FORM 10-Q


                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549


(Mark One)

[X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1998

                                      OR

[  ]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934 For the transition period from
      _________________________ to __________________________


                         Commission File No. 33-99694

                     METROPOLITAN REALTY COMPANY, L.L.C.
            (Exact name of registrant as specified in its charter)

        Delaware                                      38-3260057
(State of incorporation)                (I.R.S. Employer Identification No.)

                           535 Griswold, Suite 748
                           Detroit, Michigan 48226
                   (Address of principal executive offices)

             Registrant's Telephone Number, including area code:
                                (313) 961-5552

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 report(s), and (2) has been subject to
such filing requirements for the past 90 days.

                           Yes  __X__         No  _____

   There is no established public trading market for the Company's Class A
Membership Interests and Class B Membership Interests.

<PAGE>

                        PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements

                     METROPOLITAN REALTY COMPANY, L.L.C.
                        BALANCE SHEET (000's Omitted)
<TABLE>
<CAPTION>
                                                       September 30, 1998                       December 31, 1997
                                             ------------------------------------     -------------------------------------
                                              Class A       Class B                    Class A       Class B            
                                             Membership    Membership                 Membership    Membership          
                                             Interests     Interests      Total       Interests     Interests        Total
                                             ----------    ----------     -----       ----------    ----------       -----
<S>                                           <C>           <C>          <C>           <C>           <C>           <C>     
                Assets
Cash and cash equivalents                     $  2,957      $     17     $  2,974      $  3,783      $  1,541      $  5,324
Investment securities                           15,203        15,480       30,683        13,121        20,985        34,106
Mortgage notes receivable:
  Unaffiliated                                  24,573         9,301       33,874        23,801          --          23,801
  Affiliated                                      --            --           --           4,142          --           4,142
Allowance for loan losses                       (1,385)         --         (1,385)       (1,385)         --          (1,385)
                                              --------      --------     --------      --------      --------      --------
Total mortgage notes receivable                 23,188         9,301       32,489        26,558          --          26,558

Accrued interest and other receivables             227           139          366           327            94           421
Other assets                                        71          --             71            11          --              11
Organization costs, net of accumulated
  amortization of $156 at 
  September 30, 1998 and $90 
  at December 31, 1997                            --             290          290          --             356           356
                                              --------      --------     --------      --------      --------      --------
Total assets                                  $ 41,646      $ 25,227     $ 66,873      $ 43,800      $ 22,976      $ 66,776
                                              ========      ========     ========      ========      ========      ========

    Liabilities and Members' Equity
Liabilities
Accounts payable                              $    122      $     39     $    161      $    107      $     13      $    120
Due to (from)                                   (2,015)        2,015         --              41           (41)         --
Deferred income                                     20            41           61            23            45            68
Deposits from borrowers for property taxes         103          --            103           114          --             114
Other                                                2          --              2             1          --               1
                                              --------      --------     --------      --------      --------      --------
Total liabilities                               (1,768)        2,095          327           286            17           303

Members' Equity
Class A members' equity                         43,242          --         43,242        43,565          --          43,565
Class B members' equity                           --          22,939       22,939          --          22,936        22,936
Unrealized holding gains 
  (losses) on marketable
  securities available for sale                    172           193          365           (51)           23           (28)
                                              --------      --------     --------      --------      --------      --------
Total members' equity                           43,414        23,132       66,546        43,514        22,959        66,473
                                              --------      --------     --------      --------      --------      --------
Total liabilities and members' equity         $ 41,646      $ 25,227     $ 66,873      $ 43,800      $ 22,976      $ 66,776
                                              ========      ========     ========      ========      ========      ========
</TABLE>


                                      1


<PAGE>
                     METROPOLITAN REALTY COMPANY, L.L.C.
                   STATEMENT OF OPERATIONS (000's Omitted)

<TABLE>
<CAPTION>

                                         Three months ended             Three months ended            Nine months ended     
                                         September 30, 1998             September 30, 1997            September 30, 1998     
                                    ----------------------------   ----------------------------  ----------------------------
                                     Class A    Class B             Class A    Class B            Class A    Class B         
                                    Membership Membership          Membership Membership         Membership Membership       
                                    Interests  Interests   Total   Interests  Interests   Total  Interests  Interests   Total
                                    ---------- ----------  -----   ---------- ----------  -----  ---------- ----------  -----
<S>                                   <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>   
Revenue
Interest income:
From mortgage notes, unaffiliated     $  567    $  122    $  689    $  670    $ --      $  670    $1,719    $  146    $1,865
From mortgage notes, affiliated         --        --        --          97      --          97       105      --         105
Investment income                        286       246       532       211       376       587       898       958     1,856
Miscellaneous income                       6      --           6         8         5        13        78         3        81
                                      ------    ------    ------    ------    ------    ------    ------    ------    ------

Total revenue                            859       368     1,227       986       381     1,367     2,800     1,107     3,907

Operating Expenses
General and administrative                82        16        98       122         8       130       233        67       300
Amortization of organization costs      --          22        22      --          22        22      --          67        67
                                      ------    ------    ------    ------    ------    ------    ------    ------    ------

Total operating expenses                  82        38       120       122        30       152       233       134       367
                                      ------    ------    ------    ------    ------    ------    ------    ------    ------

Net Investment Income                 $  777    $  330    $1,107    $  864    $  351    $1,215    $2,567    $  973    $3,540
                                      ======    ======    ======    ======    ======    ======    ======    ======    ======

                                         777       330     1,107       863       351     1,214     2,567       973     3,540

<CAPTION>
                                                Nine months ended
                                                September 30, 1997
                                       ------------------------------------
                                        Class A      Class B               
                                       Membership   Membership             
                                       Interests    Interests        Total 
                                       ----------   ----------       ----- 
<S>                                   <C>           <C>           <C>      
Revenue
Interest income:
From mortgage notes, unaffiliated     $    1,992    $     --      $    1,992
From mortgage notes, affiliated              288          --             288
Investment income                            710         1,027         1,737
Miscellaneous income                          83             5            88
                                      ----------    ----------    ----------

Total revenue                              3,073         1,032         4,105

Operating Expenses
General and administrative                   361            26           387
Amortization of organization costs          --              62            62
                                      ----------    ----------    ----------

Total operating expenses                     361            88           449
                                      ----------    ----------    ----------

Net Investment Income                 $    2,712    $      944    $    3,656
                                      ==========    ==========    ==========

                                           2,712           944         3,656
</TABLE>


                                      2


<PAGE>

                     METROPOLITAN REALTY COMPANY, L.L.C.
           STATEMENT OF CHANGES IN MEMBERS' EQUITY (000's Omitted)

<TABLE>
<CAPTION>
                                                          Members' Equity
                                                 --------------------------------
                                                  Class A    Class B
                                                  -------    -------
<S>                                  <C>         <C>         <C>         <C>     
Balance - December 31, 1996          $    (40)   $ 42,209    $ 22,568    $ 64,737

Net investment income                    --         3,813       1,279       5,092

Transfer of member interest              --            82        --            82

Distributions                            --        (2,539)       (911)     (3,450)

Change in unrealized holding gains
(losses) on investment securities          12        --          --            12
                                     --------    --------    --------    --------

Balance - December 31, 1997          $    (28)   $ 43,565    $ 22,936    $ 66,473

Net investment income                    --         2,567         973       3,540

Distributions                            --        (2,890)       (970)     (3,860)

Change in unrealized holding gains
(losses) on investment securities         393        --          --           393
                                     --------    --------    --------    --------

Balance - September 30, 1998         $    365    $ 43,242    $ 22,939    $ 66,546
                                     ========    ========    ========    ========
</TABLE>



                                      3

<PAGE>

                     METROPOLITAN REALTY COMPANY, L.L.C.
                   STATEMENT OF CASH FLOWS (000's Omitted)

<TABLE>
<CAPTION>
                                                               Nine months ended 
                                                                 September 30
                                                             --------------------
                                                               1998         1997
                                                               ----         ----
<S>                                                          <C>         <C>     
Cash Flows from Operating Activities
Net investment income                                        $  3,540    $  3,656
Adjustments to reconcile net investment income to net cash
  from operating activities:
    Depreciation and amortization expense                          69          29
    Other                                                          34         (56)
Decrease (increase) in assets:
  Accrued interest and other receivables                           55         (48)
  Other assets                                                    (63)        (40)
Increase (decrease) in liabilities:
  Accounts payable                                                 41         (44)
  Other liabilities                                               (10)        (47)
                                                             --------    --------

Total adjustments                                                 126        (206)
                                                             --------    --------

Net cash provided by operating activities                       3,666       3,450

Cash Flows from Investing Activities
Purchases of investment securities                            (19,243)    (40,487)
Collections of principal from investment securities            23,025      21,218
Net change in loans                                            (5,938)       (622)
Capital expenditures                                             --            (4)
                                                             --------    --------

Net cash used in investing activities                          (2,156)    (19,895)

Cash Flows from Financing Activities
Payment to minority stockholders                                 --        (1,848)
Distributions paid to members                                  (3,860)     (2,210)
                                                             --------    --------

Net cash used in financing activities                          (3,860)     (4,058)
                                                             --------    --------

Net Decrease in Cash and Cash Equivalents                      (2,350)    (20,503)

Cash and Cash Equivalents - Beginning of period                 5,324      23,362
                                                             --------    --------

Cash and Cash Equivalents - End of period                    $  2,974    $  2,859
                                                             ========    ========
</TABLE>

                                      4

<PAGE>

                     METROPOLITAN REALTY COMPANY, L.L.C.
              STATEMENT OF COMPREHENSIVE INCOME (000's Omitted)

<TABLE>
<CAPTION>
                                 Three months ended               Three months ended      
                                 September 30, 1998               September 30, 1997      
                            ----------------------------     ---------------------------- 
                             Class A    Class B               Class A    Class B          
                            Membership Membership            Membership Membership        
                            Interests  Interests   Total     Interests  Interests   Total 
                            ---------- ----------  -----     ---------- ----------  ----- 

<S>                         <C>        <C>        <C>        <C>        <C>         <C>   
Net Investment Income       $  777     $  330     $1,107     $  864     $  351      $1,215

Other Comprehensive
Income (Loss):
Unrealized holding gain
loss for period, net of
tax                            178        180        358         29         (6)         23
                            ------     ------     ------     ------     ------      ------

Comprehensive Income        $  955     $  510     $1,465     $  893     $  345      $1,238
                            ======     ======     ======     ======     ======      ======

<CAPTION>
                                   Nine months ended                        Nine months ended 
                                   September 30, 1998                       September 30, 1997
                           ----------------------------------      ---------------------------------
                            Class A      Class B                    Class A      Class B            
                           Membership   Membership                 Membership   Membership          
                           Interests    Interests       Total      Interests    Interests      Total
                           ----------   ----------      -----      ----------   ----------     -----
<S>                          <C>          <C>          <C>          <C>          <C>          <C>   
Net Investment Income        $2,567       $  973       $3,540       $2,712       $  944       $3,656

Other Comprehensive
Income (Loss):
Unrealized holding gain
loss for period, net of
tax                             223          170          393           24            8           32
                             ------       ------       ------       ------       ------       ------

Comprehensive Income         $2,790       $1,143       $3,933       $2,736       $  952       $3,688
                             ======       ======       ======       ======       ======       ======
</TABLE>


                                      5

<PAGE>

                     METROPOLITAN REALTY COMPANY, L.L.C.

                        Notes to Financial Statements

1.   BASIS OF PRESENTATION
     The accompanying unaudited financial statements have been prepared in
     accordance with generally accepted accounting principles for interim
     financial information and with the instructions to Form 10-Q and Rule
     10-01 of Regulation S-X. Accordingly, they do not include all of the
     information and notes required by generally accepted accounting
     principles for complete financial statements. In the opinion of
     management, all adjustments, consisting of normal recurring adjustments,
     considered necessary for a fair presentation have been included.
     Operating results for the nine months ended September 30, 1998 are not
     necessarily indicative of the results that would be expected for the
     year ending December 31, 1998. For further information, refer to the
     financial statements and footnotes thereto included in the Company's
     annual report on Form 10-K for the fiscal year ended December 31, 1997.

     The accompanying financial statements for the nine months ended
     September 30, 1997 reflect certain reclassifications to be consistent
     with the presentation adopted for the nine months ended September 30,
     1998.

     Effective January 1, 1998, the Company adopted Statement of Financial
     Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive Income."
     SFAS No. 130 establishes new rules for the reporting and display of
     comprehensive income and its components. SFAS No. 130 requires
     unrealized gains or losses on securities available for sale to be
     included in other comprehensive income. Prior year financial statements
     have been reclassified to conform to the requirements of SFAS No. 130.

2.   INCOME TAXES
     As a limited liability company, it is intended that the Company will be
     classified as a partnership for federal income tax purposes and, as
     such, it generally will be treated as a "pass-through" entity that is
     not subject to federal income tax. Accordingly, no provision for income
     taxes has been made for the periods presented.

3.   DISTRIBUTIONS
     In accordance with the terms of the Operating Agreement, Class A and
     Class B members will receive pro rata quarterly distributions of cash
     income, less expenses, from their respective class of net assets within
     90 days after the end of each fiscal quarter. The Operating Agreement
     also provides for the pass through to Class A members (commencing in the
     year 2001, if elected) and Class B members (commencing in the year
     2000), from their respective classes of net assets, of principal
     returned with respect to real estate investments and any cash and cash
     equivalents which have not been invested in real estate investments. All
     distributions are subject to a determination by the Managing Board that
     the Company will have sufficient cash on hand to meet its current and
     anticipated needs to fulfill its business purpose.


                                      6

<PAGE>
Item 2. Management's Discussion and Analysis Of Financial Condition And
Results Of Operation

Overview

The Company intends to continue to invest its available funds at competitive
rates in mortgage loans to real estate projects located in southeastern
Michigan. Cycles in the local and national economy have affected and will
continue to affect the Company's ability to invest its remaining funds in
mortgage loans and the yields attainable on such investments. While the
Company expects to have the balance of its available assets fully invested in
mortgage loans by the end of 1999, management will continue its prudent
approach of approving funding only for those loans which meet the Company's
underwriting criteria.

Funds that have not yet been invested in mortgage loans are primarily
invested in marketable securities until needed for the Company's operations
or investments in mortgage loans. Income and principal received with respect
to the Company's investments in mortgage loans are also invested in
marketable securities pending distribution to members or reinvestments in
mortgage loans.

Readiness for the Year 2000

The Company has evaluated the potential impact of the Year 2000 on its
computer-based financial and management information systems. While the
Company is prepared to devote the necessary resources to resolve any problems
that may arise, the preliminary evaluation indicates that the impact to the
Company of the Year 2000 will be minimal and that the transition to the Year
2000 can be managed with little effect on the Company's business, its cost of
operations or financial prospects.

Class A Assets and Class B Assets

As a result of the restructuring effective December 6, 1996, the Company
reports its financial condition and results of operations by segregating all
information into Class A membership interests and Class B membership
interests. Each class is distinguished by its differing member composition.

Interim Financial Statements

The Interim Financial Statements furnished include all adjustments which, in
the opinion of management, are necessary to reflect fair statements of the
results for the interim period presented and are recurring in nature.

Financial Condition and Results of Operation, Class A Membership Interests

The liquid assets of the Class A Membership Interest, including cash and
investment securities, increased from $16,904,000 at December 31, 1997 to
$18,160,000 at September 30, 1998. This resulted from loan repayments
received by the Company partially offset by new loans issued.


                                      7

<PAGE>

Net investment income for the three months ended September 30, 1998 was
$777,000 versus $864,000 in the same period in 1997. This decrease of 10%
resulted from the prepayment of higher yielding loans and the recent issuance
of lower yielding loans.

The allowance for loan losses remains at $1,385,000 - unchanged since
December 31, 1997. Management reviews, on a regular basis, factors which may
adversely affect its mortgage loans, including occupancy levels, rental rates
and property values. It is possible that economic conditions in southeastern
Michigan, and the nation in general, may adversely affect certain of the
Company's loan assets. After evaluation of the loan portfolio and the
associated allowance for loan losses, management deemed the allowance of
$1,385,000 adequate to cover any potential future write-offs of loan assets.

The Company makes quarterly distributions of net income in accord with the
Operating Agreement of the Company. During August of 1998, the Company
distributed approximately $941,000 to Class A Membership Interests relating
to second quarter 1998 cash income.

Management is not aware of any material unrecorded liabilities or
contingencies relating to Class A Membership Interests.

Financial Condition and Results of Operation, Class B Membership Interests
The liquid assets of the Class B Membership Interest, including cash and
investment securities, decreased from $22,526,000 at December 31, 1997 to
$15,497,000 at September 30, 1998. This resulted from issuance of new loans.

Net investment income for the three months ended September 30, 1998 was
$330,000 versus $351,000 in the same period in 1997 - a 6% decrease.

No loan loss allowance has been recorded relating to the loans in the Class B
membership pool at September 30, 1998. Management will continually review any
potential adverse factors which may affect these mortgage loans and record a
loan loss reserve if, and when, this analysis indicates that a loan loss
reserve is appropriate.

The Company makes quarterly distributions of net income in accord with the
Operating Agreement of the Company. During August of 1998, the Company
distributed approximately $300,000 to Class B Membership Interests relating
to second quarter 1998 cash income.

Certain organization costs of the Class B Investment pool have been
capitalized at cost. Recent accounting pronouncements require the retroactive
write-off of these assets in 1999. The Company is considering adopting this 
change in accounting principle in the fourth quarter of 1998. Net
organization costs at September 30, 1998 totaled $290,000.

Management is not aware of any material unrecorded liabilities or
contingencies relating to Class B Membership Interests.

                                      8


<PAGE>

Future Business Prospects

Since the Company conducts all of its business in southeastern Michigan, the
future financial results of the Company are highly dependent on the local
economy in general and the real estate market specifically in southeastern
Michigan. In recent years, the local economy has been very strong with an
influx of new real estate developments. Consequently, the Company is
receiving a significant increase in mortgage applications versus historical
averages. At September 30, 1998, the Company had outstanding loan commitments
of $22,000,000.

                                     9

<PAGE>
                                  SIGNATURE

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.

Dated: November 12, 1998

METROPOLITAN REALTY COMPANY, L.L.C.

By:     /s/ Robert G. Jackson
        ----------------------------
        Robert G. Jackson, President
        (Principal Executive Officer and Principal Financial Officer)

                                     10