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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                   FORM 10-Q/A


             [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
   SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED SEPTEMBER 30, 1998


                         Commission File Number 1-9948


                          AMERICAN REALTY TRUST, INC.
           ----------------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)


          Georgia                                             54-0697989
-------------------------------                           --------------------
(State or Other Jurisdiction of                            (I.R.S. Employer
Incorporation or Organization)                            Identification No.)


10670 North Central Expressway, Suite 300, Dallas, Texas         75231
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   (Address of Principal Executive Offices)                  (Zip Code)


                                 (214) 692-4700
                        -------------------------------
                        (Registrant's Telephone Number,
                              Including Area Code)


Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes X   No
                                              ---   ---

                     APPLICABLE ONLY TO CORPORATE ISSUERS:


Indicate the number of shares outstanding of each of the issuer's classes of
Common Stock, as of the latest practicable date.


Common Stock, $.01 par value                      10,756,308
----------------------------           --------------------------------
          (Class)                     (Outstanding at October 30, 1998)


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This Form 10-Q/A amends the Registrant's quarterly report on Form 10-Q for the
quarter ended September 30, 1998 as follows:


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - LIQUIDITY AND CAPITAL RESOURCES - pages 26
and 32.
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ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS (Continued)

Liquidity and Capital Resources (Continued)

General. Cash and cash equivalents at September 30, 1998, aggregated $2.0
million, compared with $5.3 million at December 31, 1997. Although the Company
anticipates that during the remainder of 1998 it will generate excess cash flow
from property operations, as discussed below, such excess cash is not
sufficient to discharge all of the Company's debt obligations as they mature.
The Company will therefore continue to rely on externally generated funds,
including borrowings against its investments in various real estate entities,
the sale or refinancing of properties and, to the extent available or
necessary, borrowings from its advisor, which totaled $38.2 million at
September 30, 1998, to meet its debt service obligations, pay taxes, interest
and other non-property related expenses. In the fourth quarter of 1998, the
Company's advisor has advanced an additional $15.0 million.

At December 31, 1997, notes payable totaling $89.0 million had either scheduled
maturities or required principal reduction payments during 1998. The Company
had the option of extending the maturity dates of $18.3 million of that amount,
but in April 1998, the Company paid off $5.0 million of this amount, refinanced
the remaining $13.3 million with the same lender, increased the loan's
principal balance by $1.7 million and established a new maturity date of April
2000. On an additional $19.5 million the lender has extended the loan's
maturity date to February 2000. In March 1998, the Company made a $10.2 million
paydown on this loan. Through September 30, 1998 the Company has paid down or
paid off a total of $29.5 million of the remainder of such maturing debt. As
discussed in NOTE 4. " REAL ESTATE," the lender on a loan with a principal
balance of $20.7 million at September 30, 1998, has declared events of
non-monetary default to have accrued and demanded repayment of the amounts
owned to it. Also, as discussed in NOTE 8. "MARGIN BORROWINGS," a margin loan
with a current principal balance of $5.6 million is due, although the lender
has not demanded payment. The Company intends to extend the maturity dates or
obtain alternate financing for these and the remaining $11.5 million of debt
that matures during the fourth quarter of 1998. There can be no assurance,
however, that these efforts to obtain alternative financing or complete land
sales will be successful.

Net cash used in operating activities increased from $5.5 million for the nine
months ended September 30, 1997, to $11.8 million for the nine months ended
September 30, 1998. Fluctuations in the components of cash flow from operations
are discussed in the paragraphs that follow.

Net cash from pizza operations (sales less cost of sales) for the nine months
ended September 30, 1998, were $1.2 million compared to $2.2 million for the
same period of 1997. The decrease is attributable to start up costs associated
with five Texas stores and one San Francisco store opened subsequent to
September 30, 1997.

Net cash from property operations (rents collected less payments for expenses
applicable to rental income) increased to $13.0 million for the nine months
ended September 30, 1998 from $8.0 million for the corresponding period in 1997.
Of this increase $6.4 million relates to the Company having acquired five
hotels, two shopping centers and 34 apartment complexes subsequent to September
30, 1998. An additional $852,000 was due to increased rental income from the
Company's merchandise mart and two of its hotels. These increases were
partially offset by a decrease of $2.4 million due to costs relating to 34 land
parcels acquired subsequent to September 30, 1997.

The Company expects an increase in cash flow from property operations during
the remainder of 1998. Such increase is expected to be derived from operations
of the Inn at the Mart, Piccadilly Hotels, Williamsburg Hospitality House and
the 29 apartment complexes acquired by the Company in May 1998.

Interest collected decreased to $381,000 for the nine months ended September 30,
1998, from $2.6 million for the corresponding period in 1997. The decrease is
attributable to the foreclosure of the $22.7 million note receivable secured by
the Continental Hotel and Casino in April 1998. The note had been performing in
1997.

Interest paid increased from $12.7 million for the nine months ended September
30, 1997, to $23.9 million for the corresponding period in 1998. The increase is
primarily due to debt incurred or assumed related to 34 parcels of land, five
hotels, 34 apartment complexes and two shopping centers acquired subsequent to
September 30, 1997.

Advisory and servicing fees paid increased from $1.9 million for the nine months
ended September 30, 1997, to $2.8 million for the corresponding period in 1998.
The increase was due to an increase in the Company's gross assets, the basis for
such fee.

General and administrative expenses paid increased from $4.7 million for the
nine months ended September 30, 1997, to $5.9 million for the corresponding
period in 1998. The increase is primarily attributable to $217,000 in legal fees
incurred in 1998 relating to pending acquisitions and refinancings, a $87,000
increase in advisor cost reimbursements and $790,000 of general and
administrative expenses related to pizza operations. Pizza operations were
consolidated effective May 1, 1997.

Distributions from equity investees' increased to $9.2 million for the nine
months ended September 30, 1998 from $1.9 million for the corresponding period
in 1997. Included in the 1998 distributions are special distributions totaling
$6.7 million from Transcontinental Realty Investors, Inc. ("TCI") and National
Realty, L.P. ("NRLP"), that had been accrued at December 31, 1997.

In December 1997, the Company sold its Pin Oak land, a 567.6 acre parcel of
undeveloped land in Houston, Texas, for $11.4 million. The Company received net
cash of $3.5 million, and provided an additional $6.9 million in short term
seller financing, that was paid in full in January 1998. On the payoff of the
seller financing the Company received net cash of $1.5 million after paying off
$5.2 million in underlying mortgage debt and the payment of various closing
costs.


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ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS (Continued)

Liquidity and Capital Resources (Continued)

Equity Investments. During the fourth quarter of 1988, the Company began
purchasing shares of various real estate investment trusts having the same
advisor as the Company, and units of limited partner interest in (NRLP). It is
anticipated that additional equity securities of NRLP and the REITs, Continental
Mortgage and Equity Trust ("CMET"), Income Opportunity Realty Investors, Inc.
("IORI") and (TCI), will be acquired in the future through open-market and
negotiated transaction to the extent the Company's liquidity permits.

Equity securities of the REITs and NRLP held by the Company may be deemed to be
"restricted securities" under Rule 144 of the Securities Act of 1933
("Securities Act"). Accordingly, the Company may be unable to sell such equity
securities other than in a registered public offering or pursuant to an
exemption under the Securities Act for a period of one year after they are
acquired. Such restrictions may reduce the Company's ability to realize the
full fair market value of such investments if the Company attempted to dispose
of such securities in a short period of time.

The Company's cash flow from these investments is dependent on the ability of
each of the entities to make distributions. CMET and IORI have paid regular
quarterly distributions since the first quarter of 1993, NRLP since the fourth
quarter of 1993 and TCI since the fourth quarter of 1995. The Company received
distributions totaling $9.2 million in the first nine months of 1998 from the
REITs and NRLP, including $6.7 million in distributions that were accrued at
December 31, 1997.

The Company has margin arrangements with various brokerage firms which provide
for borrowing up to 50% of the market value of the Company's marketable equity
securities. The borrowings under such margin arrangements are secured by equity
securities of the REITs, NRLP and the Company's trading portfolio and bear
interest rates ranging from 7.0% to 11.0%. Margin borrowing totaled $42.2
million at September 30, 1998.

Management reviews the carrying values of the Company's properties and mortgage
notes receivable at least annually and whenever events or a change in
circumstances indicate that impairment may exist. Impairment is considered to
exist if, in the case of a property, the future cash flow from the property
(undiscounted and without interest) is less than the carrying amount of the
property. For notes receivable impairment is considered to exist if it is
probable that all amounts due under the terms of the note will not be
collected. In those instances where impairment is found to exist, a provision
for loss is recorded by a charge against earnings. The mortgage note receivable
review includes an evaluation of the collateral property securing such note.
The property review generally includes selective property inspections and
discussions with the manager of the property and visits to selected properties
in the surrounding area and a review of the following: 


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                                 SIGNATURE PAGE


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


                                       AMERICAN REALTY TRUST, INC.






Date:    January 26, 1999              By:  /s/ Karl L. Blaha
     -------------------------            ---------------------------
                                          Karl L. Blaha
                                          President






Date:    January 26, 1999              By:  /s/ Thomas A. Holland
     -------------------------            ---------------------------
                                          Thomas A. Holland
                                          Executive Vice President and
                                          Chief Financial Officer
                                          (Principal Financial and
                                          Accounting Officer)


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