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, 1997


                          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 12, 1997:

                           5,031,807 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, 1997 (unaudited) and
         December 31, 1996                                            1

         Consolidated Statements of Operations 
         (unaudited) for the three months
         ended March 31, 1997 and 1996                                2

         Consolidated Statements of Cash Flows 
         (unaudited) for the three months
         ended March 31, 1997 and 1996                                3

         Notes to Unaudited Consolidated Financial Statements         4

Item 2.  Management's Discussion and Analysis of 
         Financial Condition and Results
         of Operations                                                8


Part II:  Other Information


Item 2.  Market for the Registrant's Common 
         Equity and Related Shareholders
         Matters                                                     10

Item 6.  Exhibits and Reports on Form 8-K                            10

Signatures                                                           12




<PAGE>



               FIRST WASHINGTON REALTY TRUST, INC. AND SUBSIDIARIES

                            CONSOLIDATED BALANCE SHEETS

                      (dollars in thousands except share data)

                                     -----------
<TABLE>
<CAPTION>

                                          March 31,            December 31,
                                            1997                   1996
                                         (unaudited)
                               ASSETS

<S>                                       <C>                   <C>
Rental properties:
  Land                                    $ 70,115              $ 61,959
  Buildings and improvements               285,942               252,276
                                         ---------              --------
                                           356,057               314,235
Accumulated depreciation                   (32,503)              (30,450)
                                         ---------             ---------
  Rental properties, net                   323,554               283,785

Cash and equivalents                         1,457                11,780
Tenant receivables, net                      5,353                 4,639
Deferred financing costs, net                4,194                 4,403
Other assets                                 7,802                 9,006
                                        ----------            ----------
          Total assets                    $342,360              $313,613
                                          ========              ========

                       LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:
  Mortgage notes payable                  $190,904              $167,047
  Debentures                                25,000                25,000
  Accounts payable and accrued expenses      9,014                 6,328
                                        ----------            ----------

          Total liabilities                224,918               198,375

Minority interest                           18,627                16,661

Stockholders' equity:
  Common stock $.01 par value, 90,000,000 
    shares authorized; 4,946,245 shares 
    issued and outstanding                      49                    49
  Convertible preferred stock $.01 par 
    value, 3,750,000 shares designated; 
    2,314,189 issued and outstanding
    (aggregate liquidation preference of 
    $57,855)                                    23                    23
  Additional paid-in capital               119,038               116,068
  Accumulated distributions in excess 
    of earnings                            (20,295)              (17,563)
                                         ----------          -----------
      Total stockholders' equity            98,815                98,577
                                          ---------             ---------

      Total liabilities and 
        stockholders' equity              $342,360              $313,613
                                          ========              ========

</TABLE>

      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

                     (dollars in thousands, except share data)

                                    (unaudited)

                                      -------
<TABLE>
<CAPTION>

                                                      For three months ended
                                                             March 31,
                                                      1997              1996
<S>                                                 <C>               <C>
Revenues:
         Minimum rents                              $10,152           $7,098
         Tenant reimbursements                        2,123            1,555
         Percentage rents                               328              195
         Other income                                   187              513
                                                   --------         --------
              Total revenues                         12,790            9,361
                                                    -------          -------

Expenses:
         Property operating and maintenance           3,574            2,541
         General and administrative                     858              586
         Interest                                     4,372            3,315
         Depreciation and amortization                2,461            1,736
                                                    -------          -------
              Total expenses                         11,265            8,178
                                                    -------          -------

Income before income from Management Company,
         minority interest and distributions to 
         Preferred Stockholders                       1,525            1,183

Income (loss) from Management Company                   163              (23)
                                                   --------          -------

Income before minority interest and 
        distributions to Preferred Stockholders       1,688            1,160

Income allocated to minority interest                  (257)            (172)
                                                    --------        ---------

Income before distributions to Preferred 
       Stockholders                                   1,431              988

Distributions to Preferred Stockholders              (1,410)          (1,410)
                                                     -------          -------

Net Income (loss) allocated to common stockholders      $21            $(422)
                                                    ========        =========

Net Income (loss) per Common Share                    $0.00           ($0.13)
                                                    ========        =========

Weighted average shares of Common Stock, 
       in thousands                                   4,946            3,191
                                                    ========        =========

Distributions per share                             $0.4875          $0.4875
                                                     =======          =======

</TABLE>


           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)
                                                       
                                   --------

<TABLE>
<CAPTION>

                                                    For the three months ended
                                                             March 31,
                                                    1997                   1996

<S>                                               <C>                      <C>
Operating activities:
  Income before distributions 
     to Preferred Stockholders                    $1,431                   $988
  Adjustment to reconcile net 
     cash provided by operating activities:
    Income allocated to minority interest            257                    172
    Depreciation and amortization                  2,461                  1,736
    Amortization of deferred financing 
     costs and loan discounts                        455                    561
    Equity in earnings of Management 
       Company                                       (43)                   143
    Compensation paid or payable in 
       company stock                                 560                    333
    Provision for uncollectible accounts             520                     (8)
    Recognition of deferred rent                    (294)                  (209)
    Gain on sale of rental property                  (45)                      -
    Net changes in:
      Tenant receivables                            (940)                  (714)
      Other assets                                 1,274                   (713)
      Account payable and accrued 
         expenses                                  2,125                     (3)
                                               ---------                 -------
         Net cash provided by 
            operating activities                   7,761                  2,286
                                               ---------               ---------

Investing activities:
  Additions to rental properties                  (4,371)                  (885)
  Acquisition of rental properties               (17,101)               (28,201)
  Proceeds from sale of rental property            1,172                     -
                                               ---------             -----------
         Net cash used in 
            investing activities                 (20,300)               (29,086)
                                                 --------               --------

Financing activities:
  Proceeds from line of credit                    17,100                  1,000
  Proceeds from mortgage notes                     1,443                 24,281
  Repayment on mortgage notes                    (11,564)                  (270)
  Additions to deferred financing costs             (343)                  (511)
  Distributions paid to Preferred 
     Stockholders                                 (1,410)                (1,410)
  Distributions paid to Common Stockholders       (2,411)                (1,555)
  Distributions paid to minority interest           (599)                  (421)
                                               ----------               --------
         Net cash provided by 
            financing activities                   2,216                 21,114
                                               ----------              ---------

  Net decrease in cash and equivalents           (10,323)                (5,686)
  Cash and equivalents, beginning of period       11,780                  7,806
                                             ------------             ----------
         Cash and equivalents, end of period      $1,457                 $2,120
                                              ===========             ==========

</TABLE>


        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. The Company owns a
         portfolio of 39 retail  properties  containing a total of approximately
         4.1  million  square  feet of  gross  leasable  area  and  two  related
         multifamily properties located in the Mid-Atlantic region.

                  The  Company,  incorporated  in  Maryland  in April  1994,  is
         self-managed  and  self-administered  and 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  currently  owns   approximately   83.8%  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 27 Properties  directly and 14 Properties  are owned by lower tier
         partnerships  or limited  liability  companies  in which the  Operating
         Partnership  owns a 99%  partnership  interest  and the  Company  (or a
         wholly-owned subsidiary of the Company) owns a 1% partnership 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") and is
         entitled  to 99% of the cash flow from FWM.  FWM  provides  management,
         leasing and related  services  for the  Properties.  In addition to the
         Properties,  FWM provides  management,  leasing and related services to
         third-party clients, including individual,  institutional and corporate
         property  owners.  FWM is also  referred  to herein as the  "Management
         Company".

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  statement  and the
         notes  thereto of the  Company's  1996 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.

                                                         4

<PAGE>



              FIRST WASHINGTON REALTY TRUST, INC. AND SUBSIDIARIES

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

                  (dollars in thousands, except share data)

                                     ---------


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

         Income/Loss per Share

                  Income/loss  per share is calculated by dividing  income after
         minority interest, less preferred distributions by the weighted average
         number of common shares outstanding during the three months ended March
         31, 1997 and 1996  respectively.  The weighted average number of common
         shares  outstanding  during  three months ended March 31, 1997 and 1996
         were 4,946,000 and 3,191,000, respectively.  Potentially dilutive items
         i.e. the exercise of  outstanding  stock options and the  conversion of
         Convertible   Preferred   Stock,   Operating   Partnership   Units  and
         Exchangeable Debentures would not have a material dilutive effect.

         Recent Accounting Pronouncements

                  Effective  for the Company's  fiscal year ending  December 31,
         1997,  the Company  will be required to adopt  Statement  of  Financial
         Accounting  Standards  No. 128,  "Earnings  per  Share." The  potential
         impact  on the  Company  of  adopting  the new  standard  has not  been
         quantified at this time. The Company  intends to adopt the statement in
         the fourth quarter of 1997.

3.       Acquisition of Rental Properties

                  On January 24, 1997,  the Company  acquired City Line Shopping
         Center, located in Philadelphia,  Pennsylvania for an approximate price
         of $14.8  million.  The shopping  center is anchored by Acme Market and
         Thrift  Drugs.  The  acquisition  was financed  through the issuance of
         approximately 143,000 Common Units to the seller of the property with a
         value of approximately $3.4 million,  assumed mortgage  indebtedness of
         approximately $10.0 million,  new indebtedness of $1.0 million and $0.4
         million in cash.  The mortgage  loan bears  interest at 8.00% per annum
         and is payable monthly based on a 24 year  amortization  schedule.  The
         loan is due in October 2005.

                  On January  28,  1997,  the  Company  acquired  Four Mile Fork
         Shopping Center located in Fredericksburg,  Virginia for an approximate
         price  of  $5.7  million.   The  center  is  anchored  by  Safeway  and
         CVS/Pharmacy.  The  acquisition  was  financed  with  proceeds  of  the
         December 1996 Offering.

                  On January 31, 1997, the Company  acquired  Shoppes of Graylyn
         located in  Wilmington,  Delaware.  The price of the  property was $7.2
         million.  The  center is  anchored  by Rite Aid.  The  acquisition  was
         financed by a $3.8 million draw on the  Company's  line of credit,  $.4
         million  from the  proceeds  of the  sale of  Thieves  Market  and $3.0
         million in cash from the proceeds of the December 1996 Offering.

                  On March 19,  1997  (effective  March 1,  1997),  the  Company
         acquired Ashburn Farms Village Center located in Ashburn,  Virginia for
         an  approximate  price of $9.2  million.  The  center  is  anchored  by
         Superfresh Supermarket. The acquisition was financed with mortgage debt
         of $6.8 million,  the issuance of approximately  55,000 Common Units to
         the seller of the property with a value of approximately  $1.2 million,
         the issuance of  approximately  9,500  Preferred Units to the seller of
         the  property   with  a  value  of   approximately   $0.2  million  and
         approximately $1.0 million in cash. The mortgage loan bears interest at
         LIBOR + 1.5% per annum and has an annual  amortization of approximately
         $.1 million. The loan is due in January 2001.

                                                         5

<PAGE>




              FIRST WASHINGTON REALTY TRUST, INC. AND SUBSIDIARIES

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

                   (dollars in thousands, except share data)

                                   ---------


                  The following  unaudited pro forma condensed  combined results
         of  operations  are  presented  as if the  acquisitions  of the  rental
         properties occurred on January 1 of the period presented.  In preparing
         the pro forma  data,  adjustments  have  been  made to assume  that the
         December 1996 Offering occurred on January 1, of the periods presented.
         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.
<TABLE>
<CAPTION>

                                              For the three months For the year
                                                   ended March 31,    ended
                                                     1997     1996 Dec. 31, 1996
                                                     ----     ---- -------------


           <S>                                       <C>      <C>       <C>
           Total revenues                            $12,790  $12,130   $49,679
           Expenses:
            Property operating and maintenance         3,574    3,263    12,562
            General and administrative                   858      586     3,137
            Interest                                   4,372    4,366    18,152
            Depreciation and amortization              2,461    2,281     9,704
                                                      ------   ------   -------
                                                      11,265   10,496    43,555
                                                      ------   ------    ------
           Income before income from Management
            Company, minority interest and 
            distributions to Preferred Stockholders    1,525    1,634     6,124
           Income from Management Company                163      (23)      221
                                                      ------  --------   ------
           Income before minority interest and
            distributions to Preferred Stockholders    1,688    1,611     6,345
           Income allocated to minority interest        (257)    (251)     (990)
                                                     -------- --------    -----
           Income before distributions to 
            Preferred Stockholders                     1,431    1,360     5,355
           Distributions to Preferred Stockholders    (1,410)  (1,410)   (5,641)
                                                      -------  -------  -------
           Net Income (loss) allocated to 
            Common Stockholders                          $21     $(50)     (286)
                                                      =======  ======= ========
           Net Income (loss) per common share         $(0.00)  $(0.01)   $(0.06)
                                                      =======  =======  =======
</TABLE>

4.       Summary of Noncash Investing and Financing Activities

         Significant  noncash  transactions for the three months ended March 31,
1997 and 1996 and were as follows:
<TABLE>
<CAPTION>

                                                       1997              1996
                                                       ----              ----

         <S>                                        <C>                <C>
         Liabilities assumed in acquisition 
          of rental properties                      $16,843                 -

         Common units in the Operating 
          Partnership issued in connection 
          with the acquisition of rental properties  $4,660            $5,646

         Preferred units in the Operating 
          Partnership issued in connection with 
          the acquisition of rental properties         $277            $1,679

         Increase in minority interest's ownership
          of the Operating Partnership               $1,709            $2,333
</TABLE>

         The above information supplements the disclosures required by Statement
of Financial Accounting Standards No. 95 - "Statement of Cash Flows."

                                                         6

<PAGE>




           FIRST WASHINGTON REALTY TRUST, INC. AND SUBSIDIARIES

           NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

                 (dollars in thousands, except share data)

                                   ---------


5.       Commitments & Contingencies

                  On March 28,  1997,  the Company  entered  into a  non-binding
         letter  of  intent  with  respect  to  the  possible  acquisition  of a
         portfolio  of up to seven  supermarket-anchored  neighborhood  shopping
         centers outside of the Mid-Atlantic region. The total consideration for
         all seven of the properties  would be  approximately  $82 million.  The
         Company has only recently begun its due diligence with respect to these
         properties. In addition to completion of satisfactory due diligence and
         entering  into  a  binding  acquisition  agreement,   there  are  other
         significant contingencies with respect to the potential consummation of
         this acquisition.

6.       Subsequent Events

                  On  April  17,  1997  the  Board  of   Directors   declared  a
         distribution  of  $0.4875  and  $.6094  per share of  Common  Stock and
         Preferred  Stock,  respectively  to shareholders of record as of May 1,
         1997, payable on May 15, 1997.

                  On April 17, 1997,  the  Company's  Registration  Statement on
         Form S-3,  which  provides for the offering from  time-to-time  of $175
         million of securities was declared effective.

                  On May 9, 1997, 85,562 common shares of stock were issued to a
         current  shareholder.  The Company  received  proceeds of approximately
         $2.0  million  which it used to pay down a portion  of its  outstanding
         line of credit.

























                                                         7

<PAGE>



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.


Comparison  of the three  months  ended March 31, 1997 to the three months ended
March 31, 1996

         For the three months ended March 31, 1997, the net income  allocated to
common  stockholders  increased  by $433,000  from a net loss of $422,000 to net
income of $21,000,  when  compared  to the three  months  ended March 31,  1996,
primarily  due to an increase in revenues off set by an increase in expenses and
an increase in the amount of income allocated to minority interests.

         Total  revenues  increased by  $3,429,000 or 36.6%,  from  9,361,000 to
12,790,000,  due  primarily to an increase in minimum  rents of  $3,054,000  and
tenant  reimbursements  of $568,000.  The  increases  were  primarily due to the
purchase of Centre Ridge  Marketplace  on March 29, 1996,  Takoma Park  Shopping
Center on April 29,  1996,  Southside  Marketplace  on June 7, 1996,  Kings Park
Shopping Center on December 19, 1996, Newtown Square Shopping Center on December
27,  1996  and  Northway  Shopping  Center  on  December  30,  1996  (the  "1996
Acquisitions"),  City Line Shopping  Center on January 24, 1997,  Four Mile Fork
Shopping Center on January 28, 1997,  Shoppes of Graylyn on January 31, 1997 and
Ashburn   Farm   Village   Shopping   Center  on  March  19,   1997  (the  "1997
Acquisitions").

         Property operating and maintenance expense increased by $1,033,000,  or
40.7%,  from  $2,541,000  to  $3,574,000,  due  primarily  to the  1996 and 1997
Acquisitions.  General  and  administrative  expenses  increased  by $272,000 or
46.4%,  due  primarily  to an  increase  in the amount of  compensation  paid or
payable in Company stock.

         Interest expense increased by $1,057,000,  or 31.9%, from $3,315,000 to
$4,372,000,  due primarily to the increase mortgage indebtedness associated with
the 1996 and 1997  Acquisitions.  The average debt  outstanding  increased  from
$153.7  million  for 1996 to $204.0  million  for  1997.  The  weighted  average
interest rate was 8.6% in 1996 and 1997.

         Depreciation and amortization expenses increased by $725,000, or 41.8%,
from $1,736,000 to $2,461,000, primarily due to the 1996 and 1997 Acquisitions.

         Income  allocated  to minority  interests  increased by $85,000 from an
income  allocation  of $172,000 to an income  allocation  of $257,000  due to an
increase in net income and an increase in the  minority  interests  ownership of
the Operating Partnership.

Liquidity and Capital Resources


Indebtedness

         As  of  March  31,  1997,  the  Company  had  total   indebtedness   of
approximately   $215.9  million  (including  $25.0  million  of  debentures  and
approximately  $190.9  million of mortgages  and lines of credit).  The mortgage
indebtedness   consisted  of   approximately   $183.8  million  in  indebtedness
collateralized by 39 of the Properties and tax-exempt bond financing obligations
issued by the  Philadelphia  Authority  for  Industrial  Development  (the "Bond
Obligations")  of  approximately  $7.1  million  collateralized  by  one  of the
properties.  Of the Company's  mortgage  indebtedness,  $35.6 million (18.6%) is
variable rate indebtedness,  and $155.3 million (81.4%) is at a fixed rate. This
indebtedness has

                                                         8

<PAGE>



interest rates ranging from 5.0% to 10.125%,  with a weighted  average  interest
rate (excluding the Bond  Obligations) of 7.7%, and will mature between 1998 and
2021. A large  portion of the  Company's  indebtedness  will become due by 2000,
requiring  payments of $4.1 million in 1998,  $87.4  million in 1999,  and $33.5
million in 2000.  From 1998 through 2021,  the Company will have to refinance an
aggregate of approximately  $215.1 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 three  collateralized  revolving  lines of
credit (the "Lines of Credit") totaling  approximately $39 million.  The Company
has a  collateralized  revolving line of credit of up to $5.8 million from First
Union Bank.  Loans under the line of credit will bear interest at LIBOR plus two
percent (2%) per annum,  and will mature on June 30, 1998.  Loans under the line
of credit will be collateralized by a first mortgage lien on Brafferton Shopping
Center. The Company has an additional collateralized revolving line of credit of
approximately  $8.25 million with Mellon Bank.  This line is  collateralized  by
Kenhorst  Plaza and  expires  March 29,  1998.  Loans  under this line will bear
interest at LIBOR plus two percent (2%). On January 31, 1997, the Company closed
a $25 million line of credit with Corestates Bank. The line is collateralized by
Shoppes of Graylyn, Newtown Square, Four Mile Fork and Centre Ridge Marketplace,
bears interest at LIBOR plus 1.50% and expires January 31, 2000. As of March 31,
1997, $17.1 was outstanding under the lines of credit.

         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 1997.

         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.

         During 1999, $88.2 million of the Company's  indebtedness  becomes due,
including the $25.0 million Exchangeable  Debentures.  The Company believes that
it will be able to retire this debt  through  either a  refinancing  of the debt
using the properties as collateral, an equity offering or a combination of both.
The Company currently  believes that the loan-to-values on the properties are at
a level that will enable the  Company to fully  refinance  the loans  without an
additional requirement for capital.

         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.












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                                                      Part II


OTHER INFORMATION

 Item 2.       Recent Sales of Unregistered Equity Securities

               (a)        Securities Sold

                  The  following  table sets  forth the date of sale,  title and
                  amount of  unregistered  securities  sold by the Company since
                  December 31, 1996:

                  Date of Sale               Title                       Amount

                  01/24/97                   Common Units         143,385 units
                  03/19/97                   Common Units          55,335 units
                  03/19/97                   Preferred Units        9,538 units

               (b)        Underwriters and other purchasers

                  i.      January 24, 1997 Sales. Underwriters were not retained
                          in connection with the sale of these securities. These
                          units were sold to the seller of City Line Shopping 
                          Center, an "accredited investor".

                  ii.     March 19, 1997 Sales.  Underwriters were not retained 
                          in connection with the sale of these
                          securities.  These units were sold to the seller of 
                          Ashburn Farm Village Shopping Center, an
                          "accredited investor".

               (c)        Consideration

                  i.      January  24,  1997  Sales.  These units were issued in
                          exchange for property having a value of  approximately
                          $4.8 million, net of assumed indebtedness.  There were
                          no underwriting  discounts or commissions with respect
                          to such securities.

                  ii.     March 19,  1997  Sales.  These  units  were  issued in
                          exchange for property having a value of  approximately
                          $3.8 million, net of assumed indebtedness.  There were
                          no underwriting  discounts or commissions with respect
                          to such securities.

Item 6.        Exhibits and Reports on Form 8-K

(a)            Exhibits

 3.1           Articles of Incorporation of the Company (1)

 3.2           Bylaws of the Company (3)

10.40          Revolving Credit Loan Agreement dated January 31, 1997 between 
               Corestates Bank, N.A. and First Washington Realty Limited 
               Partnership.  (1)




                                                        10

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10.41          Contribution Agreement dated March 19, 1997, by and between 
               Ashburn Farms Village Center,  L.L.C.
               and First Washington Limited Partnership.  (1)

21.1           List of Subsidiaries (1)

27             Financial Data Schedule (2)

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


(1)            Incorporated herein by reference from the Company's Form 
               10-K for the year ended December 31, 1996.

(2)            Filed herewith.

(3)            Incorporated herein by reference from the Company's Registration 
               Statement on Form S-11 (No. 33-83960).

(b)            A form 8-K was filed on February 13, 1997 reporting the 
               consummation of the acquisition of six retail properties.



                                                        11

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                                                    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 13, 1997                  /s/ William J. Wolfe
                                         ------------------------------
                                         By:      William J. Wolfe
                                                  President and
                                                  Chief Executive Officer


Date:          May 13, 1997                  /s/ James G. Blumenthal
                                         ---------------------------------
                                         By:      James G. Blumenthal
                                                  Executive Vice President and
                                                  Chief Financial Officer

                                                        12

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