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, 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 May 12, 1999 was 3,880,000.


PART 1.  FINANCIAL INFORMATION

Item 1.  Financial Statements.
<TABLE>
<S>                                                               <C>            <C>               <C>    
USP REAL ESTATE INVESTMENT TRUST                                                                          
Balance Sheets                                                                                            
(unaudited)                                                                                               
                                                                                                         
                                                                       March 31,              December 31,
                                                                 1999            1998               1998
                                                                                                         
Assets                                                                                                    
  Real estate                                                                                             
    Land, buildings and improvements at cost         $        34,508,522      40,694,216        34,508,522
    Less accumulated depreciation                            (10,855,106)    (12,331,475)      (10,691,663)
                                                              23,653,416      28,362,741        23,816,859
  Cash and cash equivalents                                    2,370,846       2,185,978         3,423,296
  Rents and other receivables                                    468,335         500,203           397,822
  Prepaid and deferred                                           248,537         284,699           275,653
  Taxes held in escrow                                            -              141,502            18,863
                                                                                                          
                                                     $        26,741,134      31,475,123        27,932,493
                                                                                                          
                                                                                                         
Liabilities and Shareholders' Equity                                                                      
  Liabilities                                                                                             
    Mortgage loans payable                           $         9,645,512      14,034,337        10,897,933
    Accounts payable and accrued expenses                        469,039         573,106           418,204
    Due to affiliates                                             43,460         327,379           115,722
    Distribution declared                                        310,400         310,400           310,400
    Tenant deposits                                               82,223          83,000            78,701
    Other                                                         41,217          75,096            10,928
                                                              10,591,851      15,403,318        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      11,989,948        11,989,948
    Undistributed net earnings                                   279,335         201,857           230,657
                                                              16,149,283      16,071,805        16,100,605
                                                                                                         
                                                     $        26,741,134      31,475,123        27,932,493
</TABLE>

<TABLE>
<S>                                                                             <C>                  <C>
USP REAL ESTATE INVESTMENT TRUST                                                                
Statements of Earnings                                                                          
(Unaudited)                                                                                     
                                                                                                         
                                                                                 Three Months Ended
                                                                                       March 31,
                                                                              1999                 1998
Revenue                                                                                                   
  Rents                                                           $         1,200,527            1,596,907
  Interest                                                                     35,164               25,879
                                                                            1,235,691            1,622,786
                                                                                                         
Expenses                                                                                                  
  Property expenses:                                                                                      
    Real estate taxes                                                         116,801              152,955
    Repairs and maintenance                                                   104,620               73,130
    Utilities                                                                  28,509               26,685
    Management fee                                                             57,187               75,206
    Insurance                                                                   8,881               12,040
    Other                                                                      26,223               94,197
  Property expenses, excluding depreciation                                   342,221              434,213
    Depreciation                                                              163,443              208,723
  Total property expenses                                                     505,664              642,936
  Interest                                                                    268,571              349,074
  Administrative fee                                                           54,243               63,909
  Other administrative                                                         48,135               54,610
                                                                              876,613            1,110,529
                                                                                                         
Net earnings                                                      $           359,078              512,257
                                                                                                          
Basic and diluted net earnings per share                          $               .09                  .13
                                                                                                         
Distributions to shareholders                                     $           310,400              310,400
                                                                                                          
Distributions to shareholders per share                           $               .08                  .08
</TABLE>

<TABLE>
<S>                                                                               <C>               <C>
USP REAL ESTATE INVESTMENT TRUST                                                                            
Statements of Cash Flows                                                                                    
(unaudited)                                                                                                 
                                                                                                           
                                                                                    Three Months Ended
                                                                                         March 31,
                                                                                   1999              1998
                                                                                                           
Cash flows from operating activities:                                                                       
  Rents collected                                                        $       1,151,329         1,551,533
  Interest received                                                                 35,164            25,879
  Payments for operating expenses                                                 (424,997)         (237,147)
  Interest paid                                                                   (267,729)         (348,232)
    Net cash provided by operating activities                                      493,767           992,033
                                                                                                           
Cash flows from investing activities:                                                                       
  Other, net                                                                        16,604             4,165
    Net cash provided by investing activities                                       16,604             4,165
                                                                                                           
Cash flows from financing activities:                                                                       
  Principal portion of scheduled                                                               
    mortgage loan payments                                                         (82,294)         (106,247)
  Principal repayment of mortgage loans                                         (1,170,127)              -
  Distributions paid to shareholders                                              (310,400)         (310,400)
    Net cash used by financing activities                                       (1,562,821)         (416,647)
                                                                                                           
Net increase (decrease) in cash and cash equivalents                            (1,052,450)          579,551
Cash and cash equivalents at beginning of period                                 3,423,296         1,606,427
Cash and cash equivalents at end of period                               $       2,370,846         2,185,978
                                                                                                           
Reconciliation of net earnings to net cash                                                                  
  provided by operating activities:                                                                         
Net earnings                                                             $         359,078           512,257
Add (deduct) reconciling adjustments:                                                                       
  Depreciation                                                                     163,443           208,723
  Amortization                                                                         842               842
  Increase in rent and other receivables                                           (79,487)          (76,192)
  Decrease in prepaid and deferred expenses                                         22,166            61,976
  Decrease in taxes held in escrow                                                  18,863            11,514
  Increase in accounts payable                                                                              
    and accrued expenses                                                            50,835            12,189
  Increase (decrease) in due to affiliates                                         (72,262)          229,906
  Increase in advance rents                                                         30,289            30,818
Net cash provided by operating activities                                $         493,767           992,033
</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                                    359,078
               Dividends to shareholders                      (310,400)
            Shareholders' equity, March 31, 1999          $ 16,149,283


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

USP Real Estate Investment Trust had net earnings of
$359,078 ($.09 per share) for the three months ended March
31, 1999 compared to $512,257 ($.13 per share) for the same
period a year ago.  The decrease from 1998 to 1999 is
primarily due to the sale of Geneva Square in Lake Geneva,
Wisconsin, on December 22, 1998.

The Trust's rental income decreased by $396,000 from the
first quarter of 1998.  Rental income for properties owned
in both years actually increased by $58,000 due to a lease
termination fee and an increase in expense recoveries
(additional rents).  However, Geneva Square contributed
$454,000 in rental income in the first quarter of 1998, but
none in 1999.  At March 31, 1999, overall leased occupancy
of the portfolio was 95%.  Total property expenses,
excluding depreciation, decreased by $91,992 from 1998 to
1999.  As a percentage of rental income, such expenses
increased from 27% in 1998 to 29% in 1999, primarily because
rents declined more than expenses.

Real estate taxes decreased by $36,000 from 1998 due to the
sale of Geneva Square.  Repairs and maintenance increased by
$31,000 from 1998 primarily due to tenant remodeling
expenses.  Management fees decreased by $18,000 from 1998
due to lower revenue in 1999 as a result of the sale of
Geneva Square.  Other property expenses decreased by $68,000
compared to 1998.  This decrease is primarily due to a
reduction in lease commission expense at First Tuesday in
Carrollton, Georgia, 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 $15,000 from 1998
of which $12,000 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 $81,000 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.  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 $372,000 in 1999 compared to 1998.

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
($2,370,846 at March 31, 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 first quarter distribution
of $.08 per share, payable May 24, 1999 to shareholders of
record May 13, 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 4.  Submission of Matters to a Vote of Security
Holders.

At the Trust's annual meeting of shareholders on April 30,
1999, 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 98% of the vote for the shares represented.  The vote
tabulation for each Trustee was as follows:

Trustee                          Votes For            Votes Withheld
Patrick E. Falconio              3,117,008                34,039
Edwin L. Ingraham                3,120,219                30,828
Samuel L. Kaplan                 3,122,469                28,578
Richard M. Osborne               3,122,269                28,778


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

 (b)  Reports on Form 8-K.
     
    The Company reported on a Form 8-K, dated January 6,1999, that it
    sold Geneva Square Shopping Center in Lake Geneva, Wisconsin.
 
    The Company reported on a Form 8-K, dated February 5, 1999, the election
    of Richard M. Osborne to the Board of Trustees, the prepayment of
    mortgage loans at Presidential Drive Business Park and First Tuesday
    Mall, and the refinancing of the mortgage loans on Mendenhall Commons
    and North Park Plaza.


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 12, 1999