization                                                            1,683           1,683
  Decrease in rent and other receivables                                160,707         148,120
  Decrease (increase) in prepaid and deferred expenses                   52,952        (107,510)
  Increase in taxes held in escrow                                      (44,343)        (18,552)
  Increase  (decrease) in accounts payable                                                     
    and accrued expenses                                                181,260            (505)
  Increase (decrease) in due to affiliates                               (4,194)          7,925
  Increase (decrease) in advance rents                                      359          (1,036)
Net cash provided by operating activities                          $  1,386,306         765,909
</TABLE>

NOTES TO FINANCIAL STATEMENTS
                                                               
Note 1:  The unaudited interim financial statements are prepared in accordance
with generally accepted accounting principles and include all adjustments of
a normal recurring nature necessary for a fair presentation of the financial
position and quarterly results. Interim reports should be read in conjunction
with the audited financial statements and related notes included in the 1997
Annual Report.                                                        
                                                               
Note 2:   Shareholders' equity, December 31, 1997     $  15,869,948      
              Net Earnings                                  620,521        
              Dividends to shareholders                    (620,800)
          Shareholders' equity, June 30, 1998         $  15,869,669


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

USP  Real  Estate  Investment  Trust's net  earnings  for  the
three  and  six  months  ended  June  30, 1998  were  $108,264
($.03  per share) and $620,521 ($.16 per share), respectively,
compared  to $166,302 ($.04 per share) and $329,522 ($.08  per
share)  for the same periods in 1997.  (All per share  amounts
are  on  a  basic  and diluted basis.)  The  increase  in  net
earnings from 1997 to 1998 is due primarily to higher revenue.

The  Trust's  rental income for the first six months  of  1998
increased  by $430,000, or 18%, from the first six  months  of
1997.   Rents  at  Geneva  Square in  Lake  Geneva,  Wisconsin
increased  significantly  due to the  receipt  of  settlements
totaling $333,000, previously reserved as uncollectible,  from
P.W. Enterprises and MMM Foods, both former tenants.  Rents at
Kingsley  Square in Orange Park, Florida increased by $132,000
due  to  the Trust's ability to secure OfficeMax as an  anchor
tenant in 1997.  Rents at First Tuesday in Carrollton, Georgia
decreased  by  $63,000  in  1998  primarily  due  to  lack  of
percentage  rents  (additional rents based  on  tenant  sales)
received from Belk Rhodes in 1997.  Belk Rhodes vacated 49,836
square  feet  of space in July 1997, though continued  to  pay
base  rent.   On  July 30, 1998, this space  was  occupied  by
Martin's  Family Clothing, pursuant to a ten year  lease.   At
June  30,  1998,  overall  leased  occupancy  of  the  Trust's
portfolio  was 81%.  Interest income for the first six  months
of  1998  was  $54,000  less than  1997  due  to lower average
interest rates and a lower average  balance of funds available
for investment.

Total   property   expenses  excluding  depreciation,   as   a
percentage of rental income, decreased from 34% in 1997 to 29%
in  1998.   Real estate taxes decreased by $44,000  from  1997
primarily  due  to  the Trust's success in appealing  the  tax
assessments and reducing the assessed values at Geneva  Square
and  several of the other properties.  Utilities decreased  by
$20,000 during the first six months of 1998 primarily  due  to
the mild winter experienced at Geneva Square.  Management fees
increased  by 19% from 1997 due to the increase  in  rents  as
mentioned above.  Other property expenses increased by $41,000
primarily  due  to  unamortized  lease  commissions  at  First
Tuesday (pertaining to Luria's, a former tenant) being written
off  in  1998  and  due to various insurance  claims  totaling
$12,000  being  paid in the first quarter of  1998  at  Geneva
Square.

Other administrative expenses increased by $112,000 during the
first  six  months  of 1998 compared to the same  period  last
year.   The increase is due to legal expenses incurred  during
the  second  quarter of 1998 in connection  with  the  Trust's
efforts   to   maximize  shareholder  value.   As   previously
reported,  the  Board of Trustees has been  exploring  various
strategic alternatives with the intent to maximize shareholder
value.   Raymond James & Associates, Inc. has been engaged  as
financial  advisor  to  assist the Trust  with  these  ongoing
efforts.

Yamaha  Motor Corporation, the sole tenant at Yamaha Warehouse
in  Cudahy, Wisconsin, has notified the Trust of their  intent
to  exercise both of their remaining one year options in order
to  renew their lease for two more years.  The lease will  now
expire  in June 2000.  Strong winds recently damaged a portion
of  the  building,  but all repairs will  be  covered  by  the
tenant's insurance proceeds.

Capital  resources  of the Trust consist  of  equity  in  real
estate   investments.   Properties  are  maintained  in   good
condition   and  adequate  insurance  coverage  is   provided.
Liquidity   is  represented  by  cash  and  cash   equivalents
($2,137,965  at June 30, 1998) as well as cash flow  from  the
continued  operation  of  the Trust's real  estate  portfolio,
which is considered sufficient to meet current obligations.

The Trust has begun an initiative to refinance the real estate
properties.   The  North  Park Plaza  and  Mendenhall  Commons
mortgages  mature on March 1, 1999 and need to be  refinanced.
Since  the current interest rate environment is favorable  and
prepayment  penalties  associated  with  most  of  the   other
mortgage loans are relatively low, the Trustees believe it  is
in  the  best  interest  of  the  shareholders  to  attempt  a
refinancing at this time.

The  Board  of Trustees declared a second quarter distribution
of  $.08 per share, payable August 17, 1998 to shareholders of
record August 4, 1998.  Distributions to shareholders continue
to  be dependent upon earnings, cash flow, financial condition
and other factors reviewed by the Board of Trustees.


PART II OTHER INFORMATION

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

At  the  Trust's annual meeting of shareholders  on  July  14,
1998,  81%  of the Trust's outstanding shares were represented
(in person or by proxy).  All four incumbent Trustees were re-
elected to the Board of Trustees, with each receiving at least
85%  of  the  vote  for  the  shares  represented.   The  vote
tabulation for each Trustee was as follows:

Trustee                   Votes For         Votes Withheld
Gary A. Downing           2,711,006            447,616
Patrick E. Falconio       2,713,272            445,350
Edwin L. Ingraham         2,711,531            447,091
Samuel L. Kaplan          2,712,531            446,091

Item 6.  Exhibits and Reports on Form 8-K.

No reports on Form 8-K were filed during the second quarter of 1998.


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

                              USP REAL ESTATE INVESTMENT TRUST



                             /s/ Alan F. Fletcher
                             Alan F. Fletcher
                             Vice President and Treasurer
                             (principal financial officer)



                             /s/ Roger L. Schulz
                             Roger L. Schulz
                             Controller
                             (principal accounting officer)


Dated:  August 4, 1998