<PAGE>
 
                                                                    EXHIBIT 10.1


                          FORM OF MANAGEMENT AGREEMENT

     THIS AGREEMENT, dated as of April ___, 1998 by and between WILSHIRE REAL
ESTATE INVESTMENT TRUST INC., a Maryland corporation ("WREIT" and, together with
its subsidiaries and partnerships, and as the General Partner of Wilshire Real
Estate Partnership, L.P., a Delaware limited partnership (the "Company"), and
WILSHIRE REALTY SERVICES CORPORATION, a Delaware corporation (the "Manager");

                                  WITNESSETH:
                                  ___________

     WHEREAS, the Company intends to invest, through a subsidiary partnership,
in U.S. Commercial Investments, Mortgage-Backed Securities, International
Investments and Other Real Estate Related Assets ("Investments") and expects to
qualify for the tax benefits accorded by Sections 856 through 860 of the
Internal Revenue Code of 1986, as amended (the "Code"); and

     WHEREAS, the Company desires to retain the Manager to acquire, sell and
otherwise manage the Investments of the Company and to perform administrative
services for the Company in the manner and on the terms set forth herein;

     NOW THEREFORE, in consideration of the mutual agreements herein set forth,
the parties hereto agree as follows:

     SECTION 1.  Definitions.
                 ----------- 

     Except as the context otherwise requires, capitalized terms used but not
defined herein shall have the respective meanings assigned them in the WREIT
preliminary prospectus dated March 13, 1998.  In addition, the following terms
have the meanings assigned them:

     (a)    "Agreement" means this Management Agreement, as amended from time to
time.

     (b)    "Closing Date" means the date of closing of the Company's initial
public offering of common stock.

     (c)    "Governing Instruments" means, in the case of a corporation, the
articles of incorporation and bylaws, in the case of a partnership, the
certificate of partnership or similar document and partnership agreement and, in
the case of a limited liability company, the certificate of formation and
operating agreement.

     (d)    "International Investments" means international performing, sub-
performing and non-performing mortgage loans and real properties.

     (e)    "Mortgage-Backed Securities" means interests in mortgage-backed
securities.
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     (f)  "Subsidiary" means any subsidiary of the Company and any partnership
or limited liability company, a general partner or managing member which is the
Company or a subsidiary of the Company.

     (g)  "U.S. Commercial Investments" means non-performing, sub-performing and
performing commercial and multi-family mortgage loans and commercial and multi-
family real properties in the United States.

     SECTION 2.  Duties of the Manager.
                 --------------------- 

     (a)  The Manager at all times will be subject to the supervision of the
Company's Board of Directors and will have only such functions and authority as
the Company may delegate to it. The Manager will be responsible for the day-to-
day operations of the Company and will perform (or cause to be performed) such
services and activities relating to the assets and operations of the Company as
the Manager deems to be appropriate, including:

          (i)    serving as the Company's consultant with respect to formulation
of investment criteria and preparation of policy guidelines by the Board of
Directors. A copy of the initial policy guidelines is attached hereto as Exhibit
A (such guidelines as are in effect from time to time, the "Guidelines");

          (ii)   representing the Company in connection with the purchase and
commitment to purchase assets, the sale and commitment to sell assets, and the
maintenance and administration of its portfolio of assets;

          (iii)  furnishing reports and statistical and economic research to the
Company regarding the Company's activities and the services performed for the
Company by the Manager;

          (iv)   monitoring and providing to the Board of Directors on an
ongoing basis price information and other data obtained from certain nationally
recognized dealers that maintain markets in assets identified by the Board of
Directors from time to time, and providing data and advice to the Board of
Directors in connection with the identification of such dealers;

          (v)    providing executive and administrative personnel, office space
and office services required in rendering services to the Company;

          (vi)   except for servicing operations to be conducted by Wilshire
Credit Corporation ("WCC") and certain European affiliates of the Manager (the
"European Servicers") pursuant to certain servicing agreements dated the date
hereof with the Company (the "Servicing Agreements"), administering the day-to-
day operations of the Company and performing and supervising the performance of
such other administrative functions necessary in the management of the Company
as may be agreed upon by the Manager and the Board of Directors, including the
collection of revenues (other than servicing) and the payment of the Company's
debts and obligations and maintenance of appropriate computer services to
perform such administrative functions;

          (vii)  communicating on behalf of the Company with the holders of any
equity or debt securities of the Company as required to satisfy the reporting
and other requirements of any governmental bodies or agencies or trading markets
and to maintain effective relations with such holders;

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          (viii) to the extent not otherwise subject to the Servicing Agreements
executed by the Company, designating a servicer for mortgage loans sold to the
Company by originators that have elected not to service such loans and arranging
for the monitoring and administering of such servicers;

          (ix)   advising the Company in connection with policy decisions to be
made by the Board of Directors and in connection with the Company's borrowings
and leverage;

          (x)    engaging in hedging activities on behalf of the Company,
consistent with the Company's status as a REIT and with the Guidelines;

          (xi)   upon request by, or in accordance with the directions of, the
Board of Directors, investing or reinvesting any money of the Company; and

          (xii)  advising the Company regarding the maintenance of its status as
a REIT and monitoring compliance with the various REIT qualification tests and
other rules set out in the Code and Treasury Regulations thereunder.

     (b)  Real Estate Asset Portfolio Management. The Manager will perform
          --------------------------------------  
portfolio management services on behalf of the Company and the Operating
Partnership with respect to the Company's Investments. Such services will
include, but not be limited to, consulting with the Company on purchase and sale
opportunities, collection of information and submission of reports pertaining to
the Company's assets, interest rates, and general economic conditions, periodic
review and evaluation of the performance of the Company's portfolio of assets,
acting as liaison between the Company and banking, mortgage banking, investment
banking and other parties with respect to the purchase, financing and
disposition of assets, and other customary functions related to real estate
portfolio management. The Manager may enter into subcontracts with other
parties, including its Affiliates, to provide any such services to the Company.

     (c)  Monitoring Special Servicing. To the extent not otherwise subject to
          ----------------------------
the Servicing Agreements executed by the Company, the Manager will perform
monitoring services on behalf of the Company with respect to the Company's
Special Servicing rights. Such monitoring services will include, but not be
limited to, the following activities: negotiating Special Servicing agreements;
serving as the Company's consultant with respect to the Special Servicing of
mortgage loans; collection of information and submission of reports pertaining
to the mortgage loans and to moneys remitted to the Manager or the Company by
the Servicers; acting as a liaison between the servicers of the mortgage loans
and the Company and working with servicers to the extent necessary to improve
their servicing performance; with respect to mortgage loans for which the
Company is Special Servicer, periodic review and evaluation of the performance
of each servicer to determine its compliance with the terms and conditions of
the related servicing agreement. The parties acknowledge that the Company
intends to grant any Special Servicing rights obtained by it (other than the
right to foreclose) to the servicers under the Servicing Agreements.

     (d) Monitoring of Primary Servicing. The Manager will monitor and
         -------------------------------   
administer the servicing of the Company's assets. Such monitoring and
administrative services will include, but not be limited to, the following
activities: serving as the Company's consultant with respect to the servicing of
loans; collection of information pertaining to the mortgage loans and to moneys
remitted to the Manager or the Company by servicers; periodic review and
evaluation of the performance of each servicer to determine its compliance with
the terms and conditions of the servicing agreement; 

                                      -3-
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and acting as a liaison between servicers and the Company; review of and
recommendations as to fire losses, easement problems and condemnation,
delinquency and foreclosure procedures with regard to mortgage loans; review of
servicers' delinquency, foreclosures and other reports on mortgage loans;
supervising claims filed under any mortgage insurance policies; and enforcing
the obligation of any servicer to repurchase mortgage loans with respect
thereto.

     (e)  Commercially Reasonable Efforts. The Manager agrees to use
          -------------------------------- 
commercially reasonable efforts at all times in performing services for the
Company hereunder.

     SECTION 3.  Additional Activities of Manager.  Nothing herein shall prevent
                 --------------------------------                               
the Manager or any of its Affiliates from engaging in other businesses or from
rendering services of any kind to any other person or entity, including
investment in, or advisory service to others investing in, any type of real
estate investment (including investments which constitute Primary Investments
for the Company); provided, however, that the Manager and its subsidiaries will
grant a right of first refusal with respect to the Company's Primary Investments
on the terms and conditions set forth below.

     Directors, officers, employees and agents of the Manager or Affiliates of
the Manager may serve as directors, officers, employees, agents, nominees or
signatories for the Company or any Subsidiary, to the extent permitted by their
Governing Instruments, as from time to time amended, or by any resolutions duly
adopted by the Board of Directors pursuant to the Company's Governing
Instruments.  When executing documents or otherwise acting in such capacities
for the Company, such persons shall use their respective titles in the Company.

     SECTION 4.  Right of First Refusal.  So long as this Agreement remains in
                 ----------------------                                       
full force and effect, the Manager and its subsidiaries do hereby grant a right
of first refusal ("Right of First Refusal") to the Company with respect to real
estate investments which constitute Primary Investments for the Company;
provided, however, that neither the Manager nor any Affiliate of the Manager is
required to provide such Right of First Refusal with respect to Primary
Investments that consist of mortgage-backed securities where the mortgage loans
collateralizing such mortgage-backed securities were previously owned by the
Manager or an Affiliate of the Manager until they were so securitized.   In
addition, the foregoing Right of First Refusal does not apply to the acquisition
of real property by the Manager or an Affiliate in connection with foreclosure
(or deed in lieu of foreclosure) on property securing a mortgage loan owned by
the Manager or an Affiliate of the Manager.  With respect to acquisitions of
pools of assets consisting of both Primary Investments and Other Real Estate
Related Assets, the Right of First Refusal will only apply to the Primary
Investments contained in such pool and it is expressly agreed that the Manager
or one of its Affiliates may acquire the non-Primary Assets contained in such
pool.  Further, from time to time, mortgage lenders or others offer for sale
large pools of mortgage loans and real properties pursuant to a competitive
bidding process.  In such a case, the Manager or its Affiliates may choose an
unaffiliated entity with which to submit a joint bid for the pool, as long as
the Manager or its Affiliates takes title only to assets as to which it has not
given the Company the Right to First Refusal.  The parties acknowledge and agree
that the Manager and its Affiliates have no obligation to reveal to the Company
or its Subsidiaries any business opportunities involving non-Primary Investments
and Other Real Estate Related Assets.

     The Manager agrees that it will not invest in any Primary Assets for its
own account or that of one of its Affiliates unless a majority of the
Independent Directors of the Company have decided that the Company should not
invest in such asset.  The Company agrees that it and such Independent Directors
shall use their commercially reasonable efforts to make any such decision in
sufficient time 

                                      -4-
<PAGE>
 
to allow the Manager or one of its affiliates to bid on and acquire such asset
if the Company determines not to invest in such asset.

     The parties agree that because the market in which the Company expects to
purchase assets is characterized by rapid evolution of products and services,
and, thus, there may in the future be relationships between the Company, the
Manager, and its Affiliates in addition to those described herein, the Company
may change its policies in connection with any of the foregoing (including the
definition of Primary Investments) with the approval of the majority of the
Independent Directors.

     Except for the acquisition of the Initial Investments (which have already
been approved by the Independent Director, the Manager agrees that any Primary
Investments or Other Real Estate Related Assets to be acquired by the Company
(or one of its Subsidiaries) from the Manager (or one of its Affiliates) shall
require the approval of a majority of the Independent Directors of the Company.

     SECTION 5.  Commitments.  In order to meet the investment requirements of
                 -----------                                                  
the Company, as determined by the Board of Directors from time to time, the
Manager agrees at the direction of the Board of Directors to issue on behalf of
the Company commitments on such terms as are established by the Board of
Directors, including a majority of the Independent Directors, for the purchase
of Investments.

     SECTION 6.  Bank Accounts.  At the direction of the Board of Directors, the
                 -------------                                                  
Manager may establish and maintain one or more bank accounts in the name of the
Company or any Subsidiary, and may collect and deposit into any such account or
accounts, and disburse funds from any such account or accounts, under such terms
and conditions as the Board of Directors may approve; and the Manager shall from
time to time render appropriate accountings of such collections and payments to
the Board of Directors and, upon request, to the auditors of the Company or any
Subsidiary.

     SECTION 7.  Records; Confidentiality.  The Manager shall maintain
                 ------------------------                             
appropriate books of accounts and records relating to services performed
hereunder, and such books of account and records shall be accessible for
inspection by representatives of the Company or any Subsidiary at any time
during normal business hours.  The Manager shall keep confidential any and all
information obtained in connection with the services rendered hereunder and
shall not disclose any such information to nonaffiliated third parties except
with the prior written consent of the Board of Directors.

     SECTION 8.  Obligations of Manager.
                 ---------------------- 

     (a)  The Manager shall require each seller or transferor of Investments to
the Company to make such representations and warranties regarding such
Investments as may, in the judgment of the Manager, be necessary and
appropriate. In addition, the Manager shall take such other action as it deems
necessary or appropriate with regard to the protection of the Company's
Investments and other assets.

     (b)  The Manager shall refrain from any action that would adversely affect
the status of the Company as a real estate investment trust or exempt from
regulations under the Investment Company Act or that, in its sole judgment made
in good faith, would violate any law, rule or regulation of any governmental
body or agency having jurisdiction over the Company or any Subsidiary or that
would

                                      -5-
<PAGE>
 
otherwise not be permitted by the Company's or Subsidiary's Governing
Instruments. If the Manager is ordered to take any such action by the Board of
Directors, the Manager shall promptly notify the Board of Directors of the
Manager's judgment that such action would adversely affect such status or
violate any such law, rule or regulation or the Governing Instruments.
Notwithstanding the foregoing, the Manager, its directors, officers,
stockholders and employees shall not be liable to the Company, any Subsidiary,
the Independent Directors, or the Company's or a Subsidiary's stockholders or
partners for any act or omission by the Manager, its directors, officers,
stockholders or employees except as provided in Section 11 of this Agreement.

     (c)  Absent written direction from the Board of Directors, the Manager
shall use reasonable efforts to comply with the Guidelines, as they may be
revised from time to time.

     SECTION 9.  Compensation.
                 ------------ 

     (a) For each calendar quarter (or portion thereof) commencing with the
calendar quarter ending June 30, 1998, the Company shall pay to the Manager, for
services rendered under this Agreement, a base management fee calculated as a
percentage of the Average Invested Assets of the Company for such calendar
quarter (pro rated based on the number of days elapsed during any partial
calendar quarter) and equal to 1% per annum of the first $1.0 billion of Average
Invested Assets, 0.75% of the next $500.0 million of Average Invested Assets,
and 0.50% per annum of the Average Invested Assets above $1.5 billion. The term
"Average Invested Assets" for any period means the average of the aggregate book
value of the assets of the Company, including the assets of all of its direct
and indirect subsidiaries, before reserves for depreciation or bad debts or
other similar noncash reserves, computed by taking the daily average of such
values during such period. The Manager will not receive any management fee for
the period prior to the sale of the shares of Common Stock offered pursuant to
the Company's initial public offering. The base management fee is intended to
compensate the Manager for its costs in providing management services to the
Company.

     (b) The Company shall pay to the Manager incentive compensation for each
calendar quarter, commencing in the calendar quarter ending June 30, 1998, in an
amount equal to the product of (A) 25% of the dollar amount by which (1)(a)
Funds from Operations (before the incentive fee) of the Company per share of
Common Stock (based on the weighted average number of shares outstanding) (b)
plus gains (or minus losses) from debt restructuring and sales of property per
share of Common Stock (based on the weighted average number of shares
outstanding), exceed (2) an amount equal to (a) the weighted average of the
price per share at the initial public offering and the prices per share at any
secondary offerings by the Company multiplied by (b) the Ten-Year U.S. Treasury
Rate plus five percent per annum multiplied by (B) the weighted average number
of shares of Common Stock outstanding during such period. "Funds from
Operations" as defined by the National Association of Real Estate Investment
Trusts ("NAREIT"), on the date hereof means net income (computed in accordance
with GAAP) excluding gains (or losses) from debt restructuring and sales of
property, plus depreciation and amortization on real estate assets, and after
adjustments for unconsolidated partnerships and joint ventures. As used in
calculating the Manager's compensation, the term "Ten Year U.S. Treasury Rate"
means the arithmetic average of the weekly average yield to maturity for
actively traded current coupon U.S. Treasury fixed interest rate securities
(adjusted to constant maturities of ten years) published by the Federal Reserve
Board during a quarter, or, if such rate is not published by the Federal Reserve
Board, any Federal Reserve Bank or agency or department of the federal
government selected by the Company. If the Company determines in good faith that
the Ten Year U.S. Treasury Rate cannot be calculated as provided 

                                      -6-
<PAGE>
 
above, then the rate shall be the arithmetic average of the per annum average
yields to maturities, based upon closing asked prices on each business day
during a quarter, for each actively traded marketable U.S. Treasury fixed
interest rate security with a final maturity date not less than eight nor more
than twelve years from the date of the closing asked prices as chosen and quoted
for each business day in each such quarter in New York City by at least three
recognized dealers in U.S. government securities selected by the Company.

     (c) The Manager shall compute the compensation payable under Sections 8(a)
and 8(b) of this Agreement within 45 days after the end of each quarter. A copy
of the computations made by the Manager to calculate its compensation shall
thereafter promptly be delivered to the Board of Directors and, upon such
delivery, payment of the compensation earned under Sections 8(a) and 8(b) of
this Agreement shown therein shall be due and payable within 60 days after the
end of such fiscal quarter.

     (d) The Manager may charge the Company for any out-of-pocket expenses that
the Manager incurs in connection with any due diligence on assets considered for
purchase by the Company. Moreover, the Manager shall document the time spent by
the Manager's employees in performing such due diligence and shall be entitled
to reimbursement for the allocable portion of such employees' salaries and
benefits, which shall be reimbursed quarterly.

     SECTION 10.  [RESERVED]

     SECTION 11.  [RESERVED]

     SECTION 12.  Limits of Manager Responsibility.  The Manager assumes no
                  --------------------------------                         
responsibility under this Agreement other than to render the services called for
hereunder in good faith and shall not be responsible for any action of the Board
of Directors in following or declining to follow any advice or recommendations
of the Manager, including as set forth in Section 7(b) of this Agreement. The
Manager, its directors, officers, stockholders and employees will not be liable
to the Company, any Subsidiary, the directors or the Company's or any
Subsidiary's stockholders or partners for any acts or omissions by the Manager,
its directors, officers, stockholders or employees under or in connection with
this Agreement, except by reason of acts constituting bad faith, willful
misconduct, gross negligence or reckless disregard of their duties.  The Company
or any Subsidiary shall reimburse, indemnify and hold harmless the Manager, its
stockholders, directors, officers and employees of and from any and all
expenses, losses, damages, liabilities, demands, charges and claims of any
nature whatsoever, (including attorneys' fees) in respect of or arising from any
acts or omissions of the Manager, its stockholders, affiliates, directors,
officers and employees made in good faith in the performance of the Manager's
duties under this Agreement and not constituting bad faith, willful misconduct,
gross negligence or reckless disregard of its duties.

     SECTION 13.  No Joint Venture.  The Company and the Manager are not
                  ----------------                                      
partners or joint venturers with each other and nothing herein shall be
construed to make them such partners or joint venturers or impose any liability
as such on either of them.

     SECTION 14.  Term; Termination.  This Agreement shall commence on the
                  -----------------                                       
Closing Date and shall continue in force until the second anniversary of the
Closing Date, and thereafter, will automatically renew for successive one-year
periods unless either party delivers a notice of termination at least 120 days
prior to the end of the then current term.

                                      -7-
<PAGE>
 
     Notwithstanding any other provision to the contrary, this Agreement after
the second anniversary of the Closing Date, or any extension hereof may be
terminated by the Company, or the Company may decline to extend the term of this
Agreement as provided above, upon 60 days' written notice, without cause by
majority vote of the Independent Directors or by vote of the holders of a
majority of the outstanding shares of the Company's common stock; provided that
a termination fee, equal to the sum of the base management fee and incentive
management fee earned during the twelve months preceding such termination, will
be due (and will be in addition to the base management fee and incentive
management fee paid or payable during such period).

     If this Agreement is terminated pursuant to this Section 13, such
termination shall be without any further liability or obligation of either party
to the other, except as provided in Section 16 of this Agreement.  If this
Agreement is terminated pursuant to this Section 13, the unvested Options
granted to the Manager and directors and executive officers of the Manager
pursuant to Section 8(c) shall continue to vest in the manner described in
Section 8(c) and in the Company's Stock Option Plan.

     SECTION 15.  Assignments.
                  ----------- 

     (a)  Except as set forth in Section 14(b) of this Agreement, this Agreement
shall terminate automatically in the event of its assignment, in whole or in
part, by the Manager, unless such assignment is consented to in writing by the
Company with the consent of a majority of the Independent Directors.  Any such
assignment shall bind the assignee hereunder in the same manner as the Manager
is bound.  In addition, the assignee shall execute and deliver to the Company a
counterpart of this Agreement naming such assignee as manager.  The Management
Agreement shall be void upon (i) the sale of all or substantially all of the
assets of the Manager, or (ii) the recapitalization, restructuring, merger,
consolidation, combination or sale of the stock of the Manager as a result of
which WFSG or a direct or indirect subsidiary of WFSG is not the holder of
securities representing the majority of the outstanding capital stock entitled
to vote in an election of the director of the Manager.  This Agreement shall not
be assigned by the Company without the prior written consent of the Manager,
except in the case of assignment by the Company to another real estate
investment trust or other organization which is a successor (by merger,
consolidation or purchase of assets) to the Company, in which case such
successor organization shall be bound hereunder and by the terms of such
assignment in the same manner as the Company is bound hereunder.

     (b) Notwithstanding any provision of this Agreement, the Manager may
subcontract any or all of its responsibilities under Section 2 of this Agreement
to any of its Affiliates, which Affiliate shall be approved by the Company's
Board of Directors if such Affiliate is not a direct or indirect subsidiary of
WFSG, and the Company hereby consents to any such assignment and subcontracting
provided, however, that no such arrangement between the Manager and any
Affiliate of the Manager shall relieve the Manager of its duties or obligations
hereunder.

     SECTION 16.  Termination by the Company for Cause.  At the option of the
                  ------------------------------------                       
Company, this Agreement, or any extension hereof, shall be and become terminated
for cause immediately upon 60 days' written notice of termination from a
majority of the Independent Directors to the Manager, without payment of any
termination fee, if any of the following events shall occur:

                                      -8-
<PAGE>
 
          (a)  if the Manager shall breach any provision of this Agreement in
     any material respect and, after notice of such material breach, shall not
     cure such violation within 30 days of such notice; or

          (b)  there is entered an order for relief or similar decree or order
     with respect to the Manager by a court having competent jurisdiction in an
     involuntary case under the federal bankruptcy laws as now or hereafter
     constituted or under any applicable federal or state bankruptcy, insolvency
     or other similar laws; or the Manager (i) ceases, or admits in writing its
     inability, to pay its debts as they become due and payable, or makes a
     general assignment for the benefit of, or enters into any composition or
     arrangement with, creditors; (ii) applies for, or consents (by admission of
     material allegations of a petition or otherwise) to the appointment of a
     receiver, trustee, assignee, custodian, liquidator or sequestrator (or
     other similar official) of the Manager or of any substantial part of its
     properties or assets, or authorizes such an application or consent, or
     proceedings seeking such appointment are commenced without such
     authorization, consent or application against the Manager and continue
     undismissed for 30 days; (iii) authorizes or files a voluntary petition in
     bankruptcy, or applies for or consents (by admission of material
     allegations of a petition or otherwise) to the application of any
     bankruptcy, reorganization, arrangement, readjustment of debt, insolvency,
     dissolution, liquidation or other similar law of any jurisdiction, or
     authorizes such application or consent, or proceedings to such end are
     instituted against the Manager without such authorization, application or
     consent and are approved as properly instituted and remain undismissed for
     30 days or result  in adjudication of bankruptcy or insolvency; or (iv)
     permits or suffers all or any substantial part of its properties or assets
     to be sequestered or attached by court order and the order remains
     undismissed for 30 days.

          (c)  If any of the events specified in Section 15(b) of this Agreement
     shall occur, the Manager shall give prompt written notice thereof to the
     Board of Directors upon the happening of such event.

     SECTION 17.  Action Upon Termination.  From and after the effective date of
                  -----------------------                                       
termination of this Agreement, pursuant to Sections 13, 14, or 15 of this
Agreement, the Manager shall not be entitled to compensation for further
services hereunder, but shall be paid all compensation accruing to the date of
termination and, if terminated pursuant to Section 13, the applicable
termination fee. Upon such termination, the Manager shall forthwith:

     (a) pay over to the Company or a Subsidiary all money collected and held
for the account of the Company or a Subsidiary pursuant to this Agreement;

     (b) deliver to the Board of Directors a full accounting, including a
statement showing all payments collected by it and a statement of all money held
by it, covering the period following the date of the last accounting furnished
to the Board of Directors with respect to the Company or a Subsidiary; and

     (c) deliver to the Board of Directors all property and documents of the
Company or any Subsidiary then in the custody of the Manager.

     (d) if the Company terminates this Management Agreement, the Manager may
require the Company, at the Company's expense, to register for public resale
shares of Common Stock acquired 

                                      -9-
<PAGE>
 
by the Manager or its affiliates within two (2) years of the termination of the
Management Agreement.

     SECTION 18.  Release of Money or Other Property Upon Written Request.  The
                  -------------------------------------------------------      
Manager agrees that any money or other property of the Company or any Subsidiary
held by the Manager under this Agreement shall be held by the Manager as
custodian for the Company or any Subsidiary, and the Manager's records shall be
appropriately marked clearly to reflect the ownership of such money or other
property by the Company or such Subsidiary.  Upon the receipt by the Manager of
a written request signed by a duly authorized officer of the Company requesting
the Manager to release to the Company or any Subsidiary any money or other
property then held by the Manager for the account of the Company or any
Subsidiary under this Agreement, the Manager shall release such money or other
property to the Company or any Subsidiary within a reasonable period of time,
but in no event later than 60 days following such request.  The Manager shall
not be liable to the Company, any Subsidiary, the directors, or the Company's or
a Subsidiary's stockholders or partners for any acts performed or omissions to
act by the Company or any Subsidiary in connection with the money or other
property released to the Company or any Subsidiary in accordance with this
Section. The Company and any Subsidiary shall indemnify the Manager, its
directors, officers, stockholders and employees against any and all expenses,
losses, damages, liabilities, demands, charges and claims of any nature
whatsoever, which arise in connection with the Manager's release of such money
or other property to the Company or any Subsidiary in accordance with the terms
of this Section 19 of this Agreement. Indemnification pursuant to this provision
shall be in addition to any right of the Manager to indemnification under
Section 11 of this Agreement.

     SECTION 19.  Representations and Warranties.
                  ------------------------------ 

     (a) The Company and the Operating Partnership hereby represents and
warrants to the Manager as follows:

         (i)  The Company is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, has the
corporate power to own its assets and to transact the business in which it is
now engaged and is duly qualified as a foreign corporation and in good standing
under the laws of each jurisdiction where its ownership or lease of property or
the conduct of its business requires such qualification, except for failures to
be so qualified, authorized or licensed that could not in the aggregate have a
material adverse effect on the business operations, assets or financial
condition of the Company and its subsidiaries, taken as a whole. The Company
does not do business under any fictitious business name.

        (ii)  The Company has the corporate power and authority to execute,
deliver and perform this Agreement and all obligations required hereunder and
has taken all necessary corporate action to authorize this Agreement on the
terms and conditions hereof and the execution, delivery and performance of this
Agreement and all obligations required hereunder. No consent of any other person
including, without limitation, stockholders and creditors of the Company, and no
license, permit, approval or authorization of, exemption by, notice or report
to, or registration, filing or declaration with, any governmental authority is
required by the Company in connection with this Agreement or the execution,
delivery, performance, validity or enforceability of this Agreement and all
obligations required hereunder. This Agreement has been, and each instrument or
document required hereunder will be, executed and delivered by a duly authorized
officer of the Company, and this Agreement constitutes, and each instrument or
document required hereunder when executed and 

                                      -10-
<PAGE>
 
delivered hereunder will constitute, the legally valid and binding obligation of
the Company enforceable against the Company in accordance with its terms.

         (iii)  The execution, delivery and performance of this Agreement and
the documents or instruments required hereunder will not violate any provision
of any existing law or regulation binding on the Company, or any order,
judgment, award or decree of any court, arbitrator or governmental authority
binding on the Company, or the Governing Instruments of, or any securities
issued by the Company or of any mortgage, indenture, lease, contract or other
agreement, instrument or undertaking to which the Company is a party or by which
the Company or any of its assets may be bound, the violation of which would have
a material adverse effect on the business operations, assets or financial
condition of the Company and its subsidiaries, taken as a whole, and will not
result in, or require, the creation or imposition of any lien on any of its
property, assets or revenues pursuant to the provisions of any such mortgage,
indenture, lease, contract or other agreement, instrument or undertaking.

     (b) The Manager hereby represents and warrants to the Company and the
Operating Partnership as follows:

         (i)   The Manager is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its formation, has the corporate
power to own its assets and to transact the business in which it is now engaged
and is duly qualified to do business and is in good standing under the laws of
each jurisdiction where its ownership or lease of property or the conduct of its
business requires such qualification, except for failures to be so qualified,
authorized or licensed that could not in the aggregate have a material adverse
effect on the business operations, assets or financial condition of the Manager
and its subsidiaries, taken as a whole. The Manager does not do business under
any fictitious business name.

         (ii)  The Manager has the corporate power and authority to execute,
deliver and perform this Agreement and all obligations required hereunder and
has taken all necessary corporate action to authorize this Agreement on the
terms and conditions hereof and the execution, delivery and performance of this
Agreement and all obligations required hereunder. No consent of any other person
including, without limitation, partners and creditors of the Manager, and no
license, permit, approval or authorization of, exemption by, notice or report
to, or registration, filing or declaration with, any governmental authority is
required by the Manager in connection with this Agreement or the execution,
delivery, performance, validity or enforceability of this Agreement and all
obligations required hereunder. This Agreement has been, and each instrument or
document required hereunder will be, executed and delivered by a duly authorized
agent of the Manager, and this Agreement constitutes, and each instrument or
document required hereunder when executed and delivered hereunder will
constitute, the legally valid and binding obligation of the Manager enforceable
against the Manager in accordance with its terms.

         (iii) The execution, delivery and performance of this Agreement and the
documents or instruments required hereunder, will not violate any provision of
any existing law or regulation binding on the Manager, or any order, judgment,
award or decree of any court, arbitrator or governmental authority binding on
the Manager, or the Governing Agreements of, or any securities issued by the
Manager or of any mortgage, indenture, lease, contract or other agreement,
instrument or undertaking to which the Manager is a party or by which the
Manager or any of its assets may be bound, the violation of which would have a
material adverse effect on the business operations, assets or financial
condition of the Manager and its subsidiaries, taken as a whole, and will not
result in, 

                                      -11-
<PAGE>
 
or require, the creation or imposition of any lien on any of its property,
assets or revenues pursuant to the provisions of any such mortgage, indenture,
lease, contract or other agreement, instrument or undertaking.

     SECTION 20.  Notices.  Unless expressly provided otherwise herein, all
                  -------                                                  
notices, requests, demands and other communications required or permitted under
this Agreement shall be in writing and shall be deemed to have been duly given,
made and received when delivered against receipt or upon actual receipt of
registered or certified mail, postage prepaid, return receipt requested,
addressed as set forth below:

     (a)  If to the REIT:

               Wilshire Real Estate Investment Trust Inc.
               1776 SW Madison St.
               Portland, Oregon  97205
               Attention: President

     with a copy given in the manner prescribed
     above, to:

               James M. Waddington, Esq.
               Proskauer Rose LLP
               1585 Broadway
               New York, New York  10036

     (b)  If to the Manager:

               Wilshire Realty Services Corporation
               1776 SW Madison St.
               Portland, Oregon  97205
               Attention: President

     with a copy given in the manner prescribed
     above, to:

               James M. Waddington, Esq.
               Proskauer Rose LLP
               1585 Broadway
               New York, New York  10036

     Any party may alter the address to which communications or copies are to be
sent by giving notice of such change of address in conformity with the
provisions of this Section 21 for the giving of notice.

     SECTION 21.  Binding Nature of Agreement; Successors and Assigns.  This
                  ---------------------------------------------------       
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, personal representatives, successors and assigns as
provided herein.

                                      -12-
<PAGE>
 
     SECTION 22.  Entire Agreement.  This Agreement contains the entire
                  ----------------                                     
agreement and understanding among the parties hereto with respect to the subject
matter hereof, and supersedes all prior and contemporaneous agreements,
understandings, inducements and conditions, express or implied, oral or written,
of any nature whatsoever with respect to the subject matter hereof. The express
terms hereof control and supersede any course of performance and/or usage of the
trade inconsistent with any of the terms hereof.  This Agreement may not be
modified or amended other than by an agreement in writing.

     SECTION 23.  Controlling Law.  This Agreement and all questions relating to
                  ---------------                                               
its validity, interpretation, performance and enforcement shall be governed by
and construed, interpreted and enforced in accordance with the laws of the State
of New York, without reference to its choice of law principles.

     SECTION 24.  Schedules and Exhibits.  All Schedules and Exhibits referred
                  ----------------------                                      
to herein or attached hereto are hereby incorporated by reference into, and made
a part of, this Agreement.

     SECTION 25.  Indulgences, Not Waivers.  Neither the failure nor any delay
                  ------------------------                                    
on the part of a party to exercise any right, remedy, power or privilege under
this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power or privilege preclude any other or
further exercise of the same or of any other right, remedy, power or privilege,
nor shall any waiver of any right, remedy, power or privilege with respect to
any occurrence be construed as a waiver of such right, remedy, power or
privilege with respect to any other occurrence. No waiver shall be effective
unless it is in writing and is signed by the party asserted to have granted such
waiver.

     SECTION 26.  Costs and Expenses.  Each party hereto shall bear its own
                  ------------------                                       
costs and expenses (including the fees and disbursements of counsel and
accountants) incurred in connection with the negotiations and preparation of and
the closing under this Agreement, and all matters incident thereto.

     SECTION 27.  Titles Not to Affect Interpretation.  The titles of paragraphs
                  -----------------------------------                           
and subparagraphs contained in this Agreement are for convenience only, and they
neither form a part of this Agreement nor are they to be used in the
construction or interpretation hereof.

     SECTION 28.  Execution in Counterparts.  This Agreement may be executed in
                  -------------------------                                    
any number of counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall
together constitute one and the same instrument.  This Agreement shall become
binding when one or more counterparts hereof, individually or taken together,
shall bear the signatures of all of the parties reflected hereon as the
signatories.

     SECTION 29.  Provisions Separable.  The provisions of this Agreement are
                  --------------------                                       
independent of and separable from each other, and no provision shall be affected
or rendered invalid or unenforceable by virtue of the fact that for any reason
any other or others of them may be invalid or unenforceable in whole or in part.

     SECTION 30.  Gender.  Words used herein regardless of the number and gender
                  ------                                                        
specifically used, shall be deemed and construed to include any other number,
singular or plural, and any other gender, masculine, feminine or neuter, as the
context requires.

                                      -13-
<PAGE>
 
     SECTION 31.  Computation of Interest.  Interest will be computed on the
                  -----------------------                                   
basis of a 360-day year consisting of twelve months of thirty days each.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.

                    WILSHIRE REAL ESTATE INVESTMENT TRUST INC.,
                    a Maryland corporation and the General Partner of
                    Wilshire Real Estate Partnership L.P.

                    By: __________________________________________
                    Its: _________________________________________


                    WILSHIRE REALTY SERVICES CORPORATION, a
                    Delaware corporation


                    By: __________________________________________
                    Its: _________________________________________

                                      -14-
<PAGE>
 
                                                                       Exhibit A

                    WILSHIRE REAL ESTATE INVESTMENT TRUST INC.

                              Form of Guidelines
                              ------------------

          The following guidelines set forth certain parameters for the
operations of Wilshire Real Estate Investment Trust Inc. (the "Company"):

     1.  Geographical:  Without in any way limiting the ability of the Company
         ------------                                                         
and its advisors to invest in specific assets and once the Company is fully
invested, the Company and its advisors will seek, in making investments in real
estate assets or real estate related assets, to avoid the concentration of
assets in geographic regions.  For purposes hereof, unless the Company or its
advisors (after reviewing the potential risks to the Company and return on an
investment) determine otherwise, "concentration of assets" means more than 50%
of the Company's assets being invested in any one geographic region (e.g. a
state in the United States or the South-Eastern region of the United Kingdom).

     2.  Portfolio Composition:  Without in any way limiting the ability of the
         ---------------------                                                 
Company and its advisors to invest in specific assets and once the Company is
fully invested, the Company and its advisors will seek, in making investments in
real estate assets or real estate related assets, to maintain a portfolio
composition which will generally further the aims of the Company, such as
maintaining its status as a real estate investment trust and generating current
income and long term gains.

     3.  Legal and Tax Matters:  In making investments in real estate assets or
         ---------------------                                                 
real estate related assets, the Company and its advisors will at all times use
their respective best efforts to invest in a manner that will enable the Company
to satisfy the requirements for being classified as a real estate investment
trust for federal tax purposes, to avoid any federal income or excise tax
liability imposed by the Internal Revenue Code (the "Code"), and to ensure that
neither the Operating Partnership nor any portion thereof will be classified as
a "publicly traded partnership" for purposes of section 7704 of the Code or
otherwise as an association taxable as a corporation.

     4.  Transactions with Affiliates:  In purchasing investments in real estate
         ----------------------------                                           
assets or real estate related assets from Affiliates, the Company and its
advisors will comply (to the extent provided therein) with the provisions of the
Management Agreement between Wilshire Realty Services Corporation and the
Company requiring approval of the Independent Directors.

     Dated:  April ___, 1998

                                      -15-