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, 1999
                                       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               (IRS Employer Identification No.)
incorporation or organization)

                 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                  American Stock Exchange
  Interest, $.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
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:


The number of Common Shares of Beneficial  Interest  outstanding  as of July 31,
1999 was 8,510,115.





                                       1
<PAGE>




                              GROVE PROPERTY TRUST

                                    Form 10-Q
                                      Index

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

                                                                          Page

Part I:     Financial Information                                           3

Item 1:     Consolidated Financial Statements (unaudited)                   3

            Consolidated Balance Sheets as of June 30, 1999 and
            December 31, 1998                                               3

            Consolidated Statements of Income for the Three
            Months Ended June 30, 1999 and 1998                             4

            Consolidated Statements of Income for the Six Months
            Ended June 30, 1999 and 1998                                    5

            Consolidated Statements of Cash Flows for the Six
            Months Ended June 30, 1999 and 1998                             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 Disclosures About
            Market Risk                                                    18


Part II:    Other Information                                              19

Item 1:     Legal Proceedings                                              19

Item 2:     Change in Securities and Use of Proceeds                       19

Item 3:     Defaults upon Senior Securities                                19

Item 4:     Submission of Matters to a Vote of Security Holders            19

Item 5:     Other Information                                              19

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

Signatures                                                                 20






                                       2
<PAGE>



<TABLE>
<CAPTION>

                                               GROVE PROPERTY TRUST
                                           CONSOLIDATED BALANCE SHEETS
                                     (Dollars in thousands, except par value)


                                                                     June 30, 1999           December 31, 1998
                                                                     -------------           -----------------
                                                                      (Unaudited)                (Audited)

                                                    ASSETS
<S>                                                                  <C>                        <C>
Real estate assets:
     Land                                                            $     46,052               $     47,208
     Buildings and improvements                                           263,618                    268,683
     Furniture, fixtures and equipment                                      3,265                      2,708
                                                                ----------------------     ---------------------
                                                                          312,935                    318,599
     Less accumulated depreciation                                        (13,216)                    (9,651)
                                                                ----------------------     ---------------------
       Net real estate assets                                             299,719                    308,948
Real estate held for sale                                                   9,136                          0
Cash and cash equivalents                                                  13,045                     15,262
Due from affiliates                                                           160                        262
Deferred charges, net of accumulated amortization
     of $272 and $153, respectively                                         1,435                      1,192
Other assets                                                                1,995                      1,451
                                                                ----------------------     ---------------------
  Total assets                                                       $    325,490               $    327,115
                                                                ======================     =====================


                                     LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
     Mortgage notes payable (including  fair value step up of
       $8,583 and $9,421, respectively)                              $    158,244               $    162,141
     Revolving credit facility                                             41,650                     34,250
     Other liabilities                                                      5,839                      5,723
     Acquisition notes payable                                              7,344                     12,951
     Distributions payable                                                  2,231                      2,062
     Security deposits                                                      3,457                      3,194
     Due to affiliates                                                        292                        139
                                                                ----------------------     ---------------------
  Total liabilities                                                       219,057                    220,460
Minority interests in consolidated partnerships                               690                        686
Minority interest in the Operating Partnership                             33,747                     32,186
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; 8,510,115 and 8,639,659
       shares issued and outstanding, respectively                             85                         86
     Additional paid-in capital                                            79,297                     80,182
     Distributions in excess of earnings                                   (7,386)                    (6,485)
                                                                ----------------------     ---------------------
  Total shareholders' equity                                               71,996                     73,783
                                                                ----------------------     ---------------------
  Total liabilities and shareholders' equity                         $    325,490               $    327,115
                                                                ======================     =====================
</TABLE>

See notes to consolidated financial statements.





                                       3
<PAGE>





<TABLE>
<CAPTION>

                                               GROVE PROPERTY TRUST
                                        CONSOLIDATED STATEMENTS OF INCOME
                                                   (Unaudited)


                                                                        For the Three Months Ended June 30,
                                                                           1999                     1998
                                                                           ----                     ----
                                                                       (In thousands, except per share data)
<S>                                                                      <C>                       <C>
Revenues:
    Rental income                                                        $  15,615                 $   8,438
    Property management income- affiliates                                      91                       139
    Other property related income                                              184                        43
    Interest income                                                            134                        32
                                                                    -------------------       ------------------
        Total revenues                                                      16,024                     8,652
                                                                    -------------------       ------------------

Expenses:
    Property operating expenses                                              5,819                     2,893
    Real estate taxes                                                        1,453                       837
    Interest expense                                                         3,448                     1,388
    Depreciation                                                             2,515                     1,266
    Amortization                                                                56                        34
    General and administrative                                               1,170                       444
                                                                    -------------------       ------------------
        Total expenses                                                      14,461                     6,862
                                                                    -------------------       ------------------

         Income before extraordinary expense and minority                    1,563                     1,790
         interests

Minority interest in consolidated partnerships                                  23                        22

Minority interest in operating partnership                                     485                       456
                                                                    -------------------       ------------------

         Income before extraordinary items                                   1,055                     1,312

Extraordinary expense related to debt extinguishment                             0                      (838)
                                                                    -------------------       ------------------

           Net income                                                    $   1,055                 $     474
                                                                    ===================       ==================

Income before extraordinary expense per common share - basic and
   assuming dilution                                                     $    0.12                 $    0.16
                                                                    ===================       ==================

Extraordinary expense per common share - basic and
   assuming dilution                                                     $   (0.00)                $   (0.10 )
                                                                    ===================       ==================

Net income per common share - basic and assuming dilution                $    0.12                 $    0.06
                                                                    ===================       ==================


Weighted average number of common shares outstanding-basic                   8,510                     8,454
Effect of warrants and stock options                                           154                         8
                                                                    -------------------       ------------------
Weighted average number of shares outstanding-assuming dilution              8,664                     8,462
                                                                    ===================       ==================
</TABLE>

See notes to consolidated financial statements.


                                       4
<PAGE>





<TABLE>
<CAPTION>

                                               GROVE PROPERTY TRUST
                                        CONSOLIDATED STATEMENTS OF INCOME
                                                    (Unaudited)

                                                                         For the Six Months Ended June 30,
                                                                           1999                     1998
                                                                           ----                     ----
                                                                       (In thousands, except per share data)
<S>                                                                      <C>                       <C>
Revenues:
    Rental income                                                        $  30,868                 $  15,879
    Property management income- affiliates                                     140                       233
    Other property related income                                              358                        81
    Interest income                                                            280                        47
                                                                    -------------------       ------------------
        Total revenues                                                      31,646                    16,240
                                                                    -------------------       ------------------

Expenses:
    Property operating expenses                                             11,905                     5,540
    Real estate taxes                                                        2,863                     1,616
    Interest expense                                                         6,848                     2,390
    Depreciation                                                             4,948                     2,409
    Amortization                                                               120                        70
    General and administrative                                               2,105                       799
                                                                    -------------------       ------------------
        Total expenses                                                      28,789                    12,824
                                                                    -------------------       ------------------

         Income before extraordinary expense and minority                    2,857                     3,416
         interests

Minority interest in consolidated partnerships                                  42                        39

Minority interest in operating partnership                                     869                       878
                                                                    -------------------       ------------------

         Income before extraordinary expense                                 1,946                     2,499

Extraordinary income (expense) related to debt extinguishment                  226                     (838)
                                                                    -------------------       ------------------

           Net income                                                    $   2,172                 $   1,661
                                                                    ===================       ==================

Income before extraordinary expense per common share - basic and
   assuming dilution                                                     $    0.23                 $    0.30
                                                                    ===================       ==================

Extraordinary income (expense) per common share - basic and
   assuming dilution                                                     $    0.02                 $   (0.10)
                                                                    ===================       ==================

Net income per common share - basic and assuming dilution                $    0.25                 $    0.20
                                                                    ===================       ==================


Weighted average number of common shares outstanding-basic                   8,576                     8,454
Effect of warrants and stock options                                           119                        18
                                                                    -------------------       ------------------
Weighted average number of shares outstanding-assuming dilution              8,695                     8,472
                                                                    ===================       ==================
</TABLE>

See notes to consolidated financial statements.

                                       5
<PAGE>










<TABLE>
<CAPTION>

                                               GROVE PROPERTY TRUST
                                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                   (Unaudited)

                                                                            For the Six Months Ended June 30,
                                                                              1999                     1998
                                                                              ----                     ----
                                                                                      (In thousands)
<S>                                                                      <C>                    <C>
Operating Activities:
Net income                                                               $       2,172          $         1,661
Adjustments to reconcile net income to net cash provided
     by operating activities
         Depreciation and amortization                                           5,068                    2,479
         Extraordinary (income) expense related to debt extinguishment                                      838
                                                                                  (226)
         Minority interests                                                        911                      917
         Non-cash compensation expense                                              60                       60
Change in other assets
                                                                                  (393)                    (577)
Change in accounts payable, accrued expenses and other
     liabilities                                                                (1,206)                     748
                                                                       -------------------    ---------------------
Net cash provided by operating activities                                        6,386                    6,126
                                                                       -------------------    ---------------------

Investing activities:
     Purchase of partnership interests                                          (1,231)                  (2,336)
     Deferred charges                                                               (1)                     (42)
     Cash acquired on purchase of partnership interests                              -                       62
     Additions to real estate assets                                            (5,129)                 (29,553)
                                                                       -------------------    ---------------------
         Net cash used in investing activities                                  (6,361)                 (31,869)
                                                                       -------------------    ---------------------

Financing activities:
     Net proceeds from mortgage notes payable                                    8,668                   63,000
     Net proceeds (repayments) from  Revolving Credit Facility                   7,400                  (12,350)
     Proceeds from exercise of stock options                                        18                        -
     Equity offering costs                                                         (11)                     (30)
     Repayment of mortgage notes payable                                       (12,161)                 (18,113)
     Borrowings from affiliates, net                                               232                       59
     Financing costs                                                              (441)                    (562)
     Extraordinary income from debt refinancing                                      -                     (668)
     Repurchase of stock                                                        (1,654)                       -
     Dividends and distributions paid                                           (4,293)                  (3,429)
                                                                       -------------------    ---------------------
         Net cash (used in) provided by financing activities                    (2,242)                  27,907
                                                                       -------------------    ---------------------

Net change in cash and cash equivalents                                         (2,217)                   2,164
Cash and cash equivalents, beginning of period                                  15,262                    1,466
                                                                       -------------------    ---------------------
Cash and cash equivalents, end of period                                 $      13,045          $         3,630
                                                                       ===================    =====================

Supplemental Information:
     Cash paid for interest                                              $       6,782          $         2,077
     Mortgage notes payable assumed through property acquisitions        $           -          $         6,300
     Excess of liabilities over assets assumed on acquisition of
         partnership interests                                           $           -          $            80
     OP Units redeemed for cash                                          $         884          $           178
     Reclassification of real estate assets to held for sale                  $       9,136                        -
</TABLE>
See notes to consolidated financial statements.


                                       6
<PAGE>







                              GROVE PROPERTY TRUST

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  June 30, 1999

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  sixty-one  apartment  communities  and four  specialty
     retail properties.  The apartment  communities are generally  mid-priced or
     subsidized  multi-family  communities  that are  primarily  located  in the
     southern New England area.

2.   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, 1999 are not  necessarily
     indicative of the results that may be expected for the year ending December
     31, 1999. 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,
     1998.

3.   MORTGAGE NOTES PAYABLE
     ----------------------

     Total mortgage notes payable of $158,244,000  includes a fair value step up
     of $8,583,000.  The contractual  principal  amount  outstanding of mortgage
     notes  payable  is   $149,661,000.   The  $8,583,000  step  up  relates  to
     $47,630,000 of above market interest rate mortgages,  which were assumed in
     connection  with the  purchase of the 20 apartment  communities  in October
     1998 through December 1998 (the "McNeil Portfolio").  The interest rates on
     the assumed  debt are between  7.46% and 12.47%.  The step up was  computed
     using the Company's  estimated market interest rate at acquisition of 7.0%.
     The step up  amount  is not the legal  stipulated  principal  amount of the
     respective mortgage and,  accordingly,  this increase does not increase the
     contractual  obligation  of the  Company.  If these  loans  are paid off in
     advance  of  their  maturity,  the  amount  of the  related  step up on the
     consolidated balance sheets will be accounted for as extraordinary income.

     On March 15, 1999 the Company  prepaid the Highland  Glen  mortgage note of
     $6.5 million.  This prepayment  transaction  resulted in the recognition of
     extraordinary  income related to debt extinguishment of $0.32 million ($0.4
     million fair value step up offset by $0.08 million  prepayment  penalty and
     other expenses related to the prepayment of the mortgage).

     On June 29, 1999,  the Company  obtained a $7.6 million  ten-year term loan
     with a lender.  The net  proceeds  of the loan were  used to  refinance  an
     existing  $4.0 million loan and the  remaining net proceeds of $3.6 million
     were  used  to  repay  borrowings  under  the  Company's  Revolving  Credit
     Facility.

     As of June 30, 1999, the Company's  weighted  average  interest rate on its
     long-term debt is 7.8% and its weighted average maturity is 10.6 years.

                                       7
<PAGE>




     Mortgage  notes  payable  consist  of the  following  at June 30,  1999 (in
     thousands):

     Amortizing first mortgage notes                  $   95,244
     Interest only first mortgage notes                   63,000
                                                      ----------
                                                      $  158,244
                                                      ==========

     The amortizing first mortgage notes have fixed interest rates between 7.04%
     and  12.47%.  These  notes  mature  between the years 2000 and 2031 and are
     collateralized by twenty-eight of the properties with an aggregate-carrying
     amount of  approximately  $129.4  million as of June 30,  1999.  Certain of
     these notes are  partially  guaranteed  by certain  executive  officers and
     shareholders of the Company.

     There is one interest only first mortgage  note.  This 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 $85.3 million as of June 30, 1999.

     Annual  principal  payments  due as of June 30,  1999,  are as follows  (in
     thousands):

                               1999           $   1,550
                               2000               5,301
                               2001               3,508
                               2002               3,679
                               2003               7,905
                               Thereafter       136,301
                                              ---------
                                              $ 158,244
                                              =========

4.   ACQUISITION NOTES PAYABLE
     -------------------------

     In  conjunction  with the  purchase  of the McNeil  Portfolio,  the Company
     agreed to issue additional Common Units and pay cash to certain  continuing
     partners in the event that a McNeil  Portfolio  property was converted to a
     market rate property. The Acquisition Notes Payable are obligations related
     to three McNeil  Properties  (Rockingham Glen, 929 House, and Glen Meadow),
     to  pay  additional  cash  and  issue  additional  Common  Units  when  the
     properties are converted to market rate  properties.  On November 30, 1998,
     the  mortgages  on two of the  properties  (Glen Meadow and 929 House) were
     modified to allow these properties to be converted to 80% market rate units
     and 20% moderate income units. The Rockingham Glen mortgage was modified in
     the third  quarter of 1998 to allow this  property to be  converted  to 80%
     market  rate units and 20%  moderate  income  units.  On May 1,  1999,  the
     Operating  Partnership  issued  314,846 Common Units valued at $3.5 million
     and $1.6 million in cash payments on the Acquisition  Notes Payable.  As of
     June 30, 1999, Acquisition Notes Payable outstanding decreased $5.6 million
     to $7.3  million from $12.9  million as of December  31,  1998,  due to the
     payment  above and a change in  estimate.  The  majority  of the  remaining
     Acquisition  Notes  Payable is expected to be paid on or about  October 31,
     1999  (consisting of approximately  $3.2 million in cash and  approximately
     $4.1  million in Common  Units).  When the  Common  Units are  issued,  the
     Acquisition  Notes  Payable  balance will be reduced by the value of Common
     Units  issued  and  the  Company's  Minority  Interests  in  the  Operating
     Partnership will be increased by a corresponding amount.




                                       8
<PAGE>




5.   SHAREHOLDERS' EQUITY
     --------------------

     The following table outlines the 1999 activity in the Operating Partnership
     equity accounts:
<TABLE>
<CAPTION>

                                                                                        Number of:
                                                                             ----------------------------------
                                                                                                   Limited
                                                                                Company's         Partners'
                                                                                Operating         Operating
                                                                               Partnership       Partnership
                                                                                  Units             Units
                                                                                  -----             -----
     <S>                                                                        <C>               <C>
     Outstanding at December 31, 1998                                           8,639,659         3,768,775
     Common  Units exchanged January 1999 through June 1999                        18,177           (18,177)
     Common Shares repurchased January 1999 through June 1999                    (150,083)                -
     Common Shares issued pursuant to stock options exercised in June 1999          2,362                 -
     Common  Units redeemed January 1999 through June 1999                              -           (76,507)
     May 1999 Acquisition Note payment                                                  -           314,846
                                                                             ----------------- ----------------
     Outstanding at June 30, 1999                                               8,510,115         3,988,937
                                                                             ================= ================
         Ownership Percentage                                                      68.1 %            31.9 %
                                                                             ================= ================
</TABLE>






     Common Shares have been reserved for future issuance as follows:
<TABLE>
<CAPTION>
                    <S>                                                         <C>
                    Common Units not owned by the Company (see above)           3,988,937
                    Stock options issued                                        1,150,020
                    Additional stock options issuable                             367,100
                                                                             -------------
                                                                                5,507,057
                                                                             =============
</TABLE>

6.   SUBSEQUENT EVENT
     -----------------

     In August 1999, the Company's  outstanding  revolving  credit  facility was
     paid off with proceeds from new long-term  debt (the "August 1999 Long-term
     Debt") and a new revolving credit facility (the "1999 Credit Facility").

     The 1999 Credit Facility  decreased the  availability of the credit line to
     $40.0 million from $50.0 million,  extended the maturity to August 2001 and
     modified  certain  financial  covenants.  The 1999  Credit  Facility  bears
     interest  payable  monthly at a floating  rate of 2.0% above the 30, 60, or
     90-day LIBOR rate, as applicable.  The 1999 Credit Facility is available to
     fund future property acquisitions and working capital needs.

     The August 1999  Long-term  Debt totals  $26.3  million,  matures in August
     2009,  is secured  by five  apartment  communities,  and  requires  monthly
     payments of principal and interest based on a 30 year amortization schedule
     and has a fixed annual  interest  rate of 7.61%.  The net proceeds from the
     loan were used to repay  outstanding  borrowings  under the Company's prior
     revolving credit facility.




                                       9
<PAGE>
7.   SEGMENT REPORTING
     -----------------

     The following table presents  information  about reported segment profit or
     loss and segment  assets.  The Company  does not  allocate  income taxes or
     unusual items to segments.  In addition,  not all segments have significant
     noncash items other than  depreciation and amortization in reporting profit
     or loss (dollars in thousands):
<TABLE>
<CAPTION>
                                                       Three Months Ended June 30, 1999
                                                       --------------------------------

                                                            Subsidized
                                             Residential    Residential       Retail          Total
                                             -----------    -----------       ------          -----

         <S>                                 <C>             <C>            <C>            <C>
         Revenues                            $   11,785      $   3,508      $     667      $   15,960
         Interest Expense                    $    1,957      $     800      $      72      $    2,829
         Depreciation and amortization       $    1,946      $     362      $     145      $    2,453
         Segment Profit                      $    2,947      $   1,051      $     319      $    4,317
         Segment Assets                      $  244,166      $  54,596      $  19,148      $  317,910
         FFO                                 $    4,871      $   1,413      $     461      $    6,745
</TABLE>

<TABLE>
<CAPTION>
                                                       Three Months Ended June 30, 1998
                                                       --------------------------------

                                                            Subsidized
                                             Residential    Residential       Retail          Total
                                             -----------    -----------       ------          -----
         <S>                                 <C>             <C>            <C>            <C>
         Revenues                            $    7,808      $        0     $     671      $    8,479
         Interest Expense                    $      813      $        0     $     140      $      953
         Depreciation and amortization       $    1,136      $        0     $     130      $    1,266
         Segment Profit                      $    2,253      $        0     $     249      $    2,502
         Extraordinary expense               $    1,173      $        0     $       6      $    1,179
         Segment Assets                      $  164,176      $        0     $  18,094      $  182,270
         FFO                                 $    3,370      $        0     $     378      $    3,748
</TABLE>

<TABLE>
<CAPTION>
                                                       Six Months Ended June 30, 1999
                                                       ------------------------------

                                                            Subsidized
                                             Residential    Residential       Retail          Total
                                             -----------    -----------       ------          -----
         <S>                                 <C>             <C>            <C>            <C>
         Revenues                            $   23,198      $   6,962      $   1,327      $   31,487
         Interest Expense                    $    3,896      $   1,606      $     142      $    5,644
         Depreciation and amortization       $    3,834      $     718      $     288      $    4,840
         Segment Profit                      $    5,417      $   1,960      $     622      $    7,999
         Extraordinary income                $        0      $     324      $       0      $      324
         Segment Assets                      $  244,166      $  54,596      $  19,148      $  317,910
         FFO                                 $    9,213      $   2,679      $     906      $   12,798
</TABLE>

<TABLE>
<CAPTION>
                                                       Six Months Ended June 30, 1998
                                                       ------------------------------

                                                            Subsidized
                                             Residential    Residential       Retail          Total
                                             -----------    -----------       ------          -----
         <S>                                 <C>             <C>            <C>            <C>
         Revenues                            $   14,877      $        0     $   1,069      $   15,946
         Interest Expense                    $    1,339      $        0     $     210      $    1,549
         Depreciation and amortization       $    2,225      $        0     $     209      $    2,434
         Segment Profit                      $    4,304      $        0     $     386      $    4,690
         Extraordinary expense               $    1,173      $        0     $       6      $    1,179
         Segment Assets                      $  164,176      $        0     $  18,094      $  182,270
         FFO                                 $    6,474      $        0     $     594      $    7,068
</TABLE>

                                       10
<PAGE>

     The  following   presentation  of  reconciliation  of  reportable   segment
     revenues, profit or loss, and assets, to the Company's consolidated totals.

<TABLE>
<CAPTION>

                                                        For the Three Months Ended           For the  Six  Months Ended
                                                                 June 30,                             June 30,
                                                           1999            1998                 1999            1998
                                                           ----            ----                 ----            ----

     Revenues
     --------

     <S>                                               <C>            <C>                   <C>             <C>
     Total revenues for reportable segments            $    15,960    $      8,479          $     31,487    $     15,946
     Other revenues                                             64             173                   159             294
                                                       -----------    ------------          ------------    ------------
     Total consolidated revenues                       $    16,024    $      8,652          $     31,646    $     16,240
                                                       ===========    ============          ============    ============
     16,240

     Profit or Loss
     --------------

     Total profit/loss for reportable segments         $     4,317    $      2,502          $     7,999     $      4,690
     Other profit or loss                              (     2,754)   (        712)         (     5,142)    (      1,274)
                                                        ----------     -----------           ----------      -----------
     Income before extraordinary expense and
       minority interests                              $     1,563    $      1,790          $     2,857     $      3,416
                                                       ===========    ============          ===========     ============

     FFO
     ---

     FFO for reportable segments                       $     6,745    $      3,748          $    12,798     $      7,068
     Other FFO                                         (     2,753)   (        706)         (     5,143)    (      1,262)
                                                        ----------     -----------           ----------      -----------
     FFO before minority interests                     $     3,991    $       3,042         $     7,655     $      5,806
                                                       ===========    =============         ===========     ============


     Assets
     ------

     Total assets for reportable segments                                                   $   317,910     $    182,270
     Other assets                                                                                 7,580            5,672
                                                                                            -----------     ------------
     Total consolidated assets                                                              $   325,490     $    187,942
                                                                                            ===========     ============

                                                         Three Months Ended June 30, 1999
                                                         --------------------------------

     Other Significant Items
     -----------------------
                                                    Segment                        Consolidated
                                                    Totals         Non-segment        Totals
                                                    ------         -----------        ------

     Interest expense                               $   2,829      $      619       $   3,448
     Depreciation and amortization                  $   2,453      $      118       $   2,571


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

     Other Significant Items
     -----------------------
                                                    Segment                        Consolidated
                                                    Totals         Non-segment        Totals
                                                    ------         -----------        ------

     Interest expense                               $     953      $      435       $   1,388
     Depreciation and amortization                  $   1,266      $       34       $   1,300


                                                         Six Months Ended June 30, 1999
                                                         ------------------------------

     Other Significant Items
     -----------------------
                                                    Segment                        Consolidated
                                                    Totals         Non-segment        Totals
                                                    ------         -----------        ------

     Interest expense                               $   5,644      $    1,204       $   6,848
     Depreciation and amortization                  $   4,840      $      228       $   5,068
</TABLE>

                                       11
<PAGE>




<TABLE>
<CAPTION>

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

     Other Significant Items
     -----------------------
                                                    Segment                        Consolidated
                                                    Totals         Non-segment        Totals
                                                    ------         -----------        ------

     <S>                                            <C>            <C>              <C>
     Interest expense                               $   1,549      $      841       $   2,390
     Depreciation and amortization                  $   2,434      $       45       $   2,479
</TABLE>



                                       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,  1999
include  the three  multifamily  properties  that the  Company  has owned  since
inception (the "Original  Properties"),  a fourth  property that was acquired on
January 12, 1996, the twenty properties acquired on March 14, 1997, the fourteen
properties  subsequently acquired in 1997 (collectively referred to as the "1997
Properties"),  and the  twenty-seven  properties  purchased  in 1998 (the  "1998
Properties").  In addition,  all of the previously  mentioned  properties of the
Company are collectively referred to as the "Properties".

The  following  discussion  should  be read in  conjunction  with the  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, 1999 and
1998.

Total rental  revenues  increased  $14,989,000 to $30,868,000  from  $15,879,000
during the six months  ended June 30,  1999,  as compared  to the  corresponding
period  in  1998.  The  increase  is  primarily  due  to the  operations  of the
properties  acquired during the period from April 1998 to December 31, 1998 (the
"Recent Acquisitions").

Property management income decreased due to the sale of two properties that were
affiliated with the Company.  Other property  related income and interest income
increased primarily due to the operations of the Recent Acquisitions.

The  properties  experienced  an  increase  in rental  rates and an  increase in
occupancy.  The weighted  average monthly rental rates increased to $783 for the
six months  ended June 30, 1999 from $692 for the same period in 1998.  Economic
occupancy  increased to an aggregate weighted average occupancy of 95.8% for the
six months ended June 30, 1999 from an aggregate  weighted average  occupancy of
94.8% for the same period in 1998.

Property operating expenses increased  $6,365,000 to $11,905,000 from $5,540,000
during the six months  ended June 30,  1999,  as compared  to the  corresponding
period in 1998.  The increase is primarily  due to the  operations of the Recent
Acquisitions.

Real estate taxes increased  $1,247,000 to $2,863,000 from $1,616,000 during the
six months ended June 30, 1999, as compared to the corresponding period in 1998.
The increase is due primarily to the Recent Acquisitions.

Interest expense  increased  $4,458,000 to $6,848,000 from $2,390,000 during the
six months ended June 30, 1999, as compared to the corresponding period in 1998.
The increase is primarily  due to the  assumption  of mortgage debt and new debt
related to the Recent Acquisitions.

General and  administrative  expenses  increased  $1,306,000 to $2,105,000  from
$799,000  during  the six  months  ended  June  30,  1999,  as  compared  to the
corresponding  period in 1998.  This  increase is primarily due to the increased
costs associated with the executive stock bonus plan.

Depreciation and amortization increased $2,589,000 to $5,068,000 from $2,479,000
during the six months  ended June 30,  1999,  as compared  to the  corresponding
period in 1998. This increase is related to the Recent Acquisitions.

The Company's income before extraordinary items decreased $553,000 to $1,946,000
from  $2,499,000  during the six months ended June 30, 1999,  as compared to the
corresponding  period in 1998. The decrease in income before extraordinary items
is primarily  due to increased  interest  expense due to  borrowings  related to
property acquisitions and increased general and administrative costs.

In March 1999 the  Company  prepaid  The  Highland  Glen  mortgage  note of $6.5
million.   This   prepayment   transaction   resulted  in  the   recognition  of
extraordinary  income  related to debt  extinguishment  of $0.32  million  ($0.4
million fair value step up offset by $0.08 million prepayment penalty).

                                       13
<PAGE>

Results of  operations  of the Company for the three  months ended June 30, 1999
and 1998.

Total rental revenues increased $7,177,000 to $15,615,000 from $8,438,000 during
the three months ended June 30, 1999, as compared to the corresponding period in
1998.  The  increase  is  primarily  due to the  operations  of the  the  Recent
Acquisitions.

Property management income decreased due to the sale of two properties that were
affiliated with the Company.  Other property  related income and interest income
increased primarily due to the operations of the Recent Acquisitions.

The  properties  experienced  an  increase  in rental  rates and an  increase in
occupancy.  The weighted  average monthly rental rates increased to $791 for the
three months ended June 30, 1999 from $695 for the same period in 1998. Economic
occupancy  increased to an aggregate weighted average occupancy of 95.9% for the
three months ended June 30, 1999 from an aggregate weighted average occupancy of
95.4% for the same period in 1998.

Property operating  expenses increased  $2,926,000 to $5,819,000 from $2,893,000
during the three months ended June 30,  1999,  as compared to the  corresponding
period in 1998.  The increase is primarily  due to the  operations of the Recent
Acquisitions.

Real estate taxes  increased  $616,000 to $1,453,000  from  $837,000  during the
three  months ended June 30, 1999,  as compared to the  corresponding  period in
1998. The increase is due primarily to the Recent Acquisitions.

Interest expense  increased  $2,060,000 to $3,448,000 from $1,388,000 during the
three  months ended June 30, 1999,  as compared to the  corresponding  period in
1998.  The increase is primarily due to the  assumption of mortgage debt and new
debt related to the Recent Acquisitions.

General  and  administrative  expenses  increased  $726,000 to  $1,170,000  from
$444,000  during  the three  months  ended June 30,  1999,  as  compared  to the
corresponding  period in 1998.  This  increase is primarily due to the increased
costs associated with the executive stock bonus plan.

Depreciation and amortization increased $1,271,000 to $2,571,000 from $1,300,000
during the three months ended June 30,  1999,  as compared to the  corresponding
period in 1998. This increase is related to the Recent Acquisitions.

The Company's income before extraordinary items decreased $257,000 to $1,055,000
from $1,312,000  during the three months ended June 30, 1999, as compared to the
corresponding  period in 1998. The decrease in income before extraordinary items
is primarily  due to increased  interest  expense due to  borrowings  related to
property acquisitions and increased general and administrative costs.

In March 1999 the  Company  prepaid  The  Highland  Glen  mortgage  note of $6.5
million.   This   prepayment   transaction   resulted  in  the   recognition  of
extraordinary  income  related to debt  extinguishment  of $0.32  million  ($0.4
million fair value step up offset by $0.08 million prepayment penalty).

SAME COMMUNITY ANALYSIS

For the six months ended June 30, 1999 and 1998.

The Same Community analysis includes 35 apartment  communities (3,506 units, 79%
in Connecticut, 17% in Massachusetts,  and 4% in Rhode Island) owned by Grove or
its  affiliated  predecessors  since the beginning of 1998. On a Same  Community
basis, the weighted average monthly rental rate per apartment  increased 4.3% to
$738 from $707 and the economic occupancy rate increased to 95.8% from 94.9% for
the six months ended June 30, 1999 versus the first six months of 1998. Overall,
Same Community net operating  income  increased 7.5% to $8.72 million from $8.11
million  for the six months  ended June 30,  1999 versus the first six months of
1998.  Net operating  income  increased  7.5% due to a 5.8% increase in revenues
offset by a 3.4% increase in operating  expenses.  Revenues increased due to the
increase in rental rates and  occupancy.  Operating  expenses  increased  due to
higher snow plowing, landscaping, repairs and maintenance expenses.

                                       14
<PAGE>

The following table summarizes Same Community operations:

                                               -------------------------
                                                   Six Months Ended
                                                       June 30,             %
                                               -------------------------
                                                   1999         1998      Change
                                                   ----         ----      ------
Economic Occupancy                                95.8 %       94.9 %      0.9%
                                               =========================
Average monthly rental rate per unit             $    738     $      707   4.3%
                                               =========================
Revenues (millions)                              $  14.93     $    14.12   5.8%
Operating expenses (millions)                        6.21           6.01   3.4%
                                               =================================
    Net operating income (millions)              $   8.72     $     8.11   7.5%
                                               =================================

For the three months ended June 30, 1999 and 1998.

On a Same  Community  basis,  the  weighted  average  monthly  rental  rate  per
apartment  increased  4.3% to $742 from  $711 and the  economic  occupancy  rate
increased  to 95.8% from 95.5% for the second  quarter of 1999 versus the second
quarter of 1998. Overall,  Same Community net operating income increased 6.8% to
$4.46  million  from $4.18  million  for the second  quarter of 1999  versus the
second  quarter  of 1998.  Net  operating  income  increased  6.8% due to a 5.1%
increase in revenues offset by a 2.7% increase in operating  expenses.  Revenues
increased  due to increases in rental rates and  occupancy.  Operating  expenses
increased due to higher landscaping, repairs and maintenance expenses.

The following table summarizes Same Community operations:

                                               -------------------------
                                                  Three Months Ended
                                                       June 30,             %
                                               -------------------------
                                                   1999         1998      Change
                                                   ----         ----      ------
Economic Occupancy                                95.8 %       95.5 %      0.3%
                                               =========================
Average monthly rental rate per unit             $    742     $      711   4.3%
                                               =========================
Revenues (millions)                              $   7.53     $     7.16   5.1%
Operating expenses (millions)                        3.07           2.99   2.7%
                                               =================================
    Net operating income (millions)              $   4.46     $     4.18   6.8%
                                               =================================

LIQUIDITY AND CAPITAL RESOURCES

Cash and cash equivalents totaled $13,045,000 as of June 30, 1999. The Company's
ratio of long-term  debt,  including the 1998 Credit  Facility,  to total market
capitalization  on June 30, 1999 was 55.2% based on total market  capitalization
of $362.38 million based on 12,499,052  Common Units and Common Shares valued at
$13.00 per share/unit  (the closing price on June 30, 1999) plus $199.90 million
of long-term debt, including the 1998 Credit Facility.

On June 18, 1999,  the Company  declared a $0.18 per share  dividend,  which was
paid on July 15, 1999. The dividends  declared  during the period  resulted in a
57.3% pay out of funds from operations for the three months ended June 30, 1999.

In August 1999, the Operating  Partnership entered into the 1999 Credit Facility
with its bank and retired the Company's prior  revolving  credit  facility.  The
1999 Credit  Facility  decreased  the  availability  of the credit line to $40.0
million  from $50.0  million,  extended the maturity to August 2001 and modified
certain  financial  covenants.  The 1999 Credit Facility bears interest  payable
monthly at a floating  rate of 2.0% above the 30, 60, or 90-day  LIBOR rate,  as
applicable.  The 1999 Credit  Facility  is  available  to fund  future  property
acquisitions and working capital needs.

Acquisition  Notes Payable are  obligations  related to three McNeil  Properties
(Rockingham  Glen, 929 House,  and Glen Meadow) to pay additional cash and issue
additional  Common  Units  when the  properties  are  converted  to market  rate
properties.  On November 30, 1998, the mortgages on two of the properties  (Glen
Meadow and 929 House) were modified to allow these properties to be converted to
80%  market  rate units and 20%  moderate  income  units.  The  Rockingham  Glen
mortgage was modified in the third  quarter of 1998 to allow this property to be
converted  to 80% market rate units and 20%  moderate  income  units.  On May 1,
1999,  the Company  issued 314,846  Operating  Partnership  Units valued at $3.5
million and made $1.6 million in cash payments on the Acquisition Notes Payable.
As of June 30,  1999,  Acquisition  Notes  Payable  outstanding  decreased  $5.6
million to $7.3 million from $12.9 million as of December 31, 1998, due to the

                                       15
<PAGE>

payment  above  and  a  change  in  estimate.  The  majority  of  the  remaining
Acquisition  Notes  Payable is expected to be paid on or about  October 31, 1999
(consisting of approximately $3.2 million in cash and approximately $4.1 million
in Common  Units).  When the Common  Units are  issued,  the  Acquisition  Notes
Payable  balance  will be  reduced by the value of Common  Units  issued and the
Company's Minority Interests in the Operating Partnership will be increased by a
corresponding amount.

During 1998,  the Board of Trustees  authorized  the Company to repurchase up to
400,000  Common  Shares.  In the first  quarter of 1999,  the Board of  Trustees
authorized  the Company to purchase up to an additional  500,000  Common Shares.
Purchases of Common Shares and Common Units  presented for redemption  which are
redeemed for cash are being funded from  operating  cash flow and the  Company's
1999 Credit  Facility.  As of June 30,  1999,  from  inception,  the Company has
redeemed  328,660  Common  Units  for cash at an  average  price of  $10.56  and
repurchased 454,713 Common Shares at an average price of $10.20 per share.

The Company intends to meet its short-term  liquidity  requirements through cash
flow provided by operations and borrowings under the 1999 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 properties, the selling of additional equity interests in the
Company, non-distributed Funds From Operations, the issuance of debt securities,
funds from the 1999 Credit  Facility,  and  exchanging  Common  Shares or Common
Units for properties or interests in properties.

ACQUISITIONS/DISPOSITIONS

The  Company  regularly  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.

The  Company  has  recently  identified  5  properties  in  its  portfolio  (313
apartments) that no longer meet its long-term strategic criteria. The properties
are located in Connecticut.  Four of the identified  properties (285 apartments)
are currently  under contract for sale. It is the Company's goal to finalize the
sale of these four properties by the end of the fourth quarter of 1999.

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.  To  date,  the  Company
anticipates that the upgrade of its information systems will be completed during
1999 and  believes  that the cost  thereof is not  material  and will not have a
material impact on net income,  assets or liabilities.  The Company has incurred
costs of $12,375  specifically related to Year 2000 compliance and anticipates $
40,000  of  future  related   costs.   The  Company  has  identified  the  other
non-information  systems  that depend on  microprocessors  in the conduct of its
business. 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.  The  following  table  outlines the Company's
status to date of risks associated with the Year 2000 problem:

<TABLE>
<CAPTION>
------------------------- ------------------------ ------------------------- ------------------------ ----------------------
                                Assessment               Remediation                Testing               Implementation
------------------------- ------------------------ ------------------------- ------------------------ ----------------------

<S>                       <C>                      <C>                       <C>                      <C>
Information Technology    100% Complete            80% Complete              80% Complete             80% Complete

                                                   Expected completion       Expected completion      Expected completion
                                                   date, October 1999        date, October 1999       date, October 1999
------------------------- ------------------------ ------------------------- ------------------------ ----------------------
Operating Equipment
with Embedded Chips or    100% Complete            100% Complete             100% Complete            100% Complete
Software
------------------------- ------------------------ ------------------------- ------------------------ ----------------------

3rd Party                 90% Complete             70% Complete              70% Complete             70% Complete
------------------------- ------------------------ ------------------------- ------------------------ ----------------------
</TABLE>

Although the Company  believes that there will be no direct material  effects on
its net income, assets or liabilities from the

                                       16
<PAGE>

Year 2000 problem as it relates to the above stated systems,  it is not possible
to quantify any potential indirect effects that may result from the lack of Year
2000 readiness on the part of other third parties with whom the Company conducts
its business.


Widespread  disruptions  in the  national or  international  economy,  including
disruptions  affecting the financial  markets,  resulting from Year 2000 issues,
could also have an adverse  impact on the Company.  The likelihood and effect of
such disruptions to residential,  subsidized residential,  and retail properties
is not  determinable  at  this  time.  The  Company's  fallback  position,  if a
disruption   does  occur,   is  to  rebuild   its   information   systems   from
contemporaneous  manual monthly records maintained at the Company's main office.
Property sites consist mainly of single-story  and low-rise  buildings with very
little reliance on microprocessors imbedded in systems that are part of property
operating systems.  Any possible disruption can be avoided by manually operating
these property systems.

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 to $4.0 million from $3.0 million for the three months ended June
30, 1999 and 1998,  respectively.  Dividends declared for the three months ended
June 30, 1999 were $0.18 per share,  representing  57.3% of FFO, while dividends
declared  for the  three  months  ended  June 30,  1998  were  $0.17  per  share
representing 64.4% of FFO.

FFO  increased  to $7.6  million from $5.7 million for the six months ended June
30, 1999 and 1998,  respectively.  Dividends  declared  for the six months ended
June 30, 1999 were $0.36 per share,  representing  59.5% of FFO, while dividends
declared  for  the  six  months  ended  June  30,  1998  were  $0.34  per  share
representing 67.7% of FFO.

FFO was calculated as follows (in thousands):

<TABLE>
<CAPTION>
                                                      For the Three Months Ended    For the Six Months Ended
                                                               June 30,                     June 30,
                                                          1999           1998          1999          1998
                                                          ----           ----          ----          ----
<S>                                                    <C>             <C>           <C>           <C>
Income before minority interests and
    extraordinary items                                $  1,563        $  1,790      $ 2,857       $ 3,416
Real estate depreciation and amortization                 2,428           1,252        4,798         2,390
                                                     ---------------------------------------------------------
Funds from operations before minority interests           3,991           3,042        7,655         5,806
Minority interests in consolidated partnerships              38              34           72            63
                                                     ---------------------------------------------------------
FFO                                                    $  3,953        $  3,008      $ 7,583       $ 5,743
                                                     =========================================================
</TABLE>

SEASONALLY

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.

"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

                                       17
<PAGE>




statements in other public  documents of the Company may be forward  looking and
are subject to a variety of risks and uncertainties.  Forward looking statements
would typically  include words like  "believes,"  "anticipates"  or "estimates."
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 of
commercial 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,  (v) the ability of the
Company to successfully integrate the operation of properties it has acquired or
may acquire into its business  and (vi) 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.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The  Company is exposed to changes in  interest  rates  primarily  from its 1999
Credit  Facility.  A  hypothetical  100 basis point  adverse move  (decrease) in
interest rates along the entire interest rate yield curve would adversely affect
the net fair value of all interest sensitive  financial  instruments by $416,500
at June 30, 1999.





                                       18
<PAGE>




PART II.  OTHER INFORMATION

Item 1:  Legal Proceedings

NONE

Item 2:  Change in Securities and Use of Proceeds

On May 1, 1999 the Company  issued  314,846  Common  Units  valued at $11.05 per
Common  Unit and $1.6  million  in cash as a payment  on the  Acquisition  Notes
Payable.  The total  value of the Common  Units at the time of  issuance  in the
transaction was approximately $ 3.5 million.

The issuance of the Common Units referred to in the preceding  paragraph was not
registered  under  the  Securities  Act of 1933  in  reliance  on the  exemption
contained  in Rule 506  thereunder  on basis that each of the  purchase  in such
transaction was an accredited investor.

Item 3:  Defaults upon Senior Securities

NONE

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

The  Company  held its Annual  Meeting  of  Shareholders  on June 18,  1999 (the
"Annual Meeting"). At the Annual Meeting, the shareholders of the Company:

          1. Elected all of the nominees for the Board of Directors
          2. Ratified  the  selection  of  Ernst  & Young  LLP as the  Company's
             independent  public  accountants for  the year ending  December 31,
             1999;

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 Directors
                                     Total Vote for         Total Vote Withheld
                                      Each Trustee            For Each Trustee
                                      ------------            ----------------
             J. Joseph Garrahy         5,846,335                        0
             Joseph R. LaBrosse        5,789,035                   57,300
             Gerald A. McNamara        5,788,445                   57,890

2.     The ratification of the appointment of Ernst & Young LLP as the Company's
       independent public accountants for the year ending December 31, 1999

       For:                     5,831,535
       Against:                    13,000
       Abstain:                     1,800

Item 5:  Other Information

NONE

Item 6:  Exhibits and Reports on Form 8-K

(a)   Exhibits

      No.        Description
      ---        -----------
      27         Financial Data Schedule

(b)   Reports on Form 8-K

NONE



                                       19
<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.

                                        REGISTRANT:

                                        GROVE PROPERTY TRUST

August 12, 1999                         By:   /s/ Joseph R. LaBrosse
                                             --------------------------------
                                             Name:  Joseph R. LaBrosse
                                             (On behalf of the registrant and
                                              as Chief Financial Officer)










                                       20
<PAGE>




                                  EXHIBIT INDEX


       Exhibit Number                Description
       --------------                -----------

            27                 Financial Data Schedule