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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                   FORM 10-Q/A

                                AMENDMENT NO. 1

              [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
      SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED MARCH 31, 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
--------------------------------------------------------------------------------
        (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                            10,711,921
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          (Class)                            (Outstanding at April 30, 1998)


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This Form 10-Q/A Amendment No. 1 amends the Registrant's quarterly
report on Form 10-Q for the quarter ended March 31, 1998 as follows:


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS - Liquidity and Capital Resources - pages 18 and 21.

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

Liquidity and Capital Resources (Continued)

receivable, the sale or refinancing of properties and, to the extent available
or necessary, borrowings from its advisor to meet its debt service obligations,
pay taxes, interest and other non-property related expenses.

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. In
April 1998, the Company paid off $5.0 million of this amount and refinanced the
remaining $13.3 million with the same lender, increasing the loan's principal
balance by $1.7 million and established a new maturity date of April 2000. The
lender on an additional $19.5 million has extended the loan's maturity date to
February 2000. In March 1998, the Company made a $10.2 million paydown on this
loan. In addition, through April 30, 1998 the Company has paid down or paid off
a total of $15.0 million of the remainder of such maturing debt. The Company
intends to either pay off, extend the maturity dates or obtain alternate
financing for the remaining $39.3 million of debt that matures during the
remainder 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 decreased from $4.3 million for the three
months ended March 31, 1997, to $1.5 million for the three months ended March
31, 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 three months
ended March 31, 1998, were $200,000. Pizza operations were consolidated
effective May 1, 1997.

Net cash from property operations (rents collect less payments for expenses
applicable to rental income) increased to $1.1 million for the three months
ended March 31, 1998 from a deficit of $258,000 for the corresponding period in
1997. Of this increase $1.7 million relates to the Company having acquired five
hotels and two shopping centers in 1997. An additional increase of $252,000 was
due to increased rental income from the Company's merchandise mart. These
increases were partially offset by a decrease of $764,000 due to costs relating
to 22 land parcels acquired subsequent to March 31, 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, Best Western Oceanside Hotel, Piccadilly Hotels and
Williamsburg Hospitality House.

Interest collected decreased to $203,000 for the three months ended March 31,
1998, from $1.1 million for the corresponding period in 1997. The decrease is
attributable to the sale of two notes receivable and the payoff of a third note
receivable in 1997.

Interest paid increased from $3.5 million for the three months ended March 31,
1997, to $6.4 million for the corresponding period in 1998. The increase is
primarily due to debt incurred or assumed relating to 22 parcels of land, five
hotels and two shopping centers acquired subsequent to March 31, 1997.

Advisory and servicing fees paid increased from $424,000 for the three months
ended March 31, 1997, to $760,000 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 $870,000 for the three
months ended March 31, 1997, to $2.3 million for the corresponding period in
1998. The increase is primarily attributable to $347,000 in legal fees incurred
in 1998 relating to pending acquisitions and refinancings, a $320,000 increase
in advisor cost reimbursements and $693,000 of general and administrative
expenses related to pizza operations. Pizza operations were consolidated
effective May 1, 1997.

Distributions from equity investees' increased to $7.0 million for the
three months ended March 31, 1998 from $568,000 for the corresponding period in
1997. Included in 1998 distributions, were special distributions totaling $6.1
million from Transcontinental Realty Investors, Inc. ("TCI") and National
Realty, L.P. ("NRLP") that had been accrued at December 31, 1997.

In January 1998, the Company purchased El Dorado Parkway land, a 8.5 acre parcel
of undeveloped land in McKinney, Texas, for $952,000. The Company paid $307,000
in cash, assumed the existing mortgage of $164,000 and obtained seller financing
of the remaining $481,000 of the purchase price.

Also in January 1998, the Company purchased Valley Ranch IV land, a 12.3 acre
parcel of undeveloped land in Irving, Texas, for $2.0 million. The Company paid
$500,000 in cash and obtained seller financing of the remaining $1.5 million of
the purchase price.

Further in January 1998, the Company purchased JHL Connell land, a 7.7 acre
parcel of undeveloped land in Carrollton, Texas, for $1.3 million in cash.

In February 1998, the Company purchased Scoggins land, a 314.5 acre parcel of
undeveloped land in Tarrant County, Texas, for $3.0 million. The Company paid
$1.5 million in cash and obtained new mortgage financing of $1.5 million.

Also in February 1998, the Company purchased Bonneau land, a 8.4 acre parcel of
undeveloped land in Dallas County, Texas, for $1.0 million. The Company obtained
new mortgage financing of $1.0 million.



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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 (collectively, the
"REITs") having the same advisor as the Company, and units of limited partner
interest in National Realty, L.P. (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
Transcontinental Realty Investors, Inc. (TCI), will be acquired in the future
through open-market and negotiated transactions 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 two years 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. In the first quarter of 1993, CMET
and IORI resumed quarterly distributions. NRLP resumed distributions in the
fourth quarter of 1993 and TCI resumed distributions in the fourth quarter of
1995. The Company received distributions totaling $7.0 million in the first
three months of 1998 from the REITs and NRLP including $6.7 million in
distributions 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 $53.8
million at March 31, 1998.

The Company's management reviews the carrying values of the Company's properties
and mortgage note 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 Company's mortgage note receivable
review includes an evaluation of the collateral property securing such note. The
property review generally includes selective property inspections, a review of
the property's current rents compared to market rents, a review of the
property's expenses, a review of maintenance




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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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