UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C.  20549

                                Form 10-KSB/A No. 1

            ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                      SECURITIES EXCHANGE ACT OF 1934

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


                For the fiscal year ended December 31, 1998

                    Commission File Number:  0-25074

                        WELLINGTON PROPERTIES TRUST
          (Exact name of registrant as specified in its charter)

                Maryland                            39-6594066
(State or other jurisdiction of incorporation)   (I.R.S. Employer
                                                  Identification Number)

18650 W. Corporate Drive, Suite 300, P.O. Box 0919, Brookfield, Wisconsin  
53008-0919 (Address of principal executive offices) (zip code)

Issuer's telephone number:  414-792-8900     Fax number:  414-792-8936

Securities registered under Section 12(b) of the Act:  None      

Securities registered under to Section 12(g) of the Act:  Common Shares, $.01 
par value       
        

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 the filing requirements for the past 90 days.  YesX No    

Check if there is no disclosure of delinquent filers in response to Item 405 of 
Regulation S-B contained in this form, and no disclosure will be
contained to the best of registrant's knowledge, in definitive proxy or 
information statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10-KSB. 

<PAGE>
Issuer's revenues for its most recent fiscal year:  $3,509,436

Aggregate market value of the voting stock held by nonaffiliates of the 
Registrant, based upon the market price as of April 12, 1999 -
$6,007,626.

Number of Common Shares outstanding as of April 12, 1999 - 1,351,625 (adjusted
to give effect to the Company's 4.75 for 3.00 stock split to shareholders of
record on March 22, 1999).

                    DOCUMENTS INCORPORATED BY REFERENCE

The following documents are incorporated by reference:  None

Transitional Small Business Disclosure Format(Check one): Yes ;NoX  (Added by 
Exch Act Rel No. 31905, eff 4/26/93.)





<PAGE>
                        WELLINGTON PROPERTIES TRUST
                             1998 FORM 10-KSB

                             TABLE OF CONTENTS


PART I                                                              
                                                                      Page

Item 1    Description of Business                               

Item 2    Description of Property   

Item 3    Legal Proceedings                                           

Item 4    Submission of Matters to a Vote of Securities Holders 

PART II

Item 5    Market for Common Equity and Related
          Security Holder Matters   

Item 6    Management's Discussion and Analysis or Plan of Operation

Item 7    Financial Statements                                           F-1

Item 8    Changes In and Disagreements with Accountants on Accounting      
          and Financial Disclosure                                   

PART III

Item 9    Directors, Executive Officers, Promoters and Control Persons,
          Compliance With Section 16(a) of the Exchange Act

Item 10   Executive Compensation

Item 11   Security Ownership of Certain Beneficial Owners 
          and Management  

Item 12   Certain Relationships and Related Transactions

Item 13   Exhibits and Reports on Form 8-K   

SIGNATURES


                                   
<PAGE>
                                  PART I

Item 1.   Description of Business.

Wellington Properties Trust (the "Company") is a Maryland trust formed
on March 15, 1994.

Effective January 1, 1996 the Company has operated as a real estate investment
trust ("REIT") and expects to continue to operate as a REIT under Section
856 through 860 of the Internal Revenue Code.  Under such provisions, the
Company must distribute at least 95% of its taxable income to its 
shareholders and meet certain other asset and income tests.  As a REIT, the
Company generally is not subject to federal income tax.

As of December 31, 1998, the Company owns two residential and three commercial
properties.  The Company owns the residential properties through two
wholly owned subsidiaries.  The Company's interests in the commercial
properties are held through its subsidiary partnership, Wellington Properties
Investments, L.P., a Delaware limtied partnership (the "Operating Partnership").

Effective August 31, 1998, the Company entered into a certain Amended and 
Restated Master Contribution Agreement by and among the Company, the Operating
Partnership, American Real Estate Equities, a Delaware limited liability
company ("AREE") and certain other unrelated parties (the "Master 
Contribution Agreement").  Further effective August 31, 1998, the Company
entered into a certain Contribution Agreement (the "WMC Contribution Agreement")
by and between the Operating Partnership and Wellington Management Corporation,
a Wisconsin corporation ("WMC").  In connection therewith, the Company held
a special meeting of Shareholders on November 16, 1998, at which the 
Shareholders approved, among other things, the transactions contemplated by 
the Master Contribution Agreement and the WMC Contribution Agreement.  As
a result, the Company expanded its Board of Trustees from five to seven
members.  The shareholders of the Company elected Paul T. Lambert and Steven
B. Hoyt to fill these two newly created positions, with terms expiring in 
2001 and 2002, respectively.  Also in connection with the Master Contribution 
Agreement, Duane H. Lund was elected Chief Executive Officer of the Company 
and Robert F. Rice was elected President.  Arnold K. Leas, formerly the 
President of the Company, remains as the Chairman of the Board of Trustees of
the Company.
                                       I-1
<PAGE>
As contemplated by the Master Contribution Agreement, on November 16, 1998,
the Company issued to AREE 166,666 common shares of beneficial interest, $0.01
par value per share ("Common Shares") in exchange for $1,000,000.
Furthermore, the Company issued warrants to acquire up to 791,667 Common 
Shares to each of AREE and WMC.  The Warrants will become exercisable one 
year after the date of issuance (November 16, 1999) and will be exercisable
for a nine-year period thereafter, at an exercise price of $5.37 per Common
Share with respect to 395,833 Warrants held by each of AREE and WMC, $6.47
per Common Share with respect to 197,917 Warrants, $7.74 per Common Share 
with respect to 118,750 Warrants held by each of AREE and WMC and $9.32 per
Common Share with respect to 79,167 Warrants held by each of AREE and WMC. 
Arnold K. Leas, the Chairman of the Board of Trustees of the Company, is the
President and Chief Executive Officer of WMC and owns, together with members
of his immediate family and trusts for the benefit of such persons, 
approximately 41.8% of the outstanding capital stock of WMC.

Also as contemplated by the Master Contribution Agreement and the WMC
Contribution Agreement during 1998, the Company terminated its advisory fee
arrangements between the Company and WMC, paid WMC $310,000 as partial
consideration thereof and, effective November 16, 1998, the Company became
self administered.

On November 20, 1998, pursuant to the Master Contribution Agreement, the
Company, through the Operating Partnership acquired three commercial properties
(the "1998 Acquisition Properties" or the "Commercial Properties") in
exchange for issuance of the Operating Partnership of 2,557,707 limited
partnership units ("Units") and the assumption of debt aggregating 
$17,066,000.  The Units are exchangeable, under certain circumstances, on
a one-for-one basis for Common Shares in the Company, from and after the
one-year anniversary of the date of issuance.

AREE is owned in equal thirds by WLPT Funding, LLC, a Delaware limited
liability company, ("WLPT Funding"), Lambert Equities II, LLC, a Delaware
limited liability company ("Lambert Equities") and Steven B. Hoyt, a Trustee
of the Company.  As a result of the 1998 acquisitions, 204,904 Units were 
issued to AREE, 483,412 Units were issued to WLPT Funding, 483,412 Units 
were issued to Lambert Equities and 1,239,248 Units were issued to Mr. Hoyt
and his wife.  Each of AREE, WLPT Funding, Lambert Equities and Mr. Hoyt
have agreed not to transfer any of these Units for a two-year period after
the date of issuance.

Properties owned by the Company will compete with other rental properties. 

On December 31, 1998 the Company had 12 employees.

Item 2.   Description of Property.

As of December 31, 1998 the Company owned interests in the 
properties described below.

                     % Leased as
     Location        of 12/31/98     Description of Property/Ownership Interest

Residential:
Madison, Wisconsin      95.3%        Maple Grove Apartments, 304 unit apartment
                                     community. 

Schofield, Wisconsin    98.2%        Lake Pointe Apartments, 72 unit apartment 
                                     community. 


<PAGE>
Commercial:
                                      Rentable Square       Tenants Leasing 10%
                                      Feet                  or More of Rentable
                                      (Office)/Gross        Sq. Ft. as of 
                      % Leased as     Leaseable Area        11/30/98 & Lease
Property Location     of 12/31/98     (Industrial)          Expiration Date 

Cold Springs Office         99%        77,533               Cold Springs Granite
Center                                                      (55%)-4/02; Central 
St. Cloud, MN (the                                          MN ECSU (14%)-9/02;
"Cold Springs Center")                                      First American Bank
                                                            (17%)-4/05

Thresher Square East/West   100%       119,272              BRW, Inc.(48%)-7/01;
Minneapolis, MN ("Thresher                                  Search Institute
Square")                                                    (16%)-8/02

Nicollet Business VI        100%       50,291               Wakata Design 
Burnsville, MN  ("Nicollet                                  Systems (19%)-3/02;
VI")                                                        Quickdraw Design,
                                                            Inc. (30%)-8/02; 
                                                            Xata Corp. (41%)-
                                                            6/04


As of December 31, 1998 the properties of the Company are encumbered as follows:

Residential:

Maple Grove Apartments                     Mortgage Note to American Property
                                           Financing Inc in the amount of 
                                           $12,738,783 maturing June 1, 2004

Lake Pointe Apartments                     Mortgage Note to First Union National
                                           Bank in the amount of $2,734,512
                                           maturing March 11, 2008

Commercial:

Cold Springs Center                        Mortgage Note to Bremmer Bank N.A.
                                           in the amount of $5,596,633 maturing
                                           October 1, 2000

Cold Springs Center                        Mortgage Note to Bremmer Business
                                           Financial Corp. in the amount of
                                           $1,875,000 maturing September 30, 
                                           2000

Thresher Square (East)                     Commercial Development Revenue
                                           Refunding Bonds in the amount of
                                           $4,095,000 maturing May 1, 2015

Thresher Square (West)                     Commercial Development Revenue
                                           Refunding Bonds in the amount of
                                           $3,135,000 maturing June 1, 2010

Nicollet VI                                Mortgage Note to GMAC in the amount
                                           of $2,330,224 maturing February 1, 
                                           2008
<PAGE>
The Apartment Properties are generally occupied under leases having a
term of one year or less.  The Commercial Properties have leases of varying
terms.

The Properties are all less than 7 years old or have been renovated
within the last seven years and therefore there are no plans for significant
improvements or renovations.  

In the opinion of management the Properties are adequately insured.

Item 3.   Legal Proceedings.

     None

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

The following matters were submitted to a vote of security holders during
the Company's fourth quarter:

(a)  Meeting type and date            Special meeting held on November 16, 1998

(b)  Directors elected at meeting     See discussion below

(c)  Description of each matter voted on at meeting:

     1.  Approve a transaction (the "Transaction") the principal components
of which of which are as follows:  (a) Wellington Properties Investments, L.P.,
a Delaware limited partnership in which the Company is the sole general
partner (the "Operating Partnership"), or one or more of the Operating
Partnership's wholly owned subsidiaries will acquire 31 office and light
industrial properties in exchange for the issuance of 15,612,993
partnership units that will be exchangeable, under certain circumstances, on
a one-for-one basis, for Common Shares of the Company, the payment of
approximaely $35.2 million in cash, and the assumption of approximately
$71.8 million in indebtedness; (b) the Company will issue warrants to acquire
up to 1,583,334 Common Shares; (c) the Company will issue 166,666
Common Shares; (d) the Company will enter into a new credit facility; (e) the
Company will pay to an affiliate of the Company a cash termination fee of
approximately $1.6 million, and the advisory agreement between the Company and
such affiliate will be terminated; (f) the Company will enter into employment
agreements with Duane H. Lund and Robert F. Rice to serve as the Company's
Chief Executive Officer and President, respectively; and (g)  the Company will
enter into property management agreements with various persons and entities
with respect to the day-to-day operations and leasing of the properties to be
acquired.
<PAGE>
Results of votes:

1. (a) 

For                                       407,258.170
Against or withheld                         4,050.993
Abstentions and broker non-votes           14,690.766

1. (b)

For                                       406,126.490
Against or withheld                         4,762.993
Abstentions and broker non-votes           15,110.441

1. (c)

For                                       406,652.490
Against or withheld                         4,050.993
Abstentions and broker non-votes           15,296.441

1. (d)

For                                       406,919.170
Against or withheld                         4,050.993
Abstentions and broker non-votes           15,029.766

1. (e)

For                                       402,237.260
Against or withheld                         5,509.607
Abstentions and broker non-votes           18,253.065

1. (f)

For                                       405,614.420
Against or withheld                         5,009.300
Abstentions and broker non-votes           15,376.208

1. (g)

For                                       407,258.170
Against or withheld                         4,050.993
Abstentions and broker non-votes           14,690.766

2.  Approve certain amendments to the Company's Declaration of Trust, including
classification of the Board of Trustees, which amendments are set forth in 
Articles of Amendment and Restatement that shall take effect only upon 
consummation of the initial closing in connection with the Transaction.

Results of votes:

For                                   407,804.120                         
Against or withheld                     4,050.993
Abstentions and broker non-votes       14,144.815
<PAGE>
3.  Elect two additional members of the Board of Trustees of the Company and
to elect certain of the current members of the Board of Trustees to serve
extended terms, which elections shall take effect only upon consummation of 
the initial closing in connection with the Transaction.

Results of votes:

For                                    400,872.510
Against or withheld                     12,892.605
Abstentions and broker non-votes           971.204

4.  Approve the adoption of Wellington Properties Trust 1998 Share Option Plan.

Results of votes:     

For                                    403,655.390
Against or withheld                      6,947.915
Abstentions and broker non-votes        15,396.626

                                  PART II

Item 5.  The Common Shares are listed on NASDAQ Small Cap under the symbol
"WLPT".

The following table sets forth the range of the high and low last reported
sale prices as reported on NASDAQ, as well as the quarterly distributions per
Common Share declared and paid.

<TABLE>
<CAPTION>

    <S>                     <C>           <C>                  <C>
                                                            Cash Dividends
                                                            Declared Per
Quarter                    High(1)       Low(1)             Common Share(1)

First Quarter, 1997      $ 6.87          $4.58                 $0.13
Second Quarter, 1997     $ 6.00          $4.58                 $0.13
Third Quarter, 1997      $ 5.84          $4.58                 $0.11
Fourth Quarter, 1997     $ 5.76          $4.50                 $0.11

First Quarter, 1998      $ 5.61          $3.95                 $0.11
Second Quarter, 1998     $10.58          $4.58                 $0.11
Third Quarter, 1998      $ 6.79          $5.53                 $0.11
Fourth Quarter, 1998     $ 6.24          $3.79                 $0.11

</TABLE>
(1)Adjusted to give effect to the Stock Split

The number of holders of record of the Common Shares of the Company was 352 and
the Company estimates it has approximately 665 holders of beneficial interest
as of April 12, 1999.

On March 16, 1999, the Company declared a 4.75 for 3.00 share split payable
on March 24, 1999 to shareholders of record as of March 22, 1999 (the "Stock
Split").  All amounts herein have been adjusted to give effect to the Stock
Split.

Item 6.   Management's Discussion and Analysis or Plan of Operation.

     The following discussion should be read in conjunction with financial 
statements and notes thereto included eslewhere herein.

<PAGE>
This report may contain certain forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the 
Securities Exchange Act of 1934, as amended.  The Company intends such
forward-looking statements to be covered by the safe harbor provisions for
forward-looking statements contained in the Private Securities Reform Act
of 1995, and is including this statement for purposes of indicated such intent.
Forward-looking statements that are based on certain assumptions, and describe
future plans, strategies and expectations of the Company, are generally 
identifiable by use of the words "believe", "expect", "intend", "anticipate",
"estimate", "project" or similar expressions.  The Company's ability to 
predict results or the actual effect of future prospects of the Company
include, but are not limited to, changes in interest rates, general
economic conditions, legislative/regulatory changes, monetary and fiscal
policies of the U.S. Government, including policies of the U.S. Treasury and
the Federal Reserve Board, the quality of composition of the Company's 
portfolio of finance receivables, the ability of the Company to obtain debt
or other financing, competition, demand for financial services in the Company's
market area and accounting principles, policies and guidelines.  These risks 
and uncertainties should be considered in evaluating forward-looking
statements and undue reliance should not be placed on such statements.  Further
information concerning the Company and its business, including additional
factors that could materially affect the Company's financial results, is
included in other Company filings with the Securities and Exchange Commission.

Wellington Properties Trust is a real estate investment trust.  As of December
31, 1998, the Company owned a portfolio of two residential and three commercial
properties.  The residential properties are located in Wisconsin and contain an
aggregate of 376 units.  The commercial properties are located in Minnesota
and contain an aggregate of 247,096 square feet.

The Company's interest in the commercial properties is held through Wellington
Properties Investments, LP (the "Operating Partnership").  The Company is the
sole general partner of the Operating Partnership and, as of December 31, 1998,
the Company held a 6.1% interest in the Operating Partnership.

On November 20, 1998, pursuant to the Master Contribution Agreement with
American Real Estate Equities, LLC ("AREE"), the Company, through the Operating
Partnership acquired three commercial properties (the "1998 Acquisition 
Properties" or the "Commercial Properties") in exchange for issuance by the
Operating Partnership of 2,557,707 limited partnership units ("Units") and the
assumption of debt aggregating $17,066,000.  In connection with these 
acquisitions, the Company issued 166,666 common shares of beneficial interest
("Common Shares") to AREE in exchange for $1,000,000 and further issued
warrants (the "Warrants") for 791,667 Common Shares each to AREE, and
representatives thereof, and to Wellington Management Corporation ("WMC").
Simultaneously, WMC received a termination fee and the advisory agreement
between the Company and WMC was terminated.  (Collectively, these transactions
are referred to herein as the "1998 Transactions").

The Company accounted for the 1998 Acquisition Properties under purchase
accounting requirements; therefore, the operating results of the Company for
the year ended December 31, 1998 are not directly comparable to 1997.
<PAGE>
Results of Operations

Rental revenue increased by approximately $508,000 or 17.0% for the year ended
December 31, 1998 compared to the year ended December 31, 1997.  The increased
revenue was primarily a result of the Company's consummation of the 1998 
Acquisition Properties.  Interest and other income decreased by $179,000 or
89.5%, during these same periods, primarily due to the gain on the sale of the
Forest Downs residential property during the second quarter of 1997.

Total expenses increased from $3,457,000 for the year ended December 31, 1997
to $5,515,000 for the year ended December 31, 1998, an increase of 59.6%
or which $1,560,000 of the change represented non-recurring charges
related to the abondonment of certain potential acquisitions associated with
the 1998 Transactions, the provision for uncollectible advance to related 
party and the partial termination of the advisory agreement.  The remaining 
$498,000 was attributable to increased property expenses ($277,000), increased
depreciation and amortization ($88,000), increased interest expense ($19,000)
and increased general and administrative expenses ($114,000), primarily as a
result of the 1998 Transactions.

Depreciation and amortization increased from $606,000 in 1997 to $694,000 in
1998, an increase of 14.5%, as a result of the Company's consummation of the
1998 Acquisition Properties.  Interest expense increased from $1,398,000 in
1997 to $1,417,000 in 1998, an increase of 1.3%, primarily as a result of 
additional borrowings associated with the 1998 Acquisition Properties.

General and administrative expenses increased from $174,000 in 1997 to 
$288,000 in 1998, an increase of 65.3%.  During 1998, the Company converted
from an externally advised REIT to a self-administered REIT and
commenced administrative operations and incurred payroll expenses of 
$92,000 not incurred in previous years.

As a result of the above factors, net loss before minority interests 
decreased from ($276,000) for the year ended December 31, 1997 to a loss of
($2,005,000) for the year ended December 31, 1998.  Net loss allocated to 
Common Shares increased from ($276,000) for 1997 to ($941,000) for 1998
attributable primarily to the existence of minority interests resulting from
the new structure of the Company following the 1998 Transactions, as well as
factors described above.

Liquidity and Capital Resources

Cash provided by operations and borrowings from affiliates and lending
institutions have generally provided the primary sources of liquidity to the
Company.  Historically, the Company has used these sources to fund operating
expenses, satisfy its debt service obligations and fund distributions to
shareholders.

On November 20, 1998, the Company completed the 1998 Transactions including
the assumption of $17,066,000 in debt and the issuance of $13,731,000 in Units.
The aggregate purchase price for the 1998 Acquisition Properties was $30,797,000
excluding closing costs.  Additionally the Company completed the issuance of
$1,000,000 in Common Shares providing the Operating Partnership with 
$1,000,000 of cash for working capital.
<PAGE>
                                    II-3
As of December 31, 1998, the Company has approximately $32.7 million of debt
outstanding consisting of (i) seven mortgage loans totaling $32.5 million
(which had a weighted average interest rate of 7.7% and will mature between
September 30, 2000 and May 1, 2015) and (ii) a line of credit totaling 
$200,000 due currently.  Additionally, the Company has approximately $1.2
million in accrued liabilities as of December 31, 1998 which liabilities
primarily represent amounts due in connection with the Company's negotiations
with AREE during 1998 and the Special Meeting of Shareholders held on 
November 16, 1998.

Further, the Company is in negotiations with AREE and WMC regarding the 
reimbursement by the Operating Partnership to AREE and WMC of certain expenses
aggregating approximately $1.7 million incurred by AREE and WMC and the 
Company or the Operating Partnership during 1998 in connection with the 
potential acquisition of properties and certain administrative expenses.

Except as discussed above, the Company has no contractual obligations for 
property acquisition or material capital costs, other than tenant
improvements in the ordinary course of business.  The Company expects to 
meet its long-term capital needs through a combination of cash from operations,
additional borrowings, additional equity issuances of Common or Preferred 
Shares, and/or partnership Units.

On March 25, 1998, June 18, 1998 and September 23, 1998, the Company declared
distributions of $0.1105 per share per declaration.  On December 15, 1998 
the Company declared a distribution of $0.1137 per share.  On March 16, 1999, 
the Company declared a 4.75 for 3.00 share split payable on March 24, 1999 to
shareholders of record as of March 22, 1999 (the "Stock Split").  All amounts
herein have been adjusted to give effect to the Stock Split.

Cash Flows

During the year ended December 31, 1998, the Company generated approximately
$4,494,000 in net proceeds from borrowings and $1,246,000 from the issuance
of Common Shares.  These cash flows were used primarily for (i) repayments
of debt obligations and financing costs aggregating $3,345,000; (ii)
payment of cash dividends aggregating approximately $506,000; (iii) payment of
costs associated with new ventures aggregating $98,000; (iv) payment of costs
associated in acquiring the 1998 Acquisition Properties aggregating
$563,000 and (v) cash used in operating activities of approximately $1,187,000.
As a result, the Company's cash balances increased by approximately $40,000 to
$154,000 at December 31, 1998 from $114,000 at December 31, 1997.

Funds from Operations

The Company considers FFO to be helpful to investors as a measure of the
financial performance of an equity REIT.  In accordance with NAREIT's 
definition, FFO is defined as net income (loss) computed in accordance with GAAP
excluding gains (or losses) from debt restructuring and sales of property, plus
real estate-related depreciation and amortization and after adjustments for
uncolsolidated partnerships and joint ventures.  FFO does not represent cash
generated from operating activities determined in accordance with GAAP and
should not be considered as an alternative to net income (determined in
accordance with GAAP) as an indication of the Company's financial performance
or to cash flow from operating activities (determined in accordance with
GAAP) as a measure of the Company's liquidity, nor is it indicative of funds
available to fund the Company's cash needs, including its ability to make cash
distributions.  Other REITs may not define FFO in accordance with the current
NAREIT definition or may interpret the current NAREIT definition differently
from the Company.

Funds from operations for the years ended December 31, 1998 and December 31, 
1997 are summarized in the following table.  
                                 II-4
<PAGE>
<TABLE>
<CAPTION>

<S>                                           <C>                 <C>
                                              Year Ended          Year Ended
                                              December 31,        December 31,
                                              1998                1997

Loss before minority interests                $(2,005,883)        $   (275,579)
Deduct:  Gain on sale of real estate                   --             (166,753)
Add:  Real estate related depreciation
      and amortization                             616,209             560,730

      Non recurring expenses
        Termination of advisory agreement          310,000                 --
        Provision for uncollectible
          advance to related party                 240,000                 --
        Other non recurring                      1,010,154                 --

Funds from operations                         $    170,480         $    118,398
Weighted average Common Shares/
       Units outstanding (1)                     1,483,323            1,129,061

</TABLE>

(1) Assumes exchange of all Units, calculated on a weighted average basis for
    Common Shares, adjusted to give effect to the Stock Split.

Inflation

Inflation has not generally had a significant impact during the periods 
presented on the Company because of the relatively low inflation rates
in the markets in which the Company's properties operate.  Most of the 
Company's tenants in the residential properties represent short-term
leases and most of the Company's tenants in the Commercial properties are
contractually obligated to pay their share of operating expenses thereby
reducing exposure to increases in such costs resulting from inflation.

Year 2000

The Year 2000 issue is the result of computer programs being written using two
digits rather than four to define the applicable year.  Any of the Company's
computer programs that have time-sensitive software may recognize a date using
"OO" as the year 1900 rather than the year 2000.  This could result in a system
failure or miscalculations causing disruptions of operations, including, among
other things, a temporary inability to process transactions, send invoices or 
engage in similar normal business activities.

The Company has upgraded its current information systems to be Year 2000 
compliant.  The Company intends to review any and all purchases in this regard
to ensure Year 2000 compliance.  The Company does not believe that the impact
of the recognition of the Year 2000 by its information and operating 
technology systems will have a material adverse affect on the Company's
systems.

The Company is also requiring that all vendors and, in particular, third party
property managers upgrade their systems to be Year 2000 compliant.  WMC Realty,
Inc., which manages the apartment properties is fully Year 2000 compliant.  Hoyt
Properties, which manages the commerical properties is in the process of 
acquiring new systems to become Year 2000 compliant.
<PAGE>
Item 7.  Financial Statements

The required audited financial statements of the Company are included herein.
See pages F-1 through F-21

Item 8.  Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

None
                                 PART III

Item 9.  Directors, Executive Officers, Promoters and Control Persons,
Compliance with Section 16(a) of the Exchange Act.

Board of Trustees, Executive Officers, Significant Employees and Family
Relationships

The Trustees and Officers of the Company, their ages (at April 12, 1999) and 
their positions and offices with the Company are as follows:

                            Originally     Term       
Name               Age      Elected        Expires    Position and Offices Held

Arnold K. Leas     65       1994           2001       Chairman of the Board of 
                                                      Trustees/President

Steven B. Hoyt     46       1998           2000       Trustee

Paul T. Lambert    45       1998           2001       Trustee

Lyle W. Larcheid   70       1994           1999       Trustee

Peter Ogden        40       1994           1999       Trustee

Robert P. Ripp     72       1994           2000       Trustee

Gerald Sobczak     50       1994           1999       Trustee

Duane H. Lund      34       1998           n/a        Chief Executive Officer

Robert F. Rice     48       1994           n/a        President and Secretary

Garret T. Nakama   54       1994           n/a        Treasurer

Arnold K. Leas, Chairman of the Board of Trustees of the Company, has served 
in such capacity since the Company's inception in 1994.  Mr. Leas served
as President of the Company from the Company's inception through November
20, 1998.  Mr. Leas has also served as a director, Chief Executive Officer
and President of WMC since WMC's inception in 1988.  WMC and its subsidiary,
Wellington Investment Services Corp., currently manage over $100 million of
investors' funds.  From 1984 to 1988, Mr. Leas was Executive Vice President
of Decade Securities, Inc., a Milwaukee company that was involved primarily 
in the syndication of multi-family apartment complexes throughout the United
States.  Mr. Leas is on the Board of Directors of the Metropolitan Milwaukee
Association of Commerce Council of Small Business Executives and is a graduate
of the Realtors Institute.  
<PAGE>

Steven B. Hoyt, Trustee of the Company since November 20, 1998, has served as 
managing general partner of Hoyt Development (from 1979 to 1989) and Chief
Executive Officer of Hoyt Properties, Inc. ("HPI") (from 1989 to present).
HPI currently owns over 1,000,000 square feet of industrial and office property 
in Minnesota and has developed over 5,000,000 square feet of commercial property
since its inception.  From 1994 to 1995, Mr. Hoyt served as a Senior Regional 
Director of First Industrial Realty Trust Inc., a Maryland corporation ("First 
Industrial").  Mr. Hoyt is a member of the Board of Directors of the Better
Business Bureau and has served in numerous state and national positions for
the National Association of Industrial and Office Parks (NAIOP).

Paul T. Lambert, Trustee of the Company since November 20, 1998, served on 
the Board of Directors and was the Chief Operating Officer of First Industiral
from its initial public stock offering in June 1994 to the end of 1995.  
Mr. Lambert was one of the largest contributors to the formation of First 
Industiral and one of its founding shareholders.  Prior to forming First 
Industrial, Mr. Lambert was Managing Partner of the Midwest region for The 
Shidler Group, a national private real estate investment company ("Shidler").  
Prior to joining Shidler, Mr. Lambert was a commercial real estate developer
with Dillingham Corporation and, prior to such time, was a consultant with 
The Boston Consulting Group.  Mr. Lambert was also a founding shareholder of 
CGA Group, Ltd., a holding company whose subsidiary is a AAA-rated financial
guarantor based in Bermuda.
<PAGE>

Lyle W. Larcheid, Trustee of the Company, has served in such capacity since
1994.  Mr. Larcheid has served as Senior Vice President of lending at
Wauwatosa Savings Bank in Wauwatosa, Wisconsin since 1986.  Prior to 1986,
Mr. Larcheid was Senior Executive Vice President at St. Francis Savings and
Loan in St. Francis, Wisconsin.

Peter Ogden, Trustee of the Company, has served in such capacity since the
Company's inception in 1994.  Mr. Ogden has served as the President and Owner
of Ogden & Company since 1990 and Vice President, Treasurer and owner of 
Ogden Development Group, Inc. since 1986, both of which are Milwaukee-
based providers of real estate brokerage, leasing and property management
services and which manage over 2,500 apartment and condominium units, in
addition to shopping centers and offices, industrial and mixed-use buildings.

Robert R. Ripp, Trustee of the Company, has served in such capacity since
the Company's inception in 1994.  Mr. Ripp is the owner of RESI Realtor, a
Milwaukee-based real estate brokerage firm.  Prior to forming RESI Realtor
in 1985, Mr. Ripp was the Vice President/General Sales Manager for Wauwatosa
Realty, a real estate brokerage firm with 27 offices in the State of Wisconsin.

Gerald Sobczak, Trustee of the Company, has served in such capacity since
the Company's inception in 1994.  Since 1990, Mr. Sobczak has been a self-
employed real estate investor, owning and operating apartment units.  From
1989-1990, Mr. Sobczak served as Building Manager for American Landmark
Properties, and from 1984-1988 was an Asset/Property Manager for Eastmore
Real Estate.

Duane H. Lund, Chief Executive Officer of the Company since November 20, 1998,
was founding shareholder of First Industrial and served as a Senior Regional
Director of First Industrial from 1994 to June 1998.  In such capacity, Mr.
Lund acquired and managed over 11,000,000 square feet of commercial property
with a value in excess of $750 million.  From 1989 to 1994, Mr. Lund was an
Acquisition Partner with Shidler, where he was involved in coordinating the
underwriting and due diligence for over $200 million of commercial property.
Prior to 1989, Mr. Lund was a tax consultant with Peat Marwick Main & Company.
Mr. Lund is a member of the Boards of Directors of the Wisconsin Real Estate
Alumni Association and National Association of Industrial and Office Properties
Minnesota Chapter and is a member of the advisory boards of Midwest Real 
Estate News, Minnesota Real Estate Journal and KPMG Peat Marwick Alumni 
Association.

Robert F. Rice, President and Secretary of the Company,
has served as Secretary of the Company since its inception in 1994 and as
President of the Company since November 20, 1998.  Mr. Rice served as Executive
Vice President of the Company from May 1997 through November 20, 1998.  Prior 
to the Company's formation, Mr. Rice served as Vice President/General Counsel to
WMC beginning in November 1993.  From 1989 to October 1993, Mr. Rice provided
advice with respect to Resolution Trust Corporation matters through
Resource Alternatives, Inc., a provider of legal and consluting services to the
real estate industry.  From 1984 to 1989, Mr. Rice served as a director, officer
and general counsel for various affiliates of St. Francis Bank, F.S.B.  

Garret T. Nakama, Controller and Treasurer of the Company, has served
in such capacities since the Company's inception in 1994.  From 1991 to the
present, Mr. Nakama has served as Vice President/Finance for WMC.  From 1986
to 1991, Mr. Nakama was employed as Controller of Nassco, Inc., a New Berlin, 
Wisconsin supplier of equipment.  

Section 16(a) Beneficial Ownership Reporting Compliance 

Each of (i) WMC; (ii) Arnold K. Leas, Lyle W. Larcheid, Peter Ogden, Robert
P. Ripp, and Gerald Sobczak, each a Trustee of the Company, (iii) Robert
F. Rice and Garret T. Nakama, each a current executive officer of the Company,
and (iv)Gregory S. Leas, a former executive officer of the Company failed
to timely file their respective Forms 3, Form 4 and Form 5 for the period
1994 through October, 1998.  All such filings have since been made.  The
company cannot estimate the number of such Forms or the number of transactions
that were required to be filed but were not so filed.

<PAGE>
Item 10.  Executive Compensation

Since its inception through July 31, 1998, the Company paid
no compensation to any of its executive officers.  The following table sets 
forth the compensation paid from August 1, 1998 to December
31, 1998 and current base annual compensation for each of the officers of
the Company.

<TABLE>

Summary Compensation Table

<CAPTION>


Name and Principal                                        Securities Underlying
Position                  Year               Salary       Options
<S>                       <C>                <C>          <C>          
Duane H. Lund             1998               $18,750(1)    -- 
Chief Executive Officer       
   
Robert F. Rice            1998               $62,500(2)    7,917(3)                  
President and Secretary

Arnold K. Leas            1998               $ --          9,500(3)
Chairman of the Board(4)

</TABLE>

(1) Amount represents base annual salary of $150,000.  Mr. Lund became the
Chief Executive Officer of the Company on November 20, 1998.

(2) Amount represents base annual salary of $150,000.  Mr. Rice was paid by
the Company commencing August 1, 1998.  Mr. Rice has served as Secretary of
the Company since the inception of the Company in 1994 and as President
of the Company since November 20, 1998.  For the period commencing May 1997 and
through November 20, 1998, Mr. Rice served as Executive Vice President of the
Company.

(3) Options reported were granted under the Company's plan in effect at May 27,
1998.  All options were granted on May 27, 1998 and bear an exercise price of
$5.44 per Common Share.  Market value per share on the date of grant was $5.37.
All such options are currently exercisable.

(4) Mr. Leas was the Chief Executive Officer of the Company from the inception
of the Company in 1994 until November 20, 1998.

<PAGE>

<TABLE>

Options/SAR Grants in Last Fiscal Year

<CAPTION>

                      Number of      Percentage of     
                      Underlying     Total Options 
Name and principal    Options        Granted to 
position              Granted        Employees in     Exercise  Expiration      
                                     Fiscal Year      Price     Date
<S>                   <C>            <C>              <C>       <C>

Duane H. Lund
Chief Executive 
Officer               --             --               --        --

Robert F. Rice
President and
Secretary             7,917          14.56%           $ 5.44    May 26, 2008

Arnold K. Leas
Chairman of the 
Board                 9,500          17.47%           $ 5.44    May 26, 2008

</TABLE>
     
<PAGE>

<TABLE>

Aggregated Option/SAR Exercises in Last Fiscal Year and
Fiscal Year End Option/SAR Values

<CAPTION>
                      Common                    # of Securities   Value of 
                      Shares                    Underlying        unexercised
Name and principal    Acquired on   Value       Options/SARs at   in-the-money
position              Exercise      Realized    Fiscal Year End   options/SARs
                                                Exercisable(1)    at Fiscal Year
                                                                  End ($)
                                                                  Exercisable/
                                                                Unexercisable(2)
<S>                   <C>           <C>         <C>              <C>

Duane H. Lund         --            --          -- 
Chief Executive
Officer

Robert F. Rice        --            --          7,917            $0/$0
President and
Secretary

Arnold K Leas         --            --          9,500            $0/$0
Chairman of the
Board

</TABLE>

(1) All of the options held by the named executive officers are currently
exercisable.
(2) Calculations are based upon the closing bid price of $4.30 per share as
of December 31, 1998.


Committees of the Board of Trustees

Audit Committee

The Audit Committee, for the period January 1, 1998 through November 20, 1998,
consisted of Messrs. Larcheid, Sobczak and Nakama and for the period November
20, 1998 to date consists of Messrs. Larchied, Sobczak and Ogden.  The Audit
Committee reviews related party transactions, makes recommendations concerning
the engagement of independent public accountants, reviews with the independent
public accounts, the plans and results of the audit engagement, approves
professional services provided by the independent public accountants, reviews
the independence of the independent public accounts, considers the range of
audit and non-audit fees and reviews the adequacy of the Company's internal
accounting controls.

Compensation Committee

The Compensation Committee, for the period January 1, 1998 through November 20,
1998, consisted of Messrs. Leas, Ogden and Ripp and for the period November 20,
1998 to date consists of Messrs. Leas, Hoyt and Lambert.  The Compensation
Committee makes recommendations and exercises all powers of the Board of
Directors in connection with certain compensation matters, including
incentive compensation and benefit plans.  The Compensation Committee
adminsters, and has authority to grant awards under, the Company's 1998 Stock
Incentive Plan and the Company's 1998 Option Plan.  The Compensation Committee
met one time in 1998, on May 26, 1998.

Meetings of Trustees

The Trustees held seven meetings in 1998.  Each of Messrs. Leas, Ripp and
Sobczak attended all seven meetings.  Mr. Ogden attended six and Mr. Larcheid
attended five of the meetings of the Board of Trustees.  Each of Messrs. Hoyt
and Lambert attended the one meeting on the Board of Trustees held during his
tenture as a Trustee in 1998.

Compensation of Trustees

In 1998, Trustees who were also employees of the Company or its affiliates 
received no additional compensation for their services as Trustees, while
non-employee Trustees of the Company received a fee of $250 per Board of
Trustee or committee meeting attended.

Employment Agreements

On November 16, 1998, the Company entered into employment agreements (the
"Employment Agreements") with Duane H. Lund and Robert F. Rice.  The
Employment Agreements provide for an initial base salary of $150,000
and a discretionary performance bonus of up to 200% of base salary.  In
addition, each Employment Agreement provides that the officers shall receive
those health, life and disability and other benefits extended by the Board of
Trustees to other similarly situated executives.  Each Employment Agreement
has an evergreen term of three years.  In the event of termination of the
respective officer's employment by the Company without cause or in the event
such person's employment discontinues following a change in control of the
Company, the Company or, in the case of a change in control, its successor,
will be obligated to pay to such officer an amount equal to three year's base
salary and performance bonus and continue his benefits for three years.

<PAGE>

Item 11.  Security Ownership of Certain Beneficial Owners and Management.

The following table sets forth certain information, as of April 12, 1999, with
respect to:  (i) each person who is known by the Company to own beneficially
more than 5% of the Company's outstanding Common Shares; (ii) the
beneficial ownership of Common Shares by each of the Trustees and executive
officers; and (iii) the beneficial ownership by all Trustees and executive
officers as a group.  Except as noted below, all shares are owned directly,
and the owner has sole voting and investment power with respect to such shares.

<TABLE>
<CAPTION>

<S>                                    <C>                    <C>
                               Shares Beneficially       Percent of
Name                                 Owned (1)           Class (1)

Arnold K. Leas (2) (6)               190,624               14.0%

Steven B. Hoyt (3)                    ---                   ---
Paul T. Lambert (4)                   ---                   ---
Lyle W. Larcheid (2) (7)               3,167                 *
Peter Ogden (2) (7)                    3,167                 *
Robert P. Ripp (2) (8)                 4,148                 *
Gerald Sobczak (2) (7)                 3,167                 *

Duane H. Lund (5) (9)                166,666               12.3%
Garret T. Nakama (2) (7)               6,333                 *
Robert F. Rice (2) (10)                9,500                 *

American Real Estate
 Equities, LLC (11)                  166,666              12.3%
Esor and Company (12)                 70,693               5.2%
Wellington Management                            
 Corporation (13)                    143,767              10.6%

All Trustees and Executive
 Officers as a Group (10 persons)    386,772              27.9%

</TABLE>
*Represents less than one percent

(1) Based on 1,351,625 total outstanding Common Shares as of April 12, 1999. 
Also assumes exercise by only the shareholder or group names in each row of all 
options and warrants for the purchase of Common Shares held by such shareholder
or group and exercisable within 60 days.

(2) The business address for Messrs. Leas, Larcheid, Ogden, Ripp, Sobczak,
Nakama and Rice is 18560 W. Corporate Drive, Suite 300, P.O. Box 0919,
Brookfield, Wisconsin  53008-0919.
<PAGE>
(3) The business address for Mr. Hoyt is 708 S. 3rd Street, Suite 108,
Minneapolis, Minnesota  55415.

(4) The business address for Mr. Lambert is 4155 E. Jewel, Suite 104, Denver,
Colorado  80222.

(5) The business address for Mr. Lund is 11000 Prairie Lakes Drive, Suite 610,
Minneapolis, Minnesota  55344.

(6) Includes 31,885 Common Shares held by Mr. Leas, 3,114 Common Shares held by
Mr. Leas' wife, 2,358 Common Shares held by Mr. Leas and his wife as joint
tenants, options to purchase 9,500 Common Shares and 143,767 Common Shares
held by WMC, of which Mr. Leas is the President and Chief Executive Officer
and with respect to which Mr. Leas, members of his immediate family and 
trusts for the benefit of such persons own approximately 41.8% of the 
outstanding capital stock.  Mr. Leas disclaims beneficial ownership of the 
Common Shares held by his wife.

(7) Consists solely of options to purchase Common Shares.

(8) Includes options to purchase 3,167 Common Shares and 981 Common Shares 
held by Mr. Ripp.

(9) Includes 166,666 Common Shares held by American Real Estate Equities, LLC,
of which Mr. Lund is the President.

(10) Includes options to purchase 7,917 Common Shares and 1,583 Common Shares 
held by Mr. Rice.

(11) The business address for American Real Estate Equities, LLC is
11000 Prairie Lakes Drive, Suite 610, Minneapolis, MN  55344.

(12) The business address for Esor and Company is 1100 W. Wells Street,
Milwaukee, Wisconsin  53233.

(13) The business address for Wellington Management Corporation is 18650 W.
Corporate Drive, Suite 300, P.O. Box 0919, Brookfield, Wisconsin  53008-0919.

Item 12.  Certain Relationships and Related Transactions.

Management Fees

The Company has entered into Property Management Agreements with WMC Realty,
Inc. (WRI), a wholly-owned subsidiary of WMC, an affiliate of the Company
in which Arnold Leas (Chairman of the Board of Trustees) is President and
Chief Executive Officer, and Hoyt Properties Inc. (Hoyt), an entity controlled
by Steve Hoyt (a Trustee of the Company) to serve as property managers of
properties owned by the Company.  The property managers manage the day to day
operations of properties owned by the Company and receive a management fee
for this service.  Management fees totaled $31,503 to Hoyt and $149,386 to WRI 
for the year ended December 31, 1998 and $122,391 to WRI for the year ended
December 31, 1997.

Advisor Fees

On August 2, 1994, the Company contracted to retain WMC to serve as Advisor
to the Trust.  In payment for these services, the Advisor received a fee
equal to 5% of the gross proceeds of the public share offering.  Advisor fees
for the years ended December 31, 1998 and 1997 were $0.  In addition, the
Advisor is entitled to receive an Incentive Advisory Fee equal to 10%
of the realized gain with respect to each sale or refinancing of property
owned by the Company.  In the event a property is sold at a loss, no incentive
advisory fees will be paid until the amount of the loss has been offset by
gains from other sales.  Incentive advisory fees for the years ended December
31, 1998 and 1997 were $0 and $18,265, respectively.

In addition, the Advisor is entitled to recover certain expenses including
travel, legal, accounting and insurance.  These expenses totaled $149,178
and $114,133 for the years ended December 31, 1998 and 1997, respectively.
Fees for services, such as legal and accounting, provided by the Advisor's
employees, in the opinion of the Advisor, may not exceed fees that would have
been charged by independent third parties.

Termination Fees

In connection with the 1998 Acquisitions, the Company terminated the advisory
agreement with WMC on November 20, 1998.  The termination fee, payable to WMC,
is determined by taking 1% of the first $150,000,000 of the aggregate gross
purchase price for properties acquired in connection with the Master
Contribution Agreement and the WMC Contribution Agreement plus 0.25% of the
aggregate gross purchase price for properties acquired in excess of
$150,000,000. Termination fees paid to WMC, which are expensed as incurred,
amounted to $310,000 for the year ended December 31, 1998.

Reimbursement of Certain Expenses by Related Parties

Further, the Company is in negotiations with AREE and WMC regarding the 
reimbursement by the Operating Partnership to AREE and WMC of certain 
expenses aggregating approximately $1.7 million incurred by AREE and WMC and 
the Company  or the Operating Partnership during 1998 in connection with 
the potential acquisition of properties and certain administrative expenses.

Item 13.  Exhibits and Reports on Form 8-K.

(a) Exhibits

Exhibit   Description

2.1       Amended and Restated Contribution Agreement between the Company, the
          Operating Partnership, AREE and other limited partnership Unit
          recipients dated as of August 31, 1998 (filed as Exhibit A with the
          Company's Schedule 14A on November 6, 1998 and incorporated herein
          by reference)

3.1       Declaration of Trust (filed with the Company's Registration Statement
          on Form SB-2 (Commission File No. 33-82888C) and incorporated herein
          by reference)

3.2       Bylaws of the Company (filed with the Company's Registration Statement
          on Form SB-2 (Commission File No. 33-82888C) and incorporated herein
          by reference)

3.3       Articles of Amendment and Restatement of the Declaration of Trust
          (filed as Exhibit E with the Company's Schedule 14A on 
          November 6, 1998 and incorporated herein by reference)

10.1      Agreement of Limited Partnership of the Operating Partnership dated
          as of August 31, 1998 (filed as Exhibit C with the Company's
          Schedule 14A on November 6, 1998 and incoporated herein by reference)

10.2      Contribution Agreement between the Operating Partnership and WMC
          dated as of August 31, 1998 (filed as Exhibit B with the Company's
          Schedule 14A on November 6, 1998 and incorporated herein by
          reference)

10.3      Master Registration Rights Agreement dated as of August 31, 1998
          (filed as Exhibit E of Exhibit C with the Company's Schedule 14A on
          November 6, 1998 and incorporated herein by reference)

10.4      Form of Warrant (filed as Exhibit D with the Company's Schedule
          14A on November 6, 1998 and incorporated herein by reference)

10.5      Business Credit Agreement by and between Milwaukee Western Bank and
          the Company dated March 6, 1998 (filed with the Company's Current
          Reported on Form 8-K on August 31, 1998 and incorporated herein by
          reference)

10.6      Letter from Credit Suisse First Boston Mortgage Capital LLC to the
          Company dated March 2, 1998 (filed with the Company's Current Report
          on Form 8-K on August 31, 1998 and incorporated herein by reference)

10.7      Guaranty by the Company for the benefit of Credit Suisse First Boston
          Mortgage Capital LLC dated March 5, 1998 (filed with the Company's
          Current Report on Form 8-K on August 31, 1998 and incorporated herein
          by reference)

10.8      Promissory Note for $2,750,000 by Lake Pointe Aparmtent Homes, Inc.
          to Credit Suisse First Boston Mortgage Capital, LLC dated March 5, 
          1998 (filed with the Company's Current Report on Form 8-K on August
          31, 1998 and incorporated herein by reference)

10.9      Mortgage, Assignment of Leases and Rents and Security Agreement by and
          between Lake Pointe Apartment Homes, Inc. to Credit Suisse First
          Boston Mortgage Capital, LLC dated March 5, 1998 (filed with the
          Company's Current Report on Form 8-K on August 31, 1998 and
          incorporated herein by reference)

10.10     Common Stock Purchase Warrant by the Company to Credit Suisse First
          Boston Morton Mortgage Capital LLC, dated March 5, 1998 (filed with 
          the Company's Current Report on Form 8-K on August 31, 1998 and
          incorporated herein by reference)

10.11     Registration Rights Agreement by and between the Company and Credit
          Suisse First Boston Mortgage Capital, LLC dated March 5, 1998 (filed
          with the Company's Current Report on Form 8-K on August 31, 1998 and
          incorporated herein by reference)

10.12     Note by and between Maple Grove Apartment Homes, Inc. and
          American Property Financing, Inc., dated May 6, 1997 (filed with 
          the Company's Current Report on Form 8-K on August 31, 1998 and
          incorporated herein by reference)

10.13     Mortgage, Assignment of Leases and Rents and Security Agreement by
          and between Maple Grove Apartment Homes, Inc. and American Property
          Financing, Inc., dated May 6, 1997 (filed with the Company's Current
          Report on Form 8-K on August 31, 1998 and incorporated herein by
          reference)

27.1      Financial Data Schedule

Shareholders may obtain a copy of any exhibit listed in Item 13(a) by writing
to Robert F. Rice, Secretary of the Company.  Reasonable expenses will be
charged for copies and postage.

(b) Reports on Form 8-K

During the fourth quarter ended December 31, 1998 and through April 12, 1999, 
the Company filed the following Current Reports on Form 8-K:

Items 2, 5 and 7 in connection with the purchase of the 1998 Acquisitions
filed December 4, 1998 and amended February 2, 1999 to include relevant
financial statements and pro forma financial information.
<PAGE>

                                    SIGNATURES

By:  /s/ Robert F. Rice
     Robert F. Rice, President

Dated:  April 23, 1999

KNOW ALL PERSON BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Arnold K. Leas and Robert F. Rice, jointly and
severally, his attorneys-in-fact, each with the power of substitution, for him
in any and all capacities, to sign any amendments to this Report on Form
10-KSB and to file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said attorney-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.

In accordance with Section 13 or 15(d) of the Securities Act of 1934, the 
Company has duly caused this report to be signed on its behalf by the 
undersigned, thereunto duly authorized.

                                WELLINGTON PROPERTIES TRUST



Signature                   Title                        Date

/s/ Duane H. Lund           Chief Executive Officer      April 23, 1999
Duane H. Lund               (Principal Executive 
                             Officer)

/s/ Robert F. Rice          President                    April 23, 1999
Robert F. Rice

/s/ Garret T. Nakama        Treasurer (Principal         April 23, 1999
Garret T. Nakama             Financial and Accounting
                             Officer)

/s/ Arnold K. Leas          Chairman of the Board         April 23, 1999
Arnold K. Leas

/s/ Steven B. Hoyt          Trustee                      April 23, 1999
Steven B. Hoyt

/s/ Paul T. Lambert         Trustee                      April 23, 1999
Paul T. Lambert

/s/ Lyle W. Larcheid        Trustee                      April 23, 1999
Lyle W. Larcheid

/s/ Peter Ogden             Trustee                      April 23, 1999
Peter Ogden

/s/ Robert P. Ripp          Trustee                      April 23, 1999
Robert P. Ripp

/s/ Gerald Sobczak          Trustee                      April 23, 1999
Gerald Sobczak

<PAGE>
                        WELLINGTON PROPERTIES TRUST
                       INDEX TO FINANCIAL STATEMENTS

             CONSOLIDATED FINANCIAL STATEMENTS OF THE COMPANY

Report of Independent Certified Public Accountants                  F-2

Consolidated Balance Sheet at December 31, 1998                     F-3

Condolidated Statements of Operations for the Years Ended December
31, 1998 and December 31, 1997                                      F-4

Consolidated Statement of Equity for the Years Ended
December 31, 1998 and December 31, 1997                             F-5

Consolidated Statements of Cash Flows for the Years Ended December
31, 1998 and December 31, 1997                                      F-6

Notes to Consolidated Financial Statements                          F-7

                                         F1
<PAGE>
                                       REPORT OF INDEPENDENT
                                   CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Trustees
Wellington Properties Trust and Subsidiaries

We have audited the accompanying consolidated balance sheet of Wellington
Properties Trust and Subsidiaries as of December 31, 1998, and the related
consolidated statements of operations, equity and cash flows for the years
ended December 31, 1998 and 1997.  These financial statements are the 
responsibility of the Trust's management.  Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation.  We believe that our audits provide a reasonable
basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of
Wellington Properties Trust and Subsidiaries as of December 31, 1998, and
the consolidated results of their operations and their consolidated cash
flows for the years ended Decemeber 31, 1998 and 1997, in conformity with
generally accepted accounting principles.


/s/ Grant Thornton LLP
Fond du Lac, Wisconsin
April 9, 1999
                                       F2
<PAGE>
<TABLE>
                  Wellington Properties Trust and Subsidiaries
                         CONSOLIDATED BALANCE SHEET
                            December 31, 1998
<CAPTION>
<S>                                                    <C>
ASSETS
  Real estate property-at cost (notes A2,C,D and F)
    Land and land improvements                          9,013,206
    Buildings                                          41,540,244 
    Appliances and equipment                              924,353
                                                       51,477,803

    Accumulated depreciation                            1,730,601
                                                       49,747,202

  Cash                                                    153,901
  Accounts receivable                                      15,861
  Advance-related party, net of reserve
   of $240,000 (note F)                                     ---
  Prepaid expenses                                        111,751
  Property tax and other escrow                           843,868
  Deferred costs (note A4)                              1,748,255
  Organization costs and loan fees, net of 
   accumulated amortization of $231,995 (note A3)         906,241

                  Total Assets                         53,527,079

  The accompanying notes are an integral part of this statement.

LIABILITIES AND EQUITY

  Mortgage loans payable (note C)                      32,505,152
  Line of credit (note D)                                 200,000
  Related party payable (note F)                        1,744,423
  Accounts payable                                        166,127
  Tenant security deposits                                156,373
  Deferred rental revenue                                  65,372
  Accrued liabilities                                   1,241,239
  Dividends/distributions payable                         443,018
                                                       36,521,704

  MINORITY INTEREST IN CONSOLIDATED SUBSIDIARY         12,247,574

  EQUITY
    Common shares-authorized, 100,000,000 shares of
     $.01 par value;issued and outstanding, 
     1,339,210 shares                                      13,392
    Preferred shares-authorized, 10,000,000 shares of
     $.01 par value;no shares issued or outstanding
    Common share warrants                               1,510,000
    Additional paid-in capital                          7,497,426
    Accumulated deficit                                (4,263,017)
                                                        4,757,801

                    Total Liabilities and Equity       53,527,079
</TABLE>
                                      F3
<PAGE>

<TABLE>
                  Wellington Properties Trust and Subsidiaries
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                              Year ended December 31, 
<CAPTION>                                   
                                              1998               1997
<S>                                           <C>                <C>
Revenues (note A5)
  Rental revenue                              3,488,481          2,980,800
  Gain on sale of real estate property                -            166,753
  Interest and other                             20,955             33,443
                                              3,509,436          3,180,996

Expenses
  Property, operating and maintenance           738,972            656,591
  Advertising and promotion                      66,968             68,491
  Property taxes and insurance                  568,905            430,057
  Depreciation and amortization                 694,366            606,388
  Interest Expense                            1,417,194          1,398,457
  General and administrative                    287,871            174,200
  Management fees (note F)                      180,889            122,391
  Other nonrecurring                          1,010,154                 -
  Provision for uncollectible advance-
     related party (note F)                     240,000                 -
  Termination of advisory agreement (note F)    310,000                 -
                                              5,515,319          3,456,575

      Net loss before minority interest in
       net loss of consolidated subsidiary   (2,005,883)          (275,579)

  Minority interest in net loss of 
   consolidated subsidiary                    1,064,501                  -

      NET LOSS ALLOCATED TO
       COMMON SHARES                         $ (941,382)        $ (275,579)

Loss per common share
  Net loss-Basic and diluted                 $    (0.80)        $    (0.24)
  Weighted average number of common
    shares outstanding (note A7)              1,175,438          1,129,061

The accompanying notes are an integral part of these statements.
</TABLE>
                                     F4
<PAGE>

<TABLE>
                  Wellington Properties Trust and Subsidiaries
                      Consolidated Statement of Equity
                   Years ended December 31, 1998 and 1997
<CAPTION>
                                                 Common    Additional
                                     Common      share     paid-in
                                     shares      warrants  capital
<S>                                  <C>         <C>       <C>
Balance at January 1, 1997           6,848       --        6,018,071
Cash dividends declared              --          --        --
Issuance of common shares in
 connection with dividend
 reinvestments                         307       --          274,793
Release of the excess of purchase
 price over affiliate's basis in
 property acquired due to Forest
 Downs sale                          --          --        --
Retirement of 1,080 shares of 
 common shares in treasury              (7)      --           (6,811)
Cost of 4,750 shares of common
 shares acquired for treasury        --          --        --
Net loss                             --          --        --
Balance at December 31, 1997         7,148       --        6,286,053

</TABLE>
<TABLE>
<CAPTION>
                            Excess of purchase
                           price over affiliate's
                              basis in property  Accumulatd Treasury
                                  acquired       deficit    shares    Total
<S>                                  <C>         <C>        <C>       <C>
Balance at January 1, 1997          (152,615)   (1,968,930) (6,818)   3,896,556
Cash dividends declared              --           (543,482)  --        (543,482)
Issuance of common shares in
 connection with dividend
 reinvestments                       --          --          --         275,100
Release of the excess of purchase
 price over affiliate's basis in
 property acquired due to Forest
 Downs sale                          152,615     --          --         152,615
Retirement of 1,080 shares of common
 shares in treasury                  --          --          6,818      --
Cost of 4,750 shares of common
 shares acquired for treasury        --          --         (27,764)    (27,764)
Net loss                             --           (275,579)  --        (275,579)
Balance at December 31, 1997         --         (2,787,991) (27,764)  3,477,446
</TABLE>
The accompanying notes are an integral part of this statement.

<PAGE>
<TABLE>
                    Wellington Properties Trust and Subsidiaries
                     Consolidated Statement of Equity-Continued
                       Years ended December 31, 1998 and 1997
<CAPTION>
                                              Common     Additional
                                  Common      share      paid-in
                                  shares      warrants   capital
<S>                               <C>         <C>        <C>
Balance at December 31, 1997      7,148       --         6,286,053
Cash dividends declared           --          --         --
Issuance of common shares in      
 connection with dividend
 reinvestments                      257       --           245,453
Issuance of common shares to
 AREE                             1,053       --           998,947
Issuance of warrants(note E)      --          1,510,000    -- 
Cost of 66 shares of common    
 shares acquired for treasury     --          --           --
Retirement of 4,816 shares
 of common shares in 
 treasury                         --          --          (28,093)
Net loss                          --          --           --
Reclassification due to effect
 of common share split            4,934       --           (4,934)
Balance at December 31, 1998     13,392       1,510,000  7,497,426
</TABLE>
<TABLE>
<CAPTION>
                        Excess of purchase 
                       price over affiliate's
                           basis in property  Accumulatd  Treasury
                              acquired        deficit     shares      Total
<S>                              <C>          <C>         <C>         <C>
Balance at December 31, 1997     --          (2,787,991)  (27,764)    3,477,446
Cash dividends declared          --            (533,644)  --           (533,644)
Issuance of common shares in
 connection with dividend
 reinvestments                   --           --          --            245,710
Issuance of common shares
 to AREE                         --           --          --          1,000,000
Issuance of warrants(note E)     --           --          --          1,510,000
Cost of 66 shares of common
 shares acquired for treasury    --           --             (329)         (329)
Retirement of 4,816 shares of
 common shares in treasury       --           --           28,093       --
Net loss                         --            (941,382)  --           (941,382)
Reclassification due to
 effect to common share split    --           --          --            --
Balance at December 31, 1998     --          (4,263,017)  --          4,757,801

</TABLE>
                                     F5
<PAGE>
<TABLE>
                   Wellington Properties Trust and Subsidiaries
                      Consolidated Statements of Cash Flows
                         Year ended December 31,
<CAPTION>
                                                       1998            1997
<S>                                                    <C>             <C>
Cash flows from operating activities:
 Net loss                                                (941,382)     (275,579)
 Adjustments to reconcile net loss to net cash
  used in operating activities:
   Depreciation and amortization                          694,366       606,388
   Gain on sale of real estate property                   --           (166,753)
   Minority interest                                   (1,064,501)     --
   (Increase) decrease in accounts receivable               4,084       (11,460)
   Increase in prepaid expenses                           (75,268)      (30,047)
   (Increase) decrease in property tax and 
    other escrow                                         (192,081)      147,137
   Increase (decrease) in accounts payable                106,216      (205,223)
   Increase (decrease) in tenant security                  
    deposits                                               34,913        (9,470)
   Decrease in deferred rental revenue                    (25,624)       (4,591)
   Increase (decrease) in accrued liabilities             271,835       (55,582)
                                                         (246,060)      270,399
            Net cash used in operating activities      (1,187,442)       (5,180)

Cash flows from investing activities:
 Proceeds from sale of real estate property               --          1,898,962
 Acquisitions of and additions to
  real estate properties                                 (563,413)      (84,548)
 Increase in deferred costs-net                           (98,437)      --

            Net cash provided by (used in) 
            investing activities                         (661,850)    1,814,414

The accompanying notes are an integral part of these statements. 

</TABLE>
                                          F6
<PAGE>
<TABLE>
                    Wellington Properties Trust and Subsidiaries
                 Consolidated Statements of Cash Flows - Continued
                             Year ended December 31,
<CAPTION>
                                                    1998          1997
<S>                                                 <C>           <C>
Cash flows from financing activities:
 Proceeds from mortgage loans payable               2,750,000     12,900,700                    
 Proceeds from line of credit                             --         815,270
 Proceeds from related party payable                1,744,423            --
 Repayments of mortgage loans payable              (1,978,038)    (7,610,011)
 Repayments of line of credit                        (600,000)      (800,000)
 Repayments on land contract and business note
  obligations                                       --            (6,676,911)  
 Payment of financing costs                          (766,550)      (205,958)
 Issuance of Common Shares                          1,245,710        275,100
 Cash dividends paid-common shares                   (505,968)      (564,421)
 Purchase of treasury shares                             (329)       (27,764)
 
                Net cash provided by (used in)
                financing activities                1,889,248     (1,893,995) 

                NET INCREASE (DECREASE) IN CASH        39,956        (84,761)

Cash at beginning of year                             113,945        198,706
Cash at end of year                                   153,901        113,945

Supplemental disclosure of cash flow information:
 Cash paid during the year for:
  Interest                                          1,326,606      1,509,569
</TABLE>
Supplemental non-cash investing and financing activities:

The Trust has dividends/distributions payable of $443,018 and $124,571 as of
December 31, 1998 and 1997, respectively.

On November 20, 1998, the Trust through its subsidiary, Wellington Properties
Investments, L.P. acquired two office properties and one light industrial
property for $30,797,781 plus direct costs of acquisition.  The acquisitions 
were financed by the assumption of various long-term debt in the amount of 
$17,066,935 and by issuing $13,730,846 of Wellington Properties Investments, 
L.P. units (note B).

On November 16, 1998, the Trust issued warrants to acquire up to 791,667 Common
shares to each of American Real Estate Equities, LLC and Wellington Management
Corporation.  These warrants were valued at $1,510,000 (note E).

                                   F6
<PAGE>
               Wellington Properties Trust and Subsidiaries
                Notes to Consolidated Financial Statements
                    December 31, 1998 and 1997

NOTE A - GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General

Wellington Properties Trust (Trust) is a real estate investment trust organized
under the laws of the state of Maryland.  It was formed on March 15, 1994 to 
acquire, develop, own and operate investment real estate.  The Trust owns two
residential and three commercial properties as of December 31, 1998.  The Trust
is also the general partner and owns an approximately 6.1% interest, as of
December 31, 1998, of Wellington Properties Investments, L.P. (WPI), a 
Delaware limited partnership formed in 1998.

A summary of the significant accounting policies applied in the preparation of
the accompanying consolidated financial statements follows:

1.  Principles of Consolidation

The consolidated financial statements include all the accounts of Wellington
Properties Trust, its wholly-owned subsidiaries, Maple Grove Apartment Homes,
Inc. and Lake Pointe Apartment Homes, Inc. and WPI.  Because the Trust controls
WPI, the Trust has consolidated the accounts of WPI with the Trust.  Minority
interest consists of limited partnership interests in WPI.  All intercompany
accounts and transactions have been eliminated in the preparation of the
consolidated financial statements.

2. Real Estate Property

Real estate property is recorded at cost less accumulated depreciation.  
Depreciation is computed on a straight-line basis over a 40-year estimated
life for buildings and seven-year estimated life for appliances and equipment.
Expenditures for ordinary maintenance and repairs are expensed to operations
as incurred and significant renovations and improvements that improve and/or
extend the useful life of the asset are capitalized and depreciated over
their estimated useful life.  A combination of  straight-line and accelerated
methods is used for income tax purposes.

3. Organization Costs and Loan Fees

The costs incurred in connection with the formation of the Trust are amortized
on a straight-line basis over a period of fifteen years.

Costs incurred in obtaining and securing financing for mortgage notes or bonds
payable are amortized over the life of the respective loan using the straight-
line method.

                                     F7
<PAGE>
                   Wellington Properties Trust and Subsidiaries
            Notes to Consolidated Financial Statements - Continued
                      December 31, 1998 amd 1997 

NOTE A - GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-
 Continued

4. Deferred Costs

The Trust has incurred costs in connection with the potential purchase of 
properties by WPI.  These costs, which total approximately $1,748,000 as of 
December 31, 1998 consist primarily of legal and accounting fees and warrant
costs (note E), and are expected to be allocated among the properties purchased
and capitalized as part of the cost of the property.

5. Revenue Recognition

Rental income attributable to leases is recorded when due from tenants and
interest income is recorded on an accrual basis.

6. Income Taxes

The Trust has made an election to be taxed as a REIT under Sections 856
through 860 of the Internal Revenue Code of 1986, as amended, commencing with
its taxable year ending December 31, 1996.  As a REIT , the Trust generally
will not be subject to Federal income tax if it distributes as least 95% of
its REIT taxable income (excluding capital gains) to its shareholders.  All
dividend distributions for 1998 and 1997 were return of capital.

7.  Loss Per Share

Net loss per share is computed based on the weighted average number of shares
of common shares outstanding for the period.  Common share equivalents, to
include outstanding warrants and stock options, are not included in fully
diluted earnings per share as they would be anti-dilutive.

8.  Financial Instruments

The carrying amount of financial instruments at December 31, 1998 approximates
fair value.

9.  Use of Estimates

In preparing financial statements in conformity with generally accepted 
accounting principles, management is required to make estimates and
assumptions that affect the reported amounts of assets and liabilities,
the disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period.  Actual results could differ from those estimates.
<PAGE>
                Wellington Properties Trust and Subsidiaries
             Notes to Consolidated Financial Statements - continued
                      December 31, 1998 and 1997

NOTE B - ACQUISITION OF PROPERTIES

On November 20, 1998, the Trust through WPI, acquired two office properties
and one light industrial property in the Minneapolis, Minnesota metropolitan
area.  The combined purchase price of such properties totaled approximately
$30.8 million, excluding closing costs.  Such purchase price was funded
through the issuance of an aggregate of 2,557,707 limited partnership units
("Units") in WPI (valued at $5.37 per Unit, or an aggregate value of
approximately $13.7 million) and the assumption of certain third-party
indebtedness of approximately $17.1 million secured by such properties.  The
Units are exchangeable, under certain circumstances, on a one-for-one basis
for common shares of beneficial interest, $.01 par value per share from and
after the one-year anniversary of the date of issuance.

The following represents certain pro forma information for 1998 as if these
properties were acquired effective January 1, 1998.

     Total revenue                          $7,007,000
     Net loss before minority interest
       in net loss of consolidated 
       subsidiary                             (431,000)
     Net loss allocated to common shares      (148,000)
     Net loss per common share-basic and
       diluted                                   (0.11)

NOTE C - LONG-TERM DEBT

Long-term debt consists of the following at December 31, 1998:

8.095% mortgage note payable to American Property Financing,
Inc. in monthly installments of $95,517 including interest; 
final balloon payment due June 1, 2004; collateralized by 
the Maple Grove Apartment Complex and an assignment of rents 
and security agreement                                         $12,738,783

7.600% mortgage note payable to First Union National Bank in 
monthly installments of $19,417 including interest; final
balloon payment due March 11, 2008; collateralized by the
Lake Pointe Apartment Complex and an assignment of rents
and security agreement                                           2,734,512

7.000% mortgage note payable to GMAC Commercial Mortgage
Corporation in monthly installments of $15,635 including 
interest; final balloon payment due February 1, 2008; 
collateralized by the Nicollet Business Campus VI Complex
and an assignment of rents and security agreement                2,330,224

Commercial Development Revenue Refunding Bonds-Series 1996A
issued by the City of Minneapolis, Minnesota; interest payable
semi-annually at variable rates ranging from 5.25% to 7.25%;
principal payable annually on or before May 1 in amounts
ranging from $140,000 to $395,000 with a final payment due
May 1, 2015; collateralized by a letter of credit, the
Thresher Square East Office Complex, equipment and an
assignment of rents                                              4,095,000

<PAGE>                                 
                  Wellington Properties Trust and Subsidiaries
           Notes to Consolidated Financial Statements - Continued
                      December 31, 1998 and 1997

NOTE C - LONG-TERM DEBT- Continued

Commercial Development Revenue Refunding Bonds- dated
October 1, 1992 issued by the City of Minneapolis,
Minnesota; interest payable semi-annually at variable
rates ranging from 6.50% to 7.60%; principal payable
annually on or before June 1 in amounts ranging from
$170,000 to $375,000 with a final payment due June 1,
2010; collateralized by a letter of credit, the Thresher
Square West Office Complex and an assignment of rents
and security agreement                                     $3,135,000

Note payable to Bremer Bank, N.A. in monthly installments 
of $51,518 including interest at a variable rate (effective
rate of 8.75% at December 31, 1998) with a final balloon
payment due on October 1, 2000; collateralized by the 
Cold Springs Office Complex and fixtures                    5,596,633

Note payable to Bremer Business Financial Corp., interest
payments due monthly at a variable interest rate (effective
rate of 10.75% at December 31, 1998) with principal balance
due on September 30, 2000; collateralized by the Cold
Springs Office Complex and fixtures                         1,875,000

                                                           32,505,152

Aggregate maturities on long-term debt after December 31, 1998 are as follows:

<TABLE>
<CAPTION>
<S>                          <C>
1999                         575,856
2000                       7,884,414
2001                         551,249
2002                         592,284
2003                         634,634
Thereafter                22,266,715
                          32,505,152
</TABLE>
<PAGE>
                     Wellington Properties Trust and Subsidiaries
              Notes to Consolidated Financial Statements - Continued
                         December 31, 1998 and 1997

NOTE D-LINE OF CREDIT

During 1998, the Trust obtained a line of credit for $300,000 with Milwaukee
Western Bank.  Interest-only payments are due monthly with an interest rate of
 .5% above the bank's reference rate (effective rate at December 31, 1998 of 
8.25%).  At December 31, 1998 the outstanding balance was $200,000.  The
due date of this line of credit is March 31, 1999.  The line of credit is
collateralized by the guarantee of WMC.

NOTE E-EQUITY

During 1998, the Trust entered into agreements with American Real Estate
Equities, LLC (AREE) and Wellington Management Corporation (WMC).  Pursuant
to the agreements the Trust entered into transactions with AREE and WMC
related to issuance of warrants, issuance of Common Shares and contribution
agreements for various properties (note B).

The Trust issued warrants to acquire up to 791,667 Common Shares to each
of AREE and WMC.  The Warrants will become exercisable one year after the
date of issuance (November 16, 1999) and will be exercisable for a nine-
year period thereafter, at an exercise price of $5.37 per Common Share
with respect to 395,833 Warrants held by each of AREE and WMC, $6.47
per Common Share with respect to 197,917 Warrants held by each of AREE and
WMC, $7.74 per Common Share with respect to 118,750 Warrants held by each
of AREE and WMC and $9.32 per Common Share with respect to 79,167 Warrants
held by each of AREE and WMC.  A value of $0.954 per warrant (based on a
modified Black Scholes calculation) for a total of $1,510,000 has been
recognized at December 31, 1998.

The Trust issued 166,666 Common Shares to AREE in exchange for $1,000,000
during 1998.

In March 1998, in connection with the refinancing of debt, the Trust entered
into an agreement with Credit Suisse First Boston Mortgage Capital LLC which
provides for the granting of warrants to purchase 47,500 Common Share on any
date through March 5, 2008 at a price of $3.949 per share.  The warrants
were not exercised during the year ended December 31, 1998.  The value 
attributable to the detachable warrants was not material as of and for the
year ended December 31, 1998.

The Trust has a stock option plan (the "Old Plan") which provides for the 
granting of share options to officers, trustees and employees at a price
determined by a formula in the Plan agreement.  There are 54,387 options
outstanding as of December 31, 1998.  There were no options exercised under
the plan during the year ending December 31, 1998.

In November 1998, the Trust's shareholders approved a Share Option Plan (the
"New Plan") which provides for the granting of share options to officers, 
trustees and employees at a price determined by a formula in the Plan agreement.
The options are exercisable over a period of time determined by the Plan
Committee, but no longer than ten years after the date they are granted.  
Compensation resulting from the share options is initially measured at the 
grant date based on fair market value of the shares.  The Plan was adopted as 
of November 16, 1998, and there are 54,387 options outstanding as of December 
31, 1998.  There were no options exercised under the Plan during the year 
ending December 31, 1998.

The Trust has elected to implement the disclosure provisions of SFAS 123, 
"Accounting for Stock-Based Compensation" in its financial statements.  SFAS 
123 requires that if not implemented, the impact be disclosed in the footnotes
to the financial statements on a pro-forma basis.  The impact of SFAS 123 on
the net loss and loss per share of the Trust was not material as of 
and for the year ended December 31, 1998.

NOTE F-RELATED PARTY TRANSACTIONS

Management Fees

The Trust has entered into Property Management Agreements with WMC Realty, Inc.
(WRI), a wholly-owned subsidiary of Wellington Mangement Corporation (WMC),
an affiliate of the Trust in which Arnold Leas (Chairman of the Board of
Trustees) is President and Chief Executive Officer, and Hoyt Properties, Inc.
(Hoyt), an entity controlled by Steve Hoyt (a trustee of the Trust) to serve
as Property Managers of properties owned by the Trust.  The Property Managers
will manage the day to day operations of properties owned by the Trust and
will receive a management fee for this service.  Management fees consisted
of $31,503 to Hoyt and $149,386 to WRI for the year ended December 31, 1998
and $122,391 to WRI for the year ended December 31, 1997.

<PAGE>
                Wellington Properties Trust and Subsidiaries
           Notes to Consolidated Financial Statements - Continued
                         December 31, 1998 and 1997

NOTE F - RELATED PARTY TRANSACTIONS - CONTINUED

Advisor Fees

On August 2, 1994, the Trust contracted to retain WMC to serve as Advisor to
the Trust.  In payment for these services, the Advisor receives a fee equal
to 5% of the gross proceeds of the public share offering.  Advisor fees for
the years ended December 31, 1998 and 1997 were $0.  In addition, the
Advisor is entitled to receive an Incentive Advisory Fee equal to 10% of the
realized gain with respect to each sale or refinancing of property owned
by the Trust.  In the event a property is sold at a loss, no incentive
advisory fees will be paid until the amount of the loss has been offset by
gains from other sales.  Incentive advisory fees for the years ended
December 31, 1998 and 1997 were $0 and $18,265, respectively.

In addition, the Advisor is entitled to recover certain expenses including
travel, legal, accounting and insurance.  These expenses totaled $149,178 and
$114,133 for the years ended December 31, 1998 and 1997, respectively.  Fees
for services, such as legal and accounting, provided by the Advisor's employees,
in the opinion of the Advisor, may not exceed fees that would have been
charged by independent third parties.

Termination Fees

In connection with the purchase of properties by WPI (note B), the Trust 
terminated the advisory agreement with WMC on November 20, 1998.  The
termination fee, payable to WMC, is determined by taking 1% of the first
$150,000,000 of the aggregate gross purchase price for properties acquried
by WPI plus .25% of the aggregate gross purchase price for properties 
acquired in excess of $150,000,000.  Termination fees paid to WMC, which 
are expensed as incurred, amounted to $310,000 and $0 for the years
ended December 31, 1998 and 1997, respectively.

Reimbursement of Certain Expenses by Related Parties

WPI is in negotiations with AREE regarding the reimbursement by WPI to 
AREE of certain expenses incurred by AREE and the Trust in 
the potential acquisition of properties
and certain administrative expenses.  The accompanying consolidated financial
statements reflect all expenses incurred by AREE on behalf of WPI in 
connection with the acquisitions, with a corresponding liability to AREE
totaling $1,504,423.  In the event that the negotiations result in
reimbursement of certain expenses at a later date, that recovery will then be
reflected in the financial statements.

In connection with the negotiation by the Trust of the contribution agreement 
between AREE and WPI, a $240,000 advance was paid to WMC by AREE for the
benefit of WPI. This amount was reflected as an advance to related party in 
accompanying financial statements, with a related liability recorded due to 
AREE.  Under the terms of the contribution agreement, the advance was to be 
repaid to AREE in the event certain transactions closed before December 31, 
1998.

In connection with the negotiations discussed above, WMC management has stated
that the advance from WPI represents reimbursement from WPI for services 
rendered by WMC in the organization of WPI and the acquisition of properties.
WMC management has stated that it does not intend to reimburse WPI for the
$240,000 advance.  Due to the uncertainty of the collectibility of this
advance, the entire amount has been reserved as uncollectible in the
accompanying financial statements.

<PAGE>
                  Wellington Properties Trust and Subsidiaries
             Notes to Consolidated Financial Statements - Continued
                           December 31, 1998 and 1997

NOTE G - OPERATING LEASES

The Trust and its subsidiaries lease residential and commercial space to 
individual and corporate tenants.  These leases expire at various times
through 2005.  The following is a schedule by year of minimum operating
lease receipts under such operating leases.

<TABLE>

                        <C>                         <C>
                       Year          
                       1999                     $3,733,271
                       2000                      2,197,655
                       2001                      1,923,698
                       2002                        995,421
                       2003                        426,689
                    Thereafter                     358,477
                             Total              $9,635,211
</TABLE>
One of the commercial properties has one primary tenant who leases 55% of the
property's rentable square footage.  The future minimum operating lease
receipts from this tenant represent approximately 19% of the above total.

NOTE H - SUBSEQUENT EVENT

In March 1999, the Trust declared a Common Share split of 4.75 shares for 3
shares.  All Common Share amounts in the accompanying financial statements
have been restated to reflect the Common Share split.
<PAGE>