U. S. SECURITIES AND EXCHANGE COMMISSION

                          Washington, D.C.  20549
                    ----------------------------------

                                    FORM 10-Q

          |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998

                                       OR

          |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

                    For the transition period from ______ to _______.

                        Commission File Number: 0-17151

                      PAINE WEBBER/CMJ PROPERTIES, LP
                      -------------------------------
          (Exact name of registrant as specified in its charter)


      Delaware                                                04-2780288
      --------                                                ----------
(State or other jurisdiction of                            (I.R.S. Employer
incorporation or organization)                             Identification No.)

265 Franklin Street, Boston, Massachusetts                         02110
--------------------------------------------------------------------------------
(Address of principal executive offices)                         (Zip Code)

Registrant's telephone number, including area code  (617) 439-8118
                                                    --------------

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>

                      PAINE WEBBER/CMJ PROPERTIES, LP

                              BALANCE SHEETS
             March 31, 1998 and December 31, 1997 (Unaudited)
                         (In thousands of dollars)

                                  ASSETS
                                                    March 31    December 31
                                                    --------    -----------

Investments in local limited partnerships,
  at equity                                         $   123      $    27
Cash and cash equivalents                               486          493
                                                    -------      -------
                                                    $   609      $   520
                                                    =======      =======

                     LIABILITIES AND PARTNERS' CAPITAL

Accounts payable - affiliates                       $   249      $   199
Accounts payable and accrued expenses                    51           16
Partners' capital                                       309          305
                                                    -------      -------
                                                    $   609      $   520
                                                    =======      =======


              STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
         For the three months ended March 31, 1998 and 1997 (Unaudited)
                            (In thousands of dollars)

                                                   General       Limited
                                                   Partner       Partners
                                                   -------       --------

Balance at December 31, 1996                       $   (74)      $   336
Net loss                                                (1)         (111)
                                                   -------       -------
Balance at March 31, 1997                          $   (75)      $   225
                                                   =======       =======

Balance at December 31, 1997                       $   (73)      $   378
Net income                                               -             4
                                                   -------       -------
Balance at March 31, 1998                          $   (73)      $   382
                                                   =======       =======










                          See accompanying notes.


<PAGE>


                         PAINE WEBBER/CMJ PROPERTIES, LP

                            STATEMENTS OF OPERATIONS
         For the three months ended March 31, 1998 and 1997 (Unaudited)
               (In thousands of dollars, except per Unit amounts)

                                                1998              1997
                                                ----              ----
Revenues:
   Interest income                            $    7            $    4
                                              ------            ------
                                                   7                 4
Expenses:
   Management fees                                50                50
   General and administrative                     49                15
                                              ------            ------
                                                  99                65
                                              ------            ------
Operating loss                                   (92)              (61)

Partnership's share of local 
   limited partnerships' income (losses)          96               (51)
                                              ------            ------

Net income (loss)                             $    4            $ (112)
                                              ======            ======

Net income (loss) per Limited 
  Partnership Unit                            $ 0.49           $(12.68)
                                              ======           =======


      The above net income (loss) per Limited Partnership Unit is based upon the
8,745 Limited Partnership Units outstanding for each period.


















                          See accompanying notes.


<PAGE>


                         PAINE WEBBER/CMJ PROPERTIES, LP

                            STATEMENTS OF CASH FLOWS
         For the three months ended March 31, 1998 and 1997 (Unaudited)
                Increase (Decrease) in Cash and Cash Equivalents
                            (In thousands of dollars)

                                                       1998        1997
                                                       ----        ----
Cash flows from operating activities:
   Net income (loss)                                $      4    $   (112)
   Adjustments to reconcile net income (loss)
     to net cash used in operating activities:
     Partnership's share of local limited  
       partnerships' income (losses)                     (96)         51
     Changes in assets and liabilities:
      Accounts payable - affiliates                       50          50
      Accounts payable and accrued expenses               35           -
                                                    --------    --------
        Total adjustments                                (11)        101
                                                    --------    --------

Net decrease in cash and cash equivalents                 (7)        (11)

Cash and cash equivalents, beginning of period           493         323
                                                    --------    --------

Cash and cash equivalents, end of period            $    486    $    312
                                                    ========    ========





















                          See accompanying notes.


<PAGE>
                      PAINE WEBBER/CMJ PROPERTIES, LP
                       NOTES TO FINANCIAL STATEMENTS
                                (Unaudited)

1.  General
    -------

      The accompanying financial statements,  footnotes and discussion should be
read in conjunction with the financial statements and footnotes contained in the
Partnership's Annual Report for the year ended December 31, 1997. In the opinion
of  management,  the  accompanying  financial  statements,  which  have not been
audited, reflect all adjustments necessary to present fairly the results for the
interim period. All of the accounting  adjustments reflected in the accompanying
interim financial statements are of a normal recurring nature.

      The  accompanying  financial  statements have been prepared on the accrual
basis of accounting in accordance with generally accepted accounting  principles
which require  management  to make  estimates  and  assumptions  that affect the
reported amounts of assets and liabilities and disclosures of contingent  assets
and  liabilities  as of March 31, 1998 and  December  31, 1997 and  revenues and
expenses  for the  three-month  periods  ended March 31,  1998 and 1997.  Actual
results could differ from the estimates and assumptions used.

2.  Related Party Transactions
    --------------------------

      The Adviser  earned basic  management  fees of $50,000  during each of the
three-month periods ended March 31, 1998 and 1997. Accounts payable - affiliates
at March 31, 1998 and December 31, 1997 consist  management fees of $249,000 and
$199,000, respectively, payable to the Adviser.

      Included  in  general  and   administrative   expenses  for  both  of  the
three-month  periods  ended  March  31,  1998 and 1997 is  $9,000,  representing
reimbursements  to an affiliate of the Managing  General  Partner for  providing
certain  financial,  accounting  and  investor  communication  services  to  the
Partnership.

      Also included in general and  administrative  expenses for the three-month
periods  ended  March  31,  1998  and  1997  is  $400  and  $100,  respectively,
representing  fees  earned  by an  affiliate,  Mitchell  Hutchins  Institutional
Investors, Inc., for managing the Partnership's cash assets.

3.  Local Limited Partnerships
    --------------------------

      The Partnership has investments in six local limited  partnerships,  which
own operating investment properties,  as discussed further in the Annual Report.
These local limited  partnerships are accounted for on the equity method.  Under
the  equity  method  of  accounting  for  limited  partnership  interests,   the
investments  are carried at cost  adjusted  for the  Partnership's  share of the
local limited partnership's earnings, losses and distributions. Losses in excess
of the investment in individual  local limited  partnerships  are not recognized
currently,  but rather,  are offset against future  earnings from such entities.
Distributions  received from investments in limited  partnerships  with carrying
values of zero are recorded as other income in the  Partnership's  statements of
operations.

      Summarized operating results of these local limited partnerships follow:

                    Condensed Combined Summary of Operations
               For the three months ended March 31, 1998 and 1997
                            (In thousands of dollars)

                                                1998              1997
                                                ----              ----

      Rental revenues, including
        government subsidies                   $ 2,502           $ 2,518
      Interest income                               27                18
                                               -------           -------
                                                 2,529             2,536

      Property operating expenses                1,164             1,477
      Interest expense                             691               703
      Depreciation and amortization                347               337
      Real estate taxes                            168               159
                                               -------           -------
                                                 2,370             2,676
                                               -------           -------
      Net income (loss)                        $   159           $  (140)
                                               =======           =======

      Net income (loss):
        Partnership's share of
          combined operations                  $   141           $  (129)
        Local partners' share of
          combined operations                       18               (11)
                                               -------           -------
                                               $   159           $  (140)
                                               =======           =======

               Reconciliation of Partnership's Share of Operations
               For the three months ended March 31, 1998 and 1997
                            (In thousands of dollars)

                                                   1998              1997
                                                   ----              ----

      Partnership's share of combined
         operations, as shown above            $    141          $  (129)
      Losses in excess of basis not
         recognized by Partnership                    3               117
      Income offset with prior year
         unrecognized losses                        (48)              (39)
                                               --------          --------
      Partnership's share of local limited
         partnerships' income (losses)         $     96          $    (51)
                                               ========          ========

<PAGE>
                         PAINE WEBBER/CMJ PROPERTIES, LP

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Information Relating to Forward-Looking Statements
--------------------------------------------------

      The following  discussion of financial condition includes  forward-looking
statements  which  reflect  management's  current  views with  respect to future
events and  financial  performance  of the  Partnership.  These  forward-looking
statements  are  subject to certain  risks and  uncertainties,  including  those
identified  in Item 7 of the  Partnership's  Annual  Report on Form 10-K for the
year ended December 31, 1997 under the heading "Certain Factors Affecting Future
Operating  Results",  which could cause actual results to differ materially from
historical  results  or  those  anticipated.  The  words  "believe",   "expect",
"anticipate,"  and  similar  expressions  identify  forward-looking  statements.
Readers  are  cautioned  not to place undue  reliance  on these  forward-looking
statements,  which were made based on facts and conditions as they existed as of
the date of this report.  The  Partnership  undertakes no obligation to publicly
update or revise  any  forward-looking  statements,  whether  as a result of new
information, future events or otherwise.

Liquidity and Capital Resources
-------------------------------

      As of March 31, 1998 all six of the  properties  in which the  Partnership
has invested are generating  sufficient cash flow from operations to cover their
operating expenses and debt service payments, and the majority of the properties
are generating  excess cash flow, a portion of which is being distributed to the
Partnership on an annual basis in accordance with the respective  regulatory and
limited  partnership  agreements.  As  discussed  further in the Annual  Report,
during 1997 the Partnership received distributions  totalling $370,000 from five
of the six local limited partnership  investments:  Ramblewood,  Quaker Meadows,
Marvin Gardens,  Colonial Farms and Fawcett's Pond. The amounts received in 1997
represented the cash flow available for  distribution as of December 31, 1996 as
determined  by  the  general  partners  of the  local  limited  partnerships  in
accordance  with the  partnership,  financing and regulatory  agreements.  Total
distributions from the Partnership's investments increased slightly in 1997, but
remained  below  the  level  of  distributions  received  in 1994 and  1995.  As
previously  reported,  during  the  second  quarter  of 1997  management  of the
Partnership  completed a detailed  review of each property with the affiliate of
the operating  general  partners which manages the day-to-day  operations of the
investment  properties.  As a result of such review,  management determined that
the Partnership  should not make an annual  distribution to the Limited Partners
for 1997. Based on the current environment of rising property operating expenses
and capital improvement costs, as well as the restrictions on distributable cash
flow from the  properties,  there was not  sufficient  cash flow to support  the
payment of a distribution by the Partnership for 1997.  Subsequent to the end of
the first quarter of 1998,  the  Partnership  received  distributions  totalling
$423,000  from four of the local limited  partnerships,  which  represented  the
Partnership's  share of the cash available for  distribution  as of December 31,
1997.  Small  distribution   payments  from  the  two  remaining   partnerships,
aggregating  approximately $35,000, are expected within the next several months.
Based on the amounts of the 1998  distribution  payments  from the local limited
partnerships,  management  expects to recommend to the Board of Directors of the
Managing  General  Partner  that an annual  distribution  be made to the Limited
Partners during 1998 at a rate of 1% on original invested capital.  The increase
in the amount of the distribution  payments from the local limited  partnerships
can be  primarily  attributed  to the  receipt of $66,000  from The  Villages at
Montpelier  partnership  in 1998.  No  distributions  were  received  from  this
partnership in 1997.

      As of March 31, 1998, five of the Partnership's  six operating  investment
properties were receiving  rental subsidy  payments from the federal  government
under Section 8 of the National Housing Act. As discussed  further in the Annual
Report,  the subsidy  agreement  covering The Villages at Montpelier  Apartments
expired in July 1997. The subsidy  agreements  covering the other five operating
investment properties do not expire for another 4-to-6 years. Due to the limited
availability of government  subsidized  housing,  these properties  consistently
achieve occupancy levels of 99% to 100%. Cash flow from these five properties is
restricted by the Department of Housing and Urban Development  ("HUD") and other
applicable state housing  agencies,  which set rental rates for low-income units
and require  significant  cash  reserves to be  established  for future  capital
improvements.  In addition,  a substantial  amount of the revenues  generated by
these properties comes from the rental subsidy payments made by federal or state
housing  agencies.  These features,  which are  characteristic of all subsidized
low-income housing properties,  significantly limit the pool of potential buyers
for these real estate assets.  Furthermore,  the current  uncertainty  regarding
potential future  reductions in the level of federal  government  assistance for
these programs may further restrict the properties' marketability.  Accordingly,
management   does  not  expect  the  general   partners  of  the  local  limited
partnerships,  which receive management fee revenues from the properties through
an affiliated  management  company,  to attempt to sell any of the properties in
the near term.  As a limited  partner  of the local  limited  partnerships,  the
Partnership does not control  property  disposition  decisions.  The partnership
agreements  state that the  limited  partner may cause the sale of the assets of
the local limited partnerships subsequent to June 30, 1995, but not earlier than
one year after it has given written notice to the operating  general  partner of
its intent to cause such sale,  and only if,  during such one-year  period,  the
operating  general  partner  does  not  cause  the sale of such  assets.  If the
operating  general  partner has not caused the assets of the  partnership  to be
sold within such one-year  period,  the limited partner may cause such sale, but
only after it has offered to sell such assets to the operating  general partner,
and either the  operating  general  partner does not accept such offer within 90
days of receiving  it, or the  operating  general  partner does not complete the
sale in accordance with such offer after accepting the terms.

     The  average  occupancy  level at The  Villages  at  Montpelier  Apartments
increased  to 96% for the quarter  ended March 31, 1998  compared to 90% for the
previous  quarter.  As  previously  reported,  prior  to  July  1997  80% of the
apartments at The Villages at  Montpelier  were rented at market rates while 20%
received  government  subsidies under the Section 8 rental  assistance  program.
With  the  expiration  of the  subsidy  agreement  in July  1997,  the  property
management team began the process of converting the former  subsidized  units at
the property to market rent units during the third quarter of 1997. As expected,
the conversion resulted in a decline in occupancy at the property as a number of
subsidized  tenants  vacated the  property  and their units were  prepared to be
re-leased.  Subsequent to the expiration of the Section 8 contract,  the average
occupancy  level at the property  fell to 88% for the third  quarter of 1997 but
rebounded to 90% for the fourth quarter of 1997 and 96% for the first quarter of
1998.  Management  expects  that cash flow from  operations  at The  Villages at
Montpelier  will be comparable to the previously  subsidized  level now that the
occupancy  rate  at  the  property  has  been  stabilized.  If  the  market  for
conventional  multi-family apartment properties remains strong in the near term,
the  expiration  of the rental  subsidy  agreement at The Villages at Montpelier
Apartments  could enhance the property's  marketability  for a potential sale by
increasing the pool of interested buyers.  However, there are no assurances that
such market conditions will remain strong, and the ability of the Partnership to
cause a sale of the property will remain  restricted by the terms of the limited
partnership agreement discussed further above.

     For the  remaining  five  properties,  which each contain  100%  low-income
housing  units,  the  government  subsidy  payments range from 75% to 82% of the
total revenues of the related local limited  partnerships.  At the present time,
certain  legislative  initiatives and  governmental  budget  negotiations  could
result  in a  reduction  in funds  available  for the  various  HUD-administered
housing  programs and new  limitations on subsidized  rent levels.  Such changes
could adversely  impact the net operating  income generated by the local limited
partnerships.  In light of the uncertainty regarding the near term prospects for
government   assisted,   low-income   housing  and  the   restrictions   on  the
Partnership's  ability to cause a sale of the operating  properties,  management
does not have any  immediate  plans to initiate the sale process under the terms
of the agreements  described  above.  Notwithstanding  this, the  Partnership is
currently in the process of developing potential disposition strategies for each
of the  properties.  A decision as to when actions will be taken to initiate the
sale process with respect to any or all of the operating  investment  properties
in the future will be based upon a number of factors  including the availability
of a pool of  qualified  buyers,  an  evaluation  of the future of the  relevant
subsidy programs,  the availability of financing,  an assessment of local market
conditions and future appreciation potential.  Now that the regulatory agreement
on The Villages at Montpelier Apartments has expired, the decision of whether to
initiate a sale process for that  property  will be based on a more  traditional
analysis of existing market conditions and future appreciation  potential. It is
currently  contemplated that  dispositions of the Partnership's  assets could be
completed  within the next 2 to 3 years. The disposition of the remaining assets
would be followed by the formal  liquidation  of the  Partnership.  There are no
assurances,  however,  that  the  disposition  of  the  remaining  assets  and a
liquidation of the Partnership will be completed within this time frame.

      At March 31, 1998, the Partnership had available cash and cash equivalents
of  approximately  $486,000,  which it  intends to use for its  working  capital
requirements.  The source of future liquidity and  distributions to the partners
is expected to be from cash generated  from the operations of the  Partnership's
real  estate  investments  and  from  the  proceeds  received  from  the sale or
refinancing  of the  properties  owned by the local limited  partnerships.  Such
sources of liquidity  are expected to be  sufficient  to meet the  Partnership's
needs on both a short-term and long-term basis.

Results of Operations
Three Months Ended March 31, 1998
---------------------------------

     For the quarter ended March 31, 1998, the  Partnership  reported net income
of $4,000,  as  compared  to a net loss of  $112,000  for the same period in the
prior year. This favorable change in the Partnership's net operating results for
the first  quarter  of 1998  resulted  from a $147,000  favorable  change in the
Partnership's  share of local limited  partnerships'  income  (losses) which was
partially offset by a $31,000 increase in the Partnership's operating loss.

     The  favorable  change  in  the   Partnership's   share  of  local  limited
partnerships'  income (losses) is the result of a $132,000  favorable  change in
the Partnership's share of operations of the Ramblewood  Apartments  partnership
(Holbrook  Apartments  Company) and the  inclusion of $15,000 in income from the
operations of the Fawcett's Pond partnership in the current  three-month period.
As discussed further in the notes to the financial statements,  under the equity
method of accounting for limited partnership interests, the Partnership does not
record losses from investment  properties  when losses exceed the  Partnership's
equity method basis in these  properties,  and future income is recognized  only
when it  exceeds  the  previously  unrecorded  losses.  At March 31,  1997,  the
Holbrook  Apartments  Company  was the only  investment  with a positive  equity
method carrying value. At March 31, 1998, in addition to Holbrook, the Fawcett's
Pond  investment  had a positive  equity method  carrying  value.  The favorable
change in the net operating  results of the  Ramblewood  Apartments  partnership
resulted  mainly  from the  inclusion  of  incentive  management  fee expense of
$146,000  in the  results for the first  quarter of 1997.  Incentive  management
fees,  which  are  based  on  the  distributable   cash  of  the  local  limited
partnership,  will  fluctuate  depending  upon the amount and timing of the cash
distributions.   Incentive   management  fees  for  the  Ramblewood   Apartments
partnership in 1998 will be paid and recorded in the second quarter.

     Overall,  the  combined  net  operating  results  of the six local  limited
partnerships  improved  from a net loss of $140,000  for the three  months ended
March 31, 1997 to net income of $159,000  for the three  months  ended March 31,
1998. This favorable  change of $299,000  resulted  primarily from a decrease in
combined  property  operating  expenses.  Combined property  operating  expenses
decreased  mainly due to the inclusion of incentive  management fees of $221,000
in the  results  for the first  quarter of 1997.  As  discussed  further  above,
incentive management fees will fluctuate depending upon the amount and timing of
the cash distributions.  In addition to the Ramblewood incentive management fees
discussed above, incentive management fees of $69,000 and $6,000,  respectively,
were recorded at the Quaker Meadows and Fawcett's Pond  partnerships  during the
quarter ended March 31, 1997. As with Ramblewood,  incentive management fees for
these partnerships for 1998 will be paid and recorded in the second quarter.



<PAGE>


                                  PART II
                             Other Information



Item 1. Legal Proceedings   NONE

Item 2 through 5.   NONE

Item 6. Exhibits and Reports on Form 8-K

(a)   Exhibits:     NONE

(b) Reports on Form 8-K:

   No reports on Form 8-K have been filed by the  registrant  during the quarter
for which this report is filed.

<PAGE>



                      PAINE WEBBER/CMJ PROPERTIES, LP



                                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.





                                    PAINE WEBBER/CMJ PROPERTIES, LP

                                    By: PW SHELTER FUND, INC.
                                        ---------------------
                                        Managing General Partner




                                    By: /s/ Walter V. Arnold
                                        --------------------
                                        Walter V. Arnold
                                        Senior Vice President and
                                        Chief Financial Officer



Dated: May 12, 1998