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

                                     ASSETS
                                                September 30   March 31
                                                ------------   --------
Operating investment properties:
   Land                                          $   5,218     $  5,218
   Building and improvements                        32,817       32,691
                                                 ---------     --------
                                                    38,035       37,909
   Less accumulated depreciation                   (16,013)     (15,131)
                                                 ---------     --------
                                                    22,022       22,778

Investments in and notes receivable from
   unconsolidated joint ventures, at equity         23,787       24,369
Cash and cash equivalents                            4,408        3,118
Restricted cash                                        126          150
Prepaid expenses                                         -           13
Accounts receivable                                    387           69
Accounts receivable - affiliates                       194          308
Deferred rent receivable                                97          415
Deferred expenses, net                                 732          732
Other assets                                           290          290
                                                 ---------     --------
                                                 $  52,043     $ 52,242
                                                 =========     ========

                        LIABILITIES AND PARTNERS' CAPITAL

Net advances from consolidated ventures          $     162     $     32
Accounts payable and accrued expenses                  703          412
Interest payable                                       130           71
Bonds payable                                        1,385        1,420
Mortgage notes payable                              14,574       14,720
Partners' capital                                   35,089       35,587
                                                 ---------     --------
                                                 $  52,043     $ 52,242
                                                 =========     ========





                             See accompanying notes


<PAGE>


               PAINEWEBBER EQUITY PARTNERS ONE LIMITED PARTNERSHIP

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

                                Three Months Ended      Six  Months Ended
                                   September 30,          September 30,
                                ------------------      -----------------
                                   1998      1997         1998     1997
                                   ----      ----         ----     ----
Revenues:
   Rental income and expense
     reimbursements               $ 1,035  $   754      $ 2,112  $ 1,512
   Interest and other income           63       60          114      133
                                  -------  -------      -------   ------
                                    1,098      814        2,226    1,645

Expenses:
   Interest expense                   283      242          566      485
   Depreciation and amortization      486      322          967      703
   Property operating expenses        333      291          730      556
   Real estate taxes                   64       79          160      159
   General and administrative         119      174          208      240
   Bad debt expense                     -        -            -       16
                                  -------  -------      -------   ------
                                    1,285    1,108        2,631    2,159
                                  -------  -------      -------   ------
Operating loss                       (187)    (294)        (405)    (514)

Investment income:
   Interest income on notes 
     receivable from 
     unconsolidated ventures          200      200          400      400
   Partnership's share of 
     unconsolidated ventures'
     income                           281       65          517       27
                                  -------  -------      -------   ------

Net income (loss)                 $   294  $   (29)     $   512   $  (87)
                                  =======  =======      =======   ======

Net income (loss) per Limited
  Partnership Unit                $  0.14  $ (0.01)     $  0.25   $(0.04)
                                  =======  =======      =======   ======

Cash distributions per Limited
  Partnership Unit                $  0.25  $  0.25      $  0.50   $ 0.50
                                  =======  =======      =======   ======

   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 six months ended September 30, 1998 and 1997 (Unaudited)
                                 (In thousands)

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

Balance at March 31, 1997                     $   (950)        $ 38,813
Net loss                                            (1)             (86)
Cash distributions                                 (10)          (1,000)
                                              --------         --------
Balance at September 30, 1997                 $   (961)        $ 37,727
                                              =========        ========

Balance at March 31, 1998                     $   (973)        $ 36,560
Net income                                           5              507
Cash distributions                                 (10)          (1,000)
                                              --------         --------
Balance at September 30, 1998                 $   (978)        $ 36,067
                                              ========         ========























                             See accompanying notes


<PAGE>


               PAINEWEBBER EQUITY PARTNERS ONE LIMITED PARTNERSHIP
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
        For the six months ended September 30, 1998 and 1997 (Unaudited)
                Increase (Decrease) in Cash and Cash Equivalents
                                 (In thousands)

                                                               1998       1997
                                                               ----       ----
Cash flows from operating activities:
  Net income (loss)                                         $    512     $  (87)
  Adjustments to reconcile net income (loss) to
  net cash provided by operating activities:
   Partnership's share of unconsolidated ventures' income       (517)       (27)
   Depreciation and amortization                                 967        703
   Amortization of deferred financing costs                       10         10
   Changes in assets and liabilities:
     Prepaid expenses                                             13         13
     Accounts receivable                                        (318)        87
     Accounts receivable - affiliates                            114        (12)
     Deferred rent receivable                                    318         17
     Deferred expenses                                           (95)       (85)
     Accounts payable and accrued expenses                        291       186
     Interest payable                                              59         -
     Net advances from consolidated ventures                      130         -
                                                            ---------    ------
      Total adjustments                                           972       892
                                                            ---------    ------
      Net cash provided by operating activities                 1,484       805
                                                            ---------    ------

Cash flows from investing activities:
  Distributions from unconsolidated joint ventures              1,476       554
  Additions to operating investment properties                   (126)        -
  Net withdrawals from restricted cash                             24         -
  Additional investments in unconsolidated joint ventures        (377)     (660)
                                                            ---------    ------
      Net cash provided by (used in) investing activities         997      (106)
                                                            ---------    ------

Cash flows from financing activities:
  Repayment of principal on mortgage notes payable               (146)      (70)
  Repayment of district bond assessments                          (35)      (31)
  Distributions to partners                                    (1,010)   (1,010)
                                                            ---------    ------
      Net cash used in financing activities                    (1,191)   (1,111)
                                                            ---------    ------

Net increase (decrease) in cash and cash equivalents            1,290      (412)

Cash and cash equivalents, beginning of period                  3,118     4,325
                                                            ---------    ------
Cash and cash equivalents, end of period                    $   4,408    $3,913
                                                            =========    ======
Cash paid during the period for interest                    $     497    $  475
                                                            =========    ======


                             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  September  30, 1998 and March 31, 1998 and revenues and
expenses for each of the three-and  six-month  periods ended  September 30, 1998
and 1997. Actual results could differ from the estimates and assumptions used.

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

      Accounts  receivable - affiliates at September 30, 1998 and March 31, 1998
includes  $179,000 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  September 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.    In   addition,    accounts
receivable-affiliates  at March 31, 1998  includes  $126,000  due from one joint
venture for interest earned on a permanent loan.

      Included in general and administrative  expenses for the six-month periods
ended  September  30,  1998  and  1997 is  $91,000  and  $90,000,  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  six-month
periods ended  September  30, 1998 and 1997 is $2,000 and $7,000,  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  September  30,  1998,  the  Partnership  had  investments  in  four
unconsolidated joint venture partnerships (five at September 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.

      Subsequent to the end of the quarter,  on October 2, 1998,  Lake Sammamish
Limited Partnership and Crow PaineWebber LaJolla Limited Partnership,  two joint
ventures in which the Partnership has an interest,  sold the properties known as
the  Chandler's  Reach  Apartments  and  the  Monterra  Apartments  to the  same
unrelated third parties.  Chandler's Reach, located in Redmond,  Washington, was
sold for $17.85 million, and Monterra, located in LaJolla,  California, was sold
for $20.1  million.  The  Partnership  received  net  proceeds of  approximately
$12,359,000 from the sale of Chandler's  Reach after deducting  closing costs of
approximately $561,000,  closing proration adjustments of approximately $55,000,
the repayment of the existing  mortgage note of  approximately  $3,415,000 and a
prepayment penalty of approximately  $354,000 (of which $205,000 was paid by the
buyer),  and  a  payment  of  approximately   $1,311,000  to  the  Partnership's
co-venture  partner for its share of the sale  proceeds in  accordance  with the
joint venture agreement.  The Partnership received net proceeds of approximately
$14,796,000  from  the  sale  of  Monterra  after  deducting  closing  costs  of
approximately $306,000, closing proration adjustments of approximately $114,000,
the repayment of the existing  mortgage note of  approximately  $4,672,000 and a
prepayment penalty of approximately  $500,000 (of which $295,000 was paid by the
buyer),  and a payment of approximately  $7,000 to the Partnership's  co-venture
partner for its share of the sale proceeds in accordance  with the joint venture
agreement.  The  Partnership  will  distribute  the  majority  of the net  sales
proceeds from the sales of the Chandler's  Reach and Monterra  properties in the
form of a special  distribution to be paid on November 13, 1998 with the regular
quarterly distribution for the quarter ended September 30, 1998.

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

                    Condensed Combined Summary Of Operations
           For the three and six months ended June 30, 1998 and 1997
                                 (in thousands)

                                Three Months Ended      Six  Months Ended
                                     June 30,               June 30,
                                ------------------      -----------------
                                   1998      1997         1998     1997
                                   ----      ----         ----     ----

Revenues:
   Rental revenues and expense
     recoveries                 $ 2,822   $ 2,865       $ 5,613   $ 5,551
   Interest and other income         63        54           103        92
                                -------   -------       -------   -------

                                  2,885     2,919         5,716     5,643
Expenses:
   Property operating expenses      822     1,067         1,639     2,150
   Real estate taxes                548       578           969     1,051
   Mortgage interest expense        176       215           351       432
   Interest expense payable to
      partner                       200       200           400       400
   Depreciation and amortization    766       821         1,524     1,601
                                -------   -------       -------   -------
                                  2,512     2,881         4,883     5,634
                                -------   -------       -------   -------
Net income                      $   373   $    38       $   833   $     9
                                =======   =======       =======   =======

Net income:
   Partnership's share of
      combined income (loss)    $   292   $    76       $   540   $    50
   Co-venturers' share of 
      combined income (loss)         81       (38)          293       (41)
                                -------   -------       -------   -------
                                $   373   $    38       $   833   $     9
                                =======   =======       =======   =======

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

                                    Three Months Ended     Six  Months Ended
                                       September 30,          September 30,
                                    ------------------     ------------------
                                     1998       1997        1998       1997
                                     ----       ----        ----       ----

   Partnership's share of combined
     income, as shown above         $   292    $   76      $   540    $   50
   Amortization of excess basis         (11)      (11)         (23)      (23)
                                    -------    ------      -------    ------
   Partnership's share of
     unconsolidated ventures' 
     income                         $   281    $   65      $   517    $   27
                                    =======    ======      =======    ======

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

      At September 30, 1998,  the  Partnership's  balance sheet  includes  three
operating  investment  properties (two at September 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 and six months
ended September 30, 1998 and 1997 (in thousands):

                                   Three Months Ended      Six  Months Ended
                                       September 30,          September 30,
                                    ------------------     ------------------
                                     1998       1997        1998       1997
                                     ----       ----        ----       ----
     Property operating expenses:
      Insurance                    $   15      $  15       $   30     $   30
      Repairs and maintenance         103        109          261        190
      Utilities                        83         51          160         95
      Management fees                  24         24           48         50
      Administrative and other        108         92          231        191
                                   ------      -----       ------     ------
                                   $  333      $ 291       $  730     $  556
                                   ======      =====       ======     ======

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 September 30, 1998 and March 31, 1998 consist of
the following (in thousands):

                                                 September 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  September  30,  1998 and
     March 31, 1998.                                 $ 6,139        $ 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 September 30,
     1998  and  March  31,  1998.                      3,290          3,318
<PAGE>

     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.                             5,145          5,214
                                                     -------        -------
                                                     $14,574        $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 had 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 were recorded on the books of the unconsolidated  joint
ventures,  both had  terms of  seven  years  and were  scheduled  to  mature  in
September of 2001.  The  Chandler's  Reach loan bore interest at a rate of 8.33%
and required monthly  principal and interest  payments of $29,000.  The Monterra
loan  bore  interest  at a rate of 8.45%  and  required  monthly  principal  and
interest  payments of $40,000.  As discussed  further in Note 3, the outstanding
balances of these  mortgage  loans were repaid in full out of the proceeds  from
the sales of the  Chandler's  Reach and Monterra  properties  which  occurred on
October 2, 1998.


<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 has been focusing on potential disposition
strategies  for  the  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 by the end of calendar  year
1999.  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  were sold  subsequent to the quarter
ended  September  30, 1998.  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 as soon as certain  leasing and  environmental
issues are  resolved.  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.

      Subsequent to the end of the quarter,  on October 2, 1998,  Lake Sammamish
Limited Partnership and Crow PaineWebber LaJolla Limited Partnership,  two joint
ventures in which the Partnership has an interest,  sold the properties known as
the  Chandler's  Reach  Apartments  and  the  Monterra  Apartments  to the  same
unrelated third parties.  Chandler's Reach, located in Redmond,  Washington, was
sold for $17.85 million, and Monterra, located in LaJolla,  California, was sold
for $20.1  million.  The  Partnership  received  net  proceeds of  approximately
$12,359,000 from the sale of Chandler's  Reach after deducting  closing costs of
approximately $561,000,  closing proration adjustments of approximately $55,000,
the repayment of the existing  mortgage note of  approximately  $3,415,000 and a
prepayment penalty of approximately  $354,000 (of which $205,000 was paid by the
buyer),  and  a  payment  of  approximately   $1,311,000  to  the  Partnership's
co-venture  partner for its share of the sale  proceeds in  accordance  with the
joint venture agreement.  The Partnership received net proceeds of approximately
$14,796,000  from  the  sale  of  Monterra  after  deducting  closing  costs  of
approximately $306,000, closing proration adjustments of approximately $114,000,
the repayment of the existing  mortgage note of  approximately  $4,672,000 and a
prepayment penalty of approximately  $500,000 (of which $295,000 was paid by the
buyer),  and a payment of approximately  $7,000 to the Partnership's  co-venture
partner for its share of the sale proceeds in accordance  with the joint venture
agreement.

      Despite  incurring sizable  prepayment  penalties on the repayment of both
outstanding first mortgage loans,  management  believed that the current sale of
the  Chandler's  Reach and Monterra  properties was in the best interests of the
Limited Partners due to the exceptionally strong market conditions that exist at
the present time and which resulted in the achievement of very favorable selling
prices.  The Partnership  will distribute the majority of the net sales proceeds
from the sales of the Chandler's Reach and Monterra  properties in the form of a
special  distribution to be paid on November 13, 1998 with the regular quarterly
distribution  for the quarter  ended  September  30,  1998. A portion of the net
proceeds  (10% or less)  may be  retained  and added to the  Partnership's  cash
reserves to ensure that the Partnership has sufficient capital resources to fund
its share of potential capital improvement  expenses at its remaining investment
properties.   The  Managing   General   Partner  is  currently   analyzing   the
Partnership's  potential  future capital  requirements in order to determine the
exact  amount,  if any,  that the  Partnership  should  retain from the net sale
proceeds.
<PAGE>

      Sunol Center,  in  Pleasanton,  California,  remained 100% leased to three
tenants at September 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 believed that this was the appropriate time
to begin  marketing the Sunol  property for sale.  During the quarter ended June
30, 1998, the Partnership began exploring potential  opportunities to sell Sunol
Center,  while the property's leasing team  simultaneously  worked on re-leasing
the space that becomes  available  in May 1999.  As part of these  efforts,  the
Partnership   initiated  discussions  with  real  estate  firms  with  a  strong
background in selling properties like Sunol Center. The Partnership subsequently
selected  a  national  firm that is a leading  seller of this type of  property.
Preliminary  sales  materials were prepared and initial  marketing  efforts were
undertaken.  A  marketing  package was then  finalized  and  comprehensive  sale
efforts began in June 1998. As a result of those  efforts,  several  offers were
received.  After  completing  an  evaluation  of these  offers and the  relative
strength of the prospective  purchasers,  the  Partnership  selected an offer. A
purchase  and  sale  agreement  was  negotiated  with an  unrelated  third-party
prospective  buyer  and a  non-refundable  deposit  was made  subsequent  to the
quarter  end.  While  there  can be no  assurances  that a  transaction  will be
consummated,  this  prospective  buyer is expected to complete its due diligence
work and close on this transaction by December 1, 1998. If the sale closes,  the
net proceeds would be distributed to the Limited Partners.

     The 64,000 square foot 1881 Worcester Road Office  Building was 100% leased
as of September 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 first quarter of fiscal 1999 the tenant  leasing the entire
second floor of the property  informed the Partnership  that it is consolidating
its operations and requested a lease  termination.  This tenant's lease does not
expire until February 28, 2003. Negotiations with this tenant concerning a lease
termination  agreement are currently  underway.  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.

     The  Warner/Red  Hill  Business  Center was 97% leased and  occupied  as of
September  30,  1998,  compared to 98% leased and 84% 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
took  occupancy  during the quarter ended  September 30, 1998. In addition,  the
bankruptcy  case with the tenant that  occupied the 13,160 square foot space was
resolved during the current quarter, with the Partnership receiving a settlement
of $100,701  before  payment of attorney  fees.  During the quarter,  one tenant
occupying  a total of 1,467  square  feet  renewed  its  lease,  and one  tenant
occupying  1,165  square  feet moved from the  center.  Over the next 12 months,
leases with 5 tenants  occupying 34,223 square feet will expire.  The property's
leasing team expects that 4 of these tenants  occupying  18,957 square feet will
renew at higher rental rates, and that the remaining space will be leased to new
tenants.  With an  occupancy  level of 97% and a  stable  base of  tenants,  the
Partnership  believes  it may be an  opportune  time  to  sell  Warner/Red  Hill
Business Center. As part of a plan to market the property for sale,  discussions
are being held with real  estate  firms with a specialty  in selling  properties
like Warner/Red Hill Business  Center.  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 September 30, 1998. Three tenants occupying a total of 4,634
square  feet  moved  from the  building  when their  leases  expired  during the
quarter.  One tenant  occupying 2,162 square feet renewed its lease and expanded
its space by an additional  1,107 square feet.  Another tenant  occupying  1,926
square feet renewed its lease. As previously  reported,  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.  This tenant took occupancy  during the quarter ended  September 30, 1998.
Also during the current quarter, 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 was received at the September  meeting of the City
Council. Now that this 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  September  30,  1998.  During the
quarter,  two tenants  occupying  a total of 3,004  square  feet  renewed  their
leases.  Two tenants  occupying  2,050 square feet moved from the Center and the
space was leased to two new tenants.  Over the next twelve months, leases with 9
tenants  occupying 8,143 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,  56% 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 44% 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.  With the  occupancy  level of 100% and a  stable  base of  tenants,  the
Partnership  believes it may be an opportune  time to sell Crystal Tree Commerce
Center.  As part of a plan to market  the  property  for sale,  the  Partnership
initiated discussions with real estate firms with a strong background in selling
properties like Crystal Tree Commerce Center. Subsequent to the quarter end, the
Partnership selected a Florida real estate firm that is a leading seller of this
type of property.

      At September 30, 1998, the Partnership and its consolidated  joint venture
had available  cash and cash  equivalents  of  approximately  $4,534,000.  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.

      As noted above, the Partnership  expects to be liquidated  within the next
one to two years.  Notwithstanding  this, the  Partnership  believes that it has
made all necessary  modifications to its existing systems to make them year 2000
compliant and does not expect that  additional  costs  associated with year 2000
compliance,  if any, will be material to the Partnership's results of operations
or financial position.

Results of Operations
Three Months Ended September 30, 1998
-------------------------------------

      There was a $323,000  favorable change in the  Partnership's net operating
results for the three months ended  September 30, 1998 when compared to the same
period  in the prior  year.  This  favorable  change  in the  Partnership's  net
operating results was due to a $216,000  increase in the Partnership's  share of
unconsolidated  ventures'  income  and a $107,000  decline in the  Partnership's
operating  loss. The  Partnership's  share of  unconsolidated  ventures'  income
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.  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  changes  in net
operating results at 1881 Worcester Road and 625 North Michigan were also due to
a  decrease  in  operating  expenses.   Operating  expenses  decreased  at  both
properties primarily due to a reduction in repairs and maintenance expenses.

      The  increase  in  the  Partnership's   share  of  income  from  the  four
unconsolidated  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' income.

      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  partly 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 generated net
operating income of $20,000 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.  General and  administrative  expenses  also
decreased by $55,000  mainly due to a decline in certain  required  professional
fees.  The  increases in net income from the  consolidated  Warner/Red  Hill and
Sunol  Center  joint  ventures  and the  decrease in general and  administrative
expenses were  partially  offset by an increase in  depreciation  expense on the
wholly-owned  Crystal Tree Commerce Center.  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.

Six Months Ended September 30, 1998
-----------------------------------

      There was a $599,000  favorable change in the  Partnership's net operating
results for the six months ended  September  30, 1998 when  compared to the same
period  in the prior  year.  This  favorable  change  in the  Partnership's  net
operating results was due to a $490,000  increase in the Partnership's  share of
unconsolidated  ventures'  income  and a $109,000  decline in the  Partnership's
operating  loss. The  Partnership's  share of  unconsolidated  ventures'  income
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  six-month  period as a result of the
strong local apartment  markets.  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  changes  in net
operating results at 1881 Worcester Road and 625 North Michigan were also due to
declines in operating  expenses which were the result of declines in repairs and
maintenance costs at both properties and a reduction in real estate taxes at 625
North Michigan.

      The  increase  in  the  Partnership's   share  of  income  from  the  four
unconsolidated  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' income.

      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  partly 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 generated net
operating income of $23,000 during the current  six-month  period.  In addition,
net income  increased  at the Sunol  Center joint  venture  primarily  due to an
increase in tenant  reimbursements.  General and  administrative  expenses  also
decreased by $32,000  mainly due to a decline in certain  required  professional
fees.  The  increases in net income from the  consolidated  Warner/Red  Hill and
Sunol  Center  joint  ventures  and the  decrease in general and  administrative
expenses were  partially  offset by an increase in  depreciation  expense on the
wholly-owned  Crystal Tree Commerce Center.  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.



<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.  A Form 8-K was filed  subsequent  to the end of
the quarter to report the sales of the Chandler's  Reach and Monterra  apartment
properties on October 2, 1998 and is hereby incorporated herein by reference.



<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:  November 6, 1998