U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   Form 10-QSB



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

                  For the quarterly period ended March 31, 1997

                                       OR

               [ ]TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934


                           Commission file No. 1-13080

                              GROVE PROPERTY TRUST
        (Exact name of small business issuer as specified in its charter)


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

598 Asylum Avenue, Hartford, Connecticut                    06105
(Address of principal executive offices)                 (Zip Code)

                                 (860) 246-1126
                           (Issuer's telephone number)

                          GROVE REAL ESTATE ASSET TRUST
                                  (Former Name)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15 (d) of the  Exchange Act during the past 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:

  3,953,435 common shares, $.01 par value, were outstanding as of May 15, 1997.

Transitional Small Business Disclosure Format (check one):  Yes:     No: X

<PAGE>



                                                Form 10-QSB
                                                   Index



                                                                           Page

Part I:    Financial Information                                             3

Item 1:    Financial Statements                                              3

           Balance Sheets of Grove Property Trust as of March 31, 1997       3
           and December 31, 1996

           Income  Statements of Grove Property Trust for the three 4 months
           ended March 31, 1997 and March 31, 1996                           4

           Statements  of Cash  flows of Grove  Property  Trust  for the three 5
           months ended March 31, 1997 and March 31, 1996

           Notes to Financial Statements                                     6

Item 2:    Management's Discussion and Analysis of Financial Condition and   9
           Results of Operations

Part II:   Other Information                                                 12

Item 2:    Changes in Securities                                             12

Item 4:    Submission of Matters to a Vote of Security Holders               12

Item 6:    Exhibits and Reports on Form 8-K                                  13

Signatures                                                                   15

Exhibit Index                                                                16

<PAGE>

                              GROVE PROPERTY TRUST
                      CONDENSED CONSOLIDATED BALANCE SHEETS


                                                     March 31,      December 31,
                                                       1997             1996
                                                   (Unaudited)        (Audited)
                                                   -----------        ---------

                                                 ASSETS

Real estate assets:
        Land .................................    $  8,749,432     $    920,293
        Buildings and improvements ...........      78,229,518        8,528,075
        Furniture, fixtures and equipment ....       4,529,079          349,768
                                                  ------------     ------------
                                                    91,508,029        9,798,136
        Less - accumulated depreciation ......     (25,840,685)      (1,049,815)
                                                  ------------     ------------
                Net real estate assets .......      65,667,344        8,748,321

Cash and cash equivalents ....................       4,865,648          381,340
Cash - resident security deposits ............         848,200          157,537
Other assets .................................       1,463,527          233,412
                                                  ------------     ------------

 Total assets ................................    $ 72,844,719     $  9,520,610
                                                  ============     ============


                                  LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:
        Mortgage notes payable .............      $29,149,658       $ 5,668,578
        Other liabilities ..................        6,340,574           350,341
        Due to affiliates ..................          669,722            19,190
                                                  -----------       -----------

Total liabilities ..........................       36,159,954         6,038,109
                                                  -----------       -----------

Commitments

Minority interest ..........................           33,627              --

Shareholders' equity:
        Preferred shares, $.01 par value per
            share, 4,000,000 shares authorized;
            no shares issued or outstanding              -                   -
        Common shares, $.01 par value per share,
            10,000,000 shares authorized;
            3,953,435 and 525,000 shares issued
             and outstanding                           39,534             5,250
        Additional paid-in capital                 37,013,258         3,913,176
        Distributions in excess of earnings          (401,654)         (435,925)
                                                 --------------    -------------

Total equity                                       36,651,138         3,482,501
                                                 --------------    -------------

Total liabilities and shareholders' equity    $    72,844,719   $     9,520,610
                                                 ==============    =============
<PAGE>


                              GROVE PROPERTY TRUST
                    CONDENSED CONSOLIDATED INCOME STATEMENTS
                                   (Unaudited)


                                                   For the Three Months Ended
                                              ----------------------------------

                                                       March 31,       March 31,
                                                         1997               1996

Revenues:
    Rental income ................................     $1,177,022     $  486,233
    Property management ..........................         45,300           --
    Interest and other income ....................         83,846          8,872
                                                       ----------     ----------
        Total revenues ...........................      1,306,168        495,104
                                                       ----------     ----------


Expenses:
    Property operating and maintenance ...........        487,630        180,474
    Real estate taxes ............................        116,018         49,607
    Related party management fees ................         21,795         25,535
    General and administrative ...................         69,035         20,424
                                                       ----------     ----------
        Total expenses ...........................        694,478        276,041
                                                       ----------     ----------

                                                          611,690        219,063

Interest expense .................................        173,122         87,624
Depreciation and amortization ....................        239,628        110,486
Conveyance taxes .................................         68,761           --
                                                       ----------     ----------

            Income before minority interest ......        130,180         20,953

            Minority interest ....................         33,627           --
                                                       ----------     ----------

                Net income .......................     $   96,553     $   20,953
                                                       ==========     ==========


Net income per share .............................     $     0.08     $     0.03
                                                       ==========     ==========

Weighted average number of shares ................      1,249,732        620,102
                                                       ==========     ==========
<PAGE>





                              GROVE PROPERTY TRUST
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)



                                                   For the Three Months Ended
                                                  ------------------------------

                                                         March 31,     March 31,
                                                             1997         1996

Net cash provided by operating activities .........   $    949,197   $  123,745
                                                      ------------   ----------

Cash flows from investing activities:
      Acquisition charges .........................     (2,457,828)        --
      Acquisition of partnership assets, net ......      2,213,780         --
      Additions to real estate assets .............        (20,491)     (26,496)
                                                      ------------   ----------

Net cash used in investing activities .............       (264,538)     (26,496)
                                                      ------------   ----------

Cash flows from financing activities:
      Net proceeds from mortgage payable on
        acquisition ...............................     15,084,000      235,302
      Financing costs .............................       (648,216)     (21,000)
      Proceeds from New Equity Investment .........     30,000,000         --
      Repayment of mortgage payable ...............    (39,657,197)     (11,938)
      Payments to affiliates ......................       (761,587)     (94,683)
      Dividends paid ..............................       (217,350)    (119,438)
                                                      ------------   ----------

Net cash provided by (used in) financing activities      3,799,650      (11,757)
                                                      ------------   ----------

Net increase in cash and cash equivalents .........      4,484,309       85,492

Cash and cash equivalents, beginning of period ....        381,340      383,725
                                                      ------------   ----------

Cash and cash equivalents, end of period ..........   $  4,865,648   $  469,217
                                                      ============   ==========
<PAGE>

                              GROVE PROPERTY TRUST

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


1.   FORMATION AND BUSINESS OF THE COMPANY

     Grove  Property  Trust  (formerly  Grove  Real  Estate  Asset  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
     twenty-four  properties  with a total of 1,752  residential  apartments and
     95,255  square feet of commercial  property  including a 79,000 square foot
     neighborhood  retail center. The Company purchased three properties on June
     23, 1994 (the "Original  Properties"),  a fourth property  ("Cambridge") in
     January of 1996,  and twenty  additional  properties on March 14, 1997 (the
     "Partnership  Properties")  from  affiliated  partnerships  (the  "Property
     Partnerships")   in  conjunction   with  a  series  of  transactions   (the
     "Consolidation Transactions") (collectively the "Properties").

     These  statements  do not contain  all  information  required by  generally
     accepted  accounting  principles  to be included in a full set of financial
     statements.  In the  opinion  of  management,  the  accompanying  unaudited
     financial  statements  reflect  all the  adjustments  necessary  to present
     fairly the financial  position of the Company at March 31, 1997 and results
     of  operations  and its cash flows for the period then ended and the period
     ended March 31, 1996. These unaudited  financial  statements should be read
     in conjunction with the audited financial statements and notes contained in
     the Company's Form 10-KSB for the year ended December 31, 1996.  Results of
     operations for this period are not necessarily  indicative of results to be
     expected for the full year.

     Earnings per share is based on the weighted average number of common shares
     issued and outstanding;  1,249,732 shares from January 1, 1997 to March 31,
     1997, and 620,102 from January 1, 1996 to March 31, 1996 (both adjusted for
     the Stock Split,  as defined in note 2). The dilutive effect of the assumed
     exercise of  outstanding  stock  options and  warrants is less than 3% and,
     therefore, is not included.

     In February 1997, the Financial  Accounting Standard Board issued Statement
     No. 128,  Earnings  Per Share,  which is required to be adopted on December
     31, 1997.  At that time,  the Company will be required to change the method
     currently  used to  compute  earnings  per share and to  restate  all prior
     periods.  Under the new requirements  for calculating  primary earnings per
     share, the dilutive effect of stock options will be excluded. The impact of
     Statement 128 on the calculation of primary and fully diluted  earnings per
     share  for the  quarter  ended  March 31,  1997 and  March 31,  1996 is not
     material.

2.   CONSOLIDATION TRANSACTIONS

     The  Consolidation  Transactions  were  completed  on  March  14,  1997 and
included the following:

          The Company  formed an operating  partnership  to serve as the vehicle
         for the consolidation of ownership and/or control of the operations and
         assets of the Company (the "Operating Partnership").

          Pursuant to an exchange  offer,  the Operating  Partnership  purchased
         from  limited   partners  (the  "Limited   Partners")  the  outstanding
         partnership  interest of each of the Property  Partnerships in exchange
         for   partnership   units  (the  "Common   Units")  of  the   Operating
         Partnership,  or, in certain circumstances,  cash. The number of Common
         Units  received  by a Limited  Partner was  calculated  based upon such
         partner's  interest  in the  applicable  partnership  as applied to the
         value of the Property Partnership associated therewith.

          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  Common  Shares  to the  holders  of the  issued  and
         outstanding Common Shares as March 10, 1997.

          The Company issued  3,333,333 Common Shares to new equity investors in
exchange for $30 million.

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

         In exchange for the above, the Grove Companies received an aggregate of
         904,867 Common Units in the Operating Partnership and a cash payment of
         $177,669  from the Company,  and the Company  received  620,102  Common
         Units  in  the  Operating   Partnership.   Additionally,   the  Company
         contributed to the Operating  Partnership  the gross proceeds  received
         from new equity  investments  in  exchange  for a number of  additional
         Common Units equal to the number of Common Shares issued by the Company
         to the new equity investors.

          In  connection  with the  Consolidation  Transactions,  the  Operating
         Partnership entered into a three-year secured revolving acquisition and
         working  capital  credit  facility of  approximately  $25 million  (the
         "Revolving  Credit  Facility")  and  an  approximately   $15.1  million
         ten-year term mortgage loan.

         The  Company  used a  portion  of the  proceeds  from  the  new  equity
         investment, together with borrowings under the new credit facilities to
         refinance  approximately $39.6 million of mortgage  indebtedness of the
         Property  Partnerships  and to acquire  certain  minority  interests in
         certain of the Property Partnerships.

     The following  unaudited pro forma  information  for the three months ended
     March 31, 1997 and 1996 is presented as if the  Consolidation  Transactions
     had occurred at the beginning of 1996. The unaudited  information  does not
     purport to represent  what the Company's  results of operations  would have
     actually  been if such  transactions,  in fact,  had occurred on January 1,
     1996, nor does it purport to represent the results of operations for future
     periods.

                                           March 31, 1997       March 31, 1996
                                           --------------       --------------
   Revenues                             $     4,190,508          $  3,942,584
   Net income before minority interest
       and extraordinary items                  359,816               307,490
   Earnings per share                   $          0.09          $       0.08
                                                   

3.   MORTGAGE NOTES PAYABLE

     Mortgage  notes  payable at March 31, 1997 and December 31, 1996 consist of
the following:

                                            March 31, 1997   December 31, 1996
                                            --------------   -----------------
       Amortizing first mortgage notes       $  10,065,658      $  5,668,578
       Interest only first mortgage notes       19,084,000                 0
                                                ----------      ------------
                                                                                
                                             $  29,149,658      $  5,668,578
                                             =============      ============

     The Amortizing first mortgage notes have fixed interest rates between 7.04%
     and  7.49%,   have  monthly   principal  and  interest  payments  based  on
     amortization  schedules between 25 and 30 years, and maturities between the
     year 2000 and 2013. The notes are collateralized by 6 of the Properties and
     are partially  guaranteed by certain executive officers and shareholders of
     the Company.



<PAGE>



The  Interest  only  first  mortgage  notes are  comprised  of two notes and are
     collateralized by 9 of the Properties.  One note has a principal balance of
     $4,000,000, monthly payments of interest only at a fixed rate of 7.50%, and
     matures in 1999.  The other note has a  principal  balance of  $15,084,000,
     monthly  payments  of interest  only at a variable  rate of one month LIBOR
     plus 1.14% (one month LIBOR was 5.6875% on March 31, 1997),  and matures in
     2007.

     The interest rate on the variable note has effectively  been fixed with two
     interest  rate swap  contracts  (the  "Interest  Swaps")  with a bank.  The
     Interest Swaps, in effect, (i) have fixed $7.6 million of debt at 7.67% for
     the period  from  October 1, 1997  through  October 1, 2007,  and (ii) have
     fixed an  additional  $7.6  million  of debt at 7.68% for the  period  from
     October  1, 1997  through  January 4, 2005.  The  Interest  Swaps have been
     pledged as collateral under the variable note.

4.   REVOLVING CREDIT FACILITY

     In  March  1997,  the  Operating  Partnership  entered  into a  three  year
     Revolving Credit Facility with a bank, guaranteed by the Company, for up to
     $25.0  million.   Borrowings   under  the  Revolving  Credit  Facility  are
     collateralized  by 8 of the Properties (the  "Collateral  Properties")  and
     bear interest  payable monthly at a floating rate of 1.2% above the 30, 60,
     or 90 day LIBOR rate.  The  Operating  Partnership  is required to maintain
     certain  financial  covenants as defined in the Revolving  Credit  Facility
     agreement.  The  Revolving  Credit  Facility  is  available  to fund future
     property  acquisitions,  up to $4.0  million is  available  to fund working
     capital  needs,  and up to $2.0 million is available to fund the redemption
     of  Common  Units  or the  purchase  of  Common  Shares  by  the  Operating
     Partnership.  As of March 31, 1997,  there was no outstanding  indebtedness
     under the Revolving Credit Facility.

5.   STOCK OPTIONS AND WARRANTS

     Under  the  1996  Share   Incentive  Plan  and  in  conjunction   with  the
     Consolidation  Transactions the Company granted  nonqualified stock options
     to purchase  300,000 Common Shares with an exercise price equal to the fair
     value of the Common Shares at the date of grant.









<PAGE>




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

Overview

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

The results of operations  for the three months ended March 31, 1997 include the
three  multifamily  properties (the "Original  Properties") that the Company has
owned since its inception, a fourth property ("Cambridge"),  acquired on January
12,  1996,  and  twenty  additional  properties  acquired  on March 14,  1997 in
conjunction   with   the   Consolidation    Transactions   (the   "Consolidation
Properties"), (collectively, the "Properties). The results of operations for the
three  months  ended March 31, 1996 include the three  Original  Properties  and
Cambridge for the period subsequent to January 11, 1996.

Results of Operations

Results of  operations  of the Company for the three months ended March 31, 1997
and March 31, 1996.

Total revenues  increased  $811,064 from $495,104 to $1,306,168 during the three
months ended March 31, 1997,  as compared to the  corresponding  period in 1996.
Approximately $711,100 of the increase is due to operations of the Consolidation
Properties.  Additionally,  $45,300  of the  increase  is  related  to  property
management  revenues which represent fees earned on management services provided
to  properties  owned by  affiliated  entities.  Such  revenue is  derived  from
management   contracts   acquired   in   conjunction   with  the   Consolidation
Transactions, therefore there was no comparable revenue during the corresponding
period in 1996. The remainder of the increase in total revenues is  attributable
to the  increases in rental rates  experienced  at the Original  Properties  and
Cambridge,  discussed  below,  and from the current  period being the first full
period of operations in the Company for Cambridge.

The Original  Properties  and  Cambridge  experienced  increases in rental rates
which increased revenues.  The Original Properties weighted average rental rates
increased  to $706 for the three  months  ended March 31, 1997 from $678 for the
three  months  ended  March  31,  1996.  Physical  occupancy  for  the  Original
Properties and Cambridge  remained at an aggregate weighted average occupancy of
97.6% for the three  months  ended March 31, 1997 and March 31,  1996.  Physical
occupancy for the Original  Properties and Cambridge decreased to 97.0% at March
31, 1997 from 97.4% at March 31, 1996. The weighted average  physical  occupancy
for the Consolidation Properties was 97.8% at March 31, 1997.

Property operating and maintenance  expenses increased $307,156 from $180,474 to
$487,630  during the three  months  ended  March 31,  1997,  as  compared to the
corresponding period in 1996. Expenses increased  approximately  $309,100 due to
the  acquisition  of  the  Consolidation  Properties  offset  by a  decrease  in
operating and maintenance  expenses at the Original Properties and Cambridge due
to the relatively mild winter  experienced  during 1997 as compared to the harsh
winter  experienced in the New England area during the  corresponding  period in
1996.

General and  administrative  expenses  increased $48,611 from $20,424 to $69,035
during the three months ended March 31, 1997,  as compared to the  corresponding
period in 1996. The increase is primarily due to additional  expenses related to
the acquisition of the Consolidation Properties and increased overhead expenses.

Real estate taxes  increased  $66,411 from $49,607 to $116,018  during the three
months ended March 31, 1997,  as compared to the  corresponding  period in 1996.
Approximately  $63,300 of this  increase is  attributable  to the  Consolidation
Properties.

Related party  management  fees decreased  $3,740 from $25,535 to $21,795 during
the three months ended March 31, 1997, as compared to the  corresponding  period
in  1996.  This  decrease  is 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.

Interest  expense  increased  $85,497 from $87,624 to $173,121  during the three
months ended March 31, 1997,  as compared to the  corresponding  period in 1996.
Approximately $80,200 of this increase is due to the $23.5 million mortgage debt
assumed  and/or  refinanced  as  part  of the  Consolidation  Transactions.  The
remaining increase is due to the operations of Cambridge for the full period.

Depreciation  and  amortization  increased  $129,142  from  $110,486 to $239,628
during the three months ended March 31, 1997,  as compared to the  corresponding
period in 1996. This increase results from approximately  $144,900  attributable
to the Consolidation  Properties offset by a decrease in amortization expense of
$15,000  resulting  from the prior year write off of financing fees related to a
credit line which was terminated.

Conveyance  taxes of $68,761 for the three months ended March 31, 1997 relate to
the Consolidation Transactions. This expense is a non-recurring item.

The Company's net income  increased  $75,600 from $20,953 to $96,553  during the
three months ended March 31, 1997,  as compared to the  corresponding  period in
1996.  Approximately  $55,000 of this  increase  results  from the net effect of
decreasing  expenses and increasing rental rates at the Original  Properties and
Cambridge,  as discussed above. The remaining  increase is due to the operations
of the Consolidation Properties.

Liquidity and Capital Resources

Cash and cash equivalents totaled $4,865,648 as of March 31, 1997. The Company's
long-term debt to market capitalization on March 31, 1997 was 33% based on total
market  capitalization  of $88,311,430  (6,067,874  Operating  Partnership units
outstanding  including  minority  interest  at $9.75  plus  long-term  debt) and
long-term debt of $29,149,658.

Cash  provided by operating  activities  was $949,197 for the three months ended
March 31,  1997.  Cash used in investing  activities  was $264,539 for the three
months ended March 31, 1997.

Net cash provided by financing  activities  was  $3,799,650 for the three months
ended March 31, 1997.

On March 10, 1997, the Company declared a dividend of $0.184 per share which was
paid on March 28, 1997. The dividends  declared  during the period of $0.184 per
share  resulted in a 34.5% payout of funds from  operations for the three months
ended March 31, 1997.

The Company intends to meet its short term liquidity  requirements  through cash
flow provided by operations.  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 interest 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 interest in properties.

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.  Funds from operations 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. FFO for years prior
to 1996 have been  adjusted  to conform to the NAREIT  definition.  The  Company
believes  that in order to  facilitate a clear  understanding  of its  operating
results,  funds from operations  should be examined in conjunction  with the net
income  as  presented  in the  financial  statements  and  information  included
elsewhere  in this  Report.  Funds  from  operations  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.  Funds  from  operations  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  $148,570 from $131,213 for the three months ended March 31, 1996
to $279,783 for the three months  ended March 31, 1997.  Dividends  declared for
the three months ended March 31, 1997 were $96,600,  representing  34.5% of FFO.
However,  the dividends  declared for the three months ended March 31, 1997 were
for a short  dividend  period of January 1, 1997  through  March 13,  1997,  and
therefore the March 31, 1997 FFO payout ratio is not comparable to the March 31,
1996 ratio.  Dividends  declared  for the three months ended March 31, 1996 were
$119,438, representing 91.0% of FFO.

Cash Available for Distribution

Cash  Available for  Distribution  ("CAD") is defined as FFO (as defined  above)
plus depreciation on personal  property,  less mortgage  principal  payments and
recurring capital improvements.  Recurring capital improvements include, but are
not limited to, carpet and flooring  replacement,  appliance  replacements,  and
electrical and plumbing fixture replacement.  The Company believes that in order
to  facilitate a clear  understanding  of its operating  results,  CAD should be
examined in  conjunction  with net income as presented in the audited  financial
statements  and  information  included  elsewhere in this  Report.  CAD 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.  CAD 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.

CAD  increased  $157,857 from $116,202 for the three months ended March 31, 1996
to $274,060 for the three months  ended March 31, 1997.  Dividends  declared for
the three months ended March 31, 1997 were $96,600,  representing  35.3% of CAD.
However, as noted above, the dividends declared for the three months ended March
31, 1997 were for a short  dividend  period of January 1, 1997 through March 13,
1997, and therefore the March 31, 1997 CAD payout ratio is not comparable to the
March 31, 1996 ratio.  Dividends  declared  for the three months ended March 31,
1996 were $119,438, representing 102.8% of CAD.

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  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 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 and (v) other factors which
might be described for 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 the 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  trends  cannot be  reliably  predicted.  These  trends  may cause the
Company to adjust its operation 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.



PART II.  OTHER INFORMATION


Item 2.           Change in Securities.

         (a) In March 1997, the Operating  Partnership entered into a three-year
Revolving  Credit Facility with a bank for up to $25.0 million.  The obligations
of the Operating  Partnership under the Revolving Credit Facility are guaranteed
by the Company. The Revolving Credit Facility requires the Operating Partnership
to  meet  certain  financial  covenants  including:  (i)  maintaining  a debt to
tangible net worth of 1.25 to 1.0;  (ii)  distributing  to its partners not more
than 95% of it  Funds  From  Operations  (as  defined  in the  Revolving  Credit
Facility);  (iii)  maintaining an aggregate minimum occupancy for the properties
securing the  Revolving  Credit  Facility of 90%, with not less than 80% for any
single  property.  Compliance by the Operating  Partnership with these covenants
may have the  effect of  limiting  the  amounts of income  distributable  by the
Operating  Partnership to its partners,  including the Company.  A limitation on
the ability of the Operating  Partnership  to  distribute  funds to its partners
would  effectively limit the ability of the Company to declare and pay dividends
on its Common  Shares.  Under the  Revolving  Credit  Agreement,  the Company is
nevertheless  permitted to distribute at least 95% of its taxable income so that
it may continue to qualify as a REIT for federal income tax purposes.

         (b) Not applicable.

         (c) On March 14,  1997,  the Company  sold an aggregate of 3,333,333 of
its Common Shares to accredited  investors (as defined in Regulation D under the
Securities Act of 1933 (the "1993 Act")) for an aggregate selling price of $30.0
million.  The offer and sale of such  shares was not  registered  under the 1933
Act. No  underwriter  was engaged by the Company in  connection  with this sale,
and,  accordingly,  no underwriting  discounts or commissions were paid. Each of
the  purchasers of shares in this offering  represented to the Company that such
purchaser  was an  "accredited  investor," as defined in Rule 501 under the 1933
Act.  The offer and sale of these  shares was made in reliance on Rule 506 under
the 1933 Act.

         During the quarter  ended  March 31,  1997,  the Company  declared a 5%
stock  dividend to its  shareholders  of record on March 10, 1997 and  currently
effected a 1.125 to 1.0 stock split  (collectively  the "Stock Split") on shares
outstanding  on March 10, 1997.  The stock split  became  effective on March 14,
1997,  and the stock  dividend  was paid on March 28,  1997.  As a result of the
Stock Split,  the Company  issued an  aggregate of 95,102 of its Common  Shares.
Since these shares were issued in connection  with a stock  dividend and a stock
split,  no "sale"  or  "offer  for sale"  occurred,  and  registration  of these
transactions under the 1933 Act was not required.

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

         (a)  A special meeting of the holders of the Company's Common Shares 
              was held on March 10, 1997 (the "Special Meeting").

         (b)  Not applicable.

         (c) Two matters  were voted on by the holders of the  Company's  Common
Shares at the  Special  Meeting:  (i) a proposal  to approve  amendments  to the
Second  Amended and Restated  Declaration  of Trust of the Company (A) to delete
the requirement  that the Company  receive an independent  third party appraisal
before  purchasing  any property the  ownership  of which is  controlled  by the
executive officers of the Company or their affiliates, (B) to change the name of
the  Company  to "Grove  Property  Trust" and (C) to amend the  "Excess  Shares"
provisions to minimize the risk that the Company could fail to qualify as a REIT
for  federal  income tax  purposes  and to clarify the  "Ownership  Limit" as it
applies  to certain  executive  officers  of the  Company  and their  affiliates
("Proposal  No. 1") and (ii) a proposal to approve the adoption of the Company's
1996 Share Incentive Plan ("Proposal No. 2").


<PAGE>




Votes cast FOR,  AGAINST,  and ABSTAIN on each of these proposals at the Special
Meeting are set forth below.  There were no broker  non-votes on either Proposal
No. 1 or Proposal No. 2.

                            For                 Against             Abstain
                            ---                 -------             -------
Proposal No. 1            354,074               13,566               1,200
Proposal No. 2            346,774               20,566               1,500

         (d) Not applicable.

Item 6.  Exhibits and Reports on Form 8-K.

  (a)  Exhibits

       Exhibit No.                                         Description
     3.1   Third Amended and Restated Declaration of Trust of the Company
           substantially as filed with the State of Maryland State Department of
           Assessments and Taxation.

     4.1   Revolving  Credit  Agreement  dated  March 26,
           1997,  among Grove Operating L.P., the Company
           and Rhode Island  Hospital Trust National Bank
           (a Bank of Boston  company)  and  Other  Banks
           which may become  parties to the Agreement and
           Rhode Island  Hospital Trust National Bank, as
           Agent.

      27   Financial Data Schedule
    

  (b)  Reports on Form 8-K.

         During the  quarter  ended  March 31,  1997,  the  Company  filed three
Current  Reports on Form 8-K. The first such Current  Report was dated  February
21, 1997 and reported  information  under Item 5. The second such Current Report
was dated March 14, 1997 and reported  information  under Item 5. The third such
Current Report also dated March 14, 1997 reported  information  under Item 2 and
Item 6. The Current  Report on Form 8-K dated March 14, 1997 which  responded to
Item 2 and Item 6 contained the following financial statements:
                          GROVE REAL ESTATE ASSET TRUST
Pro Forma Financial Statements (Unaudited):
      Pro Forma Condensed Consolidated Balance Sheet  as of September 30, 1996
      Notes to Pro Forma Condensed Consolidated Balance Sheet
      Pro Forma Condensed Consolidated Statements of Income for the Nine Months
            Ended September 30, 1996 and  Year Ended December 31, 1995
      Notes to Pro Forma Condensed Consolidated Statements of Income
Historical Financial Statements:
     Unaudited Balance Sheet as of September 30, 1996
     Unaudited Statements of Income for the Nine Months Ended September 30, 1996
           and 1995
     Unaudited Statement of Changes in Shareholders' Equity for the Nine Months
           Ended September 30, 1996
     Unaudited Statements of Cash Flows for the Nine Months Ended 
           September 30, 1996 and 1995
     Notes to the Unaudited Financial Statements
     Report of Independent Auditors
     Balance Sheet as of December 31, 1995
     Statements of Income for the Year Ended December 31, 1995 and the period 
          from inception (June    24, 1994) to December 31, 1994
     Statements of Shareholders' Equity for the Year Ended December 31, 1995 
          and the period from inception (June 24, 1994) to december 31, 1994
     Statements of Cash Flows for the Year Ended December 31, 1995 and the 
          period from inception (June 24, 1994) to December 31, 1994
     Notes to Financial Statements


<PAGE>





                              GROVE OPERATING, L.P.
Financial Statements:
         Report of Independent Auditors
         Balance Sheet as of November 4, 1996
         Notes to Balance Sheet


         GROVE PROPERTY SERVICES LIMITED PARTNERSHIP AND PROPERTY PARTNERSHIPS
    Combined Financial Statements:
         Report of Independent Auditors
         Combined Balance Sheets as of September 30, 1996 (unaudited) and 
             December 31, 1995
         Combined  Statements of Income for the Nine Months Ended  September 30,
             1996  (unaudited) and 1995 (unaudited) and the Years Ended 
             December 31, 1995 and 1994 
         Combined  Statements of Changes in Owners' Equity for the
             Nine Months Ended  September 30, 1996  (unaudited)  and the 
             Years Ended December 31, 1995 and 1994
         Combined  Statements  of Cash Flows for the
         Nine Months Ended September 30, 1996  (unaudited) and 1995 (unaudited)
             and the Years Ended  December  31, 1995 and 1994 
         Notes to the  Combined Financial Statements


                 GROVE CAMBRIDGE ASSOCIATES LIMITED PARTNERSHIP
 Financial Statements:
         Report of Independent Auditors
         Balance Sheet as of  December 31,  1995
         Statement of Operations for the Years Ended December 31, 1995 and 1994
         Statement of Changes in Partners' Equity (Deficit) for the Years Ended 
             December 31, 1995 and 1994
         Statement of Cash Flows for the Years Ended December 31, 1995 and 1994
         Notes to the Financial Statements

<PAGE>







SIGNATURES

In accordance  with the  requirements  of the Exchange Act, the  registrant  has
cause this report to be signed on its behalf by the undersigned,  thereunto duly
authorized.

                          REGISTRANT:

                          GROVE PROPERTY TRUST

Date: May 15, 1997        By:   /s/Joseph R. LaBrosse
                                ---------------------
                                Name:  Joseph R. LaBrosse
                                (on behalf of the registrant and as Chief 
                                 Financial Officer)

<PAGE>



                                  EXHIBIT INDEX


Exhibit No.                         Description
-----------                         -----------
  3.1     Third Amended and Restated Declaration of Trust of the Company
          substantially as filed with the State of Maryland State Department of
          Assessments and Taxation.

  4.1     Revolving  Credit  Agreement  dated  March 26,
          1997,  among Grove Operating L.P., the Company
          and Rhode Island  Hospital Trust National Bank
          (a Bank of Boston  company)  and  Other  Banks
          which may become  parties to the Agreement and
          Rhode Island  Hospital Trust National Bank, as
          Agent.

  27      Financial Data Schedule