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

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

                 For the quarterly period ended June 30, 1998
                                      or
          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
                     THE SECURITIES EXCHANGE ACT OF 1934

                      For the transition period from to 

                         Commission file No. 1-13080

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

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

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

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


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

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

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

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


The number of Common Shares of Beneficial  Interest  outstanding  as of August
6, 1998 was 8,453,829.



<PAGE>

                             GROVE PROPERTY TRUST

                                  Form 10-Q
                                    Index

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


                                                                            Page

Part I:     Financial Information                                             

Item 1:     Consolidated Financial Statements (unaudited)                     

            Consolidated Balance Sheets of as of June 30, 1998 and
             December 31, 1997                                                3

            Consolidated Statements of Income for the three months 
             ended June 30, 1998 and 1997                                     4

            Consolidated Statements of Income for the six months
             ended June 30, 1998 and 1997                                     5

            Consolidated Statements of Cash Flows for the six months ended
            June 30, 1998 and 1997                                            6

            Notes to Consolidated Financial Statements                        7

Item 2:     Management's Discussion and Analysis of Financial Condition and
            Results of Operations                                            13

Item 3:     Quantitative and Qualitative Disclosure About Market Risk        17

Part II:    Other Information                                                17

Item 2:     Change in Securities and  Use of Proceeds

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

Item 5:     Other Information

Item 6:     Exhibits and Reports on Form 8-K                                 19

Signatures                                                                   21

Exhibit Index                                                                22



                                     



<PAGE>

                             GROVE PROPERTY TRUST
                         CONSOLIDATED BALANCE SHEETS

                                      June 30, 1998      December 31, 1997
                                       (Unaudited)          (Audited)
                                                (In thousands)
                                ASSETS
Real estate assets:
   Land                                   $  27,006         $ 21,403
   Buildings and improvements               158,721          125,412
   Furniture, fixtures and equipment          1,422              952
                                       ---------------   --------------
                                            187,149          147,767
   Less accumulated depreciation            (6,083)           (3,674)
                                       ---------------   --------------
     Net real estate assets                 181,066          144,093
Cash and cash equivalents                     3,630            1,466
Due from affiliates                             670              620
Deferred charges, net of accumulated 
amortizationof $33 and $127, respectively       857              849
Other assets                                  1,719            1,122
                                        --------------   --------------
  Total assets                            $ 187,942         $148,150
                                       ===============   ==============


                 LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
   Mortgage notes payable                 $  87,557         $  33,457
   Revolving credit facility                  3,250            15,601
   Other liabilities                          1,905             1,387
   Distributions payable                      1,918             1,436
   Security deposits                          2,347             2,026
   Due to affiliates                            198                49
                                       ---------------   --------------
  Total liabilities                          97,175            53,956
Minority interests in consolidated            1,076             1,357
partnerships
Minority interest in Operating               22,525            24,339
Partnership
Shareholders' equity:
   Preferred shares, $.01 par value
per share,
     1,000,000 shares authorized; no
shares
     issued or outstanding
   Common shares, $.01 par value per
share,
     34,000,000 shares authorized;
     8,453,829 shares issued and                 84                84
     outstanding
   Additional paid-in capital                68,855            68,976
   Distributions in excess of earnings       (1,773)             (562)
                                          ------------   ---------------
  Total shareholders'
 equity                                      67,166            68,498
                                        --------------   --------------   
  Total liabilities and shareholders'     $ 187,942         $ 148,150
equity
                                       ===============   ==============

See notes to consolidated  financial
statements.



                                     -3-
<PAGE>




                           GROVE PROPERTY TRUST
                     CONSOLIDATED STATEMENTS OF INCOME
                                (Unaudited)


                                               For the Three Months Ended
                                                        June 30,
                                                 1998             1997
                                                (In thousands, except per
                                                       share data)

Revenues:
    Rental income                                $ 8,438           $ 4,261
    Property management - affiliates                 139               173
    Other income                                      43                26
    Interest income                                   32                18
                                              -------------     ------------
        Total revenues                              8,652            4,478
                                              -------------     ------------


Expenses:
    Property operating and maintenance             2,893             1,408
    Real estate taxes                                837               426
    Interest expense                               1,388               604
    General and administrative                       444               278
    Depreciation and amortization                  1,300               915
                                              -------------     ------------
        Total expenses                             6,862             3,631
                                              -------------     ------------

      Income before minority interests and         1,790               847
      extraordinary expenses


      Minority interests in consolidated              22                46
      partnerships

      Minority interest in operating                 456               291
      partnership
                                              -------------     ------------

      Income before extraordinary expenses         1,312               510

Extraordinary expenses related to debt
refinancing, net of minority  interests              838                 -
                                              -------------     ------------
                                              -------------     ------------

      Net income                                $    474           $   510
                                              =============     ============
                                              =============     ============

Income before extraordinary expenses per        $   0.16           $  0.13
share - basic
Extraordinary expenses per share - basic           (0.10)                -
                                              =============     ============
Net income per share - basic                    $   0.06           $  0.13
                                              =============     ============

Income before extraordinary expenses per        $   0.16           $  0.13
share - assuming dilution
Extraordinary expenses per share - assuming        (0.10)                -
dilution
                                              -------------     ------------
Net income per share - assuming dilution        $   0.06           $  0.13
                                              =============     ============

Weighted average number of common shares            8,454            3,954
outstanding-basic
Effect of warrants and stock options                   8                35
                                              =============     ============
Weighted average number of shares                  8,462             3,989
outstanding-assuming dilution
                                              =============     ============

See notes to consolidated financial statements.





                                     -4-

<PAGE>


                           GROVE PROPERTY TRUST
                      CONSOLIDATED INCOME STATEMENTS
                                (Unaudited)

                                                  For the Six Months Ended
                                                          June 30,
                                                       1998
                                                                 1997
                                     (In thousands, except per share data)
Revenues:
   Rental income                                   $15,879          $5,438
   Property management-affiliates                      233             218
   Other income                                        81               86
   Interest income                                     47               42
                                                 ------------     ----------
      Total revenues                               16,240            5,784
                                                 ------------     ----------

Expenses:
   Property operating and maintenance               5,540            1,964
   Real estate taxes                                1,616              542
   Related party management fees                        -               22
   Interest expense                                 2,390              777
   General and administrative                         799              347
   Depreciation and amortization                    2,479            1,155
                                                 ------------     ----------
      Total expenses                               12,824            4,807
                                                 ------------     ----------


         Income before minority interests and
extraordinary expenses                              3,416              977
            

         Minority interests in consolidated            39               49
partnerships

         Minority interest in operating               878              314
partnership
                                                 ------------     ----------

         Income before extraordinary expenses       2,499              614

Extraordinary expenses related to debt
refinancing, net of minority                          838                -
     interests
                                                 ------------     ----------
                                                 ------------     ----------

            Net income                             $1,661           $  614
                                                 ============     ==========
                                                 ============     ==========

Income before extraordinary expenses per           $ 0.30           $ 0.24
share-basic
Extraordinary expenses per share - basic            (0.10)               -
                                                 ------------     ----------
Net income per share - basic                       $ 0.20           $ 0.24
                                                 ============     ==========

Income before extraordinary expenses per share     $ 0.30           $ 0.24
- assuming dilution
Extraordinary expenses per share - assuming         (0.10)               -
dilution
                                                 ------------     ----------
Net income per share - assuming dilution           $ 0.20           $ 0.24
                                                 ============     ==========

Weighted average number of common shares            8,454            2,627
outstanding - basic
Effect of warrants and stock options                   18                -
                                                 ============     ==========
Weighted average number of shares outstanding -     8,472            2,627
assuming dilution
                                                 ============     ==========

See notes to consolidated financial statements.






                                     -5-
<PAGE>


                             GROVE PROPERTY TRUST
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (Unaudited)

                                                For the Six Months Ended June
                                                             30,
                                                    1998             1997
                                                        (In thousands)
Operating Activities:
Net income                                        $ 1,661          $    614
Adjustments to reconcile net income to net
cash provided
   by operating activities
      Depreciation and amortization                 2,479             1,155
      Extraordinary expenses related to debt          838                 -
      refinancing
      Minority interests                              917               363
      Non-cash compensation expense                    60                60
Change in other assets                               (577)              (71)
Change in accounts payable, accrued expenses
and other  liabilities                                748             (1,495)
                                                ------------    ---------------
Net cash provided by operating activities          6,126                626
                                                ------------    ---------------

Investing activities:
   Purchase of  OP Units and partnership           (2,336)           (3,383)
interests
        Deferred charges                              (42)                -
   Cash acquired on purchase of partnership            62              3,213
interests
   Additions to real estate assets                (29,553)             (841)
                                                ------------    ---------------
      Net cash used in investing activities       (31,869)           (1,011)
                                                ------------    ---------------

Financing activities:
   Net proceeds from mortgage notes payable        63,000            15,084
   Net (repayments) proceeds from revolving       (12,350)            1,825
credit facility
   Proceeds from sale of common stock                   -            30,000
   Equity offering costs                              (30)           (2,458)
   Repayment of mortgage notes payable            (18,113)          (41,044)
   Borrowings from (loans to) affiliates, net          59              (758)
   Financing costs                                   (562)             (648)
   Prepayment penalty on debt refinancing             (668)               -
   Dividends and distributions paid                (3,429)             (217)
                                                ------------    ---------------
      Net cash provided by financing activities    27,907             1,766
                                                ------------    ---------------

Net change in cash and cash equivalents             2,164             1,381
Cash and cash equivalents, beginning of period      1,466               381
                                                ------------    ---------------
Cash and cash equivalents, end of period          $ 3,630          $  1,762
                                                ============    ===============

Supplemental Information:
   Cash paid for interest                         $ 2,099          $    626
   Mortgage notes payable assumed through         $ 9,213          $ 64,306
property acquisitions
   Net rental properties contributed in           $    61          $ 16,051
exchange for OP Units
   Excess of liabilities over assets assumed
on acquisition of
      partnership interests                       $    80          $  1,417


See notes to consolidated financial statements.

                                     -6-


<PAGE>

                             GROVE PROPERTY TRUST
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                June 30, 1998

1. FORMATION AND DESCRIPTION OF THE COMPANY 

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


2. ACQUISITIONS, CONSOLIDATION TRANSACTIONS, AND EQUITY OFFFERINGS

   On March 14,  1997,  the Company  completed a series of  transactions  (the
   "Consolidation Transactions") that included the following:
 
       The  Company   formed  an   operating   partnership   (the   "Operating
      Partnership" or the "OP") to serve as the vehicle for the  consolidation
      of ownership and control of the Company's operations and assets.

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

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

       The Company  issued  3,333,333  Common  Shares to new equity  investors
      (the  "New   Equity   Investment")   in  exchange   for  $30.0   million
      (approximately $27.5 million after costs of issuance).

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

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

       In  connection  with  the  Consolidation  Transactions,  the  Operating
      Partnership entered into a three-year secured revolving  acquisition and
      working  capital  credit  facility of up to $25.0 million (the "Original
      Revolving  Credit  Facility") and a $15.1 million ten-year term mortgage
      loan (the "Mortgage Loan").


      On June 1, 1997,  the Company  acquired two related party  residential
     apartment complexes ("Four Winds"and"Brooksyde").  In addition, the Company
     acquired an interest in Windsor  Arbor  Limited  Partnership,  the owner of
     River's Bend Apartment ("Windsor Arbor").  Upon consummation of the June 1,
     1997 transactions, the Operating Partnership issued an aggregate of 420,183
     Common Units valued at $10 per unit. The Company also assumed mortgage debt
     on Four Winds and Brooksyde in the aggregate  remaining principal amount of
     $6.2 million.

                                       -7-

<PAGE>

   To complete  these  transactions,  the Company  borrowed $1.8 million under
   its Original Revolving Credit Facility.

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

On September 1, 1997,  the Company  acquired two  apartment  communities  from
related parties.  Glastonbury  Center  Apartments in Glastonbury,  Connecticut
and  Summit  and  Birch  Hill  Apartments  in  Farmington,   Connecticut.  The
Operating  Partnership  issued  325,836 Common Units valued at 10.50 per unit,
assumed  $9.8  million in debt and drew down  $750,000  against  its  Original
Revolving Credit Facility to acquire these properties.

On  September  30,  1997,   the  Company   acquired  the   remaining   limited
partnership  interests in Windsor Arbor for $4.9  million,  with proceeds from
the Original Revolving Credit Facility.

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

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

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

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

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

On January 23, 1998, the Company purchased an apartment community,  Tanglewood
Apartments,  located in West  Warwick,  Rhode Island from an unrelated  party.
The  purchase  price  of   approximately   $7.0  million  was  paid  utilizing
borrowings under the Original Revolving Credit Facility.

On April 1, 1998,  the  Company  purchased  a  specialty  retail  property  in
Freeport,  Maine and an  apartment  community  in Agawam,  Massachusetts.  The
retail  property  includes a 25,000  square foot complex and was purchased for
approximately  $7.2  million.  The apartment  community  includes 88 units and
was  purchased  from  an  affiliate  of the  Company  for  approximately  $3.3
million.  These  acquisitions  were financed  through the assumption of a $3.9
first  mortgage on the retail  property,  issuance of 5,818 common units,  and
utilizing  borrowings  under  the  Original  Revolving  Credit  Facility.   In
addition,  a mortgage of $2.9 million on the  apartment  community was assumed
and paid off at  the closing.

On June 1, 1998,  the Company  acquired  two  residential  properties  in East
Providence,  Rhode  Island from an  unrelated  party.  The  purchase  price of
$19.4  million was  financed  with the  assumption  of a $2.4 million loan and
$17.0 million from the  new long-term mortgage financing described in Note 4.

On August 7, 1998,  the Company  acquired an  apartment  community  located in
Sturbridge,  Massachusetts for approximately $4.0 million.  The purchase price
was financed with the  assumption of a $2.4 million loan and $1.6 million from
the   New Revolving Credit Facility described in Note 5.

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

                                      -8-

<PAGE>

3.  SIGNIFICANT ACCOUNTING POLICIES 

   Basis of Presentation
   The financial  statements are presented on a consolidated  basis.  Included
   in the  Company's  financial  statements  are the accounts of the Operating
   Partnership  and  various  property  partnerships.   Properties  are  owned
   either  directly  by the  Operating  Partnership,  or are owned by  various
   limited  partnerships  or  limited  liability  companies,  that in turn are
   substantially  (89% to 99%) or wholly owned by the  Operating  Partnership.
   All significant intercompany transactions are eliminated in consolidation.

   The  accompanying  interim  financial  statements have been prepared by the
   Company's  management  in accordance  with  generally  accepted  accounting
   principles for interim  financial  information and in conjunction  with the
   rules and  regulations of the Securities  and Exchange  Commission.  In the
   opinion of management,  the interim financial  statements  presented herein
   reflect  all  adjustments  of a  normal  and  recurring  nature  which  are
   necessary to fairly  state the interim  financial  statements.  The results
   of  operations  for  the  interim  period  ended  June  30,  1998  are  not
   necessarily  indicative  of the results  that may be expected  for the year
   ending  December 31, 1998.  These  financial  statements  should be read in
   conjunction with the Company's audited  financial  statements and the notes
   thereto  included in the Company's  Annual Report on Form 10-K for the year
   ended  December 31, 1997.  Certain  amounts have been  reclassified  in the
   1997  financial  statements  in order to  conform  with the 1998  financial
   statements.

   Use of Estimates

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

   Cash and Cash Equivalents

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

   Real Estate Asset Capitalization and Depreciation

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

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

   Long-Lived Assets

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



                                     -9-


<PAGE>

   Per Share Data

   In 1997,  the Financial  Accounting  Standards  Board issued  Statement No.
   128,  Earnings  per Share  ("Statement  128").  Statement  128 replaced the
   calculation of primary and fully diluted  earnings per share with basic and
   diluted  earnings  per share.  Unlike  primary  earnings  per share,  basic
   earnings per share  excludes  the dilutive  effects of options and warrants
   (see Note 6).  Earnings  per share - assuming  dilution is very  similar to
   fully  diluted  earnings per share.  All earnings per share amounts for all
   periods have been presented and restated to conform to Statement 128.

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

   Stock-Based Compensation

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

   Advertising

   The Company expenses advertising costs as incurred.  Advertising costs
   were $133,216 and $44,014 for  the three months ended June 30, 1998, and
   1997, respectively, and $239,569 and $58,311 for the sixth months ended
   June 30, 1998 and 1997, respectively.

   Deferred Charges

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

   Revenue Recognition

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


4. MORTGAGE NOTES PAYABLE

   On June 1, 1998, the Company closed on a $63.0 million,  ten year term loan
   with a  lender.  The  net  proceeds  of the  loan  were  used to  repay  an
   existing $15.0 million loan,  acquire two properties in East Providence for
   $17.0  million  (see  Note  2),  pay down  $27.0  million  of the  Original
   Revolving  Credit  Facility  (see  note  5) and  the  remaining  amount  of
   approximately  $3.0 million was deposited in working  capital  reserves and
   used for  transaction  costs.  Payments of interest  only are due under the
   new $63.0  million loan at an effective  fixed  interest  rate of 6.71% and
   the loan  matures  in June 2008.  With this new  financing,  the  Company's
   weighted  average  interest  rate on its  long-term  debt  is 6.9%  and its
   weighted average maturity is 9.3 years.

   As a result of the $15.0  million  loan  repayment  and  retirement  of the
   Original  Revolving  Credit  Facility,  the Company  incurred $0.2 and $0.3
   million,  respectively, of expenses related to the write-off of unamortized
   finance costs.  In addition,  the Company  incurred $0.7 million of expense
   in connection with the breakage of certain LIBOR
   swap  contracts.  Accordingly,  the results of  operations  for the quarter
      and six months ended June 30, 1998 reflect
   approximately  $0.8  million of  extraordinary  expenses  (net of  minority
      interests).

                                     -10-


<PAGE>

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

    Amortizing   first   mortgage notes   $ 20,557
    Interest only first  mortgage notes     67,000
                                         ----------
                                          $ 87,557
                                         ==========


   The  amortizing  first  mortgage  notes have fixed  interest  rates between
   7.04% and 8.33%.  These  notes  mature  between the years 2000 and 2013 and
   are  collateralized  by seven of the properties  with a carrying  amount of
   approximately  $28.5 million as of June 30, 1998. These notes are partially
   guaranteed by certain executive officers and shareholders of the Company.

   There  are  two  interest  only  first  mortgage  notes.  One  note  has  a
   principal  balance of $4.0 million  requiring  monthly payments of interest
   only  at a  fixed  rate  of  7.00%,  and  matures  in  2007.  This  note is
   collateralized  by one  property  with a carrying  amount of  approximately
   $6.4  million as of June 30, 1998.  The other note has a principal  balance
   of $63.0  million  requiring  monthly  payments of interest at an effective
   fixed  interest  rate  of  6.71%,   and  matures  in  2008.  This  note  is
   collateralized  by seventeen  properties with an aggregate  carrying amount
   of approximately $74.5 million as of June 30, 1998.

      Annual  principal  payments due as of June 30, 1998,  are as follows (in
   thousands):

                      Period Ending December 31,
                       1998      $   194
                       1999          317
                       2000          343
                       2001          370
                       2002          400
                       Thereafter  85,933
                                 =========
                                 $ 87,557
                                 =========


5. REVOLVING CREDIT FACILITY

   Borrowings   under   the   Original    Revolving   Credit   Facility   were
   collateralized  by thirteen  properties and interest was payable monthly at
   a floating rate of 1.2% above the 30, 60, or 90 day LIBOR rate.

   In  April  1998,  the  Operating  Partnership  entered  into a new two year
   Revolving  Credit  Facility  with  its  bank  (the  "New  Revolving  Credit
   Facility")  and retired the Original  Revolving  Credit  Facility.  The New
   Revolving Credit Facility  increased the availability of the credit line to
   $50.0  million from $25.0  million and  converted  the line to an unsecured
   line  from  a  secured  line.  The  New  Revolving  Credit  Facility  bears
   interest  payable  monthly at a floating  rate of 1.2% above the 30, 60, or
   90 day LIBOR rate. The New Revolving  Credit  Facility is available to fund
   future  property  acquisitions  and up to $5.0 million is available to fund
   working  capital  needs.  As of June 30,  1998,  the New  Revolving  Credit
   Facility had $3.25 million outstanding.















                                     -11-


<PAGE>

6.    SHAREHOLDERS' EQUITY

   The  following  table  outlines the 1997 and 1998 activity in the Operating
   Partnership equity accounts:

                                                          Number of:
                                                    ------------------------
                                                                  Limited
                                                     Company's   Partners
                                                     Operating   Operating
                                                    Partnership Partnership
                                                       Units       Units
                                                       -----------------
    Outstanding at January 1, 1997                     620,102        - 
    Consolidation Transactions in March 1997:                    
     New Equity Investment                           3,333,333        -    
     Transfer of property interests-Grove Companies       -        909,115      
     Transfer of property interests-non-affiliates        -      1,205,324
    June 1997 acquisitions                                -        420,183
    Proceeds from stock options in May 1997                394        -
    September 1997 acquisitions                           -        325,836
    October 1997 acquisitions                             -        143,334
    The November Offering                            4,500,000        -
    April 1998 acquisitions                              -           5,818
    OP Units  Redeemed  for cash April 1998 through      -       
    June 1998                                            -        (174,557)
                                                    ------------------------
    Outstanding at June 30, 1998                     8,453,829    2,835,053
                                                    ========================
       Ownership Percentage                             74.9%       25.1%
                                                    ========================


   Income is allocated to the Minority  Interest in the Operating  Partnership
   based  on its  weighted  average  ownership  percentage  of  the  Operating
   Partnership.   The  ownership   percentage  is  computed  by  dividing  the
   weighted   average  number  of  OP  Units  held  by  the  Limited  Partners
   ("Minority  Interest")  holders  by the  total  weighted  average  OP Units
   outstanding.  Issuance or  redemption  of  additional  Common  Shares or OP
   Units  changes the ownership  percentage of both the Minority  Interest and
   the Company.

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

   Common Shares have been reserved for future issuance as follows:


     OP Units not owned by the Company (see above)   2,835,053
               Underwriters warrants                    47,248
               Stock options issued                    977,723
               Additional stock options issuable       590,003
                                                    -----------
                                                     4,450,027
                                                    ===========


   At the Company's  annual  meeting on June 30, 1998,  the Board of Directors
   approved  an  increase  in the member of  authorized  preferred  and common
   shares from 1,000 and 13,999,000 to 1,000,000 and 34,000,000, respectively.







                                     -12-




<PAGE>

Item 2.  Management's Discussion and Analysis of Financial Condition and
Results of Operations.

Overview

The  results of  operations  for the three and six months  ended June 30, 1997
included  24 and 27  residential  communities,  respectively,  and one  retail
property.  The results of  operations  for the three and six months ended June
30,  1998  included  33 and 36  residential  communities  and  three  and four
retail  properties,  respectively.  (See Note 2 to the consolidated  financial
statements for details).

The following  discussion  should be read in conjunction with the consolidated
financial statements and notes thereto included elsewhere in this report.

Results of Operations

Results of  operations  of the Company for the six months  ended June 30, 1998
and June 30, 1997.

Total revenues  increased  $10,456,000  from $5,784,000 to $16,240,000  during
the six months ended June 30, 1998,  as compared to the  corresponding  period
in 1997.  The increase is primarily due to the  operations  of the  properties
acquired  during  the  period  from  March 14,  1997 to June 30,  1998 ( the "
Recent  Acquisitions ") (See Note 2 to the consolidated  financial  statements
for details).

Property operating and maintenance expenses increased $3,576,000 from $1,964,000
to  $5,540,000  during the six months ended  June 30,  1998,  as compared to the
corresponding period in 1997. The increase is primarily due to the operations of
the Recent Acquisitions.

Real estate taxes increased  $1,074,000  from $542,000 to $1,616,000  during the
six months ended June 30, 1998, as compared to the corresponding period in 1997.
The  increase  is  due  primarily  to the  Recent  Acquisitions.  Related  party
management  fees  decreased  from $22,000 to zero due to the  acquisition by the
Company of the management  services  division of Grove Property Services Limited
Partnership ("GPS") as part of the Consolidation Transactions in March 1997.

Interest expense  increased  $1,613,000 from $777,000 to $2,390,000  during
the six months ended June 30, 1998, as compared to the corresponding period
in 1997.  The increase is primarily due to the  assumption of mortgage debt
and new debt related to the Recent Acquisitions.


General and  administrative  expenses increased $452,000 from $347,000
to $799,000  during the six months ended June 30, 1998, as compared to
the  corresponding  period in 1997.  This increase is primarily due to
the increased  costs  associated with the change in size and structure
of the Company.

Depreciation and amortization  increased $1,324,000 from $1,155,000 to
$2,479,000  during the six months ended June 30, 1998,  as compared to
the  corresponding  period in 1997.  This  increase  is related to the
Recent Acquisitions.


The  Company's   income  before   extraordinary   expenses   increased
$1,885,000  from  $614,000 to  $2,499,000  during the six months ended
June 30, 1998, as compared to the  corresponding  period in 1997.  The
increase in income before  extraordinary  expenses is primarily due to
the operations of the Recent Acquisitions.

In  June  1998,  the  Company  refinanced  certain  of  its  debt.  In
connection  with  the  refinancing,   the  Company  wrote-off  related
unamortized deferred financing costs and incurred prepayment penalties
and related  costs.  These costs were  charged to  operations  and are
reflected as extraordinary expenses, net of minority interests.


Results of  operations  of the Company for the three months ended June
30, 1998 and 1997.

Total  revenues  increased  $4,174,000  from  $4,478,000 to $8,652,000
during  the three  months  ended June 30,  1998,  as  compared  to the
corresponding  period in 1997.  The increase is  primarily  due to the
operations of the Recent Acquisitions.

Property operating and maintenance  expenses increased $1,485,000 from
$1,408,000 to $2,893,000  during the three months ended June 30, 1998,
as  compared  to the  corresponding  period in 1997.  The  increase is
primarily  due  to  additional  expenses  related  to  of  the  Recent
Acquisitions.
                                      -13-

<PAGE>

Real estate taxes  increased  $411,000 from $426,000 to $837,000 during the
three  months ended June 30, 1998,  as compared to the  corresponding  period in
1997. This increase is related to the Recent Acquisitions.

Interest expense increased  $784,000 from $604,000 to $1,388,000 during the
three  months ended June 30, 1998,  as compared to the  corresponding  period in
1997.  The increase is primarily due to the  assumption of mortgage debt and new
debt related to the Recent Acquisitions.

General and  administrative  expenses  increased  $166,000 from $278,000 to
$444,000  during  the three  months  ended June 30,  1998,  as  compared  to the
corresponding  period in 1997.  This  increase is primarily due to the increased
costs associated with the change in size and structure of the Company.

 Depreciation   and  amortization   increased   $385,000  from  $915,000  to
$1,300,000  during the three  months  ended June 30,  1998,  as  compared to the
corresponding  period in 1997.  The  increase  is  primarily  due to  additional
depreciation related to the Recent Acquisitions.

The Company's income before extraordinary  expenses increased $802,000 from
$510,000 to $1,312,000  during the three months ended June 30, 1998, as compared
to the  corresponding  period in 1997.  The  increase  is  primarily  due to the
operations of the Recent Acquisitions.

Same Community Analysis

For the six months ended June 30, 1998 and June 30, 1997.

The 27  apartment  communities  (2,564  apartments)  owned  by Grove or its
affiliated  predecessors  since  the  beginning  of  1996,  a  "Same  Community"
comparison, experienced an increase in average monthly rental rates, offset by a
small decrease in average economic  occupancy and experienced an increase in net
operating income. On a Same Community basis, the weighted average monthly rental
rate per apartment  increased 3.8% to $725 from $698 and the economic  occupancy
rate  decreased to 95.5% from 96.5% for the first six months of 1998 as compared
to the first six  months of 1997,  respectively.  Overall,  Same  Community  net
operating  income increased 8.1% to $6.3 million from $5.8 million for the first
six months of 1998 as  compared  to the first six months of 1997,  respectively.
Net  operating  income  increased  due to a 2.6%  increase in revenues  and 4.1%
decrease in operating expenses. Revenues increased due to the increase in rental
rates partially offset by a decrease in occupancy.  Expenses decreased primarily
due to a decrease in utility costs and snow plowing as a result of the unusually
mild weather  experienced  in the first  quarter of 1998.  The  following  table
summarizes Same Community operations:



                                  ------------------
                                  Six Months Ended    %
                                      June 30,
                                  ------------------
                                    1998     1997   Change
Economic Occupancy                  95.5%    96.5%   -1.0%
                                  ==================
Average monthly rental rate per     $ 725    $ 698    3.8%
unit
                                  ==================
Revenues (millions)                 $10.72   $10.44   2.6%
Operating expenses (millions)        4.47     4.66   -4.1%
                                  =========================
    Net operating income            $6.25    $5.78    8.1%
(millions)
                                  =========================

For the three months ended June 30, 1998 and June 30, 1997.

The  27  apartment  communities  (2,564  apartments)  owned  by  Grove  or its
affiliated  predecessors  since  the  beginning  of 1996,  a "Same  Community"
comparison,  experienced an increase in average  monthly rental rates,  offset
by a small decrease in average economic  occupancy and experienced an increase
in net operating  income.  On a Same  Community  basis,  the weighted  average
monthly  rental rate per  apartment  increased  3.8% to $728 from $702 and the
economic  occupancy  rate  decreased  to  96.1%  from  96.9%  for  the  second
quarter  of 1998 as  compared  to the second  quarter  of 1997,  respectively.
Overall,  Same Community net operating  income  increased 5.6% to $3.2 million
from $3.1  million  for the second  quarter of 1998 as  compared to the second
quarter of 1997,  respectively.  Net operating  income increased due to a 2.3%
increase  in  revenues  and 2.2%  decrease  in  operating  expenses.  Revenues
increased due to the increase in rental rates  partially  offset by a decrease
in  occupancy.  Expenses  decreased  primarily  due to  decreases  in payroll,
insurance and snow removal.  The following  table  summarizes  Same  Community
operations:


                                     -14-


<PAGE>


                                  ------------------
                                    Quarter Ended     %
                                      June 30,
                                  ------------------
                                    1998     1997   Change
Economic Occupancy                  96.1%    96.9%   -0.8%
                                  ==================
Average monthly rental rate per     $ 728    $ 702    3.8%
unit
                                  ==================
Revenues (millions)                 $5.43    $5.31    2.3%
Operating expenses (millions)        2.20     2.25   -2.2%
                                  =========================
    Net operating income            $3.23    $3.06    5.6%
(millions)
                                  =========================

Liquidity and Capital Resources

Cash  and  cash  equivalents  totaled  $3,630,000  as of June  30,  1998.  The
Company's ratio of long-term debt,  including the Revolving  Credit  Facility,
to total  market  capitalization  on June 30,  1998 was  43.5%  based on total
market  capitalization  of $208.6 million based on 11,288,882 Common Units and
Common Shares valued at per $10.44  share/unit  (the closing price on June 30,
1998) plus $90.8 million of long-term  debt,  including  the Revolving  Credit
Facility.

Cash provided by operating  activities was $6,126,000 for the six months ended
June 30, 1998.  Cash used in investing  activities was $31,869,000 for the six
months ended June 30, 1998.  Net cash  provided by  financing  activities  was
$27,907,000 for the six months ended June 30, 1998.

On June 15,  1998,  the  Company  declared a dividend of $0.17 per share which
was paid on July 17, 1998. The dividends  declared  during the period resulted
in a 64.4%  payout of funds from  operations  for the three  months ended June
30, 1998.

On June 15, 1998, the Operating  Partnership  declared a distribution of $0.17
per Common  Unit to the  limited  partners of the OP that was paid on July 17,
1998.

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

In  April  1998,  the  Operating  Partnership  entered  into  a new  two  year
Revolving  Credit  Facility  with its bank and retired the Original  Revolving
Credit   Facility.   The  new   Revolving   Credit   Facility   increased  the
availability  of the  credit  line to $50.0  million  from $25.0  million  and
converted  the  line  to an  unsecured  line  from a  secured  line.  The  new
Revolving  Credit  Facility bears interest  payable monthly at a floating rate
of 1.2%  above the 30,  60, or 90 day LIBOR  rate.  The new  Revolving  Credit
Facility is  available  to fund future  property  acquisitions  and up to $5.0
million is available to fund working capital needs.

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

Year 2000

In the course of the Company's  planned  upgrade of its  information  systems,
to  accommodate  growth of its  business,  the  Company  will  assure that its
computer  software  and  hardware  will be year 2000  compliant.  The  Company
anticipates  that the upgrade of its  information  systems  will be  completed
during  1998 and  1999 and  believes  that  the cost  thereof  will not have a
material impact on net income,  assets or  liabilities.  Because of the nature
of the  Company's  business,  it does not  depend  to any  material  extent on
electronic  interchange of data or information  with its residents,  suppliers
or vendors.


                                     -15-

<PAGE>


Acquisitions/Dispositions

The Company  continuously  evaluates  properties  for possible  acquisition or
disposition.  Individual  properties may be acquired  through direct  purchase
of the  property or through the  purchase of the entity  owning such  property
and may be made  for  cash  or  securities  of the  Company  or the  Operating
Partnership.  In  connection  with any  acquisition,  the  Company  may  incur
additional   indebtedness.   If  the  Company  acquires  or  disposes  of  any
property,  such acquisition or disposition could have a significant  effect on
the Company's financial condition, results of operations or cash flows.

Funds from Operations

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

FFO increased  $1,485,000  from  $1,523,000 to $3,008,000 for the three months
ended June 30, 1998 and 1997,  respectively.  Dividends declared for the three
months  ended June 30, 1998 were $0.17 per share,  representing  64.4% of FFO,
while  dividends  declared for the three months ended June 30, 1997 were $0.19
per share representing  77.5% of FFO. The dividends  declaration for the three
months ended June 30, 1997 were for the long period from March 14,  1997,  the
date the Consolidation Transactions closed, to June 30, 1997.

FFO was calculated as follows (in thousands):

                                   For the Three Months       For the Six Months
                                        Ended                      Ended
                                       June 30,                   June 30,
                                      1998      1997           1998      1997
                                     ------------------------------------------
Income before minority interests
and extraordinary items              $1,790     $847         $3,416     $  977
Real estate  depreciation  and        1,252      774          2,390        980
amortization
Non-recurring expenses                  -         -             -           69
                                 ----------------------   ---------------------
Funds from operations before          3,042    1,621          5,806      2,026
minority interests
Minority interests in                    34       98             63        106
consolidated partnerships
                               =====================      =====================
FFO                                  $3,008   $1,523         $5,743     $1,920
                               =====================      =====================



Seasonality

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


Inflation

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




                                     -16-
<PAGE>


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

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



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



Item 3  Quantitative and Qualitative Disclosure About Market Risk

Based on Securities Exchange Act Release No. 38223, the Company is not
required to provide information in response to this item.


Part II. Other Information

Item 2.  Changes in Securities and use of Proceeds

     (a)    At the Company's  Annual Meeting of Shareholders  held on June 30,
1998, the Company's  shareholders  approved  amendments to the Company's Third
Amended and Restated  Declaration of Trust dated March 14, 1997, as amended by
Articles  Supplementary dated October 23, 1997 (as so amended,  the "Charter")
(i) to  reduce  the  maximum  of Trust  Managers  which may serve on the Board
from 15 to 11,  (ii) to  increase  the  total  number  of  Common  Shares  and
Preferred  Shares which the Company has authority to issue to  34,000,000  and
1,000,000,  respectively,  and (iii) to provide that future  amendments to the
Charter  requiring  shareholders  approval may be approved by the holders of a
majority of the Company's outstanding shares entitled to vote.

         (b) Not applicable.

     (c) In June  1998,  the  Company,  through  Grove  Operating,  L.P,  (the
"Operating   Partnership"),   issued  5,818  Common  Units  of  the  Operating
Partnership  ("OP  Units")  valued  at  $10.50  per OP  Unit in  exchange  for
partnership  interests  in a property  owned by an  affiliate  of the Company.
The total  value of the OP Units at the time of  issuance  in the  transaction
was approximately $61,000.

     The issuance of the OP Units  referred to in the preceding  paragraph was
not  registered  under the Securities Act of 1993 in reliance on the exemption
contained in Rule 506  thereunder  on basis that each of the  purchasers is in
such transaction was an accredited investor.

     (d)  Not applicable.





                                     -17-


<PAGE>

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

The  Company  held its Annual  Meeting of  shareholders  on June 30, 1998 (the
"Annual Meeting").  At the Annual Meeting, the shareholders of the Company:

         1.  Elected all of the nominees for the Trustee

         2.  Approved  the  amendment  of the  Charter to reduce  the  maximum
            number of Trust  Managers  which may serve on the Board from 15 to
            11;

         3.  Approved  the  amendment  of the  Charter to  increase  the total
            number of Common  Shares and  Preferred  Shares  which the Company
            has authority to issue to 34,000,000 and 1,000,000, respectively;



         4.  Approved  the  amendment  of the  Charter to provide  that future
            amendments to the Charter  requiring  shareholder  approval may be
            approved  by  the   holders  of  a  majority   of  the   Company's
            outstanding shares entitled to votes;

         5.  Approved the  amendment  of the  Company's  1996 Share  Incentive
            Plan (the "1996  Plan") to  increase  the number of Common  Shares
            available  for issuance  thereunder  from 900,000 to 1,400,000 and
            to permit awards under the 1996 Plan to be granted to  consultants
            and advisors to the Company; and

            1.     Ratified  the  selection  of  Ernst  &  Young  LLP  as  the
            Company's  independent  public  accountants  for the  year  ending
              each as  described  in the  Notice of Annual  Meeting  and Proxy
            Statement  distributed in connection with the Annual Meeting.  The
            results of the  voting of the  shareholders  with  respect to such
            matters is set forth below.

1.   Election of Trustees
                        Total Vote for          Total Vote Withheld
                        Each Trustee             For Fach Trustee
 
     Edmund F. Navarro        8,050,481           8,487
     James F. Twaddell        8,044,881          14,087

2.   The amendment of Charter to reduce the maximum  number of Trust  Managers
     which may serve on the Board from 15 to 11.

     For                  6,999,201
     Against                 11,025
     Abstain                 13,021
     Broker Non-Vote      1,035,721


3.   The  amendment  of the  Charter to  increase  the total  number of Common
     Shares and  Preferred  Shares which the Company has authority to issue to
     34,000,000 and 1,000,000, respectively.


     For             5,757,229
     Against         1,231,780
     Abstain            15,512
     Broker Non-Vote 1,054,447






                                     -18-
<PAGE>


4.   The  amendment  of the Charter to provide that future  amendments  to the
     Charter requiring  shareholder Approval may be approved by the holders of
     a majority of the Company's outstanding shares entitled vote.


      For             6,912,913
      Against            81,713
      Abstain             9,895
      Broken Non-Vote 1,054,447




5.   The  amendment  of 1996 Plan to  increase  the  number  of Common  Shares
      available  for issuance  thereunder  from  900,000 to  1,400,000  and to
      permit  awards  under the 1996 Plan to be  granted  to  consultants  and
      advisors to the Company.

      For                     5,836,221
      Against                 1,146,197
      Abstain                    22,103
      Broker Non-Vote         1,054,447

6.   The  ratification  of  the  appointment  of  Ernst  &  Young  LLP  as the
Company's independent public accountants for the year ending December 31, 1998

      For               8,044,345
      Against               2,700
      Abstain              11,923

     As disclosed in the Company's  Proxy  Statement  dated April 30, 1998 and
      distributed  in  connection  with the Company's  1998 Annual  Meeting of
      Shareholders,  any  shareholder  desiring  to present a proposal  at the
      Annual  Meeting of  Shareholders  to be held in 1999 and wishing to have
      that  proposal  included in the Proxy  Statement  for that  meeting must
      submit  proposal in writing to the  Secretary  of the Company in time to
      be received by January 4, 1999.

     The Company's  By-laws also provide that any  shareholder  who intends to
      present a proposal  at any  annual  meeting  of  shareholders  must give
      advance  notice of such  proposal.  In general,  the advance notice must
      be given to the Secretary of the Company on which the  preceding  year's
      annual  meeting  was  held.  Proxies  to be  solicited  by the  Board of
      Directors of the Company for the Annual  Meeting of  Shareholders  to be
      held  in  1999  will  confer  discretionary  authority  to  vote  on any
      shareholder  proposal unless either (1) the Corporation  receives notice
      of such  proposal  no later  than May 1,  1999 or (2) such  proposal  is
      included in the Board of Directors'  proxy  material for that meeting as
      described in the preceding paragraph.

Item 6.  Exhibits and Reports on Form 8-K

 (A)      Exhibits

     
3.   Third Amended and Restated  Declaration  of Trust of Grove  Property  Trust
     dated March 14, 1997, as amended by Article Supplementary dated October 23,
     1997 and by Articles of Amendment dated June 30, 1998.

4.1  Revolving  Credit  Agreement among Grove  Operating,  L.P.,  Grove Property
     Trust and Rhode Island  Hospital  Trust National Bank and Other Banks Which
     May  Become  Parties To the  Agreement  with Rhode  Island  Hospital  Trust
     National  Bank, As Agent  BancBoston  Securities,  Inc. As . Arranger Dated
     April 30, 1998


                                     -19-
<PAGE>


10.  1996 Share Incentive Plan of Grove Property Trust,  Grove  Operating,  L.P.
     and Property  Partnerships,  as amended to March 11, 1998  (incorporated by
     reference to Appendix A to the Company's Notice of Annual Meeting and Proxy
     Statement dated April 30, 1998 (Commission File No. 1-13080)).


27.  Financial Data Schedule.


 (B)      Reports on Form 8-K

    During  the  quarter  ended June 30,  1998,  the  Company  filed a Current
    Report on Form 8-K dated June 1,  1998 responding to Items 2, 5 and 7.

     (a)   Financial statements of business acquired.

Freeport Properties
Financial Statements

Report of Independent Auditors
Combined Statements of Revenues and Certain Expenses for the Three Months
  Ended March 31, 1998 (Unaudited) and for the Year Ended December 31, 1997
Notes to the Combined Statements of Revenues and Certain Expenses

Coachlight Village
Financial Statements

Report of Independent Auditors
Statements  of Revenues and Certain  Expenses for the Three Months Ended March
31, 1998 (Unaudited) and for the    Years Ended  December 31,  1997,  1996 and
1995
Notes to the Statements of Revenues and Certain Expenses

Village Park and Winchester Wood

Financial Statements:

Report of Independent Auditors
Combined Statements of Revenues and Certain Expenses for the Three Months
  Ended March 31, 1998 (Unaudited) and for the Year Ended December 31, 1997
Notes to the Combined Statements of Revenues and Certain Expenses

Pro Forma Financial Statements (Unaudited)

Pro Forma Condensed Consolidated Balance Sheet as of March 31, 1998.  Pro
Forma Condensed Consolidated Statements of Income for the Three Months Ended
March 31, 1998 and for the Year Ended December 31, 1997.














                                     -20-
<PAGE>

SIGNATURES

Pursuant to the requirements of the  Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

 
                              GROVE PROPERTY TRUST

Date: August 11, 1998            /s/Joseph R. LaBrosse
                                 Name: Joseph R. LaBrosse
                                   (on behalf of the registrant and as Chief
                                    Financial Officer)















                                      -21-

<PAGE>


                                EXHIBIT INDEX



Exhibit No.                      Description

3.   Third Amended and Restated  Declaration  of Trust of Grove  Property  Trust
     dated March 14, 1997, as amended by Article Supplementary dated October 23,
     1997 and by Articles of Amendment dated June 30, 1998.

4.1  Revolving  Credit  Agreement among Grove  Operating,  L.P.,  Grove Property
     Trust and Rhode Island  Hospital  Trust National Bank and Other Banks Which
     May  Become  Parties To the  Agreement  with Rhode  Island  Hospital  Trust
     National Bank, As Agent BancBoston Securities, Inc. As Arranger Dated April
     30, 1998.

10.  1996 Share Incentive Plan of Grove Property Trust,  Grove  Operating,  L.P.
     and Property  Partnerships,  as amended to March 11, 1998  (incorporated by
     reference to Appendix A to the Company's Notice of Annual Meeting and Proxy
     Statement dated April 30, 1998 (Commission File No. 1-13080)).

27.  Financial Date Schedule.












                                      -22-