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 September 30, 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 of           (I.R.S. 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)

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:

  3,953,829 common shares,  $.01 par value,  were outstanding as of November 11,
1997.

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





<PAGE>




                              GROVE PROPERTY TRUST

                                   Form 10-QSB
                                      Index


                                                                          Page
                                                                          ----

Part I:        Financial Information

Item 1:        Condensed Consolidated Financial Statements (unaudited)

               Condensed Consolidated Balance Sheets
               as of September 30, 1997 and December 31, 1996                3

               Condensed Consolidated Statements of Income for the three
               months ended September 30, 1997 and 1996                      4

               Condensed Consolidated Statements of Income for the nine
               months ended September 30, 1997 and 1996                      5

               Condensed Consolidated Statements of Cash Flows for the
               nine months ended September 30, 1997 and 1996                 6

               Notes to Condensed Consolidated Financial Statements          7

Item 2:        Management's Discussion and Analysis of Financial Condition
               and Results of Operations                                    11

PART II:       Other Information                                            15  

Item 6:        Exhibits and Reports on Form 8-K                             15

Signatures                                                                  16 

Exhibit Index                                                               17


<PAGE>
<TABLE>

                                         GROVE PROPERTY TRUST
                                 CONDENSED CONSOLIDATED BALANCE SHEETS
<CAPTION>

                                                              September 30,  December 31,
                                                                  1997           1996
                                                              (Unaudited)      (Audited)
                                                             -----------      ---------
<S>                                                               <C>                <C>
                                                          (In thousands, except per share data)

                                                ASSETS
Real estate assets:

        Land ..................................................   $  15,013    $     920

        Buildings and improvements ............................     124,229        8,528

        Furniture, fixtures and equipment .....................       6,313          350
                                                                  ---------    ---------

                                                                    145,555        9,798
        Less - accumulated depreciation
                                                                    (33,541)      (1,050)
                                                                  ---------    ---------
                Net real estate assets
                                                                    112,014        8,748

Cash and cash equivalents, including resident security deposits       1,158          539


Other Assets ..................................................       3,268          234
                                                                  ---------    ---------

 Total assets .................................................   $ 116,440    $   9,521
                                                                  =========    =========


              LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
        Mortgage notes payable ................................   $  53,862      $ 5,669

        Revolving credit facility .............................      11,125         --

        Other liabilities .....................................       5,201          369
                                                                  ---------    ---------

Total liabilities .............................................      70,188        6,038
                                                                  ---------    ---------

Commitments

Minority interests in consolidated partnerships ...............       1,560         --

Minority interest in operating partnership ....................      20,831         --

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; 3,953,829 and
            620,102 shares issued and outstanding .............          40            6

       Additional paid-in capital .............................      24,590        3,912

       Distributions in excess of earnings ....................        (769)        (435)
                                                                       ----         ----



Total shareholders equity ....................................       23,861        3,483
                                                                  ---------    ---------


Total liabilities and shareholders' equity ....................    $116,440      $ 9,521
                                                                  =========    =========

<FN>
See notes to financial statements
</FN>

<PAGE>
</TABLE>

<TABLE>

                                           GROVE PROPERTY TRUST
                                 CONDENSED CONSOLIDATED INCOME STATEMENTS
                                               (Unaudited)

<CAPTION>
                                                               For the Three Months Ended
                                                               --------------------------
                                                                                                                  ---------
                                                               September 30, September 30,
                                                                    1997        1996
                                                                    ----        ----
                                                            (In thousands, except per share data)
<S>                                                              <C>         <C>
Revenues:
    Rental income ..............................................$     5,506   $     520

    Property management ........................................        162         --

    Interest and other income ..................................         47          8
                                                                  ---------   ---------

        Total revenues .........................................      5,715        528
                                                                  ---------   ---------


Expenses:
    Property operating and maintenance .........................      1,782         139

    Real estate taxes ..........................................        600          53

    Related party management fees ..............................        --           27

    General and administrative .................................        258          15
                                                                  ---------   ---------

        Total expenses .........................................      2,640         234
                                                                  ---------   ---------


Net operating income                                                  3,075         294


Interest expense ...............................................        918         103

Depreciation and amortization ..................................      1,225          95
                                                                  ---------   ---------


            Income before minority interests ...................        932          96


            Minority interests in consolidated partnerships ....         65          --

            Minority interest in operating partnership .........        347          --
                                                                  ---------   ---------

Net income .....................................................  $     520   $      96
                                                                  =========   =========


Net income per common share ....................................   $   0.13     $  0.16
                                                                  =========   =========

Weighted average number of common shares .......................  3,953,829     620,102
                                                                  =========   =========

<FN>
See notes to financial statements.
</FN>
</TABLE>


<PAGE>

<TABLE>

                                           GROVE PROPERTY TRUST
                                 CONDENSED CONSOLIDATED INCOME STATEMENTS
                                               (Unaudited)

<CAPTION>
                                                                      For the Nine Months Ended
                                                                      ------------------------

                                                                      June 30,      June 30,
                                                                         1997         1996
                                                                       ----------   ----------
                                                                 (In thousands, except per share data)
<S>                                                                    <C>          <C>
Revenues:
    Rental income ..................................................   $   10,944   $   1,521

    Property management ............................................          380          --

    Interest and other income ......................................          212          28
                                                                          -------       ------


        Total revenues .............................................       11,536       1,549
                                                                        ---------    ---------


Expenses:
    Property operating and maintenance .............................        3,741          485

    Real estate taxes ..............................................        1,143          155

    Related party management fees ..................................           22           80

    General and administrative .....................................          610           55
                                                                          -------       ------


        Total expenses .............................................        5,516         775
                                                                        ---------      -------

Net operating income                                                        6,020         774


Interest expense ...................................................        1,732         292

Depreciation and amortization ......................................        2,380         293
                                                                        ---------      -------


            Income before minority interests .......................        1,908         189

            Minority interests in consolidated partnerships ........          114         --

            Minority interest in operating partnership .............          658         --
                                                                       ----------   ----------


                Net income .........................................   $  1,136   $       189
                                                                       ----------   ----------


et income per common share ........................................   $     0.37   $     0.30
                                                                       ==========   ==========


Weighted average number of common shares ...........................   3,074,535      620,102
                                                                       ==========   ==========
<FN>
See notes to financial statements.
</FN>
</TABLE>



<PAGE>

<TABLE>


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

                            For the Nine Months Ended
                            ------------------------

                                                      September 30,   September 30,
                                                          1997           1996
                                                          ----           ----

<S>                                                        <C>           <C>
                                 (In thousands)
Operating activities
Net income .............................................  $  1,136     $  189

Adjustments  to  reconcile   net  income  to  net  cash  provided  by  operating
   activities:
      Depreciation and amortization ....................     2,380        293
       Minority interests ..............................       772         --
      Non-cash compensation expenses ...................        90         --

      Imputed interest - mortgage ......................        20         28

(Increase)in other assets ..............................    (1,247)       (59)

Increase in accounts payable, accrued
    expenses and other liabilities .....................       693         30
                                                           -------    -------
Net cash provided by operating activities ..............     3,844        481
                                                           -------    -------

Investing activities
Purchase of partnership interests ......................    (8,333)      --
Cash acquired on purchase of partnership interests .....     3,013       --
Deferred charges .......................................    (1,076       --

Additions to real estate assets ........................    (5,846)       (89)
                                                           -------    -------
     Net cash (used in) investing activities ...........   (12,242)       (89)
                                                           -------    -------

Financing activities
Net proceeds from mortgages payable ....................    26,209        220
Financing costs ........................................      (648)       (57)
Repayment of mortgages payable .........................   (41,888)       (42)
Net proceeds from New Equity investment ................    27,524       --
Payments to affiliates .................................      (758)       (95)
Dividends and distribution paid ........................    (1,422)      (360)
                                                           -------    -------
     Net cash provided by (used in) financing activities     9,017
                                                                         (334)
                                                           -------    -------

Net increase in cash and cash equivalents ..............       619         58


Cash and cash equivalents, beginning of period .........       539        384
                                                           -------    -------

Cash and cash equivalents, end of period ...............   $ 1,158     $  442
                                                           =======    =======


<FN>
See notes to financial statements.
</FN>
</TABLE>

<PAGE>


                              GROVE PROPERTY TRUST

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                        (Unaudited) (dollars in thousands)



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
     thirty-three  properties with a total of 2,863  residential  apartments and
     95,000  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,  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"),  three additional properties on June 2, 1997
     (the "June97 Properties") from affiliated  partnerships in conjunction with
     the  assumption  of debt and the  issuance of  additional  Common Units (as
     defined below) (the "June97 Acquisitions"),  one property effective on July
     1, 1997 from an  unrelated  third  party (the  "July97  Property")  and two
     additional  properties  effective on  September  1, 1997 (the  "September97
     Properties") and three additional  properties effective on October 31, 1997
     (the "October97 Properties") (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  September  30, 1997 and
     results  of  operations  and its cash  flows for the three and nine  months
     ended  September 30, 1997 and 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,  as  amended.  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  during the period;  620,102 shares from January 1,
     1996 to March 14, 1997;  3,953,435  shares from March 15, 1997 to April 30,
     1997,  and  3,953,829  shares from May 1, 1997 to  September  30, 1997 (all
     adjusted for the Stock Split,  as discussed 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 Standards 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 stock options will be excluded.  The impact of Statement 128 on
     the  calculation  of primary and fully  diluted  earnings per share for the
     periods ended September 30, 1997 and 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  interests in 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 26,222
         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 of 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
         909,115 Common Units in the Operating Partnership and a cash payment of
         $178 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.

3.  RECENT ACQUISITIONS

     Pursuant  to a  Contribution  Agreement  dated  as of  May  30,  1997  (the
"Contribution  Agreement"),  effective  June 1, 1997,  the Company  acquired two
related party residential apartment complexes through the Operating Partnership.
These  acquisitions  were  effected  by the  Operating  Partnership  through the
acquisition  of the  assets  (other  than  certain  amounts  of  cash)  and  the
assumption of liabilities  of Northeast  Apartments I Limited  Partnership,  the
owner of Four Winds Apartments  ("Northeast  L.P."), and of West Hartford Center
Associates,  Limited  Partnership,  the  owner of  Brooksyde  Apartments  ("West
Hartford L.P."). In addition,  simultaneously with the acquisition of Four Winds
Apartments and Brooksyde Apartments and through the Operating  Partnership,  the
Company  acquired  a  28.9%  controlling   interest  in  Windsor  Arbor  Limited
Partnership,  the  owner of  River's  Bend  Apartments  ("Windsor  Arbor"),  and
acquired  the  remaining  limited  partner ship  interests  in Windsor  Arbor on
September 30, 1997 for $4.9 million.

    Upon  consummation  of the  transactions  referred to above,  the  Operating
    Partnership  issued an aggregate  of 420,183  Common Units valued at $10 per
    unit,  which,  under certain  circumstances,  could be redeemed for an equal
    number of Common  Shares of the Company.  The Company also assumed  mortgage
    debt on Four Winds  Apartments  and  Brooksyde  Apartments  in the aggregate
    remaining principal amount of $6.2 million.  Additionally, the Windsor Arbor
    investment is encumbered by $8.6 million  mortgage debt which is included in
    the Company's  consolidated  financial  statements at September 30, 1997. To
    complete  these  transactions,  the Company  borrowed $1.8 million under its
    line of credit and used $68 of its available cash.

    Four Winds Apartments is a 168-unit  apartment complex located in North Fall
    River,  Massachusetts.  The complex, which includes six two-story wood frame
    buildings,  a clubhouse,  indoor and outdoor pools,  tennis courts and other
    recreational  facilities,  is located on approximately 24 acres of land. The
    Company intends to continue to operate the complex as rental apartments.

    Brooksyde  Apartments  is an  80-unit  apartment  complex  located  in  West
    Hartford,   Connecticut.   The  complex,   which  includes  eight  two-story
    buildings, is located on approximately 4 acres. The property is located near
    retail and  recreational  facilities.  The  Company  intends to  continue to
    operate the complex as rental apartments.

    River's  Bend  Apartments  is a  432-unit  condominium  complex  located  in
    Windsor,  Connecticut,  of which  349 units are own by  Windsor  Arbor.  The
    complex, which includes 33 two-story buildings, outdoor and indoor pools and
    a fitness center,  is located on approximately 72 acres of land. The Company
    intends to continue to operate the complex as rental apartments.

    Effective  on July 1, 1997,  the Company  purchased  127  condominium  units
    constituting  a part  of  Greenfield  Village  Condominium  in  Rocky  Hill,
    Connecticut. The purchase was made pursuant to a Purchase and Sale Agreement
    dated  May 14,  1997,  between  Highland  Income  Partners,  L.P.  and Grove
    Corporation,  an affiliate of the Company. The $4,282,500 purchase price for
    Greenfield  Village was paid  utilizing a portion of the Company's  cash and
    borrowings  under the Revolving Credit  Facility.  In addition,  Grove Rocky
    Hill  assumed  certain  obligations  of the seller,  principally  related to
    security  deposits held by the seller.  In  connection  with the purchase of
    Greenfield  Village,  the Company  paid  $107,000  for expense and  overhead
    reimbursements  to National Realty  Services,  L.P., a limited  partnership[
    owned by four of the executive officers of the Company.

    Effective on  September  1, 1997,  the Company  acquired  three  residential
    apartment  complexes through the Operating  Partnership.  These acquisitions
    were completed by the Operating  Partnership  through the acquisition of the
    assets  (other  than  certain   amounts  of  cash)  and  the  assumption  of
    liabilities of Heritage Court Associates Limited  Partnership,  the owner of
    Glastonbury   Apartments,   and  of  Farmington  Summit  Associates  Limited
    Partnership, the owner of Summit Apartments and Birch Hill Apartments.

    Upon consummation of the September 1, 1997  transactions  referred to above,
    the Operating Partnership issued an aggregate of 325,836 Common Units valued
    at $10.50 per unit, which under certain  circumstances could be redeemed for
    an equal number of Common  Shares of the  Company.  The Company also assumed
    mortgage debt on Summit  Apartments,  Birch Hill  Apartments and Glastonbury
    Center  Apartments  in the  aggregate  remaining  principal  amount  of $9.8
    million.  To complete these transactions the Company borrowed $750,000 under
    its Revolving Credit Facility,  assumed a current  liability of $1.1 million
    (subsequently paid),  including  approximately $200,000 due to an affiliate,
    and paid the balance from its available cash.

    Glastonbury  Center  Apartments  includes a total of 104  apartments  and is
    located  in  Glastonbury,  Connecticut.  Summit  and Birch  Hill  Apartments
    includes  a  total  of  184   apartments   and  is  located  in  Farmington,
    Connecticut.

    On October 31, 1997, the Company  purchased a 100 unit apartment  complex in
    Ellington,  Connecticut.  The purchase  was made  pursuant to a Purchase and
    Sale from an unrelated  party.  The  $4,200,000  (including  closing  costs)
    purchase  price for High Meadow  Apartments  was paid  utilizing  borrowings
    under the Revolving Credit Facility.

    Pursuant  to a  Solicitation  of  Consent  and  Offer  to  Exchange  Certain
    Outstanding  Limited Partnership  Interests in two affiliated  partnerships,
    effective  October 31, 1997,  the Company  acquired  two retail  communities
    through the Operating Partnership.  These acquisitions were completed by the
    Operating   Partnership  through  the  acquisition  of  certain  assets  and
    liabilities of Grove Coastal  Associates Limited  Partnership,  the owner of
    the Wharf and Corner Block.

    Upon  consummation  of the  October  31, 1997  transactions,  the  Operating
    Partnership  issued  148,668  Common  Units  valued at $10.50 per unit which
    under certain circumstances, could be redeemed for an equal number of Common
    Shares of the Company. To complete these transactions,  the Company borrowed
    approximately $7 million under its Revolving Credit Facility.

    The  Corner  Block  and  Wharf  building  properties  are  specialty  retail
    properties  which  include  a total of 16,427  square  feet of space and are
    located in Edgartown, Massachussets.

4.       PRO FORMA INFORMATION

    The  following  unaudited  pro forma  information  for the nine months ended
    September   30,  1997  and  1996  is  presented  as  if  the   Consolidation
    Transactions,  the  June97,  July97  and the  September97  Acquisitions  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.

                               September 30,        September 30,
                                    1997                 1996
                                    ----                 ----
   Revenues                            $18,474             $17,316
   Net income                          $ 1,459             $ 1,340
   Earnings per share                  $  0.37             $ 0.34

5.   MORTGAGE NOTES PAYABLE

     Mortgage  notes payable at September 30, 1997 and December 31, 1996 consist
of the following (in thousands):

                                                       Nine Months Ended

                                           September 30, 1997  December 31, 1996
                                           ------------------  -----------------
       Amortizing first mortgage notes             $ 14,425            $  5,669
       Interest only first mortgage notes            39,437                  -
                                                     ------            --------
                                                                              
                                                    $ 53,862           $  5,669
                                                    ========           ========
                                         

     The Amortizing first mortgage notes have fixed interest rates between 7.04%
     and  8.33%,   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.

     The Interest only first  mortgage  notes are comprised of variable rate and
     fixed rate  notes,  are  collateralized  by 13 of the  Properties,  and are
     partially  guaranteed by certain executive officers and shareholders of the
     Company. One note has a principal balance of $4.0 million, monthly payments
     of interest  only at a fixed rate of 7.50%,  and matures in 1999.  One note
     has a principal balance of $15.1 million, monthly payments of interest only
     at a variable rate of one month LIBOR plus 1.14% and matures in 2007.  Four
     notes  have an  aggregate  principal  balance  of  $20.3  million,  monthly
     payments of interest only at a variable rate of one month LIBOR plus 1.20%,
     and mature between 1999 and 2005.

     The interest rate on the variable notes has been partially fixed with three
     interest rate swap  contracts (the  "Interest  Swaps") with two banks.  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,  (ii) have fixed
     $7.6  million of debt at 7.68% for the period from  October 1, 1997 through
     January  4, 2005,  and (iii) have fixed $9.1  million of debt at 7.09% from
     December 15, 1995 through  December 15, 2000.  The Interest Swaps have been
     pledged as collateral under the various related variable notes.

6.   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 9 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  September  30,  1997,   there  was  $11.125  million
     outstanding under the Revolving Credit Facility.


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.  All dollar
amounts are in thousands except per share amounts

The results of operations  for the nine months ended  September 30, 1997 and the
three months ended September 30, 1997 include the three  multifamily  properties
(the "Original  Properties") that Grove Property Trust (the "Company") has owned
since its inception,  a fourth property  ("Cambridge") that the Company acquired
on January 12, 1996, twenty properties acquired on March 14, 1997 in conjunction
with the Consolidation  Transactions  (the  "Consolidation  Properties"),  three
properties acquired on June 1, 1997 from affiliated  partnerships,  one property
acquired  on July 2,  1997 from an  unrelated  third  party  and two  additional
properties  on September 1, 1997 (the twenty  March 14, 1997  acquisitions,  the
three June 1, 1997 acquisitions,  the July, 1 1997 acquisition and the September
1,  1997  acquisitions  collectively  referred  to as the  "1997  Acquisitions")
(collectively, the "Properties").

Results of Operations

Results of  operations  of the Company for the nine months ended  September  30,
1997 and September 30, 1996.

Total  revenues  increased  $9,987 from $1,549 to $11,536 during the nine months
ended  September  30,  1997,  as compared to the  corresponding  period in 1996.
Approximately  $9,472  of the  increase  is due to the  operations  of the  1997
Acquisitions.  Additionally,  $380  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 and slight  increases in occupancy
experienced at the Original Properties and Cambridge, discussed below.

The Original  Properties  and  Cambridge  experienced  increases in rental rates
which  increased  revenues.  The weighted  average rental rates for the Original
Properties and Cambridge  increased to $712 for the nine months ended  September
30,  1997 from $690 for the nine  months  ended  September  30,  1996.  Economic
occupancy for the Original  Properties  and Cambridge  increased to an aggregate
weighted average occupancy of 97.6% for the nine months ended September 30, 1997
from an aggregate  weighted average of 97.3% for the nine months ended September
30, 1996. At September 30, 1997 the weighted average economic  occupancy for the
Properties was 96.4%.

Property operating and maintenance expenses increased $3,256 from $485 to $3,741
during  the  nine  months  ended   September   30,  1997,  as  compared  to  the
corresponding period in 1996. The increase is primarily due to the operations of
the 1997 Acquisitions.

Real  estate  taxes  increased  $988 from $155 to $1,143  during the nine months
ended September 30, 1997, as compared to the  corresponding  period in 1996. The
increase is due primarily to the 1997  Acquisitions.  Related  party  management
fees  decreased  $58  from $80 to $22.  This  decrease  is due to the  Company's
acquisition  of the assets of the  management  company in  conjunction  with the
Consolidation Transactions, resulting in the elimination of all such expenses in
consolidation.

General and  administrative  expenses increased $555 from $55 to $610 during the
nine months ended September 30, 1997, as compared to the corresponding period in
1996. This increase is primarily due to the increased costs  associated with the
change in size and structure of the Company.

Interest  expense  increased  $1,440 from $292 to $1,732  during the nine months
ended September 30, 1997, as compared to the  corresponding  period in 1996. The
increase is primarily  due to the $38.3  million  mortgage  debt assumed  and/or
refinanced as part of the 1997 Acquisitions.

Depreciation  and  amortization  increased $2,087 from $293 to $2,380 during the
nine months ended September 30, 1997, as compared to the corresponding period in
1996. This increase results from  depreciation and amortization  attributable to
the 1997 Acquisitions.

The  Company's  net income  increased  $947 from $189 to $1,136  during the nine
months ended  September  30, 1997,  as compared to the  corresponding  period in
1996.  Approximately  $100 of this  increase  results  from  the net  effect  of
decreased  expenses and increased  rental rates at the Original  Properties  and
Cambridge.  The  remaining  increase  is  due  to the  operations  of  the  1997
Acquisitions.

Results of  operations  of the Company for the three months ended  September 30,
1997 and September 30, 1996.

Total  revenues  increased  $5,187 from $528 to $5,715  during the three  months
ended  September  30,  1997,  as compared to the  corresponding  period in 1996.
Approximately  $5,010  of the  increase  is due to the  operations  of the  1997
Acquisitions.  Additionally,  $162  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 and slight  increases in occupancy
experienced at the Original Properties and Cambridge, discussed below.

The Original  Properties  and  Cambridge  experienced  increases in rental rates
which  increased  revenues.  The weighted  average rental rates for the Original
Properties and Cambridge  increased to $717 for the three months ended September
30, 1997 from $696 for the three  months  ended  September  30,  1996.  Economic
occupancy for the Original  Properties  and Cambridge  increased to an aggregate
weighted  average  occupancy of 96.9% for the three months ended  September  30,
1997 from an  aggregate  weighted  average of 96.8% for the three  months  ended
September 30, 1996.

Property operating and maintenance expenses increased $1,643 from $139 to $1,782
during  the  three  months  ended   September  30,  1997,  as  compared  to  the
corresponding period in 1996. Expenses increased primarily due to the operations
of the 1997 Acquisitions.

Real estate taxes  increased $547 from $53 to $600 during the three months ended
September  30,  1997,  as  compared  to the  corresponding  period in 1996.  The
increase is primarily due to the 1997  acquisitions.  Related  party  management
fees  decreased  $27 from $27 to $0 during the three months ended  September 30,
1997, as compared to the  corresponding  period in 1996. This decrease is due to
the Company's acquisition of the assets of the management company in conjunction
with the  Consolidation  Transactions,  resulting in the elimination of all such
expenses in consolidation.

General and  administrative  expenses increased $243 from $15 to $258 during the
three months ended September 30, 1997, as compared to the  corresponding  period
in 1996. This increase is primarily due to the increased  costs  associated with
the change in size and structure of the Company.

Interest expense  increased $815 from $103 to $918 during the three months ended
September  30,  1997,  as  compared  to the  corresponding  period in 1996.  The
increase is due primarily to the mortgage debt assumed and/or refinanced as part
of the 1997 Acquisitions.

Depreciation  and  amortization  increased $ 1,130 from $95 to $1,225 during the
three months ended September 30, 1997, as compared to the  corresponding  period
in 1996. The increase is primarily due to the 1997 Acquisitions.

The Company's net income increased $424 from $96 to $520 during the three months
ended  September  30,  1997,  as compared to the  corresponding  period in 1996.
Approximately  $9 of this  increase  results  from the net  effect of  decreased
expenses and increased rental rates and occupancy at the Original Properties and
Cambridge,  as discussed above. The remaining  increase is due to the operations
of the 1997 Acquisitions.

Liquidity and Capital Resources

Cash and cash equivalents,  including  resident security deposits totaled $1,158
as of September 30, 1997.  The Company's  debt,  including the Revolving  Credit
Facility,  to total market  capitalization on September 30, 1997 was 44.5% based
on  total  market  capitalization  of  $145,907  based  on  2,860,458  Operating
Partnership  units and  3,953,829  Common Shares  outstanding  assuming a Common
Share price of $11.875 per share/unit (price of common stock as of September 30,
1997) plus debt of $64,987, including the Revolving Credit Facility.

For the nine months  ended  September  30,  1997,  cash  provided  by  operating
activities was $3,844; cash used in investing  activities was $12,242,  and cash
provided by financing activities was $9,017.

On September  11, 1997 the Company  declared a dividend of $0.1575 per share for
the three months ended  September 30, 1997. The dividend was paid on October 17,
1997 to  shareholders  of record on September  30, 1997.  On June 18, 1997,  the
Company  declared a "long"  period  dividend  of $0.189 per share for the period
from March 14, 1997 to June 30, 1997.  The dividend was paid on July 16, 1997 to
shareholders of record on June 30, 1997. On March 10, 1997, the Company declared
a "short"  period  dividend of $0.184 per share for the period  from  January 1,
1997 to March 13,  1997,  which was paid on March 28,  1997 to  shareholders  of
record on March 10, 1997. The dividends declared during the period of $.5305 per
share  resulted in a 61.5% payout of funds from  operations  for the nine months
ended September 30, 1997.

The Operating  Partnership declared a distribution of $0.1575 per common unit of
for the three  months ended  September  30, 1997.  The  distribution  amount was
prorated for unit holders that were not unit holders for the entire three months
ended September 30, 1997.
The distribution was paid on  October 17, 1997.                           .

The Company intends to meet its short term liquidity  requirements  through cash
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 interests 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. The Company believes
that in order to facilitate a clear understanding of its operating results,  FFO
should be  examined  in  conjunction  with the net  income as  presented  in the
financial statements and information included elsewhere in this Report. FFO does
not represent  cash  generated  from  operating  activities  in accordance  with
generally accepted  accounting  principles and is not necessarily  indicative of
cash  available  to  fund  cash  needs.  FFO  should  not  be  considered  as an
alternative to net income as an indication of the Company's performance or as an
alternative to cash flow as a measure of liquidity.

FFO increased  $1,941 from $443 for the nine months ended  September 30, 1996 to
$2,384 for the nine months ended September 30, 1997.  Dividends declared for the
nine months ended  September  30, 1997 were $1,467,  representing  61.5% of FFO.
Dividends  declared  for the nine  months  ended  September  30, 1996 were $361,
representing 81.4% of FFO. FFO per share was $0.78 and $0.71 for the nine months
ended September 30, 1997 and 1996, respectively.

FFO  increased  $923 from $175 for the three months ended  September 30, 1996 to
$1,098 for the three months ended September 30, 1997. Dividends declared for the
three  months ended  September  30, 1997 were $623,  representing  56.7% of FFO.
Dividends  declared  for the three months  ended  September  30, 1996 were $121,
representing  69.0% of FFO.  FFO per share was $0.28 for the three  months ended
September 30, 1997 and 1996.

FFO was calculated as follows:

<TABLE>
<CAPTION>
   
                                                         For the Three Months Ended     For the Six Months Ended
                                                         --------------------------     ------------------------
                                                          September 30 September 30, September 30, September 30,     
                                                                1997         1996         1997         1996
                                                            ----------   ----------   ----------   ----------
<S>                                                         <C>          <C>          <C>          <C>
Net income before minority interests ....................   $      932   $      96   $     1,098   $      189

Real estate depreciation and amortization ...............        1,079          78         2,073          254

Non-recurring expenses ..................................         --           --             69         --
                                                             ---------     --------       ------     --------      
                                          
Funds from operations before minority interests .........        2,011         174         4,050          443

Minority interests in consolidated patnerships ..........          180         --            286         --

Minority interest in operating partnership ..............          733         --          1,380         --
                                                               -------     --------      -------    ---------       
                                                       

FFO .....................................................   $    1,098  $      174   $     2,384   $      443
                                                            ==========   ==========   ==========   ==========
                      
FFO/ Share ..............................................   $     0.28   $     0.28   $     0.78   $     0.71
                                                             ==========   ==========   ==========   =========
    
</TABLE>

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  values  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 availability of
acquisition  financing or refinancing,  (vi) compliance with applicable laws and
regulations  and (vii) 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 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.



<PAGE>



PART II.  OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K

                  (a)      Exhibits

Exhibit No.                         Description

     3                     Third  Amended and Restated  Declaration  of Trust of
                           the  Company  as amended  by  Articles  Supplementary
                           thereto  substantially  as filed  with  the  State of
                           Maryland State Department of Assessments and Taxation

                           27 - Financial Data Schedule

                  (b)      Reports on Form 8-K

                  During the quarter ended September 30, 1997, the Company filed
a  Current Report on Form 8-K dated  July 2, 1997  responding  to Items 2 and 7.
Amendment  No.  1 to  such  Current  Report  included  the  following  financial
statements:

Financial Statements of Businesses Acquired.
         Statement of Revenue and Certain Expenses of Greenfield Village for the
         three months  ended March 31, 1997  [Unuadited]  and year  December 31,
         1996.
Pro Forma Financial Statements
         Pro  Forma  Condensed  Balance  Sheet as of March 31,  1997.  Pro Forma
         Condensed  Consolidated  Statement  of  Operations  for the year  ended
         December 31, 1996 and the three months ended March 31, 1997 [Unaudited]

     Also during the quarter  ended  September  30,  1997,  the Company  filed a
Current Report on Form 8-K dated  September 2, 1997 responding to Items 1 and 7.
Such  Current  Report did not  contain  financial  statements  for the  business
acquired or pro forma financial statements.  In accordance with the instructions
to Item 7, such financial  statements  will be filed by amendment not later than
60 days after the date of such Current Report was required to be filed.




<PAGE>



SIGNATURES

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

                                           REGISTRANT:

                                           GROVE PROPERTY TRUST

Date: November 14, 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 Restated Declaration of Trust of the Company as 
                amended by Articles Supplementary thereto substantially as 
                filed with the State of Maryland State Department of 
                Assessments and Taxation


      27        Financial Data Schedule





<PAGE>