SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                   FORM 10 - K


                  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934


For the fiscal year ending December 31, 1997     Commission file number 0-13693


                       VININGS INVESTMENT PROPERTIES TRUST
                                AND SUBSIDIARIES
             (Exact name of registrant as specified in its charter)

         Massachusetts                                            13-6850434
------------------------------------------------           -------------------
(State or other jurisdiction of                                (I.R.S. Employer
incorporation or organization)                               Identification No.)

3111 Paces Mill Road, Suite A-200, Atlanta, GA                      30339
------------------------------------------------            -----------------
(Address of principal executive offices)                        (Zip Code)

Registrant's telephone number, including area code:            (770) 984-9500
                                                            -----------------

Securities registered pursuant to Section 12(b) of the Act:              None

Securities registered pursuant to Section 12(g) of the Act:

                 Shares of Beneficial Interest without par value
                                (Title of Class)

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 _____
            ---

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.    X
             ---
Based on the  average  bid and asking  price on March 16,  1998,  the  aggregate
market value of the Registrant's shares held by non-affiliates of the Registrant
was $2,291,302.

The number of shares outstanding as of March 16, 1998 was 1,080,508.

                       DOCUMENTS INCORPORATED BY REFERENCE

                 Portions of the Trust's Proxy Statement relating
                          to its 1998 Annual Meeting of
              Shareholders are incorporated by reference into Part III


<PAGE>



                       VININGS INVESTMENT PROPERTIES TRUST
                                AND SUBSIDIARIES
                               INDEX TO FORM 10-K

PART I.................................................................3
    ITEM 1 - Business..................................................3
    ITEM 2 - Properties................................................7
    ITEM 3 - Legal Proceedings.........................................8
    ITEM 4 - Submission of Matters to a Vote of Shareholders...........8

PART II................................................................9
    ITEM 5 - Market for Registrant's Shares of Beneficial Interest.....9
    ITEM 6 - Selected Financial Information...........................11
    ITEM 7 - Management's Discussion and Analysis of Financial
                    Condition and Results of Operations...............12
    ITEM 8 - Financial Statements and Supplementary Data..............18
    ITEM 9 - Changes in and Disagreements with Accountants on
                    Accounting and Financial Disclosure...............18

PART III..............................................................19
    ITEM 10 - Directors and Executive Officers of the Registrant......19
    ITEM 11 - Executive Compensation..................................19
    ITEM 12 - Security Ownership of Certain Beneficial Owners
                      and Management..................................19
    ITEM 13 - Certain Relationships and Related Transactions..........19

PART IV...............................................................20
    ITEM 14 - Exhibits, Financial Statements and  Schedule and
                      Reports on Form 8-K.............................21

Signatures ...........................................................22

<PAGE>

This Form 10-K 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. The Trust's actual results could differ materially from those projected
in the  forward-looking  statements.  Certain  factors  that might  cause such a
difference  are set forth in the section  entitled  "Certain  Factors  Affecting
Future  Operating   Results",   in  the  relevant  paragraphs  of  "Management's
Discussion and Analysis of Results of Operations and Financial  Condition",  and
elsewhere in this report.

                                     PART I

ITEM 1 - BUSINESS

General Development of Business
-------------------------------

Vinings  Investment  Properties  Trust,  a  Massachusetts  business  trust  (the
"Trust")  (formerly known as Mellon  Participating  Mortgage  Trust,  Commercial
Properties  Series  85/10),  was  organized on December 7, 1984 as a twenty year
finite-life real estate  investment trust ("REIT").  Its original purpose was to
invest  in  participating,  shared  appreciation,  convertible  and  fixed  rate
mortgages and joint venture financing  secured by office,  industrial and retail
facilities  located  throughout  the United  States.  The  Declaration  of Trust
provided,  among other things, that the Trustees would use their best efforts to
terminate the Trust within approximately ten years, provided,  however, that the
Trustees  would have the  absolute  discretion  to  determine in good faith such
termination  date as would be in the best interests of the  shareholders  of the
Trust. As provided in the Declaration of Trust, the Trustees  proceeded with the
orderly  liquidation of assets and distribution of proceeds to the shareholders.
As of December 31, 1995 all of the assets to be liquidated  had been sold except
the Hawthorne Note, as hereinafter defined, which was sold on January 3, 1996.

In connection with the liquidation,  per share final distributions of $15.60 and
$1.28  (adjusted  for the Share  Split,  as  hereinafter  defined)  were paid on
February 2, 1996 and March 8, 1996,  respectively.  The remaining  assets of the
Trust were Peachtree Business Center ("Peachtree") and approximately $163,000 in
cash.

On January 31, 1996,  Vinings  Investment  Properties,  Inc.  (the  "Purchaser")
commenced a cash tender offer (the  "Tender  Offer") for a minimum of a majority
and a maximum of 85% of the outstanding  shares of beneficial  interest  without
par value  (the  "Shares"),  of the  Trust at a price of $0.47 per Share  ($3.76
adjusted for the Share Split, as hereinafter defined).  The Tender Offer expired
in  accordance  with its terms at midnight on February 28, 1996.  The  Purchaser
accepted an aggregate of 6,337,279 Shares (792,159 Shares adjusted for the Share
Split, as hereinafter  defined) validly  tendered  pursuant to the Tender Offer,
representing approximately 73.3% of the outstanding Shares.

The purpose of the Tender Offer was for the Purchaser to acquire  control of the
Trust and to  rebuild  the  Trust's  assets by  expanding  into the  multifamily
property  markets.  In connection with the consummation of the Tender Offer, all
of the  trustees  and  officers of the Trust  resigned  and were  replaced  with
designees of the Purchaser.  In addition,  prior to the Tender Offer,  the Trust
was an  externally  advised REIT for which it paid advisory fees to an unrelated
third  party  (the  "Advisor").  Upon  consummation  of the  Tender  Offer,  the
relationship   with  the   Advisor   was   terminated   and  the  Trust   became
self-administered.

On  June  11,  1996,  Vinings  Investment   Properties,   L.P.  (the  "Operating
Partnership"),  a Delaware limited partnership,  was organized. The Trust is the
sole general partner and an 80.67% limited partner in the Operating  Partnership
at  December  31,  1997.  During  the fourth  quarter  of the fiscal  year ended
December 31, 1997 ("fiscal  1997"),  242,546  limited  partnership  units in the
Operating  Partnership  ("Units")  were issued,  of which  224,330 Units were in
connection  with the  acquisition of Windrush,  as defined below.  The Units are
redeemable by their  holders for Shares of the Trust on a  one-for-one  basis or
for cash, at the option of the Trust. (This structure is commonly referred to as
an umbrella partnership REIT or "UPREIT").

On July 1, 1996,  the Trust  effected a 1-for-8  reverse share split (the "Share
Split") of its 8,645,000  outstanding  Shares pursuant to which  shareholders of
the  Trust  received  one  Share for every  eight  Shares  owned.  The Trust has
purchased and continues to purchase any fractional Shares at a cost of $5.50 per
Share.  As of  December  31,  1997,  fractional  Shares  totaling  113 had  been
repurchased and retired leaving 1,080,512 Shares outstanding.

At December 31, 1997,  approximately  ninety three  percent (93%) of the Trust's
total  assets  were  invested  in three real  estate  assets.  They were (1) The
Thicket Apartments ("Thicket"), a 254-unit apartment complex located in Atlanta,
Georgia, owned through Thicket Apartments, L.P., a Delaware limited partnership,
of  which  the  Operating  Partnership  is a 99%  limited  partner  and  Thicket
Holdings, Inc., a Delaware corporation and wholly-owned subsidiary of the Trust,
is the sole general partner;  (2) Windrush Apartments  ("Windrush"),  a 202-unit
apartment  community  located  in  Atlanta,   Georgia,   owned  through  Vinings
Communities,  L.P.,  a  Delaware  limited  partnership  of which  the  Operating
Partnership is a 99% limited  partner and the Trust is the sole general  partner
and; and (3)  Peachtree,  an  approximately  75,000  square  foot,  single-story
business park located in Atlanta, Georgia, owned by the Operating Partnership.

The Trust has elected to be taxed as a REIT under the  Internal  Revenue Code of
1986,  as amended,  and intends to maintain its  qualification  as a REIT in the
future.  As a REIT,  the Trust will  generally not be subject to federal  income
taxation on that portion of its income that  qualifies as REIT taxable income to
the  extent  that it  distributes  at least  95% of its  taxable  income  to its
shareholders and satisfies certain other requirements.

The Trust's  executive offices are located at 3111 Paces Mill Road, Suite A-200,
Atlanta, Georgia 30339, (770) 984-9500.


Financial Information About Industry Segments
---------------------------------------------

The Trust's operations and identifiable long-term assets have been attributed to
the real estate  industry for the entirety of its existence.  While  investments
prior to the Tender Offer were primarily mortgage loans, currently the assets of
the Trust are equity  investments.  Management  plans to continue  making equity
investments in the multifamily real estate markets.


Narrative Description of Business
---------------------------------

The primary objective of the Trust is to continue to expand into the multifamily
real  estate  markets   through  the   acquisition  of  garden  style  apartment
communities,  which are leased to  middle-income  residents.  The  middle-income
resident is a more stable and broader  based market,  often  referred to as "the
renter by necessity."  Management believes that middle market properties provide
greater  potential for appreciation  through  increased  revenues and cash flows
than the more  expensive  high-end  apartment  communities,  which  cater to the
"renter by choice."

Management  believes that these investments will provide  attractive  sources of
income to the  Trust,  which will not only  provide  cash  available  for future
distributions,  but will increase the value of the Trust's real estate portfolio
as well.

In the past,  the Trust has reviewed each real estate  investment in the Trust's
portfolio on a quarterly basis. Management plans to continue this review as well
as to  carefully  review each  acquisition  to insure that the Trust makes sound
investments  on  behalf  of its  shareholders.  In this  regard,  the  Trust has
established an Acquisition  Committee  comprised of four members of the Board of
Trustees,  one of which  is also an  officer.  The  Board  has also  established
certain  investment  criteria which must be met. The Acquisition  Committee must
review and approve  each  potential  acquisition  before it is  presented to the
Board for final approval.


Growth and Expansion Strategy
-----------------------------

Management  intends to implement its growth and expansion  strategy by targeting
properties that have been under managed and under maintained,  and purchase such
properties at a price which is below replacement  cost.  Through strategic value
added  and  return  oriented  capital   improvements   and  intensive   property
management,  the Trust  believes  that cash  flow,  and in turn  value,  will be
increased.

The Trust currently  anticipates  that these  acquisitions  will include certain
properties  within the  existing  multifamily  property  portfolios  of entities
affiliated with management of the Trust which meet certain criteria,  as well as
properties  acquired from  unaffiliated  third parties.  These properties may be
acquired either for cash, through debt financing,  in exchange for Shares of the
Trust or Units or any combination  thereof.  In addition,  the Trust believes it
can raise capital through private offerings for specific acquisitions.

<PAGE>
Competition
-----------

The Trust  competes  with a number of  housing  alternatives  for its  residents
including  other  multifamily  communities and single family homes available for
rent as well as purchase.  This competition could have an affect not only on the
properties'  ability to lease  rental units but also on the rents  charged.  The
Trust also competes with other  investors  for potential  acquisitions,  some of
which may have greater  resources with which to purchase projects that the Trust
may be interested in acquiring.


Advisory and Property Management Services
-----------------------------------------

Through February 28, 1996, the Trust's day-to-day operations were managed by the
Advisor.  See Note 8 to the Trust's  December  31, 1997  Consolidated  Financial
Statements,   which  provides  additional  information  regarding  the  advisory
agreement.  After the consummation of the Tender Offer, the Trust terminated the
services of the Advisor and became self-administered. The Trust has entered into
management  agreements  with Vinings  Properties,  Inc. for property  management
services  for  Thicket  and  Windrush  for a fee equal to five  percent of gross
revenues.  Vinings  Properties,  Inc. is an  affiliate  of certain  officers and
trustees of the Trust.  In addition,  as a commitment  to the  rebuilding of the
Trust, The Vinings Group,  Inc., the parent  corporation of Vinings  Properties,
Inc.,  (collectively,  "Vinings") provided numerous services to the Trust during
fiscal  1997  relating  to  administration,  acquisition,  and capital and asset
advisory  services  at  little  or no cost to the  Trust.  The  Trust  does  not
anticipate  that these  services  will  continue to be provided  free of charge.
However,  while the Trust has been in its  rebuilding  stages,  the officers and
trustees  have been  committed  to  providing  as many  services  as possible to
promote the  Trust's  growth.  Peachtree  is managed by a  third-party  property
management firm not affiliated with management.


Employees
---------

At December 31,  1997,  Thicket and  Windrush  had 10  employees  who  performed
on-site  property  management  services for the  communities  and were paid with
funds generated from Thicket and Windrush.  In addition,  the Trust paid a total
of $45,000 to Vinings for  shareholder  services  performed  exclusively for the
Trust  by one of its  employees.  None of the  officers  of the  Trust  received
compensation from the Trust for their services.


Environmental Policy
--------------------

Investments in real property create a potential for  environmental  liability on
the part of the Trust.  Owners of real property may be held liable for all costs
and liabilities  relating to hazardous  substances  present on or emanating from
their properties.  Current management,  as did the previous Advisor, assesses on
an as needed  basis,  measures  that may need to be been  taken to  comply  with
environmental  laws and  regulations.  In the event that there is a potential of
environmental  responsibility,  the costs to comply with  environmental laws and
regulations would be estimated at that time. At December 31, 1997, the Trust was
not aware of any potential  environmental  contamination relating to investments
in its portfolio.


Certain Factors Affecting Future Operating Results
--------------------------------------------------

This Form 10-K 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. The Trust's actual results could differ materially from those set forth
in the  forward-looking  statements.  Certain  factors  that might  cause such a
difference  include  the  following:  the  inability  of the  Trust to  identify
properties  within  existing   multifamily   property   portfolios  of  entities
affiliated with management  which will have a strategic fit with the Trust,  the
inability of the Trust to identify unaffiliated properties for acquisition,  the
less than  satisfactory  performance  of any property which might be acquired by
the Trust,  the  inability  to access the  capital  markets in order to fund the
Trust's present growth and expansion  strategy,  the cyclical nature of the real
estate market generally and locally in Georgia and the surrounding  southeastern
states, the national economic climate, the local economic climate in Georgia and
the surrounding  southeastern  states,  and the local real estate conditions and
competition in Georgia and the surrounding  southeastern states. There can be no
assurance  that, as a result of the foregoing  factors,  the Trust's  growth and
expansion strategy will be successful or that the business and operations of the
Trust will not be adversely affected thereby.


ITEM 2 - PROPERTIES

As of December 31, 1997, all of the Trust's  investments were equity investments
in real estate.  While the Trust still owns Peachtree,  a single-story  business
park, it intends to continue  investing  only in  multifamily  communities.  The
Trust's real estate investments are summarized below by property:

                                Amount of           Investment       Occupancy
                                Investment          Percentage      at 12/31/97
                                ----------         ------------     -----------
The Thicket Apartments        $ 8,308,773               46%              99%
Windrush Apartments             7,555,000               42%              93%
Peachtree Business Center       2,262,908               12%             100%
                             ============          ===========
Totals                        $18,126,681              100%
                             ============          ===========


The above  investment  amounts are net of  accumulated  depreciation.  The Trust
incorporates  herein by  reference  the  description  of owned real  property on
Schedule III and the notes  thereto.  This  schedule is made part of the Trust's
December 31, 1997 Consolidated Financial Statements.


ITEM 3 - LEGAL PROCEEDINGS

In August 1997,  the Trust,  through the Operating  Partnership,  began contract
negotiations  for the  acquisition  of a 2,365-unit  portfolio of 16 multifamily
properties.  The sellers, which were 16 individual partnerships (the "Sellers"),
were to contribute the properties to the Operating Partnership in exchange for a
combination  of  Units  and/or  cash and the  assumption  of  existing  mortgage
indebtedness  (the  "Portfolio  Transaction").  The  officers of the Trust spent
substantial  amounts of time and the Trust spent substantial amounts of money in
its due diligence on the  properties and in contract  negotiations  specifically
for this portfolio. The Trust believes that it secured a binding commitment from
the Sellers for the Portfolio  Transaction.  Conditional  commitments for equity
financing  were obtained and the Trust was prepared to close on the  transaction
in early 1998. Within thirty days of closing, the general partner of the Sellers
terminated  the contract  for reasons the Trust  believes to be  pretextual,  in
breach of the  contract  and not in the best  interests  of the  partners of the
selling partnerships or the shareholders of the Trust.

On February 3, 1998, the Trust  commenced an action  against the Sellers,  their
general  partners and a related  property  management  company seeking  specific
enforcement  of the contract and damages for the  defendant's  willful breach of
contract, lack of good faith negotiation and tortious interference in connection
with the breach and termination of the contract.  In a related case, the Sellers
filed an action on January 29, 1998  seeking a  declaratory  judgement  that the
contract  is not valid,  binding  and  enforceable  against  them.  The Trust is
vigorously  pursuing its claim.  However,  there can be no  assurances  that the
Trust will prevail in its action or recover any damages.

None of the Trust's properties are presently subject to any material  litigation
nor, to the Trust's knowledge, is any material litigation threatened against the
Trust or any of its  properties,  other  than the above  complaint  and  routine
actions or claims and administrative  proceedings arising in the ordinary course
of business.  Some of these  claims are expected to be covered by insurance  and
all of which  collectively are not expected to have a material adverse effect on
the  business,  the  financial  condition,  or the results of  operations of the
Trust.


ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS

No matters  were  submitted  to a vote of the  Trust's  shareholders  during the
fourth quarter of fiscal 1997.

                                     PART II

ITEM 5 - MARKET FOR REGISTRANT'S SHARES OF BENEFICIAL INTEREST

Stock Quotation
---------------

The Trust's Shares are currently  traded on the Nasdaq SmallCap Market under the
symbol "VIPIS".


Market Information
------------------

On July 1,  1996,  the Trust  effected  a  1-for-8  reverse  Share  Split of its
8,645,000  outstanding Shares.  Shareholders  tendered their Shares and received
one Share for every eight Shares owned. The Trust has purchased and continues to
purchase any fractional  Shares at a cost of $5.50 per share. As of December 31,
1997,  fractional  Shares totaling 113 had been  repurchased and retired leaving
1,080,512 Shares outstanding.  All Share prices and dividends have been restated
to reflect the Share  Split.  The high and low sales  prices for each  quarterly
period during  fiscal 1997 and the fiscal year ended  December 31, 1996 ("fiscal
1996"), which reflect inter-dealer prices, without retail mark-up,  mark-down or
commission  and  may  not  necessarily  represent  actual  transactions,  are as
follows:

                        ---------------------     ---------------------
                                1997                      1996

                        ---------------------     ---------------------

QUARTER ENDED                HIGH        LOW          HIGH       LOW
-------------                ----        ---          ----       ---
March 31                     4 5/8       4 3/8        22         3
June 30                      4 7/8       4 3/8         6 1/2     3
September 30                 4 7/8       4             6         4
December 31                  5 1/4       3 3/4         5         4 3/8


Dividends
---------

The Trust's  dividend  policy up to the  consummation of the Tender Offer was to
distribute all liquidating proceeds. These dividends were 100% return of capital
in fiscal 1996 (as  summarized  below) which  historically  had an effect on the
Trust's Share price. The effect of dividend distributions reduced the book value
of the Trust, and therefore, reduced the market price for the Shares, especially
with  regard to the final  liquidating  dividends  paid in the first  quarter of
fiscal   1996.   For  fiscal  1997  the  Trust  did  not  pay  or  declare  cash
distributions.  On March 16,  1998,  the  closing  sales  price for the  Trust's
Shares, as reported on the Nasdaq SmallCap Market, was $4.25.

The Trust has paid quarterly cash  distributions  to shareholders  sufficient to
enable the Trust to qualify as a REIT.  For fiscal 1996 the Trust  declared cash
distributions  per  Share  in  accordance  with  generally  accepted  accounting
principles  (adjusted  for the Share Split) as shown below.  For a discussion of
the federal income tax consequences of these distributions,  refer to Note 10 of
the Trust's December 31, 1997 Consolidated Financial Statements.

  ------------------------------------
                1996
  ------------------------------------
  Payment Date           Distributions


  February 2, 1996         $15.60
  March 8, 1996              1.28
                          ---------
      Total                $16.88
                          =========

Since the  consummation  of the  Tender  Offer,  management  has not  issued its
dividend policy for the Trust,  nor has it declared any dividends.  In an effort
to rebuild the Trust's  assets,  all  operating  cash flow has been reserved for
future growth and expansion.  However, as assets are acquired and operating cash
flow  increases,  the Trust  intends to pay  distributions  to  shareholders  in
amounts at least sufficient to enable the Trust to qualify as a REIT.


Holders
-------

The Trust had 745 holders of record of its Shares as of March 16, 1998.

<PAGE>

ITEM 6 - SELECTED FINANCIAL INFORMATION
---------------------------------------

The following table sets forth selected financial  information for the Trust and
should be read in  conjunction  with  "Management's  Discussion  and Analysis of
Financial  Condition and Results of Operations" as well as the Trust's  December
31, 1997,  Consolidated Financial Statements which are made part of this report.
All share and per share  information  have been  restated  to reflect  the Share
Split.

<TABLE>
<CAPTION>

                                                                   For the year ended December 31,
                                            -------------------------------------------------------------------------------
                                                1997             1996            1995            1994             1993
                                            --------------   -------------   --------------  --------------   -------------

<S>                                           <C>             <C>              <C>             <C>             <C>
Revenues                                      $ 2,478,824     $ 1,796,917      $ 3,244,908     $ 4,159,170     $ 6,668,425
Expenses                                        3,146,005       2,580,195        1,779,475       2,477,923       2,163,286
                                            --------------   -------------   --------------  --------------   -------------
Income (loss) before loss on
  real estate investments                        (667,181)       (783,278)       1,465,433       1,681,247       4,505,139
Loss on real estate investments                         -         (26,800)        (886,887)       (816,307)     (1,325,000)
                                            --------------   -------------   --------------  --------------   -------------
Net income (loss) before minority interest       (667,181)       (810,078)         578,546         864,940       3,180,139

Minority interest                                  (5,464)              -                -               -               -
                                            --------------   -------------   --------------  --------------   -------------

Net income (loss)                              $ (661,717)     $ (810,078)       $ 578,546       $ 864,940     $ 3,180,139
                                            ==============   =============   ==============  ==============   =============

Net income (loss) per share - basic
and diluted                                       $ (0.61)        $ (0.75)          $ 0.54          $ 0.80          $ 2.94
                                            ==============   =============   ==============  ==============   =============


Weighted average shares outstanding-basic       1,080,513       1,080,528        1,080,625       1,080,625       1,080,625
                                            ==============   =============   ==============  ==============   =============

Weighted average shares outstanding-diluted     1,089,435       1,080,528        1,080,625       1,080,625       1,080,625
                                            ==============   =============   ==============  ==============   =============

Dividends declared and paid:
Ordinary income                                    $ -            $  -             $  -            $  0.08          $ 4.08
Return of capital                                    -              16.88            12.24           24.64            -
                                            --------------   -------------   --------------  --------------   -------------
Total dividends declared and paid                  $ -            $ 16.88          $ 12.24         $ 24.72          $ 4.08
                                            ==============   =============   ==============  ==============   =============

Total assets                                 $ 18,989,558    $ 11,519,469     $ 21,878,357    $ 34,348,242    $ 60,514,634
                                            ==============   =============   ==============  ==============   =============

Shareholders' equity                         $  2,268,803     $ 2,232,548     $ 21,284,112    $ 33,932,908    $ 59,781,018
                                            ==============   =============   ==============  ==============   =============
</TABLE>


ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS

Overview
--------

The Trust was  organized on December 7, 1984 as a twenty year  finite-life  REIT
whose  original  purpose was to invest in  participating,  shared  appreciation,
convertible  and fixed rate  mortgages  and joint venture  financing  secured by
office,  industrial and retail facilities  located throughout the United States.
The Declaration of Trust provided,  among other things,  that the Trustees would
use their best efforts to terminate  the Trust within  approximately  ten years.
The  Trustees  proceeded  with  the  orderly   liquidation  of  assets  and  the
distribution  of proceeds to the  shareholders.  As of December 31, 1995, all of
the  assets to be  liquidated  had been  sold  except  the  Hawthorne  Note,  as
hereinafter defined,  which was sold on January 3, 1996. The remaining assets of
the Trust were  Peachtree  Business  Center,  a 75,000 square foot business park
located in Atlanta, Georgia ("Peachtree") and approximately $163,000 in cash.

On January 31, 1996,  Vinings  Investment  Properties,  Inc.  (the  "Purchaser")
commenced a cash tender offer (the  "Tender  Offer") for a minimum of a majority
and a maximum of 85% of the outstanding shares of beneficial  interest,  without
par value (the "Shares"),  of the Trust.  The Tender Offer expired in accordance
with its terms at midnight on February  28,  1996,  and the  Purchaser  accepted
approximately   73.3%  of  the  outstanding   Shares.  In  connection  with  the
consummation of the Tender Offer,  all of the trustees and officers of the Trust
("Prior Management")  resigned and were replaced with designees of the Purchaser
("Management").  In addition, the Trust was an externally advised REIT for which
it  paid  advisory  fees to an  unrelated  third  party  (the  "Advisor").  Upon
consummation  of the  Tender  Offer,  the  relationship  with  the  Advisor  was
terminated and the Trust became self-administered.

The purpose of the Tender  Offer was for  Management  to acquire  control of the
Trust and to rebuild the Trust's assets by expanding into the  multifamily  real
estate markets  through the  acquisition of garden style  apartment  communities
which are leased to  middle-income  residents.  Management  believes  that these
investments  will provide  attractive  sources of income to the Trust which will
not  only   increase   net  income  and  provide  cash   available   for  future
distributions,  but will increase the value of the Trust's real estate portfolio
as well.

On  June  11,  1996,  Vinings  Investment   Properties,   L.P.  (the  "Operating
Partnership"),  a Delaware limited partnership,  was organized.  At December 31,
1997, the Trust is the sole general partner and an 80.67% limited partner in the
Operating Partnership. During the fourth quarter of fiscal year end December 31,
1997  ("fiscal  1997"),  a total of  242,546  limited  partnership  units in the
Operating  Partnership  ("Units")  were issued,  of which  224,330 Units were in
connection  with the  acquisition of Windrush,  as defined below.  The Units are
redeemable  for Shares of the Trust on a  one-for-one  basis or for cash, at the
option of the Trust.  (This  structure  is  commonly  referred to as an umbrella
partnership REIT or "UPREIT").

On July 1, 1996,  the Trust  effected a 1-for-8  reverse share split (the "Share
Split") of its 8,645,000 outstanding Shares.  Shareholders tendered their Shares
and received one Share for every eight Shares owned. The Trust has purchased and
continues to purchase any fractional  Shares at a cost of $5.50 per share. As of
December 31, 1997,  fractional  Shares  totaling  113 had been  repurchased  and
retired leaving 1,080,512 Shares outstanding.

Much of Management's  efforts during fiscal 1997 were focused on the acquisition
of  Windrush  Apartments,  a 202-unit  apartment  community  located in Atlanta,
Georgia  ("Windrush"),  the Trust's  first  UPREIT  transaction  in exchange for
Units,  as well as  negotiating  for a  2,365-unit  portfolio  transaction,  the
contract  for which was  terminated  by the Seller  thirty days prior to closing
(the "Portfolio  Transaction").  (See Item 3-Legal Proceedings and Note 9 to the
Trust's December 31, 1997 Consolidated  Financial  Statements).  At December 31,
1997,  the Trust's real estate  assets were The Thicket  Apartments,  a 254-unit
apartment  community  located in  Atlanta,  Georgia  ("Thicket"),  Windrush  and
Peachtree, which were 100%, 93% and 100% leased, respectively.

The following  discussion and analysis of the financial condition and results of
operations  should be read in  conjunction  with the  accompanying  consolidated
financial statements of the Trust and the notes thereto.


Results of Operations
---------------------

Because it was the original intent of the Trust to liquidate and terminate after
approximately  ten years,  the net income,  as well as the asset  value,  of the
Trust decreased  during the liquidating  years of fiscal year ended December 31,
1995  ("fiscal")  and fiscal year ended  December 31, 1996  ("fiscal")  and have
begun to  increase  in  fiscal  1997  with the  Tender  Offer  and  Management's
redirection and rebuilding of the Trust.  Revenues decreased from fiscal 1995 to
fiscal 1996 as a result of the  liquidation  of the Trust's assets and increased
from fiscal 1996 to fiscal 1997 with  continued  growth as the Trust pursued its
expansion strategy.  Operating  expenses,  however,  increased  substantially in
fiscal 1996 due to a number of  non-recurring  costs  associated with the Tender
Offer and the  structural  reorganization  of the Trust and  increased  again in
fiscal 1997 as a result of the costs  incurred in connection  with the Portfolio
Transaction.  In addition, the nature of the operating expenses has shifted from
administrative  expenses and advisory  fees to property  operating  expenses and
mortgage interest expense connected with the Trust's income producing assets.

All of the gains (losses) on real estate  investments since fiscal 1995 were the
result of prior management's liquidation of the Trust's investments.

As a  result  of the  liquidation  of  assets,  change  in  management,  and the
redirection of the Trust's business objectives,  substantially all of the income
producing  assets held in fiscal 1995 are no longer held by the Trust,  with the
exception of Peachtree.


Comparison of Operating Results of 1997 to Operating Results of 1996
--------------------------------------------------------------------

Total revenues increased $681,907,  or 38%, from $1,796,917 to $2,478,824 due to
the fact that the Trust had begun to pursue its growth and expansion strategy.

Rental and other property revenues increased  $924,263,  or 60%, from $1,552,483
to  $2,476,746  due primarily to the revenues  generated in connection  with the
Trust's  ownership of Thicket for an entire year during  fiscal 1997 as compared
to six months  during  fiscal 1996.  Revenues  from  Peachtree  remained  fairly
constant.  Immaterial  amounts of revenue  were  generated  for the twelve  days
Windrush was owned during fiscal 1997.

Interest income decreased by $90,579,  or 98%, from $92,657 to $2,078. In fiscal
1996, interest income was generated from cash investments primarily in the first
two months of the year,  prior to the payment of  liquidating  dividends.  Since
that time there have been relatively small cash balances.

Property  operating and maintenance  expense  increased  $406,496,  or 69%, from
$586,430 to $992,926, primarily to the expenses generated in connection with the
Trust's  ownership of Thicket for an entire year during  fiscal 1997 as compared
to six months during fiscal 1996.

Depreciation increased $182,036, or 76%, from $240,357 to $422,393. Depreciation
on Thicket  increased  $185,165  due to the Trust's  ownership of Thicket for an
entire year during  fiscal 1997 as compared to six months  during fiscal 1996 as
well as  additional  depreciation  on  improvements  made  during  fiscal  1997.
Depreciation on Peachtree decreased slightly.

Interest expense  increased  $407,832,  or 100% from $408,719 to $816,551 due to
the  Trust's  ownership  of Thicket  for an entire  year  during  fiscal 1997 as
compared to six months during fiscal 1996.

General and  administrative  expense decreased $651,598 or 66%, from $987,973 to
$336,375.  The majority of the  decrease  relates to costs  associated  with the
Tender Offer and structural reorganization of the Trust during 1996 that did not
recur during fiscal 1997. The following expense  categories  included in general
and administrative  decreased from fiscal 1996 to fiscal 1997: professional fees
by $398,733,  directors' and officers' insurance by $176,768, trustee expense by
$31,312, annual report and proxy costs by $27,361 and filing fees by $17,425.

There were no investment  advisor's fees incurred during fiscal 1997. All of the
advisor's  fees during fiscal 1996 were incurred  during January and February as
the services of the Advisor were  terminated at the  consummation  of the Tender
Offer.

The unusual item of $532,185  included in operating  expenses during fiscal 1997
relates to costs incurred in connection  with the Portfolio  Transaction.  These
expenses  include due  diligence  costs such as  environmental  and  engineering
reports,  independent  financial  analysis,  investor  appraisal costs and legal
contract negotiations.
(See Note 9 to the Trust's December 31, 1997 Consolidated Financial Statements).

There were no gains or losses on real estate investments during fiscal 1997. The
loss on real estate investment of $26,800 in fiscal 1996 represents  commissions
and fees on the sale of the Hawthorne Note, as hereinafter defined.

The Trust  incurred a net loss before  minority  interest of $667,181 for fiscal
1997 as  compared  to  $810,078  for fiscal  1996,  representing  a decrease  of
$142,897, even with the unusual item described above. Had the Trust not incurred
the unusual item associated with the Portfolio Transaction,  the net loss before
minority  interest  for  fiscal  1997  would have been  $134,996.  The  minority
interest of $5,464  represents  the allocation of losses for the short period in
December 1997 during which Units in the Operating Partnership were held.


Comparison of Operating Results of 1996 to Operating Results of 1995
--------------------------------------------------------------------

Total revenues decreased $1,447,991,  or 45%, from $3,244,908 to $1,796,917 as a
result of the Trust's liquidation of investments.

Rental and other property revenues increased $952,029, or 159%, from $600,454 to
$1,552,483 as a result of the acquisition of Thicket on June 28, 1996.  Revenues
from Peachtree remained fairly constant.

There was no partnership  income during 1996, as compared to $1,730,508 in 1995,
due to the  sale  of  the  interest  in the  Mellon\Pier  I  Properties  Limited
Partnership I (the "Pier I Interest") on December 29, 1995.

Interest income decreased by $798,842,  or 90%, from $891,499 to $92,657. One of
the Trust's major sources of revenues prior to fiscal 1996 was its investment in
mortgage loan receivables.  Interest earned on these  investments  generated the
Trust's  interest  income in fiscal 1995.  In fiscal 1996,  interest  income was
generated from cash  investments  primarily in the first two months of the year,
prior to the payment of liquidating dividends.

Property  operating and maintenance  expense increased  $295,882,  or 102%, from
$290,548 to $586,430, also as a result of the acquisition of Thicket.

Depreciation  and  amortization  decreased  $116,903,  or 32%,  from $361,013 to
$244,110. There was no depreciation generated from the Pier I Interest in fiscal
1996, as compared to $277,601 in fiscal 1995. The Thicket generated depreciation
of  $162,965  for  the  six  months  held  in  fiscal  1996.   Depreciation  and
amortization on Peachtree increased slightly.

The Trust  incurred a mortgage  note  payable and  established  a line of credit
during 1996, both associated with the acquisition of Thicket. (See Note 6 to the
Trust's December 31, 1997 Consolidated Financial Statements). In connection with
these liabilities, the Trust incurred financing costs, which are being amortized
over the lives of the  obligations,  and interest  expense  associated  with the
notes. These amounts totaled $19,502 and $408,719, respectively.

General and administrative  expense increased $221,627, or 29%, from $766,346 to
$987,973. The majority of the increased expense relates to costs associated with
the Tender Offer and the structural  reorganization  of the Trust.  In addition,
the 1996 expense  includes  $180,987 of  non-recurring  directors' and officers'
insurance  obtained  for the sole  benefit of prior  management,  as well as the
Trust's continuing directors' and officers' insurance coverage.

Investment  advisor's fees decreased $28,107,  or 8%, from $361,568 to $333,461.
All of the advisor's fees were incurred  during January and February 1996 as the
services of the Advisor were terminated at the consummation of the Tender Offer.

The loss on real estate investment of $26,800 represents commissions and fees on
the sale of the Hawthorne Note as hereinafter  defined.  The Hawthorne  Research
and  Development  Complex  was sold on March 30,  1995 for  $5,095,000  of which
$3,500,000  was paid at  closing.  A note for the  balance  of  $1,595,000  (the
"Hawthorne  Note") was received by the Trust.  The Trust  realized a net gain on
this sale of  $152,825.  On  January 3, 1996,  the  Hawthorne  Note was sold for
$700,000. As of December 31, 1995, an allowance to reduce the note receivable to
fair market value of $895,000 was recognized on the Hawthorne Note.

The Trust  incurred a net loss of $810,078 for 1996 as compared to net income of
$578,546 for 1995, representing a decrease of $1,388,624.  This decrease was the
direct result of the Trust's  liquidation of its assets and the  consummation of
the subsequent Tender Offer.


Liquidity and Capital Resources
-------------------------------

Operating  activities  provided net cash of $152,536 for fiscal 1997 as compared
to net cash used in operating  activities of $704,965 for fiscal 1996, which was
the result of the liquidating and restructuring of the Trust during fiscal 1996.

As a result of the Tender Offer and the  implementation  of Management's  growth
and expansion strategy,  cash flows from investing and financing activities have
changed dramatically from fiscal years 1995 to 1996 to 1997. During fiscal 1995,
cash provided by investing  activities was the result of the Trust's liquidation
of  investments.  In  fiscal  1996,  $673,200  was  generated  from  the sale of
investments and approximately $8,700,000 was invested in Thicket. While Windrush
was acquired  during  fiscal 1997, it was not acquired with cash but through the
assumption  of debt,  escrow  accounts and the issuance of Units.  Approximately
$3,800  in cash  was  spent in  connection  with the  Windrush  acquisition  and
approximately $135,000 was used to make improvements to Thicket and Peachtree.

Cash flows used in financing  activities were comprised of (1)  distributions to
shareholders,  and  (2)  debt  incurred.   Distributions  to  shareholders  have
decreased from $13,277,342 during fiscal 1995, to $9,526,133 during fiscal 1996,
with no distributions  during fiscal 1997. All distributions  were the result of
final liquidating dividends paid to shareholders.  During fiscal 1996, the Trust
received net proceeds of $7,392,000 from a mortgage note payable, in addition to
$1,568,104 in proceeds from a secured line of credit,  all of which were used in
the acquisition of Thicket. During fiscal 1997, an additional $150,000 was drawn
from the line of  credit.  A  mortgage  note in the  amount of  $6,464,898,  was
assumed in connection  with the  acquisition of Windrush and is not considered a
cash transaction.

Many of the costs  associated  with the  liquidation  of Trust's  assets and the
subsequent  Tender Offer and  organizational  restructuring  that were  incurred
during fiscal 1996,  have not continued  into fiscal 1997.  The cash held by the
Trust at  December  31,  1997,  plus the cash flow from the Trust's  assets,  is
expected to provide  sources of liquidity to allow the Trust to meet all current
operating  obligations.  In addition,  the remaining  balance of $281,896 on the
Trust's  $2,000,000  line of credit may be drawn for  working  capital  needs or
acquisition  funding. It is anticipated that the line of credit, which is due in
June 1998,  will be renewed,  refinanced  or repaid  through the issuance of new
equity. (For additional  information  regarding the line of credit see Note 6 to
the Trust's December 31, 1997  Consolidated  Financial  Statements).  Management
intends to continue ongoing  discussions  with capital sources,  both public and
private, as well as explore financing alternatives,  so as to allow the Trust to
expand and grow its income  producing  investments.  (See "Growth and  Expansion
Strategy".)



Recent Accounting Pronouncements
--------------------------------

In February 1997, the Financial  Accounting  Standards Board issued Statement of
Financial Accounting Standards No. 128, "Earnings per Share" ("SFAS 128"), which
supersedes the authoritative literature and related interpretations for earnings
per share under  Accounting  Principles  Board Opinion No. 15. Effective for the
quarter and year ended  December 31, 1997,  the Trust computes net income (loss)
per share under the  provisions  of SFAS No. 128. As prescribed by SFAS No. 128,
all prior period net income  (loss) per share data has been  restated to conform
with the provisions of SFAS No. 128. Under SFAS No. 128, basic net income (loss)
per share is computed  based upon the weighted  average  number of common shares
outstanding  during the period.  Diluted net income (loss) per share is computed
to reflect the potential  dilution of all  instruments  or securities  which are
convertible  into common  shares of the Trust.  Previously  reported  net income
(loss) per share under prior accounting standards was equal to basic and diluted
net income (loss) per share under SFAS no. 128.


Impact of Inflation
-------------------

Substantially  all of the  residential  leases at Thicket and  Windrush  are for
periods of one year or less which will enable the Trust to seek increased  rents
upon renewal of existing  leases or upon  commencement  of new leases.  Although
there can be no assurance that rental increases may be obtained,  the short term
nature of these leases  generally  serves to reduce the risk to the Trust of the
adverse  effects  of  inflation.

Substantially all of the tenant leases at Peachtree have remaining terms of five
years or less and  contain  clauses  which  require  the  tenants  to pay  their
prorated share of operating  expenses,  including common area maintenance,  real
estate taxes,  and insurance.  This serves to reduce the risk of increased costs
and operating expenses resulting from inflation. In addition, the Trust may seek
increased base rents upon renewal of existing leases or upon commencement of new
leases in order to offset any adverse effects of inflation.  However,  there can
be no assurance that rental increases may be obtained.


Other Matters
-------------

The Trust is currently  assessing the  potential  impact of the year 2000 on the
processing of date sensitive  information.  The year 2000 issue is the result of
many  computer  programs  recognizing  a date  ending with "00" as the year 1900
rather than the year 2000,  causing potential system failures or miscalculations
which could result in disruptions of normal business operations.  However,  year
2000 computer  issues are not expected to have a material  adverse impact on the
Trust's  financial  position,  results  of  operations  or cash  flows in future
periods.  The Trust's  software systems are either currently year 2000 compliant
or will be compliant well in advance of January 1, 2000.

This Form 10-K 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. The Trust's actual results could differ materially from those set forth
in the  forward-looking  statements.  Certain  factors  that might  cause such a
difference  include  the  following:  the  inability  of the  Trust to  identify
properties  within  existing   multifamily   property   portfolios  of  entities
affiliated with management  which will have a strategic fit with the Trust,  the
inability of the Trust to identify unaffiliated properties for acquisition,  the
less than  satisfactory  performance  of any property which might be acquired by
the Trust,  the  inability  to access the  capital  markets in order to fund the
Trust's present growth and expansion  strategy,  the cyclical nature of the real
estate market generally and locally in Georgia and the surrounding  southeastern
states, the national economic climate, the local economic climate in Georgia and
the surrounding  southeastern  states,  and the local real estate conditions and
competition in Georgia and the surrounding  southeastern states. There can be no
assurance  that, as a result of the foregoing  factors,  the Trust's  growth and
expansion strategy will be successful or that the business and operations of the
Trust will not be adversely affected thereby.


ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The consolidated  financial  statements and supplementary  data are listed under
Item 14(a) and filed as part of this report on the pages indicated.


ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
         ACCOUNTING AND FINANCIAL DISCLOSURE

The  information  required by this Item 9 was  previously  reported in a Current
Report on Form 8-K filed with the Securities and Exchange  Commission on January
14, 1997.

<PAGE>
                                    PART III

ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information concerning the Trustees and Executive Officers of the Registrant
required  by Item 10  shall  be  included  in the  Proxy  Statement  to be filed
relating  to the 1998 Annual  Meeting of the  Registrant's  shareholders  and is
incorporated herein by reference.


ITEM 11 - EXECUTIVE COMPENSATION

The information concerning the Trustees and Executive Officers of the Registrant
required  by Item 11  shall  be  included  in the  Proxy  Statement  to be filed
relating  to the 1998 Annual  Meeting of the  Registrant's  shareholders  and is
incorporated herein by reference.


ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information concerning Ownership of Certain Beneficial Owners and Management
required  by Item 12  shall  be  included  in the  Proxy  Statement  to be filed
relating  to the 1998 Annual  Meeting of the  Registrant's  shareholders  and is
incorporated herein by reference.


ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The  information  concerning  Certain  Relationships  and  Related  Transactions
required  by Item 13  shall  be  included  in the  Proxy  Statement  to be filed
relating  to the 1998 Annual  Meeting of the  Registrant's  shareholders  and is
incorporated herein by reference.


                                     PART IV

ITEM 14 - EXHIBITS, FINANCIAL STATEMENTS AND SCHEDULE AND
          REPORTS ON FORM 8-K

  14(A) (1) AND (2) INDEX TO CONSOLIDATED FINANCIAL
  STATEMENTS AND SCHEDULE                                                   Page
                                                                            ----

Report of Independent Public Accountants--As of December 31, 1997
and 1996 and for the years then ended                                        24

Report of Independent Auditors--For the year ended December 31, 1995         25

Consolidated Balance Sheets--As of December 31, 1997 and 1996                26

Consolidated Statements of Operations--For the years ended
December 31, 1997, 1996 and 1995.                                            27

Consolidated Statements of Shareholders' Equity--For the years ended
December 31, 1997, 1996 and 1995                                             28

Consolidated Statements of Cash Flows--For the years ended
December 31, 1997, 1996 and 1995                                             29

Notes to Consolidated Financial Statements--For the years ended
December 31, 1997, 1996 and 1995                                             30

Consolidated Financial Statement Schedule                                    42
<PAGE>
<TABLE>
<CAPTION>
14(A) (3) EXHIBITS


<S>                    <C>     <C>
EXHIBIT NO.                    DESCRIPTION
----------                     ------------
       3.1             ---     Second Amended and Restated  Declaration of Trust of the Trust (incorporated by reference
                               to Exhibit 3.1 to the Trust's Registration Statement on Form S-11, No. 2-94776).

       3.2             ---     Amendment  No. 1 to the Second  Amended and  Restated  Declaration  of Trust of the Trust
                               (incorporated  by reference to Exhibit 3.3 to the Trust's  Annual Report on Form 10-K for
                               the fiscal year ended December 31, 1996, No. 0-13693).

       3.3             ---     Amendment  No. 2 to the Second  Amended and  Restated  Declaration  of Trust of the Trust
                               (incorporated  by reference to Exhibit 3.4 to the Trust's  Annual Report on Form 10-K for
                               the fiscal year ended December 31, 1996, No. 0-13693).

       3.4             ---     Amended and  Restated  Bylaws of the Trust  (incorporated  by reference to Exhibit 3.2 to
                               the Trust's Registration Statement on Form S-11, No. 2-94776).

      10.1             ---     Amended and Restated Agreement of Limited  Partnership of Vinings Investment  Properties,
                               L.P. (filed herewith).

      10.2             ---     First Amendment to the Amended and Restated  Agreement of Limited  Partnership of Vinings
                               Investment Properties, L.P. (filed herewith).

      10.3             ---     Second Amendment to the Amended and Restated Agreement of Limited  Partnership of Vinings
                               Investment Properties, L.P. (filed herewith).

      10.4             ---     Management  Contract,  dated June 25, 1996, between Thicket Apartments,  L.P. and Vinings
                               Properties,  Inc. (incorporated by reference to Exhibit 10.8 to the Trust's Annual Report
                               on Form 10-K for the fiscal year ended December 31, 1996, No. 0-13693).

      10.5             ---     Management  Contract,  dated July 6, 1990,  between PBC Acquisition,  Inc. and Carter and
                               Associates  Enterprises,  Inc.  (incorporated by reference to Exhibit 10.9 to the Trust's
                               Annual Report on Form 10-K for the fiscal year ended December 31, 1996, No. 0-13693).

      10.6             ---     Agreement to Contribute,  dated April 1, 1997,  between  Vinings  Investment  Properties,
                               L.P.  and  Windrush  Partners,  Ltd.  (incorporated  by  reference to Exhibit 10.1 to the
                               Trust's Current Report on Form 8-K filed December 29, 1997, No. 0-13693).

      10.7             ---     Amendment to Agreement to Contribute,  dated August 11, 1997,  between Vinings Investment
                               Properties,  L.P. and Windrush Partners,  Ltd. (incorporated by reference to Exhibit 10.2
                               to the Trust's Current Report on Form 8-K filed December 29, 1997, No. 0-13693).

      10.8             ---     Second  Amendment to Agreement to  Contribute,  dated October 30, 1997,  between  Vinings
                               Investment  Properties,  L.P. and Windrush Partners,  Ltd.  (incorporated by reference to
                               Exhibit 10.3 to the Trust's  Current  Report on Form 8-K filed  December  29,  1997,  No.
                               0-13693).

      10.9             ---     Agreement of Limited Partnership of Vinings Communities,  L.P. (incorporated by reference
                               to Exhibit  10.1 to the Trust's  Current  Report on Form 8-K/A  filed March 3, 1998,  No.
                               0-13693).

      10.10            ---     Management  Contract  dated  December  19, 1997  between  Vinings  Communities,  L.P. and
                               Vinings Properties, Inc. (filed herewith).

      10.11            ---     Limited Warranty Deed, dated December 19, 1997, by and between  Windrush  Partners,  L.P.
                               and Vinings Communities,  L.P.  (incorporated by reference to Exhibit 10.2 to the Trust's
                               Current Report on Form 8-K/A filed March 3, 1998, No. 0-13693).

      10.12            ---     Assumption  Agreement,  dated December 19 1997, by Vinings Communities,  L.P. in favor of
                               Reilly Mortgage  Group,  Inc.  (incorporated  by reference to Exhibit 10.3 to the Trust's
                               Current Report on Form 8-K/A filed March 3, 1998, No. 0-13693).

      10.13            ---     Commercial  Credit Agreement  between Hardwick Bank and Trust Company and the Trustees of
                               the Trust dated June 28, 1997 (filed herewith).

      21.1             ---     Subsidiaries of the Trust (filed herewith).

      27               ---     Financial Data Schedule (filed herewith).

</TABLE>

         14(B) REPORTS ON FORM 8-K

         Current Report on Form 8-K, dated December 19, 1997, was filed with the
         Securities and Exchange  Commission on December 29, 1997,  with respect
         to the Trust's acquisition of Windrush.

         14(C) INDEX TO EXHIBITS

         See Item 14(a)(3) above.


<PAGE>
                                   SIGNATURES

Pursuant to the requirements of Sections 13 or 15(d) 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.

                                            VININGS INVESTMENT PROPERTIES TRUST

                                            By: /s/ Peter D. Anzo
                                            ---------------------
                                                    Peter D. Anzo
                                                    President and
                                                    Chief Executive Officer

Dated:  March 30, 1998

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in the capacities and on the dates indicated.



Signature                      Title                             Date
---------                      -----                             -----

/s/ Peter D. Anzo              Chief Executive Officer,          March 30, 1998
-------------------------      President and Trustee
Peter D. Anzo


/s/ Stephanie A. Reed          Vice President, Treasurer,        March 30, 1998
-------------------------      Secretary and Trustee
Stephanie A. Reed


/s/ Martin H. Petersen         Trustee                           March 30, 1998
-------------------------
Martin H. Petersen


/s/ Gilbert H. Watts, Jr.      Trustee                           March 30, 1998
-------------------------
Gilbert H. Watts, Jr.


/s/ Phill D. Greenblatt        Trustee                           March 30, 1998
-------------------------
Phill D. Greenblatt


/s/ Henry Hirsch               Trustee                           March 30, 1998
-------------------------
Henry Hirsch

/s/ Thomas B. Bender           Trustee                           March 30, 1998
-------------------------
Thomas B. Bender


<PAGE>
                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Vinings Investment Properties Trust:

We  have audited  the  accompanying  consolidated  balance  sheets  of  Vinings
Investment  Properties Trust and  subsidiaries  (the "Trust") as of December 31,
1997  and  1996  and  the  related   consolidated   statements  of   operations,
shareholders' equity and cash flows for the years then ended. These consolidated
financial  statements and the schedule referred to below are the  responsibility
of the Trust's management.  Our responsibility is to express an opinion on these
consolidated financial statements and schedule based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material  respects,  the financial position of Vinings Investment
Properties  Trust and  subsidiaries  as of December  31, 1997 and 1996,  and the
results  of their  operations  and their  cash flows for the years then ended in
conformity with generally accepted accounting principles.

Our  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial  statements  taken as a whole.  The  schedule  listed  in the index to
financial  statements is presented for purposes of complying with the Securities
and  Exchange  Commission's  rules  and  is not  part  of  the  basic  financial
statements.  This schedule has been subjected to the auditing procedures applied
in the audits of the basic  financial  statements  and, in our  opinion,  fairly
states in all material  respects  the  financial  data  required to be set forth
therein in relation to the basic financial statements taken as a whole.

ARTHUR ANDERSEN LLP
/s/ Arthur Andersen LLP
-----------------------
Atlanta, Georgia
March 6, 1998

                         REPORT OF INDEPENDENT AUDITORS

To the Shareholders of Vinings Investment Properties Trust:

We have  audited  the  accompanying  consolidated  balance  sheet (not  included
herein) of Vinings Investment Properties Trust and Subsidiaries  (formerly known
as Mellon Participating Mortgage Trust, Commercial Properties Series 85/10) (the
"Trust") as of December  31, 1995 and the  related  consolidated  statements  of
operations,  changes in  shareholders'  equity and cash flows for the year ended
December 31, 1995.  Our audit also  included the financial  statement  schedules
listed  in the  index  as  Item 6 and  14(a).  These  financial  statements  and
schedules are the responsibility of the Trust's  management.  Our responsibility
is to express an opinion of these consolidated financial statements and schedule
based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards  require that we plan and perform the audit to obtain reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
amounts and  disclosures  in the  financial  statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material  respects,  the consolidated  financial  position of the
Trust as of December 31, 1995 and the  consolidated  results of their operations
and their cash flows for the year ended  December 31, 1995, in  conformity  with
generally  accepted  accounting  principles.  Also, it is our opinion,  that the
related financial  statement schedules above, when considered in relation to the
basic financial  statements  taken as a whole,  present fairly,  in all material
respects, the information set forth therein.

Ernst & Young LLP
/s/ Ernst & Young LLP
---------------------
New York, New York
February 23, 1996
<PAGE>


<TABLE>
<CAPTION>

                                   VININGS INVESTMENT PROPERTIES TRUST
                                             AND SUBSIDIARIES
                                       CONSOLIDATED BALANCE SHEETS

                                                                          December 31,
                                                                ----------------------------------
                                                                      1997               1996
                                                                --------------      --------------
ASSETS
------
<S>                                                               <C>                 <C>
Real estate assets:
    Land                                                          $ 2,884,500         $ 1,470,500
    Buildings and improvements                                     15,267,009           9,218,263
    Furniture, fixtures & equipment                                 1,011,483             783,691
      Less:  accumulated depreciation                              (1,036,311)           (613,918)
                                                                --------------      --------------
         Net real estate assets                                    18,126,681          10,858,536

Cash and cash equivalents                                             282,851             171,736
Cash escrows                                                          314,684             192,611
Receivables and other assets                                           63,402              86,002
Deferred financing costs,  less accumulated  amortization of
   $54,459 and $19,502 at December 31, 1997 and 1996,
   respectively                                                       169,968             204,925
Deferred leasing costs, less accumulated amortization of
    $39,087 and $28,470 at December 31, 1997 and 1996,
    respectively                                                       31,972               5,659
                                                                --------------      --------------
Total assets                                                     $ 18,989,558        $ 11,519,469
                                                                ==============      ==============


LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------

Mortgage notes payable                                           $ 13,784,566         $ 7,371,676
Line of credit                                                      1,718,104           1,568,104
Accounts payable and accrued liabilities                              708,876             347,141
                                                                --------------      --------------
       Total liabilities                                           16,211,546           9,286,921
                                                                --------------      --------------
Minority interest in Operating Partnership                            509,209                   -
                                                                --------------      --------------
Contingencies (Note 12)

Shareholders' equity:
    Shares  of  beneficial  interest,   without  par  value,
    unlimited  shares authorized,  1,080,512 and  1,080,528
    shares  issued and  outstanding  at December 31,
    1997 and 1996, respectively                                    19,429,735          18,731,763

    Cumulative earnings                                            37,217,597          37,879,314

    Cumulative distributions                                      (54,378,529)        (54,378,529)
                                                                --------------      --------------
       Total shareholders' equity                                   2,268,803           2,232,548
                                                                --------------      --------------

Total liabilities and shareholders' equity                       $ 18,989,558        $ 11,519,469
                                                                ==============      ==============
<FN>

The accompanying notes are an integral part of these consolidated financial statements
</FN>
</TABLE>


<PAGE>
<TABLE>
<CAPTION>


                       VININGS INVESTMENT PROPERTIES TRUST
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS




                                                                              For the years ended December 31,
                                                                  -----------------------------------------------------
                                                                      1997                1996                 1995
                                                                  ------------        ------------         ------------
REVENUES
--------

<S>                                                               <C>                 <C>                    <C>
     Rental revenues                                              $ 2,392,072         $ 1,482,419            $ 576,216
     Other property revenues                                           84,674              70,064               24,238
     Income from partnership                                                -                   -            1,730,508
     Interest income                                                    2,078              92,657              891,499
     Other income                                                           -             151,777               22,447
                                                                  ------------        ------------         ------------
                                                                    2,478,824           1,796,917            3,244,908
                                                                  ------------        ------------         ------------
EXPENSES
--------

     Property operating and maintenance                               992,926             586,430              290,548
     Depreciation and amortization                                    433,011             244,110              361,013
     Amortization of deferred financing costs                          34,957              19,502                    -
     Interest expense                                                 816,551             408,719                    -
     General and administrative                                       336,375             987,973              766,346
     Investment advisor's fees                                              -             333,461              361,568
     Unusual item                                                     532,185                   -                    -
                                                                  ------------        ------------         ------------
                                                                    3,146,005           2,580,195            1,779,475
                                                                  ------------        ------------         ------------
     Income (loss) before gain (loss) on real estate investments     (667,181)           (783,278)           1,465,433
                                                                  ------------        ------------         ------------

GAIN (LOSS) ON REAL ESTATE INVESTMENTS
--------------------------------------

     Gain (loss) on real estate investments                                 -             (26,800)           1,655,113
     Allowance to reduce real estate investments
       to fair market value                                                 -                   -           (2,542,000)
                                                                  ------------        ------------         ------------
                                                                            -             (26,800)            (886,887)
                                                                  ------------        ------------         ------------

     Income (loss) before minority interest                          (667,181)           (810,078)             578,546

     Minority interest                                                 (5,464)                  -                    -
                                                                  ------------        ------------         ------------

     Net income (loss)                                             $ (661,717)         $ (810,078)           $ 578,546
                                                                  ============        ============         ============

NET INCOME (LOSS) PER SHARE - BASIC AND DILUTED                       $ (0.61)            $ (0.75)              $ 0.54
                                                                  ============        ============         ============

WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC                         1,080,513           1,080,528            1,080,625
                                                                  ============        ============         ============

WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED                       1,089,435           1,080,528            1,080,625
                                                                  ============        ============         ============

<FN>
The accompanying notes are an integral part of these consolidated financial statements
</FN>

</TABLE>


<PAGE>

<TABLE>
<CAPTION>

                                   VININGS INVESTMENT PROPERTIES TRUST
                                            AND SUBSIDIARIES
                             CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY For
                          the years ended December 31, 1995, 1996 and 1997




                                             Shares of                                          Total
                                             beneficial       Cummulative     Cummulative    shareholders'
                                              interest        earnings        distributions     equity
                                            -------------    ------------    -----------------------------

<S>                                         <C>              <C>             <C>             <C>
BALANCE AT DECEMBER 31, 1994                $ 50,200,591     $ 38,110,846    $(54,378,529)   $ 33,932,908

Net income                                             -         578,546                -         578,546

Distributions to shareholders
     ($12.24 per share return of capital
     for federal income tax purposes)        (13,227,342)              -                -     (13,227,342)
                                            -------------    ------------    -------------   -------------

BALANCE AT DECEMBER 31, 1995                  36,973,249      38,689,392      (54,378,529)     21,284,112

Net loss                                               -        (810,078)               -        (810,078)

Retirement of shares                                (536)              -                -            (536)

Distributions to shareholders
     ($16.88 per share return of capital
     for federal income tax purposes)        (18,240,950)              -                      (18,240,950)
                                            -------------    ------------    -------------   -------------

BALANCE AT DECEMBER 31, 1996                  18,731,763      37,879,314      (54,378,529)      2,232,548

Adjustment for minority interest of
     unitholders and issuance of units
     in Operating Partnership                    698,056                                          698,056

Net loss                                               -        (661,717)               -        (661,717)

Retirement of shares                                 (84)              -                -             (84)
                                            -------------    ------------    -------------   -------------

BALANCE AT DECEMBER 31, 1997                $ 19,429,735     $ 37,217,597    $(54,378,529)    $ 2,268,803
                                            =============    ============    =============   =============
<FN>
The accompanying notes are an integral part of these consolidated financial statements
</FN>

</TABLE>

<PAGE>

<TABLE>
<CAPTION>


                                         VININGS INVESTMENT PROPERTIES TRUST
                                                  AND SUBSIDIARIES
                                        CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                              For the years ended December 31,
                                                                       -----------------------------------------------

                                                                            1997             1996             1995
                                                                       -------------    -------------    -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
-------------------------------------
<S>                                                                      <C>              <C>               <C>
Net income (loss)                                                        $ (661,717)      $ (810,078)       $ 578,546

Adjustments to  reconcile  net income  (loss) to net cash  provided
   by (used in) operating activities:

        Depreciation and amortization                                       433,011          244,110          409,450
        Amortization of deferred financing costs                             34,957           19,502                -
        Loan discount amortization                                                -                -         (101,800)
        Minority interest of unitholders in Operating Partnership            (5,464)
        Estimated allowance to reduce real
           estate to fair value                                                   -                -        2,542,000
        (Gain) loss on real estate investments                                    -           26,800       (1,655,113)
        Changes in assets and liabilities:
           Cash escrows                                                      75,745         (192,611)               -
           Receivables and other assets                                      22,600          260,055            3,768
           Capitalized leasing costs                                        (36,931)          (5,639)               -
           Accounts payable, accrued liabilities and due to affiliate       290,335         (247,104)          43,470
                                                                       -------------    -------------    -------------

        Total adjustments                                                   814,253          105,113        1,241,775
                                                                       -------------    -------------    -------------

Net cash provided by (used in) operating activities                         152,536         (704,965)       1,820,321
                                                                       -------------    -------------    -------------

CASH FLOWS FROM INVESTING ACTIVITIES:
-------------------------------------

Purchase of The Thicket Apartments                                                -       (8,660,900)               -
Purchase of Windrush Apartments, net of cash acquired                        (3,791)               -                -
The Thicket capital expenditures                                           (109,333)         (49,635)               -
Peachtree capital expenditures                                              (26,205)         (29,862)         (16,751)
Principal payments on notes receivable                                            -                -        2,000,000
Sales proceeds from real estate investments                                       -          673,200       25,338,141
                                                                       -------------    -------------    -------------

Net cash provided by (used in) investing activities                        (139,329)      (8,067,197)      27,321,390
                                                                       -------------    -------------    -------------

CASH FLOWS FROM FINANCING ACTIVITIES:
-------------------------------------

Net proceeds from mortgage note payable                                           -        7,392,000                -
Net proceeds from line of credit                                            150,000        1,568,104                -
Deferred financing costs                                                          -         (224,427)               -
Principal repayments on mortgage payable                                    (52,008)         (20,324)               -
Purchase of retired shares                                                      (84)            (536)               -
Distributions to shareholders                                                     -      (18,240,950)     (13,227,342)
                                                                       -------------    -------------    -------------

Net cash provided by (used in) financing activities                          97,908       (9,526,133)     (13,227,342)
                                                                       -------------    -------------    -------------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                        111,115      (18,298,295)      15,914,369

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                            171,736       18,470,031        2,555,662
                                                                       -------------    -------------    -------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                                $ 282,851        $ 171,736     $ 18,470,031
                                                                       =============    =============    =============
<FN>
The accompanying notes are an integral part of these consolidated financial statements
</FN>
</TABLE>





                       VININGS INVESTMENT PROPERTIES TRUST
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 1997, 1996 AND 1995


NOTE 1 - FORMATION AND ORGANIZATION

         Vinings  Investment  Properties  Trust (the  "Trust") was  organized on
         December 7, 1984 under the laws of the Commonwealth of Massachusetts as
         a twenty-year  finite-life real estate  investment trust ("REIT") under
         the Internal  Revenue Code of 1986. The Trust was originally  organized
         for the purpose of making real estate investments  consisting primarily
         of mortgage loans and was to liquidate at the end of approximately  ten
         years in accordance with its Declaration of Trust,  provided,  however,
         that the Trustees  would have the absolute  discretion  to determine in
         good faith such  termination  date as would be in the best interests of
         the shareholders.  On January 3, 1996, the final asset to be liquidated
         was sold and final dividends were declared.

         On  January  31,  1996,  Vinings  Investment  Properties,   Inc.  ("the
         Purchaser")  commenced a tender offer for a minimum of a majority and a
         maximum  of 85% of the  issued  and  outstanding  shares of  beneficial
         interest  without par value of the Trust (the "Shares"),  at a purchase
         price of $0.47 per share ($3.76 per share adjusted for the Share Split,
         as hereinafter  defined) (the "Tender Offer"). The Tender Offer expired
         in accordance  with its terms on February 28, 1996,  and, in connection
         therewith,  the  Purchaser  accepted an aggregate  of 6,337,279  Shares
         (792,159 Shares adjusted for the Share Split, as hereinafter  defined),
         representing approximately 73.3% of the outstanding Shares, for a total
         acquisition price of $2,978,521. The remaining assets of the Trust were
         Peachtree Business Center  ("Peachtree") and approximately  $163,000 in
         cash.  The purpose of the Tender Offer was for the Purchaser to acquire
         control of the Trust and to rebuild  the  Trust's  assets by  expanding
         into  the  multifamily   property  markets.   In  connection  with  the
         consummation  of the Tender Offer,  all of the Trustees and officers of
         the Trust resigned and were replaced with designees of the Purchaser.

         Until the consummation of the Tender Offer, the Trust was an externally
         advised  REIT for which it paid  advisory  fees to an  unrelated  third
         party (the  "Advisor").  Upon  consummation  of the Tender  Offer,  the
         relationship  with the  Advisor  was  terminated  and the Trust  became
         self-administered.

         On June 11, 1996, Vinings Investment  Properties,  L.P. (the "Operating
         Partnership"),  a Delaware limited  partnership,  was organized.  As of
         December  31,  1997,  the Trust is the sole 1% general  partner  and an
         80.67% limited partner in the Operating Partnership.  During the fourth
         quarter of 1997,  242,546  limited  partnership  units in the Operating
         Partnership  ("Units")  were  issued,  of which  224,330  Units were in
         connection with the acquisition of Windrush, as defined below. The
         Units are redeemable for shares of the Trust on a  one-for-one  basis
         or cash,  at the option of the Trust.  (This  structure  is  commonly
         referred  to as an umbrella partnership REIT or "UPREIT").

         The Trust  currently  owns three real estate  assets.  They are (1) The
         Thicket Apartments ("Thicket"), a 254-unit apartment complex located in
         Atlanta,  Georgia,  owned through Thicket Apartments,  L.P., a Delaware
         limited  partnership,  of  which  the  Operating  Partnership  is a 99%
         limited partner and Thicket Holdings,  Inc., a Delaware corporation and
         wholly-owned  subsidiary of the Trust, is the sole general partner; (2)
         Windrush  Apartments  ("Windrush"),   a  202-unit  apartment  community
         located in Atlanta, Georgia owned through Vinings Communities,  L.P., a
         Delaware  limited  partnership of which the Operating  Partnership is a
         99% limited partner and the Trust is the sole general partner;  and (3)
         Peachtree,  an approximately 75,000 square foot,  single-story business
         park located in Atlanta,  Georgia,  owned by the Operating Partnership.
         At December 31, 1997,  Thicket,  Windrush and Peachtree  were 100%, 93%
         and 100% leased, respectively.

         On July 1, 1996, the Trust effected a 1-for-8  reverse share split (the
         "Share  Split")  of  its  8,645,000  outstanding  Shares.  Shareholders
         tendered  their  Shares and  received  one Share for every eight Shares
         owned. The Trust has purchased and continues to purchase any fractional
         Shares  at a  cost  of  $5.50  per  share.  As of  December  31,  1997,
         fractional Shares totaling 113 had been repurchased and retired leaving
         1,080,512 Shares outstanding.  All share and per share data included in
         the  accompanying  financial  statements  and notes  thereto  have been
         restated to reflect the Share Split.


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Basis of Presentation
         ---------------------

         The   accompanying   consolidated   financial   statements  of  Vinings
         Investment  Properties  Trust  include  the  consolidated  accounts  of
         Vinings   Investment   Properties  Trust  and  its  subsidiaries.   All
         significant intercompany balances and transactions have been eliminated
         in  consolidation.  The  minority  interest of the  unitholders  in the
         Operating  Partnership on the accompanying  balance sheet is calculated
         based on the  minority  interest  ownership  percentage  (18.33%  as of
         December  31,  1997)  multiplied  by the  Operating  Partnership's  net
         assets.  The minority interest of the unitholders in the income or loss
         of  the  Operating   Partnership  on  the  accompanying   statement  of
         operations is calculated based on the weighted average number of Shares
         and Units outstanding during the period.  The term "Trust"  hereinafter
         refers to Vinings  Investment  Properties  Trust and its  subsidiaries,
         including the Operating Partnership.


         Income Taxes
         ------------

         The Trust has elected to be taxed as a REIT under the Internal  Revenue
         Code of 1986,  as amended  (the  "Code").  As a result,  the Trust will
         generally not be subject to federal income  taxation on that portion of
         its income that qualifies as REIT taxable income to the extent the REIT
         distributes at least 95% of its taxable income to its  shareholders and
         satisfies  certain other  requirements.  Accordingly,  no provision for
         federal income taxes has been included in the accompanying consolidated
         financial statements.


         Cash and Cash Equivalents
         -------------------------

         The Trust  considers all highly liquid  investments  purchased  with an
         original maturity of three months or less to be cash equivalents.


         Cash Escrows
         ------------

         Cash escrows consist of real estate tax, insurance, replacement reserve
         and repair  escrows  held by  mortgagees.  These  funds are  restricted
         accounts  and  released  solely  for the  purpose  for which  they were
         established.


         Use of Estimates
         ----------------

         The  preparation of financial  statements in conformity  with generally
         accepted  accounting  principles  requires  management  to make certain
         estimates and  assumptions  that affect the reported  amounts of assets
         and liabilities, the disclosure of contingent assets and liabilities at
         the  date of the  financial  statements  and the  reported  amounts  of
         revenues and expenses during the reporting period. Actual results could
         differ from those estimates.


         Real Estate Assets
         ------------------

         Real estate assets are stated at depreciated  cost less  reductions for
         impairment,  if any. In identifying  potential  impairment,  management
         considers   such  factors  as  declines  in  a   property's   operating
         performance  or market  value,  a change in use, or adverse  changes in
         general market conditions. In determining whether an asset is impaired,
         management  estimates  the future cash flows  expected to be  generated
         from the asset's use and its eventual disposition.  If the sum of these
         estimated  future cash flows on an undiscounted  basis is less than the
         asset's  carrying cost, the asset is written down to its fair value. In
         management's opinion,  there has been no impairment of the Trust's real
         estate assets as of December 31, 1997.

         Ordinary  repairs  and  maintenance  are  expensed as  incurred.  Major
         improvements  and  replacements  are capitalized  and depreciated  over
         their estimated useful lives when they extend the useful life, increase
         capacity or improve  efficiency of the related asset.  Depreciation  is
         computed  on a  straight-line  basis over the useful  lives of the real
         estate  assets  (buildings  and  improvements,  5-40 years;  furniture,
         fixtures and equipment,  5 years;  and tenant  improvements,  generally
         over the life of the related lease.)


         Revenue Recognition
         -------------------

         All leases are  classified  as  operating  leases and rental  income is
         recognized   when  earned   which   materially   approximates   revenue
         recognition on a straight-line basis.


         Deferred Financing Costs and Amortization
         -----------------------------------------

         Deferred  financing  costs  include  fees and costs  incurred to obtain
         financing  and are  capitalized  and  amortized  over  the  term of the
         related debt.


         Net Income (Loss) Per Share
         ---------------------------

         Effective for the quarter and year ended  December 31, 1997,  the Trust
         computes net income (loss) per share under the  provisions of Statement
         of  Financial  Accounting  Standards  ("SFAS") No. 128,  "Earnings  per
         Share." As  prescribed  by SFAS No.  128,  all prior  period net income
         (loss) per share data has been restated to conform with the  provisions
         of SFAS No. 128.  Under SFAS No. 128, basic net income (loss) per share
         is computed  based upon the weighted  average  number of common  shares
         outstanding  during the period.  Diluted net income (loss) per share is
         computed  to reflect  the  potential  dilution  of all  instruments  or
         securities  which are  convertible  into  common  shares of the  Trust.
         Previously  reported net income (loss) per share under prior accounting
         standards  was equal to basic and diluted  net income  (loss) per share
         under SFAS No. 128.

         The following is a reconciliation of net income (loss) available to the
         common shareholders and the weighted average shares used in the Trust's
         basic and diluted net income (loss) per share computations:
<TABLE>

                                                             1997        1996        1995
                                                         ----------- ----------- ----------
           <S>                                            <C>         <C>          <C>
           Net income (loss) - basic                      $(661,717)  $(810,078)   $578,546
           Minority interest                                 (5,464)           -          -
                                                         =========== =========== ==========
           Net income (loss) - diluted                    $(667,181)  $(810,078)   $578,546
                                                         =========== =========== ==========

           Weighted average shares - basic                 1,080,513   1,080,528  1,080,625
           Dilutive Securities
              Weighted average Units in Operating
                  Partnership                                8,922             -         -
              Share options                                       -            -         -
                                                         ----------- ----------- ----------
           Weighted average shares - diluted               1,089,435   1,080,528  1,080,625
                                                         =========== =========== ==========
</TABLE>

         The  dilutive  effect of the share  options on the  Trust's  net income
         (loss) per share calculation was excluded,  as the impact of such share
         options was antidilutive.


         Reclassification
         ----------------

         Certain   1996  and  1995   financial   statement   amounts  have  been
         reclassified to conform with the current year presentation.


NOTE 3 - REAL ESTATE ASSETS


         Windrush Apartments
         -------------------

         On December 19, 1997, the Trust acquired  Windrush for a purchase price
         of $7,555,000 consisting of the assumption of an existing mortgage loan
         in the amount of $6,464,898 and other  liabilities  and the issuance of
         224,330 limited partnership units in the Operating Partnership.


         The Thicket Apartments
         ----------------------

         On June 28, 1996,  the Trust  acquired  Thicket for a purchase price of
         $8,650,000.  The  acquisition  was  financed by a mortgage  loan on the
         property in the amount of $7,392,000  and  borrowings  from the Trust's
         line of credit.


         Peachtree Business Center
         -------------------------

         The Trust acquired  Peachtree  through a deed-in-lieu of foreclosure on
         April 12, 1990.  Peachtree was recorded at $1,700,000,  its fair market
         value,  which  was less  than the book  value of the  Trust's  mortgage
         investment at the date of foreclosure.  Subsequent to the  acquisition,
         approximately $1,062,000 of improvements have been capitalized.


NOTE 4 - REAL ESTATE INVESTMENTS


         Arbutus and Pacesetter Notes
         ----------------------------

         On August 2, 1995, the Trust sold participating  mortgage loans secured
         by  the  Arbutus  and  Pacesetter   Shopping   Centers   ("Arbutus  and
         Pacesetter") for $3,615,000 and $2,900,000,  respectively.  These sales
         resulted  in a total  loss of  $1,845,035,  comprised  of a  $1,647,000
         write-down  to reflect the  realizable  value,  and selling,  legal and
         advisory expenses of $198,035.


         Hawthorne Note
         --------------

         The Trust  acquired  the  Hawthorne  Research and  Development  Complex
         ("Hawthorne")  in 1992 through  foreclosure  of its mortgage  note. The
         Trust's  investment  in the property was written down from 1992 through
         1994 to $4,605,702 to reflect its anticipated net realizable  value. On
         March 30,  1995,  the Trust  sold  Hawthorne  for  $5,095,000  of which
         $3,500,000  was  paid  at  closing.  The  balance  of  $1,595,000  (the
         "Hawthorne Note") was payable pursuant to a non-recourse purchase money
         note and was subordinate to first mortgage liens totaling  $10,360,000.
         In connection with the sale of Hawthorne,  the Trust reported a gain of
         $152,825.  In  connection  with the  liquidation  of assets,  the Trust
         entered into an agreement  with the first  mortgage lien holder to sell
         the  Hawthorne  Note for  $700,000.  At December  31,  1995,  the Trust
         established  a  valuation  allowance  of  $895,000  to reflect  its net
         realizable  value of $700,000.  On January 3, 1996, the Trust closed on
         the sale of the Hawthorne Note and recorded  commissions and fees for a
         loss on the sale of $26,800.


NOTE 5 - INVESTMENT IN PARTNERSHIP

         The Trust held partnership  interests totaling 35.5% in the Mellon/Pier
         I Properties Limited Partnership I (the "Pier I Partnership"). The Pier
         I  Partnership  was formed to  acquire  land and  buildings  which were
         leased  to  affiliates  of the Pier I  Partnership's  managing  general
         partner, Pier I, and operated as Pier I Imports retail stores.

         On December 29, 1995, the Trust sold its partnership  interests to Pier
         I. Total  sales  proceeds  to the Trust were  $15,788,680,  which after
         legal and advisory fees of $189,648, resulted in a gain of $1,700,323.


NOTE 6 - NOTES PAYABLE


         Mortgage Notes Payable
         ----------------------

         At  December  31,  1997,  the Trust had the  following  mortgage  notes
         payable:

         1)  9.04%  mortgage  note payable in the original  principal  amount of
             $7,392,000,  which is secured by Thicket and which  matures on July
             1, 2003. Principal and interest are payable in monthly installments
             of $59,691.

         2)  7.5%  mortgage  note payable which was assumed on December 19, 1997
             with a  principal  balance  of  $6,464,898,  which  is  secured  by
             Windrush and which matures on July 1, 2024.  Principal and interest
             are payable in monthly installments of $47,457.

         At December 31, 1997,  the total  outstanding  principal for both notes
         was $13,784,566.  Scheduled  maturites of the mortgage notes payable as
         of December 31, 1997 are as follows:

                             1998             $   144,501
                             1999                 156,664
                             2000                 169,860
                             2001                 184,179
                             2002                 199,716
                             Thereafter        12,929,646
                                            ==============
                             Total            $13,784,566
                                            ==============

         Line of Credit
         --------------

         The  Trust  renewed  its one  year  line of  credit  in the  amount  of
         $2,000,000  on June 27, 1997,  which bears  interest at the bank's base
         rate which approximates  prime. At December 31, 1997, the interest rate
         was 8.50%.  Interest  is  payable  monthly  with the  entire  principal
         balance due on June 28, 1998. It is anticipated that the line of credit
         will be  renewed  at that  time.  The  line of  credit  is  secured  by
         Peachtree. At December 31, 1997, the outstanding balance of the line of
         credit was $1,718,104.


NOTE 7 - RELATED PARTY TRANSACTIONS

         The Trust entered into management  agreements with Vinings  Properties,
         Inc. to provide property  management  services for Thicket and Windrush
         for a fee equal to five percent of gross  revenues  plus a fee for data
         processing.  Vinings  Properties,  Inc.  is  an  affiliate  of  certain
         officers and  trustees of the Trust.  A total of $93,235 and $44,459 in
         management  fees and  $15,240 and $7,620 in data  processing  fees were
         incurred by the Trust during 1997 and 1996, respectively.

         In  addition,  as a  commitment  to the  rebuilding  of the Trust,  The
         Vinings Group, Inc., the parent corporation of Vinings Properties, Inc.
         (collectively  "Vinings"),  has provided numerous services to the Trust
         relating to administration, acquisition, and capital and asset advisory
         services  at  little  or no cost  to the  Trust.  The  Trust  does  not
         anticipate  that these  services  will  continue to be provided free of
         charge,  and  certain  costs  paid  on the  Trust's  behalf  have  been
         reimbursed to Vinings. However, while the Trust has been in its initial
         growth  stages,  the  officers  and  trustees  have been  committed  to
         providing  as many  services  as  possible to promote the growth of the
         Trust.  A total of $45,000 and $15,000  were paid during 1997 and 1996,
         respectively, to Vinings for shareholder services provided for the sole
         benefit of the Trust by one of Vinings' employees. The officers did not
         receive compensation from the Trust for their services.

         On  December  19,  1997,  the Trust  acquired  Windrush  from  Windrush
         Partners,  Ltd. (the  "Partnership"),  a Georgia  limited  partnership,
         whose general  partner is Hallmark  Group  Services Corp  ("Hallmark").
         Hallmark is an affiliate  of the  officers and certain  trustees of the
         Trust. In connection with the acquisition of Windrush, an advisor's fee
         of $75,550 was paid by the  Partnership to MFI Realty,  Inc.("MFI"),  a
         wholly owned subsidiary of The Vinings Group, Inc.

         In  connection  with the  acquisition  of Thicket on June 28,  1996,  a
         broker's  commission of $150,000 was paid by the seller of the property
         to MFI.

         In  addition,  the  Trust  paid a  total  of  $21,000  during  1997  to
         Northshore  Communications,  Inc., a company affiliated with one of the
         Trustees,  for the design and  production  of the  Trust's  1996 annual
         report.


NOTE 8 - ADVISORY AGREEMENT

         Prior to the  consummation  of the Tender Offer,  the Trust had engaged
         the  Advisor to provide  investment  advisory  services  and act as the
         administrator  of Trust  operations.  The  agreement  with the Advisor,
         which was terminated upon  consummation  of the Tender Offer,  provided
         for the payment of administrative, asset management and other servicing
         fees to the Advisor for services  rendered in administering the Trust's
         operations.  The  Advisor  earned  administrative,   asset  management,
         special services,  and mortgage servicing fees aggregating $333,461 and
         $290,684 for the years ended December 31, 1996 and 1995,  respectively.
         The Trust also amortized  deferred loan acquisition fees of $70,884 for
         the year ended  December  31,  1995,  which is recorded  as  investment
         advisor's fees in the accompanying financial statements.


NOTE 9 - UNUSUAL ITEM

         In August 1997,  the Trust,  through the Operating  Partnership,  began
         contract  negotiations for the acquisition of a 2,365-unit portfolio of
         16  multifamily  properties.  The  sellers,  which  were 16  individual
         partnerships (the "Sellers"),  were to contribute the properties to the
         Operating  Partnership  in exchange for a  combination  of Units and/or
         cash  and  the  assumption  of  existing  mortgage   indebtedness  (the
         "Portfolio  Transaction").  The officers of the Trust spent substantial
         amounts of time and the Trust spent substantial amounts of money in its
         due  diligence  on  the   properties   and  in  contract   negotiations
         specifically  for this portfolio.  The Trust believes that it secured a
         binding  commitment  from the  Sellers for the  Portfolio  Transaction.
         Conditional  commitments  for equity  financing  were  obtained and the
         Trust was prepared to close on the  transaction  in early 1998.  Within
         thirty days of closing,  the general partner of the Sellers  terminated
         the contract  for reasons the Trust  believes to be  pretextual,  and
         in breach of the contract and not in the best interests of the partners
         of the selling partnerships or the shareholders of the Trust.

         On February 3, 1998, the Trust commenced an action against the Sellers,
         their  general  partners  and a  related  property  management  company
         seeking  specific  enforcement  of the  contract  and  damages  for the
         defendant's willful breach of contract,  lack of good faith negotiation
         and tortious interference in connection with the breach and termination
         of the  contract.  In a related  case,  the Sellers  filed an action on
         January 29, 1998 seeking a declaratory  judgement  that the contract is
         not  valid,   binding  and  enforceable  against  them.  The  Trust  is
         vigorously pursuing its claim. However, there can be no assurances that
         the Trust will prevail in its action or recover any damages. Therefore,
         because of the  uncertainty of any legal action,  the Trust has written
         off as unrecoverable the due diligence,  contract negotiation and other
         acquisition  costs totaling $532,185 associated  with  the  Portfolio
         Transaction that were incurred during the fourth quarter of 1997.


NOTE 10 - DISTRIBUTIONS

         There were no distributions  declared or distributed for the year ended
         December 31, 1997. Distributions declared and distributed for the years
         ended   December  31,  1996  and  1995   aggregated   $18,240,950   and
         $13,227,342, respectively, or $16.88 and $12.24 per share.

         For  federal  income  tax  purposes,   all  distributions  received  by
         shareholders for the years ended December 31, 1996 and 1995 represented
         a return of capital.


NOTE 11 - LEASING ACTIVITY

         The following is a schedule of future minimum rents due under operating
         leases that have  initial or  remaining  noncancellable  lease terms in
         excess of one year as of December 31, 1997, at Peachtree:


                             1998              $  543,118
                             1999                 540,930
                             2000                 403,665
                             2001                 318,864
                             2002                 132,860
                                              ------------
                             Total             $1,939,437
                                              ============


         One tenant  generated 57% of  Peachtree's  revenues for the fiscal year
         ended December 31, 1997. The same tenant accounts for 73% of the future
         minimum lease payments. While this tenant's lease does not expire until
         May 31, 2002, it contains a 90-day cancellation clause which management
         is renegotiating to eliminate such provision.


NOTE 12 - CONTINGENCIES

         The Trust is, from time to time,  subject to various  claims that arise
         in the ordinary course of business. These matters are generally covered
         by insurance. While the resolution of these matters cannot be predicted
         with  certainty,  management  believes  that the final  outcome of such
         matters  will not  have a  material  adverse  effect  on the  financial
         position or results of operations of the Trust.


NOTE 13 - SUPPLEMENTAL CASH FLOW INFORMATION

         The Trust paid interest of $800,388 and $353,032  during 1997 and 1996,
         respectively.

         Significant noncash investing and financing activities were as follows:

         1.   In connection with the December 19, 1997 Windrush  acquisition the
              Trust  assumed a mortgage note payable in the amount of $6,464,898
              and related cash escrow  accounts.  In addition,  242,546  limited
              partnership units in the Operating  Partnership were issued during
              1997 valued at $1,212,729.

         2.    The Hawthorne  Research and  Development  Complex was sold on
               March 30, 1995 for $5,095,000 at which time the Trust received a
               note for $1,595,000.


NOTE 14 - DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

         Based on interest rates and other  pertinent  information  available to
         the Trust as of December 31, 1997 and 1996,  the Trust  estimates  that
         the carrying  value of cash and cash  equivalents,  the mortgage  notes
         payable,  the line of credit,  and other liabilities  approximate their
         fair values when compared to  instruments  of similar  type,  terms and
         maturity.

         Disclosure  about  fair  value  of  financial  instruments  is based on
         pertinent  information  available to management as of December 31, 1997
         and 1996.  Although  management  is not aware of any factors that would
         significantly  affect its estimated  fair value  amounts,  such amounts
         have not been comprehensively  revalued for purposes of these financial
         statements since December 31, 1997.


NOTE 15 - 1997 STOCK OPTION AND INCENTIVE PLAN

         At the 1997 annual shareholders meeting held on July 1, 1997, the Trust
         adopted the Vinings  Investment  Properties Trust 1997 Stock Option and
         Incentive Plan (the "Plan") in order to provide incentives to officers,
         employees,  trustees,  and other key persons. The Plan provides for the
         grant of share  options,  share  appreciation  rights,  restricted  and
         unrestricted  share  awards,  performance  share  awards,  and dividend
         equivalent rights.

         Under the Plan the maximum number of shares  reserved and available for
         issuance is 10% of the total number of  outstanding  shares at any time
         plus 10% of the  number  of  Units  outstanding  at any  time  that are
         subject to redemption  rights. At December 31, 1997 the total number of
         shares reserved under the plan totaled 132,305.

         On July 1,  1997,  the Trust  granted  a total of 26,000  non-qualified
         share options (the "Options") to the officers, trustees and certain key
         persons.  The Options are  exercisable  at a price of $5.00 (based on a
         closing  sales  price of a share of the  Trust on the  Nasdaq  SmallCap
         Market on June 30,  1997 of $4.56) to vest over a one year  period.  No
         options had been exercised as of December 31, 1997.

         The  Trust  accounts  for  share  options  issued  under  the  Plan  in
         accordance  with APB Opinion No. 25,  "Accounting  for Stock  Issued to
         Employees,"  under which no compensation cost has been recognized since
         all options have been granted with an exercise  price equal to or above
         the  fair  value  of the  Trust's  shares  on the  date  of  grant.  In
         accordance  with  Statement  of Financial  Accounting  Standard No. 123
         (SFAS 123)  "Accounting  for Stock-Based  Compensation,"  the Trust has
         estimated the fair value of the Options using a binomial option pricing
         model  with the  following  weighted  average  assumptions:  risk  free
         interest rate of 6.12%,  expected  option life of five years,  expected
         volatility  of 30% and  expected  dividend  yield of 3.6%.  Using these
         assumptions, the estimated fair value of the Options was $38,000, which
         would be included in compensation  expense over the life of the vesting
         period.  Accordingly,  had the Trust  accounted for the Plan under SFAS
         123, the Trust's pro forma net loss and net loss per share for the year
         ended December 31, 1997 would have been as follows:

              Net loss:
                As reported                            $(661,717)
                                                      ===========
                Pro forma                              $(680,717)
                                                      ===========
              Net loss per share:
                As reported                               $(0.61)
                                                      ===========
                Pro forma                                 $(0.63)
                                                      ===========

<PAGE>
NOTE 16 - SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

         Unaudited  summarized  quarterly  results of  operations  for the years
         ended December 31, 1997 and 1996 are as follows:

<TABLE>
<CAPTION>

----------------------------- --------------- ---------------- -------------- ----------------
1997                             FIRST             SECOND            THIRD         FOURTH
----------------------------- --------------- ---------------- -------------- ----------------

<S>                           <C>                <C>                <C>          <C>
Total revenues                $ 596,364          $ 600,046          $635,736     $  646,678
                              =============== ================ ============== ================

Net loss                      $ (51,820)         $ (59,171)         $(18,625)    $ (532,101)
                              =============== ================ ============== ================

Net loss per share -
   Basic and diluted            $ (0.05)           $ (0.05)          $ (0.02)      $ (0.49)
                              =============== ================ ============== ================


----------------------------- --------------- ---------------- -------------- ----------------
1996                             FIRST             SECOND            THIRD         FOURTH
----------------------------- --------------- ---------------- -------------- ----------------

Total revenues                $ 393,473          $ 169,281          $613,310     $ 620,853
                              =============== ================ ============== ================

Net loss                      $(407,671)         $(127,349)         $(76,093)    $(198,965)
                              =============== ================ ============== ================

Net loss per share -
    basic and diluted           $ (0.38)           $ (0.12)          $ (0.07)      $ (0.18)
                              =============== ================ ============== ================

Dividends declared and paid     $ 16.88            $   -             $   -         $  -
                              =============== ================ ============== ================

</TABLE>


<TABLE>
<PAGE>
                       VININGS INVESTMENT PROPERTIES TRUST
             SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
                                DECEMBER 31, 1996




<CAPTION>
                                                                                          Gross amounts at which
                                              Initial Cost to Trust                      carried at close of period
                                              ---------------------                    -------------------------------
                                                                      Improvements
                                                                       Capitalized
                                                       Buildings and  Subsequent to                Buildings and
Description                   Encumbrance     Land     Improvements    Acquisition        Land      Improvements     Total
-----------------------------------------------------------------------------------------------------------------------------

<S>                          <C>           <C>         <C>             <C>             <C>         <C>           <C>
Peachtree Business Center    $ 1,718,104   $  400,000  $ 1,300,000     $1,088,124      $  400,000  $ 2,388,124   $ 2,788,124

The Thicket Apartments         7,319,668    1,070,500    7,590,400        158,968       1,070,500    7,749,368     8,819,868

Windrush Apartments            6,464,898    1,414,000    6,141,000           -          1,414,000    6,141,000     7,555,000
                             ------------------------------------------------------------------------------------------------
Totals                       $15,502,670   $2,884,500  $15,031,400     $1,247,092      $2,884,500  $16,278,492   $19,162,992
                             ================================================================================================



                                                Life on which                    Date of
                               Accumulated      Depreciation        Date         Original
Description                    Depreciation     is Computed       Acquired     Construction
---------------------------------------------------------------------------------------------

Peachtree Business Center    $   450,953         5-40 Years         4/90           1984

The Thicket Apartments           162,965         5-40 Years         6/96           1989

Windrush                              -          5-40 Years        12/97           1983
                             ----------------------------------------------------------------
Totals                       $ 1,036,311
                             ============

The accompanying notes are an integral part of this schedule.

</TABLE>

<PAGE>

                       VININGS INVESTMENT PROPERTIES TRUST
                              NOTES TO SCHEDULE III
                                DECEMBER 31, 1997

(A)      The  Peachtree  investment  was  acquired  through  a deed  in-lieu  of
         foreclosure of an original mortgage note investment.  In June 1996, the
         Trust  obtained  a  $2,000,000  line of  credit,  which is  secured  by
         Peachtree.  At December 31, 1997,  $1,718,104  was  outstanding  on the
         line.

(B)      The  Thicket  Apartments  was  acquired on June 28, 1996 for a purchase
         price of $8,650,000. It was financed by a mortgage loan in the original
         amount of $7,392,000  and  borrowings  from the Trust's line of credit,
         which is secured by Peachtree.

(C)      Windrush  Apartments  was acquired on December 19, 1997, for a purchase
         price  of  $7,555,000  consisting  of  the  assumption  of an  existing
         mortgage loan in the amount of $6,464,898 and other liabilities and the
         issuance  of  224,330  limited   partnership  units  in  the  Operating
         Partnership.

(D)      Gross capitalized costs of real estate assets are summarized as
         follows:

                              -------------  --------------  -------------
                                   1997            1996          1995
                              -------------  --------------  -------------


Balance at beginning of period  $11,472,454     $ 2,732,057   $7,445,666
                                -----------  --------------   -----------
   Additions during period:
       Additions                  7,555,000       8,660,900        -
       Improvements                 135,538          79,497       16,751
                                -----------  --------------   -----------
              Total additions     7,690,538       8,740,397       16,751
                                -----------  --------------   -----------
    Deductions during period:
       Hawthorne                       -               -       4,730,360
                                -----------  -------------    -----------
Balance at close of period      $19,162,992     $11,472,454   $2,732,057
                                ===========  ==============   ===========


(E) Accumulated depreciation on real estate assets is as follows:


                                --------------  -----------  -----------
                                     1997           1996         1995
                                --------------  -----------  -----------


Balance at beginning of period     $  613,918     $374,524     $424,332
                                --------------  -----------  -----------
 Additions during period:
    Peachtree Business Center          74,263       76,429       75,480
    The Thicket Apartments            348,130      162,965          -
                                --------------  -----------  -----------
           Total additions            422,393      239,394       75,480
                                --------------  -----------  -----------
 Deductions during period:
     Retirements/sales                  -           -          (125,288)
                                --------------  -----------  -----------
          Total deductions              -           -          (125,288)
                                --------------  -----------  -----------
Balance at close of period         $1,036,311     $613,918     $374,524
                                ==============  ===========  ===========


<TABLE>
<CAPTION>
<PAGE>
                               INDEX TO EXHIBITS

<S>                    <C>     <C>
EXHIBIT NO.                    DESCRIPTION
----------                     ------------
       3.1             ---     Second Amended and Restated  Declaration of Trust of the Trust (incorporated by reference
                               to Exhibit 3.1 to the Trust's Registration Statement on Form S-11, No. 2-94776).

       3.2             ---     Amendment  No. 1 to the Second  Amended and  Restated  Declaration  of Trust of the Trust
                               (incorporated  by reference to Exhibit 3.3 to the Trust's  Annual Report on Form 10-K for
                               the fiscal year ended December 31, 1996, No. 0-13693).

       3.3             ---     Amendment  No. 2 to the Second  Amended and  Restated  Declaration  of Trust of the Trust
                               (incorporated  by reference to Exhibit 3.4 to the Trust's  Annual Report on Form 10-K for
                               the fiscal year ended December 31, 1996, No. 0-13693).

       3.4             ---     Amended and  Restated  Bylaws of the Trust  (incorporated  by reference to Exhibit 3.2 to
                               the Trust's Registration Statement on Form S-11, No. 2-94776).

      10.1             ---     Amended and Restated Agreement of Limited  Partnership of Vinings Investment  Properties,
                               L.P. (filed herewith).

      10.2             ---     First Amendment to the Amended and Restated  Agreement of Limited  Partnership of Vinings
                               Investment Properties, L.P. (filed herewith).

      10.3             ---     Second Amendment to the Amended and Restated Agreement of Limited  Partnership of Vinings
                               Investment Properties, L.P. (filed herewith).

      10.4             ---     Management  Contract,  dated June 25, 1996, between Thicket Apartments,  L.P. and Vinings
                               Properties,  Inc. (incorporated by reference to Exhibit 10.8 to the Trust's Annual Report
                               on Form 10-K for the fiscal year ended December 31, 1996, No. 0-13693).

      10.5             ---     Management  Contract,  dated July 6, 1990,  between PBC Acquisition,  Inc. and Carter and
                               Associates  Enterprises,  Inc.  (incorporated by reference to Exhibit 10.9 to the Trust's
                               Annual Report on Form 10-K for the fiscal year ended December 31, 1996, No. 0-13693).

      10.6             ---     Agreement to Contribute,  dated April 1, 1997,  between  Vinings  Investment  Properties,
                               L.P.  and  Windrush  Partners,  Ltd.  (incorporated  by  reference to Exhibit 10.1 to the
                               Trust's Current Report on Form 8-K filed December 29, 1997, No. 0-13693).

      10.7             ---     Amendment to Agreement to Contribute,  dated August 11, 1997,  between Vinings Investment
                               Properties,  L.P. and Windrush Partners,  Ltd. (incorporated by reference to Exhibit 10.2
                               to the Trust's Current Report on Form 8-K filed December 29, 1997, No. 0-13693).

      10.8             ---     Second  Amendment to Agreement to  Contribute,  dated October 30, 1997,  between  Vinings
                               Investment  Properties,  L.P. and Windrush Partners,  Ltd.  (incorporated by reference to
                               Exhibit 10.3 to the Trust's  Current  Report on Form 8-K filed  December  29,  1997,  No.
                               0-13693).

      10.9             ---     Agreement of Limited Partnership of Vinings Communities,  L.P. (incorporated by reference
                               to Exhibit  10.1 to the Trust's  Current  Report on Form 8-K/A  filed March 3, 1998,  No.
                               0-13693).

      10.10            ---     Management  Contract  dated  December  19, 1997  between  Vinings  Communities,  L.P. and
                               Vinings Properties, Inc. (filed herewith).

      10.11            ---     Limited Warranty Deed, dated December 19, 1997, by and between  Windrush  Partners,  L.P.
                               and Vinings Communities,  L.P.  (incorporated by reference to Exhibit 10.2 to the Trust's
                               Current Report on Form 8-K/A filed March 3, 1998, No. 0-13693).

      10.12            ---     Assumption  Agreement,  dated December 19 1997, by Vinings Communities,  L.P. in favor of
                               Reilly Mortgage  Group,  Inc.  (incorporated  by reference to Exhibit 10.3 to the Trust's
                               Current Report on Form 8-K/A filed March 3, 1998, No. 0-13693).

      10.13            ---     Commercial  Credit Agreement  between Hardwick Bank and Trust Company and the Trustees of
                               the Trust dated June 28, 1997 (filed herewith).

      21.1             ---     Subsidiaries of the Trust (filed herewith).

      27               ---     Financial Data Schedule (filed herewith).

</TABLE>