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 QUARTER ENDED JUNE 30, 1998

                                       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
                  June 30, 1998 and March 31, 1998 (Unaudited)
                                 (In thousands)

                                     ASSETS
                                                     June 30    March 31
                                                     -------    --------
Operating investment properties:
   Land                                            $   5,218    $  5,218
   Building and improvements                          32,766      32,691
                                                   ---------    --------
                                                      37,984      37,909
   Less accumulated depreciation                     (15,569)    (15,131)
                                                   ---------    --------
                                                      22,415      22,778

Investments in and notes receivable from
   unconsolidated joint ventures, at equity           24,051      24,369
Cash and cash equivalents                              3,888       3,268
Prepaid expenses                                           -          13
Accounts receivable                                      402          69
Accounts receivable - affiliates                         302         308
Deferred rent receivable                                  97         415
Deferred expenses, net                                   697         732
Other assets                                             290         290
                                                   ---------    --------
                                                   $  52,142    $ 52,242
                                                   =========    ========

                        LIABILITIES AND PARTNERS' CAPITAL

Net advances from consolidated ventures            $     226    $     32
Accounts payable and accrued expenses                    490         412
Interest payable                                          58          71
Bonds payable                                          1,420       1,420
Mortgage notes payable                                14,648      14,720
Partners' capital                                     35,300      35,587
                                                   ---------    --------
                                                   $  52,142    $ 52,242
                                                   =========    ========

                             See accompanying notes



<PAGE>


               PAINEWEBBER EQUITY PARTNERS ONE LIMITED PARTNERSHIP

                      CONSOLIDATED STATEMENTS OF OPERATIONS
          For the three months ended June 30, 1998 and 1997 (Unaudited)
                      (In thousands, except per Unit data)

                                                   1998        1997
                                                   ----        ----
Revenues:
   Rental income and expense
     reimbursements                             $   1,077     $   758
   Interest and other income                           51          73
                                                ---------     -------
                                                    1,128         831

Expenses:
   Interest expense                                   283         243
   Depreciation and amortization                      481         381
   Property operating expenses                        397         265
   Real estate taxes                                   96          80
   General and administrative                          89          66
   Bad debt expense                                     -          16
                                                ---------     -------
                                                    1,346       1,051
                                                ---------     -------
Operating loss                                       (218)       (220)

Investment income:
   Interest income on notes receivable
     from unconsolidated ventures                     200         200
   Partnership's share of unconsolidated
      ventures' income (losses)                       236         (38)
                                                ---------     -------

Net income (loss)                               $     218     $   (58)
                                                =========     =======

Net income (loss) per Limited
  Partnership Unit                              $    0.11     $ (0.03)
                                                =========     ========


Cash distributions per Limited
  Partnership Unit                              $    0.25     $   0.25
                                                =========     ========

  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 CHANGES IN PARTNERS' CAPITAL (DEFICIT)
         For the three months ended June 30, 1998 and 1997 (Unaudited)
                                 (In thousands)

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

Balance at March 31, 1997                     $   (950)        $ 38,813
Net loss                                            (1)             (57)
Cash distributions                                  (5)            (500)
                                              --------         --------
Balance at June 30, 1997                      $   (956)        $ 38,256
                                              =========        ========

Balance at March 31, 1998                     $   (973)        $ 36,560
Net income                                           2              216
Cash distributions                                  (5)            (500)
                                              ---------        --------
Balance at June 30, 1998                      $   (976)        $ 36,276
                                              =========        ========






















                             See accompanying notes



<PAGE>


               PAINEWEBBER EQUITY PARTNERS ONE LIMITED PARTNERSHIP

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
         For the three months ended June 30, 1998 and 1997 (Unaudited)
                Increase (Decrease) in Cash and Cash Equivalents
                                 (In thousands)
                                                        1998       1997
                                                        ----       ----
Cash flows from operating activities:
  Net income (loss)                                  $   218     $   (58)
  Adjustments to reconcile net income (loss) to
  net cash provided by operating activities:
   Partnership's share of unconsolidated 
     ventures' income (losses)                          (236)         38
   Depreciation and amortization                         481         381
   Amortization of deferred financing costs                5           5
   Changes in assets and liabilities:
     Prepaid expenses                                     13          13
     Accounts receivable                                (333)         97
     Accounts receivable - affiliates                      6         (52)
     Other assets                                         29           -
     Deferred rent receivable                            318           8
     Deferred expenses                                   (42)        (24)
     Accounts payable and accrued expenses                78         148
     Interest payable                                    (13)          -
     Net advances from consolidated ventures             194           -
                                                     -------     -------
      Total adjustments                                  500         614
                                                     -------     -------
      Net cash provided by operating activities          718         556
                                                     -------     -------

Cash flows from investing activities:
  Distributions from unconsolidated joint ventures       650         216
  Additions to operating investment properties           (75)        (12)
  Additional investments in unconsolidated joint
    ventures                                             (96)       (416)
                                                     -------     -------
      Net cash provided by (used in) investing
        activities                                       479        (212)
                                                     -------     -------

Cash flows from financing activities:
  Repayment of principal on mortgage notes payable       (72)        (35)
  Distributions to partners                             (505)       (505)
                                                     -------     -------
      Net cash used in financing activities             (577)       (540)
                                                     -------     -------

Net increase (decrease) in cash and cash equivalents     620        (196)

Cash and cash equivalents, beginning of period         3,268       4,325
                                                     -------     -------

Cash and cash equivalents, end of period             $ 3,888     $ 4,129
                                                     =======     =======

Cash paid during the period for interest             $   291     $   238
                                                     =======     =======
                             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, 1998. 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 June 30, 1998 and March 31, 1998 and revenues and expenses
for each of the three-month periods ended June 30, 1998 and 1997. Actual results
could differ from the estimates and assumptions used.

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

      Accounts  receivable  -  affiliates  at June 30,  1998 and March 31,  1998
includes  $113,000 and  $126,000,  respectively,  due from one joint venture for
interest earned on permanent loans and $174,000 and $167,000,  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 June 30,
1998  and  March  31,  1998  also  includes  $15,000  of  expenses  paid  by the
Partnership on behalf of one of the joint ventures during fiscal 1993.

      Included  in  general  and  administrative  expenses  for the  three-month
periods  ended June 30,  1998 and 1997 is  $45,000  and  $47,000,  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 three-month
period  ended  June 30,  1998  and  1997 is  $1,000  and  $5,000,  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  June  30,  1998,   the   Partnership   had   investments  in  four
unconsolidated  joint  venture  partnerships  (five at June 30,  1997) 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.  As discussed  further in Note 4,  effective in fiscal
1998 the  Partnership  assumed  control  over the  affairs  of  Warner/Red  Hill
Associates.  Accordingly,  this venture,  which had been accounted for under the
equity method in prior years, is presented on a consolidated  basis beginning in
the fourth quarter of fiscal 1998.

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

                    Condensed Combined Summary Of Operations
               For the three months ended March 31, 1998 and 1997
                                 (in thousands)

                                                     1998        1997
                                                     ----        ----

Revenues:
   Rental revenues and expense recoveries         $ 2,791     $ 2,686
   Interest and other income                           40          38
                                                  -------     -------
                                                    2,831       2,724
Expenses:
   Property operating expenses                        817       1,083
   Real estate taxes                                  421         473
   Mortgage interest expense                          175         217
   Interest expense payable to partner                200         200
   Depreciation and amortization                      758         780
                                                  -------     -------
                                                    2,371       2,753
                                                  -------     -------
Net income (loss)                                 $   460     $   (29)
                                                  =======     =======

Net income (loss):
   Partnership's share of combined
      income (loss)                               $   248     $   (26)
   Co-venturers' share of combined
      income (loss)                                   212          (3)
                                                  -------     -------
                                                  $   460     $   (29)
                                                  =======     =======

               Reconciliation of Partnership's Share of Operations
                For the three months ended June 30, 1998 and 1997
                                 (in thousands)

                                                     1998        1997
                                                     ----        ----

   Partnership's share of combined income
     (loss), as shown above                       $    248    $    (26)
   Amortization of excess basis                        (12)        (12)
                                                  --------    --------
   Partnership's share of unconsolidated
     ventures' income (losses)                    $    236    $    (38)
                                                  ========    ========

4. Operating Investment Properties
   -------------------------------

      At June 30, 1998, the Partnership's balance sheet includes three operating
investment  properties  (two at June 30, 1997):  the  wholly-owned  Crystal Tree
Commerce  Center,  the Sunol  Center  Office  Buildings,  owned by Sunol  Center
Associates,  a majority-owned  and controlled joint venture,  and the Warner/Red
Hill Business Center, owned by Warner/Red Hill Associates,  a majority-owned and
controlled joint venture.  Effective  August 1, 1997, the co-venture  partner in
Warner/Red Hill  Associates  assigned its interest in the joint venture to First
Equity  Partners,  Inc., the Managing  General  Partner of the  Partnership,  in
return for a release from any further  obligations  under the terms of the joint
venture  agreement.  As  a  result,  the  Partnership  assumed  control  of  the
operations of the  Warner/Red  Hill joint venture.  Accordingly,  the venture is
presented on a  consolidated  basis in the  Partnership's  financial  statements
beginning  in the fourth  quarter of fiscal  1998.  Previously  the  venture was
accounted  for on the equity  method  (see Note 3). 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 Warner/Red Hill Business
Center  consists  of three  two-story  office  buildings  totalling  93,895  net
rentable square feet located in Tustin,  California. The Partnership reports the
operations  of Sunol Center  Associates  and  Warner/Red  Hill  Associates  on a
three-month lag.

      The following is a combined summary of property operating expenses for the
Crystal  Tree  Commerce  Center,  the  Sunol  Center  Office  Buildings  and the
Warner/Red   Hill  Business  Center  (fiscal  1999  only)  as  reported  in  the
Partnership's  consolidated  statements of operations for the three months ended
June 30, 1998 and 1997 (in thousands):
<PAGE>

                For the three months ended June 30, 1998 and 1997
                                 (in thousands)

                                                    1998        1997
                                                    ----        ----
     Property operating expenses:
      Insurance                                  $     15    $     13
      Repairs and maintenance                         158          81
      Utilities                                        77          44
      Management fees                                  24          26
      Administrative and other                        123         101
                                                 --------    --------
                                                 $    397    $    265
                                                 ========    ========
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  and mature in years 2004 through  2017. In the event the operating
investment  property is sold,  the liability for the bond  assessments  would be
transferred  to the buyer.  Therefore,  the Sunol Center joint  venture would no
longer be liable for the bond assessments.

6.  Mortgage Notes Payable
    ----------------------

      Mortgage  notes payable at June 30, 1998 and March 31, 1998 consist of the
following (in thousands):

                                                   June 30        March 31
                                                   -------        --------
     9.125%  nonrecourse loan payable to
     an  insurance  company,   which  is
     secured  by the 625 North  Michigan
     Avenue     operating     investment
     property.  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 June 30,  1998 and  March
     31, 1998.                                    $ 6,164        $ 6,188

     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 June 30, 1998
     and March 31, 1998.                            3,304          3,318

     Nonrecourse   note  payable  to  an
     insurance  company which is secured
     by the  Warner/Red  Hill  operating
     investment  property.  The note was
     amended  and  restated  during 1994
     (see  discussion  below).  The note
     bears interest at 2.875% per annum,
     requires  monthly  payments  of $24
     and has a scheduled  maturity  date
     of  August  1,  2003.                          5,180          5,214
                                                  -------        -------
                                                  $14,648        $14,720 
                                                  =======        =======

      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 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, above
a specified  level after the  repayment 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.  It is not practicable for management to estimate the
fair value of the mortgage note secured by the Warner/Red Hill property  without
incurring excessive costs due to the unique terms of the note.

      In  addition  to  the  long-term   mortgage  debt  described   above,  the
Partnership has indemnified  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  September 1994, the
Partnership  obtained two new  nonrecourse,  current-pay  mortgage  loans in the
amounts of $3,600,000  secured by the Chandler's Reach Apartments and $4,920,000
secured  by  the  Monterra   Apartments.   The  Chandler's  Reach  and  Monterra
nonrecourse loans,  which are recorded on the books of the unconsolidated  joint
ventures,  both 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.


<PAGE>



               PAINEWEBBER EQUITY PARTNERS ONE LIMITED PARTNERSHIP

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

Information Relating to Forward-Looking Statements
--------------------------------------------------

      The following  discussion of financial condition includes  forward-looking
statements  which  reflect  management's  current  views with  respect to future
events and  financial  performance  of the  Partnership.  These  forward-looking
statements  are  subject to certain  risks and  uncertainties,  including  those
identified  in Item 7 of the  Partnership's  Annual  Report on Form 10-K for the
year ended March 31, 1998 under the heading  "Certain  Factors  Affecting Future
Operating  Results",  which could cause actual results to differ materially from
historical  results  or  those  anticipated.  The  words  "believe",   "expect",
"anticipate,"  and  similar  expressions  identify  forward-looking  statements.
Readers  are  cautioned  not to place undue  reliance  on these  forward-looking
statements,  which were made based on facts and conditions as they existed as of
the date of this report.  The  Partnership  undertakes no obligation to publicly
update or revise  any  forward-looking  statements,  whether  as a result of new
information, future events or otherwise.

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

      In light of the continued strength in the national real estate market with
respect to multi-family  apartment properties and the recent improvements in the
office/R&D  property markets,  management believes that this may be an opportune
time to begin the  process of selling  the  Partnership's  operating  investment
properties.   As  a  result,  management  is  currently  focusing  on  potential
disposition  strategies for the seven remaining investments in the Partnership's
portfolio.  Although there are no assurances,  it is currently contemplated that
sales of the Partnership's remaining assets could be completed within the next 2
years. 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,  marketing  efforts  for the  sale of the
Chandler's Reach and Monterra apartment  properties commenced during the quarter
ended June 30, 1998 and both  properties are currently  under contract for sale.
The  operations  of the five  commercial  office  and retail  properties  in the
Partnership's  portfolio are either stable or  improving.  As discussed  further
below,  management has begun the process of marketing the Sunol Center  property
for sale and has tentative  plans to market the 1881 Worcester Road property for
sale during the second half of calendar 1998. Given the zoning approval recently
received at the 625 North Michigan property, as discussed further below, and the
recent leasing  improvements at the Crystal Tree and Warner/Red Hill properties,
the  Partnership  is also  exploring  potential  sale  opportunities  for  these
properties.

      As discussed further in the Annual Report,  given the positive performance
of the  Chandler's  Reach  property  over the past several years and the current
strength  of  the  national  real  estate  market  for  the  sale  of  apartment
properties,  management had decided to explore potential sale  opportunities for
Chandler's  Reach during fiscal 1999.  During the fourth quarter of fiscal 1998,
the Partnership and its co-venture partner held extensive discussions concerning
marketing  strategies and requested  broker  proposals from national real estate
firms with a strong background in selling  properties like Chandler's Reach. The
Partnership  and its  co-venture  partner  reviewed  proposals  from the  broker
finalist  candidates  and  completed  interviews  with  them.  During  the first
quarter,  the  Partnership  and  its  co-venture  partner  selected  a  national
brokerage firm that is a leading  seller of apartment  properties in the Seattle
area. A marketing package was prepared, and comprehensive sales efforts began in
May 1998. As a result of such efforts, several offers to purchase the Chandler's
Reach  property were  received.  Subsequent to the quarter end, the  Partnership
executed a purchase and sale agreement with a prospective third party buyer. The
sale transaction  remains  contingent upon, among other things, the satisfactory
completion of the buyer's due  diligence.  As a result,  there are no assurances
that this sale transaction will be completed.

      The  Partnership  and its  co-venture  partner  have also  been  exploring
potential opportunities for the sale of the Monterra Apartments. As part of that
plan, the Partnership  initiated discussions during the fourth quarter of fiscal
1998 with  national  real estate  brokerage  firms with a strong  background  in
selling apartment properties. The Partnership solicited marketing proposals from
several  of these  firms.  During  the  first  quarter,  after  reviewing  their
respective  proposals  and  conducting  interviews,   the  Partnership  and  its
co-venture  partner  selected a national  brokerage  firm.  Sales materials were
prepared,  and an extensive marketing campaign began in May 1998. As a result of
such efforts,  the Partnership  received several offers to purchase the Monterra
property  and  negotiated  a  purchase  and  sale  agreement  with  one  of  the
prospective  third-party  buyers  subsequent  to the  quarter  end.  As with the
Chandler's  Reach sale, this sale  transaction  remains  contingent  upon, among
other things,  the  satisfactory  completion of the buyer's due diligence.  As a
result, there are no assurances that the sale transaction will be completed.

      Sunol Center,  in  Pleasanton,  California,  remained 100% leased to three
tenants  at June 30,  1998.  None of the  current  leases at Sunol  Center  were
scheduled to expire before  October 2001. The overall market remains strong with
increasing  rental rates and a low vacancy level.  The existing  rental rates on
the  leases at Sunol  Center  are  significantly  below  current  market  rates.
Provided  there  is  not a  dramatic  increase  in  either  planned  speculative
development  or  build-to-suit  development  with  current  tenants in the local
market,  the Partnership  would be expected to achieve a materially  higher sale
price for the Sunol  Center  property as the existing  leases with  below-market
rental rates approach their expiration  dates. The Partnership had been planning
to hold the Sunol  Center  property  over the near term in order to capture this
expected  increase in value.  However,  during the third  quarter of fiscal 1998
management  learned that the largest tenant at Sunol Center,  which occupies 52%
of the property's leasable area, wanted to consolidate its operations at another
building  in the  local  market  and was  interested  in  negotiating  an  early
termination  of their lease  agreement.  During the quarter ended June 30, 1998,
the  Partnership  reached an agreement  with this tenant on a  termination  plan
whereby  the tenant  will be  released  from all  obligations  under their lease
effective  in May 1999 in return for a payment of $125,000  to the  Partnership.
This lease  termination  may  provide the  Partnership  with an  opportunity  to
capture the expected  increase in the value of Sunol Center sooner than had been
anticipated.  In light of this situation,  and given the current strength of the
local market  conditions,  management  believes that this may be the appropriate
time to begin  marketing the Sunol  property for sale.  During the quarter ended
June 30, 1998,  the  Partnership  interviewed  potential real estate brokers and
selected a national  real  estate  firm that is a leading  seller of  R&D/office
properties.  A marketing package was subsequently  finalized,  and comprehensive
sales efforts began in June.

      The 64,000 square foot 1881 Worcester Road Office Building was 100% leased
as of June 30, 1998, unchanged from the previous quarter. With the property 100%
leased to two financially  strong tenants and no lease  expirations  until 2002,
management  had been  developing  potential  sale  strategies  for  this  asset.
However,  during the current  quarter the tenant leasing the entire second floor
of the property informed the Partnership that it is consolidating its operations
and requested a lease  termination which would be effective in the third quarter
of calendar year 1998.  This tenant's  lease does not expire until  February 28,
2003. Negotiations with this tenant concerning a lease termination agreement are
currently  underway.  If a lease  termination  agreement  with  this  tenant  is
reached,  the  property's  leasing  team  expects  to  re-lease  this space at a
significantly  higher rental rate, which could result in a higher sale price for
the property.  During fiscal 1998, the former operator of a gas station abutting
the 1881  Worcester  Road  property  notified  the  Partnership  of a leak in an
underground  storage  tank  on the  gas  station  property  and of the  risk  of
potential  contamination  of the  Partnership's  property.  Subsequent  to  this
notification,  the Partnership has received an  indemnification  from the former
operator of the gas  station  against any loss,  cost or damage  resulting  from
failure to remediate the contamination.  The extent of the contamination and any
resulting impact on the future operations and market value of the 1881 Worcester
Road property cannot be determined at the present time. Nonetheless,  management
believes that the uncertainty  regarding the lease  termination  request and the
contamination issue could depress the sale price for the property.  As a result,
the marketing efforts for this property have been delayed.  After the re-leasing
of the second floor and resolution of the ground water contamination issue, this
property is expected to be marketed for sale later in calendar year 1998.

      The Warner/Red  Hill Business Center was 98% leased and 84% occupied as of
June 30, 1998, up from 74% leased and occupied at the end of the prior  quarter.
During the third quarter of fiscal 1998, a tenant  occupying  13,160 square feet
declared  bankruptcy  and moved from the  building in January  1998.  During the
quarter ended June 30, 1998, the  Partnership  signed a lease with a replacement
tenant for the entire 13,160 square foot space.  This tenant is expected to take
occupancy next quarter. Also, leases were signed with two other new tenants that
moved into their space during the quarter. These tenants occupy a total of 7,530
square  feet.  In  addition,  lease  expansions  were signed with 2 tenants that
increased  their space by a total of 2,936 square feet. Over the next 12 months,
leases with 6 tenants  occupying 30,371 square feet will expire.  The property's
leasing team expects that 4 of these tenants  occupying  27,897 square feet will
renew at higher rental rates, and that the remaining space will be leased to new
tenants.  Local  rental  rates for office space  continue to  experience  modest
increases due to the lack of speculative office construction in the local market
and the  continued  demand for office  space.  The  property's  leasing  team is
cautiously  optimistic  that the  general  market  conditions  will  continue to
improve  throughout  calendar  1998.  Effective  August 1, 1997,  the co-venture
partner in Warner/Red Hill Associates assigned its interest in the joint venture
to First Equity Partners, Inc., the Managing General Partner of the Partnership,
in return  for a release  from any  further  obligations  under the terms of the
joint venture  agreement.  As a result,  the Partnership  assumed control of the
operations of the  Warner/Red  Hill joint venture.  Accordingly,  the venture is
presented on a  consolidated  basis in the  Partnership's  financial  statements
beginning in the fourth quarter of fiscal 1998.  Previously the venture had been
accounted for on the equity method.

      The 625 North  Michigan  Office  Building  in Chicago,  Illinois,  was 95%
leased and 87% occupied at June 30, 1998, compared to 88% leased and occupied at
the end of the prior quarter.  As discussed  further in the Annual  Report,  the
property's  leasing team had been  negotiating  a lease with a  prospective  new
tenant which would occupy  approximately 22,000 square feet of space. During the
quarter ended June 30, 1998, a lease was signed with this prospective tenant for
24,276  square feet.  The space is now being  renovated in  preparation  for the
tenant's  expected  occupancy in September 1998. In addition,  subsequent to the
quarter-end   a  lease  was  signed  with  an  existing   tenant  that  occupies
approximately  8,000  square feet.  This tenant will  relocate and expand into a
total of 10,200 square feet. The downtown  Chicago real estate market  continues
to display an improving  trend. A competitive  office  property within the local
market has recently obtained approvals to convert its lower floors into a hotel.
This should  result in the removal of 290,000  square feet of office  space from
the  market.  In  addition,  an office  tenant  at that  property  has  recently
completed a 62,000 square foot  expansion,  which brings the occupancy  level in
the building's  office portion to 100%. In this local market,  where there is no
current or planned new  construction  of office space,  this reduction in vacant
office space has resulted in a reduction in the market  vacancy level and places
more upward pressure on rental rates. The higher effective rents currently being
achieved at 625 North  Michigan are expected to increase  cash flow and value as
new tenants sign leases and existing  tenants  sign lease  renewals.  Retail and
hotel  development  in the local market  continues,  as evidenced by plans for a
Nordstrom's-anchored  95,000  square  foot  retail  development  which  recently
received  preliminary approval from the City. This proposed  development,  which
will be located  two blocks  from 625 North  Michigan,  is part of a master plan
that  includes  several  new  hotels,   entertainment  and  parking   facilities
encompassing  five city  blocks.  Management  continues  to analyze a  potential
project for the property which includes an upgrade to the building lobby and the
addition of a major retail  component to the building's  North  Michigan  Avenue
frontage.  Rental rates paid by high-end  retailers on North Michigan Avenue are
substantially greater than those paid by office tenants. While the costs of such
a project would be substantial,  it could have a significant  positive effect on
the market value of the 625 North  Michigan  property.  During the quarter ended
June 30, 1998,  preliminary  approval was received  from the City to enclose the
arcade  sections of the first floor of the 625 North  Michigan  building,  which
opens the way for this potential retail development. Formal approval is expected
to be  received  at the  September  meeting of the City  Council.  Now that this
preliminary  approval has been obtained,  the Partnership is exploring potential
sale opportunities for this property.

      The Crystal Tree  Commerce  Center in North Palm Beach,  Florida  remained
100%  leased  and  occupied  for the  quarter  ended June 30,  1998.  During the
quarter,  seven  tenants  occupying a total of 9,197 square feet  renewed  their
leases.  One tenant  occupying  1,659  square feet moved from the Center and the
space was leased to a new  tenant.  Over the next twelve  months,  leases with 9
tenants  occupying 8,013 square feet will expire.  All 9 tenants are expected to
renew their leases.  Rental rates and  occupancy  levels in the local market are
continuing to increase gradually.  However,  rents are not expected to rise to a
level over the near term that would  justify  new  construction.  Management  is
continuing  to position  Crystal  Tree  Commerce  Center for a possible  sale by
having the property's management and leasing team negotiate rental rates for new
leases on a triple-net  basis.  This requires each tenant to be 100% responsible
for its  share  of  operating  expenses.  Currently,  53% of the  leases  at the
property  are on a  triple-net  basis.  Consequently,  at this time the property
owner is responsible for the tenant's portion of operating expenses above a base
amount for a total of 47% of the  leases.  Because  most new leases in the local
market are on a  triple-net  basis,  this  conversion  is  expected  to increase
interest  from  prospective  buyers of the  property and result in a higher sale
price.

      At June 30, 1998, the Partnership and its  consolidated  joint venture had
available cash and cash  equivalents of approximately  $3,888,000.  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 its 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  refinancing  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 June 30, 1998
--------------------------------

      There was a $276,000  favorable change in the  Partnership's net operating
results  for the three  months  ended June 30,  1998 when  compared  to the same
period  in the prior  year.  This  favorable  change  in the  Partnership's  net
operating  results  was  mainly  due  to a  $274,000  favorable  change  in  the
Partnership's   share  of   unconsolidated   ventures'  income   (losses).   The
Partnership's   share  of  unconsolidated   ventures'  income  (losses)  changed
primarily as a result of favorable  changes in the net operating  results of the
Monterra,  Chandler's  Reach,  1881  Worcester Road and 625 North Michigan joint
ventures. The favorable changes in the net operating results of the Monterra and
Chandler's Reach joint ventures were mainly due to an increase in average rental
rates  during the  current  three-month  period as a result of the strong  local
apartment markets, along with reductions in certain administrative expenses. The
favorable  changes in net operating results at 1881 Worcester Road and 625 North
Michigan  were  primarily  due to increases in average  occupancy at both of the
properties.  The favorable change in net operating results at 625 North Michigan
was also due to a decrease in operating expenses of $142,000. Operating expenses
decreased  at 625 North  Michigan  due to a $69,000  reduction  in  repairs  and
maintenance expenses and a $58,000 decline in real estate taxes.

      The  increase  in the  Partnership's  share of income  from the four joint
ventures  discussed  above was partially  offset by the  Partnership's  share of
income realized from Warner/Red Hill Associates during fiscal 1998. As discussed
above, the operating  results of Warner/Red Hill are presented on a consolidated
basis in the Partnership's  financial  statements for the current period. In the
prior period, the Partnership's share of the net operating results of Warner/Red
Hill  Associates  was  included  in the  Partnership's  share of  unconsolidated
ventures' losses.

      The Partnership's  operating loss decreased by $2,000 for the three months
ended June 30, 1998 when  compared  to the same  period in the prior  year.  The
Partnership's  operating  loss,  which  includes  the  operating  results of the
wholly-owned  Crystal Tree Commerce Center and the consolidated Sunol Center and
Warner/Red Hill (fiscal 1999 only) joint ventures,  decreased  mainly due to the
inclusion of the operating  results of the Warner/Red  Hill joint venture during
the  current  period,  as  explained  above.  Warner/Red  Hill had net income of
$44,000 during the current three-month period. In addition, net income increased
at the  Sunol  Center  joint  venture  primarily  due to an  increase  in tenant
reimbursements.  The  increases in net income from the  consolidated  Warner/Red
Hill and Sunol Center joint  ventures were offset by an increase in  deprecation
expense on the wholly-owned Crystal Tree Commerce Center, a decrease in interest
income earned on the Partnership's  cash and cash equivalents and an increase in
general and administrative  expenses.  Depreciation  expense on the Crystal Tree
property  increased for the current period as a result of a reassessment  of the
Partnership's  depreciation policy based on a re-evaluation of the Partnership's
anticipated  remaining holding period for this asset.  Interest income earned on
the  Partnership's  cash  reserves  decreased by $16,000 due to a decline in the
average amount of cash and cash equivalents. General and administrative expenses
increased  by  $22,000  mainly due to an  increase  in  certain  required  legal
expenses.



<PAGE>


                                     PART II
                                Other Information

Item 1. Legal Proceedings   NONE

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:  August 11, 1998