UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-Q

                   Quarterly Report Under Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

        For Quarter Ended: March 31, 1997 Commission File Number: 1-9646
                          ---------------

                           ASR Investments Corporation
             ------------------------------------------------------
             (Exact name of Registrant as specified in its Charter)

                                    Maryland
         --------------------------------------------------------------
         (State or other jurisdiction of incorporation or organization)

                                   86-0587826
                      ------------------------------------
                      (I.R.S. Employer Identification No.)

                   335 N. Wilmot, Suite 250, Tucson, AZ 85711
                   ------------------------------------------
                    (Address of principal executive offices)

                                 (520) 748-2111
              ----------------------------------------------------
              (Registrant's telephone number, including area code)

                                (Not applicable)
              ----------------------------------------------------
              (Former Name, former address and former fiscal year,
                          if changed since last report)

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.

                      X   Yes         No
                     ---          ---

                      APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

Common  Stock  (par value  $.01)  outstanding  as of May 9, 1997 were  4,437,419
shares.
<PAGE>
                           ASR INVESTMENTS CORPORATION
                           Consolidated Balance Sheets
                      March 31, 1997 and December 31, 1996
                             (Dollars in Thousands)
<TABLE>
<CAPTION>
                                                                                 1997         1996
                                                                               ---------    ---------
                                                                             (Unaudited)
<S>                                                                            <C>          <C>      
Assets
     Real estate investments
        Apartments, net of depreciation                                        $  74,855    $  70,506
        Investments in joint ventures                                              2,788        2,811
        Construction in progress                                                  18,528       14,694
        Land held for development                                                    925          925
        Other real estate                                                          1,617        1,022
                                                                               ---------    ---------
           Total real estate investments                                          98,713       89,958
     Mortgage assets                                                               3,270        5,039
     Cash                                                                         10,781        2,403
     Other assets                                                                  1,269          396
                                                                               ---------    ---------
            Total assets                                                       $ 114,033    $  97,796
                                                                               =========    =========

Liabilities
     Real estate notes payable                                                 $  52,477    $  48,855
     Construction loan payable                                                    10,224          255
     Short-term borrowing                                                            500        2,014
     Construction costs payable                                                    1,070        1,581
     Other liabilities                                                             4,665        4,989
                                                                               ---------    ---------
            Total  liabilities                                                    68,936       57,694
                                                                               ---------    ---------

Committments and Contingencies

Stockholders' Equity
     Common Stock, par value $.01 per share, 40,000,000 shares
     authorized; 3,394,392 and 3,307,892 shares issued                                34           33
     Additional paid in capital                                                  157,496      155,875
     Deficit                                                                    (109,502)    (112,875)
     Stock notes receivable                                                         (385)        (385)
     Treasury stock - 160,742 shares                                              (2,546)      (2,546)
                                                                               ---------    ---------
             Total  stockholders'  equity                                         45,097       40,102
                                                                               ---------    ---------
        Total  liabilities  and  stockholders'  equity                         $ 114,033    $  97,796
                                                                               =========    =========
</TABLE>

See Notes to Consolidated Financial Statements.
                                        2
<PAGE>
                          ASR INVESTMENTS CORPORATION
                     Consolidated Statements of Operations
                 For the Quarters Ended March 31, 1997 and 1996
                    (In thousands except per share amounts)
                                  (Unaudited)


                                                    1997       1996
                                                 -------    -------
Real  Estate  Operations
     Rental and other income                     $ 3,702    $ 3,642
                                                 -------    -------
     Operating and maintenance expenses            1,343      1,254
     Real estate taxes and insurance                 341        360
     Interest expense on real estate mortgages     1,123      1,082
     Depreciation and amortization                   680        680
                                                 -------    -------
       Total  operating  expenses                  3,487      3,376
                                                 -------    -------
     Income from  real  estate                       215        266
                                                 -------    -------

Mortgage  Assets
     Prospective yield  income                       330        770
     Income from redemptions and sales             5,338      1,977
     Interest expense                                (17)       (75)
                                                 -------    -------
     Income from mortgage assets                   5,651      2,672
                                                 -------    -------

 Income Before Administrative Expenses
   and Other Income (Expense)                      5,866      2,938
     Administrative expenses                      (1,107)      (638)
     Other income (expense), net                     187         40
                                                 -------    -------
Net Income                                       $ 4,946    $ 2,340
                                                 =======    =======

Net  Income  Per  Share of Common
     Stock and Common Stock Equivalents          $  1.52    $  0.74
                                                 =======    =======
Average  Shares of Common Stock and
     Common Stock Equivalents                      3,159      3,154
                                                 =======    =======

Dividends  Declared  Per  Share                  $  0.50    $  0.50
                                                 =======    =======

     See  Notes  to  Consolidated  Financial  Statements.
                                        3
<PAGE>
                          ASR INVESTMENTS CORPORATION
               Consolidated Statements of Cash Flows - Unaudited
                 For the Quarters Ended March 31, 1997 and 1996
                                 (In Thousands)

                                                         1997        1996
                                                     --------    --------
OPERATING  ACTIVITIES
Net income                                           $  4,946    $  2,340
Principal noncash charges (credits)
    Depreciation and amortization                         785         783
    Increase in accrual                                   513
                                                     --------    --------
Cash  Provided  By  Operations                          6,244       3,123
                                                     --------    --------
INVESTING  ACTIVITIES
Investment in apartments                               (4,984)       (427)
Investment in joint ventures                              (49)         50
Construction expenditures                              (3,834)     (1,024)
Purchase of land for development                          (60)
Other real estate assets                                 (595)         80
Reduction in mortgage assets                            1,769       1,095
Increase  in other assets                                (873)       (240)
                                                     --------    --------
Cash  Used  In  Investing  Activities                  (8,566)       (526)
                                                     --------    --------
FINANCING  ACTIVITIES
Issuance of real estate notes payable                   3,700
Payment of loan costs                                     (78)
Proceeds from construction loan                         9,969         221
Repayment of real estate notes                            (78)       (137)
Short-term borrowing                                   (1,514)         92
Construction cost payable                                (511)
Stock issuance                                          1,622
Payment of dividends                                   (1,573)     (1,577)
(Decrease)  increase in other liabilities                (837)        442
                                                     --------    --------
Cash Provided By (Used  In)  Financing  Activities     10,700        (959)
                                                     --------    --------
Cash
    Increase  during the period                         8,378       1,638
    Balance - beginning of period                       2,403       2,421
                                                     --------    --------
    Balance - end of period                          $ 10,781    $  4,059
                                                     ========    ========
Supplemental Disclosure of Cash Flow Information
Interest Paid                                        $  1,181    $  1,160
                                                     ========    ========
Interest Captalized                                  $    205    $     82
                                                     ========    ========

See  Notes  to  Consolidated  Financial  Statements.
                                        4
<PAGE>
                           ASR INVESTMENTS CORPORATION
                 Consolidated Statement of Stockholders' Equity
                   For the Three Months Ended March 31, 1997
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                                     Common
                                                          Additional                                Stock in
                                  Number of        Par     Paid-In                      Notes      Treasury -
                                    Shares        Value    Capital       Deficit      Receivable     at Cost       Total
                                    ------        -----    -------       -------      ----------     -------       -----

<S>                              <C>          <C>         <C>          <C>             <C>          <C>          <C>    
Balance, December 31, 1996           3,308         $33     $155,875     ($112,875)       ($385)      ($2,546)     $40,102
Net income                                                                  4,946                                   4,946
Dividends declared                                                         (1,573)                                 (1,573)
Stock issuance                          86           1        1,621                                                 1,622
                                  --------    --------     --------     ---------      --------     --------     --------
Balance, March 31, 1997              3,394         $34     $157,496     ($114,448)       ($385)      ($2,546)     $40,151
                                  ========    ========     ========     =========      ========     ========     ========
</TABLE>
See  Notes  to  Consolidated  Financial  Statements.
                                        5
<PAGE>
                           ASR INVESTMENTS CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 For the Quarters Ended March 31, 1997 and 1996


1.  BASIS OF PRESENTATION

         The accompanying interim consolidated  financial statements include the
accounts of the  Company and its wholly  owned  subsidiaries  (collectively  the
"Company").  Investments  in joint  ventures in which the Company does not own a
controlling  interest are accounted for under the equity method. All significant
inter-company balances and transactions have been eliminated.  In the opinion of
management,   all  adjustments  (consisting  of  normal  recurring  adjustments)
considered  necessary for a fair  presentation  have been included.  They do not
include all of the  information and  disclosures  generally  required for annual
financial  statements.  These  interim  operating  results  are not  necessarily
indicative  of the  results  that may be  expected  for the entire  year.  These
interim consolidated financial statements should be read in conjunction with the
December 31, 1996 audited consolidated financial statements and notes thereto.

         Reclassification - Certain  reclassifications have been made to conform
the prior year with the current year presentation.

         New Accounting  Standard - In February  1997, the Financial  Accounting
Standards Board issued FASB No. 128, "Earnings Per Share", which establishes new
standards for computing and presenting earnings per share (EPS). It replaces the
presentation  of primary EPS with a presentation  of basic EPS. It also requires
dual  presentation of basic and diluted EPS on the face of the income  statement
for all entities with complex capital  structures and requires a  reconciliation
of the numerator and  denominator of the basic EPS  computation to the numerator
and denominator of the diluted EPS  computation.  The new statement is effective
for  financial  statements  for both  interim and annual  periods  ending  after
December 15, 1997.  The Company has not  determined the effect of application of
SFAS No. 128 on the financial statements at this time.

2.  REAL ESTATE INVESTMENTS

         At December 31, 1996,  the Company owned  directly  nineteen  apartment
communities  (3,093 units) located in Arizona,  Texas, and New Mexico.  In March
1997, the Company acquired a 266-unit apartment  community in northwest Houston,
Texas. The purchase price was  approximately  $4,450,000 and the Company expects
to invest $700,000 in capital improvements.  The Company obtained a new mortgage
loan of $3,700,000 with a fixed rate of 8.39%.  The Company issued 86,500 shares
of common
                                        6
<PAGE>
                           ASR INVESTMENTS CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 For the Quarters Ended March 31, 1997 and 1996


stock  for net  proceeds  of  $1,622,000  to  provide  for the cash  used in the
acquisition.  As of March 31, 1997 and December 31, 1996, the Company's directly
owned apartment communities consisted of the following (in thousands):

                                                     1997               1996
                                                   --------          -------
         Land                                      $15,514           $15,514
         Building and improvements                  63,294            58,476
         Accumulated depreciation                   (8,184)           (7,504)
         Restricted cash and
             deferred loan fees                      4,231             4,020
                                                   -------          --------
         Apartments, net                           $74,855           $70,506
                                                   =======          ========

         In March 1996, the Company began  construction of a 356-unit  apartment
community, Finisterra Apartments, in Tempe, Arizona. The total cost is estimated
to be approximately $21,000,000. As of March 31, 1997 and December 31, 1996, the
Company had invested  $18,528,000  and  $14,694,000 in construction in progress.
The Company has obtained a $15,350,000  construction  loan of which  $10,224,000
and $255,000  were  outstanding  at March 31, 1997 and  December  31, 1996.  The
Company  has  begun  the  lease-up  phase  and  anticipates  construction  to be
substantially completed at the end of the third quarter.

         In  addition,  at March 31,  1997,  the  Company  owned  six  apartment
communities  (1,441,  units)  located in Arizona  through joint  ventures with a
pension plan affiliate of Citicorp.  The Company is a 15% equity partner and the
managing  partner or managing member of the joint ventures.  On May 1, 1997, the
Company  acquired  the  remaining  interest  in one joint  venture  and sold its
interests  in  the  other  five  joint  ventures.  See  Note  3  for  additional
information.

3.  SUBSEQUENT  REAL ESTATE  ACQUISITIONS

         On  April  30,  1997,  the  Company  completed  the  acquisition  of 13
apartment  communities  containing  2,260  units  located in Houston and Dallas,
Texas and  Pullman,  Washington,  and one office  building  located in  Seattle,
Washington (the "Winton Properties").  The acquisitions are pursuant to a Master
Combination and Contribution  Agreement dated November 8, 1996. The sellers were
14 separate limited partnerships in which Don W. Winton was the general partner.
The total purchase price of the properties
                                        7
<PAGE>
                           ASR INVESTMENTS CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 For the Quarters Ended March 31, 1997 and 1996


is  approximately  $83,223,000.  The  Company (i)  assumed or  refinanced  first
mortgage  loans  totalling  $49,396,000,  (ii) issued  683,626  shares of common
stock, (iii) issued operating partnership units convertible to 942,184 shares of
common stock of the Company after one year, and (iv) paid the sellers $1,250,000
for transaction  costs. As a part of the acquisition,  the Company issued 70,284
shares of common stock to acquire the entire  interests in Winton &  Associates,
the property management company for the Winton Properties.

         In April 1997,  the Company  acquired a 257-unit  community in Houston,
Texas,  for $6,000,000 and obtained a first mortgage loan for $4,400,000 with an
interest  rate of  8.57%.  On May 9,  1997,  the  Company  acquired  a  176-unit
apartment community in Seattle,  Washington, for $4,059,000 and obtained a first
mortgage loan of $2,900,000 with an interest rate of 8.67%.  The Company expects
to invest  $1,000,000  in capital  improvements  in these two  communities.  The
Company  issued  187,850  shares of common  stock  for  total  net  proceeds  of
$3,394,000 to pay for the two purchases.

         On May 1, 1997,  the  Company  acquired  the  remaining  interest in La
Privada  Apartments  L.L.C.  for  $8,233,000.  The La  Privada  Apartments  is a
350-unit community in Scottsdale,  Arizona. The Company also sold to its partner
the Company's  entire  interests in the other five joint  ventures for total net
proceeds of $2,062,000.  The Company  obtained a $3,000,000  loan to pay for the
acquisition.  As a result of these  transactions,  the  Company  owns all of its
apartment communities directly.  The purchase increased the Company's investment
in  apartments  by  approximately  $25,500,000  and real estate notes payable by
$19,000,000.  The sale of the  interests in the joint  ventures  will not have a
significant impact on the operating results of the Company.

         As of May 9, 1997, the Company owns 36 apartment communities containing
6,346 units with a total book value of approximately $217,000,000, and the total
real estate borrowing is approximately $139,000,000.

4.  MORTGAGE ASSETS

         The  mortgage  assets  entitle the Company to receive the excess of the
cash flows on pools of  mortgage  instruments  over the  required  payments on a
series of structured financings that they secure. The Company also has the right
to cause the early  redemption  of the  structured  financings  under  specified
conditions; in such event, the mortgage
                                        8
<PAGE>
                           ASR INVESTMENTS CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 For the Quarters Ended March 31, 1997 and 1996


instruments are sold and the net proceeds after the redemption of the structured
financings  are  remitted to the  Company.  In some cases,  the Company  sells a
mortgage asset that is redeemable in the foreseeable future. Redemption and sale
transactions occur from time to time as specified conditions are met rather than
on a monthly or quarterly basis;  therefore,  the amount of net proceeds and the
income  from  the  redemption  transactions  fluctuates   significantly  between
periods.

         During the first quarter of 1997,  the Company  redeemed three mortgage
assets for proceeds of $6,815,000 and realized  redemption income of $5,338,000.
During the first quarter of 1996,  the Company sold a 40% interest in a mortgage
asset  that was later  redeemed  in the  second  quarter  of 1996.  The  Company
received  proceeds of $2,400,000  and redemption  income of $1,977,000  from the
sale. In April 1997, the Company redeemed two additional  assets for proceeds of
$710,000 and  estimated  income of $330,000.  At March 31, 1997 and December 31,
1996, the prospective  yield on mortgage  assets  (excluding the mortgage assets
redeemed in April) was 40% and 38%.

5.  NOTES PAYABLE

         In March 1997, the Company obtained a $3,700,000 new mortgage loan with
a fixed rate of 8.39% and a 10 year term in  connection  with the purchase of an
apartment community.

         As  discussed  in  Note 2,  the  Company  has  obtained  a  $15,350,000
construction  loan to  finance  the  construction  of its  Finisterra  apartment
community.  The loan bears  interest at 1% per annum above the bank's prime rate
(8.5%).  At March 31, 1997 and December 31, 1996, the amount  outstanding on the
loan was $10,224,000 and $255,000, respectively.

         At March 31, 1997 and  December  31,  1996,  the  Company's  short-term
borrowing  was  secured  by  mortgage  assets  with a total  carrying  value  of
$2,029,000 and $3,084,000, respectively.

6.  RELATED PARTY TRANSACTIONS

         From the inception of the Company through April 30, 1997, Pima Mortgage
L.P.  (the  "Manager"),  managed the  operations  of the  Company  pursuant to a
management
                                       9
<PAGE>
                           ASR INVESTMENTS CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 For the Quarters Ended March 31, 1997 and 1996


agreement.  The management fee and  administrative  fee were $95,000 and $40,000
for the  quarter  ended  March 31,  1997 and  $97,000  and  $52,000 for the 1996
quarter.

         Prior to May 1, 1997, the Company had a property  management  agreement
with Pima Realty Advisors,  Inc. (the "Property  Manager"),  an affiliate of the
Manager,  for each of its apartment  communities.  Under the property management
agreements, the Property Manager provided customary property management services
at its cost  without  profit or  distributions  to its  owners,  subject  to the
limitation of the prevailing  management fee rates for similar properties in the
market.  The costs were  allocated to the Company  monthly based on the ratio of
the number of units owned by the Company  relative to the total  apartment units
managed by the  Property  Manager.  The costs  allocated  to the Company for the
quarters ended March 31, 1997 and 1996 were $145,000 and $109,000, respectively,
which were equal to  approximately  3.9% and 3.0%,  respectively,  of rental and
other income.

         As a part of the  acquisitions  described  in Note 3, the Company  also
acquired the entire ownership  interests of the Manager and the Property Manager
for  262,008  shares of common  stock.  As a result,  the  Company  has become a
self-administered  and self-managed  REIT. The owners of the Manager continue to
be executive officers and members of the Board of Directors of the Company.  The
cost of the  acquisition of $5,250,000 is assigned to the contracts  between the
Company and the Pima entities. As the contracts are effectively terminated,  the
cost is charged to contract termination expense in the second quarter of 1997.

                                       10
<PAGE>
                           ASR INVESTMENTS CORPORATION
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                 For the Quarters Ended March 31, 1997 and 1996


General

         ASR Investments Corporation (the "Company") is a real estate investment
trust  engaged   primarily  in  the   acquisition  and  operation  of  apartment
communities in the  southwestern  United States.  At March 31, 1997, the Company
owned 20  apartment  communities  (3,359  units)  located in Tucson and Phoenix,
Arizona,  Houston,  Texas, and Albuquerque,  New Mexico.  The Company also owned
through joint  ventures six apartment  communities  (1,441 units) in Phoenix and
Tucson, Arizona.

         The Company  continues to own mortgage  assets (all  acquired  prior to
1993) to  generate  cash  flows  for  apartment  acquisitions  and  development,
operations,  payment of dividends and other corporate  purposes.  These mortgage
assets  entitle  the  Company to receive the excess of the cash flow on pools of
mortgage  instruments  over the  required  payments  on a series  of  structured
financings which they secure. The Company also has the option to cause the early
redemption of the structured  financings at par after  specified  conditions are
met  (generally  when the structured  financing is below a specified  balance or
after a specified  date). In such event,  the mortgage  instruments are sold and
the net proceeds after the  redemption of the structured  financing are remitted
to the Company. In some cases, the Company decides to sell a mortgage asset that
is expected to be redeemable in the foreseeable future.

Results of Operations

         Real Estate  Operations  - Rental and other income for the 1997 quarter
increased  by $60,000  primarily  as a result of (i)  $40,000  from  rental rate
increases (attributable primarily to the Houston Communities), (ii) $81,000 from
higher  occupancy  rates  (attributable  primarily  to the  Houston  and  Tucson
communities),  (iii) $13,000 from prior rental increases  becoming  effective as
leases are renewed or the apartment is  re-leased,  (iv) $6,000 from an increase
in  income  from  the  joint  ventures  and  (v)  $23,000  from an  increase  in
laundry/vending and other miscellaneous  income. The increases were mitigated by
an increase in rental  concessions  of $103,000  (attributable  primarily to the
Albuquerque  and  Tucson   communities).   Operating  and  maintenance  expenses
increased $89,000 (7.10%) as a result of an increase in turnover costs and other
expenses  related to the increased  occupancy in the Houston  communities.  Real
estate taxes and insurance and depreciation and amortization  expenses  remained
flat as there were no significant  changes in rates and no  acquisitions in 1996
or early in the 1997 quarter. Interest expense on real
                                       11
<PAGE>
                           ASR INVESTMENTS CORPORATION
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                 For the Quarters Ended March 31, 1997 and 1996


estate mortgages increased $41,000 as a result of "catch up" costs for loan fees
amortized on a loan that is due at the end of 1997.

         Mortgage  Assets  -  Prospective  yield  income  decreased  due  to the
decrease  in  the  mortgage  asset  balance  as a  result  of  amortization  and
redemptions.  The average  mortgage  asset balance was  $3,761,000  for the 1997
quarter compared with $11,672,000 for the 1996 quarter.  The average prospective
yield for the  quarter  was 38% in 1997  compared  to 35% in 1996.  Income  from
redemptions  and sales  increased by $3,361,000 as a result of the redemption of
three mortgage  assets in the quarter 1997 for income of $5,338,000  compared to
the sale of a 40% interest in a mortgage asset in the quarter 1996 for income of
$1,977,000.   Interest  expense  on  mortgage  assets  decreased  due  to  lower
short-term  borrowing  in  1997  ($500,000  at  March  31,  1997  compared  with
$4,587,000 at March 31, 1996).

         Administrative  Expenses  and Other  Income -  Administrative  expenses
increased in the 1997  primarily as a result of an increase in expense  accruals
for stock appreciation  rights of $513,000 as a result of price increases in the
Company's  common stock.  Other income  increased due to interest  earned on the
Company's average cash balance which was higher during the 1997 quarter compared
with the 1996 quarter.

         Income from Mortgage  Redemption  and Sales - As discussed  above,  the
Company has, from time to time, redeemed or sold mortgage assets. Redemption and
sale transactions occur as specified conditions are met rather than on a monthly
or quarterly basis, and the net proceeds are affected by the market price of the
mortgage  instruments.  Thus, the cash flows and income from redemption and sale
transactions  fluctuate  significantly between periods. The income recognized in
the past  periods is not  indicative  of future  operating  results or financial
condition  because (i) the Company has a finite number of mortgage assets and is
not  purchasing any additional  mortgage  assets,  and (ii) the income is highly
dependent on future  levels of mortgage  prepayment  rates,  interest  rates and
mortgage  prices.  As mortgage  asset  redemptions  and sales have the effect of
accelerating  future cash flows, they reduce the cash flows and income in future
periods.

Liquidity, Capital Resources and Commitments

         Comparison of Quarters Ended March 31, 1997 and 1996 - Cash provided by
                                       12
<PAGE>
                           ASR INVESTMENTS CORPORATION
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                 For the Quarters Ended March 31, 1997 and 1996


operations  for the three  months ended March 31, 1997 was  $6,244,000  compared
with $3,123,000 for the same period in 1996. The increase was primarily a result
of a $3,361,000 increase in income from redemptions and sales of mortgage assets
($5,338,000 for the three months ended March 31, 1997 compared to $1,977,000 for
the same  period in 1996)  offset by a $440,000  decrease in  prospective  yield
income on the mortgage assets.

         Cash used in investing  activities for the three months ended March 31,
1997 was  $8,566,000  compared  with  $526,000 for the same period in 1996.  The
increase  in cash usage of  $8,040,000  primarily  reflects  (i) an  increase of
$4,557,000 in  investments  in  apartments  primarily as a result of the Company
purchasing  an apartment  community in March 1997,  while making no purchases in
1996,  (ii) an increase  of  $2,810,000  of  construction  expenditures  for the
Company's Finisterra apartment community, (iii) an increase of $615,000 in other
real estate and land held for development  primarily  related to the capitalized
costs of the 14  properties  acquired in April 1997 (iv) an increase of $633,000
in other assets primarily due to funding a deferred compensation plan and (v) an
increase of $99,000 in the  investment in joint  ventures.  The increase in cash
usage was  mitigated  by an increase of  $674,000 in the  reduction  in mortgage
assets.

         Cash provided by financing  activities for the three months ended March
31, 1997 was  $10,700,000  compared  with cash used in financing  activities  of
$959,000 for the same period in 1996. The increase of $11,659,000  was primarily
as a result of (i) an increase in the issuance of real estate  notes  payable of
$3,700,000  related to the  apartment  acquisition  made in March 1997,  with no
similar  purchases in 1996,  (ii) an increase of $9,748,000 in proceeds from the
Finisterra  Apartment's  construction  loan and (iii) an increase of  $1,622,000
from stock  issuance  related to the apartment  acquisition  in March 1997.  The
increase was mitigated by (i) an increase of short-term  borrowing repayments of
$1,606,000 (ii) a decrease in the accrued  construction cost payable of $551,000
for the Finisterra Apartment community and (iii) a decrease in other liabilities
and other financing  activities of $1,254,000  primarily as a result of $487,000
paid to employees for stock appreciation  rights exercised and to an increase in
the  apartment's  property  tax  accrual at March 31,  1996 from the  accrual at
December 31, 1995.

         Subsequent  Acquisitions - On April 30, 1997, the Company completed the
acquisition  of 13  apartment  communities  containing  2,260  units  located in
Houston and  Dallas,  Texas and  Pullman,  Washington,  and one office  building
located in Seattle,
                                       13
<PAGE>
                           ASR INVESTMENTS CORPORATION
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                 For the Quarters Ended March 31, 1997 and 1996


Washington  (the  "Winton  Properties").  The sellers  were 14 separate  limited
partnerships in which Don W. Winton was the general partner.  The total purchase
price of the properties is approximately $83,223,000. The Company (i) assumed or
refinanced  first  mortgage  loans  totalling  $49,396,000,  (ii) issued 683,626
shares of common stock, (iii) issued operating  partnership units convertible to
942,184  shares of common stock of the Company after one year, and (iv) paid the
sellers  $1,250,000 for  transaction  costs. As a part of the  acquisition,  the
Company issued 70,284 shares of common stock to acquire the entire  interests in
Winton & Associates, the property management company for the Winton Properties.

         In  April  1997,  the  Company  acquired  an  apartment  community  for
$6,000,000 and obtained a first  mortgage loan for $4,400,000  with a fixed rate
of 8.57%.  On May 9, 1997,  the Company  acquired  an  apartment  community  for
$4,059,000 and obtained a first mortgage loan of $2,900,000 with a fixed rate of
8.67%. The Company expects to invest $1,000,000 in capital improvements in these
two communities. The Company issued 187,850 shares of common stock for total net
proceeds of $3,394,000 to pay for the two purchases.

         On May 1, 1997,  the  Company  acquired  the  remaining  interest in La
Privada  Apartments  L.L.C.  for  $8,233,000.  The La  Privada  Apartments  is a
350-unit community in Scottsdale,  Arizona. The Company also sold to its partner
the Company's  entire  interests in the other five joint  ventures for total net
proceeds  of  $2,062,000.  The  Company  obtained a  $3,000,000  loan that bears
interest at LIBOR plus 3%.

         With the above  acquisitions,  the total monthly principal and interest
payments on the real estate mortgage loans are approximately  $985,000,  and the
monthly  deposits to loan escrow  accounts for  property  taxes,  insurance  and
capital replacements are approximately  $425,000.  The Company estimates that it
would spend  approximately  $1,300,000  during the  remainder of 1997 in capital
replacement expenditures.

         Concurrent with the acquisition of the Winton  Properties,  the Company
acquired the entire interests in Pima Mortgage and Pima Realty (collectively the
"Pima Entities") in exchange for 262,008 shares of its common stock. The cost of
the  acquisition of $5,250,000 is assigned to the contracts  between the Company
and the Pima Entities. As the contracts are effectively terminated,  the cost is
charged to contract termination expense in the second quarter of 1997.
                                       14
<PAGE>
                           ASR INVESTMENTS CORPORATION
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                 For the Quarters Ended March 31, 1997 and 1996


         The Company  anticipates that the above acquisitions will result in (i)
significant increases in the Company's gross income and operating expenses, (ii)
an increase in interest expenses on real estate  mortgages,  (iii) a decrease in
administrative  expenses  resulting  from the  replacement  of  management  fees
previously  paid to the Pima Entities by Company with salaries to be paid to the
owners of the managers who will become employees of the Company.  The net income
for 1997,  however,  will be reduced by the $5,250,000  charge to income for the
cost of the acquisition of the Pima entities.  As this is a non-cash charge,  it
will not have any effect on the cash provided by operations.

         Mortgage  Assets  Cash  Flows  -  The  Company   continues  to  realize
substantial  cash  flows  from  its  mortgage  assets,  a  majority  of which is
generated from  redemptions or sales.  The  redemptions or sales  accelerate the
mortgage  asset cash flows and  increase  the  present  value.  During the first
quarter of 1997, the mortgage  assets  generated  total cash flow of $7,420,000,
including  $6,815,000 from the redemption of three mortgage assets.  The Company
used a portion of the proceeds to reduce short-term borrowing by $1,514,000.  In
April,  the Company  redeemed  two  additional  mortgage  assets for proceeds of
approximately $710,000.

         The Company has prepared the  following  estimates of future cash flows
from the  mortgage  assets.  Cases 1, 2 and 3 assume  that  except for the early
redemptions  or sales of the  mortgage  assets  in  April  as  described  in the
preceding  paragraph,  there would be no further early  redemptions  or sales of
mortgage assets. The assumed interest rate and mortgage prepayment rates in Case
2 are the  approximate  interest rate and forecasts of prepayment  rates made by
market  participants  as of March 31,  1997.  The  estimates in Case 4 have been
prepared  using the same interest rate and mortgage  prepayment  rates as Case 2
except that each mortgage asset is assumed to be redeemed at the first available
date and the underlying mortgages are sold at the March 31, 1997 prices (average
price of 106% of par). (Dollars in thousands.)

                             Case 1         Case 2        Case 3        Case 4
                            --------       --------      --------      -------
Assumed one month LIBOR        3.7%           5.7%           7.7%          5.7%
Assumed annual mortgage
  prepayments                19.14%         11.85%          7.62%        11.85%
Estimated cash flows
         1997              $ 2,295        $ 2,165       $  1,914      $  4,767
         1998                1,587          1,579          1,298         1,763
                                       15
<PAGE>
                           ASR INVESTMENTS CORPORATION
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                 For the Quarters Ended March 31, 1997 and 1996


         1999               1,085         1,218           1,061           427
         2000                 738           917             900        16,744
         2001                 458           693             762           721
         2002-2020          2,886         6,804         12,390             64
                         --------       -------        -------       --------
         Total           $  9,049       $13,339        $18,325       $ 24,486
                         ========       =======        =======       ========

         There can be no assurance that the actual interest and prepayment rates
will be as assumed or that the prices of the mortgage instruments will remain at
the assumed levels.  Proceeds from  redemptions  are highly  dependent on prices
available  upon  sale of the  mortgages  as well as the  timing of  meeting  the
conditions for redemption  (generally reduction of the structured financing to a
specified  balance or a specified  date). As an example,  if the assumed average
price above par for mortgage sales in Case 4 above were to decrease by half (the
average  mortgage  prices  decreases to 103%),  the estimated total cash flow in
Case 4 would decline by $8,811,000 of which $1,283,000 would relate to 1997.

         Cash Balances - At March 31, 1997, the Company had cash of $10,781,000.
In April,  the  Company  received  funding  of  $2,046,000  from the  Finisterra
apartments  construction  loan and $710,000 from the  redemption of two mortgage
assets.  The Company intends to use such funds to pay for the acquisitions  made
in April,  capital  improvements on existing apartment  communities,  to acquire
additional apartment communities, and to pay dividends and operating expenses.

Other Information

         Apartment  leases  generally  are  for  terms  of  six  to  12  months.
Management  believes that such short-term  leases lessen the impact of inflation
as a result of the  ability to adjust  rental  rates to market  levels as leases
expire. To the extent that the inflation rate influences federal monetary policy
and results in rising short-term interest rates or declines in mortgage interest
rates, the income and cash flows from the mortgage assets would be affected.
                                       16
<PAGE>
                           ASR INVESTMENTS CORPORATION
                          QUARTERLY REPORT ON FORM 10-Q
                      For the Quarter Ended March 31, 1997


PART  II

OTHER INFORMATION

Item 1.           Legal Proceedings - None
                  -----------------       

Item 2.           Changes in Securities - Not applicable
                  ---------------------

Item 3.           Defaults Upon Senior Securities - Not applicable
                  -------------------------------

Item 4.            Submission of Matters to a Vote of Security Holders - None
                   ---------------------------------------------------

Item 5.           Other Information - Not applicable
                  -----------------

Item 6            Exhibits and Reports on Form 8-K - None
                  --------------------------------

                              ********************

                                   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.

ASR INVESTMENTS CORPORATION

Mary C. Clements                           Joseph C. Chan
---------------------                      --------------------------
Mary C. Clements                           Joseph C. Chan
Controller                                 Executive Vice President,
May 14, 1997                                        Chief Operating Officer,
                                                    Chief Financial and
                                                    Accounting Officer
                                                    May 14, 1997
                                       17