FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                              Washington, DC 20549


[X]  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934

                       For the period ended March 31, 1999


                         Commission File Number 0-25230



                       FIRST WASHINGTON REALTY TRUST, INC.
             (Exact name of registrant as specified in its charter)



Maryland                                                              52-1879972
(State or other jurisdiction of                                 (I.R.S. Employer
incorporation or organization)                               identification no.)



             4350 East-West Highway,  Suite 400, Bethesda,  MD 20814 (Address of
              principal executive offices) (Zip code)



Registrant's telephone number, including area code (301) 907-7800

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

Common Stock, $.01 par value, outstanding as of May 14, 1999:

                        8,603,218 Shares of Common Stock


<PAGE>








                       FIRST WASHINGTON REALTY TRUST, INC.
                                    FORM 10-Q

                                      INDEX
                                      -----








Part I:  Financial Information                                              Page
------------------------------                                              ----

Item 1.  Consolidated Balance Sheets as of March 31, 1999 (unaudited) and
              December 31, 1998                                                1

         Consolidated Statements of Operations (unaudited) for the three months
              ended March 31, 1999 and 1998                                    2

         Consolidated Statements of Cash Flows (unaudited) for the three months
              ended March 31, 1999 and 1998                                    3

         Notes to Unaudited Consolidated Financial Statements                  4

Item 2.  Management's Discussion and Analysis of Financial Condition and Results
              of Operations                                                    9

Item 3.   Qualitative and Quantitative Disclosures about Risk                 12

Part II:  Other Information
---------------------------

Item 2.  Market for the Registrant's Common Equity and Related Shareholders
              Matters                                                         12

Item 6.  Exhibits and Reports on Form 8-K                                     12

Signatures                                                                    13



<PAGE>




              FIRST WASHINGTON REALTY TRUST, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                    (dollars in thousands except share data)

                                   -----------

                                               March 31,            December 31,
                                                 1999                    1998 
                                                 ----                    ---- 
                                              (unaudited)
                                     ASSETS

Rental properties:
  Land                                          $111, 767              $108,562
  Buildings and improvements                      461,849               447,584
                                                 --------              --------
                                                  573,616               556,146
Accumulated depreciation                          (55,481)              (51,475)
                                                 ---------             ---------
Rental properties, net                            518,135               504,671

Cash and equivalents                                4,611                 3,163
Tenant receivables, net                             9,913                 9,463
Deferred financing costs, net                       4,964                 1,921
Other assets                                       11,289                13,736
                                              -----------           -----------

          Total assets                           $548,912              $532,954
                                                 ========              ========


                      LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:
  Mortgage notes payable                         $262,324              $244,113
  Debentures                                       25,000                25,000
  Accounts payable and accrued expenses            10,557                11,542
                                              -----------           -----------

          Total liabilities                       297,881               280,655

Minority interest                                  65,613                66,218

Commitments and Contingencies

Stockholders' equity:
  Convertible preferred stock $.01 par 
     value, 3,800,000 shares designated; 
     2,315,469 and 2,314,189 issued and 
     outstanding, respectively(aggregate 
     liquidation preference of $57,887 
     and 57,855 respectively)                          23                    23
  Common stock $.01 par value, 90,000,000 
     shares authorized; 8,603,218 and 
     8,566,985 shares issued and outstanding, 
     respectively                                      86                    86
  Additional paid-in capital                      219,405               218,345
  Accumulated distributions in excess of 
     earnings                                     (34,096)              (32,373)
                                                 ----------          -----------

          Total stockholders' equity              185,418               186,081
                                                 --------            ----------

          Total liabilities and stockholders' 
          equity                                 $548,912              $532,954
                                                 ========              ========



        The                  accompanying  notes are an  integral  part of these
                             consolidated financial statements.

                                        1

<PAGE>



              FIRST WASHINGTON REALTY TRUST, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                      (in thousands, except per share data)

                                   (unaudited)
                                     -------

                                                          For three months ended
                                                                   March 31, 
                                                          ----------------------

                                                          1999             1998
                                                          ----             -----
         Revenues:
              Minimum rents                               $15,976       $12,928
              Tenant reimbursemen                           4,298         3,088
              Percentage rents                                381           396
              Other income                                    470           228
                                                          --------      -------
                  Total revenues                           21,125        16,640
                                                          -------       -------

         Expenses:
              Property operating and maintenance            5,205         4,143
              General and administrative                    1,095           837
              Interest                                      5,525         4,851
              Depreciation and amortization                 4,212         3,265
                                                          -------       -------
                  Total expenses                           16,037        13,096
                                                          -------      --------

              Income before gain on sale of properties,  income from  Management
               Company,  extraordinary item, minority interest and distributions
               to Preferred
               Stockholders                                 5,088         3,544

              Gain on sale of properties                        0         1,683

              Income from Management Company                   85           280
                                                          -------         -----

              Income before extraordinary item,
                minority interest and distributions
                to Preferred Stockholders                   5,173         5,507

              Extraordinary item - loss on early
                extinguishment of debt                          0          (358)
                                                          -------         -----

              Income before minority interest and
                distributions to Preferred Stockholders     5,173         5,149

              Income allocated to minority interest        (1,306)       (1,065)
                                                        ----------    ----------
              Income before distributions to
                Preferred Stockholders                      3,867         4,084
              Distributions to Preferred Stockholders      (1,410)       (1,410)
                                                           -------       -------
              Income allocated to Common Stockholders      $2,457        $2,674 
                                                        =========      =========

              Earnings per Common Share - Basic
                  Income before extraordinary item          $0.29         $0.41
                  Extraordinary item                         0.00         (0.05)
                                                        ---------      ---------
                  Net income                                $0.29         $0.36 
                                                        =========      =========
              Earnings per Common Share - Diluted
                  Income before extraordinary item          $0.28         $0.41
                  Extraordinary item                         0.00         (0.05)
                                                         --------      ---------
                  Net income                                $0.28         $0.36 
                                                          =======      =========
              Shares of Common Stock -   Basic              8,575         7,380
                                                        =========      =========
              Shares of Common Stock -  Diluted             8,649         7,481
                                                        =========      =========
              Distributions per share                     $0.4875       $0.4875
                                                        =========      =========


              The      accompanying   notes  are  an  integral   part  of  these
                       consolidated financial statements.

                                        2

<PAGE>



              FIRST WASHINGTON REALTY TRUST, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                             (Dollars in thousands)
                                   (unaudited)
                                    --------
                                                      For three months ended
                                                             March 31,
                                                      ----------------------    
                                                    1999                   1998
                                                    ----                   ----

Operating Activities:
  Income before distributions to 
     Preferred Stockholders                       $3,867                 $4,084
  Adjustment to reconcile net cash 
     provided by operating activities:
    Income allocated to minority interest          1,306                  1,065
    Depreciation and amortization                  4,212                  3,265
    Gain of sale of rental properties                  0                 (1,683)
    Loss on early extinguishment of debt               0                    358
    Amortization of deferred financing costs 
     and loan premiums                              (203)                  (120)
    Equity in earnings of Management Company          35                   (160)
    Compensation paid or payable in company 
     stock                                           286                    323
    Provision for uncollectible accounts             540                    627
    Recognition of deferred rent                    (319)                  (145)
    Net changes in:
      Tenant receivables                            (671)                    22
      Other assets                                   394                    (40)
      Accounts payable and accrued expenses         (124)                  (652)
                                                 --------               --------
         Net cash provided by operating 
          activities                               9,323                  6,944
                                                 --------               --------

Investing Activities:
  Additions to rental properties                  (2,296)                (1,914)
  Acquisition of rental properties               (10,344)               (17,989)
  Proceeds from sale of rental properties              0                  4,253
                                                 --------               --------
         Net cash used in investing activities   (12,640)               (15,650)
                                                 --------               --------

Financing Activities:
  Net proceeds from line of credit                16,800                 21,437
  Proceeds from exercise of stock options             50                     37
  Repayment of line of credit                          0                 (6,300)
  Mortgage notes principal payments               (1,167)                  (978)
  Additions to deferred financing costs           (3,311)                  (487)
  Distributions paid to Preferred Stockholders    (1,410)                (1,410)
  Distributions paid to Common Stockholders       (4,182)                (3,619)
  Distributions paid to minority interest         (2,015)                (1,185)
                                                 --------             ----------
         Net cash provided by financing 
          activities                               4,765                  7,495 
                                                 --------             ----------

  Net change in cash and equivalents               1,448                 (1,211)
  Cash and equivalents, beginning of period        3,163                  3,142
                                                 --------             ----------
         Cash and equivalents, end of period      $4,611                 $1,931
                                                 ========             ==========

              The      accompanying   notes  are  an  integral   part  of  these
                       consolidated financial statements.

                                        3

<PAGE>



              FIRST WASHINGTON REALTY TRUST, INC. AND SUBSIDIARIES

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

                    (dollars in thousands, except share data)
                                    ---------

1.       Business

         General

                  First Washington Realty Trust, Inc. (the "Company") is a fully
         integrated  real estate  organization  with expertise in  acquisitions,
         property management, leasing, renovation and development of principally
         supermarket-anchored  neighborhood shopping centers that has elected to
         be taxed as a real estate  investment trust ("REIT") under the Internal
         Revenue  Code of 1986,  as amended  (the  "Code") . The Company  owns a
         portfolio of 56 retail  properties  containing a total of approximately
         6.0  million  square  feet  of  gross  leasable  area  located  in  the
         Mid-Atlantic region and the Chicago, Illinois metropolitan area.

                  The  Company  currently  owns   approximately   73.1%  of  the
         partnership  interests in First Washington  Realty Limited  Partnership
         (the  "Operating  Partnership").  All of the Company's  operations  are
         conducted through the Operating Partnership.  The Operating Partnership
         owns 38 Properties  directly and 18 Properties  are owned by lower tier
         entities  in which the  Operating  Partnership  owns a 99%  partnership
         interest and the Company (or a wholly-owned  subsidiary of the Company)
         owns a 1% interest.

                  Due to the  Company's  ability,  as the  general  partner,  to
         exercise  both  financial  and  operational  control over the Operating
         Partnership,  the Operating  Partnership is consolidated  for financial
         reporting purposes. Allocation of net income to the limited partners of
         the  Operating  Partnership  is based on their  respective  partnership
         interests and is reflected in the accompanying  Consolidated  Financial
         Statements  as  minority  interests.  Losses  allocable  to the limited
         partners  in  excess  of  their  basis  are  allocated  to  the  Common
         Stockholders  as the  limited  partners  have  no  requirement  to fund
         losses.

                  The  Operating  Partnership  also owns 100% of the  non-voting
         preferred  stock  of  First  Washington  Management,   Inc.  ("FWM"  or
         "Management Company") and is entitled to 99% of the cash flow from FWM.
         FWM  provides   management,   leasing  and  related  services  for  the
         Properties   and  to   third-party   clients,   including   individual,
         institutional and corporate property owners.

2.       Summary of Significant Accounting Policies

         Basis of Presentation

                  The unaudited interim consolidated financial statements of the
         Company  are  prepared   pursuant  to  the   Securities   and  Exchange
         Commission's  rules  and  regulations  for  reporting  on Form 10-Q and
         should be read in  conjunction  with the financial  statements  and the
         notes  thereto of the  Company's  1998 Annual  Report to  Stockholders.
         Accordingly,   certain   disclosures   accompanying   annual  financial
         statements  prepared in accordance with generally  accepted  accounting
         principles are omitted. In the opinion of management,  all adjustments,
         consisting solely of normal recurring  adjustments,  necessary for fair
         presentation of the consolidated  financial  statements for the interim
         periods have been included.  The current period's results of operations
         are not  necessarily  indicative  of results  which  ultimately  may be
         achieved for the year.

                  The consolidated  financial statements include the accounts of
         the Company and its majority  owned  entities,  including the Operating
         Partnership.  All significant  intercompany  balances and  transactions
         have been eliminated.



                                        4

<PAGE>



              FIRST WASHINGTON REALTY TRUST, INC. AND SUBSIDIARIES

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

                    (dollars in thousands, except share data)
                                    ---------


         Derivatives

                  The Company may enter into various forward  interest rate swap
         arrangements  from  time to time in  anticipation  of a  specific  debt
         transaction.  These  arrangements  are  used to  manage  the  Company's
         exposure to  fluctuations  in  interest  rates.  The  Company  does not
         utilize these arrangements for trading or speculative  purposes.  These
         arrangements,  considered  qualifying  hedges,  are not recorded in the
         financial  statements until the debt transaction is consummated and the
         arrangement  is settled.  The proceeds or payments  resulting  from the
         settlement of the  arrangement are deferred and amortized over the life
         of the debt as an  adjustment  to interest  expense.  Premiums  paid to
         purchase  interest  rate  protection  agreements  (such  as  caps)  are
         capitalized and amortized over the terms of those  agreements using the
         interest  method.   Unamortized   premiums  are  included  in  deferred
         financing costs in the  consolidated  balance sheet.  Amounts  received
         under  the  interest  rate  protection  agreements  are  recorded  as a
         reduction of interest expense.

                  With the  application  to Met Life,  (see note 6) the  Company
         executed a rate lock agreement thereby fixing the interest rate for the
         term of the loans. Accordingly, in February 1999 the Company closed out
         three forward interest rate swap arrangements which were to commence in
         1999. These  arrangements which had a combined notional amount of $73.5
         million  were  closed out at a combined  cost to the Company of $3,100.
         This  cost  which is  included  in  deferred  financing  costs  will be
         amortized  over the  life of the Met  Life  loan  using  the  effective
         interest rate method.

3.       Acquisition of Rental Properties

                  During the first three  months of 1999,  the Company  acquired
         one shopping center for an aggregate  acquisition cost of approximately
         $15,204.  All the  acquisitions  were  accounted for using the purchase
         method of accounting  and the operations of the property is included in
         the Company's Statement of Operations from the date of acquisition. The
         following is a summary of the acquisition transaction:

Date      Property                          Total         Anchor         Anchor
Acquired    Name       Location     GLA     Cost          Tenant         (GLA) 
--------  --------     --------     ---     -----         ------         ------

1/99      Kamp         Fairfax,
          Washington   Virginia    71,825  $15,204      Border Books     30,000

The acquisition was financed as follows:

           Number of
Property   Partnerships  Market  Assumed Mortgage   Line of Credit
Name         Units       Value       Debt (1)            Draw      Cash   Total
--------   ------------  ------  ----------------   -------------  ----   -----

Kamp            -           -         $3,045            $9,800    $2,359 $15,204
Washington           



                                        5

<PAGE>



(1)  Includes loan premiums.
(2)  Includes  net proceeds  from the sale of  properties  that  occurred in the
     fourth quarter of 1998.  Approximately  $1,814 of net proceeds were used to
     acquire Kamp Washington in a Section 1031 tax free exchange.

                  The following  unaudited pro forma condensed  combined results
         of  operations  are presented as if the  acquisitions  and sales of the
         rental properties that occurred during 1998 and 1999, and the July 1998
         offering had occurred on January 1, 1998.  The proforma  statements are
         provided for  information  purposes only.  They are based on historical
         information  and do not  necessarily  reflect the actual  results  that
         would  have  occurred  nor are they  necessarily  indicative  of future
         results of operations of the Company.

                                        6

<PAGE>



              FIRST WASHINGTON REALTY TRUST, INC. AND SUBSIDIARIES

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

                    (dollars in thousands, except share data)
                                    ---------




                                                      For the three months ended
                                                                March 31,    
                                                      --------------------------
                                                                     (unaudited)
                                                         1999               1998
                                                         ----               ----
           Pro forma Total Revenues                    $21,125           $19,098
                                                       =======           =======
           Pro forma net income                        $ 2,457           $ 2,431
                                                       =======           =======
           Pro forma earnings per Common 
               Share - Basic                           $  0.29           $  0.28
                                                       =======           =======
           Pro forma earnings per Common 
               Share - Diluted                         $  0.28           $  0.28
                                                       =======           =======


4.       Summary of Noncash Investing and Financing Activities

         Significant  noncash  transactions for the three months ended March 31,
1999 and 1998 were as follows:


                                                          1999              1998
                                                          ----              ----

                  Liabilities assumed in acquisition 
                    of rental properties                $3,045            $5,400
                  Common units in the Operating 
                    Partnership issued in connection 
                    with the acquisition of rental 
                    properties                             -              $5,384
                  Increase in minority interest's 
                    ownership of the Operating 
                    Partnership                           $104            $2,125
                  Accrued compensation paid 
                    through the issuance of Common 
                    Stock                               $1,116              $760



                                        7

<PAGE>



              FIRST WASHINGTON REALTY TRUST, INC. AND SUBSIDIARIES

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

                    (dollars in thousands, except share data)
                                    ---------



5.       Business Segments

         The Company  owns one  property  type only i.e.  neighborhood  shopping
centers.  The Company's  management  makes decisions on allocation of resources,
designs compensation  packages and performs internal financial analysis based on
the following business segments:

                                     Retail        FWM,
                                     Properties    Inc.       Other (1)    Total
                                     ----------    ---------  ---------    -----

Three months ended March 31, 1999:
Revenues                                 $20,806      $1,810   ($1,491)  $21,125
Operating and maintenance expenses         5,205       1,725    (1,725)    5,205
                                         -------       -----    -------   ------
Income from operations                   $15,601         $85     $ 234   $15,920
                                        ========       =====     =====   =======
Commercial real estate property
 expenditures                            $17,404      $  -       $  -    $17,404
                                        ========      ======     =====   =======
Segment assets at March 31, 1999        $548,912      $  -       $  -   $548,912
                                        ========      ======     =====  ========

Three months ended March 31, 1998:
Revenues                                 $16,495      $2,045   ($1,900)  $16,640
Operating and maintenance expenses         4,143       1,765    (1,765)    4,143
                                         -------      ------    -------   ------
Income from operations                   $12,352        $280     ($135)  $12,497
                                         =======        ====     ======  =======
Commercial real estate property
 expenditures                            $28,309      $  -       $  -    $28,309
                                        ========      ======     ======  =======
Segment assets at March 31, 1998        $456,872      $  -       $  -   $456,872
                                        ========      ======     ====== ========

         The following  table  reconciles  income from operations for reportable
segments  to  income  (loss)  before  extraordinary  items  as  reported  in the
Consolidated Statements of Operations.

                                                     Three months ended March 31
                                                     ---------------------------

                                                       1999                 1998
                                                       ----                 ----

Income from operations for reportable segments       $15,920            $12,497
General and administrative expenses                   (1,095)              (837)
Interest expense                                      (5,525)            (4,851)
Depreciation and amortization                         (4,212)            (3,265)
Income allocated to minority interest                 (1,306)            (1,065)
Distributions to Preferred Stockholders               (1,410)            (1,410)
Income from Management Company                            85                280
Gain on sale of properties                               -0-              1,683
                                                      -------            -------
Income before extraordinary items                      $2,457            $3,032
                                                      =======            =======



                                        8

<PAGE>



(1)  Represents the adjustment for  straight-lining  of rents and reflecting the
     net income from FWM using the equity method of accounting.

6.   Subsequent Events

     On April 16,  1999,  the Board of  Directors  declared  a  distribution  of
$0.4875 and $0.6094 per share of Common Stock and Preferred Stock,  respectively
to shareholders of record as of May 1, 1999, payable on May 15, 1999.

     In April 1999,  Metropolitan  Life Insurance  Company  approved the pending
application  for six loans totaling $75.0 million ("Met Life Loan"),  subject to
final   environmental   reviews  being  performed  at  some  of  the  collateral
properties.  In April 1999, two of the six loans were closed  totaling  $17,600.
The  proceeds  of  these  loans  were  used  to  pay  off  the  maturing   loans
collateralized by Mallard Creek and McHenry Commons Shopping Centers.

Item 2.  Management's Discussion and Analysis of Financial Condition and Results
         of Operation

Overview

     The following  discussion  should be read in conjunction with the "Selected
Consolidated  Financial  Information"  and the  Financial  Statements  and notes
thereto of the Company  appearing  elsewhere  in this Form 10-Q.  Dollars are in
thousands except per share data.

Comparison  of the three  months  ended March 31, 1999 to the three months ended
March 31, 1998

     For the three  months  ended March 31,  1999,  the net income  allocated to
common  stockholders  decreased  by $217 or 8.1%  from  $2,674 to  $2,457,  when
compared to the three months ended March 31,  1998,  primarily  due to a gain on
sale of properties of $1,683 recorded  during the first quarter of 1998,  offset
by an increase in revenues  which were  primarily due to the purchase of Watkins
Park Plaza in March 1998,  Parkville  Shopping  Center in April  1998,  Elkridge
Corners  Shopping  Center in May 1998,  Village  Shopping  Center in June  1998,
Wilston Centre I, Wilston Centre II and Town Center at Sterling in November 1998
(the "1998  Acquisitions"),  and Kamp  Washington  in  January,  1999 (the "1999
Acquisition").

     Total revenues  increased by $4,485 or 27.0%, from $16,640 to $21,125,  due
primarily to an increase in minimum rents of $3,048 and tenant reimbursements of
$1,210.  The  increases  were  primarily due to the 1998  Acquisitions  and 1999
Acquisitions.

     Property  operating and maintenance  expense increased by $1,062, or 25.6%,
from  $4,143 to $5,205,  due  primarily  to the 1998  Acquisitions  and the 1999
Acquisitions.  General and  administrative  expenses increased by $258 or 30.8%,
from $837 to $1,095 due  primarily  to an  increase  in the  amount of  internal
preacquisition  costs of $157. Prior to March 19, 1998, internal  preacquisition
costs were capitalized and included in the cost of acquiring rental properties.

     Interest  expense  increased by $674,  or 13.9%,  from $4,851 to $5,525 due
primarily  to the  increased  mortgage  indebtedness  associated  with  the 1998
Acquisitions and the 1999 Acquisitions.  The average debt outstanding  increased
from $244.4 million for 1998 to $278.2 million for 1999 and the weighted average
interest rate remained constant at 7.9%.

     Depreciation and  amortization  expenses  increased by $947 or 29.0%,  from
$3,265  to  $4,212,  primarily  due  to  the  1998  Acquisitions  and  the  1999
Acquisitions.

     There were no sales of properties or extraordinary  losses during 1999. For
the same period in 1998,  there was a $1,683 gain on sale of  properties,  and a
$358 extraordinary loss due to the early extinguishment of debt.



                                        9

<PAGE>



     Income  allocated  to minority  interests  increased  by $241 or 22.6% from
$1,065  to  $1,306  primarily  due to an  increase  in the  minority  interests'
ownership of the Operating Partnership from 21.2% to 26.9%.

     Earnings per Common Share-Basic  decreased from $0.36 to $0.29 due to items
that  occurred  in 1998 but not in  1999.  In  1998,  there  was gain on sale of
properties of $1,683 and an extraordinary  loss on early  extinguishment of debt
of $358. These items did not occur in 1999. If not for these items, Earnings per
Common Share-Basic for 1998 would have been $0.18.

Liquidity and Capital Resources

Indebtedness

     As of March 31, 1999, the Company had total  indebtedness of  approximately
$287.3 million  (including $25.0 million of debentures and approximately  $262.3
million  of  mortgage  indebtedness).  The  mortgage  indebtedness  consists  of
approximately  $255.6  million  in  indebtedness  collateralized  by 46  of  the
Properties and tax-exempt bond financing  obligations issued by the Philadelphia
Authority for Industrial  Development (the "Bond  Obligations") of approximately
$6.7  million  collateralized  by  one  of  the  properties.  Of  the  Company's
indebtedness,  $39.3 million (13.7%) is variable rate  indebtedness,  and $248.0
million  (86.3%)  is at a  fixed  rate.  The  effective  interest  rates  of the
indebtedness  range from 4.5% to 9.8%, with a weighted  average interest rate of
7.8%,  and will mature  between 1999 and 2014. A large  portion of the Company's
indebtedness  will  become  due by 2000,  requiring  balloon  payments  of $88.9
million in 1999, and $24.4 million in 2000.  From 1999 through 2014, the Company
will have to  refinance  an  aggregate  of  $249.2  million.  Since the  Company
anticipates that only a small portion of the principal of such indebtedness will
be repaid  prior to  maturity  and the Company  will likely not have  sufficient
funds on hand to repay such  indebtedness,  the Company  will need to  refinance
such indebtedness  through  modification or extension of existing  indebtedness,
additional   debt  financing  or  through  an  additional   offering  of  equity
securities.

     The Company currently has two collateralized revolving lines of credit (the
"Lines of Credit"). The Company has a collateralized revolving Line of Credit of
up to $45,000 with Union Bank of  Switzerland.  This line is  collateralized  by
seven properties (Kenhorst Plaza,  Shoppes of Graylyn,  Watkins Park Plaza, Four
Mile Fork, Takoma Park,  Centre Ridge Marketplace and Newtown Square).  The line
matures on January  31,  2001 and loans  under this line will bear  interest  at
LIBOR plus one  percent  (1%).  The  Company  has an  additional  collateralized
revolving Line of Credit of up to $5,775 from First Union Bank. Loans under this
line will bear  interest  at LIBOR plus two  percent  (2%) per  annum,  and will
mature on August  31,  1999.  This  Line of  Credit is  collaterized  by a first
mortgage lien on Brafferton  Shopping  Center.  As of March 31, 1999,  there was
$26,000 outstanding under the Lines of Credit.

Liquidity

     The Company expects to meet its short-term liquidity requirements generally
through its working  capital,  net cash provided by operations  and draws on the
Lines of Credit.  The Company  believes that the foregoing  sources of liquidity
will be sufficient to fund liquidity needs through 2000.

     The Company expects to meet certain long-term  liquidity  requirements such
as development, property acquisitions,  scheduled debt maturities,  renovations,
expansions  and  other  non-recurring  capital  improvements  through  long-term
secured  and  unsecured  indebtedness,  including  the Lines of  Credit  and the
issuance of additional equity securities.  The Company also expects to use funds
available under the Lines of Credit to fund acquisitions, development activities
and capital improvements on an interim basis.



                                       10

<PAGE>



     The  Company  has  elected  to  qualify  as a REIT for  federal  income tax
purposes  commencing  with its tax year ended December 31, 1994. To qualify as a
REIT, the Company is required,  among other items, to pay  distributions  to its
shareholders of at least 95% of its taxable income.  The Company intends to make
quarterly distributions to its shareholders from operating cash flow.

Other
-----

Year 2000 Issue

     The "Year 2000  Issue" is the  result of many  existing  computer  programs
using only the last two  digits to refer to a year.  Therefore,  these  computer
programs may not properly  recognize a year that begins with "20" instead of the
familiar "19". If not corrected, many computer applications could fail or create
erroneous results.

     The  Company  is in the  process  of  conducting  a review of its  computer
systems to identify  which  systems could be affected by the "Year 2000" problem
and to what extent such  problems  will have an impact on the Company 's ability
to conduct its business.

         The Company has developed a Year 2000  Compliance  Plan ("The Plan") to
address these issues.  The Plan is being managed by two of the Company's  senior
executives and has been approved by senior management.  The progress of the Plan
is being monitored by the Company's Board of Directors. The Plan focuses on four
major  components:  IT systems  such as the  Company's  accounting  and property
management  software packages and related  hardware;  non-IT systems such as the
Company's  telephone system,  voice mail system and other office equipment;  the
state of readiness of the Company's critical trading partners such as its banks,
utilities and tenants;  and embedded systems,  particularly those located at the
Company's Retail Properties such as sprinkler  systems,  security systems,  etc.
(Note:  the Retail  Properties  access does not rely on elevator service because
the  structures are no higher than two stories.) The Plan contains ten phases as
follows:

                                    Estimated               Estimated
Phase Description                   Start Date           Completion Date
-----------------                   ----------           ---------------

1. Educate senior management         Commenced              Completed
2. Designate a Plan manager          Commenced              Completed
3. Inventory all systems             Commenced              June 1, 1999
4. Contact suppliers of systems      Commenced              Mail by July 1, 1999
5. Send questionnaire to tenants     All have been mailed   Currently receiving 
                                                                       responses
6. Send questionnaire to other 
     critical trading partners       Commenced              Mail by July 1, 1999
7. Prioritize problems
     (critical vs. non-critical)     Commenced              July 1, 1999
8. Identify solutions 
     (repair or replace)             Commenced              August 1, 1999
9. Test Solutions                    July 1, 1999           September 30, 1999
10.Anticipate contingencies 
     including the most reasonably 
     likely worst case scenarios     Commenced              Continuous

         The   Company   has   incurred   approximately   $20  to  date  in  the
implementation  of the Plan. These costs have primarily been incurred to upgrade
the desktop PC's at the Company's home office.  The Company has determined  that
implementing  the Plan will  cost  less than  $100.  However,  the  Company  has
budgeted $500 to replace its current accounting and property management software
system. Although the Company believes that the current system is materially Year
2000  compliant  the  Company  has  decided to migrate  because of the  improved
technology and reporting capabilities of the new system. The Company anticipates
going live on the new system by October 1, 1999. These costs will be funded from
the Company's cash flow. The Plan efforts will be primarily staffed by employees
of the Company.



                                       11

<PAGE>



         The most  reasonably  likely worst case  scenario is that the Company's
tenants are delayed in  generating  their rental  payments due to their own Year
2000 IT problems. If this occurs the Company's property managers will attempt to
accelerate  rental payments by requesting  manual checks by personally  visiting
the tenants or by contacting the appropriate  personnel at the tenants' accounts
payable  departments.  Also, the Company will have available its Lines of Credit
to fund immediate cash flow needs if such delay occurs.

         The Company  presently  believes that the Year 2000 issue will not pose
significant  operational  problems  for the Company.  However,  if all Year 2000
issues are not properly  identified,  or if assessment,  remediation and testing
are not effected  timely or accurately with respect to Year 2000 issues that are
identified,  there  can be no  assurance  that  the  Year  2000  issue  will not
materially adversely affect the Company's results of operations. Also, there can
be no assurance that the Year 2000 issues of the Company's  suppliers,  vendors,
tenants and other important  trading  partners will not have a material  adverse
impact on the Company's business or results of operations.

         The  costs  of the  Company's  Year  2000  identification,  assessment,
remediation and testing  efforts and the dates on which the Company  believes it
will complete such efforts are based upon  management's  best  estimates,  which
were derived using numerous assumptions  regarding future events,  including the
continued availability of certain resources,  third-party remediation plans, and
other factors.  There can be no assurance that these  estimates will prove to be
accurate,  and actual  results  could  differ  materially  from those  currently
anticipated.  Specific  factors  that  could  cause  such  material  differences
include,  but are not limited to, the availability and cost of relevant computer
codes and embedded technology,  and similar uncertainties.  Although some of the
Company's agreements with suppliers and contractors contain provisions requiring
such parties to indemnify the Company under some circumstances,  there can be no
assurance that such  indemnification  agreements will cover all of the Company's
liabilities  and costs  related to claims by third  parties  related to the Year
2000 issue.

Item 3.  Qualitative and Quantitative Disclosure about Market Risk

         As of March 31, 1999,  there has been no significant  changes in market
risks of the Company since December 31, 1999. Refer to the Annual Report on Form
10K for disclosure.

                                     Part II

OTHER INFORMATION
-----------------

Item 2.        Recent Sales of Unregistered Equity Securities

               None

Item 6.        Exhibits and Reports on Form 8-K

(a)            Exhibits

         27    Financial Data Schedule
-----------------------------------------------------------------------


(b)      Reports on Form 8-K.

         An interim report on Form 8-K was filed on March 10, 1999 reporting the
acquisition of two retail properties.

         Three  interim  reports  on Form 8-K  were  filed  on  March  24,  1999
including certain exhibits thereto.

         An  interim  report on Form 8-K was filed on March 24,  1999  regarding
Risk Factors.



                                       12

<PAGE>





                                   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.


                       FIRST WASHINGTON REALTY TRUST, INC.


       Date:     May 14, 1999                  /s/ William J. Wolfe             
                                            ------------------------------------
                                            By:    William J. Wolfe
                                                   President and
                                                   Chief Executive Officer


       Date:     May 14, 1999                  /s/ James G. Blumenthal          
                                            ------------------------------------
                                            By:    James G. Blumenthal
                                                   Executive Vice President and
                                                   Chief Financial Officer

                                       13

<PAGE>