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 March 31, 2000    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 May 15, 2000 was 3,880,000.

PART 1.  FINANCIAL INFORMATION

Item 1.  Financial Statements.
<TABLE>
USP REAL ESTATE INVESTMENT TRUST
Balance Sheets
(unaudited)
<S>                                                                   <C>            <C>             <C>

                                                                           March 31,            December 31,
                                                                      2000          1999             1999

Assets
  Real estate
    Land, buildings and improvements at cost               $       34,663,342     34,508,522      34,617,710
    Less accumulated depreciation                                 (11,514,427)   (10,855,106)    (11,350,214)
                                                                   23,148,915     23,653,416      23,267,496
  Cash and cash equivalents                                         2,746,502      2,370,846       2,369,176
  Rents and other receivables                                         504,867        468,335         499,810
  Prepaid and deferred                                                212,070        248,537         243,659

                                                           $       26,612,354     26,741,134      26,380,141


Liabilities and Shareholders' Equity
  Liabilities
    Mortgage loans payable                                 $        9,275,547      9,645,512       9,359,426
    Accounts payable and accrued expenses                             640,093        469,039         665,387
    Due to affiliates                                                  40,464         43,460          31,935
    Distribution declared                                                 -          310,400             -
    Tenant deposits                                                    86,208         82,223          86,259
    Other                                                              27,953         41,217           6,353
                                                                   10,070,265     10,591,851      10,149,360

  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                                     11,989,948     11,989,948      11,989,948
    Undistributed net earnings                                        672,141        279,335         360,833
                                                                   16,542,089     16,149,283      16,230,781

                                                           $       26,612,354     26,741,134      26,380,141
</TABLE>

<TABLE>
USP REAL ESTATE INVESTMENT TRUST
Statements of Earnings
(Unaudited)
<S>                                                                      <C>               <C>

                                                                         Three Months Ended
                                                                              March 31,
                                                                       2000               1999
Revenue
  Rents                                                      $       1,072,582         1,200,527
  Interest                                                              35,028            35,164
                                                                     1,107,610         1,235,691

Expenses
  Property expenses:
    Real estate taxes                                                  124,431           116,801
    Repairs and maintenance                                             82,718           104,620
    Utilities                                                           25,902            28,509
    Management fee                                                      50,486            57,187
    Insurance                                                            7,921             8,881
    Other                                                                7,716            26,223
  Property expenses, excluding depreciation                            299,174           342,221
    Depreciation                                                       164,213           163,443
  Total property expenses                                              463,387           505,664
  Interest                                                             200,055           268,571
  Administrative fee                                                    54,414            54,243
  Other administrative                                                  78,446            48,135
                                                                       796,302           876,613

Net earnings                                                 $         311,308           359,078

Basic and diluted net earnings per share                     $             .08               .09

Distributions to shareholders                                $               -           310,400

Distributions to shareholders per share                      $               -               .08
</TABLE>

<TABLE>
USP REAL ESTATE INVESTMENT TRUST
Statements of Cash Flows
(unaudited)
<S>                                                                   <C>                <C>

                                                                        Three Months Ended
                                                                              March 31,
                                                                       2000               1999

Cash flows from operating activities:
  Rents collected                                             $      1,090,512          1,151,329
  Interest received                                                     39,145             35,164
  Payments for operating expenses                                     (420,660)          (424,997)
  Interest paid                                                       (199,213)          (267,729)
    Net cash provided by operating activities                          509,784            493,767

Cash flows from investing activities:
  Capital expenditures                                                 (45,632)               -
  Other, net                                                            (2,947)            16,604
    Net cash provided (used) by investing activities                   (48,579)            16,604

Cash flows from financing activities:
  Principal portion of scheduled
    mortgage loan payments                                             (83,879)           (82,294)
  Principal repayment of mortgage loans                                    -           (1,170,127)
  Distributions paid to shareholders                                       -             (310,400)
    Net cash used by financing activities                              (83,879)        (1,562,821)

Net increase (decrease) in cash and cash equivalents                   377,326         (1,052,450)
Cash and cash equivalents at beginning of period                     2,369,176          3,423,296
Cash and cash equivalents at end of period                    $      2,746,502          2,370,846

Reconciliation of net earnings to net cash
  provided by operating activities:
Net earnings                                                  $        311,308            359,078
Add (deduct) reconciling adjustments:
  Depreciation                                                         164,213            163,443
  Amortization                                                             842                842
  Decrease (increase) in rent and other receivables                        447            (79,487)
  Decrease in prepaid and deferred expenses                             28,139             22,166
  Decrease in taxes held in escrow                                         -               18,863
  Increase (decrease) in accounts payable
    and accrued expenses                                               (25,294)            50,835
  Increase (decrease) in due to affiliates                               8,529            (72,262)
  Increase in advance rents                                             21,600             30,289
Net cash provided by operating activities                     $        509,784            493,767
</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 1999 Annual Report.

  Note 2:  Shareholders' equity, December 31, 1999   $   16,230,781
               Net earnings                                 311,308
           Shareholders' equity, March 31, 2000      $   16,542,089


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

USP Real Estate Investment Trust had net earnings of $311,308
($.08 per share) for the three months ended March 31, 2000
compared o $359,078 ($.09 per share) for the same period in
1999.  (All per share amounts are on a basic and diluted
basis.)

The Trust's rental income this year is $127,945 lower than the
first three months of 1999 primarily due to lower rents at
Kingsley Square in Jacksonville, Florida.  The decrease in
rents at Kingsley Square was caused by OfficeMax exercising
their lease provision allowing them to pay rent based on sales
when Publix Super Markets, the former anchor tenant, vacated
its space in April 1999.  As a result of Publix vacating their
space, the Trust will be receiving significantly less rent
from OfficeMax.

At March 31, 2000, overall leased occupancy of the portfolio
was 87%, but due to tenants vacating prior to lease
expiration, overall physical occupancy is slightly below 85%.
Winn Dixie has recently announced publicly that it will be
closing its store at First Tuesday Mall in Carrollton,
Georgia.  While Winn Dixie will be obligated to pay rent
through lease expiration in 2004, their vacancy will reduce
overall physical occupancy of the Trust's portfolio to 79%.
Management continues to seek replacement tenants to fill
vacancies at Kingsley Square and First Tuesday Mall.

Total property expenses, excluding depreciation, decreased by
$43,047 from 1999 to 2000.  As a percentage of rental income,
such expenses decreased from 29% in 1999 to 28% in 2000.
Repairs and maintenance decreased by $21,902 from 1999
primarily due to tenant remodeling expenses and electrical
repairs required in the first quarter of 1999.  Management
fees decreased by $6,701 from 1999 due to lower rental income
in 2000.  Other property expenses were $18,507 lower than
1999, primarily due to reduced lease commissions.

Interest expense decreased by $68,516 due to the Trust
prepaying the mortgage loans in February 1999 on Presidential
Drive Business Park in Atlanta, Georgia and First Tuesday Mall
and the March 1999 refinancing of the mortgage loans on North
Park Plaza in Phoenix, Arizona and Mendenhall Commons in
Memphis, Tennessee.  Other administrative expenses increased
by $30,311 during the first three months of 2000 compared to
the same period last year.  This increase is due to higher
legal expenses incurred in connection with the anticipated
transaction to sell all of the real estate assets to AEGON USA
Realty Advisors.

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
($2,746,502 at March 31, 2000) as well as cash flow from the
continued operation of the Trust's real estate portfolio,
which is considered sufficient to meet current obligations.

As previously announced, the Trust has signed a contract to
sell all of its real estate assets to AEGON USA Realty
Advisors, the Trust's advisor.  The anticipated sale of assets
and proposed liquidation of the Trust are subject to, among
other things, shareholder approval.  In order to obtain
shareholder approval, a special shareholder meeting has been
scheduled for June 13, 2000, for which a proxy statement is
being distributed in order to solicit shareholder votes.  If
shareholders approve the proposed transaction and the
liquidation of the Trust on June 13, 2000, the sale of assets
will take place shortly thereafter and a liquidating
distribution currently expected to be in excess of $6.50 per
share will be paid to all shareholders.  Due to the pending
transaction, regular quarterly distributions have been
suspended.

Forward Looking Information

This Form 10-Q Quarterly Report contains "forward-looking
statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended.  These forward-
looking statements represent our expectations or beliefs
relating to anticipated financial performance, business
prospects and our plans for future operations, which are
subject to various risks and uncertainties.  When used in this
Form 10-Q and in future filings by the Trust with the
Securities and Exchange Commission, in our press releases,
presentations to securities analysts or investors, in oral
statements made by or with the approval of an executive
officer of the Trust, the words or phrases "believes," "may,"
"will," "expects," "should," "continue," "anticipates,"
"intends," "will likely result," "estimates," "projects," or
similar expressions and variations thereof are intended to
identify such forward-looking statements.  The Private
Securities Litigation Reform Act of 1995 provides a safe
harbor for these types of statements.  In order to comply with
the terms of the safe harbor, the Trust notes that a variety
of factors could cause the Trust's actual results and
experiences to differ materially from the anticipated results
or other expectations expressed in the Trust's forward-looking
statements.  The risks and uncertainties that may affect the
operations, performance, results of the Trust's business, and
the potential sale of assets include but are not limited to
the following:

     *  The Trust's ability to renew expiring tenant leases
and obtain new leases at competitive rental rates.

     *  Changes in interest rates which will affect the amount
of interest paid on mortgage loans.

     *  The Trust's ability to refinance mortgage loans which
require balloon payments.

     *  The ability to complete the anticipated sale of real
estate assets to AEGON Advisors.


Item 3.  Quantitative and Qualitative Disclosures About Market
Risk.

There have been no material changes in the market risks of our
financial instruments since December 31, 1999.


PART II  OTHER INFORMATION

Item 5.  Other Events.

On May 10, 2000, the Trust became aware of an unsolicited
offer from a company identified as Sutter Opportunity Fund,
LLC to purchase for cash up to 190,000 shares of the Trust
(approximately 4.9% of the toal outstanding) for $6.05 per
share less any distributions paid after May 1, 2000.  USP
encouraged shareholders to reject the offer based on
comparison of the anticipated liquidating distribution with
the offer price.  This event was reported in a news release
dated May 11, 2000.  A copy of the news release is included
herein as an exhibit to this report.


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

 (a)  Exhibits.

        (99)   News release dated May 11, 2000.

 (b)  Reports on Form 8-K.

      The Trust reported on a Form 8-K, dated February 1, 2000,
      that it had signed a contract to sell all of its assets
      to AEGON USA Realty Advisors, the Trust's advisor.  It
      was also reported that due to the anticipated sale of the
      real estate assets, regular quarterly distributions have
      been suspended.


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:  May 15, 2000



                         EXHIBIT INDEX




          Exhibit Item      Title or Description

               99           News release dated May 11, 2000