<PAGE>   1
                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON D.C. 20549
                                    FORM 10-Q


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

For the quarterly period ended September 30, 1996

                                       OR

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

For the transition period from              to
                               -------------  -------------

Commission file number 0-27562

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

            MARYLAND                                             13-3849655
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)

747 Third Avenue, New York, N.Y.                                           10017
(Address of principal executive offices)                              (Zip Code)

                                  212-702-8561
              (Registrant's telephone number, including area code)


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

Number of shares of beneficial interest ($.01 par value) of the Registrant
outstanding as of November 4, 1996:  3,561,553.
<PAGE>   2
ATLANTIC REALTY TRUST               FORM 10-Q                 SEPTEMBER 30, 1996

                                    I N D E X


<TABLE>
<CAPTION>
Part I. FINANCIAL INFORMATION                                 PAGE NO.
                                                              --------
<S>                                                           <C>
Item 1. Financial Statements

   Statements of Net Assets in Liquidation
   September 30, 1996 and May 10, 1996 (Date of Transfer).....   3

   Statements of Changes in Net Assets in Liquidation - 
   Periods July 1, 1996 through September 30, 1996, 
   May 11, 1996 through June 30, 1996 and 
   April 1, 1996 through May 10, 1996 (Date of Transfer)......   4

   Notes to Financial Statements..............................   5

Item 2.

  Management's Discussion of Liquidation Activities...........   8

Part II.  OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K......................   9
</TABLE>

                                       -2-
<PAGE>   3
ATLANTIC REALTY TRUST              FORM 10-Q                 SEPTEMBER 30, 1996

                         PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL  STATEMENTS


               STATEMENTS OF NET ASSETS IN LIQUIDATION (UNAUDITED)
                        (LIQUIDATION BASIS OF ACCOUNTING)



<TABLE>
<CAPTION>                                       SEPTEMBER 30,         MAY 10, 1996
                                                     1996          (DATE OF TRANSFER)  
                                              -----------------    ------------------
<S>                                             <C>                    <C>
  ASSETS:

  Investment in Real Estate                     $ 36,002.000           $36,606,600
  Mortgage Loans and Interest Receivable          10,114,623            15,180,106
  Cash and Short Term Investments                  6,054,974             2,658,354
                                                ------------           -----------
    Total Assets                                  52,171,597            54,445,060
                                                ------------           -----------

  LIABILITIES:

  Loan Payable                                     2,134,563             5,849,325
  Estimated Cost of Liquidation                    2,221,286             3,731,520
                                                ------------           -----------
    Total Liabilities                              4,355,849             9,580,845
                                                 -----------           -----------


   Net Assets in Liquidation                    $ 47,815,748           $44,864,215
                                                ============           ===========
</TABLE>

                        SEE NOTES TO FINANCIAL STATEMENTS


                                      -3-
<PAGE>   4
ATLANTIC REALTY TRUST               FORM 10-Q                SEPTEMBER 30, 1996


          STATEMENTS OF CHANGES IN NET ASSETS IN LIQUIDATION (UNAUDITED)
                        (LIQUIDATION BASIS OF ACCOUNTING)

<TABLE>
<CAPTION>
                                    FOR THE PERIOD         FOR THE PERIOD        FOR THE PERIOD 
                                   7/1/96 TO 9/30/96      5/11/96 TO 6/30/96    4/1/96 TO 5/10/96
<S>                                   <C>                   <C>                   <C>           
Net Assets in Liquidation                                                                       
  Beginning of Period                 $45,036,094            $44,864,215           $       100  
                                                                                                
Net Assets Transferred to                                                                       
  Atlantic Realty Trust                                                                         
  (at Historical Cost)                     -                      -                 49,281,693  
                                                                                                
Adjustments for RPS Transaction                                                                 
  (Note 5)                                 -                      -                 (5,514,484) 
                                                                                                
Adjustments to Reflect Liquidation                                                              
  Basis of Accounting                   2,779,654                171,879             1,096,906  
                                      -----------            -----------           -----------  
Net Assets in Liquidation                                                                       
  End of Period                       $47,815,748            $45,036,094           $44,864,215  
                                      ===========            ===========           ===========  
</TABLE>
                        SEE NOTES TO FINANCIAL STATEMENTS


                                       -4-
<PAGE>   5
ATLANTIC REALTY TRUST               FORM 10-Q                SEPTEMBER 30, 1996

1.      ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

        Atlantic Realty Trust (the "Trust") a Maryland real estate investment
        trust, was formed on July 27, 1995 for the purpose of liquidating the
        mortgage loan portfolio and certain other assets and liabilities which
        were transferred to the Trust from RPS Realty Trust ("RPS") on May 10,
        1996 (the "Transaction"). The Trust adopted the liquidation basis of
        accounting as of the date of the Transaction based on its intention to
        liquidate its assets within eighteen months from the date of the
        Transaction or merge or combine operations with another real estate 
        entity.

        The interim financial data is unaudited; however, in the opinion of
        management, the Trust's interim financial data for the nine months ended
        September 30, 1996 includes all adjustments (consisting of recording the
        transfer of the net assets described above, recording the adjustments
        for the liquidation basis of accounting described below and other
        recurring adjustments) necessary for a fair presentation of the results
        of the interim period on the liquidation basis of accounting.    

        LIQUIDATION BASIS OF ACCOUNTING

        The Trust's financial statements are prepared on the liquidation basis
        of accounting. The liquidation basis of accounting is appropriate when
        liquidation appears likely and the Trust is no longer viewed as a
        going concern. Under this method of accounting, assets are stated at
        their estimated net realizable values and liabilities are stated at the
        anticipated settlement amounts.

        In determining the net realizable values of the assets, the Trust
        considered each asset's ability to generate future cash flows, offers to
        purchase received from third parties, if any, and other general market
        information. Such information was considered in conjunction with the
        Trust's plan for disposition of assets. Computations of net realizable
        value necessitate the use of certain assumptions and estimates. Future
        events, including economic conditions that relate to real estate markets
        in general, may differ from those assumed or estimated at the time such
        computations are made. There can be no assurance that the amounts
        ultimately realized will equal the amounts presented for such assets. 
        The actual value of any liquidating distributions will depend upon a 
        variety of factors including, among others, the proceeds from the sale 
        of the Trust's assets and the timing of distributions.

        The valuations presented in the accompanying Statements of Net Assets in
        Liquidation represent the estimates at the date shown, based on current
        facts and circumstances, of the estimated net realizable value of assets
        and estimated costs of liquidating the Trust. Adjustments to the net
        realizable value of assets and anticipated settlement amounts of
        liabilities may be recognized from time to time as a result of
        differences between estimated and actual amounts received and costs
        incurred, as well as additional information that may arise relating to
        the liquidation of the Trust. There can be no assurance that the net
        values ultimately realized and costs actually incurred for such assets
        will not materially differ from the amounts presented.

                                       -5-
<PAGE>   6
ATLANTIC REALTY TRUST               FORM 10-Q                 SEPTEMBER 30, 1996

2.    MORTGAGE LOANS AND INTEREST RECEIVABLE

<TABLE>
<CAPTION>
                                                                            ESTIMATED NET
                                    CURRENT   AVERAGE   MATURITY           REALIZABLE VALUE
DESCRIPTION              TYPE        RATE     ACCRUED     DATE    SEPTEMBER 30, 1996(a)    MAY 10, 1996
<S>                   <C>            <C>       <C>       <C>          <C>                  <C>         
Branhaven Plaza       Shopping Ctr.  14.25%     0.00%    Feb-97      $ 2,905,700            $ 3,365,750
Mt. Morris Commons    Shopping Ctr.  10.50%     2.00%    Jun-99        1,752,923              1,752,923
Copps Hill Plaza      Shopping Ctr.   6.00%     0.50%    Jul-96        2,856,000              2,945,251
1733 Massachusetts 
  Avenue(c)           Shopping Ctr.   8.58%     1.42%    Jun-01            --                 3,382,805
NCR Building(d)       Office Bldg.   10.00%     0.00%    Dec-95            --                   520,586
Rector                Office Bldg.    0.00%     6.00%    Mar-04        2,600,000              1,255,596
1-5 Wabash Avenue(b)  Office Bldg.    5.00%     0.00%    Mar-01            --                 1,957,195
                                                                     -----------            -----------
                                                                     $10,114,623            $15,180,106
                                                                     ===========            ===========
</TABLE>

(a)   Includes estimated cash flows using disposition periods ranging from 1
      month to 11 months. Realized values may differ depending on actual 
      disposition results and time periods.

(b)   On June 17, 1996, the Trust received proceeds of $2,150,000 from the
      repayment of the 1-5 Wabash loan.

(c)   On June 26, 1996, the Trust received proceeds of $3,382,805 from the
      prepayment of the 1733 Massachusetts Avenue loan. The proceeds consisted
      of the prepayment of the principal loan balance of $2,200,000, deferred
      interest of $375,467, current interest of $32,618, contingent interest of
      $50,187 and additional contingent interest of $724,533.

(d)   On July 12, 1996 the Trust received proceeds of $539,802 from the
      repayment of the NCR Building loan. The proceeds consisted of the
      repayment of the principal loan balance of $468,493, current interest of
      $52,093 and expenses due to the foreclosure action of $19,216.

3.    INVESTMENTS IN REAL ESTATE

<TABLE>
<CAPTION>
                                                                           ESTIMATED NET
                                                                         REALIZABLE VALUE
      PROPERTY                          LOCATION              SEPTEMBER 30, 1996(a)      MAY 10, 1996
<S>                                     <C>                        <C>   
      Hylan Shopping Center             Staten Island, NY          $29,775,000         $30,000,000
      Norgate Shopping Center           Indianapolis, IN             4,690,000           4,726,600
      9 North Wabash Building           Chicago, IL                  1,537,000           1,880,000
                                                                   -----------         -----------
                                                                   $36,002,000         $36,606,600
                                                                   ===========         ===========
</TABLE>

(a)   Includes estimated cash flows using disposition periods ranging from 3
      months to 11 months. Realized values may differ depending on actual 
      disposition results and time periods.

4.    SHARES OUTSTANDING

      The weighted average number of shares outstanding for the period ending
      September 30, 1996 was 3,563,553.

5.    SHORT-TERM INVESTMENTS

      Short-term investments at September 30, 1996 consist primarily of a 
      $4,500,000 Certificate of Deposit at a major New York bank, bearing 
      interest at a fixed rate of 4.60%.

                                       -6-
<PAGE>   7
ATLANTIC REALTY TRUST               FORM 10-Q                 SEPTEMBER 30, 1996

6.    LOAN PAYABLE

      In connection with the Transaction the Trust assumed $5,550,000 in
      indebtedness, the proceeds of which, together with existing resources of
      RPS, were used by RPS primarily for the payment of severance benefits in  
      connection with the termination of certain employment agreements of 
      approximately $3,000,000, distributions to shareholders of approximately
      $2,279,000, directors' and officers' insurance premiums of approximately
      $1,150,000 and approximately $750,000 in working capital for the Trust.
      Such indebtedness bears interest at 8.25% per annum and matures on
      November 9, 1997. The expected interest payable on the loan has been
      included in the Adjustments to reflect Liquidation Basis Accounting. The
      indebtedness is secured by a collateral assignment on the Trust's
      interest in the Hylan Shopping Center.  On July 10, 1996 the Trust
      prepaid $3,500,000 of the principal balance of such loan.

7.    TAX CONTINGENCY

      During the third quarter of 1994, RPS held more than 25% of the value
      of its gross assets in overnight Treasury Bill reverse repurchase
      transactions which the Internal Revenue Service ("IRS") may view as 
      non-qualifying assets for the  purposes of satisfying an asset
      qualification  test applicable to REITs,  based on a Revenue Ruling
      published in 1977 (the  "Asset Issue"). RPS has requested that the IRS
      enter into a closing agreement  with RPS that the Asset Issue will not
      impact RPS' status as a REIT. The IRS has deferred any action relating
      to the Asset Issue pending the further examination of RPS' 1991-1994 tax
      returns (the "RPS Audit," and together with the Asset Issue, the "RPS
      Tax Issues"). Based on developments in the law which occurred since
      1977, RPS' tax counsel, rendered an opinion that RPS' investment in
      Treasury Bill repurchase obligations would not adversely affect its REIT
      status. However, such opinion is not binding upon the IRS. In connection
      with the Transaction, the Trust assumed all tax liability arising out of
      the RPS Tax Issues (other than liability that relates to events occurring
      or actions taken by RPS following the date of the Transaction). In
      connection with the assumption of such potential liabilities, the Trust
      and RPS entered into a tax agreement which provides that RPS (currently
      known as Ramco Gershenson Properties Trust) (under the direction of its
      Continuing Trustees), and not the Trust, will control, conduct and effect
      the settlement of any tax claims against RPS relating to the RPS Tax
      Issues. Accordingly, the Trust does not have any control as to the timing
      of the resolution or disposition of any such claims and no assurance can
      be given that the resolution or disposition of any such claims will be on
      terms or conditions as favorable to the Trust as if they were resolved or
      disposed of by the Trust. RPS and the Trust also have received an opinion
      from legal counsel that, to the extent there is a deficiency in RPS'
      taxable income arising out of the IRS examination and provided RPS timely
      makes a deficiency dividend (i.e. declares and pays a distribution which
      is permitted to relate back to the year for which each deficiency was
      determined to satisfy the requirement that a REIT distribute 95 percent
      of its taxable income), the classification of RPS as a REIT for the
      taxable years under examination would not be affected. If,
      notwithstanding the above-described opinions of legal counsel, the IRS
      successfully challenged the status of RPS as a REIT, the REIT status of
      the Trust could be adversely affected. Management estimates that this
      would have an effect of approximately $600,000 for 1995 and $400,000 for
      1994 which has not been provided in the financial statements of RPS or
      the Trust. Such amounts do not include potential penalties and interest.
      The possible effect on the Trust for subsequent periods could be
      significant depending on the taxable income of either RPS or the Trust in
      such periods. As of September 30, 1996, the Trust has not been required
      to perform its indemnity with respect to the RPS Tax Issues and
      Management is not aware of any determination of tax liability by the
      IRS against RPS.

8.    SUBSEQUENT EVENTS

      On November 1, 1996, the Trust received proceeds of $2,835,665 from the
      prepayment of the Branhaven Plaza mortgage loan. The proceeds consisted of
      the prepayment of the principal loan balance of $2,800,000, current
      interest of $34,358 and deferred interest of $1,307.
        
        


                                     -7-

<PAGE>   8
ATLANTIC REALTY TRUST               FORM 10-Q                SEPTEMBER 30, 1996

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 
         AND LIQUIDATION ACTIVITIES
         
      CAPITAL RESOURCES AND LIQUIDITY
Upon consummation of the Transaction, the Trust owned seven mortgage loans and
three retail properties (which include the Hylan Plaza Shopping Center, located
in Staten Island, New York, the Norgate Shopping Center, located in
Indianapolis, Indiana and the 9 North Wabash Avenue Building, located in
Chicago, Illinois), as well as cash and certain other assets, which include
furniture, fixtures and equipment, formerly held by RPS. In addition, upon
consummation of the Transaction, the Trust assumed $5,550,000 in indebtedness
from RPS, borrowed by RPS in connection with the acquisition of certain stock
interests in Ramco-Gershenson, Inc. ("Ramco") and substantially all of the real
estate assets of Ramco's affiliates (the "Ramco Acquisition") pursuant to a
promissory note which bears interest at a rate of 8.25% and matures on November
9, 1997 (the "Promissory Note"). The Promissory Note is secured by a collateral
assignment of the Trust's interest in the Hylan Shopping Center. On July 10,
1996, the Trust repaid $3,500,000 of the principal balance of the Promissory
Note. The Trust does not intend to make new loans or actively engage in either
the mortgage lending or the property acquisition business, other than in
connection with potential workouts of certain of its mortgage loans.

The Trust's primary objective is to liquidate its assets in an eighteen month
period from the date of the Transaction while realizing the maximum values for
such assets. Although the Trust considers its assumptions and estimates as to
the values and timing of such liquidations to be reasonable, the period of time
to liquidate the assets and distribute the proceeds of such assets is subject
to significant business, economic and competitive uncertainties and
contingencies, many of which are beyond the Trust's control. There can be no
assurance that the net values ultimately realized and costs actually incurred
for such assets will not materially differ from the Trust's estimate.

The Trust believes that cash and cash equivalents on hand, proceeds generated
from the mortgage loans and real estate properties that continue to operate and
from the eventual sale of such assets will be sufficient to support the Trust's
operations and meet its obligations.

During the period ended September 30, 1996 the Trust received proceeds of
approximately $5,880,000 from the prepayment of three mortgage loans. At
September 30, 1996 the Trust owned four mortgage loans and the three retail
properties discussed above. The Trust intends to reduce to cash or cash
equivalents the mortgage loan and real property portfolio in an orderly manner
as soon as practicable and make a liquidating distribution or distributions to
its shareholders, or merge or combine operations with another real estate
entity.

                                      -8-

<PAGE>   9
ATLANTIC REALTY TRUST              FORM 10-Q                  SEPTEMBER 30, 1996

                           PART II - OTHER INFORMATION

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

A.    EXHIBITS

      27.1 Financial Data Schedule

B.    The registrant has not filed any reports on Form 8-K for the period

      

                                      -9-
<PAGE>   10
ATLANTIC REALTY TRUST               FORM 10-Q                 SEPTEMBER 30, 1996

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.




                                       ATLANTIC REALTY TRUST




Date: November 11, 1996                By:/s/ Joel Pashcow
                                       ------------------------------
                                       Joel Pashcow
                                       Chairman and President
                                       (Chief Executive Officer)



Date: November 11, 1996                By:/s/ Edwin R. Frankel
                                       ------------------------------
                                       Executive Vice President and
                                       Chief Financial Officer
<PAGE>   11
                                EXHIBIT INDEX



EXHIBIT NO.                                        DESCRIPTION


    27                                        FINANCIAL DATA SCHEDULE