UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-K

              [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                 For the fiscal year ended December 31, 1997 or

            [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                        For the transition period from to

                           Commission file No. 1-13080

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

          Maryland                                  06-1391084
 (State or other jurisdiction of          (I.R.S. Employer Identification No.)
incorporation or organization) 

                 598 Asylum Avenue, Hartford, Connecticut 06105
               (Address of Principal Executive Offices) (Zip Code)

                                 (860) 246-1126
                (Issuer's Telephone Number, including area code)


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

         Title of Each Class: Name of Each Exchange on Which Registered:
       Common Shares of Beneficial Interest, American Stock Exchange, Inc.
                                 $.01 par value

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

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section  13 or 15(d) of the  Securities  Exchange  Act during the
preceeding  12  months  (or for such  shorter  period  that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes: X No:

Indicate by check mark  disclosure of delinquent  filers pursuant to Item 405 of
Regulation S-K is not contained herein,  and will not be contained,  to the best
of  registrant's  knowledge,  in  definitive  proxy  or  information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

The aggregate  market value of voting and  non-voting  common equity held by  
non-affiliates  of the registrant as of March 15, 1998 was $72,080,223.

The number of Common Shares of Beneficial  Interest  outstanding as of March 15,
1998 was 8,453,829.

                      DOCUMENTS INCORPORATED BY REFERENCE:
                     Definitive  proxy  statement  for 1998  Annual  Meeting  of
Shareholders - Part III of Form 10-K


<PAGE>



PART 1

Item 1.  Business

The Company

Grove Property Trust, a Maryland real estate  investment trust (the "Company" or
"Grove") is a self-managed and  self-administered  real estate  investment trust
("REIT")  that is  engaged in the  acquisition,  repositioning,  management  and
operation of  mid-priced  multifamily  and  specialty  retail  properties in the
Northeastern  United  States.  The  Company is a fully  integrated  real  estate
organization with in-house acquisition, repositioning and renovation, financing,
marketing, leasing and property management expertise.

As of March 15,  1998,  Grove  owned  interests  in and  operated  36  Apartment
Communities containing a total of 3,580 units in Connecticut,  Massachusetts and
Rhode Island and three community shopping centers in Massachusetts containing an
aggregate  of   approximately   100,000  rentable  square  feet.  The  Apartment
Communities are mid-priced apartment properties consisting primarily of two- and
three-story buildings in landscaped settings. The Apartment Communities are well
located  within  their  markets and appeal to middle  income  residents  who are
generally "renters by necessity."

Grove's  predecessors  commenced  operations in 1980. The Company  completed its
initial  public  offering  in 1994  with  the  acquisition  of  three  apartment
properties.  At that  time,  affiliates  of  Grove  owned  additional  apartment
properties  and other real estate  assets  outside of the Company and  conducted
management  and  acquisition  activities  through  entities that were also owned
outside of the  Company.  In 1996,  management  began to  undertake  a number of
strategic initiatives intended to maximize shareholder value. In March 1997, the
Company  completed the  following:  (i) the creation of an Umbrella  Partnership
REIT (an "UPREIT")  structure by forming Grove  Operating,  L.P. (the "Operating
Partnership") to facilitate the consolidating  transactions  described below and
to provide potential sellers with a mechanism to defer their tax liability; (ii)
the  acquisition  through the Operating  Partnership  of 20 properties  owned by
affiliates of Grove; (iii) the acquisition of the property management assets and
related liabilities of Grove Property Services Limited Partnership  ("GPS"), the
entity that managed the  properties  owned by Grove as well as the 20 properties
owned by affiliates of Grove;  (iv) a $30 million private  placement  (3,333,333
shares at $9.00 per share) of equity  securities  to  investors  that  included,
among others,  four investment  funds managed by Morgan Stanley Group,  Inc. and
the Oregon Public Employees Retirement Fund and (v) the closing of a $25 million
Credit  Facility  and  a $15  million  term  loan  facility  (collectively,  the
"Consolidation Transactions").

In November  1997,  the  Company  completed a public  offering  underwritten  by
Salomon Smith Barney and  co-managed  by Lehman  Brothers.  Simultaneously,  the
Company sold additional shares directly to certain  investors.  The Company sold
an  aggregate of 4,500,000  shares at a public  offering  price per share of $10
7/8.

On  November  24,  1997,  the date of the  closing of the  offering,  the yearly
dividend was increased to $0.68 per Common Share.  It is the Company's  business
philosophy to utilize retained earnings for additional real estate acquisitions.
The  proceeds  from  this  offering  were  primarily  used to  reduce  the  then
outstanding corporate debt.

As of December 31,1997, the Company's assets were approximately $148,150,000 and
its debt to total market capitalization ratio was approximately 28.3%.

The Company operates in a single industry segment.

The Operating Partnership

The Operating  Partnership  was formed to act as the vehicle for the acquisition
of properties.  Grove is the sole general  partner of the Operating  Partnership
and thereby controls the Operating Partnership. Using the Operating Partnership,
the Company is able to acquire  properties  in exchange  for Common Units of the
Operating  Partnership  ("Common Units" or "OP Units"),  which represent limited
partnership  interests in the Operating  Partnership.  The  recipients of Common
Units are  restricted  from  transferring  such Common Units for a period of one
year from the acquisition  date. The Common Units are redeemable after such time
for cash  (based  on the fair  market  value of an  equivalent  number of Common
Shares at the time of such redemption) or, at the Company's  option,  for Common
Shares of the Company on a one-for-one basis,  subject to certain  anti-dilution
adjustments and exceptions.  While the holders of Common Units determine whether
they want to redeem Common Units,  the Company  decides if the redemption  price
will be paid in cash or in Common Shares.  With the Operating  Partnership,  the
Company  believes  it is able to offer  attractive  purchase  terms to owners of
properties who have little or no tax basis remaining in such properties. In many
cases,  the immediate  tax liability  incurred by such owners upon a transfer of
such properties would be significant if the purchase price were paid in cash. By
utilizing the Operating Partnership  structure,  the Company can make payment in
Common Units,  thereby  deferring all or a portion of an owner's  federal income
tax liability.  At December 31, 1997, Grove owned approximately 74% of the total
partnership  interests,  including  the sole general  partner  interest,  in the
Operating  Partnership,  consisting  of Grove's  ownership of  8,453,829  Common
Units.

Business Objectives and Growth Strategies

The Company's current long-term objectives are (i) actively acquiring and, where
appropriate,  repositioning and renovating under-managed  multifamily properties
at  significant  discounts  to  replacement  costs and at returns  that  enhance
shareholder value; (ii) aggressively managing its portfolio to increase revenues
and reduce operating costs;  (iii)  maintaining a conservative  ratio of debt to
total market capitalization and (iv) consistently  providing quality service and
a desirable  living  environment to all of its residents.  A variety of factors,
many of which are beyond the  Company's  control,  may prevent the Company  from
achieving these  objectives.  In addition,  future  developments  and events may
cause the  Company  to  redefine  its  objectives  either by  modifying  current
objectives or by identifying additional ones.

Acquisitions.  The  Company's  primary  growth  strategy  has  been  to  acquire
under-managed,  mid-priced  apartment  properties  in  the  Northeastern  United
States.  Grove believes that  opportunities for acquisitions in the Northeastern
United  States are  particularly  attractive  at this time because the region is
generally  characterized  by: (i) limited new  construction  due to  significant
barriers  to  entry  resulting  from  high  construction  costs,   limited  land
availability,  strict  zoning laws and  extended  permitting  processes;  (ii) a
limited  number of publicly  traded  companies  focusing on the  acquisition  of
under-managed,  mid-priced  multifamily  communities;  (iii)  highly  fragmented
markets with many  small-to-medium  sized family owned  companies that own older
apartment  properties  in which the owners are looking to sell with  minimal tax
impact  and  (iv)  many  older  apartment   properties  where   maintenance  and
improvements have been deferred and where the Company believes selective capital
improvements and professional  management may create opportunities for increased
rents.   Although  the  Company's   principal   focus  is  the   acquisition  of
under-managed apartment communities,  it expects to examine additional mixed-use
and specialty retail properties that meet the Company's return requirements.

When evaluating  potential  acquisitions,  the following factors are among those
the Company considers: (i) the demographic  characteristics and resident profile
of the neighborhood; (ii) the age and quality of the property; (iii) the current
and  projected  cash flow of the property and the ability to increase  cash flow
through  return-oriented  capital  improvements;  (iv) the potential for capital
appreciation of the property;  (v) the terms of leases,  including the potential
for rent  increases;  (vi) the  potential  for  economic  growth and the tax and
regulatory  environment of the community in which the property is located; (vii)
the  occupancy of and demand for  properties of a similar type in the market and
(viii)   competition  from  existing   properties  and  the  potential  for  the
construction of new properties in the area.

The  Company's   acquisitions   of  Apartment   Communities   have  ranged  from
approximately  $4 million to $15  million and have ranged in size from 75 to 300
units.

Repositioning and Renovation. The Company evaluates repositioning and renovating
newly  acquired  properties.  When  pursuing  an  acquisition,  members  of  the
Company's in-house  acquisition,  development and property management teams work
together in evaluating  potential  renovation and  repositioning  strategies and
budgets.  Additionally,  the Company  reviews its  portfolio to determine  where
opportunities  exist to make  incremental  capital  improvements  that  meet its
targeted  return  on  cost.  Typical   renovations  include  replacing  carpets,
appliances,  kitchen cabinets,  counter tops,  bathroom fixtures and vanities as
well as upgrading  landscaping,  adding  fitness  centers and  community  rooms,
adding additional  apartment units,  repaving existing parking spaces and adding
additional parking spaces.


Financing Strategies

The Company intends to maintain a debt-to-total  market  capitalization ratio of
60% or less. At December 31, 1997,  the Company had debt totaling  $49.1 million
and a ratio of debt-to-total market capitalization of approximately 28% based on
the closing price of the Company's  Common Shares on the American Stock Exchange
of  $10.875  and  assuming  conversion  of all OP Units.  The  weighted  average
interest  rate on the  Company's  mortgage  debt as of  December  31,  1997  was
approximately 7.5% and the weighted average maturity was 8.5 years.

In  December  1997,  the  Operating  Partnership  entered  into a treasury  lock
agreement   with  Salomon  Smith  Barney   whereby  the  Operating   Partnership
effectively  locked  the ten year U. S.  Treasury  Bond rate on $20  million  of
future debt at a rate of 5.835%. The treasury lock is valid through July 1998.


Revolving Credit Facility

On December 31, 1997, the Company, through the Operating Partnership,  had a $25
million  secured line of credit with  BankBoston.  The line of credit matures in
March  2000 and bears  interest  at a per annum rate of one,  two,  three or six
month  LIBOR,  plus 1.2%.  As of  December  31,  1997,  there was $15.6  million
outstanding on this line of credit. The outstanding credit line balance was used
for the purchase of four apartment communities on December 31, 1997. The Company
is  currently  in the process of  increasing  the size of its credit line to $50
million  and  converting  the line of credit  to an  unsecured  facility  from a
secured facility.


Policies with respect to Certain Activities

General. The following is a discussion of certain current investments, financing
and other  practices of the Company.  These  practices may be amended or revised
from time to time without a vote of the Company's shareholders,  except that the
Company  cannot  change  its policy of holding  its  assets and  conducting  its
business  principally  through the Operating  Partnership without the consent of
the  holders of Common  Units as  provided  in the  Agreement  of the  Operating
Partnership.  No assurance  can be given that the Company's  objectives  will be
attained or that the value of the Company will not decrease.

Investment  Objectives and Practices.  The Company's  investment objective is to
provide  quarterly  distribution of a portion of cash available for distribution
and to achieve  long-term  capital  appreciation  through increases in cash flow
from  operations,  reinvestment  of  retained  cash and growth of the  Company's
property  portfolio  through  acquisitions  and  repositioning.   The  Company's
practice is to acquire  assets  primarily for  generation of current  income and
appreciation in long-term value.

The Company may  purchase or lease  income-producing  multifamily,  mixed-use or
specialty  retail  properties for long-term  investment,  expand and improve the
properties  acquired,  or sell  such  properties,  in  whole  or in  part,  when
circumstances  warrant.  Any financing or indebtedness  secured by the Company's
properties  will have a priority over the Common Shares in the event of a forced
sale or upon liquidation of any property in the Company's portfolio which serves
as such security.

While the Company has emphasized  equity real estate  investments in multifamily
properties,  it may, at the discretion of the Board,  invest in specialty retail
or  mixed-use  buildings,  equity  real  estate  investments  in other  types of
properties,  mortgages (including participating or convertible mortgages), stock
of other REIT's and other real estate interests.  The Company does not currently
intend to invest in mortgages or stock of other  REIT's.  The  investment by the
Company in  securities of other REIT's,  other  concerns  engaged in real estate
activities or other issues is subject to the percentage of ownership limitations
and gross income tests necessary for REIT qualification.

Disposition.  The Company  periodically  will review the assets in the Company's
portfolio.  The  Company  has no  current  intention  to  dispose  of any of its
properties,  unless the Board, based in part upon management's periodic reviews,
determines that the disposition of such property is in the best interests of the
Company.

Financing Practices.  The Company expects to continue to maintain a conservative
debt to total market  capitalization ratio of 60% or less. Such ratio represents
total debt of the  Company  as a  percentage  of the market  value of the Common
Shares  (assuming the exchange of all Common Units for Common Shares) plus total
debt of the Company.  The Company's  Third Amended and Restated  Declaration  of
Trust, as supplemented (the "Charter") and Bylaws,  however,  does not limit the
amount of percentage of  indebtedness  that the Company may incur.  In addition,
from time to time, the Company may modify its debt practice in light of changing
economic conditions, relative costs of debt and equity capital, market values of
its properties, general conditions in the market for debt and equity securities,
fluctuations  in the  fair  market  prices  of the  Common  Shares,  growth  and
acquisition  opportunities  and other  factors.  Accordingly,  the  Company  may
increase or decrease its debt to total market capitalization above or below 60%.

Other.  The  Company  intends to operate in a manner that will not subject it to
regulation under the Investment Company Act of 1940. The Company does not intend
(i) to invest in the  securities  of other issuers for the purpose of exercising
control over such issuer;  (ii) to  underwrite  securities  of other  issuers or
(iii) to trade actively in loans or other investments.




The Apartment Communities

The  Company at March 15, 1998 owned  interests  in and  operated  36  Apartment
Communities  containing a total of 3,580 units.  The Apartment  Communities  are
mid-priced  apartment  properties that consist primarily of two- and three-story
buildings in landscaped  settings.  The Apartment  Communities  are well located
within their  markets and appeal to middle  income  residents  who are generally
"renters by necessity."  The Apartment  Communities are located in the following
states:

State            Number of Apartment    Number of Apartment  Percentage of Total
                     Communities                  Units         Apartment Units
                     -----------                  -----         ---------------
Connecticut               28                      2,759             77%
Massachusetts              5                        521             15%
Rhode Island               3                        300              8%
                          -                         ---              --
Totals as of 
February 1998             36                      3,580             100%
                          ==                      =====             ====



Of the current 36  Apartment  Communities,  17 have 100 units or more,  with the
largest having 355 units and the smallest  having 28 units.  The average size of
the Apartment  Communities is approximately 100 units. Of the 3,580 units in the
Apartment Communities,  199 units or approximately 5.6% are studios, 1,408 units
or approximately 39.3% are one bedrooms,  1,961 units or approximately 54.8% are
two bedrooms and 12 units or approximately .3% are three bedrooms. The Apartment
Communities  contain an aggregate of  approximately  3.4 million rentable square
feet with an average unit size of approximately  934 square feet. For the twelve
months  ended  December  31,  1997,  the  Apartment  Communities  had an average
economic  occupancy rate of approximately 96% and an average monthly rental rate
of approximately $702 per unit.



<PAGE>


<TABLE>

                                 Property Table


<CAPTION>
                                                                                                        
                                                                                      Average Economic     Average Monthly Rental
                                                                                     Occupancy Rate (1)     Rate Per Unit (2)
                                                                                     ------------------     -----------------

                                                                            Average    Year      Year      Year       Year
                                        Percentage  Number  Year    Year    Sq. Ft.    Ended     Ended     Ended      Ended
Property                 Town/City      Ownership of Units  Built  Renovated Per Unit 12/31/96  12/31/97  12/31/96   12/31/97
--------                 ---------      --------- -------- -----  --------- -------- --------  --------  --------   --------
<S>                      <C>                 <C>     <C>     <C>       <C>     <C>      <C>       <C>     <C>       <C>            
Connecticut:
208-210 Main St. (3)     Manchester          100%       28   1969      1988      929     97.8%     95.8%  $         $
                                                                                                               761         780
Arbor Commons (3)        Ellington           100%       28   1975      1988      780     97.6%     96.6%       686
                                                                                                                           695
Avonplace                Avon                 99%      147   1973      1995    1,542     99.1%     98.3%       845
                                                                                                                           867
Barons Apartments        Southington         100%       54   1970      1994      900     95.8%     95.8%       684
                                                                                                                           710
Bradford Apartments      Newington            91%       64   1964      1989      894     91.6%     96.6%       686
                                                                                                                           696
Briar Knoll(5)           Vernon              100%      150   1986                867
                                                                          -                  -         -         -           -
Brooksyde (4)            West Hartford       100%       80   1945      1997      800     94.0%     96.5%       643
                                                                                                                           684
Burgundy Studios (4)     Middletown          100%      102   1973      1996      443     96.7%     97.2%       430
                                                                                                                           436
Cambridge Estates        Norwich             100%       92   1977      1990      939     97.4%     97.7%       715
                                                                                                                           737
Colonial Village         Plainville          100%      104   1968      1989      981     96.5%     97.1%       726
                                                                                                                           747
Dogwood Hills            Hamden              100%       46   1971      1993    1,330     98.2%     97.5%       722
                                                                                                                           743
Summit & Birch Hill (4)  Farmington          100%      184   1967      1996      937     96.5%     96.8%       745
                                                                                                                           785
Fox Hill Apartments      Enfield              97%      168   1974      1991      796     96.5%     93.9%       642
                                                                                                                           667
Fox Hill Commons         Vernon              100%       74   1965      1989      849     97.1%     94.5%       692
                                                                                                                           710
Greenfield Village       Rocky Hill          100%      129   1965      1997      729
(4)(5)                                                                                       -         -         -           -
Hamden Centre            Hamden              100%       65   1968      1993      873     96.2%     95.1%       637
                                                                                                                           655
High Meadow(4)(6)        Ellington           100%      100   1975                605     90.0%     93.4%
                                                                          -                                    580         595
Hill Top(5)              Norwich             100%      120   1988                986
                                                                          -                  -         -         -           -
Glastonbury Center       Glastonbury         100%      104   1962      1989      961     95.6%     90.8%       773
                                                                                                                           801
Loomis Manor             West Hartford        91%       43   1948      1990    1,138    100.0%     99.5%       826
                                                                                                                           848
Ocean Reef               New London           97%      163   1962      1995      829     94.4%     94.4%       633
                                                                                                                           650
Park Place West          West Hartford       100%       63   1961      1989      861     97.9%     96.5%       656
                                                                                                                           671
Pinney Brook(5)          Ellington           100%       34   1969                882
                                                                                             -         -         -           -
Ribbon Mill(5)           Manchester          100%      104   1908      1985    1,221
                                                                                             -         -         -           -
Sandalwood(4)(6)         New London           97%       39   1977      1996      517     61.7%     97.6%       453
                                                                                                                           464
Westwynd Apartments      West Hartford        91%       46   1969      1990      901     95.2%     97.2%       648
                                                                                                                           659
River's Bend             Windsor             100%      355   1973      1996    1,000     95.3%     96.0%       714
                                                                                                                           752
Woodbridge               Newington           100%       73   1968      1991      792     94.7%     99.2%       712
                                                                                                                           724
Massachusetts
Dean Estates             Taunton             100%       58   1984 -            1,014     94.9%     97.5%       668
                                                                                                                           687
Four Winds(4)            Fall River          100%      168   1987      1996    1,089     90.5%     95.2%       627
                                                                                                                           692
Security Manor           Westfield            89%       63   1971      1988    1,150     99.1%     99.8%       576
                                                                                                                           584
Van Deene Manor (3)      West                 89%      109   1970      1990      664     98.5%     99.3%       609
                         Springfield                                                                                       618
Village Arms(5)          Acton               100%      123   1973                732
                                                                                             -         -         -           -
Rhode Island
Dean Estates II          Cranston             97%       48   1970      1994    1,170     93.5%     96.5%       687
                                                                                                                           701
Royale                   Cranston             97%       76   1976      1993    1,151     96.9%     91.7%       684
                                                                                                                           700
Tanglewood(5)            W.Warwick           100%      176   1973              1,059
                                                                                             -         -         -           -
                                                
                                                  =========                 ===================================================
    Total/Weighted Average                           3,580                       934     95.5%     96.1%  $    676     $   702 
                                                  =========                 ===================================================
    Same Community Weighted Average(4)                                                   96.5%     96.4%  $    696     $   718      
                                                                                     ==========================================



                            (NOTES ON FOLLOWING PAGE)


</TABLE>

<PAGE>



 (1) Average  economic  occupancy rate is derived by dividing  actual  collected
rental income by gross potential  rental income.  Gross potential  rental income
includes  vacancy  losses and bad debt,  but does not include model  expenses or
employee  concessions or discounts.  (2) Average monthly rental rate per unit is
derived by dividing  gross  potential  rental income by total number of leasable
units. (3) The following Apartment Communities contain additional space which is
rented to commercial tenants:

Apartment Communities                 Commercial Sq. Ft.
---------------------                 ------------------
208-210 Main St.                            9,597
Arbor Commons                               4,016
Van Deene Manor                             1,630
Total                                       15,243


(4) The same community  weighted average amounts represent the average occupancy
and  rental  rates  for the 23  Apartment  Communities  owned  by  Grove  or its
affiliated  predecessors for the years 1995, 1996 and 1997.  Thirteen properties
were purchased by Grove or its affiliated  predecessors  during or subsequent to
such  periods  and have  been  excluded  from the same  community  amounts.  The
following sets forth the acquisition dates for such Apartment Communities:


Apartment Communities                  Acquisition Date
---------------------                  ----------------
Summit & Birch Hill                         Feb 95
Four Winds                                  Oct-95
Burgundy Studios                            Oct-95
Sandalwood                                  Dec-95
Brooksyde                                   Oct-96
Greenfield Village                          Jul-97
High Meadow                                 Oct-97
Pinney Brook                                Dec-97
Briar Knoll                                 Dec-97
Hill Top                                    Dec-97
Ribbon Mill                                 Dec-97
Village Arms                                Dec-97
Tanglewood                                  Jan-98

(5) These seven properties were purchased from non-affiliated parties in 1997 or
1998, as noted in note 4 above. Information on these Properties is not available
for the entirety of the periods covered in the above table.
(6) High Meadow was purchased in October 1997 from a non-affiliated party.
(7) Sandalwood was purchased in December 1995. The property was not leasable 
    until September 1996.


The Retail Properties

Although the  Company's  principal  focus is the  acquisition  and  ownership of
apartment  communities,  it owns and may in the  future  acquire  mixed-use  and
specialty retail properties. The Company currently owns three retail properties.
One  of  these  properties  is  a  community   shopping  center  in  Longmeadow,
Massachusetts that contains  approximately 79,000 rentable square feet of retail
and office space.  The shopping center,  which was originally  constructed by an
unaffiliated  owner in 1962 and subsequently  expanded in 1978, was purchased by
an affiliate of the Company in 1994 and renovated  and  retenanted by management
at various times from 1994 through 1997.  For the year ended  December 31, 1997,
the  shopping  center had an average  annual base  rental rate of  approximately
$12.97 per square foot and was approximately 97% leased.

The other two retail  properties  are specialty  retail  properties,  which were
acquired from an affiliate of the Company on October 31, 1997.  These properties
are in the historic  district of Edgartown,  Massachusetts.  The two  properties
were  originally  constructed in the 1800's.  The first  building,  known as the
Wharf  Building,  contains  approximately  11,000  rentable square feet, and was
renovated by the previous affiliated owner in 1996. As of December 31, 1997, the
Wharf  Building had an average  annual rental rate of  approximately  $27.93 per
square foot and was 100% leased. The second building, the Cornerblock,  contains
approximately  5,400 rentable square feet and was substantially  renovated by an
unaffiliated predecessor owner in 1988. For the twelve months ended December 31,
1997, the Cornerblock had an average annual rental rate of approximately  $32.78
per square foot and was 100% leased.




Property Management

Grove manages its portfolio  through its staff of approximately 146 professional
and  support  personnel  and  approximately  17  part-time  support   personnel,
including  the Chief  Operating  Officer and regional  property  managers at the
corporate  level and property  managers,  service  technicians,  leasing agents,
porters and  landscapers at the property  level.  The Chief  Operating  Officer,
regional  property  managers  and  on-site  personnel  are  supported  by  seven
accounting and administrative employees.

During 1995, 1996 and 1997, the Company  experienced  average resident retention
rates of 60%, 61% and 62%,  respectively.  The  management  division  implements
on-site management programs,  accounting systems, marketing systems and resident
quality control and retention  procedures.  On-site  property  management  teams
perform leasing and rent collection  functions and coordinate resident services.
The Company uses newspaper advertisements,  resident referrals, apartment guides
and the Internet to market and advertise the Apartment Communities.  The Company
supplements  its  marketing  and  advertising   effort  with   point-of-purchase
materials and well-maintained  properties with strong curb appeal. The Company's
marketing personnel market the Apartment Communities on a continual basis rather
than waiting until vacancies occur.

On-site   management  is  assisted  by  the  regional  managers  and  accounting
department  personnel.  Regional managers monitor  performance  criteria at each
Apartment  Community,  and the  accounting  division  audits and  monitors  each
Apartment Community's financial records.

Prior to entering  into leases,  Grove  conducts  background  investigations  of
potential  residents,  including  credit checks,  prior landlord  references and
employer  verifications.  Substantially  all of the  apartments in the Apartment
Communities  are  rented  pursuant  to  standard   twelve-month   leases,  which
facilitate   uniform  lease   administration  by  helping  to  standardize  rent
collections, security deposit dispositions, evictions, repairs and renewals. The
Company typically  requires  residents to provide security deposits equal to one
month's rent. In addition,  the Company manages lease expirations to ensure that
vacancies occur on a staggered basis.

The Company's marketing and leasing procedures are designed to ensure compliance
with all federal, state and local laws and regulations.  Underwriting guidelines
for prospective  residents comply with FHAA and ADA regulations and are designed
to stabilize cash flows. None of the Apartment  Communities is currently subject
to rent control or rent stabilization regulation.

Insurance

Grove carries comprehensive liability, fire, flood (where required) and extended
coverage  and  rental  loss  insurance  on  all of its  properties  with  policy
specifications,  insured limits and deductibles  customarily carried for similar
properties.  There are,  however,  certain  types of losses  which may be either
uninsurable  or  not  economically  insurable,  such  as  those  resulting  from
earthquakes,  floods,  tidal waves,  explosion of water pipes,  nuclear hazards,
wars, civil disturbances and environmental matters.

Competition

All of the  Apartment  Communities  are located in developed  areas that include
other apartment communities. The number of competitive apartment properties in a
particular area could have a material  effect on the Company's  ability to lease
apartment  units or at any newly  acquired  properties  and on the rental  rates
charged. There are numerous real estate companies,  including those operating in
the markets in which the Company's  properties  are located,  which compete with
the Company in seeking properties for acquisition and for tenants to occupy such
properties.  The Company may compete with companies that have greater  resources
than the Company.  Further, the availability of single-family  housing and other
forms  of  multifamily  residential  properties,  such as  manufactured  housing
communities,  provide  alternatives  to  existing  and  potential  residents  of
apartment communities.

Regulation

General.   Multifamily   apartment  properties  are  subject  to  various  laws,
ordinances  and  regulations,  including  regulations  relating to  recreational
facilities such as swimming pools, activity centers and other common areas.

Americans With Disabilities Act. The Company's properties must comply with Title
III of the Americans with  Disabilities  Act (the "ADA") to the extent that such
properties are "public  accommodations" and/or "commercial  facilities" (each as
defined by the ADA). Compliance with the ADA could require removal of structural
barriers to handicapped  access in certain public areas of properties where such
removal is readily achievable.  The ADA does not, however,  consider residential
properties,  such as  multifamily  properties,  to be public  accommodations  or
commercial facilities, except to the extent portions of such facilities, such as
a leasing office,  are open to the public.  Noncompliance  with ADA requirements
and  applicable  state laws could result in  imposition  of fines or an award of
damages to private  litigants.  The Company may incur additional costs to comply
with such laws.

Fair Housing  Amendments  Act of 1988.  The Fair Housing  Amendments Act of 1988
(the "FHAA") requires multifamily properties first occupied after March 13, 1990
to be accessible to the handicapped. Noncompliance with the FHAA could result in
the imposition of fines or an award of damages to private litigants.

Rent  Control  Legislation.  State  and  local  rent  control  laws  in  certain
jurisdictions  limit a property owner's ability to increase rents and to recover
increases  in  operating  expenses  and  costs  of  capital   improvements  from
residents. Enactment of such laws has been considered from time to time in other
jurisdictions,  although such laws have not been adopted in the jurisdictions in
which the Company currently operates.

Environmental Matters


Under various federal, state and local laws, ordinances and regulations relating
to the protection of the environment, a current or previous owner or operator of
real estate may be held  liable for the costs of  investigations  or  performing
removal or  remediation  of certain  hazardous or toxic  substances or petroleum
products  released on, under,  in, emitting from, or located on, under or in the
property and may be held liable to a  governmental  entity or third  parties for
damages,  investigation,  remediation,  or  other  costs  associated  with  such
contamination.  These laws often impose liability  without regard to whether the
owner was  responsible  for, or even knew of, the presence of such  hazardous or
toxic substances or petroleum products.  The costs of investigation,  removal or
remediation  of such  substances  may be  substantial,  and the presence of such
substances may adversely affect the owner's ability to rent or sell the property
or to borrow using such  property as  collateral  and may expose it to liability
resulting  from any release or exposure of such  substances.  Moreover,  certain
loan documents  provide for recourse  liability in connection  with hazardous or
toxic substances. Persons who arrange for the disposal or treatment of hazardous
or toxic  substances  at  another  location  may also be liable for the costs of
removal or remediation of such substances at the disposal or treatment facility,
whether  or not such  facility  is owned or  operated  by such  person.  Certain
environmental laws impose liability for release of asbestos containing materials
into the air, and third  parties may also seek recovery from owners or operators
of real  properties  for personal  injury  associated  with asbestos  containing
materials  and other  hazardous or toxic  substances or petroleum  products.  In
connection with the ownership  (direct or indirect),  operation,  management and
development  of real  properties,  the  Company  may be  considered  an owner or
operator of such properties regulated by such laws, ordinances,  and regulations
relating to the  protection  of the  environment  or as having  arranged for the
off-site disposal or treatment of hazardous or toxic substances and,  therefore,
if  environmental  contamination  were to be found at such  real  properties  or
off-site  locations,  the  Company  could be  potentially  liable for removal or
remediation   costs,   as  well  as  certain  other  related  costs,   including
governmental penalties and injuries to persons and property.

Federal  legislation  requires  owners  and  landlords  of  residential  housing
constructed  prior to 1978 to disclose to potential  residents or  purchasers of
the properties any known  lead-paint  hazards and will impose treble damages for
failure to give the required  notice.  The  existence of  lead-based  paint in a
property may result in lead poisoning in children  residing  therein if chips or
particles of lead-based  paint are ingested,  and the Company may be held liable
under state laws for any injuries  caused by ingestion  of  lead-based  paint by
children  living  at  the  Apartment  Communities  or any  apartment  properties
acquired by the Company in the future.

All of the Properties  were subject to Phase I (or an update of a prior Phase I)
or similar environmental assessments by independent  environmental  consultants.
Phase I  assessments  are  intended to discover  information  regarding,  and to
evaluate the  environmental  condition of, the surveyed property and surrounding
properties.  Phase I assessments generally include a historical review, a public
records review, a preliminary investigation of the surveyed site and surrounding
properties, and preparation and issuance of a written report, but do not include
soil  sampling  or  subsurface  investigations.  The  environmental  assessments
disclosed that certain  underground  storage tanks, which have been removed from
the Sandalwood,  Fox Hill Commons and Ocean Reef, need to be registered with the
Connecticut  Department of Environmental  Protection ("DEP").  The environmental
assessments also disclosed that four properties  include floor drains which need
to be sealed or for which permits must be obtained from DEP.

Various  environmental  laws and regulations also control how certain activities
can or must be conducted at the Company's  properties.  Such requirements govern
maintenance   activities,   renovation  projects  and  other  worker  operations
involving  asbestos or  lead-based  paint.  They also may govern air  emissions,
wastewater  discharges,  waste  management  or  similar  activities  related  to
operation of the Company's properties.

Under  various laws and  regulations,  owners and operators of  underground  and
aboveground  storage  tanks  containing  petroleum are obligated to meet certain
construction  and  operating  standards.  In  addition,  such  tank  owners  and
operators are responsible for remediating any contamination  caused by petroleum
released from such tanks.

Grove's  environmental  assessments  of its  properties  have not  revealed  any
environmental  liability that the Company believes would have a material adverse
effect on its business, assets or results of operations taken as a whole, nor is
the Company aware of any such material environmental liability.  Nonetheless, it
is  possible  that the  Company's  assessments  do not reveal all  environmental
liabilities  or that  material  environmental  liabilities  exist of  which  the
Company is unaware.  Moreover,  there can be no assurance  that (i) future laws,
ordinances or regulations or new interpretations of existing laws or regulations
will not  impose  any  material  environmental  liability  or (ii)  the  current
environmental  condition  of the  Company's  properties  will not be affected by
tenants, by the condition of land or operations in the vicinity of the Company's
properties (such as the presence of leaking  underground  storage tanks),  or by
third   parties   unrelated  to  the  Company  so  as  to  impose  any  material
environmental liability.


Employees

As of February 15, 1998 the Company employed approximately 160 persons including
part time employees and its executive officers, none of whom is represented by a
labor union. The Company considers its relations with its employees to be good.

Item 2.  Properties

The information  concerning the Company's  properties contained in Item 1 hereof
under the captions "The Apartment  Communities"  and "The Retail  Properties" is
incorporated herein by reference.

Certain  of the  Company's  properties  secure  mortgage  indebtedness  on  such
property or the Company's borrowings under its revolving credit facility.


<PAGE>



                     Principal Amount    Interest            Maturity
 Name of Property       Outstanding       Rate                 Date
 ----------------       -----------       ----                 ----
                   (amounts in thousands)
 208-210 Main St          (1) $15,600       (2)               March 2000
 Arbor Commons                    (1)       (2)               March 2000
 Avonplace                        (1)       (2)               March 2000
 Colonial Village                 (1)       (2)               March 2000
 Park Place West                  (1)       (2)               March 2000
 Sandalwood                       (1)       (2)               March 2000
 Fox Hill Apartments              (1)       (2)               March 2000
 Greenfield Village               (1)       (2)               March 2000
 High Meadow                      (1)       (2)               March 2000
Cornerblock                       (1)       (2)               March 2000
The Wharf                         (1)       (2)               March 2000
 Dean Estates II                  (1)       (2)               March 2000
 Royale                           (1)       (2)               March 2000
 Barons Apartments                         7.25%               June 2013
                                1,242
 Bradford Apartments                        (4)               March 2007
                                1,860
 Burgundy Studios                           (4)               March 2007
                                1,650
 Cambridge Estates       (3)    4,373      7.04%             January 2006
 Dogwood Hills                    (3)      7.04%             January 2006
 Hamden Centre                    (3)      7.04%             January 2006
 Fox Hill Commons                           (4)               March 2007
                                2,100
 Glastonbury Center                        8.33%             December 2003
                                4,408
 Loomis Manor                               (4)               March 2007
                                1,650
 Ocean Reef                                7.49%            September 2005
                                2,329
 Westwynd Apartments                        (4)               March 2007
                                1,215
 Woodbridge                                 (4)               March 2007
                                2,220
 Dean Estates                              7.09%             December 2000
                                2,022
 Longmeadow Shops                          7.00%             December 2007
                                4,000
 Security Manor                             (4)               March 2007
                                1,389
 Van Deene Manor                            (4)               March 2007
                                3,000
                      ================
  Total                      $ 49,058
                      ================

(1) These thirteen  properties secure the Company's $25 million Revolving Credit
Facility.  (2) The interest rate on the Revolving  Credit Facility floats at the
thirty,  sixty,  or ninety day LIBOR rate plus 1.2%. (3) This loan is secured by
three properties,  Cambridge Estates,  Dogwood Hills, and Hamden Center. (4) The
interest  rate on these loans floats at an interest rate equal to the thirty day
LIBOR rate plus 1.14%.  The interest  rate on theses loans has been  effectively
fixed with two interest  rate swap  contracts  at an  effective  average rate of
7.67%.


Reference is also made to Notes 5 and 6 to the Company's  Consolidated 
Financial  Statements  for the year ended  December 31, 1997included elsewhere
herein.

Item 3.  Legal Proceedings

The  Company is not  presently  involved  in any legal  proceedings,  other than
litigation arising in the ordinary course of business, some of which is expected
to be covered by  liability  insurance  and all of which,  collectively,  is not
expected to have a material adverse effect on the business,  financial condition
or results of operations of the Company.


Item 4.  Submission of Matters to a Vote of Security Holders

The Company did not submit any matters to a vote of security  holders during the
fourth quarter of the fiscal year ended December 31, 1997.

Part II

Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters

Market Information

The Company's Common Shares of Beneficial Interest,  $.01 par value (the "Common
Shares") are listed on the American Stock  Exchange (the "AMEX")  (Regular List)
under the symbol "GVE." Prior to November 1997, the Common Shares were listed on
the Emerging Company Marketplace of the AMEX. The following table sets forth for
the periods  indicated  the high and low sale prices as reported on the AMEX and
the  dividends  declared  and paid by the Company on each Common  Share for each
such period.  All prices and  dividends  have been adjusted to reflect the share
split and share dividend paid by the Company in March 1997.

     1996 Quarter Ending   
                                                                   Dividend per
                               High              Low               Common Share
                               ----              ---               ------------
       March 31, 1996         $8.572            $7.090               $0.1926
       June 30, 1996           8.466             7.619                0.1947
       September 30, 1996      8.043             7.514                0.1947
       December 31, 1996       8.148             6.773                0.1947

     1997 Quarter Ending
                                                                   Dividend per
                               High              Low               Common Share
                               ----              ---               ------------
       March 31, 1997        $10.371           $ 7.719                $0.1558(1)
       June 30, 1997         $11.250           $ 9.625                $0.1890(2)
       September 30, 1997    $12.375           $10.625                $0.1575
       December 31, 1997     $12.000           $10.0625               $0.1620

------------------------

(1)  Represents  the  dividend  declared  and paid for the period  beginning  on
January 1, 1997 and ending on March 14, 1997,  the date of the  consummation  of
the Consolidation Transactions.

(2)    Represents the dividend declared and paid for the period beginning on 
March 15, 1997 and ending June 30, 1997.

The Company made no sales of Common Shares  during 1995,  1996 or 1997 that were
not  registered  under the  Securities  Act of 1933,  except for sales for which
information has been previously included in a Quarterly Report on Form 10-QSB.

Equity Offerings and OP Unit Issuance

In March 1997,  the  Company  completed  a private  offering  of  3,333,333  
of Common  Shares at $9.00 per share and  received  net proceeds of  
approximately $27 million in connection therewith.

In March 1997, the Company, through the Operating Partnership,  issued 2,114,439
OP  Units at $9.00  per OP Unit in  exchange  for  partnership  interests  in 20
properties  owned by  affiliates  of the  Company  and the  assets  and  related
liabilities of GPS, the entity that manages the Company's properties.  The total
value of the OP Units at the time of  issuance  for the above  transactions  was
approximately $19 million.

In June 1997, the Company, through the Operating Partnership,  issued 420,183 OP
Units  at  $10.00  per OP  Unit  in  exchange  for  partnership  interests  in 3
properties  owned by affiliates of the Company.  The total value of the OP Units
at the time of issuance for above transactions was approximately $4.2 million.

 In September  1997,  the Company,  through the  Operating  Partnership,  issued
325,836 OP Units at $10.50 per OP Unit in exchange for partnership  interests in
3 properties owned by affiliates of the Company. The total value of the OP Units
at the time of issuance for above transactions was approximately $3.4 million.

In October 1997, the Company, through the Operating Partnership,  issued 143,334
OP Units at  $10.50  per OP Unit in  exchange  for  partnership  interests  in 2
properties  owned by affiliates of the Company.  The total value of the OP Units
at the time of issuance for above transactions was approximately $1.5 million.

All of the  transactions  referred  to  above  were  not  registered  under  the
Securities  Act of 1933 in  reliance  on the  exemption  contained  in Rule  506
thereunder on the basis that each of the purchasers in such  transaction  was an
accredited investor.

In  November  1997,  the  Company  completed  a  registered  public  offering of
3,141,475  Common  Shares and a  concurrent  offering  to certain  institutional
investors of 1,358,525  Common Shares both at $10.875 per share and received net
proceeds of approximately $45.2 million in connection therewith.

Dividends

During 1997, the Company declared  dividends totaling $0.66 per Common Share, or
approximately  63% of its Funds From  Operations  during the year. For 1996, the
Company declared dividends totaling $0.78 per Common Share, or approximately 81%
of its funds from  operations  during the year.  The payment of dividends by the
Company will be at the discretion of the Board of Trust Managers and will depend
on  numerous  factors,  including  the  actual  cash  flow of the  Company,  its
financial condition, capital requirements,  the annual distribution requirements
under the REIT  provisions  of the Code and such other factors that the Board of
Trust Managers deems relevant.

Distributions  by the  Company  to the  extent of its  current  and  accumulated
earnings and profits for Federal  income tax purposes  generally will be taxable
to shareholders as ordinary dividend income.  Distributions in excess of current
and  accumulated  earnings and profits  (return of capital) will be treated as a
non-taxable  reduction  of a  shareholder's  basis in the  Common  Shares to the
extent thereof,  and thereafter as taxable gain. Dividends that are treated as a
reduction of a shareholder's  basis in its Common Shares will have the effect of
deferring taxation until the sale of such shareholder's  Common Shares.  None of
the $0.66 of  dividends  declared  for 1997  represented  a return  of  capital.
Approximately  $0.02  (or  2.54%) of the $0.78 of  dividends  declared  for 1996
represented a return of capital.


Holders

The  approximate  number of holders of record of the Common  Shares on March 15,
1998 was 118.


<PAGE>


Item 6.           Selected Financial Data
<TABLE>
<CAPTION>

                                                                             Company                     Predecessor (2)
                                                             ----------------------------------------- --------------------
                                                                  Years Ended December 31,  6/24/94 to 1/1/94  Year Ended
                                                                                                         to
                                                                1997      1996      1995    12/31/94   6/23/94  12/31/93
                                                             --------------------------------------------------------------
                                                                       (Dollars in thousands, except per share data)
<S>                                                           <C>          <C>     <C>       <C>       <C>        <C> 
Revenues:
  Rental income                                               $  17,111    $2,046    $1,287    $  641    $ 574      $  976        
  Property and management                                           518
                                                                                -         -         -        -           -
  Interest and other                                                309        36        30        13        9           6
                                                             --------------------------------------------------------------
      Total revenues                                             17,938     2,082     1,317       654      583         982
                                                             --------------------------------------------------------------
Expenses:
  Property operating and maintenance                              6,078       656       406       208      235         313
  Real estate taxes                                               1,770       208       149        76                  134
                                                                                                            71
  Related party management fees                                      22       109        67        33       33          48
  Interest expense                                                2,741       394        85        45      173         323
  Depreciation and amortization                                   2,701       387       216       117      102         182
  General and administrative                                        908        67        56        16
                                                                                                             -           -
                                                             --------------------------------------------------------------
      Total expenses                                             14,220     1,821       979       495      614       1,000
                                                             --------------------------------------------------------------
Income (loss) before minority interests                           3,718       261       338       159     (31)        (18)
Minority interests in consolidated partnerships                     155
                                                                                -         -         -        -           -
Minority interest in Operating Partnership                        1,267         -         -         -        -           -  
                                                             ==============================================================
Net income (loss)                                             $   2,296  $    261   $   338   $   159  $ (31)      $  (18)
                                                             ==============================================================
Net income per common share - - basic and assuming dilution(1)$    0.61  $   0.42   $  0.55   $  0.26 
                                                             =========================================
Weighted average number of common shares outstanding-basic        3,765       620       620       620 
                                                             =========================================
Weighted average number of common shares                          3,785       620       620       620
outstanding-assuming dilution
                                                             =========================================
Other Information:
Funds from operations                                         $   5,977 $    596    $   508    $  502 
                                                             =========================================
Cash flow from (used in):
Operating activities                                          $   5,821 $    776    $   685    $  559
                                                             =========================================
Investment activities                                         $(40,440) $   (303)   $  (99)  $ (5,137)
                                                             =========================================
Number of apartment communities (end of period)                      35         4         3         3
                                                             =========================================
Number of apartment units (end of period)                         3,403       257       165       165
                                                             =========================================
Average monthly rental rate per unit                          $     702 $     676   $   660    $  642
                                                             =========================================
Average economic occupancy rate                                   96.1%     95.5%     97.8%     95.6%
                                                             =========================================
Number of retail properties (end of period)                           3         0         0         0
                                                             =========================================
Balance Sheet Information:
                 
Real estate, before accumulated depreciation                 $  147,767 $ 9,798   $  5,393  $  5,294
                                                             =========================================

Total assets                                                 $  148,150 $ 9,521   $  5,241  $  5,377
                                                             =========================================
Total mortgage and revolving credit facility debt            $   49,058 $ 5,669   $  1,190  $  1,537
                                                             =========================================
Minority interests                                           $    1,357 $   -     $    -    $    -    
                                                             =========================================
Shareholders' equity                                         $   24,339 $   3,483 $  3,703  $  3,840
                                                             =========================================
</TABLE>

(1) The Company adopted Statement 128 in 1997.  Statement 128 had no impact on 
earnings per share in 1996 and 1995.  SeeNote 3 in the accompanying notes to 
the financial statements.
(2) The  Company  began  operations  on June 24,  1994,  the date of its initial
public offering. The operations of the predecessor represents the the operations
the Original Properties prior to June 24, 1994.



<PAGE>



Item 7.           Management's Discussion and Analysis of Financial Condition 
and Results of Operations

Overview

The following  discussion  should be read in conjunction  with the  consolidated
financial  statements and notes thereto included  elsewhere in this Report.  The
dollar amounts discussed are in thousands unless otherwise noted.

The results of operations for the year ended December 31, 1997 include the three
multifamily  properties (the "Original  Properties")  that the Company has owned
since its inception,  a fourth property  ("Cambridge") that the Company acquired
on January 12, 1996, twenty properties acquired on March 14, 1997 in conjunction
with  the  Consolidation  Transactions  (the  "Consolidation  Properties"),  and
fourteen properties subsequently acquired in 1997. The Consolidation  Properties
and the fourteen  subsequent 1997  acquisitions are collectively  referred to as
the "1997 Acquisitions". In addition, all of the previously mentioned properties
of the Company are collectively referred to as the "Properties".

Results of Operations

Results of operations  of the Company for the years ended  December 31, 1997 and
1996.

Total  revenues  increased  $15,856 from $2,082 to $17,938 during the year ended
December 31, 1997, as compared to the year ended December 31, 1996. The increase
is mainly due to the operations of the 1997 Acquisitions.  Additionally, $518 of
the increase is related to property  management  revenues  which  represent fees
earned  on  management  services  provided  to  properties  owned by  affiliated
entities.  Such  revenue  is  derived  from  management  contracts  acquired  in
conjunction  with  the  Consolidation  Transactions;   therefore  there  was  no
comparable revenue during 1996.

On a comparable basis, the Properties experienced increases in both rental rates
and occupancy.  The weighted  average monthly rental rates increased to $702 for
the year ended December 31, 1997 from $676 for the year ended December 31, 1996.
Furthermore,  economic occupancy for the year increased to an aggregate weighted
average  occupancy  of 96.1%  for the  year  ended  December  31,  1997  from an
aggregate weighted average of 95.5% for the year ended December 31, 1996.

The 23  apartment  communities  owned  by Grove or its  predecessors  since  the
beginning of 1995, a "same  community"  comparison,  experienced  an increase in
average  monthly rental rates,  offset by a small  decrease in average  economic
occupancy  and  experienced  an  increase  in net  operating  income.  At  these
apartment communities, average monthly rental rates increased to $718 from $696,
average  economic  occupancy  decreased  to 96.4% from  96.5% and net  operating
income increased to $9,884 from $9,294 for the years ended December 31, 1997 and
1996, respectively.

Property operating and maintenance expenses increased $5,422 from $656 to $6,078
during the year ended  December 31, 1997, as compared to the year ended December
31,  1996.  The  increase  is  primarily  due to  the  operations  of  the  1997
Acquisitions.

Real estate taxes  increased  $1,562 from $ 208 to $ 1,770 during the year ended
December 31, 1997, as compared to the year ended December 31, 1996. The increase
is due  primarily  to the  1997  Acquisitions.  Related  party  management  fees
decreased  $87  from  $109  to  $22.  This  decrease  is due  to  the  Company's
acquisition of the  management  company in  conjunction  with the  Consolidation
Transactions,   resulting   in  the   elimination   of  all  such   expenses  in
consolidation.

General and  administrative  expenses increased $841 from $67 to $908 during the
year ended  December 31, 1997, as compared to the year ended  December 31, 1996.
This increase is mainly due to the increased costs associated with the change in
size and structure of the Company.

Interest  expense  increased  $2,347  from $394 to $2,741  during the year ended
December 31, 1997, as compared to the year ended December 31, 1996. The increase
is primarily due to the $38.3 million mortgage debt assumed and/or refinanced as
part of the 1997 Acquisitions.

Depreciation  and  amortization  increased $2,314 from $387 to $2,701 during the
year ended  December 31, 1997, as compared to the year ended  December 31, 1996.
The  increased  expense is  primarily  due to  depreciation  related to the 1997
Acquisitions

The  Company's net income  increased  $2,035 from $261 to $2,296 during the year
ended  December 31, 1997, as compared to the year ended  December 31, 1996.  The
increase is mainly due to the operations of the 1997 Acquisitions.

Results of operations  for the Company for the years ended December 31, 1996 and
1995.

The Original  Properties  experienced  a small  decrease in occupancy  offset by
increases in rental  rates  which,  overall,  increased  revenues.  The weighted
average  monthly rental rates  increased to $678 for the year ended December 31,
1996  from  $660  for the year  ended  December  31,  1995.  Physical  occupancy
decreased to an aggregate weighted average occupancy of 97.1% for the year ended
December 31, 1996 from an aggregate weighted average of 97.8% for the year ended
December 31, 1995. Physical occupancy at December 31, 1996 was 98.2%.

Rental and other income increased $765 from $1,317 to $2,082 for the years ended
December 31, 1995 and 1996,  respectively.  Approximately  $733 of such increase
was due to the  operations of Cambridge,  and the remainder is  attributable  to
increases in rental rates as discussed above.

The 23  apartment  communities  owned  by Grove or its  predecessors  since  the
beginning  of 1995,  a "same  community"  comparison,  experienced  increases in
average  monthly  rental  rates,  average  economic  occupancy and net operating
income. At these apartment  communities,  average monthly rental rates increased
to $696 from $680, average economic occupancy  increased to 96.5% from 95.7% and
net  operating  income  increased  to $9,294  from  $9,125  for the years  ended
December 31, 1996 and 1995, respectively.

Property  operations and maintenance  expenses  increased $250 from $406 for the
year ended  December  31,  1995 to $656 for the year ended  December  31,  1996.
Approximately  $233  of the  increase  is due to the  operations  of  Cambridge.
Additionally,  the Original Properties  experienced an increase in operating and
maintenance  expenses due primarily to the harsh winter  experienced  in the New
England area in 1996 compared to the more mild winter experienced in 1995.

General and administrative  expenses increased $11 from $56 to $67 for the years
ended December 31, 1995 and 1996,  respectively.  The increase was primarily due
to additional  expenses  related to the  acquisition  of Cambridge and increased
overhead expenses.

Real estate taxes  increased $59 from $149 to $208 for the years ended  December
31, 1995 and 1996,  respectively.  Related party  management  fees increased $42
from $67 to $109 for the years ended  December 31, 1995 and 1996,  respectively.
These increases were due primarily to the acquisition of Cambridge.

Interest  expense  increased  $309 from $85 to $394 for the years ended December
31, 1995 and 1996,  respectively.  This  increase is due to the $4,500  mortgage
note payable used to finance the  acquisition  of  Cambridge.  Depreciation  and
amortization  increased  $171,  primarily  as a  result  of the  acquisition  of
Cambridge.

The  Company's  net income  decreased  $77 from $338 to $261 for the years ended
December 31, 1995 and 1996, respectively.  Approximately $54 of the decrease was
due to a loss  experienced  by  Cambridge.  The  decrease  in net income for the
Original  Properties  of  approximately  $23 was due to an  increase in property
operating and maintenance expenses as discussed above.

Liquidity and Capital Resources

Cash and cash equivalents  totaled $1,466 as of December 31, 1997. The Company's
ratio of long-term  debt,  including the Revolving  Credit  Facility,  to market
capitalization   on  December   31,  1997  was  28.3%  based  on  total   market
capitalization of $173,659, based on 3,003,792 Common Units and 8,453,829 Common
Shares valued at $10.875 per share/unit (the closing price on December 31, 1997)
plus long-term debt $49,058, including the Revolving Credit Facility .

Cash  provided by operating  activities  was $5,821 for the twelve  months ended
December 31, 1997. Cash used in investing  activities was $40,440 for the twelve
months ended  December 31, 1997.  Net cash provided by financing  activities was
$35,546 for the twelve months ended December 31, 1997.

   
On December 11, 1997, the Company  declared a "short"  period  dividend of $0.07
per share for the period  from  November  24,  1997 to December  31,  1997.  The
dividend was paid on January 16, 1998 to  shareholders of record on December 31,
1997. On November 18, 1997, the Company  declared a "short"  period  dividend of
$0.092 per share for the period from October 1, 1997 to November  23, 1997.  The
dividend was paid on January 16, 1998 to  shareholders of record on November 21,
1997.  On  September  11, 1997,  the Company  declared a dividend of $0.1575 per
share for the three months ended  September  30, 1997.  The dividend was paid on
October 17, 1997 to  shareholders  of record on September  30, 1997. On June 18,
1997, the Company  declared a "long" period dividend of $0.189 per share for the
period from March 14, 1997 to June 30,  1997.  The dividend was paid on July 16,
1997 to  shareholders of record on June 30, 1997. On March 10, 1997, the Company
declared a "short"  period  dividend  of $0.1558  per share for the period  from
January  1,  1997 to  March  13,  1997,  which  was paid on  March  28,  1997 to
shareholders of record on March 10, 1997. The dividends declared during the year
ended  December 31, 1997 of $0.6643 per share  resulted in a 63% payout of funds
from operations for the twelve months ended December 31, 1997.

On December  11,  1997,  the  Operating  Partnership  declared a "short"  period
distribution  of $0.07 per Common Unit for the period from  November 24, 1997 to
December 31, 1997.  The  distribution  was paid on January 16, 1998. On November
18, 1997, the Operating  Partnership  declared a "short" period  distribution of
$0.092 per share for the period from October 1, 1997 to November  23, 1997.  The
distribution  amount was prorated for unit holders who were not unit holders for
the entire period of October 1, 1997 to November 24, 1997. The  distribution was
paid on January 16, 1998.  On  September  11, 1997,  the  Operating  Partnership
declared a  distribution  of $0.1575 per Common Unit for the three  months ended
September 30, 1997.  The  distribution  amount was prorated for unit holders who
were not unit  holders for the entire  period of July 1, 1997 to  September  30,
1997.  The  distribution  was paid on October 17, 1997.  On June 18,  1997,  the
Operating  Partnership declared a "long" period distribution of $0.189 per share
for the period from March 14, 1997 to June 30, 1997. The distribution amount was
prorated  for unit  holders who were not unit  holders for the entire  period of
March 14, 1997 to June 30, 1997. The distribution was paid on July 16, 1997.
    

In March 1997,  the  Operating  Partnership  entered into the  Revolving  Credit
Facility,  a three year revolving credit facility guaranteed by the Company, for
up to  $25.0  million.  Borrowings  under  the  Revolving  Credit  Facility  are
collateralized  by thirteen of the Properties and bear interest  payable monthly
at a floating rate of 1.2% above the 30, 60, or 90 day LIBOR rate. The Revolving
Credit  Facility is available to fund future property  acquisitions,  up to $4.0
million is available to fund working  capital  needs,  and up to $2.0 million is
available  to fund the  redemption  of Common  Units or the  purchase  of Common
Shares by the Operating Partnership.

The Company intends to meet its short term liquidity  requirements  through cash
on hand,  cash flow provided by operations  and funds from the Revolving  Credit
Facility. The Company considers its ability to generate cash to be adequate, and
expects it to continue to be adequate  to meet  operating  requirements  and pay
shareholder dividends in accordance with REIT requirements.  The Company may use
other sources of capital to finance additional acquisitions  including,  but not
limited to, the selling of additional equity interest in the Company,  cash flow
in excess of  distributions,  the  issuance of debt  securities,  funds from the
Revolving  Credit  Facility,  and  exchanging  Common Shares or Common Units for
properties or interests in properties.

   
In the course of the Company's  planned upgrade of its information  systems,  to
accommodate  the  growth of its  business,  the  Company  will  assure  that its
computer  software  and  hardware  will  be year  2000  compliant.  The  Company
anticipates that the upgrade of its information systems will be completed during
1998 and believes  that the cost thereof will not have a material  impact on net
income,  assets or liabilites.  Because of the nature of the Company's business,
it does not depend to any material  extent on electronic  interchange of data or
information with its residents, suppliers or vendors.
    

The  Company  regularly  evaluates   properties  for  possible   acquisition  or
disposition.  Individual  properties may be acquired  through direct purchase of
the property or through the purchase of the entity  owning such property and may
be made for cash or securities of the Company or the Operating  Partnership.  In
connection with any acquisition,  the Company may incur additional indebtedness.
The Company is currently  negotiating to increase its borrowings  capacity under
the Revolving Credit facility from $25 million to $50 million and to convert the
facility  from a secured  facility  to an  unsecured  facility.  If the  Company
acquires or disposes of any property, such acquisition or disposition could have
a significant effect on the Company's financial condition, results of operations
or cash flows.


Funds from Operations

   
Industry  analysts  generally  consider funds from  operations  ("FFO") to be an
appropriate  measure of performance of an equity REIT.  Funds from operations is
defined as income before gains (losses) on investments and  extraordinary  items
(computed in accordance with generally accepted accounting principles) plus real
estate   depreciation,   less  preferred  dividends  and  after  adjustment  for
significant  non-recurring  items,  if  any.  This  definition  conforms  to the
recommendations  set forth in a White Paper adopted by the National  Association
of Real Estate  Investment  Trusts ("NAREIT") in early 1995. FFO for years prior
to 1996 have been  adjusted  to conform to the NAREIT  definition.  The  Company
believes  that in order to  facilitate a clear  understanding  of its  operating
results,  FFO should be examined in conjunction with the net income as presented
in the financial  statements and information  included elsewhere in this Report.
FFO does not represent cash  generated  from operating  activities in accordance
with generally accepted accounting principles and is not necessarily  indicative
of cash  available  to fund cash  needs.  FFO  should  not be  considered  as an
alternative to net income as an indication of the Company's performance or as an
alternative to cash flow as a measure of liquidity.
    

FFO increased  $3,256 from $596 to $3,852 for the years ended  December 31, 1996
and 1997, respectively.  Dividends declared for the year ended December 31, 1997
were $2,423,  representing  62.9% of FFO, while dividends  declared for the year
ended December 31, 1996 were $481, representing 80.7% of FFO.

Funds From Operations increased $88 from $508 in 1995 to $596 in 1996. Dividends
declared for the year ended December 31, 1996 were $481,  representing  80.7% of
funds from operations.  Dividends  declared for the year ended December 31, 1995
were $475, representing 93.5% of funds from operations.



FFO was calculated as follows:


                         For the Year Ended December 31,

                                                     1997      1996     1995
                                                     ----      ----     ----
                                                    
 Income before minority interests                     $3,718    $261     $338
 Real estate depreciation and amortization             2,530     335      170
 Non-recurring expenses                                   69      -        -
                                                       -----    ----     ----

                                                                   
                                              
 Funds from operations before minority interests       6,317     596      508
 Minority interests in consolidated partnerships       (340)     -         -
                                                      -------   -----    -----
 FFO                                                  $5,977    $596      $508 
                                                  ============================

Seasonality

Historically,  net income  from the  Properties  has been lower in the first and
second quarters than in the remainder of the year due to higher utility charges,
snow removal and other  weather  related  expenses.  In  addition,  rental rates
increase  ratably during the year which results in higher rental revenues in the
second half of the year.


<PAGE>


Inflation

Substantially  all of the leases at the Apartment  Communities are for a term of
one year or less,  which may enable the  Company  to seek  increased  rents upon
renewal or rerenting.  Such short-term  leases  generally lessen the risk to the
Company of the potential adverse effects of inflation.

"Safe Harbor" Statement under Private Securities Litigation Reform Act of 1996

Certain  statements  contained  in  this  report,  and  in  particular  in  this
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations,"  statements  in other  filings  with the  Securities  and  Exchange
Commission  and  statements  in other  public  documents  of the  Company may be
forward  looking and are subject to a variety of risks and  uncertainties.  Many
factors could cause actual results to differ  materially from these  statements.
These factors include,  but are not limited to, (i) population  shifts which may
increase or decrease the demand for rental housing, (ii) the value of commercial
and  residential  rental  properties in the Northeast where all of the Company's
properties are located, in recent years, have fluctuated considerably, (iii) the
effect on the Company's  properties of competition from new apartment  complexes
which may be  completed  in  proximity  to such  properties  thereby  increasing
competition,  (iv)  the  effect  of  weather  and  other  conditions  which  can
significantly  affect  property  operating  expenses,  (v) the  availability  of
acquisition  financing or refinancing,  (vi) compliance with applicable laws and
regulations  and (vii) other factors which might be described  from time to time
in the  Company's  filings  with the  Securities  and  Exchange  Commission.  In
addition,  the  Company  is subject  to the  effects  of changes in the  general
business economic conditions.

Although the Company believes that its properties will continue to be attractive
to tenants  and that it will be able to control  expenses,  future  revenue  and
operating  trends  cannot be  reliably  predicted.  These  trends  may cause the
Company to adjust its operation in the future.  Factors  external to the Company
can also  affect  the  price of the  Company's  Common  Shares.  Because  of the
foregoing and other  factors,  recent  trends should not be considered  reliable
indicators of future financial results or stock prices.

Item 8.           Financial Statements and Supplementary Data

The financial statements are included on pages F-1 to F-16.

Item. 9           Changes in and Disagreements with Accountants on Accounting
  and Financial Disclosure

The  information  required  by this Item 9 has been  previously  reported by the
Company (as "previously  reported" is defined in Rule 12b-2 under the Securities
and Exchange Act of 1934).

Part III

Item 10. Directors and Executive Officers of the Registrant

The  information  required by this Item 10 is incorporated by reference from the
Company's definitive Proxy Statement for its 1998 Annual Meeting of Shareholders
to be filed  pursuant to Regulation  14A  promulgated  under the  Securities and
Exchange Act of 1934,  which Proxy Statement will be filed within 120 days after
the end of the Company's fiscal year ended December 31, 1997.

Item 11. Executive Compensation

The  information  required by this Item 11 is incorporated by reference from the
Company's definitive Proxy Statement for its 1998 Annual Meeting of Shareholders
to be filed  pursuant to Regulation  14A  promulgated  under the  Securities and
Exchange Act of 1934,  which Proxy Statement will be filed within 120 days after
the end of the Company's fiscal year ended December 31, 1997.

Item 12. Security Ownership of Certain Beneficial Owners and Management

The  information  required by this Item 12 is incorporated by reference from the
Company's definitive Proxy Statement for its 1998 Annual Meeting of Shareholders
to be filed  pursuant to Regulation  14A  promulgated  under the  Securities and
Exchange Act of 1934,  which Proxy Statement will be filed within 120 days after
the end of the Company's fiscal year ended December 31, 1997.

Item 13. Certain Relationships and Related Transactions

The  information  required by this Item 13 is incorporated by reference from the
Company's definitive Proxy Statement for its 1998 Annual Meeting of Shareholders
to be filed  pursuant to Regulation  14A  promulgated  under the  Securities and
Exchange Act of 1934,  which Proxy Statement will be filed within 120 days after
the end of the Company's fiscal year ended December 31, 1997.

Part IV

Item 14. Exhibits and Reports on Form 8-K


(a)(1) Financial Statements:

The  financial   statements  listed  in  the  accompanying  Index  to  Financial
Statements and Supplementary Data at page F-1 are filed as part of this Report.

(a)(2) Financial Schedules:

Schedule III, Real Estate and  Accumulated  Depreciation,  is inculuded on pages
F-17 to F-20 of this report.


<PAGE>



(a)(3) Exhibits:


Exhibit No.                                         Description

2.1  Contribution  Agreement,  dated as of May 30,  1997,  by and between  Grove
     Operating, L.P., Northeast Apartments I Limited Partnership,  West Hartford
     Center  Associated  Limited  Partnership,  Windsor Equity  Partnership  and
     Windsor Commons  Corporation  (incorporated  by reference to Exhibit 2.1 to
     the  Company's  Current  Report on Form 8-K dated May 30, 1997  (Commission
     File No. 1-13080))

2.2   orm of First  Amendment  effective  as of June 1, 1997 to Agreement of
     Limited Partnership of Windsor Arbor Limited  Partnership  (incorporated by
     reference to Exhibit 2.2 to the Company's  Current Report on Form 8-K dated
     May 30, 1997 (Commission File No. 1-13080))

2.3  Purchase and Sale  Agreement,  dated May 14,  1997,  between  Highland
     Income  Partners,  L.P.,  as Seller,  and Grove  Corporation,  a  Purchaser
     (incorporated  by reference to Exhibit 2.1 to the Company's  Current Report
     on Form 8-K dated July 2, 1997 (Commission File No. 1-13080))

2.4  Purchase and Sale  Agreement,  dated  September  5, 1997,  by and
     between Werner O. Kunzli,  as Seller,  and Grove  Corporation,  a
     Purchaser  (incorporated  by  reference  to  Exhibit  2.4  to the
     Company's Registration Statement on Form S-2, No. 333-38183)

2.5  Grove  Operating,  L.P.,  Solicitation of Consent and Offer to Exchange
     Certain Outstanding Units of Limited Partnership  Interest in Grove-Coastal
     Associates,  L.P.  for  Consideration  of  3,435.5  Common  Units  of Grove
     Operating,  L.P.  with  an  option  to  holders  to  instead  receive  cash
     consideration,  dated June 19, 1997, as  supplemented on June 19, 1997, and
     Letter of  Transmittal  and Addendum to Letter of Transmittal in connection
     therewith  (incorporated  by  reference  to  Exhibit  2.5 to the  Company's
     Registration Statement on Form S-2, No. 333-38183)

3.1  Third  Amended and Restated  Declaration  of Trust of the Company dated
     March 14,  1997,  as amended by Articles  Supplementary  dated  October 23,
     1997.

3.2  Amended and Restated Bylaws of the Company  (incorporated  by reference
     to Exhibit 3.2 to the Company's  Current Report on Form 8-K dated March 14,
     1997 and filed March 31, 1997 (Commission File No. 1-13080)

4.1  Form of  Agreement of Limited  Partnership  of Grove  Operating,  L.P.,
     among the Company and the other  partners  named therein  (incorporated  by
     reference to Exhibit 10.2 to the Company's Current Report on Form 8-K dated
     February 13, 1997 (Commission File No. 1-13080))

4.2   Revolving  Credit  Agreement  dated March 26,  1997,  among Grove
      Operating,  L.P., the Company and Rhode Island Hospital Trust National
      Bank (a Bank of Boston  company)  and  Other  Banks  which may  become
      parties to the  Agreement  and Rhode Island  Hospital  Trust  National
      Bank,  as Agent  (incorporated  by  reference  to  Exhibit  4.1 to the
      Company's  Quarterly Report on Form 10-QSB for the quarter ended March
      31, 1997)

4.3  Amendment  to the  Agreement  of  Limited  Partnership  of  Grove
      Operating, L.P. among the Company and the other partners named therein
      (incorporated   by   reference   to  Exhibit  4.3  of  the   Company's
      Registration Statement on Form S-2, No. 333-38183)

10.1   Securities Purchase  Agreement,  dated February 20, 1997, between
          the Company and Morgan Stanley Group Inc.  (incorporated  by reference
          to  Exhibit  10.1 to the  Company's  Current  Report on Form 8-K dated
          March 14, 1997 (Commission File No. 1-13080))

10.2   Securities Purchase  Agreement,  dated February 21, 1997, between
          the Company  and  ABKB/LaSalle  Securities  Limited  (incorporated  by
          reference to Exhibit 10.2 to the Company's  Current Report on Form 8-K
          dated March 14, 1997 (Commission File No. 1-13080))

10.3  Form of Securities Purchase Agreement executed by other Investors
          in the Private Placement (incorporated by reference to Exhibit 10.3 to
          the  Company's  Current  Report  on Form  8-K  dated  March  14,  1997
          (Commission File No. 1-13080))

10.4    egistration Rights Agreement,  dated March 14, 1997, between the
          Company and the Investors  (incorporated  by reference to Exhibit 10.4
          to the  Company's  Current  Report  on Form 8-K dated  March 14,  1997
          (Commission File No. 1-13080))

10.5   Multifamily  Note,  dated March 14,  1997,  among  Citicorp  Real
               Estate, Inc., GR-Properties III Limited Partnership, Foxwoodburg,
               L.P., Grove-Westfield Associates Limited Partnership,  Grove-West
               Springfield   Associates  Limited   Partnership  and  GR-Westwynd
               Associates  Limited  Partnership  (incorporated  by  reference to
               Exhibit 10.5 to the  Company's  Current  Report on Form 8-K dated
               March 14, 1997 (Commission File No. 1-13080))

10.6  Cash  Management  Agreement,  dated as of March 14,  1997,  among
          Citicorp Real Estate,  Inc.,  GR-Properties  III Limited  Partnership,
          Foxwoodburg,  L.P.,  Grove-Westfield  Associates Limited  Partnership,
          Grove-West  Springfield Associated Limited Partnership and GR-Westwynd
          Associates Limited  Partnership  (incorporated by reference to Exhibit
          10.6 to the Company's  Current Report on Form 8-K dated March 14, 1997
          (Commission File No. 1-13080))

10.7  Form of Multifamily  Open-End Mortgage Deed,  Assignment of Rents
          and  Security  Agreement,  between  Citicorp  Real  Estate,  Inc.  and
          GR-Properties  III Limited  Partnership  (incorporated by reference to
          Exhibit 10.7 to the Company's  Current  Report on Form 8-K dated March
          14, 1997 (Commission File No. 1-13080))

10.8  Pledge  Agreement,  dated as of March 14,  1997,  between  Grove
          Operating,  L.P.  and  Citicorp  Real  Estate,   Inc.(incorporated  by
          reference to Exhibit 10.8 to the Company's  Current Report on Form 8-K
          dated March 14, 1997 (Commission File No. 1-13080))

10.9   Registration Rights Agreement,  dated March 14, 1997, between the
          Company,   Grove  Operating,   L.P.  and  certain  partners  of  Grove
          Operating,  L.P.  (incorporated  by  reference  to Exhibit 10.9 to the
          Company's  Current Report on Form 8-K dated March 14, 1997 (Commission
          File No. 1-13080))

10.10   1994 Share  Option  Plan  (incorporated  by  reference  to
               Exhibit  10.16 to the  Company's  Registration  Statement on Form
               SB-2 (File No. 33-76732))

10.11    1996 Share  Incentive  Plan  (incorporated  by reference to
               Exhibit 10.10 to the Company's  Current  Report on Form 8-K dated
               March 14, 1997 (Commission File No. 1-13080))

10.12    Pledge  Agreement,  dated  March  14,  1997,  among  Damon
               Navarro, Brian Navarro, Edmund Navarro,  Joseph LaBrosse,  Gerald
               McNamara,  National Realty  Services  Limited  Partnership,  GIG,
               Burgundy   Associates   Limited    Partnership,    Grove   Equity
               Partnership, Grove Holding Co. Inc. and the Company (incorporated
               by reference to Exhibit 10.11 to the Company's  Current Report on
               Form 8-K dated March 14, 1997 (Commission File No. 1-13080))

10.13  Noncompetition  Agreement,  dated March 14, 1997, among the
               Company, Grove Operating,  L.P., National Realty Services Limited
               Partnership,  GIG and  Burgundy  Associates  Limited  Partnership
               (incorporated  by  reference  to Exhibit  10.12 to the  Company's
               Current Report on Form 8-K dated March 14, 1997  (Commission File
               No. 1-13080))

10.14          Form  of  Noncompetition  Agreement  executed  by each of
                       Damon Navarro,  Brian Navarro,  Joseph  LaBrosse,  Edmund
                       Navarro and Gerald McNamara (incorporated by reference to
                       Exhibit 10.13 to the Company's Current Report on Form 8-K
                       dated March 14, 1997 (Commission File No. 1-13080))

10.15          Amendment,   dated   as   of   October   15,   1997,   to
                       Noncompetition  Agreement,  dated March 14, 1997, between
                       the Company and Damon Navarro  (incorporated by reference
                       to Exhibit 10.15 of the Company's  Registration Statement
                       on Form S-2, No. 333-38183)

10.16          Amendment,   dated   as   of   October   15,   1997,   to
                       Noncompetition  Agreement,  dated March 14, 1997, between
                       the Company and Brian Navarro  (incorporated by reference
                       to Exhibit 10.16 of the Company's  Registration Statement
                       on Form S-2, No. 333-38183)

10.17          Amendment,   dated   as   of   October   15,   1997,   to
                       Noncompetition  Agreement,  dated March 14, 1997, between
                       the Company and Edmund Navarro (incorporated by reference
                       to Exhibit 10.17 of the Company's  Registration Statement
                       on Form S-2, No. 333-38183)

10.18          Amendment,  dated as of October 15, 1997, to Noncompetition
               Agreement,  dated March 14, 1997,  between the Company and Joseph
               LaBrosse  (incorporated  by  reference  to  Exhibit  10.18 of the
               Company's Registration Statement on Form S-2, No. 333-38183)

10.19          Amendment,  dated as of October 15, 1997, to Noncompetition
               Agreement,  dated March 14, 1997,  between the Company and Gerald
               McNamara  (incorporated  by  reference  to  Exhibit  10.19 of the
               Company's Registration Statement on Form S-2, No. 333-38183)

10.20          Employment  Agreement,  dated March 14, 1997,  between the
               Company and Damon Navarro  (incorporated  by reference to Exhibit
               10.14 to the Company's Current Report on Form 8-K dated March 14,
               1997 (Commission File No. 1-13080))

10.21          Amendment,  dated as of October 15, 1997,  to  Employment
                Agreement,  dated March 14, 1997, between the Company and
                Damon Navarro (incorporated by reference to Exhibit 10.21
                of the Company's Registration Statement on Form S-2, No.
                333-38183)
  
10.22          Employment  Agreement,  dated March 14, 1997,  between the
               Company and Brian Navarro  (incorporated  by reference to Exhibit
               10.15 to the Company's Current Report on Form 8-K dated March 14,
               1997 (Commission File No. 1-13080))

10.23          Amendment,  dated as of October 15, 1997,  to  Employment
                Agreement,  dated March 14, 1997, between the Company and
                Brian Navarro (incorporated by reference to Exhibit 10.23
                of the Company's Registration Statement on Form S-2, No.
                333-38183)

10.24          Employment  Agreement,  dated March 14, 1997,  between the
               Company and Edmund Navarro  (incorporated by reference to Exhibit
               10.16 to the Company's Current Report on Form 8-K dated March 14,
               1997 (Commission File No. 1-13080))

10.25          Amendment,  dated as of October 15, 1997,  to  Employment
               Agreement,  dated March 14, 1997, between the Company and
               Edmund  Navarro  (incorporated  by  reference  to Exhibit
               10.25 of the  Company's  Registration  Statement  on Form
               S-2, No.
               333-38183)

10.26          Employment  Agreement,  dated March 14, 1997,  between the
               Company and Joseph LaBrosse (incorporated by reference to Exhibit
               10.17 to the Company's Current Report on Form 8-K dated March 14,
               1997 (Commission File No. 1-13080))

10.27          Amendment,  dated as of October 15, 1997,  to  Employment
               Agreement,  dated March 14, 1997, between the Company and
               Joseph  LaBrosse  (incorporated  by  reference to Exhibit
               10.27 of the  Company's  Registration  Statement  on Form
               S-2, No.
               333-38183)

10.28          Employment  Agreement,  dated March 14, 1997,  between the
               Company and Gerald McNamara (incorporated by reference to Exhibit
               10.18 to the Company's Current Report on Form 8-K dated March 14,
               1997 (Commission File No. 1-13080))

10.29          Amendment,  dated as of October 15, 1997,  to  Employment
               Agreement,  dated March 14, 1997, between the Company and
               Gerald  McNamara  (incorporated  by  reference to Exhibit
               10.29 of the  Company's  Registration  Statement  on Form
               S-2, No.
               333-38183)

10.30          Form of  Contribution  Agreement  among the Company,  Grove
               Operating,  L.P.  and  certain  other  parties  (incorporated  by
               reference to Exhibit 10.1 to the Company's Current Report on Form
               8-K dated February 13, 1997 (Commission File No. 1-13080))

10.31          Form  of  Indemnification  Agreement  by and  between  the
               Company,   the  Trust   Managers  and  the   Executive   Officers
               (incorporated  by  reference  to Exhibit  10.18 to the  Company's
               Registration Statement on Form SB-2 (No. 33-76732))

10.32          Assumption  of Mortgage Deed and Security  Agreement  made
               June 23, 1994 by and among Southington Baron Limited Partnership,
               Charles D. Gersten,  Ada C Berin,  the Company,  Damon D. Navarro
               and Brian A. Navarro  (incorporated by reference to Exhibit 10.22
               to the Company's  Annual Report on Form 10-KSB for the year ended
               December 31, 1994 (Commission File No. 1-13080))

10.33          Mortgage Note from Southington Baron Limited Partnership to
               Charles  D.   Gersten  and  Ada  C.  Berin  dated  June  8,  1994
               (incorporated  by  reference  to Exhibit  10.23 to the  Company's
               Annual Report on Form 10-KSB for the year ended December 31, 1994
               (Commission File No. 1-13080))

10.34          Purchase and Sale Agreement between the Company and Grove
               Cambridge Associates Limited Partnership (incorporated by
               reference to Exhibit 1 to the Company's Current Report on
               Form 8-K dated  October  30,  1995  (Commission  File No.
               1-13080))

10.35          Mortgage  Note from the  Company  to First  Union Bank of
               Connecticut  dated  January  11,  1996  (incorporated  by
               reference to Exhibit 10.25 to the Company's Annual Report
               on Form  10-KSB  for the year  ended  December  31,  1995
               (Commission File No. 1-13080))

 11            List of Subsidiaries

 23            Consent of Ernst & Young, LLP

 27            Financial Data Schedule




(b) Reports on Form 8-K

During the fourth quarter of the year ended December 31, 1997, the Company filed
a Current  Report on Form 8-K dated November 17, 1997  (reporting  under Items 2
and 7) regarding  the Company's  acquisition  of two retail  properties  and one
residential property.  The Company also filed a Current Report on Form 8-K/A no.
1 dated November 24, 1997,  amending Item 7 as originally  filed,  and a Current
Report on Form 8-K/A no. 2 dated December 9, 1997, amending Item 7 as originally
filed.


<PAGE>



                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) 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, on March 19, 1998.

                                                     GROVE PROPERTY TRUST



                            By: /s/Joseph R. LaBrosse
                               ---------------------
                               Joseph R. LaBrosse
                              Chief  Financial Officer


         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
registrant and in the capacities and on the dates indicated.


Name                                        Title                     Date


/s/ Damon D. Navarro     Trustee and Chairman of the Board           3/19/98
Damon D. Navarro         and Chief Executive Office (Principal
                         executive officer)


/s/ Joseph R. LaBrosse   Trustee and Chief  Financial Officer        3/19/98
Joseph R. LaBrosse       (Principal financial and accounting
                            officer)


/s/ Edmund F. Navarro    Trustee and Chief Operating Officer         3/19/98
Edmund F. Navarro



/s/ Theodore R. Bigman   Trustee                                     3/19/98
Theodore R. Bigman



/s/ J. Joseph Garrahy
J. Joseph Garrahy        Trustee                                     3/19/98



/s/ Harold V. Gorman     Trustee                                     3/19/98
Harold V. Gorman



/s/ James F. Twaddell    Trustee                                     3/19/98
James F. Twaddell


<PAGE>


                                                     F-21


                              GROVE PROPERTY TRUST

                 Consolidated Financial Statements and Schedule
                                      Index
--------------------------------------------------------------------------------



                                                                         Page

Item 14(a) (1 and 2) Financial Statements filed as part of this report

Consolidated Financial Statements:

Report of Independent Auditors                                            F-2

Consolidated Balance Sheets as of December 31, 1997 and 1996              F-3

Consolidated Income Statements for the years ended
December 31, 1997, 1996 and 1995                                          F-4

Consolidated Statements of Changes in Shareholders' Equity
for the years ended December 31, 1997, 1996 and 1995                      F-5

Consolidated Statements of Cash Flows for the years
ended December 31, 1997, 1996 and 1995                                    F-6

Notes to Consolidated Financial Statements                                F-7

Schedule filed as part of this report:

Schedule III - Real Estate and Accumulated Depreciation                  F-17


All other schedules are omitted since the required information is not present in
amounts  sufficient  to  require  submission  of the  schedule  or  because  the
information required is included in the financial statements and notes thereto.







<PAGE>




                                          Report Of Independent Auditors


The Shareholders and Board of Trust Managers
Grove Property Trust

We have audited the accompanying  consolidated  balance sheets of Grove Property
Trust as of December 31, 1997 and 1996 and the related  consolidated  statements
of income,  changes in shareholders' equity and cash flows for each of the three
years in the period ended  December 31, 1997. We have also audited the financial
statement schedule listed on the Index to Financial Statements.  These financial
statements  and  financial  statement  schedule  are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements and financial statement schedule based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable  assurance  about  whether the  financial  statements  and  financial
statement  schedule  are  free  of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements  and  financial  statement  schedule.  An audit  also
includes assessing the accounting principals used and significant estimates made
by  management,   as  well  as  evaluating  the  overall   financial   statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the consolidated  financial  position of Grove Property
Trust as of December 31, 1997 and 1996 and the results of its operations and its
cash flows for each of the three years in the period ended  December 31, 1997 in
conformity with generally accepted accounting  principles.  Also in our opinion,
the financial  statement schedule referred to above, when considered in relation
to the basic financial  statements  taken as a whole,  presents  fairly,  in all
material respects the information set forth therein.


/s/Ernst & Young  LLP
---------------------
New York, New York
February 27, 1998










<PAGE>
<TABLE>


                                               GROVE PROPERTY TRUST
                                            CONSOLIDATED BALANCE SHEETS
                                              (Dollars in thousands)
<CAPTION>

                                                               As of  December 31,

                                                                   1997                       1996
                                                                    ----                       ----
<S>                                                              <C>                         <C>
                                                ASSETS
Real estate assets:
     Land                                                         $21,403                      $920
     Buildings and improvements                                   125,412                     8,528
     Furniture, fixtures and equipment                                952                       350
                                                        ----------------------     ---------------------
                                                                  147,767                     9,798
     Less accumulated depreciation                                 (3,674)                   (1,050)
                                                        ----------------------     --------------------
       Net real estate assets                                     144,093                     8,748
Cash and cash equivalents                                           1,466                       539
Due from affiliates                                                   620                        -                        
Deferred charges, net of accumulated amortization
     of $127 and $6, respectively                                     849                       223
Other assets                                                        1,122                        11
                                                        ----------------------     ---------------------
  Total assets                                                   $148,150                    $9,521
                                                        ======================     =====================


                                 LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
     Mortgage notes payable                                       $33,457                    $5,669
     Revolving credit facility                                     15,601                        -       
     Other liabilities                                              1,387                        72
     Distributions payable                                          1,436                       121
     Security deposits                                              2,026                       157
     Due to affiliates                                                 49                        19
                                                        ----------------------     ---------------------
  Total liabilities                                                53,956                     6,038
Minority interests in consolidated partnerships                     1,357                        -
                                                                                 
Minority interest in Operating Partnership                         24,339                        -
                                                                                   
Shareholders' equity:
     Preferred shares, $.01 par value per share,
       1,000 shares authorized; no shares
       issued or outstanding
     Common shares, $.01 par value per share,
       13,999,000 shares authorized; 8,453,829
(1997)
and 620,102 (1996) shares issued and                                   84                         6
outstanding
     Additional paid-in capital                                    68,976                     3,912
     Distributions in excess of earnings                             (562)                     (435)
                                                        ----------------------     ---------------------
  Total shareholders' equity                                       68,498                     3,483
                                                        ----------------------     ---------------------
  Total liabilities and shareholders' equity                     $148,150                    $9,521
                                                        ======================     =====================

See notes to consolidated  financial statements.

</TABLE>


<PAGE>

<TABLE>


                                                  GROVE PROPERTY TRUST
                                             CONSOLIDATED INCOME STATEMENTS
                                          (In thousands, except per share data)

<CAPTION>

                                                                              For the Year Ended December 31,

                                                                        1997             1996             1995
                                                                        ----             ----             ----
<S>                                                                  <C>               <C>              <C>
Revenues:
    Rental income                                                    $17,111           $2,046           $1,287
    Property management                                                  518               -               -
    Other property related income                                        168                5
    Interest  income                                                     141               31               30
                                                            ---------------------------------------------------
        Total revenues                                                17,938            2,082            1,317
                                                            ---------------------------------------------------


Expenses:
    Property operating and maintenance                                 6,078              656              406
    Real estate taxes                                                  1,770              208              149
    Related party management fees                                         22              109               67
    Interest expense                                                   2,741              394               85
    Depreciation expense                                               2,568              356              208
    Amortization expense                                                 133               31                8
    General and administrative                                           908               67               56
                                                            ---------------------------------------------------
        Total expenses                                                14,220            1,821              979
                                                            ---------------------------------------------------


            Income before minority interests                           3,718              261              338

Minority interests in consolidated partnerships                          155               -                -

Minority interest in Operating Partnership                             1,267               -                -

                                                            ---------------------------------------------------
           Net income                                                 $2,296             $261             $338
                                                            ===================================================


Net income per common share - basic and assuming dilution              $0.61            $0.42            $0.55
                                                            ===================================================

Weighted average number of common shares outstanding-basic             3,765              620              620
Effect of warrants and stock options                                      20               -                -
                                                             ---------------------------------------------------
Weighted average number of shares outstanding-assuming dilution        3,785              620              620
                                                             ===================================================


See notes to consolidated financial statements.
</TABLE>


<PAGE>




<TABLE>


                                                  GROVE PROPERTY TRUST
                               CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                                                 (Dollars in thousands)
<CAPTION>

                                                                                        Additional      Dividends
                                                         Number of                        Paid-In       in Excess
                                                       Common Shares   Common Shares      Capital       of Earnings      
                                                       -------------   -------------      -------       -----------      
<S>                                                      <C>                  <C>          <C>               <C>   
Shareholders' equity as of January 1, 1995                620,102              $6           $3,912            $(78)
Net income                                                   -                  -              -               338
Declared dividends                                           -                  -              -              (475)
                                                      ---------------- --------------- ---------------- ---------------
Shareholders' equity as of December 31, 1995              620,102               6            3,912            (215)
Net income                                                       -                                 -           261
Declared dividends                                               -                                 -          (481)
                                                      ---------------- --------------- ---------------- ---------------
Shareholders' equity as of December 31, 1996              620,102               6            3,912            (435)
Issuance of common shares on March 14, 1997, 
net of offering costs                                   3,333,333              33           27,491              -
Exercise of stock options                                     394               -                4              -
Issuance of common shares on November 24, 1997, net   
of offering costs                                       4,500,000              45           45,223             -
Net income                                                     -                -               -            2,296
Declared dividends                                             -                -               -           (2,423)
Allocation of shareholders' equity to minority
interest in Operating Partnership                              -                -           (7,654)              -
                                                      ================ =============== ================ ===============
Shareholders' equity as of December 31, 1997            8,453,829             $84          $68,976           $(562)
                                                      ================ =============== ================ ===============






See notes to consolidated  financial statements.
</TABLE>


<PAGE>





<TABLE>


                                                GROVE PROPERTY TRUST
                                        CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>

                                                                                     For the Year Ended December 31,

                                                                            1997                 1996            1995      
                                                                            ----                 ----            ---- 
                                                                                            (In thousands)
<S>                                                                      <C>                    <C>              <C>
Operating Activities: 
Net income                                                                $2,296                 $261            $338
Adjustments to reconcile net income to net cash provided
     by operating activities
        Depreciation and amortization                                      2,701                  387             216
        Minority interests                                                 1,422                    -               -
        Non-cash compensation expense                                        120                    -               -
        Imputed interest - mortgage                                           22                   38              35
Changes in other assets                                                    (347)                  (8)               5
Changes in accounts payable, accrued
     expenses and other liabilities                                        (393)                   98              91
                                                                 -----------------------------------------------------
Net cash provided by operating activities                                  5,821                  776             685
                                                                 -----------------------------------------------------

Investing activities:
Purchase of partnership interests                                       (10,417)                    -               -
Cash acquired on purchase of partnership interests                        3,565                    -               -
Deferred charges                                                             (6)                (174)               -
Additions to real estate assets                                         (33,582)              (4,629)            (99)
                                                                 -----------------------------------------------------
     Net cash used in investing activities                              (40,440)              (4,803)            (99)
                                                                 -----------------------------------------------------

Financing activities:
Net proceeds from mortgage notes payable and Revolving
Credit Facility                                                          51,109                4,720               -
Financing costs                                                            (668)                 (21)            (23)
Repayment of mortgage notes payable                                     (84,438)                 (59)               -
Net proceeds from sale of common stock and exercise  of stock
options                                                                  72,796                    -               -
Payments to affiliates                                                     (659)                 (78)            (22)
Dividends and distributions paid                                         (2,594)                (480)           (473)
                                                                 -----------------------------------------------------
     Net cash provided by (used in) financing activities                  35,546              (4,082)           (518)
                                                                 -----------------------------------------------------

Net change in cash and cash equivalents                                      927                   55              68

Cash and cash equivalents, beginning of year                                 539                  484             416
                                                                 -----------------------------------------------------

Cash and cash equivalents, end of year                                    $1,466                 $539            $484
                                                                 =====================================================

Supplemental Information:
     Cash paid for interest                                               $2,600                 $400            $100
     Mortgage notes payable assumed through property
         acquisitions                                                    $76,696                    -               -
     Net rental properties contributed in exchange for OP Units          $15,279                    -               -
     Excess of liabilities over assets assumed on acquisition
         and partnership interests                                      $  1,995                    -               -
       
See notes to consolidated  financial statements.

</TABLE>

<PAGE>


                                               GROVE PROPERTY TRUST

                                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                                 December 31, 1997

1.   FORMATION AND DESCRIPTION OF THE COMPANY

     Grove  Property  Trust  (formerly  Grove  Real  Estate  Asset  Trust)  (the
     "Company")  was  organized  in the State of  Maryland on April 4, 1994 as a
     Real Estate  Investment  Trust  ("REIT").  The Company  currently  operates
     thirty-six  residential  communities  and  three  retail  properties.   The
     residential  properties are generally mid-priced  multi-family  communities
     that are primarily located in the southern New England area.


2.   ACQUISITIONS  AND CONSOLIDATION TRANSACTIONS

     The Company  purchased three  properties on June 23, 1994 and an additional
property in January of 1996.

     On March 14,  1997,  the Company  completed a series of  transactions  (the
     "Consolidation Transactions") that included the following:

          The  Company   formed  an  operating   partnership   (the   "Operating
         Partnership")  to  serve  as  the  vehicle  for  the  consolidation  of
         ownership and control of the Company's operations and assets.

          Pursuant to an exchange  offer,  the Operating  Partnership  purchased
         from   non-affiliated   limited  partners   substantially  all  of  the
         outstanding  partnership  interests  of twenty  additional  properties,
         including one retail property ("Property Partnerships") in exchange for
         1,205,324  partnership  units (the  "Common  Units")  of the  Operating
         Partnership,  or, in  certain  circumstances,  cash.  Common  Units are
         generally exchangeable for the Company's Common Shares on a one-for-one
         basis.

          Immediately   prior   to  the   consummation   of  the   Consolidation
         Transactions,  the Company declared a stock dividend aggregating 26,250
         Common  Shares and  concurrently  effected a stock  split of 1.125 to 1
         (collectively the "Stock Split"), thereby issuing on a pro rata basis a
         total of 95,102  additional  Common Shares to the holders of the issued
         and  outstanding   Common  Shares  just  prior  to  the   Consolidation
         Transactions. All outstanding Common Shares were retroactively adjusted
         to reflect the Stock Split.

          The Company  issued  3,333,333  Common Shares to new equity  investors
         (the  "New   Equity   Investment")   in   exchange   for  $30   million
         (approximately $27.0 million after costs of issuance).

          Pursuant  to a  contribution  agreement  among  the  Company,  certain
         companies  and  individuals  affiliated  with the  Company  (the "Grove
         Companies")  and the Operating  Partnership,  substantially  all of the
         assets  and  operations,  the  management  services  division  of Grove
         Property   Services  Limited   Partnership  and  the  Grove  Companies'
         interests in the Property  Partnerships  were also  transferred  to the
         Operating Partnership.

         In exchange for the above, the Grove Companies received an aggregate of
         909,115 Common Units in the Operating Partnership and a cash payment of
         $178,000  from the Company,  and the Company  received  620,102  Common
         Units  in  the  Operating   Partnership.   Additionally,   the  Company
         contributed to the Operating Partnership the net proceeds received from
         the  aforementioned  new equity  investment  in exchange for  3,333,333
         additional Common Units.

          In  connection  with the  Consolidation  Transactions,  the  Operating
         Partnership entered into a three-year secured revolving acquisition and
         working  capital credit  facility of up to $25 million (the  "Revolving
         Credit  Facility") and a $15.1 million ten-year term mortgage loan (the
         "Mortgage Loan").

The  Company  used a portion of the  proceeds  from the New  Equity  Investment,
together with borrowings  under the Revolving  Credit Facility and Mortgage Loan
to refinance approximately $39.6 million of mortgage indebtedness and to acquire
certain minority interests in certain of the Property Partnerships.

On June 1, 1997, the Company  acquired two related party  residential  apartment
complexes  ("Four Winds" and  "Brooksyde") In addition,  the Company acquired an
interest  in  Windsor  Arbor  Limited  Partnership,  the owner of  River's  Bend
Apartments ("Windsor Arbor").

Upon consummation of the June 1, 1997  transactions,  the Operating  Partnership
issued an aggregate of 420,183  Common Units valued at $10 per unit. The Company
also  assumed  mortgage  debt on  Four  Winds  and  Brooksyde  in the  aggregate
remaining principal amount of $6.2 million. To complete these transactions,  the
Company borrowed $1.8 million under its Revolving Credit Facility.

On July 2, 1997, the Company acquired certain  condominium units  representing a
portion of the  condominium  units in the Greenfield  Village complex located in
Rocky Hill,  Connecticut from an unrelated party. The Company paid approximately
$4.3  million,  with  proceeds  from  the  Revolving  Credit  Facility,  in  the
aggregate, for these units.

On  September  1, 1997,  the Company  acquired two  additional  properties  from
related  parties.  Heritage Court in Glastonbury,  Connecticut and  Summit/Birch
Hill in Farmington, Connecticut. The Operating Partnership issued 325,836 Common
Units,  assumed  $9.8  million  in debt  and drew  down  $750,000  against  it's
Revolving Credit Facility to acquire these properties.

On September 30, 1997, the Company  acquired the remaining  limited  partnership
interests in Windsor Arbor for $4.9 million.

On October  31,  1997,  the  Company  purchased  an  apartment  complex  from an
unrelated  party in Ellington,  Connecticut  ("High  Meadow").  The $4.2 million
purchase  price  was  paid  utilizing  borrowings  under  the  Revolving  Credit
Facility.

In addition,  on October 31, 1997,  the Company  acquired two retail  properties
from related parties.  These  acquisitions,  Cornerblock and the Wharf Building,
are  specialty  retail  properties  located in  Edgartown,  Massachusetts.  Upon
consummation of the Cornerblock and Wharf Building  transactions,  the Operating
Partnership  issued an aggregate of 143,334  Common Units valued at $10.50 each.
To complete these transactions,  the Company borrowed approximately $7.0 million
under its Revolving Credit Facility.

In November  1997,  the Company  completed  the sale of 4,500,000  Common Shares
("the  November  Offering").  The net proceeds from the sale after  underwriting
discounts and other costs was approximately $45.2 million.  The Company used the
proceeds to retire its  Revolving  Credit  Facility and certain  mortgage  notes
payable (see notes 5 and 6)
and for working capital purposes.

On December 1, 1997, the Company acquired an apartment complex from an unrelated
party in Ellington, Connecticut ("Pinney Brook") for approximately $950,000. The
purchase price was paid from working capital.

On December 31, 1997,  the Company  acquired  four  communities  from  unrelated
parties for approximately  $20.0 million.  The individual  communities are Briar
Knoll,  Ribbon Mill,  Hilltop and Village Arms and are located  respectively  in
Manchester,  Vernon  and  Norwich,  Connecticut  and Acton,  Massachusetts.  The
purchase price was paid utilizing borrowings under the Revolving Credit Facility
and cash on hand.

The Company intends to continue to operate all of its  multi-family  communities
and retail commercial properties as rental properties.





3.  SIGNIFICANT ACCOUNTING POLICIES

     Basis of Presentation
     The 1997  financial  statements  are  presented  on a  consolidated  basis.
     Included in the  Company's  financial  statements  are the  accounts of the
     Operating   Partnership,   the  management  company  and  various  property
     partnerships.   Most   properties  are  owned  directly  by  the  Operating
     Partnership,  however,  certain  properties  are owned by  various  limited
     partnerships,  which in turn are wholly owned or substantially (88% to 98%)
     owned  by  the  Operating   Partnership.   All   significant   intercompany
     transactions were eliminated in consolidation.

     Reclassification
     Certain  amounts in 1996 and 1995 were  reclassified to conform to the 1997
presentation.

     Use of Estimates

     The  preparation  of financial  statements  in  conformity  with  generally
     accepted  accounting  principles  requires management to make estimates and
     assumptions  that affect the reported  amount of assets and liabilities and
     disclosure  of  contingent  assets  and  liabilities  at  the  date  of the
     financial  statements and reported  amounts of revenues and expenses during
     the reporting period. Actual results could differ from those estimates.

     Cash and Cash Equivalents

     The Company  considers all highly liquid debt  instruments with an original
     maturity  of  three  months  or less at the  time  of  purchase  to be cash
     equivalents.  The combined account  balances at each financial  institution
     periodically exceed the Federal Depository  Insurance  Corporation ("FDIC")
     insurance  coverages and, as a result,  there is a concentration  of credit
     risk  related to amounts on deposit in excess of FDIC  insurance  coverage.
     The Company believes that the risk is not significant  since its banking is
     with major financial institutions.

     Real Estate Asset Capitalization and Depreciation

     Interests  owned  by  certain   principals  of  the  Grove  Affiliates  and
     contributed  to the  Operating  Partnership  as part  of the  Consolidation
     Transactions  were recorded at their historical cost due to the controlling
     relationship  between  the  Company  and  the  principals  of the  entities
     previously  owning and  operating  the  Properties.  The value of interests
     contributed by non-principals was recorded based upon the fair market value
     of their  interests.  Subsequent  acquisitions  were recorded in accordance
     with the purchase method of accounting.

     Expenditures   for   long-lived   replacement-type   items  in   stabilized
     properties'  such as  appliances  and  floor  coverings,  are  capitalized.
     Furthermore,  expenditures  for  non-recurring  items under  $1,000 and for
     normal tenant turnover expenses (such as cleaning and painting) and repairs
     and  maintenance  are  expensed as incurred.  With  respect to  development
     properties, the Company generally capitalizes all costs incurred throughout
     the redevelopment stage.

     Depreciation is provided for building and land  improvements  and buildings
     using the  straight-line  method  over the  estimated  useful  lives of the
     assets (10 to 30 years).  Additionally,  furniture,  fixtures and equipment
     are depreciated using an accelerated method over the estimated useful lives
     of the assets (5 to 7 years).

     Long-Lived Assets

     In March 1995, the Financial Accounting Standards Board issued Statement of
     Financial  Accounting  Standards No. 121, "Accounting for the Impairment of
     Long-Lived  Assets and Long-Lived Assets to be Disposed of " (FAS No. 121),
     which requires  long-lived assets to be reviewed for impairment when events
     or  circumstances   indicate  that  an  impairment  might  exist.  When  an
     impairment indicator is present, assets must be grouped at the lowest level
     for which there are identifiable cash flows. If the sum of the undiscounted
     cash flows is less than the carrying  amounts of the assets,  an impairment
     loss must be recorded.  The  impairment  loss is measured by comparing  the
     fair value of the assets with their  carrying  amount.  To date,  no losses
     have been recognized and management believes that no impairment  conditions
     exist.

     Per Share Data

     In 1997, the Financial Accounting Standards Board issued Statement No. 128,
     Earnings  per  Share   ("Statement   128").   Statement  128  replaced  the
     calculation of primary and fully diluted  earnings per share with basic and
     diluted  earnings  per share.  Unlike  primary  earnings  per share,  basic
     earnings per share  excludes  the dilutive  effects of options and warrants
     (see Note 8).  Earnings  per share - assuming  dilution is very  similar to
     fully  diluted  earnings per share.  All earnings per share amounts for all
     periods have been presented, and where appropriate,  restated to conform to
     the Statement 128 requirements.

     Income per common share information is based on the weighted average number
     of Common Shares  outstanding  during each year. On February 10, 1997,  the
     Board  of  Trust  Managers  of  the  Company   declared  a  stock  dividend
     aggregating  26,250  Common  Shares and the  concurrent  effectuation  of a
     1.125-for-one  common stock  split.  All shares  outstanding  and per share
     amounts have been restated to reflect these changes in capital structure.

     Stock-Based Compensation

     Effective in fiscal year 1996,  the Company  adopted  Financial  Accounting
     Standard No. 123, "Accounting for Stock-Based Compensation." This statement
     defines  a fair  value  based  method  of  accounting  for  employee  stock
     compensation  plans.  However,  it also  allows an entity  to  continue  to
     measure  compensation  cost for those plans in accordance  with  Accounting
     Principle  Board (APB)  Opinion  No. 25,  "Accounting  for Stock  Issued to
     Employees."  Under APB No. 25,  compensation cost is the excess, if any, of
     the quoted  market price of the stock at the grant date over the amount the
     employee must pay to acquire the stock. The Company has elected to continue
     to account for its employee stock compensation plans under APB No. 25. (See
     Note 8).

     Income Taxes and Dividends

     The Company has made the election to be taxed as a REIT under  Sections 856
     through 860 of the Internal Revenue Code of 1986, as amended. To qualify as
     a REIT, the Company  generally must  distribute at least 95% of its taxable
     income to its shareholders and comply with other requirements. Accordingly,
     no provision has been made for federal  income taxes for the Company in the
     accompanying  financial  statements.  Even though the Company qualifies for
     taxation as a REIT,  the Company may be subject to certain  state and local
     taxes on its income and property and to federal  income and excise taxes on
     its  undistributed  income,  if any.  Shareholders  are taxed on  dividends
     declared and must report such dividends as either  ordinary  income,  short
     term gains, long term gains, or as a return of capital.  The federal income
     tax characteristics of dividends paid by the Company consisted of:
                                           1997         1996         1995
                                           ----         ----         ----
   Ordinary income                          100%       97.46%       83.22%
   Return of capital                          0%        2.54%       16.78%

     No income taxes were paid during 1997, 1996 and 1995.

     Advertising

     The Company expenses advertising costs as incurred.  Advertising costs 
     were $214,000, $24,000 and  $17,000 in 1997, 1996 and 1995, respectively.

     Deferred Charges

     Deferred charges,  consisting principally of loan costs, are amortized on a
     straight  line basis  over the term of the  related  obligation.  When term
     loans are retired prior to maturity,  the  unamortized  deferred loan costs
     are written-off and reported as extraordinary items.

     Revenue Recognition

     Rental income  attributable to leases is recorded when due from tenants and
     recognized monthly as it is earned,  which is not materially different than
     the straight-line  basis. The Company generally requires tenants to provide
     a cash  security  deposit equal to one month's rent or pay the last month's
     rent in advance.  Such  payments  are deferred and are included in security
     deposits on the accompanying consolidated balance sheets.




4.       PRO FORMA INFORMATION  (UNAUDITED)

    In 1997, the  historical  consolidated  financial  statements of the Company
    contain results of operations data for the properties and management company
    below from their respective dates of acquisition to December 31, 1997.

                                                            Acquisition Date
                                                            ----------------
      Grove Property Services Limited Partnership 
      and Property  Partnerships (20 properties and the
      management company as part of the Consolidation
      Transactions)                                         March   14, 1997
      Four Winds                                                June 1, 1997
      Brooksyde                                                 June 1, 1997
      River's Bend                                              June 1, 1997
      Greenfield Village                                        July 1, 1997
      Glastonbury Centre                                   September 1, 1997
      Summit & Birch Hill                                  September 1, 1997
      Corner Block and Wharf Building (2 properties)        October 31, 1997
      High Meadow                                           October 31, 1997
      Pinney Brook                                          December 1, 1997
      Briar Knoll                                          December 31, 1997
      Ribbon Mill                                          December 31, 1997
      Hilltop                                              December 31, 1997
      Village Arms                                         December 31, 1997

    The following  unaudited pro forma  information  for the year ended December
    31, 1997, is presented as if the Consolidation Transactions,  the other 1997
    acquisitions  listed  above and the  November  Offering  had all occurred on
    January 1, 1997.  The  unaudited  information  does not purport to represent
    what the Company's  results of  operations  would have actually been if such
    transactions,  in fact, had occurred on January 1, 1997, nor does it purport
    to represent the results of operations for future periods.

                                                                  (In thousands,
                                                                   except share
                                                                      data)
   Revenues                                                     $    29,188
                                                                ================
   Income before minority interests                             $      6,545
                                                                ================
                                                                ================
   Net income                                                   $      4,715
                                                                ================
                                                                ================
   Earnings per common share - basic and assuming dilution      $        0.56
                                                                ================


5.   MORTGAGE NOTES PAYABLE

     Mortgage  notes  payable   consist  of  the  following  at  December  31(in
thousands):

                                                    1997               1996
                                                    ----               ----
       Amortizing first mortgage notes             $14,373         $  5,669
       Interest only first mortgage notes           19,084                0
                                                    ------           ------   
                                                   $33,457         $  5,669
                                                   ========         ========

     The amortizing first mortgage notes have fixed interest rates between 7.04%
     and  8.33%.  These  notes  mature  between  the years 2000 and 2013 and are
     collateralized  by  five  of  the  properties  with  a  carrying  value  of
     approximately  $16.7  million as of  December  31,  1997.  These  notes are
     partially  guaranteed by certain executive officers and shareholders of the
     Company.

     There are two interest only first mortgage notes.  One note has a principal
     balance of $4.0 million  requiring  monthly  payments of interest only at a
     fixed rate of 7.00%,  and matures in 2007. This note is  collateralized  by
     one  property  with a carrying  value of  approximately  $6.4 million as of
     December 31, 1997. The other note has a principal  balance of $15.1 million
     requiring monthly payments of interest only at a variable rate of one month
     LIBOR plus 1.14% (one month LIBOR was 5.72 % on  December  31,  1997),  and
     matures in 2007. This note is  collateralized  by eight  properties with an
     aggregate carrying value of approximately  $20.9 million as of December 31,
     1997.

     The interest  rate on the $15.1  million  variable rate note has been fixed
     with two interest rate swap contracts  (the "Interest  Swaps") with a bank.
     The Interest Swaps have in effect:  (i) fixed $7.6 million of debt at 7.67%
     for the period from October 1, 1997 through  October 1, 2007 and (ii) fixed
     an additional  $7.6 million of debt at 7.68% for the period from October 1,
     1997  through  January 4, 2005.  The  Interest  Swaps have been  pledged as
     collateral under the related variable note.

     Annual principal payments due as of  December 31, 1997, are as follows
    (in thousands):
                               Year Ending December 31,
                                  1998           $     203
                                  1999                 218
                                  2000                 235
                                  2001                 253
                                  2002                 273
                                  Thereafter        32,275
                                                    ------
                                                 $  33,457

     In December 1997, the OP entered into an agreement whereby the OP 
     effectively locked the ten year  U. S. treasury bond rate on $20.0 million
     of future debt at a rate of 5.835%.  The agreement is in effect through
     July, 1998.


6.   REVOLVING CREDIT FACILITY

     In  March  1997,  the  Operating  Partnership  entered  into a  three  year
     Revolving Credit Facility with a bank, guaranteed by the Company, for up to
     $25.0  million.   Borrowings   under  the  Revolving  Credit  Facility  are
     collateralized   by   thirteen   properties   with  a  carrying   value  of
     approximately  $38.7  million as of December  31, 1997 and bears  interest,
     payable  monthly,  at a  floating  rate of 1.2% above the 30, 60, or 90 day
     LIBOR rate.  The  Operating  Partnership  is  required to maintain  certain
     financial  covenants as defined in the Revolving Credit Facility agreement.
     The  Revolving  Credit  Facility  is  available  to  fund  future  property
     acquisitions;  $4.0 million is available  to fund  working  capital  needs,
     while $2.0 million is available to fund the  redemption  of Common Units by
     the Operating  Partnership or the purchase of Common Shares. As of December
     31, 1997,  there was $15.6 million  outstanding  under the Revolving Credit
     Facility.



<PAGE>



7.   SHAREHOLDERS' EQUITY

     The following table outlines the 1997 activity in the Operating Partnership
equity accounts:
<TABLE>
<CAPTION>

                                                                      Number of:
                                                           ----------------------------------
       <S>                                                   <C>               <C>
                                                                                 Limited
                                                              Company's         Partners
                                                              Operating         Operating
                                                             Partnership       Partnership
                                                                Units             Units
       Outstanding at December 31, 1996                         620,102            -
       Consolidation Transactions in March 1997:
           New Equity Investment                              3,333,333            -
           Transfer of property interests-Grove Companies             -         909,115
           Transfer of property interests-non-affiliates              -       1,205,324
       June 1997 acquisitions                                         -         420,183
       Proceeds from stock options in May 1997                      394               -
       September 1997 acquisitions                                    -         325,836
       October 1997 acquisitions                                      -         143,334
       The November Offering                                  4,500,000             -
                                                           ----------------- ----------------
                                                              8,453,829       3,003,792
                                                           ================= ================
           Ownership Percentage                                  73.78%           26.22%
                                                           ================= ================
</TABLE>


     Income is allocated to the Minority  Interest in the Operating  Partnership
     based  on its  weighted  average  ownership  percentage  of  the  Operating
     Partnership  ("OP").  The ownership  percentage is computed by dividing the
     weighted  average number of OP Units held by the Minority  Interest holders
     by the total weighted average OP Units outstanding.  Issuance of additional
     Common  Shares  or OP Units  changes  the  ownership  of both the  Minority
     Interest and the Company.  Such transactions and the proceeds therefrom are
     treated  as  capital  transactions  and  result  in an  allocation  between
     Shareholders' Equity and Minority Interest to account for the change in the
     respective percentage ownership of the underlying equity of the OP.

     An OP Unit  and each  Common  Share  have  essentially  the  same  economic
     characteristics as they effectively share equally in the net income or loss
     and  distributions  of the OP. OP Units  generally may be redeemed for cash
     or, at the  election of the  Company,  for Common  Shares on a  one-for-one
     basis, subject to certain lock-up provisions.

     Common Shares have been reserved for future issuance as follows:

       OP Units not owned by the Company (see above)              3,003,792
       Underwriters warrants (Note 8)                                47,248
       Stock options issued (Note 8)                                977,723
       Additional stock options issuable (Note 8)                    90,003
                                                             ---------------
                                                                  4,118,766
                                                             ===============


8.   WARRANTS AND STOCK OPTION PLANS

     In conjunction with the Company's  initial public offering of Common Shares
     in 1994,  the  managing  underwriter  was granted  Underwriter  Warrants to
     purchase 47,248 Common Shares. The Underwriter  Warrants are exercisable at
     $11.31 per Common  Share and expire in June  1999.  No  warrants  have been
     exercised as of December 31, 1997.

     The Company  adopted a stock  option  plan in 1994 (the "1994  Plan") for a
     maximum of 118,120 Common Shares for key employees and  non-employee  Trust
     Managers of the  Company.  Options  are granted at the market  price of the
     Company's Common Shares on the date of grant, become exercisable ratably on
     each of the first three  anniversaries  of the date of the grant and have a
     maximum  term of ten years.  At  December  31,  1996,  no options  had been
     exercised.  In May 1997, a Trust  Manager  exercised  options on 394 Common
     Shares.  In March 1997, the Company  instituted an additional  stock option
     plan ("1996 Plan").  The Company reserved a total of 900,000 Common Shares,
     subject to  adjustment,  pursuant to the 1996 Plan.  The  provisions of the
     1996 Plan are  similar  to the 1994  Plan.  Pursuant  to the  Consolidation
     Transactions and the November Offering, the Company granted 810,000 options
     to certain executive  officers,  employees and non-employee  Trust Managers
     and an  additional  50,000  nonqualified  options were granted to a Company
     advisor.  Each non-employee  Trust Manager receives 5,000 options per year.
     The exercise price of the options is between $7.20 and $10.91 per share.
<TABLE>

     Stock option activity is summarized as follows:
<CAPTION>

                                                                  1997                              1996
                                                    --------------------------------- ---------------------------------
       <S>                                             <C>          <C>                  <C>           <C>                
                                                                        Weighted                          Weighted
                                                                         Average                           Average
                                                        Options      Exercise Price       Options      Exercise Price
                                                        -------      --------------       -------      --------------
       Outstanding at beginning of year                 118,117      $     8.48            69,689      $     9.31
       Granted                                          860,000      $    10.57            48,428      $     7.29
       Exercised                                          (394)      $     7.73                 -
                                                    ================                  ================
       Outstanding at end of year                       977,723      $    10.30           118,117      $     8.48
                                                    ================                  ================
       Options exercisable at end of year                69,296      $     9.33            45,272      $     9.36
                                                    ================                  ================

</TABLE>


     The Company accounts for stock option grants in accordance with APB No. 25.
     Accordingly,  no  compensation  cost has been  recognized  for stock option
     grants  since all of the options have  exercise  prices equal to the market
     value of the Company's Common Shares at the date they were granted.

     Pro forma  information  regarding  net  income  and  earnings  per share is
     required  by FAS No.  123,  and has been  determined  as if the Company had
     accounted for its employee stock options under the fair value method of FAS
     No.  123.  The fair value for these  options was  estimated  at the date of
     grant  using a  Black-Scholes  option  pricing  model  with  the  following
     assumptions  for 1997:  risk-free  interest rate of 5%;  dividend yields of
     6.48%;  volatility  factors of the expected  market price of the  Company's
     Common Shares of .231 and a  weighted-average  expected life of the options
     of ten years.

     The  Black-Scholes   option  valuation  model  was  developed  for  use  in
     estimating  the  fair  value  of  traded  options  which  have  no  vesting
     restrictions  and are fully  transferable.  In addition,  option  valuation
     models  require the input of highly  subjective  assumptions  including the
     expected stock price volatility.  The Company's employee stock options have
     characteristics  significantly  different  from  those of  traded  options;
     furthermore,  changes in the subjective  input  assumptions  can materially
     affect the fair value estimate.  Therefore,  in management's  opinion,  the
     existing models do not necessarily provide a reliable single measure of the
     fair value of its employee stock options.

     For  purposes of pro forma  disclosures,  the  estimated  fair value of the
     options is  amortized  to expense over the  options'  vesting  period.  The
     Company's pro forma information follows (in thousands,  except for earnings
     per share information):

                                   Year Ended
                                December 31, 1997
                                -----------------
       Pro forma net income                                    $  2,221
                                                              ===========
       Pro forma  earnings  per  share - basic and  assuming
       dilution                                               $    0.59
                                                              ===========






9.  RELATED PARTY TRANSACTIONS

     Management Fee
     On June 23, 1994,  the Company  entered  into a Management  Agreement ( the
     "Agreement" ) with Grove Property Services Limited Partnership  ("GPS"), an
     affiliated company which provided operating and support functions requisite
     to the operation of the Company's properties.  The Agreement provided for a
     management fee equal to 5% of gross monthly revenues,  as defined,  and was
     terminated  pursuant  to the  Consolidation  Transactions  in  March  1997.
     Management fees incurred in 1997, 1996 and 1995 were approximately $22,000,
     $109,000 and $67,000, respectively.

     Subsequent to the Consolidation Transactions,  the Company earned revenues,
     through GPS, of approximately $518,000, by providing management services to
     affiliated companies not owned by the Company or the OP.

     Rent to Related Party
     The  Company's  executive  offices were leased from an  affiliated  company
     under a three year lease which expired in 1997. The lease has been extended
     on a month-to-month basis at a rate of $4,150 per month.

     Related party rent expense was approximately  $41,000 in 1997 and $6,000 in
each of 1996 and 1995.


10.  FAIR VALUE OF FINANCIAL INSTRUMENTS

     The  following  disclosures  of  estimated  fair value were  determined  by
     management  using available  market  information and appropriate  valuation
     methodologies.  Judgment is necessary to interpret  market data and develop
     estimated fair value.  Accordingly,  the estimates presented herein are not
     necessarily  indicative  of  the  amounts  the  Company  could  realize  on
     disposition  of the  financial  instruments.  The use of  different  market
     assumptions  and/or estimation  methodologies may have a material effect on
     the estimated fair values.

     Cash  equivalents,  accounts  receivable and accounts  payable,  because of
     their short term nature, approximate fair value. Mortgage notes payable are
     also carried at amounts that approximate their fair values.


11.  PENSION PLAN

     The Company sponsors a defined  contribution pension plan (the "Plan") that
     is qualified under Section 401(k) of the Internal  Revenue Code.  Full-time
     employees are eligible to join the Plan at specified  dates after they have
     been employed by the Company for over one year. Employee  contributions are
     in  accordance  with I.R.S.  guidelines;  the Company  matches  twenty-five
     percent of employee  contributions  up to one  percent of the  individual's
     total annual base salary.


12.  COMMITMENTS AND CONTINGENCIES

     The  Company,   as  an  owner  of  real  estate,   is  subject  to  various
     environmental and other laws of Federal and local  governments.  Compliance
     by the Company with existing laws has not had a material  adverse effect on
     the Company's financial condition and results of operations.  However,  the
     Company  cannot predict the impact of new or changed laws or regulations on
     its current  Properties or on properties that it may acquire in the future.
     The Company is party to various  litigation from time-to-time in the normal
     course of business.  Management believes that substantially all matters are
     covered by insurance or, in the event of an unfavorable outcome,  would not
     have a  material  adverse  effect on its  financial  position,  results  of
     operations or cash flows of the Company.


13.  SUBSEQUENT EVENTS

     On January 23, 1998, the Company  purchased an apartment complex located in
     West  Warwick,  Rhode  Island from an unrelated  party  through the OP. The
     purchase price of approximately $7.0 million was paid utilizing  borrowings
     under the  Revolving  Credit  Facility.  The  Company  intends to  continue
     operating the complex as rental apartments.

     In January 1998, the Company entered into another agreement whereby the 
     Company effectively locked the ten year  U. S. treasury bond rate on $20.0 
     million of future debt at a rate of 5.47%.  The agreement is in effect
     through April 1, 1998.


14.  QUARTERLY FINANCIAL DATA (UNAUDITED)
<TABLE>

     The following is a summary of selected unaudited  quarterly  financial data
     (in thousands, except per share data):
<CAPTION>
                                            --------------------------------1997----------------------------------------
                                               1st Quarter        2nd Quarter       3rd Quarter        4th Quarter
                                              January-March       April-June       July-September    October-December
                                            ------------------ ------------------ ----------------- -------------------
<S>                                             <C>                 <C>               <C>              <C>                 

Revenues                                        $   1,306           $   4,478         $   5,715        $    6,402
                                            ================== ================== ================= ===================

Income before minority interests                $     130           $     847         $     932        $    1,809
Minority interests                                    (33)               (337)             (412)            (640)
                                            ================== ================== ================= ===================
Net income                                      $      97           $     510         $     520        $    1,169
                                            ================== ================== ================= ===================

Net income per weighted average
     share-basic and assuming
dilution                                        $    0.08           $    0.13         $    0.13        $     0.20
                                            ================== ================== ================= ===================
Weighted average common shares
     outstanding                                    1,250               3,954             3,954             5,813
                                            ================== ================== ================= ===================
</TABLE>

<TABLE>
<CAPTION>


                                            -------------------------------------------1996--------------------------
                                               1st Quarter        2nd Quarter       3rd Quarter        4th Quarter
                                              January-March       April-June       July-September    October-December
                                            ------------------ ------------------ ----------------- -------------------
<S>                                             <C>                 <C>               <C>              <C>            

Revenues                                        $     495           $     515         $     529        $      543
                                            ================== ================== ================= ===================

                                            ================== ================== ================= ===================
Net income                                      $      21           $      71         $      96        $       73
                                            ================== ================== ================= ===================

Net income per weighted average
     share-basic and assuming
dilution                                        $    0.03           $    0.11         $    0.15        $     0.12
                                            ================== ================== ================= ===================
Weighted average common shares
     outstanding                                      620                 620               620               620       
                                            ================== ================== ================= ===================

<FN>

The 1996 and first three  quarters of 1997  earnings per share amounts have been
restated  to comply  with  Statement  128.  Statement  128 had no impact on 1996
earnings per share and an immaterial impact with respect to 1997.
</FN>
</TABLE>


<PAGE>


<TABLE>

Schedule III
Part 1
Real Estate and Accumulated Depreciation

<CAPTION>
                                                                                   Intial Cost
       Apt Name           Location       Encumbrances                  Land           Building                                      
       --------           --------       ------------                  ----           --------
<S>                    <C>              <C>                        <C>              <C>         
Connecticut
 208-210 Main St       Manchester       $  15,600,000     (A)             149,629         847,897                                   
 Arbor Commons         Ellington                          (A)             164,946         934,695                                   
 Avonplace             Avon                               (A)           1,095,513       6,207,906                                   
 Barons Apartments     Southington          1,241,296                     162,696       1,445,468                                   
 Bradford Apartments   Newington            1,860,000                     358,864       2,036,562                                   
 Briar Knoll Apts      Vernon                                             956,711       5,421,363                                   
 Brooksyde Apts        West Hartford                                      467,829       2,651,030                                   
 Burgundy Studios      Middletown           1,650,000                     313,856       1,778,520                                   
 Cambridge Estates     Norwich              4,372,770     (B)             426,470       3,808,829                                   
 Colonial Village      Plainville                         (A)             604,027       3,422,818                                   
 Dogwood Hills         Hamden                             (B)             170,942       1,680,865                                   
 Summit & Birch Hill   Farmington                                       1,432,693       8,118,593                                   
 Fox Hill Apartments   Enfield                            (A)           1,034,266       5,877,842                                   
 Fox Hill Commons      Vernon               2,100,000                     395,047       2,238,597                                   
 Greenfield Village    Rocky Hill                         (A)             783,698       3,498,803                                   
 Hamden Centre         Hamden                             (B)             160,185       1,607,407                                   
 High Meadow           Ellington                          (A)             626,395       3,549,569                                   
 Hilltop               Norwich                                            777,880       4,407,984                                   
 Glastonbury Center    Glastonbury          4,407,715                     793,383       4,497,538                                   
 Loomis Manor          West Hartford        1,650,000                     305,045       1,728,588                                   
 Ocean Reef            New London           2,329,330                     579,134       3,281,760                                   
 Park Place West       West Hartford                      (A)             256,440       1,453,161                                   
 Sandalwood            New London                         (A)             112,314         636,444                                   
 Ribbon Mills          Manchester                                         591,778       3,353,407                                   
 River's Bend          Windsor                                          2,244,296      12,909,411                                   
 Westwynd Apartments   West Hartfor         1,215,000                     224,822       1,273,991                                   
 Woodbridge            Newington            2,220,000                     361,635       2,049,267   
                        
Massachusetts                                              
Cornerblock           Edgartown                           (A)             272,295       1,543,005                                   
 Dean Estates          Taunton              2,022,147                     376,705       2,134,664                                   
 Four Winds            Fall River                                       1,051,300       5,957,369                                   
 Longmeadow Shops      Longmeadow           4,000,000                     976,373       5,532,783                                   
 Security Manor        Westfield            1,389,000                     348,661       1,999,499                                   
 Van Deene Manor       West Springfield     3,000,000                     585,049       3,360,177                     
 Village Arms          Acton                                              806,777       4,571,736                                   
 The Wharf             Edgartown                          (A)             387,888       2,198,032
 
Rhode Island                     
 Dean Estates II       Cranston                           (A)             253,198       1,434,786                                   
 Royale                Cranston                           (A)             342,607       1,941,439
                                       ------------------------------------------------------------
               Totals:                   $ 49,057,258               $  20,951,346    $121,409,633                                   
                                       ============================================================
<FN>

(A) - - One of  thirteen  properties  that  secure  the  Company's  $25  million
Revolving Credit Facility 
(B) - - One of three properties that secure one of the
Company's amortizing first mortgage notes 
(C) - - The aggregate cost of land and
buildings  as of December  31,  1997 was  $136,195,727  for  Federal  income tax
purposes
</FN>


<PAGE>



Schedule III (Continued)
Part I
Real Estate and Accumulated Depreciation
<CAPTION>

                                      Costs Capitalized                    Gross Carrying Amount at
                                  Subsequent to Acquisition                    Close of Period
                              ----------------------------------------------------------------------------------
<S>
          Apt Name                Land          Building            Land           Building       Accum. Depr.
          --------                ----          --------            ----           --------       ------------
Connecticut                      <C>           <C>                 <C>               <C>              <C>        
 208-210 Main St                 $       -     $         9185      $   149,629       $   857,082      $   23,718             
 Arbor Commons                            -            14,318          164,946           949,013          26,125                    
 Avonplace                           19,319           147,161        1,114,832         6,355,067         176,765                    
 Barons Apartments                        -            18,370          162,696         1,463,838         237,983                    
 Bradford Apartments                 13,319           115,480          372,183         2,152,042          59,442                    
 Briar Knoll Apts                         -                 -          956,711         5,421,363               -                    
 Brooksyde Apts                       4,503           309,363          472,332         2,960,393          56,985                    
 Burgundy Studios                     1,355            56,989          315,211         1,835,509          50,419                    
 Cambridge Estates                        -            45,996          426,470         3,854,825         271,811                    
 Colonial Village                         -            35,913          604,027         3,458,732          96,177                    
 Dogwood Hills                            -             8,419          170,942         1,689,284         370,847                    
 Summit & Birch Hill                 31,220           249,434        1,463,913         8,368,027          92,706                    
 Fox Hill Apartments                 44,301           255,498        1,078,567         6,133,340         170,501                    
 Fox Hill Commons                         -            40,026          395,047         2,278,623          63,238                    
 Greenfield Village                  38,908           375,559          822,605         3,874,362          62,551                    
 Hamden Centre                            -            42,758          160,185         1,650,165         306,087                    
 High Meadow                        146,859           843,359          773,254         4,392,929          22,124                    
 Hilltop                                  -                 -          777,880         4,407,984               -                    
 Glastonbury Center                  23,744           162,496          817,127         4,660,034          51,645                    
 Loomis Manor                        12,840            85,682          317,885         1,814,271          50,212                    
 Ocean Reef                          16,640           262,288          595,774         3,544,048          97,043                    
 Park Place West                          -             5,027          256,440         1,458,187          40,562                    
 Sandalwood                            (61)             3,146          112,253           639,590          17,700                    
 Ribbon Mills                             -                 -          591,778         3,353,407               -                    
 River's Bend                        33,683           214,401        2,277,980        13,123,812         108,651                    
 Westwynd Apartments                  7,985            48,392          232,807         1,322,383          36,728                    
 Woodbridge                               -            71,060          361,635         2,120,326          58,774
                       
Massachusetts          
 Cornerblock                            288             1,630          272,583         1,544,635           8,581                    
 Dean Estates                             -            16,161          376,705         2,150,824          59,660                    
 Four Winds                           7,918           171,786        1,059,219         6,129,155         119,123                    
 Longmeadow Shops                     4,178            52,388          980,551         5,585,171         153,062                    
 Security Manor                      11,471            74,833          360,132         2,074,333          57,615                    
 Van Deene Manor                     25,083           157,705          610,132         3,517,882          97,674                    
 Village Arms                             -                 -          806,777         4,571,736               -                    
 The Wharf                            3,339            31,780          391,227         2,229,812          12,388                    
Rhode Island           
 Dean Estates II                      1,627            19,824          254,825         1,454,609          40,613                    
 Royale                               3,049            55,520          345,656         1,996,959          55,450
                              -----------------------------------------------------------------------------------
                      Totals:    $  451,568      $  4,001,947     $ 21,402,914    $  125,411,580    $  3,154,073                    
                              ===================================================================================





<PAGE>



Schedule III (Continued)
Part I
Real Estate and Accumulated Depreciation
<CAPTION>

                                            Date                     Estimated
                          -----------------------------------------
        Apt Name           Constructed    Renovated     Acquired   Life (Years)
        --------           -----------    ---------     --------   ------------
<S>                            <C>          <C>           <C>        <C>     
Connecticut
 208-210 Main St               1969          1988         1997       10 to 30
 Arbor Commons                 1975          1988         1997       10 to 30
 Avonplace                     1973          1995         1997       10 to 30
 Barons Apartments             1970          1994         1994       10 to 30
 Bradford Apartments           1964          1989         1997       10 to 30
 Briar Knoll Apts              1986                       1997       10 to 30
 Brooksyde Apts                1945          1997         1997       10 to 30
 Burgundy Studios              1973          1996         1997       10 to 30
 Cambridge Estates             1977          1990         1996       10 to 30
 Colonial Village              1968          1989         1997       10 to 30
 Dogwood Hills                 1971          1993         1994       10 to 30
 Summit & Birch Hill           1967          1996         1997       10 to 30
 Fox Hill Apartments           1974          1991         1997       10 to 30
 Fox Hill Commons              1965          1989         1997       10 to 30
 Greenfield Village            1965          1997         1997       10 to 30
 Hamden Centre                 1968          1993         1994       10 to 30
 High Meadow                   1975                       1997       10 to 30
 Hilltop                       1988                       1997       10 to 30
 Glastonbury Center            1962          1989         1997       10 to 30
 Loomis Manor                  1948          1990         1997       10 to 30
 Ocean Reef                    1962          1995         1997       10 to 30
 Park Place West               1961          1989         1997       10 to 30
 Sandalwood                    1977          1996         1997       10 to 30
 Ribbon Mills                  1908          1985         1997       10 to 30
 River's Bend                  1973          1996         1997       10 to 30
 Westwynd Apartments           1969          1990         1997       10 to 30
 Woodbridge                    1968          1991         1997       10 to 30
Massachusetts
 Cornerblock                  1800's         1988         1997       10 to 30
 Dean Estates                  1984                       1997       10 to 30
 Four Winds                    1987          1996         1997       10 to 30
 Longmeadow Shops              1962          1978         1997       10 to 30
 Security Manor                1971          1988         1997       10 to 30
 Van Deene Manor               1970          1990         1997       10 to 30
 Village Arms                  1973                       1997       10 to 30
 The Wharf                    1800's         1996         1997       10 to 30
Rhode Island
 Dean Estates II               1970          1994         1997       10 to 30
 Royale                        1976          1993         1997       10 to 30
</TABLE>






<PAGE>



Schedule III
Part II
Rollforward of Assets and Accumulated Depreciation

                                                    Years
                                                 ------------
Land, buildings and related improvements          10 to 30
Furniture, fixtures and equipment                  5 to 7

The  changes in total real  estate  assets for the years  ended  December 31 (in
     thousands) are as follows:
                                                1997        1996        1995
                                       --------------------------------------
       Balance, beginning of year            $  9,448     $ 5,153     $ 5,071
                                 
      New property acquisitions               136,321       4,279
                                 
      Additions                                 1,046          16          82
                                        ======================================
       Balance, beginning of year            $146,815      $9,448     $ 5,153
                                        ======================================


The  changes in  accumulated  depreciation  for the years ended  December 31 (in
     thousands) are as follows:
                                                   1997        1996        1995
                                          --------------------------------------
              Balance, beginning of year        $    867       $ 559       $ 389
            
             Depreciation expense                  2,287         308         170
                                          ======================================
   
             Balance, beginning of year         $  3,154       $ 867       $ 559
                                          ======================================



<PAGE>



                                                     E-4
Exhibit Index

Exhibit No.                                         Description

2.1  Contribution  Agreement,  dated as of May 30,  1997,  by and between  Grove
     Operating, L.P., Northeast Apartments I Limited Partnership,  West Hartford
     Center  Associated  Limited  Partnership,  Windsor Equity  Partnership  and
     Windsor Commons  Corporation  (incorporated  by reference to Exhibit 2.1 to
     the  Company's  Current  Report on Form 8-K dated May 30, 1997  (Commission
     File No. 1-13080))

2.2   orm of First  Amendment  effective  as of June 1, 1997 to Agreement of
     Limited Partnership of Windsor Arbor Limited  Partnership  (incorporated by
     reference to Exhibit 2.2 to the Company's  Current Report on Form 8-K dated
     May 30, 1997 (Commission File No. 1-13080))

2.3  Purchase and Sale  Agreement,  dated May 14,  1997,  between  Highland
     Income  Partners,  L.P.,  as Seller,  and Grove  Corporation,  a  Purchaser
     (incorporated  by reference to Exhibit 2.1 to the Company's  Current Report
     on Form 8-K dated July 2, 1997 (Commission File No. 1-13080))

2.4  Purchase and Sale  Agreement,  dated  September  5, 1997,  by and
     between Werner O. Kunzli,  as Seller,  and Grove  Corporation,  a
     Purchaser  (incorporated  by  reference  to  Exhibit  2.4  to the
     Company's Registration Statement on Form S-2, No. 333-38183)

2.5  Grove  Operating,  L.P.,  Solicitation of Consent and Offer to Exchange
     Certain Outstanding Units of Limited Partnership  Interest in Grove-Coastal
     Associates,  L.P.  for  Consideration  of  3,435.5  Common  Units  of Grove
     Operating,  L.P.  with  an  option  to  holders  to  instead  receive  cash
     consideration,  dated June 19, 1997, as  supplemented on June 19, 1997, and
     Letter of  Transmittal  and Addendum to Letter of Transmittal in connection
     therewith  (incorporated  by  reference  to  Exhibit  2.5 to the  Company's
     Registration Statement on Form S-2, No. 333-38183)

3.1  Third  Amended and Restated  Declaration  of Trust of the Company dated
     March 14,  1997,  as amended by Articles  Supplementary  dated  October 23,
     1997.

3.2  Amended and Restated Bylaws of the Company  (incorporated  by reference
     to Exhibit 3.2 to the Company's  Current Report on Form 8-K dated March 14,
     1997 and filed March 31, 1997 (Commission File No. 1-13080)

4.1  Form of  Agreement of Limited  Partnership  of Grove  Operating,  L.P.,
     among the Company and the other  partners  named therein  (incorporated  by
     reference to Exhibit 10.2 to the Company's Current Report on Form 8-K dated
     February 13, 1997 (Commission File No. 1-13080))

4.2   Revolving  Credit  Agreement  dated March 26,  1997,  among Grove
      Operating,  L.P., the Company and Rhode Island Hospital Trust National
      Bank (a Bank of Boston  company)  and  Other  Banks  which may  become
      parties to the  Agreement  and Rhode Island  Hospital  Trust  National
      Bank,  as Agent  (incorporated  by  reference  to  Exhibit  4.1 to the
      Company's  Quarterly Report on Form 10-QSB for the quarter ended March
      31, 1997)

4.3  Amendment  to the  Agreement  of  Limited  Partnership  of  Grove
      Operating, L.P. among the Company and the other partners named therein
      (incorporated   by   reference   to  Exhibit  4.3  of  the   Company's
      Registration Statement on Form S-2, No. 333-38183)

10.1   Securities Purchase  Agreement,  dated February 20, 1997, between
          the Company and Morgan Stanley Group Inc.  (incorporated  by reference
          to  Exhibit  10.1 to the  Company's  Current  Report on Form 8-K dated
          March 14, 1997 (Commission File No. 1-13080))

10.2   Securities Purchase  Agreement,  dated February 21, 1997, between
          the Company  and  ABKB/LaSalle  Securities  Limited  (incorporated  by
          reference to Exhibit 10.2 to the Company's  Current Report on Form 8-K
          dated March 14, 1997 (Commission File No. 1-13080))

10.3  Form of Securities Purchase Agreement executed by other Investors
          in the Private Placement (incorporated by reference to Exhibit 10.3 to
          the  Company's  Current  Report  on Form  8-K  dated  March  14,  1997
          (Commission File No. 1-13080))

10.4    egistration Rights Agreement,  dated March 14, 1997, between the
          Company and the Investors  (incorporated  by reference to Exhibit 10.4
          to the  Company's  Current  Report  on Form 8-K dated  March 14,  1997
          (Commission File No. 1-13080))

10.5   Multifamily  Note,  dated March 14,  1997,  among  Citicorp  Real
               Estate, Inc., GR-Properties III Limited Partnership, Foxwoodburg,
               L.P., Grove-Westfield Associates Limited Partnership,  Grove-West
               Springfield   Associates  Limited   Partnership  and  GR-Westwynd
               Associates  Limited  Partnership  (incorporated  by  reference to
               Exhibit 10.5 to the  Company's  Current  Report on Form 8-K dated
               March 14, 1997 (Commission File No. 1-13080))

10.6  Cash  Management  Agreement,  dated as of March 14,  1997,  among
          Citicorp Real Estate,  Inc.,  GR-Properties  III Limited  Partnership,
          Foxwoodburg,  L.P.,  Grove-Westfield  Associates Limited  Partnership,
          Grove-West  Springfield Associated Limited Partnership and GR-Westwynd
          Associates Limited  Partnership  (incorporated by reference to Exhibit
          10.6 to the Company's  Current Report on Form 8-K dated March 14, 1997
          (Commission File No. 1-13080))

10.7  Form of Multifamily  Open-End Mortgage Deed,  Assignment of Rents
          and  Security  Agreement,  between  Citicorp  Real  Estate,  Inc.  and
          GR-Properties  III Limited  Partnership  (incorporated by reference to
          Exhibit 10.7 to the Company's  Current  Report on Form 8-K dated March
          14, 1997 (Commission File No. 1-13080))

10.8  Pledge  Agreement,  dated as of March 14,  1997,  between  Grove
          Operating,  L.P.  and  Citicorp  Real  Estate,   Inc.(incorporated  by
          reference to Exhibit 10.8 to the Company's  Current Report on Form 8-K
          dated March 14, 1997 (Commission File No. 1-13080))

10.9   Registration Rights Agreement,  dated March 14, 1997, between the
          Company,   Grove  Operating,   L.P.  and  certain  partners  of  Grove
          Operating,  L.P.  (incorporated  by  reference  to Exhibit 10.9 to the
          Company's  Current Report on Form 8-K dated March 14, 1997 (Commission
          File No. 1-13080))

10.10   1994 Share  Option  Plan  (incorporated  by  reference  to
               Exhibit  10.16 to the  Company's  Registration  Statement on Form
               SB-2 (File No. 33-76732))

10.11    1996 Share  Incentive  Plan  (incorporated  by reference to
               Exhibit 10.10 to the Company's  Current  Report on Form 8-K dated
               March 14, 1997 (Commission File No. 1-13080))

10.12    Pledge  Agreement,  dated  March  14,  1997,  among  Damon
               Navarro, Brian Navarro, Edmund Navarro,  Joseph LaBrosse,  Gerald
               McNamara,  National Realty  Services  Limited  Partnership,  GIG,
               Burgundy   Associates   Limited    Partnership,    Grove   Equity
               Partnership, Grove Holding Co. Inc. and the Company (incorporated
               by reference to Exhibit 10.11 to the Company's  Current Report on
               Form 8-K dated March 14, 1997 (Commission File No. 1-13080))

10.13  Noncompetition  Agreement,  dated March 14, 1997, among the
               Company, Grove Operating,  L.P., National Realty Services Limited
               Partnership,  GIG and  Burgundy  Associates  Limited  Partnership
               (incorporated  by  reference  to Exhibit  10.12 to the  Company's
               Current Report on Form 8-K dated March 14, 1997  (Commission File
               No. 1-13080))

10.14          Form  of  Noncompetition  Agreement  executed  by each of
                       Damon Navarro,  Brian Navarro,  Joseph  LaBrosse,  Edmund
                       Navarro and Gerald McNamara (incorporated by reference to
                       Exhibit 10.13 to the Company's Current Report on Form 8-K
                       dated March 14, 1997 (Commission File No. 1-13080))

10.15          Amendment,   dated   as   of   October   15,   1997,   to
                       Noncompetition  Agreement,  dated March 14, 1997, between
                       the Company and Damon Navarro  (incorporated by reference
                       to Exhibit 10.15 of the Company's  Registration Statement
                       on Form S-2, No. 333-38183)

10.16          Amendment,   dated   as   of   October   15,   1997,   to
                       Noncompetition  Agreement,  dated March 14, 1997, between
                       the Company and Brian Navarro  (incorporated by reference
                       to Exhibit 10.16 of the Company's  Registration Statement
                       on Form S-2, No. 333-38183)

10.17          Amendment,   dated   as   of   October   15,   1997,   to
                       Noncompetition  Agreement,  dated March 14, 1997, between
                       the Company and Edmund Navarro (incorporated by reference
                       to Exhibit 10.17 of the Company's  Registration Statement
                       on Form S-2, No. 333-38183)

10.18          Amendment,  dated as of October 15, 1997, to Noncompetition
               Agreement,  dated March 14, 1997,  between the Company and Joseph
               LaBrosse  (incorporated  by  reference  to  Exhibit  10.18 of the
               Company's Registration Statement on Form S-2, No. 333-38183)

10.19          Amendment,  dated as of October 15, 1997, to Noncompetition
               Agreement,  dated March 14, 1997,  between the Company and Gerald
               McNamara  (incorporated  by  reference  to  Exhibit  10.19 of the
               Company's Registration Statement on Form S-2, No. 333-38183)

10.20          Employment  Agreement,  dated March 14, 1997,  between the
               Company and Damon Navarro  (incorporated  by reference to Exhibit
               10.14 to the Company's Current Report on Form 8-K dated March 14,
               1997 (Commission File No. 1-13080))

10.21          Amendment,  dated as of October 15, 1997,  to  Employment
                Agreement,  dated March 14, 1997, between the Company and
                Damon Navarro (incorporated by reference to Exhibit 10.21
                of the Company's Registration Statement on Form S-2, No.
                333-38183)
  
10.22          Employment  Agreement,  dated March 14, 1997,  between the
               Company and Brian Navarro  (incorporated  by reference to Exhibit
               10.15 to the Company's Current Report on Form 8-K dated March 14,
               1997 (Commission File No. 1-13080))

10.23          Amendment,  dated as of October 15, 1997,  to  Employment
                Agreement,  dated March 14, 1997, between the Company and
                Brian Navarro (incorporated by reference to Exhibit 10.23
                of the Company's Registration Statement on Form S-2, No.
                333-38183)

10.24          Employment  Agreement,  dated March 14, 1997,  between the
               Company and Edmund Navarro  (incorporated by reference to Exhibit
               10.16 to the Company's Current Report on Form 8-K dated March 14,
               1997 (Commission File No. 1-13080))

10.25          Amendment,  dated as of October 15, 1997,  to  Employment
               Agreement,  dated March 14, 1997, between the Company and
               Edmund  Navarro  (incorporated  by  reference  to Exhibit
               10.25 of the  Company's  Registration  Statement  on Form
               S-2, No.
               333-38183)

10.26          Employment  Agreement,  dated March 14, 1997,  between the
               Company and Joseph LaBrosse (incorporated by reference to Exhibit
               10.17 to the Company's Current Report on Form 8-K dated March 14,
               1997 (Commission File No. 1-13080))

10.27          Amendment,  dated as of October 15, 1997,  to  Employment
               Agreement,  dated March 14, 1997, between the Company and
               Joseph  LaBrosse  (incorporated  by  reference to Exhibit
               10.27 of the  Company's  Registration  Statement  on Form
               S-2, No.
               333-38183)

10.28          Employment  Agreement,  dated March 14, 1997,  between the
               Company and Gerald McNamara (incorporated by reference to Exhibit
               10.18 to the Company's Current Report on Form 8-K dated March 14,
               1997 (Commission File No. 1-13080))

10.29          Amendment,  dated as of October 15, 1997,  to  Employment
               Agreement,  dated March 14, 1997, between the Company and
               Gerald  McNamara  (incorporated  by  reference to Exhibit
               10.29 of the  Company's  Registration  Statement  on Form
               S-2, No.
               333-38183)

10.30          Form of  Contribution  Agreement  among the Company,  Grove
               Operating,  L.P.  and  certain  other  parties  (incorporated  by
               reference to Exhibit 10.1 to the Company's Current Report on Form
               8-K dated February 13, 1997 (Commission File No. 1-13080))

10.31          Form  of  Indemnification  Agreement  by and  between  the
               Company,   the  Trust   Managers  and  the   Executive   Officers
               (incorporated  by  reference  to Exhibit  10.18 to the  Company's
               Registration Statement on Form SB-2 (No. 33-76732))

10.32          Assumption  of Mortgage Deed and Security  Agreement  made
               June 23, 1994 by and among Southington Baron Limited Partnership,
               Charles D. Gersten,  Ada C Berin,  the Company,  Damon D. Navarro
               and Brian A. Navarro  (incorporated by reference to Exhibit 10.22
               to the Company's  Annual Report on Form 10-KSB for the year ended
               December 31, 1994 (Commission File No. 1-13080))

10.33          Mortgage Note from Southington Baron Limited Partnership to
               Charles  D.   Gersten  and  Ada  C.  Berin  dated  June  8,  1994
               (incorporated  by  reference  to Exhibit  10.23 to the  Company's
               Annual Report on Form 10-KSB for the year ended December 31, 1994
               (Commission File No. 1-13080))

10.34          Purchase and Sale Agreement between the Company and Grove
               Cambridge Associates Limited Partnership (incorporated by
               reference to Exhibit 1 to the Company's Current Report on
               Form 8-K dated  October  30,  1995  (Commission  File No.
               1-13080))

10.35          Mortgage  Note from the  Company  to First  Union Bank of
               Connecticut  dated  January  11,  1996  (incorporated  by
               reference to Exhibit 10.25 to the Company's Annual Report
               on Form  10-KSB  for the year  ended  December  31,  1995
               (Commission File No. 1-13080))

 11            List of Subsidiaries

 23            Consent of Ernst & Young, LLP

 27            Financial Data Schedule