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 SEPTEMBER 30, 1997

                                       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
           September 30, 1997 and December 31, 1996 (Unaudited)
                         (In thousands of dollars)

                                  ASSETS
                                                  September 30    December 31
                                                  ------------    -----------

Investments in local limited partnerships,
  at equity                                         $     -       $     92
Cash and cash equivalents                               502            323
                                                    -------       --------
                                                    $   502       $    415
                                                    =======       ========

                     LIABILITIES AND PARTNERS' CAPITAL

Accounts payable - affiliates                       $   149       $    132
Accounts payable and accrued expenses                    17             21
Partners' capital                                       336            262
                                                    -------       --------
                                                    $   502       $    415
                                                    =======       ========


              STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
        For the nine months ended September 30, 1997 and 1996 (Unaudited)
                            (In thousands of dollars)

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

Balance at December 31, 1995                          $  (72)      $  536
Cash distributions                                        (1)        (131)
Net loss                                                   -          (35)
                                                      ------       ------
Balance at September 30, 1996                         $  (73)      $  370
                                                      ======       ======

Balance at December 31, 1996                          $  (74)      $  336
Net income                                                 1           73
                                                      ------       ------
Balance at September 30, 1997                         $  (73)      $  409
                                                      ======       ======




                          See accompanying notes.



<PAGE>


                         PAINE WEBBER/CMJ PROPERTIES, LP

                            STATEMENTS OF OPERATIONS
         For the three and nine months ended September 30, 1997 and 1996
                                   (Unaudited)
               (In thousands of dollars, except per Unit amounts)

                                       Three Months Ended   Nine Months Ended
                                          September 30,        September 30,
                                      ------------------   ------------------
                                         1997     1996        1997     1996
                                         ----     ----        ----     ----
Revenues:
   Other income from local limited
     partnerships                      $   4    $   101    $  189     $   101
   Interest income                         7          3        18           9
                                       -----    -------    ------     -------
                                          11        104       207         110
Expenses:
   Management fees                        50         50       149         149
   General and administrative             35         23        73          62
                                       -----    -------    ------     -------
                                          85         73       222         211
                                       -----    -------    ------     -------
Operating income (loss)                  (74)       31        (15)       (101)

Partnership's share of local 
  limited partnerships'
  income (losses)                         91       (52)        89          66
                                       -----    -------    ------     -------

Net income (loss)                      $  17    $  (21)    $   74     $   (35)
                                       =====    ======     ======     =======

Net income (loss) per Limited
  Partnership Unit                     $1.92    $(2.45)    $ 8.39     $ (3.97)
                                       =====    ======     ======     =======


Cash distributions per Limited 
  Partnership Unit                     $   -    $ 5.00     $    -     $  15.00
                                       =====    ======     ======     ========


      The above net income (loss) and cash distributions per Limited Partnership
Unit are 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 nine months ended September 30, 1997 and 1996 (Unaudited)
                Increase (Decrease) in Cash and Cash Equivalents
                            (In thousands of dollars)

                                                        1997       1996
                                                        ----       ----
Cash flows from operating activities:
   Net income (loss)                                  $   74    $    (35)
   Adjustments to reconcile net income (loss)
     to net cash used in operating activities:
     Partnership's share of local limited 
       partnerships' income                              (89)        (66)
     Other income from local limited partnerships       (189)       (101)
     Changes in assets and liabilities:
      Accounts payable - affiliates                       17          82
      Accounts payable and accrued expenses               (4)          -
                                                      ------    --------
        Total adjustments                               (265)        (85)
                                                      ------    --------
        Net cash used in operating activities           (191)       (120)

Cash flows from investing activities:
   Distributions from local limited partnerships         370         310

Cash flows from financing activities:
   Distributions to partners                               -        (132)
                                                      ------    --------

Net increase in cash and cash equivalents                179          58

Cash and cash equivalents, beginning of period           323         325
                                                      ------    --------

Cash and cash equivalents, end of period              $  502    $    383
                                                      ======    ========













                          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, 1996. 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 September 30, 1997 and December 31, 1996 and revenues and
expenses for the three and nine months ended September 30, 1997 and 1996. Actual
results could differ from the estimates and assumptions used.

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

      The Adviser earned basic  management  fees of $149,000  during each of the
nine-month  periods  ended  September  30,  1997 and  1996.  Accounts  payable -
affiliates at September 30, 1997 and December 31, 1996 consist  management  fees
of $149,000 and $132,000, respectively, payable to the Adviser.

      Included in general and administrative  expenses for the nine months ended
September 30, 1997 and 1996 is $26,000 and $24,000,  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 both of the
nine-month  periods ended  September  30, 1997 and 1996 is $1,000,  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.
<PAGE>

    Summarized operating results of these local limited partnerships follow:

                    Condensed Combined Summary of Operations
         For the three and nine months ended September 30, 1997 and 1996
                            (In thousands of dollars)

                                    Three Months Ended    Nine Months Ended
                                       September 30,        September 30,
                                   -------------------   -------------------
                                      1997     1996        1997      1996
                                      ----     ----        ----      ----

      Rental revenues, including
        government subsidies       $ 2,427    $ 2,485     $ 7,452   $ 7,431
      Interest income                   23         25          64        71
                                   -------    -------     -------   -------
                                     2,450      2,510       7,516     7,502

      Property operating expenses    1,320      1,503       4,187     3,986
      Interest expense                 700        711       2,105     2,137
      Depreciation and amortization    337        323       1,010       970
      Real estate taxes                151        164         465       473
                                   -------    -------     -------   -------
                                     2,508      2,701       7,767     7,566
                                   -------    -------     -------   -------
      Net loss                     $   (58)   $  (191)    $  (251)  $   (64)
                                   =======    =======     =======   =======

      Net loss:
         Partnership's share of
           combined operations     $   (50)   $  (161)    $  (233)  $   (44)
         Local partners' share of
           combined operations          (8)       (30)        (18)      (20)
                                   -------    -------     -------   -------
                                   $   (58)   $  (191)    $  (251)  $   (64)
                                   =======    =======     =======   =======

               Reconciliation of Partnership's Share of Operations
         For the three and nine months ended September 30, 1997 and 1996
                            (In thousands of dollars)

                                    Three Months Ended    Nine Months Ended
                                       September 30,         September 30,
                                    -----------------     ------------------
                                      1997     1996        1997      1996
                                      ----     ----        ----      ----

   Partnership's share of combined
     operations, as shown above     $  (50) $  (161)     $  (233)   $  (44)
   Losses in excess of basis not
     recognized by Partnership         141      128          322       215
   Income offset with prior year
     unrecognized losses                 -      (19)           -      (105)
                                    ------  -------      -------    ------
   Partnership's share of local 
     limited partnerships' 
     income (losses)                $   91  $   (52)     $    89    $   66
                                    ======  =======      =======    ======


<PAGE>



                      PAINE WEBBER/CMJ PROPERTIES, LP

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

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

      As discussed  further in the Annual Report,  during 1996  distributions to
the Partnership from the local limited partnerships declined, causing management
to suspend distributions  effective for the fourth quarter of 1996 until further
notice. In the future,  to the extent there is distributable  cash flow from the
properties  after the  payment  of  Partnership  management  fees and  operating
expenses,  the Partnership will make annual distribution payments each November.
During 1996, the Partnership received distributions totalling $310,000 from four
of the six local limited partnership  investments:  Ramblewood,  Quaker Meadows,
Colonial Farms and Fawcett's Pond. Through the quarter ended September 30, 1997,
the Partnership received annual  distributions  totalling $366,000 from the same
four local limited partnership  investments,  plus a distribution of $4,000 from
Marvin Gardens.  The amounts received in 1996 and 1997 represented the cash flow
available for  distribution as of December 31, 1995 and 1996,  respectively,  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 the
current  year due to an increase in  distributions  from the Quaker  Meadows and
Ramblewood   partnerships   and  the   distribution   from  the  Marvin  Gardens
partnership,  but remain below the level of  distributions  received in 1994 and
1995. As reported in the second quarter, management of the Partnership completed
its 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 and capital improvement costs,
and the strict restrictions on available cash flow from the properties, there is
not  sufficient  cash flow at the  present  time to  support  the  payment  of a
distribution  for  the  current  year.   Management  believes  the  next  likely
distribution  would  be a  distribution  to  be  made  in  November  1998  at an
annualized rate of 1% on invested capital, provided that current projections for
1998 are met.

      Occupancy  levels at all five of the  properties in which the  Partnership
has  invested  remained  in the  mid-to-high  90%  range for the  quarter  ended
September 30, 1997.  Cash flow from the  properties in which the  Partnership as
invested  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 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.

      As of  September  30,  1997,  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. The subsidy  agreement
covering  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.  As  previously  reported,  80% of the  apartments at
Villages at Montpelier were rented at market rates while 20% received government
subsidies  under the Section 8 rental  assistance.  With the  expiration  of the
subsidy agreement,  the property management team began the process of converting
the former  subsidized  units at the  property to market  rent units  during the
third quarter. 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.  Average  occupancy for the quarter ended
September  30,  1997 was 88%,  compared to 94% for the prior  quarter.  Based on
current  market  conditions,  the units which had been  designated as low-income
units are  expected to be  re-leased  at market rates which would keep the total
revenues  of  the  local  limited  partnership  relatively  unchanged  from  the
previously  subsidized  level.  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. If market conditions were to deteriorate, the
Villages  at  Montpelier   Apartments  could  experience  extended  declines  in
occupancy and revenues as a result of the expiration of the subsidy agreement.

      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 plans, at the present time, to initiate the sale process under
the terms of the  agreements  described  above. A decision as to whether to take
such  actions 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.

      At  September  30,  1997,  the  Partnership  had  available  cash and cash
equivalents of approximately  $502,000,  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 September 30, 1997
-------------------------------------

      For the three months ended  September 30, 1997, the  Partnership  reported
net income of $17,000,  as compared to a net loss of $21,000 for the same period
in the prior year.  This  favorable  change in the  Partnership's  net operating
results  for the third  quarter of 1997 is mainly  due to a  $143,000  favorable
change in the Partnership's share of local limited partnership's income (losses)
which was  partially  offset by a decrease of $97,000 in other income from local
limited  partnerships.   Distributions  received  from  investments  in  limited
partnerships  with  carrying  values of zero are recorded as other income in the
Partnership's  statements  of  operations.  The decrease in other income for the
current  three-month  period results from a timing  difference in the receipt of
distributions  from the local limited  partnerships,  the majority of which were
received in the second quarter during 1997. As discussed further in the Notes to
the Financial  Statements,  under the equity  method of  accounting  for limited
partnership  interests,  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.  During the current  three-month
period,  the  Partnership's  share of  local  limited  partnerships'  operations
represents  the  allocable  portion  of the  operations  of the  Ramblewood  and
Fawcett's Pond partnerships.  The corresponding  three-month period in the prior
year includes the  operations  of only the  Ramblewood  investment.  Income from
Fawcett's Pond in the prior period was offset against prior unrecognized losses.
In addition,  the net operating results of the Ramblewood  partnership  improved
over the same  period in the prior  year  mainly  due to the  recognition  of an
incentive  management  fee in the third quarter of 1996 in  connection  with the
annual distribution  payment.  The incentive  management fee was recorded in the
second quarter in 1997.  Overall,  the combined net operating results of the six
local  limited  partnerships  changed  from a net loss of $191,000 for the three
months  ended  September  30, 1996 to a net loss of $58,000 for the three months
ended September 30, 1997. This favorable change of $133,000  resulted  primarily
from a decrease in combined  property  operating  expenses  which was  partially
offset by a decrease in rental  revenues.  The  decrease  in  combined  property
operating  expenses was primarily due to the timing difference in the payment of
incentive  management  fees  for  those  partnerships  which  made  distribution
payments in 1996 and 1997.


<PAGE>


Nine Months Ended September 30, 1997
------------------------------------

      For the nine months ended September 30, 1997, the Partnership reported net
income of  $74,000,  as compared to a net loss of $35,000 for the same period in
the prior year. This favorable change in the Partnership's net operating results
is primarily  attributable to a decrease in the Partnership's  operating loss of
$86,000  and  an  increase  in  the   Partnership's   share  of  local   limited
partnerships'  income of $23,000.  The decrease in the  Partnership's  operating
loss is primarily attributable to an increase in other income from local limited
partnerships  of $88,000 and a $9,000  increase in  interest  income  which were
partially  offset by an  increase  in general  and  administrative  expenses  of
$11,000. Other income from local limited partnerships increased mainly due to an
increase in the  distributions  received from the  Ramblewood and Quaker Meadows
partnerships  in  1997.  Interest  income  improved  due to an  increase  in the
Partnership's   average   outstanding   cash  reserve   balances.   General  and
administrative  expenses  increased mainly due to additional  professional  fees
incurred in 1997.

      The Partnership's share of local limited partnerships'  operations for the
current  nine-month period represents the allocable portion of the operations of
the Ramblewood and Fawcett's Pond partnerships. The Partnership's share of local
limited  partnerships'  operations for the nine months ended  September 30, 1996
included only the  operations of the Ramblewood  partnership  because the income
from Fawcett's Pond was offset against prior unrecognized  losses.  Overall, the
combined net  operating  results of the six local limited  partnerships  changed
from a net loss of $64,000 for the nine months ended September 30, 1996 to a net
loss of $251,000 for the nine months ended September 30, 1997. This  unfavorable
change of $187,000  resulted  primarily  from an  increase in combined  property
operating expenses, which was partially offset by an increase in combined rental
revenues.  Combined  property  operating  expenses  increased  mainly due to the
inclusion of an earned  surplus  reimbursement  expense at Colonial Farms during
the current nine-month period. Earned surplus  reimbursements  represent surplus
cash  flows in  excess of  allowable  owner  distribution  limits  for  projects
regulated  by  the  California  Housing  Finance  Agency.   During  the  current
nine-month  period,  Colonial  Farms paid earned surplus  reimbursement  fees of
$68,000,  representing  the  partnership's  excess  cash flow for the year ended
December 31, 1996. The earned surplus  reimbursement for the year ended December
31, 1995 was not recorded until the fourth quarter of 1996. Increases in repairs
and  maintenance  expenses at four of the six properties  during the nine months
ended September 30, 1997 also contributed to the increase in property  operating
expenses.   Additional   repairs  and  maintenance   related  expenses  included
re-carpeting  and  painting,  plus repair of the parking lot at Colonial  Farms,
repainting of the building  exterior and replacement of trees at Quaker Meadows,
wallpaper and painting at Fawcett's Pond and re-carpeting and painting at Marvin
Gardens.


<PAGE>


                                  PART II
                             Other Information



Item 1. Legal Proceedings

     As previously  disclosed,  the Partnership's General Partners were named as
defendants  in  a  class  action  lawsuit   against   PaineWebber   Incorporated
("PaineWebber") and a number of its affiliates relating to PaineWebber's sale of
70 direct  investment  offerings,  including  the  offering of  interests in the
various limited partnership investments and REIT stocks, including those offered
by the  Partnership.  In  January  1996,  PaineWebber  signed  a  memorandum  of
understanding  with the plaintiffs in the class action outlining the terms under
which the parties have agreed to settle the case. Pursuant to that memorandum of
understanding,  PaineWebber  irrevocably  deposited  $125 million into an escrow
fund under the  supervision of the United States District Court for the Southern
District of New York to be used to resolve the  litigation in accordance  with a
definitive  settlement  agreement  and a plan of  allocation.  On July 17, 1996,
PaineWebber and the class plaintiffs submitted a definitive settlement agreement
which  provides for the  complete  resolution  of the class  action  litigation,
including  releases in favor of the  Partnership and PWPI, and the allocation of
the $125 million settlement fund among investors in the various partnerships and
REITs at issue in the case. As part of the settlement,  PaineWebber  also agreed
to provide class members with certain financial  guarantees  relating to some of
the  partnerships  and REITs.  The details of the  settlement are described in a
notice mailed  directly to class members at the direction of the court.  A final
hearing on the fairness of the proposed  settlement  was held in December  1996,
and in March 1997 the court announced its final approval of the settlement.  The
release of the $125 million of settlement  proceeds had been delayed pending the
resolution  of an appeal of the  settlement  agreement  by two of the  plaintiff
class  members.  In July 1997, the United States Court of Appeals for the Second
Circuit upheld the settlement  over the objections of the two class members.  As
part  of  the  settlement   agreement,   PaineWebber  has  agreed  not  to  seek
indemnification  from the related partnerships and real estate investment trusts
at issue in the litigation  (including the  Partnership) for any amounts that it
is  required  to pay  under  the  settlement.  In  addition,  in  December  1996
PaineWebber  agreed to settle the Abbate action discussed  further in the Annual
Report.  Final releases and dismissals  with regard to this action were received
during the  quarter  ended June 30,  1997.  Based on the  settlement  agreements
discussed  above  covering  all  of  the  outstanding   shareholder  litigation,
management  does not expect that the  resolution  of these  matters  will have a
material impact on the Partnership's financial statements, taken as a whole.

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: November 10, 1997