UNITED STATES SECURITIES AND EXCHANGE COMMISSION

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

                                    FORM 10-Q

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

               FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 1996

                                       OR

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

            For the transition period from           to          .


                            Commission File Number    :  0-14857


                 PAINEWEBBER EQUITY PARTNERS ONE LIMITED PARTNERSHIP

            (Exact name of registrant as specified in its charter)


            Virginia                                          04-2866287
(State or other jurisdiction of                             (I.R.S. Employer
incorporation or organization)                              Identification No.)


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

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


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed  by  Section  13 or 15 (d) of the  Securities  Exchange  Act of 1934
during the preceding 12 months (or for such shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days. Yes X . No .



<PAGE>


             PAINEWEBBER EQUITY PARTNERS ONE LIMITED PARTNERSHIP

                         CONSOLIDATED BALANCE SHEETS
               December 31, 1996 and March 31, 1996 (Unaudited)
                                 (In thousands)

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

Operating investment properties:
   Land                                          $     3,962       $    3,962
   Buildings and improvements                         28,518           27,771
                                                 -----------       ----------
                                                      32,480           31,733
   Less accumulated depreciation                     (10,419)          (9,499)
                                                 -----------       ----------
                                                      22,061           22,234

Investments in unconsolidated joint ventures          23,031           23,728
Cash and cash equivalents                              4,027            4,042
Prepaid expenses                                           -               13
Accounts receivable, net                                 428               81
Accounts receivable - affiliates                         255              255
Deferred rent receivable                                   -              185
Deferred expenses, net                                   657              717
                                                 -----------       ----------
                                                 $    50,459       $   51,255
                                                 ===========       ==========

                      LIABILITIES AND PARTNERS' CAPITAL

Accounts payable and accrued expenses            $       650       $      373
Interest payable                                          60               60
Bonds payable                                          1,547            1,576
Mortgage notes payable                                 9,683            9,780
Co-venturer's share of net assets of
  consolidated joint venture                             187              187
Partners' capital                                     38,332           39,279
                                                 -----------       ----------
                                                 $    50,459       $   51,255
                                                 ===========       ==========

        CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
        For the nine months ended December 31, 1996 and 1995 (Unaudited)
                                 (In thousands)

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

Balance at March 31, 1995                          $ (912)      $42,464
Net loss                                               (9)         (866)
Cash distributions                                     (8)         (750)
                                                   ------       -------
Balance at December 31, 1995                       $ (929)      $40,848
                                                   ======       =======

Balance at March 31, 1996                          $ (936)      $40,215
Net loss                                               (2)         (187)
Cash distributions                                     (8)         (750)
                                                   ------       -------
Balance at December 31, 1996                       $ (946)      $39,278
                                                   ======       =======



                             See accompanying notes


<PAGE>


              PAINEWEBBER EQUITY PARTNERS ONE LIMITED PARTNERSHIP

                      CONSOLIDATED STATEMENTS OF OPERATIONS
   For the three and nine months ended December 31, 1996 and 1995 (Unaudited)
                      (In thousands, except per Unit data)

                                      Three Months Ended      Nine Months Ended
                                          December 31,          December 31,
                                      ------------------      -----------------
                                      1996        1995         1996     1995
                                      ----        ----         ----     ----
Revenues:
   Rental income and expense
     reimbursements                 $ 756      $  582      $2,080      $1,592
   Interest and other income           63          65         178         219
                                    -----      ------      ------      ------
                                      819         647       2,258       1,811
Expenses:
   Property operating expenses        353         507       1,096       1,084
   Depreciation and amortization      360         362       1,053         870
   Interest expense                   252         247         760         774
   General and administrative         155         151         315         428
   Bad debt expense                     -           -          30          27
                                    -----      ------      ------      ------
                                    1,120       1,267       3,254       3,183
                                    -----      ------      ------      ------
Operating loss                       (301)       (620)       (996)     (1,372)

Investment income:
   Interest income on notes 
     receivable from 
     unconsolidated ventures          200         200         600         600
   Partnership's share of 
      unconsolidated
      ventures' income 
      (losses)                        123           4         207        (103)
                                    -----      ------      ------      ------
Net income (loss)                   $  22      $ (416)     $ (189)     $ (875)
                                    =====      ======      ======      ======

Net income (loss) per Limited
  Partnership Unit                  $0.01      $(0.20)     $(0.09)     $(0.43)
                                    =====      ======      ======      ======

Cash distributions per Limited
  Partnership Unit                  $0.13     $  0.13     $  0.38      $ 0.38
                                    =====     =======     =======      ======


   The above net income (loss) and cash  distributions  per Limited  Partnership
Unit are based upon the 2,000,000 Limited  Partnership Units outstanding  during
each period.



                           See accompanying notes.


<PAGE>


               PAINEWEBBER EQUITY PARTNERS ONE LIMITED PARTNERSHIP

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
        For the nine months ended December 31, 1996 and 1995 (Unaudited)
                Increase (Decrease) in Cash and Cash Equivalents
                                 (In thousands)


                                                       1996              1995
                                                       ----              ----
Cash flows from operating activities:
  Net loss                                         $    (189)         $  (875)
  Adjustments to reconcile net loss to
  net cash provided by (used in) operating activities:
   Partnership's share of unconsolidated
     ventures' income (losses)                          (207)             103
   Depreciation and amortization                       1,053              870
   Amortization of deferred financing costs               15               15
   Changes in assets and liabilities:
     Escrowed cash                                         -             (161)
     Prepaid expenses                                     13               (9)
     Accounts receivable                                (347)            (214)
     Accounts receivable - affiliates                      -              (17)
     Deferred rent receivable                            185               29
     Deferred expenses                                   (60)            (620)
     Accounts payable and accrued expenses               276              477
                                                   ---------          -------
      Total adjustments                                  928              473
                                                   ---------          -------
      Net cash provided by (used in)
          operating activities                           739             (402)
                                                   ---------          -------

Cash flows from investing activities:
  Distributions from unconsolidated joint ventures     1,658              987
   Additions to operating investment properties         (747)          (2,130)
  Additional investments in unconsolidated
    joint ventures                                      (781)            (277)
                                                   ---------          -------
      Net cash provided by (used in) 
          investing activities                           130           (1,420)
                                                   ---------          -------

Cash flows from financing activities:
  Repayment of principal on mortgage notes payable       (97)            (116)
  District bond assessments                              (29)               -
  Distributions to partners                             (758)            (758)
                                                   ---------          -------
      Net cash used in financing activities             (884)            (874)
                                                   ---------          -------

Net decrease in cash and cash equivalents                (15)          (2,696)

Cash and cash equivalents, beginning of period         4,042            6,460
                                                   ---------          -------

Cash and cash equivalents, end of period           $   4,027         $  3,764
                                                   =========         ========

Cash paid during the period for interest           $     745         $    759
                                                   =========         ========






                           See accompanying notes.


<PAGE>


             PAINEWEBBER EQUITY PARTNERS ONE LIMITED PARTNERSHIP
                  Notes to Consolidated Financial Statements
                                 (Unaudited)



1. General

        The accompanying  financial statements,  footnotes and discussion should
    be read in  conjunction  with the financial  statements and footnotes in the
    Partnership's  Annual  Report  for the year  ended  March 31,  1996.  In the
    opinion of management, the accompanying financial statements, which have not
    been  audited,  reflect  all  adjustments  necessary  to present  fairly the
    results for the interim period. All of the accounting  adjustments reflected
    in the accompanying  interim financial  statements are of a normal recurring
    nature.

        The accompanying  financial statements have been prepared on the accrual
    basis  of  accounting  in  accordance  with  generally  accepted  accounting
    principles which requires  management to make estimates and assumptions that
    affect the reported  amounts of assets and  liabilities  and  disclosures of
    contingent assets and liabilities as of December 31, 1996 and March 31, 1996
    and  revenues and  expenses  for each of the three- and  nine-month  periods
    ended  December  31, 1996 and 1995.  Actual  results  could  differ from the
    estimates and assumptions used.

2. Related Party Transactions

        Accounts receivable - affiliates at December 31, 1996 and March 31, 1996
    includes  $100,000 and $117,000,  respectively,  due from two joint ventures
    for  interest   earned  on  permanent   loans  and  $140,000  and  $123,000,
    respectively, of investor servicing fees due from several joint ventures for
    reimbursement  of  certain  expenses   incurred  in  reporting   Partnership
    operations to the Limited Partners of the Partnership. Accounts receivable -
    affiliates  at both  December  31,  1996 and  March 31,  1996 also  includes
    $15,000 of expenses paid by the  Partnership on behalf of the joint ventures
    during fiscal 1993.

        Included  in general  and  administrative  expenses  for the  nine-month
    periods  ended  December  31,  1996  and  1995  is  $131,000  and  $153,000,
    respectively,  representing  reimbursements  to an affiliate of the Managing
    General  Partner for providing  certain  financial,  accounting and investor
    communication services to the Partnership.

        Also included in general and administrative  expenses for the nine-month
    periods   ended   December   31,  1996  and  1995  is  $9,000  and  $11,000,
    respectively,  representing  fees earned by an affiliate,  Mitchell Hutchins
    Institutional Investors, Inc., for managing the Partnership's cash assets.

3. Investments in Unconsolidated Joint Venture Partnerships

        As of December 31, 1996 and 1995,  the  Partnership  had  investments in
    five   unconsolidated   joint  venture   partnerships  which  own  operating
    properties as more fully described in the Partnership's  Annual Report.  The
    unconsolidated  joint  ventures are accounted for by using the equity method
    because  the  Partnership  does not have a voting  control  interest  in the
    ventures.  Under the equity method,  the assets,  liabilities,  revenues and
    expenses  of  the  unconsolidated  joint  ventures  do  not  appear  in  the
    Partnership's financial statements.  Instead, the investments are carried at
    cost adjusted for the Partnership's share of each venture's earnings, losses
    and distributions. The Partnership reports its share of unconsolidated joint
    venture earnings or losses three months in arrears.


<PAGE>


        Summarized  operations of the  unconsolidated  joint  ventures,  for the
    periods indicated, are as follows:

                    Condensed Combined Summary of Operations
        For the three and nine months ended September 30, 1996 and 1995
                                 (in thousands)

                                        Three Months Ended    Nine Months Ended
                                            September 30,        September 30,
                                       -------------------   ----------------
                                          1996     1995        1996     1995
                                          ----     ----        ----     ----
Revenues:
   Rental revenues and expense
      recoveries                        $  2,827  $  2,784   $8,335     $8,138
   Interest and other income                  52        45      165        140
                                        --------  --------   ------     ------
                                           2,879     2,829    8,500      8,278
Expenses:
   Property operating expenses             1,015       967    2,941      2,771
   Real estate taxes                         442       620    1,509      1,879
   Mortgage interest expense                 204       246      643        682
   Interest expense payable to partner       200       200      600        600
   Depreciation and amortization             805       768    2,375      2,342
                                        --------  --------   ------     ------
                                           2,666     2,801    8,068      8,274
                                        --------  --------   ------     ------
 Net income                             $   213   $     28   $  432     $    4
                                        =======   ========   ======     ======

Net income (loss):
   Partnership's share of combined
     income (loss)                      $   135   $     16   $  242     $  (68)
   Co-venturers' share of combined
     income (loss)                           78         12      190         72
                                        -------   --------   ------     ------
                                        $   213   $     28   $  432     $    4
                                        =======   ========   ======     ======

               Reconciliation of Partnership's Share of Operations
         For the three and nine months ended December 31, 1996 and 1995
                                 (in thousands)

                                       Three Months Ended    Nine Months Ended
                                           December 31,         December 31,
                                       ------------------    -----------------
                                          1996     1995        1996     1995
                                          ----     ----        ----     ----

   Partnership's share of
     combined income (loss),
     as shown above                    $  135    $    16      $  242   $  (68)
   Amortization of excess basis           (12)       (12)        (35)     (35)
                                       ------    -------      ------   ------
   Partnership's share of 
     unconsolidated
     ventures' income (losses)         $  123    $     4      $  207   $ (103)
                                       ======    =======      ======   ======

4. Operating Investment Properties

        At December 31, 1996 and March 31, 1996, the Partnership's balance sheet
    includes two operating investment properties:  the wholly-owned Crystal Tree
    Commerce Center and the Sunol Center Office Buildings, owned by Sunol Center
    Associates,  a majority-owned and controlled joint venture. The Crystal Tree
    Commerce  Center  consists of three  one-story  retail plazas  containing an
    aggregate of 74,923 square feet of leasable space and one four-story  office
    building  containing 40,115 square feet of leasable space,  located in North
    Palm Beach,  Florida.  The Sunol Center Office  Buildings  comprise  116,680
    square  feet of  leasable  space,  located in  Pleasanton,  California.  The
    Partnership   reports  the  operations  of  Sunol  Center  Associates  on  a
    three-month lag.
<PAGE>
        The following is a combined summary of property  operating  expenses for
    the Crystal Tree Commerce  Center and the Sunol Center  Office  Buildings as
    reported in the Partnership's  consolidated statements of operations for the
    three and nine months ended December 31, 1996 and 1995 (in thousands):

                                       Three Months Ended    Nine Months Ended
                                           December 31,         December 31,
                                       ------------------    -----------------
                                          1996     1995        1996       1995
                                          ----     ----        ----       ----

     Property operating expenses:
      Real estate taxes                $   76   $   89       $   191   $  148
      Repairs and maintenance              87      169           324      326
      Utilities                            36       30           124      109
      Management fees                      41       42            87       87
      Administrative and other            113      177           370      414
                                       ------   ------        ------   ------
                                       $  353   $  507        $1,096   $1,084
                                       ======   ======        ======   ======

5.  Bonds Payable

      Bonds  payable  consist  of the  Sunol  Center  joint  venture's  share of
     liabilities  for bonds  issued by the City of  Pleasanton,  California  for
     public  improvements  that  benefit the Sunol Center  operating  investment
     property.  Bond  assessments are levied on a semi-annual  basis as interest
     and  principal  become due on the bonds.  The bonds for which the operating
     investment property is subject to assessment bear interest at rates ranging
     from 5% to 7.87%, with an average rate of 7.2%.  Principal and interest are
     payable in semi-annual installments.  In the event the operating investment
     property is sold, Sunol Center  Associates will no longer be liable for the
     bond assessments.

6.  Mortgage Notes Payable

        Mortgage  notes  payable at December 31, 1996 and March 31, 1996 consist
    of the following (in thousands):

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

     9.125%  nonrecourse loan payable to
     an  insurance  company,   which  is
     secured  by the 625 North  Michigan
     Avenue     operating     investment
     property  (see  discussion  below).
     The terms of the note were modified
     effective  May  31,  1994.  Monthly
     payments,  including  interest,  of
     $55 are due beginning  July 1, 1994
     through  maturity on May 31,  1999.
     In  addition,   the  loan  requires
     monthly   deposits   to  a  capital
     improvement  escrow. The fair value
     of  the   mortgage   note   payable
     approximated  its carrying value at
     December  31,  1996 and  March  31,
     1996.                                        $ 6,301        $ 6,362

     8.39%  nonrecourse  note payable to
     an  insurance  company,   which  is
     secured   by   the   Crystal   Tree
     Commerce      Center      operating
     investment    property.     Monthly
     payments,  including  interest,  of
     $28 are due beginning  November 15,
     1994 through  maturity on September
     19,  2001.  The  fair  value of the
     mortgage note payable  approximated
     its carrying  value at December 31,
     1996  and  March  31,  1996.                   3,382          3,418
                                                  -------        -------

                                                  $ 9,683        $ 9,780
                                                  =======        =======

        In  addition  to  the  long-term  mortgage  debt  described  above,  the
    Partnership has indemnified  Warner/Red  Hill  Associates,  Crow/PaineWebber
    -LaJolla,  Ltd.  and Lake  Sammamish  Limited  Partnership,  along  with the
    related co-venture  partners,  against all liabilities,  claims and expenses
    associated with certain outstanding secured borrowings of the unconsolidated
    joint ventures.  During the quarter ended December 31, 1993, the Partnership
    negotiated and signed a letter of intent with the existing  lender to modify
    and extend the maturity of a zero coupon loan secured by the Warner/Red Hill
    Office Building with an accreted principal balance of $5,763,000.  The terms
    of the extension and modification  agreement,  which was finalized in August
    1994,  provided  for a 10-year  extension  of the note  effective  as of the
    original maturity date of August 15, 1993. During the term of the agreement,
    the  loan,  which  is  recorded  on the  books of the  unconsolidated  joint
    venture,  will bear  interest at 2.875% per annum and monthly  principal and
    interest  payments of $24,000  will be  required.  In  addition,  the lender
    required  a  participation  in  the  proceeds  of  a  future  sale  or  debt
    refinancing  in order to enter into this  agreement.  Accordingly,  upon the
    sale or refinancing of the Warner/Red Hill property, the lender will receive
    40% of the residual value of the property, as defined,  after the payment of
    the outstanding balance of the loan payable.  The extension and modification
    agreement  also required the  Partnership  to establish an escrow account in
    the  name of the  joint  venture  and to fund  such  escrow  with an  equity
    contribution  of $350,000.  The escrowed funds are to be used solely for the
    payment of capital and tenant  improvements,  leasing  commissions  and real
    estate taxes related to the  Warner/Red  Hill  property.  The balance of the
    escrow  account is to be maintained  at a minimum level of $150,000.  In the
    event that the escrow balance falls below  $150,000,  all net cash flow from
    the property is to be deposited into the escrow until the minimum balance is
    re-established.

        During  September 1994, the Partnership  obtained three new nonrecourse,
    current-pay  mortgage  loans in the  amounts  of  $3,600,000  secured by the
    Chandler's Reach Apartments,  $4,920,000 secured by the Monterra  Apartments
    and $3,480,000 (see description  above) secured by the Crystal Tree Commerce
    Center.  The  Chandler's  Reach and Monterra  nonrecourse  loans,  which are
    recorded on the books of the  unconsolidated  joint ventures,  have terms of
    seven years and mature in September of 2001. The Chandler's Reach loan bears
    interest at a rate of 8.33% and  requires  monthly  principal  and  interest
    payments  of  $29,000.  This  loan  will  have  an  outstanding  balance  of
    $3,199,000 at maturity.  The Monterra loan bears interest at a rate of 8.45%
    and requires monthly principal and interest  payments of $40,000.  This loan
    will have an outstanding balance of approximately $4,380,000 at maturity.

7.   Contingencies

      As discussed  in more detail in the  Partnership's  Annual  Report for the
     year ended March 31, 1996,  the  Partnership  is involved in certain  legal
     actions.  At the present time,  the Managing  General  Partner is unable to
     determine what impact,  if any, the resolution of these matters may have on
     the Partnership's financial statements, taken as a whole.



<PAGE>



             PAINEWEBBER EQUITY PARTNERS ONE LIMITED PARTNERSHIP

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



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

      As discussed  further in the Annual  Report,  quarterly  distributions  of
Partnership  net cash flow were reinstated with the payment made on May 15, 1995
for the  quarter  ended  March 31,  1995 at the rate of 1% per annum on original
invested  capital.  Current  cash  flow  generated  by the  Partnership's  seven
operating investment  properties exceeds the level of these  distributions.  The
two multi-family  apartment  properties in which the Partnership has an interest
continue to experience  strong occupancy levels and increasing  rental rates. As
discussed further below, the operations of the five commercial office and retail
properties in the Partnership's  portfolio are either stable or improving.  As a
result of the  improvement in operations of the properties in the  Partnership's
portfolio,  particularly at Sunol Center,  the Partnership plans to increase the
quarterly  distribution  to  $5.00  per  original  $1,000  investment,  which is
equivalent to a 2% annualized  return.  This planned  increase will be effective
for the distribution to be paid on May 15, 1997 for the quarter ending March 31,
1997.

      Sunol Center,  in  Pleasanton,  California,  remained 100% leased to three
tenants as of December  31, 1996.  During the current  quarter,  the  property's
largest  tenant  took  occupancy  of the final  12,000  square feet of its lease
space,  representing the remaining vacant space at the property. This tenant now
occupies 61,621 square feet, or approximately 52% of the property's net rentable
area.  During the first  nine  months of fiscal  1997,  the  Partnership  funded
approximately  $348,000  to the Sunol  Center  joint  venture  to pay for tenant
improvements  and leasing  commissions in connection with the final build-out of
this major tenant's space.  Now that all the required capital work is completed,
the Sunol  Center joint  venture is not expected to require any further  capital
contributions  for the next several  years.  None of the current leases at Sunol
Center expire before October 2001.

      Crystal Tree Commerce  Center was 94% leased as of December 31, 1996, down
2% from  the  previous  quarter.  During  the  current  quarter,  three  tenants
occupying a total of 4,418 square feet of space moved out,  while a  replacement
tenant moved into 2,884 square feet. During the next twelve months,  leases with
twelve tenants  totalling 12,753 square feet will expire.  The majority of these
tenants are  expected  to renew their  leases.  Market  conditions  in the South
Florida area remain very  competitive  and continued  tenant turnover is likely.
Property improvements during the first nine months of fiscal 1997 were comprised
mainly of  restriping  the parking  lot,  resurfacing  the retail  walkways  and
installing  new awnings on the fourth floor  balconies in the office  section of
the property.

     The 64,000 square foot 1881 Worcester  Road Office  Building was 51% leased
as of  December  31,  1996,  unchanged  from the prior  quarter.  As  previously
reported,  a tenant which had occupied 19% of the net leasable area moved out of
the  building  during the second  quarter,  although  its lease  obligation  was
scheduled  to  continue  until  December  1998.  During  the  third  quarter,  a
settlement  payment in the amount of $100,000 was  received  from this tenant in
return for a release from its remaining  lease  obligation.  The funds from this
settlement  will be used to pay the costs of newly leased space at the property.
During the quarter,  a lease  expansion and extension  agreement was signed with
the building's sole remaining  tenant.  This tenant,  which agreed to extend its
lease term from three to six years,  will now occupy the entire  second floor of
this  two-story  building,  increasing  its occupancy from 29% to 51% of the net
rentable area. The market for office space in the suburban  Boston area in which
1881 Worcester Road is located  continues to strengthen.  Average vacancy levels
at similar  buildings in the area have now declined below 5%. As a result,  very
few large blocks of space are available. Consequently,  management is cautiously
optimistic  that the leasing of the vacant first floor at 1881  Worcester  Road,
which comprises over 30,000 square feet,  will be successfully  completed in the
near term.

     The 625 North Michigan Office Building was 86% leased at December 31, 1996,
down 3% from the prior quarter.  A tenant occupying 15,639 square feet moved out
of the  building  during the current  quarter upon the  expiration  of its lease
obligation.  However,  the loss of this tenant was  partially  offset by certain
positive  leasing  developments  during the quarter.  Two tenants expanded their
spaces for a total of 2,358 square feet, two leases were signed with new tenants
occupying  4,724 square feet,  and one tenant renewed its lease for 2,109 square
feet.  The  modernization  of the  building's  elevator  controls  is  currently
underway, and this work is expected to continue for approximately one year at an
estimated total cost of approximately $700,000.

     The leasing  level at the  Warner/Red  Hill  Business  Center was 85% as of
December  31,  1996,  unchanged  from the  previous  quarter.  During  the third
quarter,  the property's  leasing team finalized one lease renewal with a tenant
occupying  1,080  square  feet of space.  Leases  with four  tenants  comprising
approximately  16,000 square feet of space will be expiring over the next twelve
months. The property's leasing team expects to renew most of these leases.

     As  previously  reported,  the  Partnership  elected early  application  of
Statement  of  Financial  Accounting  Standards  No.  121,  "Accounting  for the
Impairment of  Long-Lived  Assets and for  Long-Lived  Assets to Be Disposed Of"
(SFAS 121) in fiscal 1995. In accordance  with SFAS 121, an impairment loss with
respect to an operating  investment  property is recognized  when the sum of the
expected future net cash flows  (undiscounted  and without interest  charges) is
less than the carrying  amount of the asset.  An impairment  loss is measured as
the amount by which the  carrying  amount of the asset  exceeds  its fair value,
where fair value is defined as the amount at which the asset  could be bought or
sold in a current  transaction  between  willing  parties,  that is other than a
forced or liquidation  sale. The effect of such  application was the recognition
of impairment losses on the operating investment  properties owned by Warner/Red
Hill  Associates  and  Framingham  1881 - Associates  in fiscal  1995.  Based on
management's  analysis of potential  impairment in the fourth  quarter of fiscal
1996,  the  estimated  fair values of the Sunol Center,  625 North  Michigan and
Crystal Tree properties were below their net carrying amounts as of December 31,
1995.  Management's  estimates of future  undiscounted  cash flows for all three
properties  indicated that such carrying  amounts were expected to be recovered,
but, in the case of 625 North  Michigan and Crystal Tree,  the reversion  values
could be less than the carrying amounts at the time of disposition.  As a result
of such assessment,  the 625 North Michigan joint venture commenced recording an
additional  annual  depreciation  charge of $350,000 in calendar  1995,  and the
Partnership  commenced  recording an additional  annual  depreciation  charge of
$65,000 on the Crystal  Tree  property in fiscal  1996.  Both  adjustments  were
reflected in the Partnership's  consolidated  financial statements effective for
the fourth  quarter of fiscal  1996.  Such annual  charges  will  continue to be
recorded in future  periods.  Based on management's  analysis,  no change to the
depreciation on Sunol Center was required.

     At December 31, 1996, the  Partnership and its  consolidated  joint venture
had available  cash and cash  equivalents  of  approximately  $4,027,000.  These
funds,  along  with the  future  cash  flow  distributions  from  the  operating
properties,  will  be  utilized  for the  working  capital  requirements  of the
Partnership,  monthly loan  payments,  the funding of capital  enhancements  and
potential  leasing  costs  for  the  commercial  property  investments,  and for
distributions to the partners.  The source of future liquidity and distributions
to the  partners  is  expected  to be from  the  sales  or  refinancings  of the
operating  investment  properties.  Such sources of liquidity are expected to be
sufficient to meet the  Partnership's  needs on both a short-term  and long-term
basis.

Results of Operations
Three Months Ended December 31, 1996
------------------------------------

      The Partnership  reported net income of $22,000 for the three months ended
December 31, 1996,  as compared to a net loss of $416,000 for the same period in
the prior year. This favorable  change in net operating  results is attributable
to an increase in the Partnership's share of unconsolidated  ventures' income of
$119,000 and a decrease in the  Partnership's  operating  loss of $319,000.  The
increase  in the  Partnership's  share of  unconsolidated  ventures'  income  is
primarily  due to an  increase  in net  income  of the 625  North  Michigan  and
Monterra joint ventures. Net income at 625 North Michigan increased primarily as
a result of a property tax reassessment  which resulted in a lower valuation and
a decrease in real estate tax expense for the current  three-month  period.  Net
income at  Monterra  increased  largely  due to an  increase  in rental  income,
resulting from rental rate increases implemented over the past year.

      The Partnership's  operating loss, which includes the operating results of
the wholly-owned  Crystal Tree Commerce Center and the consolidated Sunol Center
joint  venture,  decreased by $319,000  for the three months ended  December 31,
1996,  mainly due to an  increase  in rental  income and a decrease  in property
operating expenses. The increase in rental income was the result of the increase
in  occupancy at Sunol Center over the past year.  Property  operating  expenses
decreased  mainly due to a decrease in repairs and maintenance and certain other
administrative  expenses for both the Sunol Center joint venture and the Crystal
Tree Commerce Center.
<PAGE>
Nine Months Ended December 31, 1996
-----------------------------------

      The Partnership's net loss decreased by $686,000 for the nine months ended
December  31,  1996,  when  compared to the same period in the prior year.  This
decrease in net loss is largely  attributable to a favorable  change of $310,000
in  the  Partnership's  share  of  unconsolidated   ventures'  operations.   The
improvement in the Partnership's  share of unconsolidated  ventures'  operations
for the nine months ended  December 31, 1996 is primarily  due to an increase in
the net income of the Warner/'Red Hill and 625 North Michigan joint ventures and
a  decrease  in the net  loss of the  Monterra  joint  venture.  Net  income  at
Warner/Red Hill increased  mainly due to the receipt of a real estate tax refund
during the current  period,  which related to calendar  1995 taxes,  and a small
increase in rental income. Net income at 625 North Michigan increased  primarily
as a result of a property tax  reassessment  which resulted in a lower valuation
and a decrease in real estate tax expense for the current nine-month period. Net
loss at Monterra decreased largely due to an increase in rental income resulting
from rental rate increases implemented over the past year.

      The Partnership's  operating loss, which includes the operating results of
the wholly-owned  Crystal Tree Commerce Center and the consolidated Sunol Center
joint  venture,  decreased by $376,000  for the nine months  ended  December 31,
1996,  mainly due to an increase in rental  income and a decrease in general and
administrative  expenses.  The  increase in rental  income was the result of the
increase  in  occupancy  at  Sunol  Center  over  the  past  year.  General  and
administrative  expenses  decreased mainly due to a decrease in certain required
professional services. The increase in rental income and the decrease in general
and administrative expenses were partially offset by an increase in depreciation
expense. Depreciation expense of the Sunol Center joint venture increased due to
the substantial  tenant improvement work which has occurred at the property over
the past year as a result of the leasing  activity.  In  addition,  depreciation
expense on the Crystal Tree  Commerce  Center is slightly  higher in the current
period as a result of the depreciation adjustment discussed further above.


<PAGE>


                                   PART II
                              Other Information

Item 1. Legal Proceedings

     As discussed in prior  quarterly  and annual  reports,  in November  1994 a
series of purported class actions (the "New York Limited  Partnership  Actions")
were filed in the United States District Court for the Southern  District of New
York concerning  PaineWebber  Incorporated's  sale and sponsorship of 70 limited
partnership  investments,  including  those  offered  by  the  Partnership.  The
lawsuits were brought against  PaineWebber  Incorporated  and Paine Webber Group
Inc.  (together   "PaineWebber"),   among  others,  by  allegedly   dissatisfied
partnership investors.  In March 1995, after the actions were consolidated under
the title In re  PaineWebber  Limited  Partnership  Litigation,  the  plaintiffs
amended their complaint to assert claims against a variety of other  defendants,
including  First Equity  Partners,  Inc. and Properties  Associates  1985,  L.P.
("PA1985"),  which are the General Partners of the Partnership and affiliates of
PaineWebber.  On May 30, 1995, the court certified class action treatment of the
claims asserted in the litigation.

     In January 1996,  PaineWebber signed a memorandum of understanding with the
plaintiffs in the New York Limited Partnership Actions outlining the terms under
which the parties have agreed to settle the case. Pursuant to that memorandum of
understanding,  PaineWebber  irrevocably  deposited  $125 million into an escrow
fund under the  supervision of the United States District Court for the Southern
District of New York to be used to resolve the  litigation in accordance  with a
definitive  settlement  agreement  and plan of  allocation.  On July  17,  1996,
PaineWebber and the class plaintiffs submitted a definitive settlement agreement
which has been preliminarily approved by the court and provides for the complete
resolution of the class action  litigation,  including  releases in favor of the
Partnership  and the General  Partners,  and the  allocation of the $125 million
settlement  fund among  investors  in the various  partnerships  at issue in the
case.  As part of the  settlement,  PaineWebber  also  agreed to  provide  class
members with certain financial  guarantees relating to some of the partnerships.
The details of the settlement are described in a notice mailed directly to class
members at the  direction of the court.  A final  hearing on the fairness of the
proposed  settlement  was held in December  1996, and a ruling by the court as a
result of this final hearing is currently pending.

      With regard to the Abbate and Bandrowski  actions  described in the Annual
Report on Form 10-K for the year ended March 31,  1996,  in  September  1996 the
court  dismissed  many  of  the  plaintiffs'  claims  as  barred  by  applicable
securities arbitration  regulations.  Mediation with respect to both actions was
held in December  1996. As a result of such  mediation,  a tentative  settlement
between  PaineWebber  and the  plaintiffs  was reached  which would  provide for
complete resolution of such actions.  PaineWebber  anticipates that releases and
dismissals with regard to these actions will be received by February 1997.

     Under certain limited circumstances,  pursuant to the Partnership Agreement
and other contractual  obligations,  PaineWebber affiliates could be entitled to
indemnification  for expenses and  liabilities in connection with the litigation
discussed above. However, PaineWebber has agreed not to seek indemnification for
any amounts it is required to pay in connection  with the  settlement of the New
York Limited  Partnership  Actions.  At the present time,  the Managing  General
Partner  cannot  estimate the impact,  if any, of the potential  indemnification
claims on the Partnership's financial statements, taken as a whole. Accordingly,
no provision for any liability  which could result from the eventual  outcome of
these  matters has been made in the  accompanying  financial  statements  of the
Partnership.

Item 2. through 5.   NONE

Item 6. Exhibits and Reports on Form 8-K

(a)  Exhibits:      NONE

(b)  Reports on Form 8-K:

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


<PAGE>



             PAINEWEBBER EQUITY PARTNERS ONE LIMITED PARTNERSHIP


                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the  Partnership  has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.


                              PAINEWEBBER EQUITY PARTNERS ONE
                                    LIMITED PARTNERSHIP


                              By:  First Equity Partners, Inc.
                                 Managing General Partner





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



Dated:  February 12, 1997