SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-K/A

      [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934
                   For the Fiscal Year Ended December 31, 1997

                                       OR

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

                           Commission File No. 1-7003

                             PROPERTY CAPITAL TRUST
                             ----------------------
             (Exact name of registrant as specified in its charter)


       MASSACHUSETTS                                            04-2452367
--------------------------------------------------------------------------------
(State or other jurisdiction of                              (I.R.S. Employer
 incorporation or organization)                              Identification No.)


    101 FEDERAL STREET, 4TH FLOOR
       BOSTON, MASSACHUSETTS                                      02110-1817
--------------------------------------------------------------------------------
(Address of principal executive offices)                          (Zip Code)


       Registrant's telephone number, including area code: (617) 737-0100


           Securities registered pursuant to Section 12(b) of the Act:

                                                            Name of exchange
      Title of each Class                                  on which registered
      -------------------                                  -------------------
COMMON SHARES, WITHOUT PAR VALUE                         AMERICAN STOCK EXCHANGE
RIGHTS TO PURCHASE COMMON SHARES                         AMERICAN STOCK EXCHANGE

Securities registered pursuant to Section 12(g) of the Act: NONE

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 [ ].

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. Yes [X] No [ ].

As of March 9, 1998, the aggregate market value of Common Shares held by
non-affiliates of the registrant was approximately $6,589,000.

As of March 9, 1998, there were 9,584,220 Common Shares outstanding.

<PAGE>

PART III

ITEM 10. TRUSTEES AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information with respect to Executive Officers is set forth, pursuant to
General Instruction G of Form 10-K, under Part I of this Report. The information
with respect to the Trustees is set forth below.

<TABLE>
<CAPTION>
                              
                                    
                                                    PRINCIPAL OCCUPATION                
TRUSTEE AND POSITIONS                                FOR PAST 5 YEARS,              
HELD WITH TRUST                                     AFFILIATIONS AND AGE                                  SINCE
---------------------------------------------------------------------------------------------------------------
<S>                        <C>                                                                            <C> 
Walter M. Cabot . . . . . .Senior Advisor of Standish, Ayer & Wood, Inc., Boston, MA; Director,           1982
 Trustee (1)(3)            General Reinsurance Company,  Stamford,  CT, and Rockefeller Financial
                           Services, New York, NY; Trustee and Treasurer, Wellesley College, 
                           Wellesley, MA; Member, Board of Trustees, Lifespan Corp., Providence, RI 
                           (Age 65).

John A. Cervieri Jr. . . . Chairman and President of Property Capital Associates, formerly known as       1969
 Managing Trustee (1)      Property Capital Advisors, Inc. (the "Advisor")(the former investment 
                           advisor to the Trust) and its affiliates, Boston, MA; Director of 
                           BankBoston, Boston, MA; Chairman and Chief Executive Officer of Americana
                           Hotels and Realty Corporation, Boston, MA (Age 67).

Graham O. Harrison . . . . Manager and Investment Committee Chairman, Swarthmore College, Swarthmore,     1980
 Trustee (2)(3)            PA; prior to May, 1994,  Vice President and Chief  Investment  Officer
                           of the  Howard Hughes Medical Institute, Chevy Chase, MD (Age 74).

Walter F. Leinhardt . . . .Partner of Paul, Weiss, Rifkind, Wharton & Garrison, New York, NY, law firm    1969
 Trustee and Secretary     (Age 65).
 (2)(4)

Robert M. Melzer . . . . . President and Chief Executive Officer of the Trust since 1996; prior to 1996,  1992
 Trustee, President and    President, Chief Executive Officer and Chief Financial Officer of the Trust;
 Chief Executive Officer   Director, Genesee & Wyoming, Inc., Greenwich, CT, and Red Lion Properties,
 (1)                       Inc., Phoenix, AZ; Trustee, MGI Properties, Boston, MA; Trustee and Treasurer, 
                           Beth Israel Deaconess Medical Center, Boston, MA (Age 57).

Glenn P. Strehle . . . . . Vice President for Finance (since 1994), Treasurer (since 1975) and Vice       1993
 Trustee (2)(3)            President for resource development (from 1986 to 1994) of the Massachusetts 
                           Institute of Technology, Cambridge, MA; member of MIT Executive and 
                           Investment Committees; Chairman of the Trustees of the MIT Retirement Plan;
                           Director of Liberty Mutual Insurance Companies and Liberty Financial 
                           Companies, Boston, MA and BankBoston, Boston, MA (Age 62).
</TABLE>


(1) Member of the Executive Committee.

(2) Member of the Audit Committee.

(3) Member of the Compensation Committee.

(4) Paul, Weiss, Rifkind, Wharton & Garrison performed legal services for the 
    Trust during 1997 and is performing legal services for the Trust during the
    current calendar year. See Item 13. "Certain Relationships and Related
    Transactions."

                                       2

<PAGE>

         During 1997, there were six meetings of the Board of Trustees. The
Trust has standing Audit, Executive and Compensation Committees. The Audit
Committee, which during 1997 was composed of Messrs. Harrison, Leinhardt and
Strehle, none of whom is or was employed by the Trust ("Outside Trustees"), met
three times during such year. The function of the Audit Committee is to
supervise all relations between the Trust and its independent auditors,
including participating in the planning for the annual audit and receiving and
reviewing the results of that audit.

         The Executive Committee, which during 1997 was composed of Messrs.
Cabot, Cervieri and Melzer, is responsible, among other things, for addressing
major issues which arise between scheduled Trustees' meetings. During 1997, the
Executive Committee did not hold meetings, but its members discussed by
telephone from time to time matters concerning the Trust's business.

         The Compensation Committee, which during 1997 was composed of three
Outside Trustees, Messrs. Cabot, Harrison and Strehle met two times during 1997.
The Compensation Committee is responsible for administering the 1992 Employee
Stock Option Plan and for making decisions concerning the compensation of the
Trust's executive officers which, in the case of Mr. Melzer, are subject to
ratification by the full Board of Trustees.

         During 1998 the Audit and Compensation Committees will continue to be
composed entirely of Outside Trustees. The Trust does not have a standing
Nominating Committee. During 1997, each Trustee attended at least 75% of the
meetings of the Board and of each committee on which such Trustee served.

COMPENSATION OF TRUSTEES

         Each Trustee receives a base fee of $833 per month and each member of
the Executive Committee and each member of the Audit Committee receives a fee of
$417 per month. In addition, each Trustee receives $1,000 for each meeting
attended. Trustees' fees totaled $106,000 in 1997. The Trust also reimburses the
Trustees for their expenses incurred in attending meetings of the Trustees. For
1997, reimbursed expenses totaled $2,032. Mr. Melzer receives no compensation
for serving as a Trustee.

AMENDED AND RESTATED DEFERRED STOCK PLAN FOR NON-EMPLOYEE TRUSTEES

         Prior to February 19, 1998, under the Trustee Deferred Stock Plan, each
non-employee Trustee may have elected, on an annual basis, to have fees that
would otherwise have been payable in cash to the Trustee credited to an account
for the Trustee's benefit. Until January 1, 1997, to the extent such fees were
deferred by a Trustee, (i) share units of the Trust's Common Shares were
allocated to such Trustee's account based upon the closing price for the Common
Shares on the American Stock Exchange (the "AMEX") as of the date the fees would
have been paid, and (ii) additional share units were allocated to reflect
dividends that would have been paid on a number of Common Shares equal to the
number of share units in a Trustees' account. The Trustees could also direct
their fees to be invested in cash equivalents. Subsequent to January 1, 1997,
the non-employee Trustees elected to invest their fees in mutual funds and cash
equivalents. For calendar 1997, all of the non-employee Trustees elected to
participate in the Trustee Deferred Stock Plan with respect to all fees payable
to them, except for Walter F. Leinhardt, who elected to receive his fees in
cash. On February 19, 1998, the Trustee Deferred Stock Plan was terminated and
all Common Shares and funds held by the Trustee Deferred Stock Plan were
distributed to the Trustees. For calendar 1998 all of the non-employee Trustees
will receive all fees payable to them in cash.

1994 STOCK OPTION PLAN FOR NON-EMPLOYEE TRUSTEES

         Under the Trustee Stock Option Plan, each Trustee who is not an
employee of the Trust or any of its affiliates is entitled to receive a grant of
non-qualified stock options for the purchase of 4,000 Common Shares upon the
election or reelection of such Trustee at an annual meeting of shareholders. The
exercise price of options under the Trustee Stock Option Plan is equal to the
fair market value of the underlying Common Shares on the date of grant, but not
less than $1.00 per share. Options vest on the day immediately preceding the
next annual meeting of shareholders to occur following the date of grant, except
in the event of death, disability or a change of control (as defined in the
Trustee Stock Option Plan) occurring prior to such annual meeting, in which case
such options immediately vest and become exercisable.

                                       3

<PAGE>

ITEM 11. EXECUTIVE COMPENSATION

SUMMARY COMPENSATION OF EXECUTIVE OFFICERS

         The following table sets forth the compensation awarded to, earned by
or paid to the Chief Executive Officer and the four other most highly
compensated executive officers of the Trust during the calendar year ended
December 31, 1997, the five months ended December 31, 1996 (the Transition
Period) and the fiscal years ended July 31, 1996 and 1995.


SUMMARY COMPENSATION TABLE (1)

<TABLE>
<CAPTION>
                                                                                                           Long-Term
                                                                                                         Compensation
                                                                                                         ------------
                                                                                                    Common   
                                                                        Annual Compensation         Shares          
                                                                        -------------------         Underlying
                                                                                 Other Annual       Options           All Other
                                                          Salary       Bonuses   Compensation       Granted         Compensation
Name and Principal Position                 Period           $            $            $               #                  $
---------------------------              ------------     -----------------------------------------------------------------------
<S>                                      <C>              <C>          <C>             <C>          <C>              <C>       
Robert M. Melzer . . . . . . . . . . . . Y/E 12/31/97     254,854         0            0               0             749,471(5)
   President and                         P/E 12/31/96(2)  105,462         0            0               0               3,855(6)
   Chief Executive Officer               Y/E 7/31/96      241,505         0            0               0               9,701(7)
                                         Y/E 7/31/95      232,207      30,000          0            35,000(3)          8,588(8)

William A. Bonn . . . . . . . . . . . . .Y/E 12/31/97        0            0            0               0                  0
   Former Sr. Vice President, General    P/E 12/31/96(2)   86,030      33,250          0               0             204,769(6)
   Counsel and Assistant Secretary       Y/E 7/31/96      189,769      76,000          0               0               9,684(7)
                                         Y/E 7/31/95      177,788      30,000          0            12,500(3)          8,598(8)

Michael I. Sucoff . . . . . . . . . . . .Y/E 12/31/97     128,447      50,400          0               0               8,665(5)
   Vice President                        P/E 12/31/96(2)   53,123         0            0               0               5,932(6)
                                         Y/E 7/31/96      119,850      48,000          0               0               8,234(7)
                                         Y/E 7/31/95      111,952      20,000          0            10,000(3)(4)       7,011(8)

Robin W. Devereux . . . . . . . . . . . .Y/E 12/31/97     115,067      45,150          0               0               8,422(5)
   Vice President and                    P/E 12/31/96(2)   47,589         0            0               0               6,149(6)
    Chief Financial Officer              Y/E 7/31/96      107,327      43,000          0               0               7,592(7)
                                         Y/E 7/31/95       92,058      25,000          0            10,000(3)          6,344(8)

Randolph L. Kazazian . . . . . . . . . . Y/E 12/31/97     107,039      42,000          0               0               8,413(5)
   Vice President                        P/E 12/31/96(2)   44,269         0            0               0               6,037(6)
                                         Y/E 7/31/96       99,827      40,000          0               0               6,966(7)
                                         Y/E 7/31/95       86,971      20,000          0            10,000(3)          5,478(8)

</TABLE>

    (1) The columns designated by the Securities and Exchange Commission ("SEC")
for the reporting of restricted stock awards and payouts of certain long-term
compensation have been eliminated as being inapplicable during the period
covered by the table.

    (2) In 1997 the Trust changed its fiscal year from one which ended on July
31st to one which ends on December 31st. This information is for the five months
ended December 31, 1996.

    (3) Effective as of November 30, 1994, the Compensation Committee awarded
options to acquire Common Shares of the Trust to key employees of the Trust,
including all five named executive officers, at the closing price of the Common
Shares on the AMEX on such date ($6.125), subject to a dollar-for-dollar
reduction (but not below $1.00) to reflect any distributions in excess of funds
from operations. The options were awarded pursuant to the 1992 Employee Stock
Option Plan.

                                       4

<PAGE>

    (4) Effective as of February 22, 1995, the Compensation Committee awarded to
Mr. Sucoff 5,000 options to acquire Common Shares of the Trust at the closing
price of the Common Shares on the AMEX on such date ($6.375), subject to a
dollar-for-dollar reduction (but not below $1.00) to reflect any distributions
in excess of funds from operations. The options were awarded pursuant to the
1992 Employee Stock Option Plan.

    (5) Represents (i) amounts contributed by the Trust (a) on a matching basis
with contributions made by employees and (b) on a profit-sharing basis under the
PCT 401(k) plan ($8,147 for each of Messrs. Melzer, Sucoff, Kazazian and Ms.
Devereux), (ii) premiums paid by the Trust for term life insurance policies (in
the aggregate face amount of $50,000 for each executive officer) ($216 for Mr.
Melzer, $518 for Mr. Sucoff, $275 for Ms. Devereux and $266 for Mr. Kazazian),
and (iii) $741,108 paid by the Trust to Mr. Melzer as provided for in his
Incentive Compensation Agreement (see below).

    (6) Represents (i) amounts contributed by the Trust (a) on a matching basis
with contributions made by employees and (b) on a profit-sharing basis under the
PCT 401(k) plan ($3,735 for Mr. Melzer, $5,149 for Mr. Bonn, $5,812 for Mr.
Sucoff, $6,029 for Ms. Devereux and $5,917 for Mr. Kazazian), (ii) premiums paid
by the Trust for term life insurance policies (in the aggregate face amount of
$50,000 for each executive officer) ($120 for each of Messrs. Melzer, Bonn,
Sucoff, Kazazian and Ms. Devereux), and (iii) $199,500 paid by the Trust to Mr.
Bonn as provided for in Mr. Bonn's Termination Agreement.

    (7) Represents (i) amounts contributed by the Trust (a) on a matching basis
with contributions made by employees and (b) on a profit-sharing basis under the
PCT 401(k) plan ($9,413 for Mr. Melzer, $9,396 for Mr. Bonn, $7,946 for Mr.
Sucoff, $7,304 for Ms. Devereux and $6,678 for Mr. Kazazian), and (ii) premiums
paid by the Trust for term life insurance policies (in the aggregate face amount
of $50,000 for each executive officer) ($288 for each of Messrs. Melzer, Bonn,
Sucoff, Kazazian and Ms. Devereux).

    (8) Represents (i) amounts contributed by the Trust (a) on a matching basis
with contributions made by employees and (b) on a profit-sharing basis under the
PCT 401(k) plan ($8,286 for Mr. Melzer, $8,296 for Mr. Bonn, $6,709 for Mr.
Sucoff, $6,042 for Ms. Devereux and $5,176 for Mr. Kazazian), and (ii) premiums
paid by the Trust for term life insurance policies (in the aggregate face amount
of $50,000 for each executive officer) ($302 for each of Messrs. Melzer, Bonn,
Sucoff, Kazazian and Ms. Devereux).


INCENTIVE COMPENSATION AGREEMENT

         The following sets forth certain information concerning the incentive
compensation arrangement with Robert M. Melzer.

              LONG-TERM INCENTIVE PLAN AWARDS IN LAST CALENDAR YEAR

<TABLE>
<CAPTION>

                                                                                                  Estimated Future Payouts under
                                                                                                    Non-Stock Price-Based Plans
                                                                                                    ---------------------------
                                 Number of Shares, Units       Performance or Other Period
Name                                 Or Other Rights           Until Maturation or Payout       Threshold      Target       Maximum
----                             -----------------------       ---------------------------      ---------      ------       -------
<S>                                      <C>                               <C>                                  <C>   
Robert M. Melzer (1) . . . . .           250,000                           (1)                                  N/A

</TABLE>

    (1) As of August 25, 1995, the Trust entered into an incentive compensation
agreement (the "Incentive Compensation Agreement") with Mr. Melzer. Under the
Incentive Compensation Agreement, Mr. Melzer receives cash compensation equal to
the amount he would have realized if he had purchased on May 24, 1995 (the date
of the adoption by the Trustees of the 1995 Business Plan), 250,000 Common
Shares of the Trust (the "Phantom Shares") at $6.75 per share, the market price
of a Common Share on May 24, 1995, with the proceeds of a loan made to him by
the Trust bearing interest at the rate of 10% per annum, compounding monthly
(the "Phantom Loan"). Each dividend or other distribution paid on each Common
Share subsequent to May 24, 1995 is deemed to have been simultaneously paid on
the Phantom Shares, with such deemed dividends and other distributions being
applied first to pay the interest on and principal of the Phantom Loan. Once the
Phantom Loan has been discharged, Mr. Melzer is paid in cash an amount equal to
all such deemed dividends and other distributions. Upon termination of Mr.
Melzer's employment with the Trust, whether such termination results from Mr.
Melzer's discharge by the Trust, his election to leave the Trust, death,
disability or the termination of the Trust, the Trust will pay to Mr. Melzer an
amount in cash equal to the excess of the market value of the Phantom Shares
(which is equivalent to the then market value of a like amount of Common Shares)
over the amount, if any, then due on the Phantom Loan. Mr. Melzer will not be
entitled to any such payment if he voluntarily terminates his employment with
the Trust and fails to give the Trust the requisite notice under his Termination
Agreement or if the Trust terminates Mr. Melzer's employment for cause (as
defined in Mr. Melzer's Termination Agreement). If the Trust merges or
consolidates into or with another entity and the Trust is not the survivor of
such merger or consolidation, then the surviving entity will be required to pay
to Mr. Melzer an amount equal to the excess of the value of 250,000 Common
Shares of the Trust in connection with such merger or consolidation over the
amount then due on the Phantom Loan. As of December 31, 1997, the principal of
   the Phantom Loan was repaid together with unpaid interest thereon, and Mr.
Melzer received $741,108 in compensation under this Incentive Compensation
Agreement.

                                       5
<PAGE>

STOCK OPTION GRANTS

         During 1997 there were no stock option grants to the executive
officers. The Trust does not grant stock appreciation rights ("SARs") of any
kind.

OPTION EXERCISES/VALUE OF UNEXERCISED OPTIONS

         The following table sets forth certain information concerning
unexercised options to purchase Common Shares of the Trust held at the end of
1997 by the named executive officers. No named executive officers have any SARs.

             AGGREGATED OPTIONS/EXERCISES IN LAST CALENDAR YEAR AND
                        CALENDAR YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
                                                                   Number of Common
                                                                        Shares
                                Common                           Underlying Unexercised               Value of Unexercised
                                Shares                             Options at Fiscal                  In-The-Money Options
                              Acquired on       Value                  Year-end (#)                   at December 31, 1997($)
Name                          Exercises(#)     Realized       Exercisable     Unexercisable        Exercisable     Unexercisable
------------------------------------------------------------------------------------------------------------------------------------
<S>                             <C>            <C>                 <C>              <C>               <C>              <C>  
Robert M. Melzer  . . . . . .   60,000         $327,350            0                0                 $   0            $   0
William A. Bonn . . . . . . .   25,000         $135,875            0                0                 $   0            $   0
Michael I. Sucoff . . . . . .   12,500         $ 72,063            0                0                 $   0            $   0
Robin W. Devereux . . . . . .   20,000         $114,879            0                0                 $   0            $   0
Randolph L. Kazazian III  . .   17,500         $ 99,510            0                0                 $   0            $   0

</TABLE>

TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENTS

         The Trust is a party to a termination agreement (the "Termination
Agreement") with Mr. Melzer, which Termination Agreement expires on October 19,
2000. During the term of the Termination Agreement, upon the occurrence of a
"change of control" of the Trust, Mr. Melzer would be entitled to a payment from
the Trust equal to 150% of his annual base salary at the date of such change of
control if during the six months following such change of control he elects to
terminate his employment. Beginning October 19, 1997, the amount payable to Mr.
Melzer following such termination was reduced to 100% of his annual base salary
at the date of such change of control.

         The Termination Agreement also provides for the Trust to make certain
payments to Mr. Melzer equal to 150% of annual base salary on the date of
termination or resignation if Mr. Melzer is terminated by the Trust other than
for "cause" or if he resigns for "good reason." Beginning October 19, 1997, the
amount payable to Mr. Melzer in such event was reduced to 100% of his annual
base salary at the date of such termination or resignation. The Termination
Agreement provides that termination for "cause" may occur if (i) Mr. Melzer
engages in fraud, misappropriation, embezzlement or any other conduct that
either results in his conviction for a felony under the laws of the United
States or any State or is designed to result, directly or indirectly, in
improper gain or personal enrichment of himself at the expense of the Trust, or
any of its affiliates, or (ii) in the reasonable opinion of the Trustees, has
wilfully failed to perform material duties of his office and such failure is not
cured within a cure period. The Termination Agreement provides that Mr. Melzer
may resign for "good reason" if (i) he is removed from his current position with
the Trust (other than if he is terminated for cause or receives an equivalent or
more senior position with the Trust), (ii) he is assigned duties materially
inconsistent with his position, responsibilities, reporting requirements and
status or the Trust takes any action which results in a material diminution of
his position, authority, duties, responsibilities, reporting requirements or
status, subject in each case to a cure right, (iii) his annual base salary is
reduced or (iv) the Trust relocates its current headquarters outside the greater
metropolitan Boston area. The Termination Agreement also requires that Mr.
Melzer provide the Trust with at least six months' written notice prior to a
voluntary cessation of employment with the Trust that does not qualify for
payment of a termination fee.

                                       6

<PAGE>

         A "change of control" as defined in the Termination Agreement will have
occurred if (i) after the effective date of the Termination Agreement, any
person becomes a beneficial owner directly or indirectly of securities
representing 25% or more of the combined voting power of the then outstanding
voting securities of the Trust or (ii) a merger or consolidation of the Trust, a
sale of all or substantially all of the assets of the Trust or a contested
election of Trustees, or any combination of the foregoing, occurs and within two
years after the occurrence of any of the foregoing, the individuals who are
Trustees (excluding any employee of the Trust) immediately prior thereto shall
cease to constitute a majority of the Board of Trustees of the Trust or the
Board of Trustees or Directors of the Trust's successor.

         Mr. Melzer is not entitled to any payment under his Termination
Agreement if he voluntarily leaves the employ of the Trust (other than for good
reason or within six months after a change of control) or if his employment
terminates by reason of his death or disability.

COMPENSATION COMMITTEE'S REPORT ON COMPENSATION

         The Trust had a standing Compensation Committee during 1997 and,
accordingly, decisions regarding the compensation of the executive officers were
made by the Compensation Committee subject, in the case of Robert M. Melzer,
President and Chief Executive Officer of the Trust, to ratification by the full
Board of Trustees. Mr. Melzer did not participate in discussions regarding his
own compensation.

         During 1997, the compensation of executive officers of the Trust
included cash compensation consisting of base salary plus bonuses (if any), and
participation in certain benefit plans generally available to employees of the
Trust such as the Trust's 401(k) plan and health insurance. The Compensation
Committee fixed the annual salary of, and awarded cash bonuses to, the executive
officers of the Trust subject, in the case of the salary of Robert M. Melzer,
President and Chief Executive Officer of the Trust, to ratification by the full
Board of Trustees (excluding Mr. Melzer).

         Executive officers of the Trust also are eligible to participate in the
1992 Employee Stock Option Plan. During 1997, the Compensation Committee did not
award stock options to any of the executive officers. In order to motivate the
Trust's executive officers to remain with the Trust during the implementation of
the new business plan for the Trust (the "1995 Business Plan"), the terms of all
outstanding options were amended by the Compensation Committee to provide for
automatic vesting (a) upon termination of an executive's employment with the
Trust where such termination results from the contraction of the Trust or (b)
when the exercise price of such options falls below $2.00. Subsequent to the end
of fiscal 1996, the Compensation Committee amended the terms of the outstanding
options to substitute in lieu of clause (b) above, automatic vesting when a
dividend is declared by the Trustees which when distributed would reduce, in the
opinion of the Compensation Committee, the exercise price of such options to no
more than $2.00.

         In establishing officers' salaries and bonuses for 1997, the
Compensation Committee examined both the base salaries and bonuses such persons
were being paid by the Trust and the compensation paid to officers by public
companies with market capitalizations similar to the Trust, primarily other
publicly-traded real estate investment trusts. In addition, the Compensation
Committee generally sought to link the compensation paid to the executive
officers of the Trust to the performance of the Trust and, for certain executive
officers, the performance of Trust investments for which they have
responsibility. Specifically, the indicators of corporate performance which the
Compensation Committee relied upon in making such decisions were the achievement
of Trust and individual investment projections and budgets, success in leasing
owned properties, consummation of targeted dispositions of Trust investments as
well as the consideration received by the Trust from the purchasers in
connection with such dispositions and the individual efforts and accomplishments
of each executive officer in achieving such objectives. The Compensation
Committee also took account of the fact that under the 1995 Business Plan the
Trust would eventually go out of business, and based its salary and bonus
determinations on the need to encourage the executive officers to remain with
the Trust as its business was wound down.

         With regard to Mr. Melzer, the Compensation Committee determined that
his Incentive Compensation Agreement which was established in 1995 was adequate
as an incentive to help secure his continuing services and, as a consequence, no
additional incentives were recommended.

         The Compensation Committee also deemed it appropriate to limit Mr.
Melzer's salary increase and bonus. As a result, for 1997, Mr. Melzer was
awarded a salary increase equal to the rate of inflation and he was not awarded
a bonus.

                  By the 1997 Compensation Committee:

                  Walter M. Cabot
                  Graham O. Harrison
                  Glenn P. Strehle

                                       7

<PAGE>

PERFORMANCE GRAPH

         The following graph compares the yearly percentage change in the
cumulative total shareholder return on the Trust's Common Shares against the
cumulative total return of the AMEX Market Index and the National Association of
Real Estate Investment Trust Total Return Index for Hybrid REITS (the "Hybrid
Index") for the period of five years commencing January 1, 1993 and ended on the
last day of the Trust's last completed year, December 31, 1997. The graph
assumes an investment of $100 on January 1, 1993, a reinvestment of dividends
and actual increase or decrease of the market value of the Trust's Common Shares
relative to an initial investment of $100. The Trustees believe that the Hybrid
Index is the most relevant index of a peer group for the Trust because the
Trust's portfolio consists of wholly-owned properties, structured investments
and mortgages.

     COMPARISON OF CUMULATIVE TOTAL RETURN FOR PERIOD FROM 12/31/92 THROUGH
          12/31/97 AMONG PROPERTY CAPITAL TRUST, AMEX MARKET INDEX AND
                     NAREIT HYBRID REIT TOTAL RETURN INDEX

                            TOTAL RETURN PERFORMANCE

<TABLE>
<CAPTION>

                                                                     PERIOD ENDED
                                                                     ------------

INDEX                           12/31/92       12/31/93       12/31/94      12/31/95       12/31/96       12/31/97
<S>                               <C>            <C>            <C>           <C>            <C>            <C>   
Property Capital Trust            100.00         170.96         162.93        253.61         373.88         249.62
AMEX Market Index                 100.00         119.52         108.63        137.32         146.10         177.20
NAREIT Hybrid Index               100.00         121.18         126.03        155.01         200.51         222.07

</TABLE>

                   ASSUMES $100 INVESTED ON DECEMBER 31, 1992
                      ASSUMES DIVIDENDS REINVESTED THROUGH
                                DECEMBER 31, 1997

         The Trust believes the information provided in the above performance
graph has only limited relevance to an understanding of the Trust's compensation
policies during the indicated period as the Trust believes that the graph does
not reflect all matters appropriately considered by the Trust in developing its
compensation strategy.

                                       8

<PAGE>

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth certain information regarding each
person (including any "group" as that term is used in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) known (based
solely upon filings with the Securities and Exchange Commission (the
"Commission") prior to such date pursuant to Sections 13(d) or 13(g) of the
Exchange Act) to own beneficially (as such term is defined in Rule 13d-3 under
the Exchange Act) more than 5% of the outstanding Common Shares. In accordance
with the rules promulgated by the Commission, such ownership includes shares
currently owned as well as shares of which the named person has the right to
acquire beneficial ownership within 60 days, including, but not limited to,
shares which the named person has the right to acquire through the exercise of
any option, warrant or right, or through the conversion of a security.
Accordingly, more than one person may be deemed to be a beneficial owner of the
same securities.

                                                                  Percent of
   Name and Address                   Number of Shares Owned  Outstanding Shares
   ----------------                   ----------------------  ------------------
   Warren E. Buffett . . . . . . . . .       831,600                 8.7%
   1440 Kiewit Plaza
   Omaha, Nebraska 68131


         The following table sets forth, as of March 31, 1998, information known
to the Trust with respect to the beneficial ownership of Common Shares by (i)
each Trustee of the Trust, (ii) each executive officer of the Trust named in the
Summary Compensation Table under "Executive Compensation" (other than William A.
Bonn, whose employment with the Trust terminated during calendar 1996) and (iii)
all Trustees and executive officers of the Trust as a group:


                                          Amount and Nature
                                            of Beneficial            Percent of
   Name and Address                         Ownership(1)                Class
   ----------------                       -----------------          ----------
   Walter M. Cabot . . . . . . . . . . . .   22,165 (3)                  (2)
   John A. Cervieri Jr.  . . . . . . . . .        0 (4)                  (2)
   Robin W. Devereux . . . . . . . . . . .    5,600 (5)                  (2)
   Graham O. Harrison  . . . . . . . . . .   57,720 (6)                  (2)    
   Randolph L. Kazazian III  . . . . . . .        0                       -
   Walter F. Leinhardt . . . . . . . . . .       40 (7)                  (2)
   Robert M. Melzer  . . . . . . . . . . .   57,000 (8)                  (2)
   Glenn P. Strehle  . . . . . . . . . . .   20,110 (9)                  (2)
   Michael I. Sucoff . . . . . . . . . . .        0                       -
   All Trustees and executive officers
    as a group (9 persons) . . . . . . . .  162,635 (10)                1.7%


    (1) Nature of beneficial ownership is sole voting and investment power
except as indicated in subsequent notes.

    (2) Less than 1%.

    (3) Includes 22,165 Common Shares owned by Mr. Cabot. Does not include 4,000
Common Shares issuable upon exercise of options which were granted under the
Trustee Stock Option Plan which have not yet vested.

    (4) Does not include 4,000 Common Shares issuable upon exercise of options
which were granted under the Trustee Stock Option Plan which have not yet
vested.

                                       9

<PAGE>

    (5) Includes 4,600 Common Shares owned by Mrs. Devereux and 1,000 Common
Shares held through an Individual Retirement Account owned and controlled by
Mrs. Devereux.

    (6) Includes 57,720 Common Shares owned by Mr. Harrison. Does not include
4,000 Common Shares issuable upon exercise of options which were granted under
the Trustee Stock Option Plan which have not yet vested.

    (7) Includes 40 Common Shares owned by Mr. Leinhardt. Does not include 4,000
Common Shares issuable upon exercise of options which were granted under the
Trustee Stock Option Plan which have not yet vested.

    (8) Includes 41,000 Common Shares owned by Mr. Melzer and 16,000 Common
Shares held for the benefit of Mr. Melzer through The Boxer Trust, the
profit-sharing trust for the Trust's former investment advisor, of which Mr.
Melzer is a Trustee.

    (9) Includes 20,110 Common Shares owned by Mr. Strehle. Does not include
4,000 Common Shares issuable upon exercise of options which were granted under
the Trustee Stock Option Plan which have not yet vested. The Massachusetts
Institute of Technology ("M.I.T.") owns 350,000 Common Shares with respect to
which Mr. Strehle has voting and investment power by virtue of his position as
Vice President for Finance and Treasurer of M.I.T., subject to the policies and
procedures of the Investment Committee of M.I.T. of which Committee Mr. Strehle
is an ex-officio member. In addition, the M.I.T. Retirement Plan owns 240,047
Common Shares with respect to which Mr. Strehle has voting and investment power
by virtue of his position as Chairman of the Trustees of the M.I.T. Retirement
Plan. Mr. Strehle disclaims beneficial ownership of the Common Shares owned by
M.I.T. and the M.I.T. Retirement Plan.

    (10) Includes shares owned by members of the immediate families of certain
Trustees and officers, as to which shares the relevant Trustee or officer
disclaims beneficial ownership.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         In connection with the internalization of the Trust's management, the
Trust and PCA Institutional Advisors ("PCAIA") (of which Messrs. Cervieri and
Melzer are principals), reached an agreement pursuant to which the Trust,
effective as of August 1, 1992, assumed day-to-day responsibility for rendering
services under advisory agreements (the "Advisory Agreements") between PCAIA and
four investment partnerships (Property Capital Midwest Associates, L.P., PCA
Southwest Associates Limited Partnership, PCA Canyon View Associates Limited
Partnership and PCA Crossroads Associates, Ltd.) in which the Trust was a
general partner (referred to collectively as the "Subject Partnerships") and an
advisory agreement with respect to a loan participation in which the Trust
served as the lead lender (referred to as the "Lisle Participation").

         In return for the Trust's taking over from PCAIA the management
services for the Subject Partnerships and the Lisle Participation, the Trust
received annually the first $150,000 (which amount generally corresponded to the
additional expenses incurred by the Trust in the performance of such tasks)
payable pursuant to the Advisory Agreements plus 50% of additional amounts
payable pursuant to the Advisory Agreements. PCAIA received the remaining 50% of
such payments in excess of $150,000. No additional amount was received by the
Trust or PCAIA in calendar 1997.

         During calendar 1997, the Trust paid legal fees in the amount of
$147,060 (exclusive of additional amounts, if any, paid by the Trust's lessees
and borrowers) to the law firm of Paul, Weiss, Rifkind, Wharton & Garrison, of
which Walter F. Leinhardt, Secretary and Trustee of the Trust, is a partner.

                                       10

<PAGE>

                                    SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Trust
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.


                                    PROPERTY CAPITAL TRUST
                                    ----------------------
                                          REGISTRANT


                                    /s/ Robin W. Devereux
                                    ---------------------
                                    Robin W. Devereux
                                    Vice President and Chief Financial Officer


Date: April 30, 1998