<PAGE>   1
                                   FORM 10-Q
                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
 
 X  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
--- EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 1997

                                       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 April 22, 1997: 3,561,553.

<PAGE>   2


ATLANTIC REALTY TRUST              FORM 10-Q                      MARCH 31, 1997
AND SUBSIDIARY


                                   I N D E X

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

          Consolidated Statements of Net Assets in Liquidation
          March 31, 1997 and December 31, 1996..................................     3

          Consolidated Statement of Changes in Net Assets in Liquidation -
          Period January 1, 1997 through March 31, 1997.........................     4

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

Item 2.   Management's Discussion and Analysis of Financial Condition and
          Liquidation Activities................................................     8
 
Part II.  OTHER INFORMATION

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


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<PAGE>   3

ATLANTIC REALTY TRUST              FORM 10-Q                      MARCH 31, 1997
AND SUBSIDIARY



                     ATLANTIC REALTY TRUST AND SUBSIDIARY
              CONSOLIDATED STATEMENTS OF NET ASSETS IN LIQUIDATION
                       (LIQUIDATION BASIS OF ACCOUNTING)



<TABLE>
<CAPTION>
                                                                                March 31, 1997         December 31, 1996
                                                                                --------------         -----------------
<S>                                                                             <C>                    <C>
                                  ASSETS

Investments in Real Estate................................................        $36,113,000               $36,995,500
Mortgage Loans and Related Interest.......................................          7,066,836                 7,132,434
Cash and Short Term Investments...........................................          6,607,187                 7,047,098
                                                                                  -----------               -----------
      Total Assets........................................................        $49,787,023               $51,175,032
                                                                                  ===========               ===========


                                LIABILITIES

Estimated Costs of Liquidation............................................          1,870,707                 2,170,262
Distribution Payable......................................................               -                    1,389,006
                                                                                  -----------               -----------
      Total Liabilities...................................................        $ 1,870,707               $ 3.559,268
                                                                                  -----------               -----------

Net Assets in Liquidation.................................................        $47,916,316               $47,615,764
                                                                                  ===========               ===========

</TABLE>






                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


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<PAGE>   4

ATLANTIC REALTY TRUST              FORM 10-Q                      MARCH 31, 1997
AND SUBSIDIARY



                      ATLANTIC REALTY TRUST AND SUBSIDIARY
         CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS IN LIQUIDATION
                       (LIQUIDATION BASIS OF ACCOUNTING)


<TABLE>
<CAPTION>
                                                                                           For the Period
                                                                                          1/1/97 to 3/31/97
                                                                                          -----------------
<S>                                                                                        <C>
Net Assets in Liquidation Beginning of Period...........................................      $47,615,764
Adjustments to Reflect Liquidation Basis of Accounting..................................          300,552
                                                                                              -----------  
Net Assets in Liquidation...............................................................      $47,916,316
                                                                                              =========== 
</TABLE>








                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



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<PAGE>   5

ATLANTIC REALTY TRUST              FORM 10-Q                      MARCH 31, 1997
AND SUBSIDIARY



                     ATLANTIC REALTY TRUST AND SUBSIDIARY
                         NOTES TO FINANCIAL STATEMENTS

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 its interests
in real properties, 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 "Spin-Off Transaction").  The Trust had no operations from
the date of formation to the date of the Spin-Off Transaction.  The Trust
adopted the liquidation basis of accounting as of the date of the Spin-Off
Transaction based on its intention to liquidate its assets within eighteen
months from the date of the Spin-Off Transaction or merge or combine operations
with another real estate entity.

Liquidation Basis of Accounting

     As a result of the Spin-Off Transaction, the Trust has adopted the
liquidation basis of accounting.  The liquidation basis of accounting is
appropriate when liquidation appears imminent 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.

     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.  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.  The estimated
costs of liquidation represent the estimated costs of operating the Trust
through its anticipated termination.  These costs primarily include payroll,
consulting and related costs, rent, shareholder relations, legal and auditing.
The estimated costs of liquidation assume liquidation within 18 months from the
date of the Spin-Off Transaction.  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.  Because of inherent uncertainty of valuation when an entity is in
liquidation, the amounts ultimately realized from assets disposed and costs
incurred to settle liabilities may materially differ from amounts presented.

Consolidation

     The consolidated financial statements include the accounts of the Trust
and its subsidiary.  All significant intercompany accounts and transactions
have been eliminated in consolidation.



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<PAGE>   6

ATLANTIC REALTY TRUST              FORM 10-Q                      MARCH 31, 1997
AND SUBSIDIARY



                      ATLANTIC REALTY TRUST AND SUBSIDIARY
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

2.   MORTGAGE LOANS AND RELATED INTEREST

<TABLE>
<CAPTION>
                                                    CURRENT          AVERAGE                            ESTIMATED NET
                                  TYPE OF           INTEREST         ACCRUED           MATURITY       REALIZABLE VALUE
DESCRIPTION                      PROPERTY             RATE        INTEREST RATE          DATE            3/31/97 (A)
-----------                      --------           --------      -------------       ----------      ----------------
<S>                            <C>                 <C>            <C>                 <C>             <C>
Mt. Morris Commons              Shopping Ctr.        10.50%           2.00%             Jun-99           $1,970,000
Copps Hill Plaza (b)            Shopping Ctr.         6.00%           0.50%             Jul-96            2,470,800
Rector                          Office Bldg.          0.00%           6.00%             Mar-04            2,626,036
                                                                                                         ----------
                                                                                                         $7,066,836
                                                                                                         ==========
</TABLE>

-----------

(a) Includes estimated cash flows using disposition periods ranging from 2
    months to 3 months.  Realized values may differ depending on actual 
    disposition results and time periods.

(b) The Copps Hill Plaza mortgage loan has matured and is currently in default.
    All payments of interest are current.

3.   INVESTMENTS IN REAL ESTATE

<TABLE>
<CAPTION>
                                                     ESTIMATED NET
                                                    REALIZABLE VALUE
PROPERTY                        LOCATION                3/31/97(A)
--------                        --------             --------------
<S>                            <C>                   <C>  
Hylan Shopping Center           Staten Island, NY      $30,425,000
Norgate Shopping Center         Indianapolis, IN         4,610,000
9 North Wabash Building         Chicago, IL              1,078,000
                                                       -----------
                                                       $36,113,000
                                                       ===========
</TABLE>

-----------

(a) Includes estimated cash flows using disposition periods ranging from 4
    months to 7 months.  Realized values may differ depending on actual 
    disposition results and time period.

4.   SHARES OUTSTANDING

     The weighted average number of common shares outstanding for the period
ending March 31, 1997 was 3,561,553.




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<PAGE>   7

ATLANTIC REALTY TRUST              FORM 10-Q                      MARCH 31, 1997
AND SUBSIDIARY



                      ATLANTIC REALTY TRUST AND SUBSIDIARY
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

5.   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 Spin-Off 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) pursuant to a tax agreement, dated May 10, 1996, by and
between RPS and the Trust, which provides that RPS (now named 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 or that any such claims will be
resolved within 18 months from the date of the Spin-Off Transaction.  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
$0 for 1996, $600,000 for 1995 and $400,000 for prior years which have 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 March 31, 1997, 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.



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<PAGE>   8

ATLANTIC REALTY TRUST              FORM 10-Q                      MARCH 31, 1997
AND SUBSIDIARY




ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
          AND LIQUIDATION ACTIVITIES

CAPITAL RESOURCES AND LIQUIDITY

     At December 31, 1996, the Trust owned three mortgage loans and three
retail properties (Hylan Plaza Shopping Center, located in Staten Island, New
York, Norgate Shopping Center located in Indianapolis, Indiana and 9 North
Wabash Avenue Building, located in Chicago, Illinois), as well as cash and
certain other assets, which include furniture, fixtures and equipment.  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 18-month
period from the date of the Spin-Off 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 and meet its obligations. At March 31, 1997 the Trust had
approximately $6,607,000 in cash and short term investments, which amount
reflects a distribution of $1,870,707 to shareholders.

     At March 31, 1997 the Trust continued to own three mortgage loans and the
three retail properties discussed above.  The Trust intends to reduce to 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.



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ATLANTIC REALTY TRUST              FORM 10-Q                      MARCH 31, 1997
AND SUBSIDIARY



                          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 three month
     period ended March 31, 1997.




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ATLANTIC REALTY TRUST              FORM 10-Q                      MARCH 31, 1997
AND SUBSIDIARY



                                   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: May 2, 1997                               /s/ Joel M. Pashcow
                                                -------------------------
                                                Joel M. Pashcow
                                                Chairman and President
                                                (Principal Executive Officer)



Date: May 2, 1997                               /s/ Edwin R. Frankel
                                                -------------------------
                                                Edwin R. Frankel
                                                Executive Vice President,
                                                Chief Financial Officer
                                                and Secretary   
                                                (Principal Financial and
                                                Accounting Officer)