FORM 10-Q
                  QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934


                                          UNITED STATES
                               SECURITIES AND EXCHANGE COMMISSION
                                      Washington, D.C.  20549
                                            FORM 10-Q


   (Mark One)
   [ X ]  QUARTERLY  REPORT  PURSUANT  TO SECTION 13 OR 15(d) OF THE  SECURITIES
   EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1998
          ----------------------------------------------------------------------
                                                        or
   [   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
   EXCHANGE ACT OF 1934
   For the transition period from _______________________ to ___________________
   (Amended by Exch Act Rel No. 312905. Eff 4/26/93)

   Commission File Number:                              1-12286
                            -----------------------------------

                                 MID-ATLANTIC REALTY TRUST
   -----------------------------------------------------------------------------
                       (Exact name of registrant as specified in its charter)

              MARYLAND                                52-1832411
   -----------------------------------------------------------------------------
       (State or other jurisdiction of             (I.R.S.. Employer
       incorporation or organization)             Identification No.)

    170 West Ridgely Road, Suite 300, Lutherville                   21093
   -----------------------------------------------------------------------------
       (Address of principal executive offices)                   (Zip Code)

                         (410) 684-2000
   -----------------------------------------------------------------------------
              (Registrant's telephone number, including area code)


   -----------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
              if changed since last report)


   Indicate  by check mark  whether  the  registrant  (1) has filed all  reports
   required to be filed by Sections 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
                                      ---               --

   14,125,048 Common Shares were outstanding as of October 28, 1998.






<PAGE>                                  1

                              MID-ATLANTIC REALTY TRUST
                                  AND SUBSIDIARIES


   Part I.    FINANCIAL INFORMATION

         Item 1.  CONSOLIDATED FINANCIAL STATEMENTS

                          CONSOLIDATED BALANCE SHEETS

                          CONSOLIDATED STATEMENTS OF OPERATIONS

                          CONSOLIDATED STATEMENTS OF CASH FLOWS

                          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

         Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS
                 OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


   Part II.    OTHER INFORMATION

         Item 1.   LEGAL PROCEEDINGS

         Item 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS

         Item 3.   DEFAULTS UPON SENIOR SECURITIES

         Item 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         Item 5.   OTHER INFORMATION

         Item 6.   EXHIBITS AND REPORTS ON FORM 8-K

























<PAGE>                                     2


   Part I. FINANCIAL INFORMATION
   Item 1. Consolidated Financial Statements

                              MID-ATLANTIC REALTY TRUST
                             Consolidated Balance Sheets




<TABLE>
<CAPTION>
                                                             As of
                                                September 30,     December 31,
                                                    1998             1997
                                               ---------------- ----------------
                                                 (UNAUDITED)
<S>                                                 <C>                  <C>                                       
ASSETS
Properties:
 Operating properties                              $346,737,374      306,887,360
 Less accumulated depreciation and amortization      48,417,516       42,781,532             
                                                    298,319,858      264,105,828
 Development operations                              10,930,801       18,812,326
 Property held for development or sale                5,419,913        5,559,864
                                                 -------------- ----------------            
                                                    314,670,572      288,478,018

 Cash and cash equivalents                              912,311        8,427,217
 Notes and accounts receivable - tenants  and other   2,474,759          880,414
 Prepaid expenses and deposits                        2,771,359        1,928,584
 Deferred financing costs                               931,950        1,172,470
                                                --------------- ----------------
                  
                                              $     321,760,951      300,886,703
                                               ================ ================



LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:
 Accounts payable and accrued expenses ...........$   6,045,543        5,721,093
 Notes payable ....................................  21,465,858        3,400,000
 Construction loan payable ........................   9,000,043        8,692,916
 Mortgages payable ................................ 123,604,102      116,065,741
 Convertible subordinated debentures ..............  14,731,000       17,502,000
 Deferred income ..................................     751,122          666,444
                                                --------------- ----------------
                                                    175,597,668      152,048,194
                                                --------------- ----------------

Minority interest in consolidated joint ventures  .. 41,855,238       42,076,946
                                               ---------------- ----------------

Shareholders' Equity:
 Preferred shares of beneficial interest, $.01 par value, authorized
    2,000,000 shares, issued and outstanding, none        -                  -
 Common shares of beneficial interest, $.01 par value,
    authorized 100,000,000 shares, issued and outstanding,
    14,438,762 and 14,460,248, respectively .......     144,387         144,602
 Additional paid-in capital  ...................... 130,714,807     131,281,852
 Distributions in excess of accumulated earnings .  (26,551,149)    (24,664,891)
                                                --------------- ----------------
                                                    104,308,045     106,761,563
                                                --------------- ----------------
                                                  $ 321,760,951      300,886,703
                                               ================ ================




See   accompanying   notes   to   consolidated   financial
statements.
</TABLE>


<PAGE>                                     3

                              MID-ATLANTIC REALTY TRUST

                           Consolidated Statements of Operations
                                       (UNAUDITED)
<TABLE>
<CAPTION>



                     Nine Months Ended                 Three Months Ended
                        September 30,                      September 30,
             --------------------------------  ---------------------------------
                  1998             1997              1998             1997
             --------------  ----------------  -----------------  --------------
<S>                <C>              <C>               <C>             <C>


REVENUES:
 Rentals .....$ 30,775,729         23,527,704         10,393,557       9,767,118
 Tenant recovery 5,289,009          4,105,905          1,823,158       1,616,569
 Other......       349,448            190,673            105,740          43,498
             --------------  ----------------  -----------------  --------------
                36,414,186         27,824,282         12,322,455      11,427,185
             --------------  ----------------  -----------------  --------------

COSTS AND EXPENSES:
  Interest  ..   8,855,358          9,545,898          2,965,536       4,183,338
  Depreciation
   / amortization
  of property and
  improvements   6,692,418          4,905,039          2,379,128       2,155,773
  Operating  .   7,571,106          6,719,536          2,644,114       2,496,279
  General and
  administrative 2,065,695          1,721,904            608,816         587,158

             --------------   ---------------- -----------------  --------------
                25,184,577         22,892,377          8,597,594       9,422,548
             --------------   ---------------- -----------------  --------------
EARNINGS FROM
 OPERATIONS BEFORE
 MINORITY
 INTEREST  ..   11,229,609          4,931,905          3,724,861       2,004,637

Minority interest
 expense ....  (2,237,530)          (734,344)          (745,617)       (596,622)
              -------------  -----------------  ----------------  --------------

EARNINGS FROM
 OPERATIONS      8,992,079          4,197,561          2,979,244       1,408,015

Gain on
 properties .       92,431           (49,562)                (5)       (140,734)
              --------------  ----------------  ---------------- ---------------

EARNINGS BEFORE
 EXTRAORDINARY
 LOSS........    9,084,510          4,147,999          2,979,239       1,267,281

Extraordinary loss
 from early
 extinguishment of
 debt             (32,984)               -                  -              -



NET EARNINGS. $  9,051,526         4,147,999           2,979,239       1,267,282
              ==============  ================  ================ ===============



NET EARNINGS PER SHARE
-BASIC AND DILUTED
 AND BEFORE AND
 AFTER EXTRAORDINARY
 ITEM         $     0.62             0.52              0.20              0.15
              ==============  ================  ================ ===============











See   accompanying   notes   to   consolidated   financial
statements.
</TABLE>


<PAGE>                                      4
                               MID-ATLANTIC REALTY TRUST
                          Consolidated Statements of Cash Flows
                                     (UNAUDITED)
<TABLE>
<CAPTION>

                                             Nine Months Ended September 30,
                                           -------------------------------------
                                                1998              1997
                                           ----------------  -------------------
<S>                                              <C>               <C>
Cash flows from operating activities:
  Net earnings .......................    $      9,051,526          4,147,999
  Adjustments to reconcile net earnings to net
    cash provided by operating activities:
      Depreciation and amortization  ..          6,692,418          4,905,039
      (Gain)loss on properties .......             (92,431)            49,562
      Stock compensation, net..........            205,578                -
      Minority interest in earnings, net         2,230,182            734,344
     Amortization of deferred financing costs      200,963            296,170
      Changes in operating assets and liabilities:
      Increase in operating assets ....         (2,437,120)        (1,256,554)
      Increase in operating liabilities            409,128            629,117
                                           ----------------  -------------------

            Total adjustments  ........          7,208,718          5,357,678
                                           ----------------  -------------------

              NET CASH PROVIDED BY
                OPERATING ACTIVITIES ..         16,260,244          9,505,677
                                           ----------------  -------------------

Cash flows from investing activities:
   Acquisitions of and additions to properties (20,981,686)       (14,384,478)
    Proceeds from sales of properties            4,498,017         26,628,371
    Receipts from minority partners ...            335,012             17,607
    Payments to minority partners .....         (2,786,902)        (1,081,332)
                                           ----------------  -------------------

              NET CASH (USED IN) PROVIDED BY
                INVESTING ACTIVITIES  .       (18,935,559)         11,180,168
                                           ----------------  -------------------

Cash flows from financing activities:
   Proceeds from notes payable  .......        26,076,308          31,500,000
   Principal payments on notes payable         (8,010,450)        (47,900,000)
   Principal payments on mortgages payable     (8,633,394)         (5,213,190)
   Proceeds from construction loan payable        307,127           7,532,946
   Additions to deferred financing costs          (30,792)            (21,763)
   Dividends paid......................       (10,937,784)         (5,749,384)
   Shares repurchased..................        (3,583,774)            (15,610)
   Other,net...........................           (26,832)             39,026
                                           ----------------  -------------------

              NET CASH USED IN
                FINANCING ACTIVITIES  .        (4,839,591)        (19,827,975)
                                           ----------------  -------------------

NET (DECREASE)  INCREASE IN CASH
  AND CASH EQUIVALENTS  ...............        (7,514,906)            857,870

CASH AND CASH EQUIVALENTS,
  beginning of period  ................         8,427,217           1,013,838
                                           ----------------  -------------------

CASH AND CASH EQUIVALENTS,
  end of period  .....................    $       912,311           1,871,708
                                           ================  ===================

Schedule of Noncash Investing and Financing Activities:
 Operating partnership units issued ....  $        -               36,064,914
 Mortgages payable assumed in acquisitions     16,171,755          83,922,499
 Conversion of subordinated debentures,
  net of deferred financing costs ......  $     2,696,476          19,943,448
                                           ================  ===================


During the nine month  periods ended  September 30, 1998 and 1997,  $523,217 and
$210,898,  respectively,  of interest  costs were  capitalized  as  construction
period interest in development operations.




 See accompanying notes to consolidated financial statements.
</TABLE>



<PAGE>                                      5



                              MID-ATLANTIC REALTY TRUST
                       Notes To Consolidated Financial Statements
                                   (UNAUDITED)

   ORGANIZATION
       Mid-Atlantic  Realty Trust was  incorporated  June 29, 1993 and commenced
   operations effective with the completion of its initial public share offering
   on September  11,  1993.  Mid-Atlantic  Realty Trust is the  successor to the
   operations  of BTR Realty,  Inc. and  qualifies  as a real estate  investment
   trust  ("REIT") for Federal  income tax  purposes.  As used herein,  the term
   "MART" or the "Company"  refers to  Mid-Atlantic  Realty Trust,  and entities
   owned  or  controlled  by  MART,  including  MART  Limited  Partnership  (the
   "Operating Partnership").

   DESCRIPTION OF BUSINESS
       The  Company  is  a  fully  integrated,   self-administered  real  estate
   investment  trust  which owns,  acquires,  develops,  redevelops,  leases and
   manages  primarily  neighborhood or community  shopping centers in the Middle
   Atlantic region of the United States.

       The Company has an equity interest in 32 operating  shopping centers,  27
   of which are  wholly-owned  by the  Company and five in which the Company has
   interests  ranging from 50% to 93%, as well as other  commercial  properties.
   The  Company   also  owns  seven   undeveloped   parcels  of  land   totaling
   approximately 125 acres which it is holding for development or sale.

        All of MART's  interests in  properties  are held directly or indirectly
   by, and  substantially  all of its operations  relating to the properties are
   conducted through, the Operating Partnership.  Subject to certain conditions,
   units of partnership interest in the Operating  Partnership  ("Units") may be
   exchanged  by the  limited  partners  for cash or at the option of MART,  the
   obligation may be assumed by MART and paid either in cash or in common shares
   of  beneficial  interest in MART on a  one-for-one  basis.  MART controls the
   Operating Partnership as the sole general partner, and owns approximately 82%
   of the Units at September 30, 1998.


   CONSOLIDATED FINANCIAL STATEMENTS
        The  consolidated  balance  sheet  as of  September  30,  1998  and  the
   consolidated  statements of operations for the Company for the nine and three
   month  periods  ended  September  30,  1998 and  September  30,  1997 and the
   consolidated  statements  of cash  flows  for the nine  month  periods  ended
   September 30, 1998 and September 30, 1997,  have been prepared by the Company
   without audit. In the opinion of management,  all adjustments  (which include
   only normal recurring  adjustments) necessary to present fairly the financial
   position,  results  of  operations  and cash flows  have been  included.  The
   results of  operations  for the  periods  ended  September  30,  1998 are not
   necessarily indicative of the operating results for the full year.

        Certain  information  and  footnote  disclosures  normally  included  in
   financial   statements   prepared  in  accordance  with  generally   accepted
   accounting   principles  have  been  omitted.  It  is  suggested  that  these
   consolidated   financial   statements  be  read  in   conjunction   with  the
   consolidated   financial   statements  and  notes  thereto  included  in  the
   Mid-Atlantic Realty Trust 1997 Annual Report to Shareholders.

   NET EARNINGS PER SHARE
        Basic  earnings  per share  ("EPS") is  computed  by  dividing  earnings
   available to common  shareholders  by the weighted  average  number of common
   shares outstanding. Diluted EPS is computed after adjusting the numerator and
   denominator  of the basic EPS  computation  for the  effects of all  dilutive
   potential common shares  outstanding  during the period. The dilutive effects
   of convertible  securities are computed using the  "if-converted"  method and
   the dilutive effects of options,  warrants and their  equivalents  (including
   fixed  awards and  nonvested  shares  issued under  share-based  compensation
   plans) are computed using the "treasury stock" method.










                                            CONTINUED







<PAGE>                                     6


                              MID-ATLANTIC REALTY TRUST
                     Notes To Consolidated Financial Statements - Continued
                                     (UNAUDITED)

NET EARNINGS PER SHARE - Continued

The following table sets forth  information  relating to the computation
of basic and diluted earnings per share:
<TABLE>
<CAPTION>
              Nine Months Ended September 30,   Three Months Ended September 30,
             -------------------------------------------------------------------
                 1998             1997              1998             1997
             --------------  ----------------  ---------------- ----------------
<S>              <C>               <C>               <C>              <C>
Numerator:
Earnings before
 extraordinary
 loss:      $  9,084,510         4,147,999         2,979,239        1,267,282
Dividends on
 unvested
 restricted
 share awards  (230,524)            -               (76,929)         -
             --------------  ----------------  ---------------- ----------------
Numerator for
 basic earnings
 per share-
 earnings
 available to
 common
 shareholders  8,853,986         4,147,999         2,902,310        1,267,282

Adjustments to
 dividends on
 restricted
 share awards      -                 -                 -                -
Numerator for
 diluted
 earnings
 per share-
 earnings
 available to
 common
 shareholders==============  ================  ================ ================
            $  8,853,986         4,147,999         2,902,310        1,267,282
             ==============  ================  ================ ================


Denominator: (1)
Denominator for
 basic earnings
 per share -weighted
 average shares
 outstanding  14,269,982         7,998,582        14,270,130        8,421,096
Effect of
 dilutive
 securities:
Share options     69,432            39,143            43,242           53,594
Denominator for
 diluted earnings
 per share-
 adjusted
 weighted
 average shares
 outstanding ==============  ================  ================ ================
              14,339,414         8,037,725        14,313,372        8,474,690
             ==============  ================  ================ ================
</TABLE>

   (1) The denominator excludes the effect of securities which are antidilutive.
   For purposes of this  computation  at September  30,  1998,  the  convertible
   subordinated debentures, if converted,  would produce an additional 1,402,953
   shares and the Units,  if exchanged,  would  produce an additional  3,175,771
   shares.


   CONVERTIBLE SUBORDINATED DEBENTURES
      Effective September 11, 1993 the Company issued $60,000,000 of convertible
   subordinated  debentures  at 7.625% scheduled to mature in  September  2003.
   Interest on the  debentures is paid  semi-annually  on March 15 and September
   15. The debentures are convertible,  unless previously redeemed,  at any time
   prior to maturity into common shares of beneficial interest of the Company at
   $10.50 per share, subject to certain  adjustments.  For the nine months ended
   September 30, 1998, $2,771,000 in debentures were converted to 263,891 common
   shares of beneficial interest.  For the nine months ended September 30, 1997,
  $20,597,000  in  debentures  were  converted  to 1,961,569  common  shares of
   beneficial interest. The balance of the debentures, at September 30, 1998, of
  $14,731,000,  convertible  at $10.50 per  share,  if fully  converted,  would
  produce an additional 1,402,953 shares. Costs associated with the issuance of
  the  debentures  were  approximately  $752,097 at September  30, 1998 and are
  being amortized through 2003. The debentures are redeemable by the Company at
  any time at 100% of the  principal  amount  thereof,  together  with  accrued
  interest.
  The debentures are subordinate to all mortgages payable.

   SHAREHOLDERS' EQUITY
      During the nine months ended  September 30, 1998,  shareholders'  equity
changed for the  following  items:  - 
          -Net  earnings of  $9,051,526 
          -Dividend paid of $10,937,784 
          -Common shares and additional  paid-in capital increased by $2,696,476
            due to conversion of $2,771,000 in debentures 
          -Other changes, $3,263,735 primarily related to stock repurchases
             

       Restricted Share Plan
        In 1997, the Executive Compensation Committee recommended, and the Board
  of Trustees  approved,  a Restricted  Share Plan. The Executive  Compensation
  Committee  believes  that the grant of  restricted  share  awards  provides a
  long-term  incentive  to  persons  who  contribute  to the growth of MART and
  establishes a direct link between  compensation  and shareholder  return.  In
  1997,  400,000 restricted shares were made available for the plan and 368,333
  restricted  shares with a market value of $13.38 per share were awarded under
  the plan. These shares are subject to forfeiture  restrictions which lapse at
  defined annual rates to 2008, subject to the recipients' continued employment
  with the Company.  The Company  recognizes the amortization of the fair value
  of the shares  awarded as  compensation  costs over the terms of the  awards.
   









<PAGE>                                    7

                              MID-ATLANTIC REALTY TRUST
                           MANAGEMENT'S DISCUSSION AND ANALYSIS
                     OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



          The following  discussion compares the Company's results of operations
for the nine and three months ended  September  30, 1998,  with those for the
nine and three months ended September 30, 1997.

   Comparison  of nine months  ended  September  30,  1998 to nine months  ended
September 30, 1997

         Rental  revenues  increased by $7,248,000 or 31% to $30,776,000 for the
  nine months ended  September  30, 1998 from  $23,528,000  for the nine months
  ended  September 30, 1997. The portfolio  acquisition of ten properties  from
  partnerships associated with Jack H. Pechter in July 1997 ("JHP Acquisition")
  contributed an increase in rental  revenues of  approximately  $6,623,000 for
  the period.  Acquisitions  of Milford  Commons and Arundel  Plaza in December
  1997, of Wayne Heights Plaza in January 1998,  Wayne Avenue Plaza in February
  1998, and DelAlba Plaza in September 1998 ("New Acquisitions") contributed an
  Increase in rental revenues of approximately $1,985,000. The redevelopment of
  Lutherville  Station,  the  development  of North  East  Station,  and  other
  occupancy and net rental increases  contributed  approximately  $1,445,000 in
  net increases.  The increases  were partially  offset by $2,805,000 in rental
  revenue decreases attributable to the March 1997 sale of Union Hills shopping
  center,  the May 1997 sale of the  Plaza  Del Rio  shopping  center,  the
  September  1997 sale of the Gateway  International  Office  project,  and the
  April 1998 sale of Page Plaza shopping center.

         Tenant  recovery  revenues  increased by $1,183,000 to $5,289,000 from
 $4,106,000.  The increased  tenant  recoveries  were primarily due to the JHP
 Acquisition and the New Acquisitions offset by decreases related to the sales
 of properties referred to above.

          Other  revenues  increased  by  $159,000  to  $349,000  from  $190,000
  primarily due to interest income from higher short term investment balances.

          As  a  result  of  the  above  changes  total  revenues  increased  by
 $8,590,000 to $36,414,000 from $27,824,000.

          Interest  expense  decreased by $691,000 to $8,855,000 from $9,546,000
 primarily  due to decreases  related to the conversion of debentures 
 $1,359,000 and the paydown of mortgages and notes payable $1,549,000 partly
 offset by increases related to debt assumed for the JHP acquisition and New
 Acquisitions $2,217,000.

          Depreciation  and  amortization  increased by $1,787,000 to $6,692,000
 from $4,905,000 primarily due to increases related to the JHP Acquisition .

          Operating expenses increased by $852,000 to $7,571,000 from $6,719,000
 primarily due to increased  operating  expenses from JHP and New  Acquisition
 properties offset by reduced operating expenses related to property sales.

          General and administrative expenses increased by $344,000 to 
 $2,066,000 from $1,722,000 due primarily to expense related to nonviable 
 projects and compensation.

          Minority  interest expense  increased by $1,503,000 to $2,237,000 from
 $734,000  due  primarily  to the  addition  of minority  limited  partnership
 interests in connection with the JHP and New Acquisition properties.


          For the nine months ended September 30, 1998, earnings from operations
 increased by $4,794,000 to $8,992,000 from $4,198,000. MART also recognized a
 gain  on  properties  of  $92,000  and an  extraordinary  loss  on the  early
 extinguishment  of debt of $33,000.  The gain on properties and extraordinary
 item, when combined with earnings from  operations,  resulted in net earnings
 of $9,051,000.  For the nine months ended September 30, 1997, MART recognized
 a loss on properties of $50,000.  The loss on properties,  when combined with
 earnings  from  operations,  resulted in net earnings of  $4,148,000  for the
 period.

Comparison  of three  months ended  September  30, 1998 to three months ended
September 30, 1997

         Rental  revenues  increased  by $626,000 or 6% to  $10,393,000 for the
 three months ended  September 30, 1998 from  $9,767,000  for the three months
 ended September 30, 1997. New Acquisitions  contributed an increase in rental
 revenues of  approximately  $714,000  for the period.  The  redevelopment  of
 Lutherville  Station,  the  development  of North  East  Station,  and  other
 occupancy  and net rental  increases  contributed  approximately  $689,000 in
 rental  increases.  The increases were partially offset by $777,000 in rental
 revenue  decreases  attributable  to the  September  1997 sale of the Gateway
 International  Office project, and the April 1998 sale of Page Plaza shopping
 center.

         Tenant  recovery  revenues  increased by $206,000 to  $1,823,000  from
 $1,617,000.  The increased  tenant  recoveries were primarily due to the New
 Acquisitions,  development  , and  redevelopment  projects  partly offset by
 decreases related to the sales of properties
 referred to above.


                                    CONTINUED

<PAGE>                                    8

                              MID-ATLANTIC REALTY TRUST
                         MANAGEMENT'S DISCUSSION AND ANALYSIS
            OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED

   Comparison  of three  months ended  September  30, 1998 to three months ended
September 30, 1997 - Continued
          
          As a result of the above changes total revenues  increased by $895,000
to $12,322,000 from $11,427,000.

          Interest expense decreased by $1,218,000 to $2,965,000 from $4,183,000
 primarily due to the paydown of mortgages payable $873,000,  expenses related
 to the  conversion  of  debentures  $388,000,  partly  offset by increases
 from the debt assumed for New Acquisitions,  the redevelopment of Lutherville
 Station, and credit line borrowings $144,000.

          Depreciation and amortization increased by $223,000 to $2,379,000 from
$2,156,000 primarily due to increases related to New Acquisitions.

          Operating expenses increased by $148,000 to $2,644,000 from $2,496,000
 primarily  due  to  increased   operating   expenses  from  New   Acquisition
 properties,  the redevelopment of Lutherville Station,  and the development
 of North East Station  partly offset by reduced  operating  expenses  related
 to property sales.

          General and administrative expenses increased by $22,000 to $609,000
 from $587,000 due primarily to increased shareholder related
 expense and expense related to nonviable projects.

          Minority  interest  expense  increased  by $149,000  to $746,000  from
 $597,000  due  primarily  to  the  addition  of  minority  limited
 partnership interests in connection with New Acquisitions.

   Cash Flow Comparison
          The  following   discussion  compares  the  statement  of  cash  flows
 information for 1998 with the information for 1997.

          Net cash flow provided by operating  activities  was  $16,260,000 and
$ 9,506,000  in  the  nine  months  ended   September  30,  1998  and, 1997
 respectively.  The changes in cash provided by operating  activities were due
 primarily  to the factors  discussed  above in the  comparisons  of operating
 results.  The level of net cash  provided  by  operating  activities  is also
 affected  by the timing of receipt of revenues  and the payment of  operating
 and interest expenses.

          Net cash flow used in investing activities increased by $30,116,000 to
 $18,936,000 in 1998 from cash provided by investing activities of $11,180,000
 in  1997.  The  increase  was  primarily  a result  of  increased  levels  of
 acquisitions of properties and decreases in proceeds from the sale of 
 properties in 1998.

          Net cash flow used in financing activities decreased by $14,988,000 to
 $4,840,000 in 1998 from $19,828,000 in 1997.  The decrease was primarily a 
 result of a higher level of net principal paydowns in 1997, primarily due to
 a line of credit paydown from proceeds of the sale of the Gateway
 International Office Project.

RECENT ACCOUNTING PRONOUNCEMENTS

      On March  19,  1998,  the  Emerging  Issues  Task  Force of the  Financial
  Accounting Standards Board reached a consensus on Issue 97-11, Accounting for
  Internal Costs Relating to Real Estate Property  Acquisitions" which provides
  that internal costs of identifying and acquiring  operating property incurred
  subsequent to March 19, 1998 should be expensed. The Company has historically
 capitalized the direct  internal costs of identifying and acquiring  property
 and,  accordingly,  realized an  increase in expense in each of the  quarters
 ended June 30,  1998,  and  September  30,  1998.  The Company  estimates  an
 annualized  cost  of  $.01  per  common  share  and  expects  this  level  of
 acquisition costs will continue in the future.

        In May 1998, the Emerging Issues Task Force of the Financial  Accounting
 Standards  Board reached a consensus on Issue 98-9 relating to the accounting
 for contingent rent in interim financial periods. The consensus requires that
 a lessor defer  recognition  of contingent  rental income in interim  periods
 until the  specified  target that  triggers the  contingent  rental income is
 achieved.  The  implementation of this  pronouncement did not have a material
 impact for the three and nine month periods ended September 30, 1998.

   YEAR 2000 ISSUE

        The year 2000 issue  relates to whether  computer  systems will properly
 recognize  date  sensitive   information  to  allow  accurate  processing  of
 transactions  and data relating to the year 2000 and beyond.  Systems that do
 not properly  recognize such  information  could  generate  erroneous data or
 fail.
        As a result of the Company's  normal upgrade and replacement  processes,
 it has been  determined  that all existing  network and desktop  equipment is
 year 2000 compliant.  The Company's mission critical property  management and
 financial   reporting   software   will  require  a  year  2000   programming
 modification.  This  modification  is scheduled for  installation in November
 1998. The Company has determined  that all non-mission  critical  software is
 year 2000 compliant.  As the Company owns primarily  community retail centers
 without enclosed common areas, the use of this technology is very limited and
 management  does not believe  that the year 2000 issue will pose  significant
 problems in these systems. The company expects that the costs to specifically
 remediate year 2000 information technology issues will be minimal.
       The Company  believes the "worst case scenario"  exposure to be indirect
 in nature involving vendors,  suppliers, and tenants.  Currently,  management
 does  not  feel  it  is  possible   to  measure   the  effect  of   potential
 complications.  The Company will continually monitor and evaluate these areas
 and develop contingency plans on an as needed basis.

                                   CONTINUED 
<PAGE>                                 9
                            

                              MID-ATLANTIC REALTY TRUST

   Part II. OTHER INFORMATION

   Item 1. Legal  Proceedings - In the ordinary course of business,  the Company
 is  involved  in legal  proceedings.  However,  there are no  material  legal
 proceedings pending against the Company.

   Item 2. Changes in Securities - None

   Item 3. Defaults upon Senior Securities - None

   Item 4. Submission of Matters to a Vote of Security Holders - None.

   Item 5. Other Information -
   Summary Financial Data

          The  following  sets  forth  summary  financial  data  which  has been
 prepared by the Company without audit. Management believes the following data
 should be used as a supplement to the  historical  statements of  operations.
 The  data  should  be read  in  conjunction  with  the  historical  financial
 statements and the notes thereto for MART.

<TABLE>
<CAPTION>

--------------------------------------------------------------------------------
                                MID-ATLANTIC REALTY TRUST
                                 Summary Financial Data
                           (In thousands, except per share data)
                           Nine Months                       Three Months
                        Ended September 30,                Ended September 30,
                --------------------------------  ------------------------------
                    1998              1997              1998             1997
                    ----              ----              ----             ----
<S>                  <C>               <C>               <C>              <C>

Revenues        $ 36,414            27,824            12,322           11,427

Net earnings    $  9,051             4,148             2,979            1,267
Net earnings   
per share -
basic and 
diluted         $   0.62              0.52              0.20             0.15

OTHER FINANCIAL DATA:
-----------------------------------------------------

FFO-diluted (1) $ 18,571            11,916             6,294            4,767

Weighted
average
number of
shares
outstanding
- FFO diluted     19,023            12,853            18,910           14,922

SELECTED CASH FLOW DATA:
-----------------------------------------------------

Net cash
flow provided
by operating
activities      $ 16,260             9,506
Net cash
flow used in
investing
activities       (18,936)           11,180
Net cash
flow used in
financing
activities        (4,840)          (19,828)

RECONCILIATION OF NET EARNINGS TO FFO - DILUTED
----------------------------------------------------------------------

Net earnings  $   9,051             4,148             2,979            1,267
Depreciation and
amortization on
real estate
assets            6,692             4,905             2,379            2,156
Gain (loss) on
properties         (92)                50                 -              141
Extraordinary
loss on early
extinguishment
of debt              33                 -                 -                -
Operating
Partnership
minority interest
expense           1,962               529               649              529
Convertible debenture
interest expense    925             2,284               287              674
             --------------  ----------------  ---------------- ----------------
FFO -
diluted       $  18,571            11,916             6,294            4,767
             ==============  ================  ================ ================
</TABLE>
        (1) Funds from operations as defined by the National Association of Real
 Estate  Investment  Trusts,  Inc.  (NAREIT) -Funds from operations means net
 income   (computed  in  accordance   with  generally   accepted   accounting
 principles),   excluding   cumulative   effects  of  change  in   accounting
 principles,  extraordinary  or unusual items,  and gains or losses from debt
 restructuring and sales of property, plus depreciation and amortization, and
 after adjustments for  unconsolidated  partnerships and joint ventures.  FFO
 does not  represent  cash flows  from  operations  as  defined by  generally
 accepted accounting principles (GAAP). FFO is not indicative that cash flows
 are  adequate  to fund  all cash  needs  and is not to be  considered  as an
 alternative to net income as defined by GAAP. The presentation of FFO is not
 normally included in financial statements prepared in accordance with GAAP.



   -----------------------------------------------------------------------------
   Item 6. Exhibits and Reports on Form 8K - None








<PAGE>                                     10


                         MID-ATLANTIC REALTY TRUST AND SUBSIDIARIES
                                        SIGNATURES




        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.





                              MID-ATLANTIC REALTY TRUST AND
                              SUBSIDIARIES
                              (Registrant)


  Date:            10/30/98                    By:   /s/ F. Patrick Hughes
           -----------------                   ----------------------------     
                                                         F. Patrick Hughes
                                                         President
                                                         Chief Executive Officer




  Date:             10/30/98                    By:   /s/ Janice C. Robinson
           -----------------                    -----------------------------
                                                          Janice C. Robinson
                                                          Controller





























                                                    11