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, 1999       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 12, 1999 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>

                                                                          June 30,                   December 31,
                                                                     1999         1998                   1998

Assets
  Real estate
    Land, buildings and improvements at cost                $     34,523,996     40,722,496           34,508,522
    Less accumulated depreciation                                (11,023,335)   (12,540,113)         (10,691,663)
                                                                  23,500,661     28,182,383           23,816,859
  Cash and cash equivalents                                        2,622,069      2,137,965            3,423,296
  Rents and other receivables                                        290,926        260,827              397,822
  Prepaid and deferred expenses                                      243,922        288,524              275,653
  Taxes held in escrow                                                -             197,359               18,863

                                                            $     26,657,578     31,067,058           27,932,493


Liabilities and Shareholders' Equity
  Liabilities
    Mortgage loans payable                                  $      9,546,389     13,925,439           10,897,933
    Accounts payable and accrued expenses                            499,385        742,177              418,204
    Due to affiliates                                                 52,173         93,279              115,722
    Distribution declared                                            310,400        310,400              310,400
    Tenant deposits                                                   82,484         81,457               78,701
    Other                                                             41,507         44,637               10,928
                                                                  10,532,338     15,197,389           11,831,888

  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     11,989,669           11,989,948
    Undistributed net earnings                                       255,292          -                  230,657
                                                                  16,125,240     15,869,669           16,100,605

                                                            $     26,657,578     31,067,058           27,932,493
</TABLE>


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

                                                                  Three Months Ended            Six Months Ended
                                                                       June 30,                     June 30,
                                                                    1999       1998            1999          1998
Revenue
  Rents                                                     $   1,114,221    1,236,203      2,314,748     2,833,110
  Interest                                                         30,833       30,500         65,997        56,379
                                                                1,145,054    1,266,703      2,380,745     2,889,489

Expenses
  Property expenses:
    Real estate taxes                                             118,364      152,955        235,165       305,910
    Repairs and maintenance                                       144,971      111,739        249,591       184,869
    Utilities                                                      29,143       22,617         57,652        49,302
    Management fee                                                 59,974       56,668        117,161       131,874
    Insurance                                                       7,027       10,757         15,908        22,797
    Other                                                          29,183       19,798         55,406       113,995
  Property expenses, excluding depreciation                       388,662      374,534        730,883       808,747
    Depreciation                                                  168,229      208,638        331,672       417,361
  Total property expenses                                         556,891      583,172      1,062,555     1,226,108
  Interest                                                        184,824      346,425        453,395       695,499
  Administrative fee                                               54,243       63,909        108,486       127,818
  Other administrative                                             62,739      164,933        110,874       219,543
                                                                  858,697    1,158,439      1,735,310     2,268,968

Net earnings                                                $     286,357      108,264        645,435       620,521

Basic and diluted net earnings per share                    $         .07          .03            .17           .16

Distributions to shareholders                               $     310,400      310,400        620,800       620,800

Distributions to shareholders per share                     $         .08          .08            .16           .16
</TABLE>


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

                                                                              Six Months Ended
                                                                                  June 30,
                                                                          1999              1998

Cash flows from operating activities:
  Rents collected                                                $      2,442,241         2,994,176
  Interest received                                                        65,997            56,379
  Payments for operating expenses                                        (888,917)         (970,433)
  Interest paid                                                          (451,712)         (693,816)
    Net cash provided by operating activities                           1,167,609         1,386,306

Cash flows from investing activities:
  Capital expenditures                                                    (15,474)          (28,280)
  Other, net                                                               18,982             9,457
    Net cash provided (used) by investing activities                        3,508           (18,823)

Cash flows from financing activities:
  Principal portion of scheduled
    mortgage loan payments                                               (181,417)         (215,145)
  Principal repayment of mortgage loans                                (1,170,127)              -
  Distributions paid to shareholders                                     (620,800)         (620,800)
    Net cash used by financing activities                              (1,972,344)         (835,945)

Net increase (decrease) in cash and cash equivalents                     (801,227)          531,538
Cash and cash equivalents at beginning of period                        3,423,296         1,606,427
Cash and cash equivalents at end of period                       $      2,622,069         2,137,965

Reconciliation of net earnings to net cash
  provided by operating activities:
Net earnings                                                     $        645,435           620,521
Add (deduct) reconciling adjustments:
  Depreciation                                                            331,672           417,361
  Amortization                                                              1,683             1,683
  Decrease in rent and other receivables                                   96,914           160,707
  Decrease in prepaid and deferred expenses                                24,831            52,952
  Decrease (increase) in taxes held in escrow                              18,863           (44,343)
  Increase in accounts payable
    and accrued expenses                                                   81,181           181,260
  Decrease in due to affiliates                                           (63,549)           (4,194)
  Increase in advance rents                                                30,579               359
Net cash provided by operating activities                        $      1,167,609         1,386,306
</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 1998 Annual Report.

Note 2:   Shareholders' equity, December 31, 1998    $  16,100,605
             Net earnings                                  645,435
             Distributions to shareholders                (620,800)
          Shareholders' equity, June 30, 1999        $  16,125,240


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, 1999 were $286,357 ($.07
per  share)  and  $645,435 ($.17 per  share),  respectively,
compared to $108,264 ($.03 per share) and $620,521 ($.16 per
share) for the same periods in 1998.  (All per share amounts
are on a basic and diluted basis.)

The Trust's rental income so far this year is $518,362 lower
than  the  first  six  months of  1998.   This  decrease  is
attributed to Geneva Square Shopping Center, which was  sold
in  December  1998.  Rental income for properties  owned  in
both  years  increased by $81,478 due to a lease termination
fee  and  an  increase  in  expense  recoveries  (additional
rents).  At June 30, 1999, overall leased occupancy  of  the
portfolio  was  95%.   Total  property  expenses,  excluding
depreciation, decreased by $77,864 from 1998 to 1999.  As  a
percentage  of  rental income, such expenses increased  from
29% in 1998 to 32% in 1999, primarily because rents declined
more than expenses.

Real  estate taxes decreased by $70,745 from 1998  primarily
due  to  the sale of Geneva Square.  Repairs and maintenance
increased by $64,722 from 1998 primarily due to an  increase
in  tenant  remodeling expenses and parking lot  repairs  in
1999.  Utilities increased by $8,350 from 1998 primarily due
to an increase in water usage at Presidential Drive Business
Park  in  Atlanta, Georgia.  These charges are paid  by  the
Trust  and  billed  back  to  tenants  as  additional  rent.
Management fees decreased by $14,713 from 1998 due to  lower
revenue  in  1999 as a result of the sale of Geneva  Square.
Other  property  expenses decreased by $58,589  compared  to
1998.   This  decrease is primarily due to  a  reduction  in
lease  commission expense at Kinglsey Square in Orange Park,
Florida  where unamortized lease commissions (pertaining  to
Luria's,  a  former tenant) in the amount  of  $46,000  were
written  off  in  the  first quarter  of  1998  and  due  to
insurance  claims which decreased by $15,627  from  1998  of
which $11,893 pertained to Geneva Square.

In  1999,  depreciation expense and the  administrative  fee
each  decreased from 1998 due to the sale of Geneva  Square.
Interest  expense decreased by $242,104 due to the  sale  of
Geneva  Square and due to the Trust prepaying  the  mortgage
loans  in February 1999 on Presidential Drive Business  Park
in  Atlanta,  Georgia and First Tuesday Mall in  Carrollton,
Georgia.  The prepayment of these two loans, along with  the
March  1999 refinancing of the mortgage loans on North  Park
Plaza in Phoenix, Arizona and Mendenhall Commons in Memphis,
Tennessee,  will  reduce  the  Trust's  debt  service   (and
increase  cash  flow)  by  approximately  $358,000  in  1999
compared to 1998.

Other  administrative expenses decreased by $108,669  during
the  first  six months of 1999 compared to the  same  period
last  year.  This decrease is due to legal expenses incurred
during  the  second quarter of 1998 in connection  with  the
Trust's efforts to maximize shareholder value.

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
($2,622,069 at June 30, 1999) 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 Board of Trustees declared a second quarter distribution
of  $.08  per share, payable August 16, 1999 to shareholders
of  record  August 6, 1999.  Distributions  to  shareholders
continue to be dependent upon earnings, cash flow, financial
condition  and  other  factors  reviewed  by  the  Board  of
Trustees.

YEAR 2000 ISSUE

Management  of  the Trust is well aware of  the  issues  and
concerns surrounding the potential problems associated  with
computer  systems  that may not be able to  distinguish  the
year  2000 from the year 1900, typically referred to as "the
year  2000  issue."   The Trust does  not  own  or  use  any
information   technology  directly,  because  all   services
necessary to conduct the day-to-day operations of the  Trust
are  performed by AEGON USA Realty Advisors,  Inc.  and  its
affiliates (the Advisor).  Nevertheless, the Trust could  be
adversely  affected if computer systems, as well as  certain
embedded  technology, used by the Advisor, tenants, vendors,
financial  institutions  and  other  third  parties  do  not
properly process and calculate date-related information  and
data from and after January 1, 2000.

The  most significant risks associated with year 2000 issues
that  could  negatively impact the Trust include failure  of
tenants  to  pay rent, failure by the Trust to pay  its  own
obligations,  failure  of various building  systems  at  the
Trust's real estate properties, failure of any and all third
parties  to  provide services and failure  of  any  and  all
information,   accounting  and  recordkeeping   systems   or
processes.  The reasons for such failures could range from a
simple  inability  to process electronic  information  in  a
timely  manner  to a total business failure somehow  related
to, or the result of, the year 2000 issue.

The  Advisor  has developed plans to modify, upgrade  and/or
replace  portions  of its information technology  to  ensure
that its computer systems will function properly in the year
2000   and  thereafter,  and  is  in  process  of  obtaining
reasonable assurances that comparable steps are being  taken
by  the  Trust's'  other  major service  providers.   As  of
December  31,  1998,  substantially  all  of  the  Advisor's
mission  critical  systems were year  2000  compliant.   The
Advisor will continue conducting revalidation testing of its
systems  throughout 1999, including the development, review,
and revision of business resumption and continuity plans.

The  Trust  is  not  expected  to  incur  any  direct  costs
associated with year 2000 issues.  Based on these efforts to
date,   management  of  the  Trust  is  not  aware  of   any
consequence  of  the year 2000 issue that it believes  would
have  a material effect on the Trust's business, results  of
operations  or  financial  condition.   There  can   be   no
assurance, however, that these efforts will be sufficient to
avoid any adverse impact to the Trust.

FORWARD LOOKING STATEMENTS

The  discussion  in  this report concerning  prepayment  and
refinancing  of mortgage loans and the potential  impact  on
debt   service   and  cash  flow  contains   forward-looking
statements  within  the  meaning  of  Section  27A  of   the
Securities  Act  of 1933 and Section 21E of  the  Securities
Exchange  Act  of 1934.  Actual results and  the  timing  of
certain events could differ materially from those stated  in
the forward-looking statements.


PART II  OTHER INFORMATION

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

No  reports on Form 8-K were filed during the second quarter of 1999.


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 12, 1999