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 June 30, 1997

_____    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934
         for the transition period from ____________ to ____________



                       Commission File Number 33-99694 
                     METROPOLITAN REALTY COMPANY, L.L.C.
            (Exact name of registrant as specified in its charter)


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

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

                                (313) 961-5552
             (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.

                           YES __ X __   NO _______



<PAGE>


                        PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements

<TABLE>
<CAPTION>
                     METROPOLITAN REALTY COMPANY, L.L.C.
                                BALANCE SHEET
                     June 30, 1997 and December 31, 1996


                                                    June 30, 1997                               December 31, 1996
                                        ------------------------------------         ---------------------------------------
                                        Class A        Class B                       Class A         Class B
                                         Member         Member                        Member          Member
                                        Interest       Interest        Total         Interest        Interest          Total
                                        --------       --------        -----         --------        --------          -----
<S>                                  <C>            <C>            <C>            <C>             <C>             <C>         
ASSETS:
Cash and cash equivalents .......    $  1,118,415   $  1,823,515   $  2,941,930   $    787,501    $ 22,574,178    $ 23,361,679
Marketable securities ...........      14,002,218     20,285,345     34,287,563     14,661,426                      14,661,426
Mortgage notes receivable:
   Notes, unaffiliated ..........      25,843,842                    25,843,842     25,703,825                      25,703,825
   Notes, affiliated ............       4,155,754                     4,155,754      4,177,441                       4,177,441
   Allowance for loan losses ....      (1,600,000)                   (1,600,000)    (1,600,000)                     (1,600,000)
                                     ------------                  ------------   ------------                    ------------
                                       28,399,596                    28,399,596     28,281,266                      28,281,266
Accrued interest and other
  receivables ...................         354,491        352,121        706,612        330,555                         330,555
Other assets ....................          41,962                        41,962         23,790                          23,790
Organization costs, net of
  accumulated amortization
  of $45,961 at June 30,
  1997 and $5,584 at
  December 31, 1996 .............                        363,391        363,391                        403,768         403,768
                                     ------------   ------------   ------------   ------------    ------------    ------------

         Total assets ...........    $ 43,916,682   $ 22,824,372   $ 66,741,054   $ 44,084,538    $ 22,977,946    $ 67,062,484
                                     ============   ============   ============   ============    ============    ============

LIABILITIES AND MEMBERS' EQUITY:
Liabilities:
   Accounts payable .............    $    193,682   $     18,004   $    211,686   $  2,046,201                    $  2,046,201
   Due to (from) ................                                            --       (409,353)   $    409,353              --
   Deferred income ..............         139,552                       139,552        134,552                         134,552
   Deposits from borrowers
     for property taxes .........         219,384                       219,384        140,682                         140,682
   Other ........................           2,335                         2,335          3,645                           3,645
                                     ------------   ------------   ------------   ------------    ------------    ------------

         Total liabilities ......         554,953         18,004        572,957      1,915,727         409,353       2,325,080
                                     ------------   ------------   ------------   ------------    ------------    ------------

Commitments .....................              --             --             --             --              --              --

Members' equity:
   Class A Members' Equity ......      43,406,939                    43,406,939     42,208,569                      42,208,569
   Class B Members' Equity ......                     22,792,546     22,792,546                     22,568,593      22,568,593
   Unrealized holding
     gains/(losses) on
     marketable securities
     available for sale .........         (45,210)        13,822        (31,388)       (39,758)                        (39,758)
                                     ------------   ------------   ------------   ------------    ------------    ------------

            Total members' equity      43,361,729     22,806,368     66,168,097     42,168,811      22,568,593      64,737,404
                                     ------------   ------------   ------------   ------------    ------------    ------------

          Total liabilities and
            members' equity .....    $ 43,916,682   $ 22,824,372   $ 66,741,054   $ 44,084,538    $ 22,977,946    $ 67,062,484
                                     ============   ============   ============   ============    ============    ============
<FN>
  The accompanying notes are an integral part of the financial statements.
</TABLE>


                                      1

<PAGE>

<TABLE>
<CAPTION>

                     METROPOLITAN REALTY COMPANY, L.L.C.
                           STATEMENT OF OPERATIONS
       for the three months and six months ended June 30, 1997 and 1996


                               Three months ended June 30, 1997               Six months ended June 30, 1997
                              ----------------------------------              ------------------------------
                              Class A     Class B               Three months   Class A    Class B              Six months
                              Member       Member                ended June    Member     Member                  ended
                             Interest     Interest     Total      30, 1996    Interest   Interest     Total   June 30, 1996
                             --------     --------     -----    ------------  --------   --------     -----   -------------
                                                                                                                            
<S>                         <C>         <C>         <C>         <C>         <C>         <C>         <C>         <C>        
Income:
  Interest income:
    From mortgage
      notes, unaffiliated   $  649,437              $  649,437  $  590,966  $1,321,747              $1,321,747  $1,182,964  
    From mortgage
      notes, affiliated ..      96,119                  96,119      97,001     191,429                 191,429     194,217  

  Investment income ......     273,696  $  262,152     535,848     216,321     498,971  $  650,924   1,149,895     482,992  
  Miscellaneous
    income ...............      39,819          --      39,819      11,723      75,082          --      75,082      51,800  
                            ----------  ----------  ----------  ----------  ----------  ----------  ----------  ----------  

         Total income ....   1,059,071     262,152   1,321,223     916,011   2,087,229     650,924   2,738,153   1,911,973  
                            ----------  ----------  ----------  ----------  ----------  ----------  ----------  ----------  
Operating expenses:
  General and
    administrative .......      89,448       9,580      99,028     113,611     239,129      18,010     257,139     238,277  
  Amortization of
   organization costs ....          --      20,190      20,190          --          --      40,378      40,378          --  
                            ----------  ----------  ----------  ----------  ----------  ----------  ----------  ----------  
         Total operating
          expenses .......      89,448      29,770     119,218     113,611     239,129      58,388     297,517     238,277  
                            ----------  ----------  ----------  ----------  ----------  ----------  ----------  ----------  
         Net investment
          income .........  $  969,623  $  232,382  $1,202,005  $  802,400  $1,848,100  $  592,536  $2,440,636  $1,673,696  
                            ==========  ==========  ==========  ==========  ==========  ==========  ==========  ==========  

<FN>
Note: Per share information is no longer relevant as a result of the
restructuring described in Note 2.

   The accompanying notes are an integral part of the financial statements.
</TABLE>


                                      2

<PAGE>

<TABLE>
<CAPTION>

                     METROPOLITAN REALTY COMPANY, L.L.C.
                           STATEMENT OF CASH FLOWS
               for the six months ended June 30, 1997 and 1996



                                                                      Six months ended
                                                                June 30, 1997   June 30, 1996
                                                                -------------   -------------
<S>                                                             <C>              <C>         
Cash flows from operating activities:
 Net investment income .....................................    $  2,440,636     $  1,673,696
                                                                ------------     ------------
 Adjustments to reconcile net investment income to
  net cash provided by operating activities:
  Depreciation and amortization expense, net ...............          14,470          (23,700)
  Expiration of commitment fees ............................         (23,500)         (29,400)
  Other ....................................................           9,419           14,197
  Increase in assets:
     Receivables ...........................................        (325,643)         (28,747)
     Other assets ..........................................         (15,259)         (28,000)
  Increase (decrease) in liabilities:
     Accounts payable ......................................          13,384           (5,438)
     Other liabilities .....................................          77,392           39,875
                                                                ------------     ------------

         Total adjustments .................................        (249,737)         (61,213)
                                                                ------------     ------------

         Net cash provided by operating activities .........       2,190,899        1,612,483
                                                                ------------     ------------

Cash flows from investing activities:
  Purchase of marketable securities ........................     (23,325,738)      (4,029,062)
  Collections of principal from marketable securities ......       3,648,138        2,322,463
  Loan repayments ..........................................       3,514,390          267,996
  Loan disbursements .......................................      (3,630,830)        (345,066)
  Commitment and loan extension fees received, net .........          53,500            5,000
  Capital expenditures .....................................          (3,896)              --
                                                                ------------     ------------

         Net cash used in investing activities .............     (19,744,436)      (1,778,669)
                                                                ------------     ------------

Cash flows from financing activities:
   Payments to minority shareholders for surrender of shares      (1,847,899)              --
   Member distributions paid ...............................      (1,018,313)              --
   Dividends paid ..........................................              --         (498,539)
                                                                ------------     ------------

         Net cash used in financing activities .............      (2,866,212)        (498,539)
                                                                ------------     ------------

Net decrease in cash and cash equivalents ..................     (20,419,749)        (664,725)
                                                                ------------     ------------

Cash and cash equivalents, beginning of period .............      23,361,679        2,446,221
                                                                ------------     ------------

Cash and cash equivalents, end of period ...................    $  2,941,930     $  1,781,496
                                                                ============     ============
<FN>
   The accompanying notes are an integral part of the financial statements.
</TABLE>


                                      3

<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 three months and
         six months ended June 30, 1997 are not necessarily indicative of 
         the results that may be expected for the year ending December 31, 
         1997. 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, 1996.

         The accompanying financial statements as of and for the three 
         months and six months ended June 30, 1996 reflect certain 
         reclassifications to be consistent with the presentation adopted 
         for the three months and six months ended June 30, 1997.

2.       Restructuring

         The Company, a Delaware limited liability company, is the successor
         in interest to Metropolitan Realty Corporation (the "Corporation").
         The Corporation, incorporated November 13, 1986, was organized to
         qualify as a real estate investment trust ("REIT") under the
         provisions of the Internal Revenue Code. On December 6, 1996,
         pursuant to the terms of a restructuring agreement, the assets and
         liabilities of the Corporation were transferred to Metropolitan
         Realty Company, L.L.C. in exchange for Class A Membership Interests
         in the Company. Holders of fewer than 50,000 shares of common stock
         of the corporation as of October 9, 1996 (the Record Date) received,
         upon surrender of their shares, a cash payment in lieu of the
         distribution of Class A Membership Interests in the Company. This
         amount totaled $1,940,980 and was recorded as a payable of the
         Corporation. The Corporation was then dissolved, and the Class A
         Membership Interests were distributed pro rata to the Corporation's
         shareholders who owned 50,000 shares or more of the Corporation's
         common stock.

         For financial statement presentation, the assets and liabilities,
         with the exception of marketable securities, were transferred to the
         Company at their carrying values at the date of distribution.
         Marketable securities were recorded at fair market value with the
         unrealized loss recorded as a reduction in Class A members' equity.

         Concurrently with the consummation of the Restructuring, the Company
         offered Class B Membership Interests in a separate offering to
         create a new investment pool. The proceeds from the offering of
         Class B Membership Interests totaled $22,500,000 and were invested
         in money market funds and marketable securities at June 30, 1997.


                                      4


<PAGE>



3.       Marketable Securities

         Marketable securities available for sale are carried at market value
         and unrealized gains and losses are included in a separate component
         of total members' equity. Total members' equity at June 30, 1997
         includes net unrealized holding losses on marketable securities of
         $31,388. Marketable securities at June 30, 1997 and December 31,
         1996 consist of Federal National Mortgage Association and Federal
         Home Loan Mortgage Corporation mortgage-backed securities and U.S.
         Treasury Notes. Realized gains and losses on sales of securities are
         determined based upon specific identification.

         The net realized loss on the sales of marketable securities included
         in investment income in the accompanying statement of operations
         aggregated $3,514 and $9,419 for the three and six months ended June
         30, 1997, and $8,478 and $14,197 for the three and six months ended
         June 30, 1996. At June 30, 1997 and 1996, all marketable securities
         are considered available for sale.



                                      5


<PAGE>

4.       Mortgage Notes Receivable

         Mortgage notes receivable as of the dates indicated are summarized
as follows:

<TABLE>
<CAPTION>
                                                                           June 30, 1997  December 31, 1996
                                                                           -------------  -----------------
<S>                                                                          <C>             <C>       
9.09% Mortgage note receivable, net of loan origination fees of              $4,155,754      $4,177,441
$20,512 at June 30, 1997 and $22,976 at December 31, 1996, due
monthly in installments of principal and interest of $35,494 through
December 2000

10.875% Mortgage note receivable, net of loan origination fees of                    --         960,439
$5,114 at December 31, 1996, due monthly in varying installments of 
principal and interest through December 1999*

9.3752% Mortgage note receivable, net of loan origination fees of             2,083,809       2,093,322
$5,662 at June 30, 1997 and $6,614 at December 31, 1996, due
monthly in installments of principal and interest of $18,298 through
January 2000

9.26% Mortgage note receivable, net of loan origination fees of               1,768,085       1,784,069
$12,222 at June 30, 1997 and $14,185 at December 31, 1996, due
monthly in varying installments of principal and interest through April
2000

8.0% and 9.5% Mortgage note receivable, net of loan origination fees          1,347,738       1,354,681
of $4,296 at June 30, 1997 and $4,882 at December 31, 1996, due
monthly in varying installments of principal and interest through
August 2000

9.25% Mortgage note receivable, net of loan origination fees of                 598,941         604,392
$6,317 at June 30, 1997 and $7,187 at December 31, 1996, due
monthly in installments of principal and interest of $5,800 through
September 2000

7.25% Mortgage note receivable, net of loan origination fees of                 657,556         661,773
$4,361 at June 30, 1997 and $4,955 at December 31, 1996, due
monthly in varying installments of principal and interest through
October 2000

10.5% Mortgage note receivable, net of loan origination fees of                 932,317         935,431
$3,120 at June 30, 1997 and $3,493 at December 31, 1996, due
monthly in varying installments of principal and interest through
December 2000

11.25% Mortgage note receivable, net of loan origination fees of              2,068,348       2,080,277
$9,802 at June 30, 1997 and $11,006 at December 31, 1996, due
monthly in installments of principal and interest of $21,961 through
October 2000

10.25% Mortgage note receivable, net of loan origination fees of                254,267         255,850
$2,746 at June 30, 1997 and $3,072 at December 31, 1996, due
monthly in varying installments of principal and interest through
January 2001

<FN>
--------
*On April 30, 1997, the outstanding principal balance of this mortgage note
was prepaid. The Company also received a prepayment penalty of approximately
$9,600.
</TABLE>

                                      6


<PAGE>
4.       Mortgage Notes Receivable, (continued)

<TABLE>
<CAPTION>
                                                                                  June 30, 1997   December 31, 1996
                                                                                  -------------   -----------------

<S>                                                                               <C>                <C>         
11.25% Mortgage note receivable, net of loan origination fees of                  $  1,551,261       $  1,560,208
$7,351 at June 30, 1997 and $8,255 at December 31, 1996, due
monthly in installments of principal and interest of $16,471 through
October 2000

9.5% Mortgage note receivable through February 28, 1996 adjusted                       706,612            711,498
to 6.75% (based on the U.S. Treasury Securities weekly average yield
adjusted to a constant maturity of 5 years plus 1.5%) on March 1, 1996 to
maturity, net of loan origination fees of $6,765 at June 30, 1997 and $7,606
at December 31, 1996, due monthly in varying installments of principal and
interest through February 2001

9.875% Mortgage note receivable, net of loan origination fees of                     2,422,580          2,430,975
$11,751 at June 30, 1997 and $13,095 at December 31, 1996, due
monthly in varying installments of principal and interest through
January 1999

10.25% and 9.75% Mortgage notes receivable, net of loan origination                         --          2,292,465
fees of $4,102 at December 31, 1996, due monthly in varying
installments of principal and interest through March 1997

10.25% and 12.25% Mortgage notes receivable, net of loan                             2,062,778          2,084,656
origination fees of $2,467 at December 31, 1996, due monthly in
varying installments of principal and interest through May 1997*

10.25% Mortgage note receivable, net of loan origination fees of                     1,735,203          1,737,891
$44,545 at June 30, 1997 and $47,332 at December 31, 1996, due
monthly in installments of interest only through April 1995 at which
time varying installments of principal and interest will be due monthly
through April 2003

Bank prime rate plus 1% Mortgage note receivable, net of loan                        1,118,062            925,543
origination fees of $23,888 at June 30, 1997 and December 31,
1996, due monthly in installments of interest only until final closing,
at which time payments of principal and interest of $12,355 will 
be due monthly through July 2007

10.00% Mortgage note receivable due monthly in installments of                         429,975            437,355
principal and interest of $4,889 through August 2000

9.00% Mortgage note receivable, net of loan origination fees of                      2,793,000          2,793,000
$57,000 at June 30, 1997 and December 31, 1996, due in monthly
payments of interest only until December 1997 at which time it is
anticipated that it will convert to a permanent loan

10.25% Revolving mortgage note receivable, net of origination fees                   3,313,310                 --
of $25,000 at June 30, 1997, due in monthly payments of interest                  ------------       ------------
only until April 2000 at which time outstanding principal is due
                                                                                    29,999,596         29,881,266
Allowance for loan losses                                                           (1,600,000)        (1,600,000)
                                                                                  ------------       ------------
Mortgage notes receivable, net of allowance for loan losses                       $ 28,399,596       $ 28,281,266
                                                                                  ============       ============
<FN>
--------
*The Company has agreed to extend the maturity date of
this loan from May 1, 1997 to September 1, 1997. All other terms of the
original agreement remain unmodified.
</TABLE>

                                      7


<PAGE>

4.       Mortgage Notes Receivable, (continued)

         The Company's portfolio of mortgage notes receivable are reported at
         their principal outstanding balance net of charge-offs and deferred
         loan fees and costs of origination. Interest income is generally 
         recognized when income is earned using the interest method. Loan 
         origination fees and certain direct loan origination costs are 
         deferred and the net amounts are amortized as adjustments of the 
         loans' yields.

         A loan is considered impaired, based on current information and
         events, if it is probable that the Company will be unable to collect
         the scheduled payments of principal or interest when due according
         to the contractual terms of the loan agreement. The measurement of
         impaired loans is generally based on the present value of expected
         future cash flows discounted at the historical effective interest
         rate, except that all collateral-dependent loans are measured for
         impairment based on the fair value of the collateral. The adequacy 
         of the allowance for loan losses (substantially all of the allowance 
         is related to the provision for impaired loans as discussed above) 
         is periodically evaluated by the Company in order to maintain 
         the allowance at a level that is sufficient to absorb probable
         credit losses. Management's evaluation of the adequacy of the
         allowance is based on a review of known and inherent risks 
         in the loan portfolio, including adverse circumstances that may 
         affect the ability of the borrower to repay interest and/or
         principal and the estimated value of collateral. In determining 
         the allowance for possible losses, the Company has considered 
         many indicators of value, including market evaluations of
         the underlying collateral, the cost of money, operating cash flow
         from the property during the projected holding period and expected
         capitalization rates applied to the stabilized net operating income
         of the specified property.

         The allowance for credit losses is established through charges to
         earnings in the form of a provision for loan losses. Increases and
         decreases in the allowance due to changes in the measurement of
         impaired loans are included in the provision for credit losses.
         Loans continue to be classified as impaired unless they are brought
         fully current and the collection of scheduled interest and principal
         is considered probable. When a loan or portion of a loan is
         determined to be uncollectible, the portion deemed uncollectible is
         charged against the allowance and subsequent recoveries, if any, are
         credited to the allowance.

         At June 30, 1997, the total recorded investment in impaired loans
         was $5,237,075 and the allowance related to these loans totalled
         $1,600,000. The average recorded investment in impaired loans was
         approximately $5,250,000 with interest income of $133,000 and 
         $265,000 for the three months and six months ended June 30, 1997. 
         All impaired loans were classified as earning during 1997, with 
         interest income recognized on an accrual basis. The Company 
         believes that the allowance for loan losses of $1,600,000 at 
         June 30, 1997 is at a level that is sufficient to absorb probable 
         credit losses in the mortgage loan portfolio.

5.       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 three months and six months 
         ended June 30, 1997. Prior to the restructuring into a limited 
         liability company, the Company operated at all times to qualify as 
         a real estate investment trust under provisions of the Internal 
         Revenue Code. As a real estate investment trust, each year 
         qualification is met, income is not subject to federal income 
         tax at the company level, to the extent distributed to shareholders.

                                      8


<PAGE>

6.       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. The declared distribution to Class A 
         and Class B members totaled $839,891 and $368,583, respectively, 
         for the three months and six months ended June 30, 1997. Of the 
         declared distribution, $1,018,313 was paid to members on June 26,
         1997. The balance, of $190,161, relates to those Class A members
         which had not yet exchanged their shares of common stock for
         certificates of membership interest in the Company. Prior to the
         restructuring of the Company on December 6, 1996, cash dividends
         were declared and paid to shareholders on a quarterly basis and 
         totaled $.11 per share during the three months and six months 
         ended June 30, 1996.

7.       Related Party Transactions

         The Company was involved in various transactions with affiliates as
         follows:

         Consulting fees under a contractual agreement aggregating $13,406
         and $23,373 were earned by an officer of the Company during the six
         months ended June 30, 1997 and 1996, respectively.

         Fees aggregating $27,087 and $11,018 during the six months ended
         June 30, 1997 and 1996, respectively were earned by a member manager
         of the Company for providing various investment and other services
         to the Company.

         One of the Company's Managing Board Members is the vice president
         of an entity which has a mortgage note with the Company. The 
         carrying amount of the mortgage note receivable totaled
         $4,155,754 at June 30, 1997 and earned the Company $191,429 and
         $194,217 during the six months ended June 30, 1997 and 1996,
         respectively.

         One of the Company's Managing Board Members is a member of a law
         firm which provides legal services to the Company. Fees for legal
         services provided by the law firm amounted to $41,842 (of
         which $14,144 was reimbursed to the Company by borrowers) and 
         $49,932 for the six months ended June 30, 1997 and 1996, 
         respectively.

8.       Commitments

         At June 30, 1997, the Company had outstanding loan commitments
         aggregating $1,884,741.


                                      9


<PAGE>



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

Restructuring

Metropolitan Realty Company, L.L.C., a Delaware limited liability company
(the "Company"), is the successor in interest to Metropolitan Realty
Corporation (the "Corporation"), a Michigan corporation. The Corporation had
operated since 1988 as a qualified real estate investment trust ("REIT")
under the Internal Revenue Code of 1986, as amended (the "Code"), and
invested in commercial real estate mortgages in southeastern Michigan and
other investments. The Company was organized as a Delaware limited liability
company on October 23, 1995 for the purpose of implementing the Restructuring
described below. Prior to the consummation of the Restructuring, the Company
had never conducted any business and had no assets.

At a special meeting of the shareholders of the Corporation held on December
6, 1996, the shareholders of the Corporation approved and adopted the
Agreement and Plan of Dissolution and Restructuring, dated as of September
24, 1996 (the "Restructuring Agreement"), between the Company and the
Corporation. Pursuant to the terms of the Restructuring Agreement, effective
December 6, 1996, the Corporation transferred all of its assets (the "Class A
Assets") to, and the liabilities of the Corporation were assumed by, the
Company in exchange for Class A limited liability company membership
interests (the "Class A Membership Interests") of the Company. The
Corporation was then dissolved, and the Class A Membership Interests were
distributed pro rata to the Corporation's shareholders who owned 50,000
shares or more of the Corporation's common stock beneficially or of record on
October 9, 1996 (the "Record Date") (the "Majority Shareholders") in
liquidation (the "Restructuring"). Holders, beneficially or of record, of
fewer than 50,000 shares of the Corporation's common stock (the "Minority
Shareholders") as of the Record Date received, upon surrender of their
shares, a cash payment equal to the book value of their shares of September
30, 1995 ($9.03 per shares) in lieu of the distribution of Class A Membership
Interests in the Company. These cash payments were made exclusively from the
Class A Assets.

Concurrently with the consummation of the Restructuring, the Company offered
its Class B Membership Interests in a separate offering to create a new
investment pool which is segregated on the books of the Company from the
Class A Assets. The total proceeds of the offering of Class B Membership
Interests were $22,500,000. The net proceeds of the offering of Class B
Membership Interests (the "Class B Assets") will be invested in short-term
investments until such time as the proceeds are invested in real estate
loans.

As a result of the restructuring discussed above, the following presents the
results of operations for the three months and six months ended June 30, 
1997, individually, for the Class A and Class B Membership Interests.

Results of Operations, Class A Membership Interests

The Company's net investment in mortgage loans represented 65% and 64% of its
Class A assets, or $28,399,596 and $28,281,266, at June 30, 1997 and December
31, 1996, respectively. The range of yields on outstanding mortgage loans
closed from the Company's inception through June 30, 1997 ranges from 7.06%
to 12.25%. The weighted average yield of mortgage loans was 9.99% at June
30, 1997 as compared to 10.05% at December 31, 1996.

The overall average yield on interest earning Class A assets was 8.97% for the
six months ended June 30, 1997 and 8.75% for the year ended December 31,
1996. The average amount held in marketable

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securities, net of unrealized holding gains and losses, for the six months
ended June 30, 1997 was $13.3 million. The average yield (based on total
yield divided by average amount of investments) was 6.6% for the six months
ended June 30, 1997 and 7.03% for the year ended December 31, 1996.

Investment income from marketable securities increased $53,155 to $253,780
for the second quarter of 1997 from $200,625 for the second quarter of 1996.
Of the increase 71,345 was the result of an increase in the average yield
offset by $18,190 resulting from a decrease in the average amount invested.
Investment income from marketable securities increased $29,667 to
$466,575 for the first six months of 1997 from $436,908 for the first six
months of 1996. Of the increase, $73,912 was the result of an increase in the
average yield offset by $44,245 related to a decrease in the average amount 
invested.

Investment income from money market securities increased $4,220 to $19,916
for the second quarter of 1997 from $15,696 for the second quarter of 1996.
Of the increase, $6,298 was the result of an increase in the average amount
invested in money market securities offset by a $2,078 decrease in the
average yield. Investment income from money market securities decreased
$13,688 to $32,396 for the first six months of 1997 from $46,084 for the
first six months of 1996. Of the decrease, $8,100 was the result of a decrease
in the average yield and $5,588 was the result of a decrease in the average
amount invested in money market securities.

Interest income from mortgage notes increased $57,589 to $745,556 for the
second quarter of 1997 from $687,967 for the second quarter of 1996. Of the
increase, $74,231 was the result of an increase in the average amount
invested in mortgage notes offset by $16,642 resulting from a decrease in 
average yield. Interest income from mortgage notes increased $135,995 to 
$1,513,176 for the first six months of 1997 from $1,377,181 for the first six
months of 1996. Of the increase, $154,729 was the result of an increase in the
average amount invested in mortgage notes, offset by $18,734 related to a 
decrease in average yield.

Operating expenses decreased $24,163, or 21%, to $89,448 for the second
quarter of 1997 from $113,611 for the second quarter of 1996. This decrease
results primarily from decreased professional fees. Operating expenses
for the six month periods ended June 30, 1997 and 1996 were comparable.

Net investment income increased $167,223, or 21%, to $969,623 for the second
quarter of 1997 from $802,400 for the second quarter of 1996 as a result of
the items discussed above. Net investment income increased $174,404, or 10%,
to $1,848,100 for the first six months of 1997 from $1,673,696 for the first
six months of 1996 as a result of the items discussed above.

Management reviews, on a regular basis, factors which adversely affect its
mortgage loans, including occupancy levels, rental rates and property values.
It is possible that economic conditions in Southeast Michigan and the nation
in general may adversely affect certain of the Company's other loans. The
Company believes that the allowance for loan losses of $1,600,000 at June 30,
1997 is at a level that is sufficient to absorb probable credit losses in the
mortgage loan portfolio.

Results of Operations, Class B Membership Interests

Proceeds of $22,500,000 from the offering of Class B Membership Interests
were received by the Company on December 6, 1996. At June 30, 1997, the net
assets of the Class B investment pool totaled $22,806,368 and were primarily
invested in U.S. Treasury notes and money market funds. Certain
organizational costs of the Class B investment pool have been capitalized at
cost and will be amortized over five years. Net organization costs at June
30, 1997 totaled $363,391. The net

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proceeds from the offering of Class B Membership Interests will be invested
in short-term investments until such time as the proceeds are invested in
real estate loans. Investment income and net investment income earned by
Class B Assets for the six months ended June 30, 1997 totaled $650,924 and
$592,536, respectively. The average yield earned on interest earning Class B
assets was 5.85% for the six months ended June 30, 1997.

Although the Company expects to have the balance of its available Class A and
Class B assets fully invested in mortgage loans to real estate projects by
the end of 1999, management will continue its prudent approach of approving
funding only of those loans which meet appropriate underwriting criteria.

Liquidity and Capital Resources

Funds that have not yet been invested in mortgage loans are primarily
invested in marketable mortgage-backed securities and U.S. Treasury Notes
until needed for the Company's operations or investments in mortgage loans.
Income and principal received with respect to the Company's investment in
mortgage loans are also invested in marketable securities pending
distribution to members in accordance with the terms of the Operating
Agreement. At June 30, 1997, the Class A investment pool had $28,399,596
invested in net mortgage loans, $7,563,640 invested in marketable
mortgage-backed securities, $6,438,578 invested in U.S. Treasury Notes and
$859,030 invested in money market funds. The Company does not invest in high
risk, mortgage-backed securities such as interest only strips or residual
traunches. However, there can be no assurance that cash flows will
materialize as scheduled as a result of prepayments of the underlying
mortgages or that the proceeds can be invested in securities that will
provide comparable yields.

At June 30, 1997, the Company had outstanding loan commitments aggregating
$1,884,741. The source of funds to satisfy these commitments will be the
Company's marketable securities. The Company anticipates that its sources of
cash are more than adequate to meet its liquidity needs. During 1997, the 
Company made payments from Class A assets to minority shareholders, which 
totaled $4,515 and $1,847,899 respectively for the three months and six
months ended June 30, 1997, for the surrender of their shares of common
stock in connection with the restructuring of the Company discussed in Note 2
to the Financial Statements. At June 30, 1997, amounts owed to minority
shareholders in connection with this transaction totaled $93,081 and are
recorded as a liability of the Company.

At June 30, 1997, the Class B investment pool had $20,041,375 invested in
U.S. Treasury Notes, $243,970 invested in marketable mortgage-backed
securities and $1,822,646 invested in money market funds. Certain
organizational costs of the Class B investment pool have been capitalized at
cost and will be amortized over five years.

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. The declared distribution to Class A and Class B members totaled 
$839,891 and $368,583, respectively, for the three months and six months 
ended June 30, 1997. Of the declared distribution, $1,018,313 was remitted
to members on June 26, 1997. The balance, of $190,161, relates to those Class
A members which had not yet exchanged their shares of common stock for
certificates of membership interest in the Company. Prior to the 
restructuring of the Company on December 6, 1996, cash dividends were 
declared and paid on a quarterly basis and totaled $.11 per share during 
the three months and six months ended June 30, 1996.

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                                  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.



                                          METROPOLITAN REALTY COMPANY L.L.C.



Dated: August 11, 1997                   By: /s/ Robert G. Jackson
             ----                            ----------------------
                                                Robert G. Jackson, President
                                          (Chief Executive Officer and
                                           Chief Financial Officer)


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