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 September 30, 1997       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 incorporation         (I.R.S. Employer
               or organization)                     Identification No.)


  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 November 13, 1997 was 3,880,000

PART I FINANCIAL INFORMATION

Item 1.  Financial Statements.

USP REAL ESTATE INVESTMENT TRUST                                               
Balance Sheets                                                                 
(unaudited)                                                                     
<TABLE>
<S>                                                    <C>             <C>             <C>
                                                              September 30,            December 31,
                                                           1997           1996              1996
                                                                                                  
ASSETS                                                                                            
  Real estate                                                                                     
    Land, buildings and improvements at cost        $   40,695,104      39,654,127      39,683,279
    Less accumulated depreciation                      (11,922,726)    (11,113,764)    (11,316,419)
                                                        28,772,378      28,540,363      28,366,860
                                                                                                  
  Mortgage loans receivable, net of deferred gain        1,238,796       1,267,960       1,260,926
    Real estate and mortgage loans receivable           30,011,174      29,808,323      29,627,786
                                                                                                  
  Cash and cash equivalents                                502,324       1,837,689       1,733,640
  Rent and other receivables                               371,494         497,077         443,800
  Prepaid and deferred expenses                            340,302         245,416         255,631
  Taxes held in escrow                                      97,160          95,134         146,871
                                                                                                  
  Total Assets                                      $   31,322,454      32,483,639      32,207,728
                                                                                                  
                                                                                                  
LIABILITIES AND SHAREHOLDERS' EQUITY                                                              
Liabilities                                                                                       
  Mortgage loans payable                            $   14,454,257      14,935,400      14,819,479
  Accounts payable and accrued expenses                    698,118         757,226         684,145
  Due to affiliates                                         43,954          69,212          46,446
  Distribution declared                                    310,400         310,400         310,400
  Tenant deposits                                           71,235          77,232          74,217
  Other                                                     64,801          36,422          57,779
  Total Liabilities                                     15,642,765      16,185,892      15,992,466
                                                                                                  
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                            11,799,689      12,018,890      12,018,890
  Undistributed net earnings                                   ---         398,857         316,372
  Total Shareholders' Equity                            15,679,689      16,297,747      16,215,262
                                                                                                  
  Total Liabilities and Shareholders' Equity        $   31,322,454      32,483,639      32,207,728
</TABLE>


USP Real Estate Investment Trust                                               
Statements of Earnings                                                         
(Unaudited)                                                                    
<TABLE>
<S>                                                  <C>         <C>         <C>          <C>

                                                      Three Months Ended      Nine Months Ended 
                                                         September 30,            September 30,   
                                                      1997         1996        1997         1996
REVENUE                                                                                            
  Rents                                         $    1,200,960   1,302,684   3,604,226    3,865,761
  Interest                                              49,495      68,285     159,969      188,994
Total Revenue                                        1,250,455   1,370,969   3,764,195    4,054,755
                                                                                                  
EXPENSES                                                                                           
Property expenses:                                                                                 
  Real estate taxes                                    170,150     168,775     520,286      554,676
  Repairs and maintenance                              191,353     128,782     380,283      263,513
  Utilities                                             25,963      32,145      94,968       89,761
  Management fee                                        55,980      60,633     167,217      179,538
  Insurance                                             12,039      11,922      35,021       34,556
  Other                                                 35,277      88,557     108,187      169,590
Property expenses, excluding depreciation              490,762     490,814   1,305,962    1,291,634
  Depreciation                                         200,045     202,654     606,307      608,243
Total property expenses                                690,807     693,468   1,912,269    1,899,877
Interest                                               359,525     371,173   1,087,234    1,123,276
Administrative fees                                     64,536      63,238     192,330      189,723
Other administrative                                    69,482      37,038     176,735      123,564
Total Expenses                                       1,184,350   1,164,917   3,368,568    3,336,440
                                                                                                  
Net earnings                                    $       66,105     206,052     395,627      718,315
                                                                                                  
Net earnings per share                          $          .02         .05         .10          .19
                                                                                                  
Distributions to shareholders                   $      310,400     310,400     931,200      931,200
                                                                                                  
Distributions to shareholders per share         $          .08         .08         .24          .24
</TABLE>


USP Real Estate Investment Trust                                               
Statements of Cash Flows                                                       
(unaudited)                                                                    
<TABLE>
<S>                                                                             <C>         <C>
                                                                                Nine Months Ended
                                                                                  September 30, 
                                                                                  1997        1996
                                                                                                    
CASH FLOWS FROM OPERATING ACTIVITIES:                                                                
  Rents collected                                                           $   3,675,732   3,976,232
  Interest received                                                               167,506     192,370
  Payments for operating expenses                                              (1,677,658) (1,365,146)  
  Interest paid                                                                (1,084,710) (1,117,506)
    Net cash provided by operating activities                                   1,080,870   1,685,950
                                                                                                    
CASH FLOWS FROM INVESTING ACTIVITIES:                                                                
  Principal collections on mortgage loans receivable                               22,130      20,132
  Capital expenditures                                                         (1,011,825)     (2,561)
  Other, net                                                                      (26,069)     30,730
    Net cash provided (used) by investing activities                           (1,015,764)     48,301
                                                                                                    
CASH FLOWS FROM FINANCING ACTIVITIES:                                                                
  Principal payments on mortgage loans payable                                   (365,222)   (335,985)
  Distributions paid to shareholders                                             (931,200)   (931,200)
    Net cash used by financing activities                                      (1,296,422) (1,267,185)
                                                                                                    
Net increase (decrease) in cash and cash equivalents                           (1,231,316)    467,066
Cash and cash equivalents at beginning of period                                1,733,640   1,370,623
Cash and cash equivalents at end of period                                  $     502,324   1,837,689
                                                                                                    
RECONCILIATION OF NET EARNINGS TO NET                                                                
  CASH PROVIDED BY OPERATING ACTIVITIES:                                                             
Net earnings                                                                $     395,627     718,315
  Depreciation                                                                    606,307     608,243
  Amortization                                                                      2,524       5,770
  Decrease in rent and other receivables                                           76,965     115,244
  Decrease (increase) in prepaid and deferred expenses                            (63,823)     30,426
  Decrease in taxes held in escrow                                                 49,711      47,644
  Increase  in operating accounts payable                                                            
    and accrued expenses                                                           13,973     130,771
  Increase (decrease) in due to affiliates                                         (2,492)     30,934
  Increase (decrease) in advance rents                                              2,078      (1,397)
Net cash provided by operating activities                                   $   1,080,870   1,685,950
</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
1996 Annual Report.

<TABLE>
<S>                                                                     <C>
Note 2:   Shareholders' equity, December 31, 1996                $       16,215,262
                  Net earnings                                              395,627
                  Distributions to shareholders                            (931,200)
                  Shareholders' equity, September 30, 1997       $       15,679,689
</TABLE>

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
nine months ended September 30, 1997 were $66,105 ($.02 per
share) and $395,627 ($.10 per share), respectively, compared to
$206,052 ($.05 per share) and $718,315 ($.19 per share) for the
same periods in 1996.  The decline in net earnings from 1996 to
1997 is due primarily to lower revenue and higher repairs and
maintenance expenses.

The Trust's rental income for the first nine months of 1997 was
$262,000 lower than the first nine months of 1996.  Rents at
Geneva Square in Lake Geneva, Wisconsin decreased by $145,000
mainly due to P.W. Enterprises vacating their space in January
1996 and MMM Foods discontinuing their land lease rental payments
in October 1996.  Rents decreased by $151,000 at Kingsley Square
in Orange Park, Florida primarily due to Luria's discontinuing
their rent payments at the end of August 1996.  The Trust has
leased the space formerly occupied by Luria's to OfficeMax, which
is now moved in and beginning to pay rent.  Rental income at
Presidential Drive in Atlanta, Georgia increased by $35,000 due
to a cash settlement pertaining to delinquent rents received from
a tenant in the third quarter of 1997.  The decrease in interest
income is due to a lower balance of funds available for
investment.

Total property expenses excluding depreciation, as a percentage
of rental income, increased from 33% in 1996 to 36% in 1997.
Repairs and maintenance increased by $117,000 from 1996 due
primarily to tenant remodeling expenses along with parking lot
and roof repairs.  The increase in repairs and maintenance was
partially offset by a decrease in real estate taxes for all of
the Trust's properties.  Other administrative expenses increased
due to legal and consulting expenses related to the effort to
explore strategic alternatives for the Trust.

Capital expenditures through September 30, 1997 were $1,012,000
which primarily included $771,000 to move in OfficeMax at
Kingsley Square and $177,000 for parking lot and sidewalk
improvements at First Tuesday Mall in Carrollton, Georgia and at
Presidential Drive.

As reported in the 1996 annual report, Staples closed their store
at North Park in Phoenix, Arizona in February 1996 and assigned
their lease to the developer of the new center where Staples
relocated.  Safeway, the anchor tenant at North Park, has
accepted assignment of the Staples lease and is studying the
feasibility of expanding into the space. As previously reported,
Yamaha Motor Corporation, the sole tenant at Yamaha Warehouse in
Cudahy, Wisconsin, exercised an option to renew their lease for
one year.  The one year lease option expires June 1998.  Yamaha
has two additional one-year lease options.  Belk Rhodes, an
anchor tenant at First Tuesday recently vacated their space but
is expected to continue paying rent until their lease expires in
September 1998.

Capital resources of the Trust consist of equity in real estate
investments and mortgage loans receivable.  Properties are
maintained in good condition and adequate insurance coverage is
provided.  Liquidity is represented by cash and cash equivalents
($502,324 at September 30, 1997) as well as cash flow from the
continued operation of the Trust's real estate portfolio,
considered sufficient to meet current obligations which include
capital expenditures.

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.

The Board of Trustees declared a third quarter distribution of
$.08 per share, payable November 17, 1997 to shareholders of
record November 7, 1997.  Distributions to shareholders continue
to be dependent upon earnings, cash flow, financial condition and
other factors reviewed by the Board of Trustees.  The recent
declines in occupancy, rents, earnings, and cash flow are being
closely monitored for their impact on the Trust's liquidity,
financial condition and quarterly distributions.

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:  November 13, 1997