UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 
20549 
 Form 10-QSB QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15() OF THE
SECURITIES EXCHANGE ACT OF 1934 For
the quarterly period ended March 31, 2001 Commission
File Number: 0-25074 STONEHAVEN REALTY
TRUST(Exact name of registrant as specified
in its charter)  Maryland(State or other jurisdiction of incorporation)
  39-6594066(I.R.S. Employer Identification Number)4150
  Olson Memorial Highway, Minneapolis, MN(Address of principal executive
  offices)
  55422 (Zip code)
 Issuer's telephone number:763-398-1100 Fax number: 763-398-1101 Securities registered under
Section 12(b) of the Act: None Securities registered under
Section 12(g) of the Act: Common Shares, $0.01 par value  Check whether the issuer (1) filed all
reports required to be filed by Section 13 or 15(d) of the Exchange Act
during the past 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to the filing
requirements for the past 90 days. YesxNo ̈ As of May 1, 2001, 4,517,524 shares of the
issuer's common shares were outstanding. Transitional Small Business Disclosure Format
(Check one): Yes ̈Nox(Added by Exch Act Rel No. 31905, eff 4/26/93.) This report
contains 19 pages. There is 1 exhibit.   STONEHAVEN REALTY TRUST AND SUBSIDIARIES
FORM 10-QSB
INDEX



PART I.  Financial
  InformationConsolidated Balance SheetMarch
  31, 2001 (unaudited)Consolidated
  Statements of OperationsThree months ended March 31, 2001 and March 31,
  2000(unaudited)Consolidated
  Statements of Cash FlowsThree months ended March 31, 2001 and March 31,
  2000(unaudited)Notes to
  Consolidated Financial StatementsManagement's
  Discussion and Analysis of Financial Condition and Plan of OperationPart II. 
  Other InformationOther InformationExhibits and Reports
  on Form 8–KSignaturesStonehaven
Realty Trust and SubsidiariesConsolidated Balance Sheet
 March 31, 2001
(unaudited)



ASSETSInvestments in fixed
  assets:Land
  $2,195,034Buildings and improvements
  8,780,142Computer hardware, software and other
  fixed assets
  946,52511,921,701Accumulated depreciation and
  amortization
  (565,998)Net investments in real estate
  11,355,703Cash and cash
  equivalents
  1,692,682Accounts receivable,
  net
  521,028Restricted cash
  1,060,193Other assets, net
  1,762,701Goodwill, net
  2,868,008TOTAL
  ASSETS
  $19,260,315LIABILITIES AND SHAREHOLDERS EQUITYLiabilities:Mortgage
  loans and notes payable
  $6,615,774Related party note
  payable
  335,000Accounts payable and
  accrued expenses
  1,949,097Deferred revenue and
  security deposits
  165,043Dividends and
  distributions payable
  709,139Total liabilities
  9,774,053Minority interest in
  consolidated subsidiary
  85,691COMMITMENTS AND CONTINGENCIES:  (Note 8)Shareholders' equity:Preferred Shares 
  $0.01 par value, 10,000,000 authorized: 
  663,291 Class A cumulative convertible shares issued and outstanding,
  $10.00 per share liquidation preference
  6,633Common
  Shares - $0.01 par value, 100,000,000 authorized; 4,517,524 shares issued and
  outstanding
  45,176Additional paid-in
  capital
  25,595,216Accumulated deficit
  (16,206,685)Treasury stock, at
  cost
  (39,769)Total shareholders'
  equity
  9,400,571TOTAL
  LIABILITIES AND SHAREHOLDERS EQUITY
  $19,260,315The accompanying notes
are an integral part of the consolidated financial statements.

Stonehaven
Realty Trust and SubsidiariesConsolidated Statements of
Operations
(unaudited)



For the three months ended March 31,2001
  2000RevenuesRental revenue
  $471,481
  $787,151Tenant recoveries
  313,570
  388,877Professional services and sales of
  hardware and software
  802,314
  461,163Interest and other
  35,009
  106,397Total revenues
  1,622,374
  1,743,588ExpensesProperty, operating and maintenance
  140,858
  213,461Advertising and promotion
  79,685
  1,800Property taxes and insurance
  140,689
  219,942Depreciation and amortization
  798,885
  334,437Interest
  341,023
  428,828General and administrative
  512,547
  471,180Management fees
  36,898
  58,481Costs related to professional services
  and sales of hardware and software
  408,834
  314,684Product development
  51,602
  -Total expenses
  2,511,021
  2,042,813Loss from operations
  before equity in income of unconsolidated subsidiary and loss allocated to
  minority interest
  (888,647)
  (299,225)Equity in income of unconsolidated
  subsidiary
  -
  1,856Loss allocated to minority interest
  40,757
  160,377Loss from operations
  (847,890)
  (136,992)Gain (loss) on sale of
  investments in real estate
  (165,835)
  -Net Loss
  (1,013,725)
  (136,992)Preferred Share
  Dividends
  -
  (328,495)Net loss available to
  Common Shareholders
  $(1,013,725)
  $(465,487)Net loss available to
  Common Shareholders per Common Share: 
  Basic and Diluted
  $(0.22)
  $(0.16)Weighted average
  number of Common Shares outstanding
  4,517,524
  2,902,524The
accompanying notes are an integral part of the consolidated financial
statements.

Stonehaven Realty Trust and
SubsidiariesConsolidated Statements of Cash
Flows
(unaudited)



For
  the three months ended March 31,2001
  2000Cash flows from operating
  activities:Net loss
  $(1,013,725)
  $(136,992)Adjustments to reconcile net loss to
  net cash used in operating activities:Depreciation and amortization
  798,885
  334,437Loss allocated to minority interest
  (40,757)
  (160,377)Loss on sales of investment of real
  estate
  165,835
  -Equity in income of unconsolidated
  subsidiary
  -
  (1,856)Net change in assets and liabilities:Accounts receivable, net
  (47,514)
  (330,989)Restricted cash
  (26,159)
  (240,430)Other assets, net
  10,639
  (39,479)Related party payable
  -
  (9,297)Accounts payable and accrued
  expenses
  (369,712)
  435,627Deferred revenue and security
  deposits
  18,830
  134,216Net cash used in operating
  activities
  (503,678)
  (15,140)Cash flows from investing
  activities:Acquisition of and additions to real
  estate properties
  -
  (1,544,943)Acquisition of computer hardware,
  software and other fixed assets
  (6,592)
  -Disposition of real estate property
  593,579
  -Cash proceeds received from acquisition
  of consolidated subsidiary
  -
  160,759Redemption of marketable securities,
  net
  -
  5,187,855Investment in unconsolidated subsidiary
  -
  7,425Net cash provided by investing
  activities
  586,987
  3,811,096Cash flows from financing
  activities:Payments on mortgage loans and notes
  payable
  (26,543)
  (42,368)Payments on line of credit
  -
  167,500Dividends/distributions paid, net
  -
  (152,689)Gross proceeds from the issuance of
  common shares
  -
  47,632Net cash used in financing
  activities
  (26,543)
  20,075Net
  increase in cash and cash equivalents
  56,766
  3,816,031Cash and cash
  equivalentsBeginning of period
  1,635,916
  2,892,724End of period
  $1,692,682
  $6,708,755The accompanying notes
are an integral part of the consolidated financial statements.

Stonehaven Realty Trust and Subsidiaries

Notes to
Consolidated Financial Statements

Note 1Organization

Stonehaven Realty Trust(the
"Company") is a real estate and
technology company separated into two business segments: a commercial real
estate segment which acquires, owns and operates commercial real estate and a
technology segment which provides information technology consulting and
document management solutions.

The
Company is a self-administered real estate investment trust (REIT) formed on
March 15, 1994 under Maryland law.  In
November 1998, the Company became an umbrella partnership REIT and formed an
operating partnership, Wellington Properties Investments, L.P. (Operating
Partnership), of which the Company is the sole general partner and owns an
approximate 92.9% interest.  Through the
Operating Partnership and certain wholly owned subsidiaries, the Company
acquires, owns and operates commercial real estate investment properties.  As of March 31, 2001, the Company owned four
commercial industrial properties that contained approximately 129,000 rentable
square feet.

Note 2Basis of Presentation and
Summary of Significant Accounting Policies

The Company has prepared the consolidated financial
statements without audit pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in the financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations.  However, the Company believes that the included disclosures are
adequate to make the information presented not misleading. In the opinion of
the Company, all adjustments (consisting solely of normal recurring items)
necessary for a fair presentation of the financial position of the Company as
of March 31, 2001, the results of their operations for the three months ended
March 31, 2001 and 2000, and their cash flows for the three month periods ended
March 31, 2001 and 2000 have been included. The results of operations for such
interim periods are not necessarily indicative of the results for a full year.
For further information, refer to the Company's consolidated financial
statements and footnotes included in the Annual Report of Form 10-KSB for
the year ended December 31, 2000.

Use of
Estimates in the Preparation of Financial Statements

In order to conform with generally accepted accounting
principles, management, in preparation of the Company's consolidated financial
statements, is required to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities as of March 31, 2001, and the reported amounts of revenues and
expenses for the three months ended March 31, 2001 and 2000. Actual results
could differ from those estimates.

Other Assets

Other assets primarily consist of nonrefundable prepaid
minimum software royalties, valuation of proprietary database and deferred
financing costs incurred to obtain and secure mortgage debt financing.  The nonrefundable prepaid minimum software
royalties and the valuation of the proprietary databases are being amortized
over the life of the contracts on a straight-line basis.  The deferred financing costs are being
amortized over the life of the respective loans on a straight-line basis.  Accumulated amortization as of March 31,
2001 was $599,000.

Goodwill

Goodwill incurred in connection with the acquisition of
RESoft is amortized on a straight-line basis over an estimated useful life of
three years.   Accumulated amortization
as of March 31, 2001 was $1.6 million.

Product
Development Costs

Costs related to development of the Companys new
software product are charged to product development expense as incurred.  Software development costs are capitalized
beginning when a products technological feasibility has been established,
which to date has been when the Company has a working model of the software,
and ending, when a product is available for general release to customers.  Substantially all development costs are
incurred prior to establishing a working model.  As a result, the Company has not capitalized any software
development costs since costs have not been significant.

Income Taxes

The
tax provision differs from the benefit that would ordinarily result from
applying Federal statutory rates to the loss before taxes due to the effect of
state income taxes and valuation allowances for deferred tax assets,
substantially all of which relate to net operating loss carry forwards.

Segment
Disclosure

In June 1997, the FASB issued Statement of Financial
Accounting Standards No. 131, Disclosures about Segments of an Enterprise and
Related Information.  This statement
requires that a public company report financial and descriptive information
about its reportable operating segments. 
Generally, financial information is required to be reported on the basis
that it is used internally for evaluating segment performance and deciding how
to allocate resources to segments, Management views the Company as two business
segments: a commercial real estate segment which acquires, owns and operates
commercial real estate and a technology segment which provides information
technology consulting and document management solutions.

Note 3Disposition of Real Estate
Properties

On
March 31, 2001, the Company sold the St. Cloud, Minnesota real property to an
unrelated third party.  In exchange for
the real property, the Company received approximately $8.3 million in
cash.  In addition, the Company retired
the related mortgage indebtedness of approximately $7.3 million.  The Company has recorded a loss on the sale
of the investment in the real estate of approximately $166,000 as of March 31,
2001.

The following pro forma condensed
consolidated financial information presented below is as if the acquisitions of
the Plymouth Properties and RESoft and the dispositions of Maple Grove, Lake
Pointe, Highlander and Cold Springs had occurred on January 1, 2000.  The pro forma financial information is not
necessarily indicative of the results, which actually would have occurred if
the acquisitions or disposition had been consummated on January 1, 2000, nor
does the pro forma information purport to represent the results of operations
for future periods.

For
  the three months ended March 31,2001
  2000Pro
  forma total revenue
  $1,244,060
  $1,542,786Pro
  forma loss available to Common Shareholders
  $822,781
  $715,234Pro
  forma loss per Common Share Basic and Diluted
  $0.18
  $0.22

Note 4Mortgage Loans and Notes
Payable

In connection with the disposition of
Cold Springs, The Company retired mortgage notes payable totaling approximately
$7.3 million.

Note 5Equity/Distributions

On April 19, 2001, the Company declared a dividend of
$0.475 per share with respect to the Class A Preferred Shares.  The dividend with respect to the Class A
Preferred Shares will be paid on May 15, 2001 to shareholders of record on
April 30, 2001.

Note 6Loss Per Share

The Company has adopted the Statement of Financial
Accounting Standards No. 128, "Earnings Per Share"
("EPS") for all periods presented herein. Net loss per weighted
average Common Share outstandingbasic
and net loss per weighted average Common Share outstandingdiluted is computed based on the weighted
average number of Common Shares outstanding for the period. The weighted
average number of Common Shares outstanding for the three months ended March
31, 2001 and March 31, 2000 were 4,517,524 and 2,902,524 respectively. Common
share equivalents include outstanding convertible preferred shares, warrants
and stock options, and are not included in net loss per weighted average Common
Share outstandingdiluted
as they would be anti-dilutive.

For the three months ended March 31,2001
  2000NumeratorLoss from operations
  $(847,890)
  $(136,992)Gain (loss) on sale of
  investments in real estate
  (165,835)
  -Net
  loss
  (1,013,725)
  (136,992)Preferred Share
  Dividends
  -
  (328,495)Net loss available to
  Common Shareholders
  $(1,013,725)
  $(465,487)DenominatorWeighted
  average Common Shares outstanding at March 31, 2001 and 2000,
  respectively:  Basic and Diluted
  4,517,524
  2,902,524Basic and Diluted EPSNet
  loss available to Common Shareholders from operations
  $(0.19)
  $(0.16)Loss on sale of
  investments in real estate
  (0.03)
  -Net loss available to Common Shareholders
  $(0.22)
  $(0.16)

Note 7  Commitments and Contingencies

Legal Proceeding

On December 29, 2000, Stonehaven notified
Odeh Muhawesh, a Trustee of the Company, that it was suspending its payment to
him under a promissory note assumed by RESoft. RESoft assumed the payment
obligation in February 2000 pursuant to the terms of the merger agreement
between Company, RESoft and NETLink International, Inc. (NETLink), a company
founded and owned by Mr. Muhawesh whereby NETLink was merged into RESoft.
Management of the Company believes Mr. Muhawesh is in default under the merger
agreement for, among other things, failure by him to cause to be transferred to
RESoft 5% of the issued and outstanding stock of MyFreeDesk.com, Inc.

On January 8, 2001, Mr. Muhawesh filed a
complaint against RESoft in the District Court of Hennepin County, Minnesota
alleging that RESoft failed to pay him $350,000 on January 1, 2001 under the
terms of a promissory note. The Company has filed a counterclaim against Mr.
Muhawesh requesting, among other things, the repayment of amounts previously
paid to him under the promissory note. 
The Company intends to vigorously defend against this matter.

Legal Actions

In
the normal course of business, the Company is involved in legal actions arising
from the ownership of its properties. 
In managements opinion, the liabilities, if any, that may ultimately
result from such legal actions are not expected to have a materially adverse
effect on the consolidated financial position, operations or liquidity of the
Company.

Note 8Related Party Transactions

Management
Fees

The Company maintains a property management agreement
with Hoyt Properties Inc. ("Hoyt"), an entity controlled by a
Trustee of the Company to serve as Property Manager of the commercial
properties owned by the Company. In connection with the agreement, Hoyt manages
the day-to-day operations of properties owned by the Company and receives a
management fee for this service. Management fees paid to Hoyt totaled
approximately $36,898 and $58,481 as of March 31, 2001 and March 31, 2000,
respectively.

Note 9 Supplemental Information to Statements of Cash Flows

For the three months ended March 31,2001
  2000Interest
  paid
  $377,090
  $308,602Supplemental schedule of non-cash investing and financing activities:The following assets and liabilities were assumed in connection with
  the acquisition of RESoft:Furniture and equipment
  $-
  $(74,672)Accounts receivable
  -
  (430,888)Goodwill
  -
  (4,499,777)Other assets
  -
  (74,604)Line of credit
  -
  68,466Related party note
  payable
  -
  750,000Other liabilities
  -
  422,233Common Shares
  -
  9,143Additional paid in
  capital
  -
  3,990,858Cash proceeds received
  from acquisition of consolidated subsidiary
  $-
  $160,759The following assets and liabilities were assumed
  in connection with the acquisition of the Plymouth Properties and additions
  to other properties:Purchase of real
  estate
  $-
  $(6,772,313)Additions to real
  estate
  -
  (38,951)Mortgage notes payable
  -
  4,471,694Minority interests
  -
  794,627Acquisition of and
  additions to real estate properties
  $-
  $(1,544,943)The following assets and liabilities were disposed of in connection
  with the disposition of Cold Springs:Disposition
  of real estate
  $8,184,686
  $-Deferred
  costs and other assets
  26,552
  -Mortgage
  note payable
  (7,306,716)
  -Accounts
  payable and accrued liabilities
  (140,997)
  -Security
  deposits
  (4,111)
  -Loss on sale of
  investment in real estate
  (165,835)
  -Dispositions
  of real estate properties
  $593,579
  $-Dividends
  and distributions payable
  $709,139
  $727,286Note 10  Information by Business Segment

In June 1997, the FASB issued Statement
of Financial Accounting Standards No. 131, Disclosure about Segments of an
Enterprise and Related Information. 
This statement requires that a public business enterprise report
financial and descriptive information about its reportable operating
segments.  Generally, financial
information is required to be reported on the basis that it is used internally
for evaluating segment performance and deciding how to allocate resources to
segments.  Management views the
operations of its real estate properties and the operations of RESoft as two
segments.

Real Estate
  Properties
  RESoft
  TotalThree months ended March 31,
  2001Revenues
  $814,701
  $807,673
  $1,622,374Operating
  expenses
  318,445
  488,519
  806,964Income from operations
  $496,256
  $319,154
  $815,410Segment assets at
  March 31, 2001
  $17,680,662
  $1,579,653
  $19,260,315Three months ended March 31,
  2000Revenues
  $1,282,210
  $461,378
  $1,743,588Operating expenses
  493,683
  314,685
  808,368Income from operations
  $788,527
  $146,693
  $935,220Segment assets at
  March 31, 2000
  $48,550,157
  $5,300,348
  $53,850,505The following table reconciles income
from operations for reportable segments to loss from operations as reported in
the Consolidated Statements of Operations.

Three months ended March 31,2001
  2000Income
  from operations for reportable segments
  $815,410
  $935,220Add:Equity in income of unconsolidated
  entities
  -
  1,856Minority interests
  40,757
  160,377Less:General and administrative
  (512,547)
  (471,180)Interest
  (341,023)
  (428,828)Product development
  (51,602)
  -Amortization
  (608,478)
  (136,971)Depreciation
  (190,407)
  (197,466)Loss from operations
  $(847,890)
  $(136,992)ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN
OF OPERATION

The
following discussion should be read in conjunction with the financial statements
and notes thereto included elsewhere herein.

This report on Form 10-QSB contains
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. Forwardlooking statements are based on certain
assumptions and describe future plans, strategies and expectations of the
Company.  They are generally
identifiable by use of the words "believe", "expect",
"intend", "anticipate", "estimate", "project"
or similar expressions. These statements are not guarantees of future
performance, events or results and involve potential risks and uncertainties.
Accordingly, actual performance, events or results may differ materially from
such forward-looking statements. Management undertakes no obligation to update
publicly any forward-looking statements, whether as a result of new
information, future events or otherwise.

Factors that could
cause actual results to differ materially from current expectations include, but
are not limited to, changes in general economic conditions, changes in interest
rates, legislative and regulatory changes, changes in monetary and fiscal
policies of the U.S. government, including policies of the U.S. Treasury and
the Federal Reserve Board, changes in local real estate conditions (including
rental rates and competing properties), changes in industries in which the
Company's principal tenants compete, the failure to timely lease unoccupied
space, the failure to timely re-lease occupied spaced upon expiration of
leases, the inability to generate sufficient revenues to meet debt service
payments and operating expenses, the unavailability of equity and debt
financing, unanticipated costs associated with the Company's acquisitions,
potential liability under environmental or other laws and regulations,
expanding a new line of business, customer demand for online services and
products, uncertainty of emerging online services, ability to meet competition,
loss of existing key personnel, ability to hire and retain future personnel,
the failure of the Company to manage its growth effectively and the other risks
identified inthis filing or other reports of the Company
filed with the Securities and Exchange Commission. These risks and
uncertainties should be considered in evaluating forwardlooking statements and
undue reliance should not be placed on such statements. Further information
concerning the Company and its business, including additional factors that
could materially affect the Company's financial results is included in other
Company filings with the Securities and Exchange Commission.

Overview

The Company is a real estate and
technology company separated into two business segments: a commercial real
estate segment which acquires, owns and operates commercial real estate and a
technology segment which provides document management solutions and information
technology consulting.

The Company was formed on March 15, 1994
as a Maryland real estate investment trust. The Company has operated as a traditional
real estate investment trust by buying, selling, owning, and operating
commercial and residential properties. The Company derived substantially all of
its revenues since inception through February 2000 from these real estate
operations.

In February 2000, the Company acquired
RESoft, Inc. (RESoft), a Minnesota corporation that has developed software
applications and that provides information technology services useful in the
real estate and other industries. During the remainder of 2000, the Company
developed RESofts additional product offering and included in its overall
business focus the development and sale of RESofts software product and
services. Since the acquisition, the Company has placed increasing emphasis on
the enhancement of the technology business and expects to continue to do so in
the future. As a result of the RESoft operations, the Company is no longer a
REIT for federal tax purposes but maintains its status as a REIT under Maryland
law.   For the year ended December 31,
2000, the Company was in a taxable loss position, and as a result, was not
subject to federal income taxes.

Also during 2000, for a variety of
reasons, including making available our cash resources for the Companys
technology operations by reducing the Companys debt obligations, the Company
sold two of its properties including the Companys last residential property
and on March 31, 2001, the Company sold its Cold Spring property. The Company
intends to maintain and operate its remaining commercial properties, all of
which are 100% leased, due to the expected cash flow results. The Company may,
in the future, buy or sell additional properties depending upon a variety of
factors including the successfulness of RESoft, general economic conditions,
ability to obtain financing, valuation and capital appreciation of real estate,
and the Companys debt levels.

Real Estate Segment

As of March 31, 2001, the Company owned
the following four commercial real estate properties containing approximately
129,000 rentable square feet:


  A 26,186 square-foot
  light industrial facility in Plymouth, Minnesota,
  A 26,186 square-foot
  light industrial facility in Plymouth, Minnesota,
  A 26,186 square-foot
  light industrial facility in Plymouth, Minnesota,
  A 50,291 square-foot light
  industrial facility in Burnsville, MinnesotaThe Companys interest in the real
properties is held through Wellington Properties Investments, LP (the
Operating Partnership).  The Company
is the sole general partner of the Operating Partnership and as of March 31,
2001, held a 92.3% interest in the Operating Partnership.

The Company expects to continue to own
and operate its light industrial facilities in 2001. The Company expects its
properties will remain 100% occupied and will continue to provide a predictable
cash flow and operating results. The Company also expects to continue to review
and analyze valuation and capital appreciation opportunities for its real
estate portfolio including refinancing, exchanging or disposition alternatives.

Technology Segment

On February 24, 2000, the Company
acquired RESoft. Since 1991, RESoft has offered various information technology
services and has been a reseller of various computer hardware and software
products. Subsequent to the acquisition, the Company has continued to provide
similar service offerings and in addition and has introduced a proprietary
product, REDocs, that adds certain features to existing document management
software products. RESofts goal is to become a leading document management
reseller and provider for the real estate and legal industries as well as to
major corporations.

RESoft offers the following services to
its customers: technology consulting services including, among other services,
information technology planning and analysis, network integration services,
software implementation and migration and website development; application
service provider (ASP) service for its real estate owners and managers who
utilize REDocs; and the resale of various hardware or software products to the
real estate and legal industries as well as to major corporations.

REDocs is a web-based document management
solution designed specifically for the needs of real estate owners and
managers. RESoft launched a test version of REDocs during the second quarter of
2000. At the end of the third quarter of 2000, RESoft executed an agreement
with a software company to provide the software application platform for its
ASP service. REDocs operates from this platform. RESoft officially released the
first version REDocs in the fourth quarter of 2000. RESoft expects to continue
to invest in various research and development initiatives to further enhance
REDocs.

RESoft markets its service offerings
through a combination of a direct sales force, strategic customer relationships
and the use of the external sales and marketing company. RESoft compensates its
various channels primarily through incentive based programs.

Income Taxes

The Company is now subject to federal and
state income taxes.  See income tax
disclosure in Note 2 of the financial statements for effect on operations.

Results of
Operations

Our
revenues traditionally included rental revenues and tenant improvements and now
also include revenues from technology consulting services and sales of hardware
and software. The Company anticipates that revenues from the Companys
technology operations will increase in the future while our revenues from real
estate, which have decreased due to the real estate dispositions, will remain
constant in future periods subject to the effects of possible acquisitions,
dispositions, general economic factors and fluctuations in owning and operating
real estate generally.

Comparison of the Three Month Period
Ended March 31, 2001 and 2000:Rental revenue
decreased by approximately $316,000 or 40.1% for the three month period ended
March 31, 2001 compared to the three month period ended March 31, 2000.  The decreased revenue was primarily a result
of the Company's disposition of Lake Pointe on June 30, 2000 and Thresher
on December 31, 2000, offset, in part, by the acquisition of the Plymouth
Properties on February 29, 2000.Tenant
recoveries decreased by approximately $75,000 or 19.4% for the three-month
period ended March 31, 2001 compared to the three-month period ended March 31,
2000 due to the disposition of Lake Pointe. 
Professional services and sales of hardware and software increased by
approximately $341,000 or 74.0% for the three-month period ended March 31, 2001
compared to the three month period ended March 31, 2000.  The increase is the result of the Companys
February 24, 2000 acquisition of RESoft. 
Interest income and other income decreased by $71,000 during these same
periods primarily due to the use of cash and cash equivalents.

Total expenses increased from approximately $2,043,000
for the three–month period ended March 31, 2000 to $2,511,000 for the
three–month period ended March 31, 2001, a net increase of $468,000.
Increased costs related to sales of hardware, software and professional
services, to advertising and promotion, and to product development costs were a
result of the acquisition of RESoft. Decreased property, operating and
maintenance, property taxes and insurance, management fees and interest expense
were primarily a result of the disposition of Lake Pointe on June 30, 2000 and
Thresher on December 31, 2000.  The
decreases were offset, in part, by the acquisition of the Plymouth Properties
on February 29, 2000. Increased general and administrative expenses were
primarily the result of additional general and administrative costs associated
with RESoft.

Depreciation and amortization primarily
increased for the following reasons: the Company's amortization of goodwill in
connection with the acquisition of RESoft, the amortization of a proprietary
database, the amortization of the non-refundable prepaid minimum royalty, and
the increased depreciation from the recently acquired Plymouth Properties.  All of these increases were offset, in part,
by reduced depreciation as a result of the dispositions of the Lake Pointe and
Thresher properties.

There was no equity in income of unconsolidated
subsidiary for the three month period ended March 31, 2001 as compared to
$1,856 for the three month period ended March 31, 2000, due to the sale and
transfer of the Company's 8% interest in Highlander on June 30, 2000.

The loss on sale of investment in real estate was a
result of the additional loss recognized on the sale of the St. Cloud,
Minnesota property.   A portion of the
loss from the sale of the St. Cloud, Minnesota property was accrued as of
December 31, 2000.  The quarter ended
March 31, 2001 includes $220,853 of rental revenue and $159,935 of operating
income derived from that property.   As
a result of the sale, the remaining quarters will not include operations from that
property.

As a result of the above factors, loss from operations
before equity in income of unconsolidated subsidiary and loss allocated to
minority interests increased from approximately $299,000 for the three month
period ended March 31, 2000 to a loss of approximately $889,000 for the three
month period ended March 31, 2001 and net loss available to Common Shareholders
increased from approximately $465,000 for the three month period ended March
31, 2000 to $1,014,000 for the three month period ended March 31, 2001.

Liquidity
and Capital ResourcesShort Term and Long Term Liquidity

Cash provided by operations, equity transactions, and
borrowings from affiliates and lending institutions have generally provided the
primary sources of liquidity to the Company. Historically, the Company has used
these sources to fund operating expenses, satisfy its debt service obligations
and fund distributions to shareholders.

The Company anticipates using its cash
and cash equivalents, restricted cash that is released to the Company, cash
from dispositions and cash provided by operations primarily to the fund the
technology operations. The Company anticipates that its cash sources will be
able to maintain these operations for the next fiscal year if not longer. If
not, the Company will need to seek additional financing which cannot be
guaranteed if its real estate operations are unable to fund the deficit.

As
part of the sale of the Thresher property on December 29, 2000, the Company
expects to have released to it in the near future $804,000 of cash, which is
currently securing a letter of credit.

On April 19, 2001, The Company declared a dividend of
$0.475 per share with respect to the Class A Preferred Shares.    The dividend with respect to the Class A
Preferred Shares will be paid on May 15, 2001 to shareholders of record on
April 30, 2001.

The Company has no other material contractual obligations
for property acquisition, material capital costs, other than scheduled payments
in connection with licensing and marketing agreements and tenant improvements
in the ordinary course of business, or operating expenses. The Company expects
to meet its long-term capital needs through a combination of cash from
operations, net cash proceeds from sales of investments, additional borrowings
and additional equity issuances of Common or Preferred Shares.

Cash Flows

During the three month period ended March 31, 2001, the
Company generated (i) approximately $594,000 from net cash proceeds in
connection with the disposition of Cold Springs.  These cash flows were used primarily for (i) acquisition of
computer hardware, software and other fixed assets of approximately $7,000;
(ii) payments on mortgage loans and notes payable of approximately $26,000;
and (iii) cash used in operating activities of approximately $504,000. As
a result, the Company's cash balance increased by approximately $57,000 from
approximately $1,636,000 at December 31, 2000 to $1,693,000 at March 31,
2001.

Master
Warrant Agreement With Circata Corporation

On December 5, 2000 the Company entered into a Master
Warrant Agreement with the Circata Corporation, a provider of wireless
infrastructure technology, in exchange for entering into a strategic marketing
and development agreement.  The Master
Warrant Agreement will be effective until December 5, 2003.  Circata Corporation agrees to issue a
warrant to RESoft, which will represent a right to purchase a number of shares
of capital stock of the Company equal to the aggregate number of shares of
capital stock sold or issued to parties other than RESoft in such Equity
Financing Arrangement.

PART II.  OTHER INFORMATION

ITEM 1.  LEGAL
PROCEEDINGS

On December 29, 2000, Stonehaven notified
Odeh Muhawesh, a Trustee of the Company, that it was suspending its payment to
him under a promissory note assumed by RESoft. RESoft assumed the payment
obligation in February 2000 pursuant to the terms of the merger agreement
between Company, RESoft and NETLink International, Inc. (NETLink), a company
founded and owned by Mr. Muhawesh whereby NETLink was merged into RESoft.
Management of the Company believes Mr. Muhawesh is in default under the merger
agreement for, among other things, failure by him to cause to be transferred to
RESoft 5% of the issued and outstanding stock of MyFreeDesk.com, Inc.

On January 8, 2001, Mr. Muhawesh filed a
complaint against RESoft in the District Court of Hennepin County, Minnesota
alleging that RESoft failed to pay him $350,000 on January 1, 2001 under the
terms of a promissory note. The Company has filed a counterclaim against Mr.
Muhawesh requesting, among other things, the repayment of amounts previously
paid to him under the promissory note. 
The Company intends to vigorously defend against this matter.

ITEM 2.  CHANGES
IN SECURITIES

a.        None

b.        None

c.        None

d.        None

ITEM 3.  DEFAULTS
UPON SENIOR SECURITIES

None

ITEM 4. 
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

On January 25, 2001, the Company held its
1999 Annual Meeting of Shareholders for the election of two Class II trustees
and one Class III trustee (the Meeting). The Company's Declaration of Trust,
as amended, and Bylaws provide that the Board of Trustees shall be comprised of
seven trustees divided into three classes. The Company had at the time of the
Meeting and currently still has six trustees and one vacancy.

At the Meeting, both incumbent Class II
trustees, Messrs. Steven B. Hoyt and Duane H. Lund, were each elected by the
shareholders to serve a three-year term or until the 2002 Annual Meeting.   Also, Odeh A. Muhawesh, a trustee recently
elected by the Board to fill a vacancy, was elected by the shareholders as a
Class III trustee to serve until the 2000 Annual Meeting of Shareholders.

Each nominee received the number of votes
set forth below:

Steven B. HoytFor
  3,671,648Against or withheld
  7,586Abstentions and broker
  non-votes
  0Duane H. LundFor
  3,196,219Against or withheld
  483,015Abstentions and broker
  non-votes
  0Odeh A. MuhaweshFor
  909,917Against or withheld
  2,769,317Abstentions and broker
  non-votes
  0

The other members of the Board of
Trustees are Class I Trustees Robert D. Salmen and Mark S. Whiting who shall
continue to serve until the 2001 Annual Meeting and Class III Trustee Paul T.
Lambert who shall continue to service until the 2000 Annual Meeting.

ITEM 5.  OTHER INFORMATION

None

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

Exhibit
  Number
  ExhibitDescription2.1
  Amended and Restated
  Contribution Agreement between the Company, the Operating Partnership, AREE
  and other limited partnership Unit recipients dated as of August 31, 1998
  (filed as Exhibit A with the Company's Schedule 14A on November 6, 1998 and
  incorporated herein by reference)2.2
  Agreement and Plan of
  Reorganization dated as of February 25, 2000, by and among the Company, NTLI
  Acquisition Corporation, a Delaware corporation, NETLink International, Inc.,
  a Minnesota corporation and Odeh A. Muhawesh, Mary Henschel, Alan Schmidt,
  Ahmad Yassine, Patrick Archbold, Ann Wessels, Art Carruth, Patricia Hewitt,
  Thomas walker and Sherry Ajax (filed as Exhibit 2.2 with the Company's Form
  8-K on March 17, 2000 and incorporated herein by reference)2.3
  Contribution Agreement
  between Wellington Partners, L.P., the Company and Plymouth Partners II, LLC
  and other LP Unit Recipients dated as of February 29, 2000 (filed as Exhibit
  2.3 with the Company's Form 8-K on March 17, 2000 and incorporated herein by
  reference)3.1
  Declaration of Trust
  (filed with the Company's Registration Statement on Form SB–2
  (Commission File No. 33–82888C) and incorporated herein by reference)3.2
  Bylaws of the Company
  (filed with the Company's Registration Statement on Form SB–2
  (Commission file No. 33–82888C) and incorporated herein by reference)3.3
  Articles of Amendment
  and Restatement of the Declaration of Trust (filed as Exhibit E with the
  Company's Schedule 14A on November 6, 1998 and incorporated herein by
  reference)10.1
  Agreement of Limited
  Partnership of the Operating Partnership dated as of August 31, 1998 (filed
  as Exhibit C with the Company's Schedule 14A on November 6, 1998 and
  incorporated herein by reference)10.2
  Contribution Agreement
  between the Operating Partnership and WMC dated as of August 31, 1998 (filed
  as Exhibit B with the Company's Schedule 14A on November 6, 1998 and
  incorporated herein by reference)10.3
  Master Registration
  Rights Agreement dated as of August 31, 1998 (filed as Exhibit E of Exhibit C
  with the Company's Schedule 14A on November 6, 1998 and incorporated herein
  by reference)

10.4
  Promissory Note for
  $2,750,000 by Lake Pointe Apartment Homes, Inc. to Credit Suisse First Boston
  Mortgage Capital, LLC dated March 5, 1998 (filed with the Company's Current
  Report on Form 8–K on August 31, 1998 and incorporated herein by
  reference)10.5
  Mortgage, Assignment
  of Leases and Rents and Security Agreement by and between Lake Pointe
  Apartment Homes, Inc. to Credit Suisse First Boston Mortgage Capital, LLC
  dated March 5, 1998 (filed with the Company's Current Report on Form 8–K
  on August 31, 1998 and incorporated herein by reference)10.6
  Common Stock Purchase
  Warrant by the Company to Credit Suisse First Boston Mortgage Capital LLC,
  dated March 5, 1998 (filed with the Company's Current Report on Form 8–K
  on August 31, 1998 and incorporated herein by reference)10.7
  Registration Rights
  Agreement by and between the Company and Credit Suisse First Boston Mortgage
  Capital, LLC dated March 5, 1998 (filed with the Company's Current Report on
  Form 8–K on August 31, 1998 and incorporated herein by reference)10.8
  Purchase Agreement by
  and between Maple Grove Apartment Homes, Inc. and The Shelard Group, Inc.,
  dated July 2, 1999 (filed with the Company's Current Report on Form 8–K
  on November 23, 1999 and incorporated herein by reference)10.9
  Stock Exchange
  Agreement between the Company and Wellington Management Corporation effective
  June 30, 2000 (filed with the Company's Current Report on Form 8–K on
  July 14, 2000 and incorporated herein by reference)10.10
  Warrant to Purchase
  Shares of Stock dated March 28, 2000 between the Company and Venture One Real
  Estate LLC (filed with the Company's Quarterly Report for the period ended
  June 30, 2000 on Form 10–QSB filed on August 14, 2000 and incorporated
  herein by reference)10.11
  Call
  Agreement dated March 28, 2000 between the Company and Venture One Real
  Estate LLC (filed with the Company's Quarterly Report for the period ended
  June 30, 2000 on Form 10–QSB filed on August 14, 2000 and incorporated
  herein by reference)10.12
  Warrant to Purchase
  Shares of Stock dated June 22, 2000 between the Company and Venture One Real
  Estate LLC (filed with the Company's Quarterly Report for the period June 30,
  2000 on Form 10–QSB filed on August 14, 2000 and incorporated herein by
  reference)10.13
  Exclusive Agency and
  Representation Agreement between RESoft, Inc. and Venture One Real Estate,
  LLC (filed with the Company's Quarterly Report for the period September 30,
  2000 on Form 10–QSB filed on November 14, 2000 and incorporated herein
  by reference)10.14
  Membership Unit
  Purchase Agreement dated December 29, 2000, between the Company, Wellington
  Properties Investments, L.P., and Steven B. Hoyt, Bruce K. Hoyt, Donald
  Ringrose, and Richard Wolsfeld (filed with the Company's Current Report as
  Exhibit 10.1 on Form 8–K on January 16, 2001 and incorporated herein by
  reference)10.15
  Master Warrant
  Agreement between RESoft Inc. and Circata Corporation(b)
Reports On Form 8-K

During
the three months ended March 31, 2001 and May 11, 2001, the Company filed the
following Current Reports of Form 8-K:

On January 16, 2001, the Company reported that it had
disposed of its interest in the Thresher Square property.

On February 2, 2001, the Company reported that it had
appointed Boulay, Heutmaker, Zibell & Co., PLLP as its independent auditors
for the fiscal year ended December 31, 2000. 
See the Companys Current Report of Form 8-K dated November 9, 2000,
which reported the resignation of the Companys previous independent auditors.



SIGNATURES

In
accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized.



STONEHAVEN REALTY TRUSTBy:
  s/s/
  Duane H. LundDate: May 11, 2001
  
  Duane
  H. LundChief Executive Officer Chief Accounting Officer