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, 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 November 15, 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>

                                                                   September 30,             December 31,
                                                                1999             1998             1998

Assets
  Real estate
    Land, buildings and improvements at cost           $     34,617,710       40,722,496       34,508,522
    Less accumulated depreciation                           (11,185,980)     (12,747,098)     (10,691,663)
                                                             23,431,730       27,975,398       23,816,859
  Cash and cash equivalents                                   2,616,567        1,809,854        3,423,296
  Rents and other receivables                                   334,568          354,272          397,822
  Prepaid and deferred expenses                                 214,665          278,337          275,653
  Taxes held in escrow                                            -              159,467           18,863

                                                       $     26,597,530       30,577,328       27,932,493


Liabilities and Shareholders' Equity
  Liabilities
    Mortgage loans payable                             $      9,449,202       13,813,825       10,897,933
    Accounts payable and accrued expenses                       630,955          619,498          418,204
    Due to affiliates                                            41,542           48,442          115,722
    Distribution declared                                       310,400          310,400          310,400
    Tenant deposits                                              82,717           80,095           78,701
    Other                                                         9,192           32,924           10,928
                                                             10,524,008       14,905,184       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       11,792,144       11,989,948
    Undistributed net earnings                                  203,574           -               230,657
                                                             16,073,522       15,672,144       16,100,605

                                                       $     26,597,530       30,577,328       27,932,493
</TABLE>


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

                                                  Three Months Ended           Nine Months Ended
                                                     September 30,               September 30,
                                                   1999         1998           1999        1998
Revenue
  Rents                                      $   1,053,922   1,201,595      3,368,670    4,034,705
  Interest                                          35,562      29,021        101,559       85,400
                                                 1,089,484   1,230,616      3,470,229    4,120,105

Expenses
  Property expenses:
    Real estate taxes                              118,366     152,955        353,531      458,865
    Repairs and maintenance                        118,682     132,259        368,273      317,128
    Utilities                                       29,789      33,309         87,441       82,611
    Management fee                                  37,356      55,442        154,517      187,316
    Insurance                                        8,881      10,757         24,789       33,554
    Other                                           39,194      37,107         94,600      151,102
  Property expenses, excluding depreciation        352,268     421,829      1,083,151    1,230,576
    Depreciation                                   162,645     206,985        494,317      624,346
  Total property expenses                          514,913     628,814      1,577,468    1,854,922
  Interest                                         186,731     343,753        640,126    1,039,252
  Administrative fee                                54,243      63,909        162,729      191,727
  Other administrative                              74,915      81,265        185,789      300,808
                                                   830,802   1,117,741      2,566,112    3,386,709

Net earnings                                 $     258,682     112,875        904,117      733,396

Basic and diluted net earnings per share     $         .07         .03            .23          .19

Distributions to shareholders                $     310,400     310,400        931,200      931,200

Distributions to shareholders per share      $         .08         .08            .24          .24
</TABLE>


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

                                                                  Nine Months Ended
                                                                    September 30,
                                                                1999            1998

Cash flows from operating activities:
  Rents collected                                        $    3,421,113       4,090,636
  Interest received                                             101,559          85,400
  Payments for operating expenses                            (1,226,618)     (1,662,072)
  Interest paid                                                (637,602)     (1,036,728)
    Net cash provided by operating activities                 1,658,452       1,477,236

Cash flows from investing activities:
  Capital expenditures                                         (109,188)        (28,280)
  Other, net                                                     23,938          12,430
    Net cash used by investing activities                       (85,250)        (15,850)

Cash flows from financing activities:
  Principal portion of scheduled
    mortgage loan payments                                     (278,604)       (326,759)
  Principal repayment of mortgage loans                      (1,170,127)             -
  Distributions paid to shareholders                           (931,200)       (931,200)
    Net cash used by financing activities                    (2,379,931)     (1,257,959)

Net increase (decrease) in cash and cash equivalents           (806,729)        203,427
Cash and cash equivalents at beginning of period              3,423,296       1,606,427
Cash and cash equivalents at end of period               $    2,616,567       1,809,854

Reconciliation of net earnings to net cash
  provided by operating activities:
Net earnings                                             $      904,117         733,396
Add (deduct) reconciling adjustments:
  Depreciation                                                  494,317         624,346
  Amortization                                                    2,524           2,524
  Decrease in rent and other receivables                         54,179          67,285
  Decrease in prepaid and deferred expenses                      47,617          57,940
  Decrease (increase) in taxes held in escrow                    18,863          (6,451)
  Increase in accounts payable
    and accrued expenses                                        212,751          58,581
  Decrease in due to affiliates                                 (74,180)        (49,031)
  Decrease in advance rents                                      (1,736)        (11,354)
Net cash provided by operating activities                $    1,658,452       1,477,236
</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                                         904,117
          Distributions to shareholders                       (931,200)
          Shareholders' equity, September 30, 1999    $     16,073,522

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, 1999 were $258,682
($.07   per   share)   and  $904,117   ($.23   per   share),
respectively,  compared to $112,875  ($.03  per  share)  and
$733,396  ($.19  per share) for the same  periods  in  1998.
(All  per  share amounts are on a basic and diluted  basis.)
While net earnings and funds from operations increased  from
1998  to 1999, both revenues and expenses were lower in 1999
primarily  due  to the December, 1998 sale of Geneva  Square
Shopping Center in Lake Geneva, Wisconsin.

The  Trust's rental income this year is $666,035 lower  than
the  first nine months of 1998, entirely attributable to the
sale  of Geneva Square.  Rental income for properties  owned
in  both years actually increased by $56,074 due to a  lease
termination  fee  and  an  increase  in  expense  recoveries
(additional  rents).  At September 30, 1999, overall  leased
occupancy   of  the  portfolio  was  95%.   Total   property
expenses, excluding depreciation, decreased by $147,425 from
1998  to  1999.   As  a  percentage of rental  income,  such
expenses  increased  from  30%  in  1998  to  32%  in  1999,
primarily because rents declined more than expenses.

Real  estate taxes decreased by $105,334 from 1998 primarily
due  to  the sale of Geneva Square.  Repairs and maintenance
increased by $51,145 from 1998 primarily due to an  increase
in  tenant  remodeling expenses and parking lot  repairs  in
1999.  Utilities increased by $4,830 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 $32,799 from 1998 due to  lower
revenue  in  1999 as a result of the sale of Geneva  Square.
Other property expenses were $56,502 lower than 1998, due to
reduced lease commissions, insurance claims, and advertising
and promotional expenses.

In  1999,  depreciation expense and the  administrative  fee
each  decreased from 1998 due to the sale of Geneva  Square.
Interest  expense decreased by $399,126 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.    Other  administrative  expenses   decreased   by
$115,019  during the first nine months of 1999  compared  to
the  same  period last year.  This decrease is due to  lower
legal  expenses, incurred primarily 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
($2,616,567 at September 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.

As  reported  in a news release dated August 16,  1999,  the
Trust  announced that it had executed a letter of intent  to
sell  all  of  its assets to AEGON USA Realty Advisors,  the
Trust's   advisor.   The  sale  of  assets  is  subject   to
negotiation   of  a  definitive  agreement  and  shareholder
approval,  and  is  expected  to  result  in  a  liquidating
distribution  to  USP shareholders in excess  of  $6.00  per
share   after   all  transaction  costs  have   been   paid.
Shareholders  will  receive  a  proxy  statement  containing
additional information regarding the transaction.  While  no
assurance  can  be given that the sale will be  consummated,
completion of the transaction is planned for early 2000.

The  Board of Trustees declared a third quarter distribution
of $.08 per share, payable November 29, 1999 to shareholders
of  record  November  16,  1999.   Future  distributions  to
shareholders  will continue to be dependent  upon  earnings,
cash  flow,  financial  condition, and  the  status  of  the
proposed sale and liquidation.

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.

PART II  OTHER INFORMATION

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

 (b)  Reports on Form 8-K.

     The Company reported on a Form 8-K, dated August 16,
     1999, that it had executed a letter of intent to sell
     all of its assets to AEGON USA Realty Advisors, the
     Trust's advisor.


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 15, 1999