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, 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 May 8, 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>          
                                                                 March 31,                 December 31,           
                                                           1998             1997               1997
                                                                                                     
ASSETS                                                                                                
  Real estate                                                                                         
    Land, buildings and improvements at cost      $     40,694,216       40,055,926         40,694,216
    Less accumulated depreciation                      (12,331,475)     (11,519,550)       (12,122,752)
                                                        28,362,741       28,536,376         28,571,464
  Mortgage loans receiveable, net of deferred gain          -             1,253,723             -
     Real estate and mortgage loans receivable          28,362,741       29,790,099         28,571,464
  Cash and cash equivalents                              2,185,978        1,184,663          1,606,427
  Rents and other receivables                              500,203          487,282            421,637
  Prepaid and deferred                                     284,699          329,386            351,874
  Taxes held in escrow                                     141,502          109,335            153,016
                                                                                                      
                                                  $     31,475,123       31,900,765         31,104,418
                                                                                                      
                                                                                                     
LIABILITIES AND SHAREHOLDERS' EQUITY                                                                  
  Liabilities                                                                                         
    Mortgage loans payable                        $     14,034,337       14,700,695         14,140,584
    Accounts payable and accrued expenses                  573,106          619,689            560,917
    Due to affiliates                                      327,379           55,352             97,473
    Distribution declared                                  310,400          310,400            310,400
    Tenant deposits                                         83,000           76,387             80,818
    Other                                                   75,096           70,160             44,278
                                                        15,403,318       15,832,683         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                          11,989,948       12,018,890         11,989,948
    Undistributed net earnings                             201,857          169,192             -
                                                        16,071,805       16,068,082         15,869,948
                                                                                                     
                                                  $     31,475,123       31,900,765         31,104,418
</TABLE>

USP REAL ESTATE INVESTMENT TRUST                                           
Statements of Earnings                                                     
(Unaudited)                                                                
<TABLE>
  <S>                                                     <C>               <C>
                                                                               
                                                             Three Months Ended
                                                                   March 31,
                                                           1998              1997
REVENUE                                                                            
  Rents                                           $     1,596,907         1,219,172
  Interest                                                 25,879            58,250
                                                        1,622,786         1,277,422
                                                                                  
EXPENSES                                                                           
  Property expenses:                                                               
    Real estate taxes                                     152,955           179,565
    Repairs and maintenance                                73,130           115,293
    Utilities                                              26,685            35,565
    Management fee                                         75,206            58,294
    Insurance                                              12,040            11,853
    Other                                                  94,197            34,971
  Property expenses, excluding depreciation               434,213           435,541
    Depreciation                                          208,723           203,131
  Total property expenses                                 642,936           638,672
  Interest                                                349,074           365,278
  Administrative fee                                       63,909            63,474
  Other administrative                                     54,610            46,778
                                                        1,110,529         1,114,202
                                                                                  
Net earnings                                      $       512,257           163,220
                                                                                   
Basic and diluted net earnings per share          $           .13               .04
                                                                                  
Distributions to shareholders                     $       310,400           310,400
                                                                                   
Distributions to shareholders per share           $           .08               .08
</TABLE>

USP REAL ESTATE INVESTMENT TRUST                                               
Statements of Cash Flows                                                       
(unaudited)                                                                    
<TABLE>
 <S>                                                            <C>              <C>
                                                                                
                                                                   Three Months Ended
                                                                        March 31,
                                                                 1998            1997
                                                                                       
CASH FLOWS FROM OPERATING ACTIVITIES:                                                  
  Rents collected                                      $     1,551,533        1,193,461
  Interest received                                             25,879           65,787
  Payments for operating expenses                             (237,147)        (641,012)
  Interest paid                                               (348,232)        (364,436)
    Net cash provided by operating activities                  992,033          253,800
                                                                                       
CASH FLOWS FROM INVESTING ACTIVITIES:                                                  
  Principal collections on mortgage loans receivable              -               7,203
  Capital expenditures                                            -            (372,647)
  Other, net                                                     4,165           (8,149)
    Net cash provided (used) by investing activities             4,165         (373,593)
                                                                                       
CASH FLOWS FROM FINANCING ACTIVITIES:                                                  
  Principal portion of scheduled                                          
    mortgage loan payments                                    (106,247)        (118,784)
  Distributions paid to shareholders                          (310,400)        (310,400)
    Net cash used by financing activities                     (416,647)        (429,184)
                                                                                       
Net increase (decrease) in cash and cash equivalents           579,551         (548,977)
Cash and cash equivalents at beginning of period             1,606,427        1,733,640
Cash and cash equivalents at end of period             $     2,185,978        1,184,663
                                                                                       
RECONCILIATION OF NET EARNINGS TO NET                                                  
  CASH PROVIDED BY OPERATING ACTIVITIES:                                               
Net earnings                                           $       512,257          163,220
Add (deduct) reconciling adjustments:                                                  
  Depreciation                                                 208,723          203,131
  Amortization                                                     842              842
  Increase in rent and other receivables                       (76,192)         (39,816)
  Decrease (increase) in prepaid and deferred expenses          61,976          (77,205)
  Decrease in taxes held in escrow                              11,514           37,536
  Increase  (decrease) in accounts payable                                             
    and accrued expenses                                        12,189          (64,456)
  Increase in due to affiliates                                229,906            8,906
  Increase in advance rents                                     30,818           21,642
Net cash provided by operating activities              $       992,033          253,800
</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                                  512,257          
                Dividends to shareholders                    (310,400)       
            Shareholders' equity, March 31, 1998         $ 16,071,805         

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

USP Real Estate Investment Trust had net earnings of
$512,257 ($.13 per share) for the three months ended March
31, 1998 compared to $163,220 ($.04 per share) for the same
period a year ago.  (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 increased by $378,000, or 31%,
from the first quarter 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 $82,000 due to the Trust's
ability to secure OfficeMax as an anchor tenant in 1997.
Rents at First Tuesday in Carrollton, Georgia decreased by
$44,000 primarily due to 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 continues to pay rent.  Recently, the Trust was
successful in leasing this space to Martin's Family Clothing
pursuant to a ten year lease.  At March 31, 1998, overall
leased occupancy of the Trust's portfolio was 87%.

Total property expenses excluding depreciation, as a
percentage of rental income, decreased from 36% in 1997 to
27% in 1998.  Real estate taxes decreased by $27,000 from
1997 primarily due to the Trust's success in appealing the
tax assessments and reducing the assessed values at
Mendenhall Commons in Memphis, Tennessee and Geneva Square.
Repairs and maintenance decreased by $42,000 from 1997 due
primarily to tenant remodeling expenses and roof repairs
incurred in 1997 that were not required in 1998.  Utilities
decreased by 25% during the first quarter of 1998 primarily
due to the mild winter experienced at Geneva Square.
Management fees increased by 29% from 1997 due to the
increase in rents as mentioned above.  Other property
expenses increased by $59,000 primarily due to unamortized
lease commissions at First Tuesday (pertaining to Luria's, a
former tenant) being written off in the amount of $46,000 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 $8,000 during the
first quarter of 1998 compared to last year, due to legal
expenses incurred 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 expire in June 2000.

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
($2,185,978 at March 31, 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 Board of Trustees declared a first quarter distribution
of $.08 per share, payable May 18, 1998 to shareholders of
record May 7, 1998.  Distributions to shareholders continue
to be dependent upon earnings, cash flow, financial
condition and other factors reviewed by the Board of
Trustees.

USP Real Estate Investment Trust's Annual Shareholder
Meeting will be held on Tuesday, July 14, 1998 in Cedar
Rapids, Iowa.

PART II  OTHER INFORMATION

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

No reports on Form 8-K were filed during the first 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:  May 8, 1998