SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-K
(Mark One)

[X]       ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
          EXCHANGE ACT OF 1934 [FEE REQUIRED]

                   For the fiscal year ended October 31, 1994

[ ]       TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR 15(d) OF THE
          SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

                 For the transition period from _____ to _____

                           Commission File No. 1-6309


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

        MASSACHUSETTS                                          04-245-8042
 -------------------------------                          ---------------------
 (State or other jurisdiction of                            (I.R.S. Employer
  incorporation or organization)                            Identification No.)

      530 FIFTH AVENUE
     NEW YORK, NEW YORK                                          10036
 -------------------------------                          ---------------------
    (Address of principal                                      (Zip code)
     executive offices) 

       Registrant's telephone number, including area code: (212) 642-4800

Securities registered pursuant to Section 12(b) of the Act:

                                                  Name of each exchange
   Title of each class                             on which registered
- --------------------------                     -----------------------------
 Common Shares, without par value                New York Stock Exchange

 Preferred Share Purchase Rights                 New York Stock Exchange


Securities registered pursuant to Section 12(g) of the Act:  None

           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 [ ]

           Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained  herein,  and will not be contained,
to the best of the  Registrant's  knowledge,  in definitive proxy or information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. [x]

           State  the  aggregate  market  value  of the  voting  stock  held  by
non-affiliates of the Registrant ($50,974,477.00 as of January 12, 1995).

           Indicate the number of shares outstanding of each of the Registrant's
classes of common stock, as of the latest  practicable  date:  5,341,696  Common
Shares, without par value, as of January 12, 1995.

                      DOCUMENTS INCORPORATED BY REFERENCE
           Proxy  Statement  for Annual  Meeting of  Shareholders  to be held on
March 15, 1995 (certain parts as indicated herein) (Part III).

                                     PART I
Item I.  Business.
         General Development

         HRE  Properties  (the  "Trust")  was  organized  on July 7,  1969 as an
unincorporated   business   trust  under  the  laws  of  the   Commonwealth   of
Massachusetts pursuant to a Declaration of Trust dated July 7, 1969, as amended.
The Trust's headquarters are located in New York, New York.

         The Trust has  qualified  and has  elected to be taxed as a real estate
investment trust under Sections 856-858 of the Internal Revenue Code of 1986, as
amended (the  "Code").  Pursuant to such  provisions  of the Code, a trust which
distributes at least 95% of its real estate  investment  trust taxable income to
its shareholders  each year and which meets certain other conditions will not be
taxed  on that  portion  of its  taxable  income  which  is  distributed  to its
shareholders.  The  Trust  intends  to  continue  to  qualify  as a real  estate
investment trust for federal income tax purposes.

         Description of Business

         The Trust's sole business is the  ownership of real estate  investments
which consist principally of equity investments in income-producing  properties,
with primary  emphasis on properties  in the eastern part of the United  States.
The Trust owns and manages a portfolio of retail  properties,  office buildings,
and industrial properties. The Trust also seeks to identify desirable properties
for acquisitions  which it makes in the normal course of business.  In addition,
the Trust  regularly  reviews its portfolio and from time to time  considers and
makes the sale of certain properties.

         At October  31,  1994,  the Trust  owned or had an equity  interest  in
twenty-three  properties  comprised of shopping  centers,  single  tenant retail
stores,  office  buildings and service and  distribution  facilities  located in
fifteen states  throughout  the United  States,  containing a total of 3,353,000
square feet of gross leasable space.

         In the five year period ended October 31, 1994, the Trust  acquired six
real estate properties  totalling 504,000 square feet of gross leasable space at
an aggregate purchase price of $47.4 million.  The properties were acquired with
the proceeds of $27.2 million of non-recourse first mortgage loan financings and
available cash. During such period, the Trust also spent nearly $12.1 million to
expand, renovate,  improve and lease its other properties.  Such activities were
funded primarily from cash and cash  equivalents.  During this same period,  the
Trust sold four net leased  properties  totalling  282,000  square feet of gross
leasable space for proceeds totalling $11.6 million.

         At October 31,  1994,  of the  twenty-three  properties  in the Trust's
portfolio,   ten  were  retail  properties  (including  six  shopping  centers),
containing in the aggregate  1,385,000  square feet of gross leasable space. The
Trust's retail properties collectively had approximately 138 tenants providing a
wide range of retail products and services.  Major tenants include supermarkets,
national discount  department  stores and a movie theater.  At October 31, 1994,
the Trust's overall occupancy rate in its retail properties was 89%. In January,
1995 , the Trust  acquired a 193,000  square  foot  shopping  center  located in
Danbury,  Connecticut at a purchase price of $19.25 million. The acquisition was
funded with a $11.25 million first  mortgage and cash. The property  contains 20
tenants.

         Five  properties  in  the  Trust's   portfolio  are  office  buildings,
totalling  approximately 421,000 square feet of gross leasable space. The office
properties  collectively  have more than 50 tenants  which offer a wide range of
services  and  include  insurance  companies,   a  major  engineering  firm  and
government agencies.  At October 31, 1994, the Trust's overall occupancy rate in
its office  properties was 89%. The Trust also held one  participating  mortgage
note in the  amount of  $4,836,000,  secured  by an office  building  containing
62,000 square feet of gross leasable space. In December 1994, this mortgage note
was sold for net proceeds of  $3,750,000.  The mortgage note was written down to
its net  realizable  value in fiscal 1994. In fiscal 1993, the Trust disposed of
three office  properties  which were owned by joint  ventures in which the Trust
held a 50% or more interest. The three office properties totalled 525,000 square
feet and had an aggregate book value net of related liabilities of approximately
$8.4 million.  Two of the  properties  were  foreclosed  upon by the  respective
mortgage  lenders  after the joint  ventures  elected not to make  required debt
service  payments.  The Trust sold its 50%  interest in the third joint  venture
owning an office building in Santa Ana, California for $250,000.  For additional
information,  see Item 7,  "Management's  Discussion  and  Analysis of Financial
Condition and Results of Operations".

         Eight properties in the Trust's  portfolio are service and distribution
facilities  totalling 1,547,000 square feet of gross leasable space,  consisting
of six automobile  and truck parts  distribution  warehouses  leased to Chrysler
Corporation,  one  truck  sales  and  service  center  and one  automobile  tire
distribution  facility.  The service and distribution  facilities are net leased
under long-term lease arrangements whereby the tenant pays all taxes, insurance,
maintenance  and other  operating  costs of the property  during the term of the
lease.  Rents paid by  Chrysler  Corporation  to the Trust  exceeded  10% of the
Trust's gross rental  revenues in fiscal 1994.  (See Recent  Developments  below
regarding  contract  for sale of certain of the  properties  leased to  Chrysler
Corporation).

         At October 31, 1994, the Trust also owned a portfolio of mortgage notes
receivable consisting of fixed rate mortgages aggregating  $4,013,000 (excluding
the  participating  mortgage  described  above).  The fixed rate  mortgages  are
secured by retail properties sold by the Trust in prior years.

         Property Management

         The Trust actively manages and supervises the operations and leasing at
six of its retail  property  and two  office  locations.  Eleven of the  Trust's
properties are net leased to single tenants under long-term lease  arrangements,
in which case,  management  is provided by the  tenants.  The Trust's  remaining
properties are managed by independent  third party  management firms retained by
the Trust.  The Trust  closely  supervises  the  management  firms it engages to
manage its properties.

         Recent Developments
         During fiscal 1994,  the Trust  acquired two properties at an aggregate
purchase price of $25.8  million.  The Trust also spent $1.8 million for leasing
costs and capital improvements to properties it already owns.  Substantially all
such capital  improvements  were incurred in connection  with the Trust's office
and retail  leasing  activities.  The Trust expects to spend similar  amounts in
fiscal 1995 for leasing costs and capital improvements at its properties. During
the 1994  fiscal  year,  the Trust  leased  over  145,000  square  feet of gross
leasable  space,  compared to 130,000  square feet in the prior year. The square
footage  leased in fiscal 1994 comprised 8% of the total gross leasable space of
the Trust's retail and office building properties.

         In November  1994,  the Trust  entered  into a contract  to sell,  to a
single  purchaser,  four of its service and  distribution  facilities  totalling
626,000  square  feet of gross  leasable  space and net  leased to the  Chrysler
Corporation.  The aggregate sale price is approximately $13.5 million. The Trust
has  also  entered  into a  contract  to sell its  retail  property  located  in
Manassas,  Virginia at a sale price of $7.5 million.  The property is net leased
to a single tenant  occupying  106,000 square feet of gross leasable space.  The
transactions are expected to close in fiscal 1995.

         The Trust intends to continue to invest substantially all of its assets
in income producing real estate,  with a primary  emphasis on shopping  centers,
although the Trust will retain the  flexibility to invest in other types of real
property.  While the Trust is not  limited  to any  geographical  location,  the
Trust's current strategy is to invest in properties  located in the Northeastern
United States.  The Trust also intends to sell certain of its real estate assets
such as its mortgage  notes  receivable and certain of its office and industrial
properties.

         Competition
         The real estate investment  business is highly  competitive.  The Trust
competes for real estate  investments  with  investors  of all types,  including
domestic and foreign  corporations,  financial  institutions,  other real estate
investment  trusts and  individuals.  In addition,  the Trust's  properties  are
subject to local competitors from the surrounding areas.

         The Trust's  office  buildings  compete for  tenants  principally  with
office buildings  throughout the respective areas in which they are located.  In
most areas where the Trust's  office  buildings  are  located,  competition  for
tenants is intense. Leasing space to prospective tenants is generally determined
on the basis of, among other things, rental rates, location, physical quality of
the property and availability of space. The shopping centers compete for tenants
with  other  regional,   community  or  neighborhood  shopping  centers  in  the
respective areas where Trust retail properties are located.

         Since  the  Trust's  industrial  properties  are all net  leased  under
long-term lease arrangements which are not due to expire in the near future, the
Trust does not currently  face any  competitive  pressures  with respect to such
properties.

         Employees
         The Trust has 16 employees, eight of whom oversee the management of the
Trust's real estate  portfolio,  analyze  potential  acquisition  properties and
determine which  properties,  if any, to sell. The Trust's  remaining  employees
serve in various professional, executive and administrative capacities.








Item II. Properties.

         Retail Properties

           The following  table sets forth  information  concerning  each retail
property in which the Trust owned an equity  interest at October 31,  1994.  All
retail properties are 100% owned in fee by the Trust.




                                                  Gross Leasable
                           Year         Year          Square                     Number
Location                 Completed    Acquired         Feet          Acres     of Tenants    Occupancy      Principal Tenant
- ----------------         ---------    --------       --------        ------     ---------    ---------    ----------------------
                                                                                   
Mesa, Arizona            1971           1971           92,000         7.6           1          100%     Mervyn's (Dayton Hudson)

Tempe, Arizona           1970           1970           86,000         8.6           1          100%     Mervyn's (Dayton Hudson)

Meriden, Connecticut     1989           1993          296,000        29.2          18           92%     Bradlee's

Clearwater, Florida      1983           1985          231,000        21.5          39           80%     Albertson's

Springfield, 
  Massachusetts          1970           1970          284,000        26.0          14           74%     Caldor

Newington, New Hampshire 1975           1979          102,000        14.3          10          100%     Sears Roebuck Home Life 
                                                                                                        Store

Wayne, New Jersey        1959           1992           99,000         9.0          31           85%     Great Atlantic & Pacific 
                                                                                                        Tea Co.

Farmingdale, New York    1981           1993           70,000         5.6          11           95%     King Kullen

Somers, New York         1989           1992           19,000         4.9          12          100%     Putnam County Savings Bank

Manassas, Virginia       1971           1972          106,000        14.1           1          100%     The Hecht Company 
                                                                                                        (May Department Stores)











         Office Properties

         The  following  table sets forth  information  concerning  each  office
property in which the Trust owned an equity interest at October 31, 1994. Except
as otherwise noted, office properties are 100% owned in fee by the Trust.




                                                     Rentable
                            Year        Year          Square                     Number
Location                 Completed    Acquired         Feet          Acres     of Tenants    Occupancy        Principal Tenant
- --------                ---------    --------         ------         -----     ----------    ---------       ------------------

                                                                                      
Denver, Colorado           1983         1983          122,000         9.1           10          90%*       Kemper Insurance Company

Greenwich, Connecticut     1983         1993           10,000          .2            3          100%       Multivision Cable TV

Greenwich, Connecticut     1983         1994            9,700          .2            4          100%       Prescott Investors, Inc.

Southfield, Michigan12     1973         1983          183,000         7.8            4          100%       Giffels Associates

Houston, Texas             1972         1975           96,000         3.1           32           93%       Houston Title Company


<FN>
- --------
   1   The Trust owns an 85% partnership interest in this property.

*  Includes tenant occupying 30,400 square feet of space who took occupancy on December 1, 1994






         Distribution and Service Properties

         The following table sets forth information concerning each distribution
and service  property in which the Trust owned an equity interest at October 31,
1994. Distribution and service properties are 100% owned in fee by the Trust.




                       Rentable
                         Year         Year          Square                     Number
Location              Completed    Acquired         Feet          Acres     of Tenants    Occupancy          Tenant
- --------              ---------    --------        ------         -----     ----------    ---------          ------

                                                                                                
Dallas, Texas           1970           1970          253,000        14.5           1          100%      Chrysler Corporation

Denver, Colorado        1970           1970          127,000        11.2           1          100%      Chrysler Corporation

Memphis, Tennessee      1970           1970          175,000        13.7           1          100%      Chrysler Corporation

Orlando, Florida        1970           1970          175,000        23.8           1          100%      Chrysler Corporation

Beaverton, Oregon       1970           1970          149,000        11.4           1          100%      Chrysler Corporation

St. Louis, Missouri     1970           1970          163,000        16.0           1          100%      Chrysler Corporation

Syracuse, New York      1973           1973           29,000        10.0           1          100%      Navistar International

Albany, Georgia         1972           1972          476,000        51.3           1          100%      Firestone





Item III.  Legal Proceedings.

           No legal proceedings are required to be reported under this Item.

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

           No matter was  submitted  to a vote of  security  holders  during the
           fourth quarter of the fiscal year ended October 31, 1994.


           Item  Pursuant  to Instruction  3 of  Item 401 (b) of Regulation S-K:
           Executive Officers of the Trust.

           For information regarding Executive Officers of the Trust -- See Item
           X.


                                    PART II

Item V.    Market for the  Registrant's  Common  Equity and Related  Stockholder
           Matters.

(a) Price Range of Common Shares

         The  Common  Shares  of the  Trust  are  traded  on the New York  Stock
Exchange under the symbol "HRE". The following table sets forth the high and low
closing sales prices for the Trust's Common Shares during the fiscal years ended
October  31,  1994 and  October  31,  1993,  as  reported  on the New York Stock
Exchange:




                                        Fiscal Year                        Fiscal Year
                                          Ended                               Ended
                                     October 31, 1994                    October 31, 1993
                                     ----------------                    ----------------

                                                                           
                                      High            Low               High              Low
Fourth Quarter                     $15-1/2     -    13-7/8           $15-7/8      -    $14-1/4
Third Quarter                       16-1/4     -    13-3/4            15-5/8      -     13-3/4
Second Quarter                      16         -    13-1/2            16-3/8      -     12-1/4
First Quarter                       15-5/8     -    14-1/8            12-3/8      -     11-1/8


(b) Approximate Number of Equity Security Holders


         At December 31, 1994,  there were 3,135  shareholders  of record of the
Trust's Common Shares.


(c) Dividends Declared on Common Shares and Tax Status

         The following table sets forth the dividends  declared per Common Share
and tax status for Federal  income tax purposes of the dividends paid during the
fiscal years ended October 31, 1994 and October 31, 1993:




                                                     Portion of Dividend Designated as:

Fiscal Year Ended                           Gross Dividend     Income           Non-Taxable
October 31, 1994:                           Paid Per Share    Distribution     Distribution
- --------------------                       ----------------  ---------------  ---------------
                                                                           
Fourth Quarter                                     $ .28             $ .14        $ .14
Third Quarter                                      $ .28             $ .14        $ .14
Second Quarter                                     $ .27             $ .14        $ .13
First Quarter                                      $ .27             $ .13        $ .14
                                                   -----             -----        -----
                                                   $1.10             $ .55        $ .55
                                                   =====             =====        =====





                                                   Portion of Dividend Designated as:

Fiscal Year Ended      Gross Dividend           Income         Capital Gain             Non-Taxable
October 31, 1993:      Paid Per Share         Distribution     Distribution             Distribution
                       ----------------     ---------------   ----------------         -------------
                                                                                 
Fourth Quarter              $ .27                  $ .02             $ .20                 $ .05
Third Quarter               $ .27                  $ .03             $ .20                 $ .04
Second Quarter              $ .27                  $ .03             $ .19                 $ .05
First Quarter               $ .27                  $ .03             $ .19                 $ .05
                            -----                  -----             -----                 -----
                            $1.08                  $ .11             $ .78                 $ .19
                            =====                  =====             =====                 =====


         The Trust made  distributions  to  shareholders  aggregating  $1.10 per
Common Share during the fiscal year ended  October 31, 1994.  The Trust has paid
quarterly dividends on its Common Shares since it commenced operations as a real
estate investment trust in 1969.

         Although the Trust intends to continue to declare  quarterly  dividends
on its Common Shares,  no assurances can be made as to the amounts of any future
dividends.  The  declaration of any future  dividends by the Trust is within the
discretion  of the Board of Trustees,  and will be dependent  upon,  among other
things, the earnings, financial condition and capital requirements of the Trust,
as well as any other  factors  deemed  relevant  by the Board of  Trustees.  Two
principal   factors  in  determining  the  amounts  of  dividends  are  (i)  the
requirement  of the Code  that a real  estate  investment  trust  distribute  to
shareholders  at least 95% of its real estate  investment  trust taxable income,
and (ii) the amount of the Trust's funds from operations.

         The Trust has a Dividend  Reinvestment  and Share  Purchase  Plan which
allows  shareholders to acquire  additional shares by automatically  reinvesting
dividends.  Shares are  acquired  pursuant  to the Plan at a price  equal to the
higher of 95% of the market price of such shares on the dividend payment date or
100% of the average of the daily high and low sales  prices for the five trading
days ending on the day of purchase  without payment of any brokerage  commission
or  service  charge.  Approximately  14% of the  Trust's  eligible  shareholders
currently participate in the Plan.



Item IV.     Selected Financial Data.
(In thousands, except per share data)




Year Ended October 31,                   1994           1993           1992          1991            1990
                                        -------        -------        -------       -------        -------

                                                                                        
Total Assets                           $142,559       $119,330       $137,855      $130,727       $135,342

Mortgage Notes and
 Other Long-term
   Obligations                         $ 46,386       $ 24,227       $ 31,226      $ 20,534       $ 20,711

Revenues                               $ 18,969       $ 16,162       $ 16,942      $ 17,136       $ 17,902

Operating Income (Loss)                $  1,262       $(7,293)       $  1,588      $    892       $  2,247

Gains on Sales of
 Properties                           $      82       $  2,330     $       --      $  2,205       $  1,622

Net Income (Loss)                      $  1,344       $(4,963)       $  1,588      $  3,097       $  3,869

Funds From Operations*                 $  7,950       $  7,036       $  6,902      $  7,841       $  8,998


Per Share Data:

Net Income (Loss)                          $ .26          $(.94)         $.30           $.58          $.70

Cash Dividends                             $1.10          $1.08         $1.16          $1.40         $1.60



*Defined as net income,  before gains on sales of properties  and  non-recurring
items,  adjusted for noncash  charges and credits,  recoveries  of investment in
properties  owned subject to financing  leases and cash  distributions  received
from investments in unconsolidated joint ventures.

Item VII. Managment's Discussion and Analysis of Financial Condition and Results
          of Operations

Liquidity and Capital Resources

The Trust meets its liquidity  requirements  primarily by generating  funds from
the operations of its properties, sale of real estate investments and collection
of principal and interest on its mortgage notes receivable. Payments of expenses
related to real estate operations,  capital improvement programs,  debt service,
management and professional fees, and dividend requirements place demands on the
Trust's liquidity.

The Trust believes that the financial  resources  currently  available to it are
sufficient  to meet all of its known  obligations  and  commitments  and to make
additional real estate  investments  when  appropriate  opportunities  arise. At
October 31, 1994, the Trust had $8.7 million in cash and cash  equivalents.  The
Trust also has available $17 million in unsecured lines of credit, (including an
increase of $2 million in one such line of credit  subsequent  to year end) with
two major  commercial  banks.  Long-term  debt consisted of eight mortgage notes
payable totalling $46.4 million, of which $411,000 in principal payments are due
in fiscal 1995. Current liabilities, including current installments of principal
payments of mortgage notes payable,  and short-term  borrowings under the credit
lines,  were  approximately  $6.4  million.  The credit  lines are  available to
finance the acquisition, management or development of commercial real estate and
a portion of such credit lines is available for working  capital  purposes.  The
credit lines expire at various  periods in 1995 and outstanding  borrowings,  if
any,  may be repaid from  proceeds of  additional  debt  financings  or sales of
properties.  The Trust may also request that the time for  repayment be extended
by the banks.  It is the  Trust's  intent to renew  these  credit  lines as they
expire in 1995. During fiscal 1994, the Trust obtained proceeds of $22.5 million
from first mortgage loan financings.  The loans are  collateralized  by three of
the Trust's  properties  having a net carrying value of $34.9 million at October
31, 1994.  The mortgage  loans bear interest at fixed rates that range from 7.5%
to 9.75% and mature in five to seven years.

In fiscal 1994,  the Trust sold its  distribution  property  located in Memphis,
Tennessee,  for  $450,000,  all cash.  The Trust  realized a gain on the sale of
property  of  $82,000.  In December  1994,  the Trust also sold a  participating
mortgage note  receivable  with a face amount of  $4,836,000.  The mortgage note
receivable  was written down to its net  realizable  value of  $3,750,000 in the
1994 consolidated statement of income and sold at such amount.

The Trust has  entered  into  contracts  to sell  four of its  distribution  and
service  properties to a single  purchaser for an aggregate  sale price of $13.5
million.  The Trust has also  contracted  to sell a 106,000  square  foot retail
property  for $7.5  million.  The  transactions  are expected to close in fiscal
1995.  The proceeds from such sales may be used to make  additional  real estate
investments  and/or  reduce  outstanding  mortgage  loan  indebtedness  or  meet
dividend distribution requirements.

The  Trust  acquired  two  properties  in fiscal  1994 at a total  cost of $25.8
million.  Funds  for the  acquisitions  were  provided  principally  from  first
mortgage note proceeds of $15 million and available  cash,  including $5 million
drawn from a credit  line.  The Trust  expects to make  additional  real  estate
investments periodically.  The funds for such investments may come from existing
liquid  assets,  line of credit  arrangements,  proceeds  from  property  sales,
financing  of  acquired  or existing  properties  or the sale of mortgage  notes
receivable. Subsequent to fiscal 1994, the Trust contracted to acquire a 193,000
square  foot  shopping  center in Danbury,  Connecticut.  The  property  will be
acquired  at a  purchase  price of $19.25  million  and  funded  through a first
mortgage loan of $11.25 million and available cash. The first mortgage will bear
interest  at 9.5% per  annum  and  mature  in five  years.  The  acquisition  is
scheduled to be completed  in the first  quarter of fiscal 1995.  The Trust also
invests in its existing  properties and, during fiscal 1994, spent approximately
$1.8 million on its properties for capital  improvement  and leasing costs.  The
Trust expects to invest similar amounts in the next fiscal year.

Results of Operations

The Trust defines "funds from  operations" as net income (computed in accordance
with generally accepted accounting  principles),  excluding gains (or losses) on
sales of  properties,  adjusted for noncash  charges and credits,  recoveries of
investment  in  properties   owned  subject  to  financing   leases,   and  cash
distributions  received from unconsolidated  joint ventures.  The Trust believes
the level of funds from operations to be an appropriate  supplemental  financial
measure of its  operating  performance.  In fiscal 1994,  funds from  operations
increased  13% to  $7,950,000  from  $7,036,000  in the  year  ago  period.  The
improvement  is primarily  the result of the positive  effect of the Trust's new
retail property investments in fiscal 1994 and late 1993.

Fiscal 1994 vs. Fiscal 1993
Revenues
Total  revenues were  $18,969,000 in fiscal 1994 compared to $16,162,000 in 1993
and  $16,942,000  in 1992.  Rental  income in fiscal 1994,  including the income
portion of rental received in respect of direct finance leases, comprised 94% of
total  revenues.  Rental  income from retail  properties  increased 53% to $11.5
million  from $7.5 million in fiscal 1993.  Retail  property  acquired in fiscal
1994 and late 1993 produced additional rents of $3.9 million in fiscal 1994. The
Trust's overall retail property  occupancy levels were generally  unchanged from
last year. Gross rents from office property investments  decreased nearly 20% to
$4.9 million in fiscal 1994 compared to $6.1 million a year ago,  reflecting the
disposition in fiscal 1993 of the Trust's former office  building  investment in
Portland,  Oregon and lower  occupancy  during the year at the  Trust's  Denver,
Colorado  office  building.  The Trust recently signed leases  totalling  62,000
square  feet of  leasable  space at the  Denver  property  and the  building  is
currently 95% occupied.

Expenses
Total  expenses were  $17,727,000  in fiscal 1994,  compared to  $23,470,000  in
fiscal 1993. Included in expenses in fiscal 1994 and 1993 are write-downs in the
carrying values of investments of $1,086,000 and  $8,285,000,  respectively.(see
discussion below.)

The largest  expense  category is operating  expenses of the Trust's real estate
operating  properties.  Operating  expenses totalled  $7,205,000 in fiscal 1994,
compared to $6,311,000 in 1993. Expenses were generally unchanged for properties
owned during both 1994 and 1993.  Operating  expenses for the Trust's new retail
properties  added  expenses  of  $1,231,000  in fiscal  1994.  The prior  year's
expenses included $548,000 for operating expenses of the Trust's office building
property in Portland,  Oregon that was disposed of during fiscal 1993.  Interest
expense rose $1,281,000 in fiscal 1994 due to the addition of three new mortgage
notes payable  aggregating  $22.5  million.  The mortgage notes bear interest at
annual rates ranging from 7.5% to 9.75%.  In fiscal 1993, the Trust satisfied in
foreclosure  a 10 3/4% mortgage loan with an  outstanding  principal  balance of
$13.5 million.

General and administrative  expenses decreased in fiscal 1994 as a result of the
Trust's  decision to redeploy  certain of its  available  staff  resources  from
administrative  and asset  management  functions to direct  property  management
activities  at certain of its retail  properties.  The  properties  were managed
previously by third-party management firms under fee arrangements.

The decrease in consulting fee expense  resulted from the  termination in fiscal
1993 of a consulting arrangement with a trustee.

Fiscal 1993 vs. Fiscal 1992
Revenues
Operating  lease  income  was lower in fiscal  1993  compared  to the prior year
primarily  as a result of the  disposition  in that year of the  Trust's  office
building  investment in Portland,  Oregon. The Trust discontinued  recording the
revenues  and expenses of the property  after a receiver was  appointed  for the
property in connection  with a foreclosure  proceeding.  Rents from other office
building investments  reflected lower occupancy especially at the trust's office
building in Denver,  Colorado  where a tenant  occupying  34,000  square feet of
space failed to renew its lease upon expiration. Revenues from retail properties
increased by approximately  14.7% reflecting  income earned from recent shopping
centers  acquisitions  by the  Trust  and  improved  occupancy  at  the  Trust's
Newington, New Hampshire property.

Interest income  decreased  principally from lower rates of return on short-term
investments  and  lower  levels  of cash  and  cash  equivalents  available  for
short-term  investment.  Interest earned from a loan to an unconsolidated  joint
venture  decreased  when the loan in the  principal  amount of  $800,000  became
non-performing and was subsequently written off during the year.

Expenses

Real estate operating expenses include the effect of the additional  expenses of
shopping  centers  acquired  by the  Trust  and the  discontinued  recording  of
expenses of the Portland office building earlier in the year.

The increase in net interest  expense resulted from the addition of two mortgage
notes payable  totaling  $11.65  million at an average  annual  interest rate of
9.36% and the satisfaction in foreclosure of a nonrecourse mortgage loan with an
outstanding  balance of $13.5  million.  In light of  continued  adverse  office
market conditions including excess supply of available space, weak tenant demand
and declining  rents,  the Trust  determined in fiscal 1993 that the  additional
funds required to meet capital and debt service obligations was not justified by
the near-term  prospects for two of its office building  investments  which were
encumbered  with  mortgage  notes payable  totalling  $19.1  million.  The Trust
commenced  discussions  with the lenders to the properties,  seeking among other
things,  modifications to the mortgage notes payable to more closely reflect the
then  current  market  conditions.  The  office  buildings  were  owned by joint
ventures in which the Trust held a 50% or greater  interest.  The joint ventures
elected not to make debt service  payments on its mortgage loan  obligations and
as  a  result,  the  mortgagees  filed  actions  seeking   foreclosures  of  the
properties.  Subsequently, the mortgagees obtained foreclosure judgments and the
properties  were sold.  As a result of these  developments,  the Trust  recorded
charges of $2.6 million in fiscal 1993 to reflect one of the property's carrying
value at its  estimated  fair value and  $800,000  to write off the  Trust's net
investment in a second mortgage loan to the other joint venture.

For similar  reasons  discussed  above,  the Trust also  reached an agreement in
principle to sell its 50% interest in a third  unconsolidated  joint  venture to
its partner for $250,000.  The joint venture owned an office building located in
Santa Ana, California.  In this connection,  the Trust recorded a charge of $4.9
million to reflect its  investment  in the  unconsolidated  joint venture at net
realizable value.

The Trust  recorded  a gain on sale of  properties  of $2.3  million or $.44 per
share  in  connection  with a sale of the  Trust's  62,000  square  foot  retail
property located in Los Angeles, California.


Item VIII.  Financial Statements and Supplementary Data.

      The consolidated financial statements required by this Item, together with
the  report  of the  Trust's  independent  public  accountants  thereon  and the
supplementary  financial  information  required by this Item are included  under
Item 14 of this Annual Report.

Item IX.    Changes in  and  Disagreements  With  Accountants  on Accounting and
            Financial Disclosure.

      No information is required to be reported under this Item.

                                    PART III

Item X.       Directors and Executive Officers of the Registrant.

      The  Trust has filed  with the  Securities  and  Exchange  Commission  its
definitive  Proxy Statement for its Annual Meeting of Shareholders to be held on
March 15, 1995.  The  additional  information  required by this Item is included
under  the  caption  "Election  of  Trustees"  of such  Proxy  Statement  and is
incorporated herein by reference.

         Executive Officers of the Registrant.

      The  following  sets forth  certain  information  regarding  the executive
officers of the Trust:



         Name                                   Age           Offices Held
         ----                                   ----          -------------                  

                                                         
         Charles J. Urstadt                     66            Chairman; President and Chief Executive
                                                              Officer (since September 1989)

         James R. Moore                         46            Senior Vice President and Chief Financial
                                                              Officer (since September 1989); Secretary
                                                              (since April 1987) and Treasurer (since
                                                              December 1987); Vice President-Finance
                                                              and Administration (April 1987 to
                                                              September 1989); prior to April 1987,
                                                              Senior Manager, Ernst & Young

         Raymond P. Argila                      46            Senior Vice President and Chief Legal
                                                              Officer (since June 1990); formerly Senior
                                                              Counsel, Cushman & Wakefield, Inc.,
                                                              September 1987 to May 1990 and
                                                              associated with Finley, Kumble, Wagner,
                                                              Heine, Underberg, Manley, Myerson &
                                                              Casey from March to June 1987; Vice
                                                              President and Chief Legal Officer, Pearce,
                                                              Urstadt, Mayer & Greer Realty Corp. from
                                                              January 1984 to March 1987

         Bryant Young                           46            Senior Vice President-Asset Management
                                                              (since December, 1992); Vice President
                                                              (June 1986 to December 1992); Assistant
                                                              Vice President (February 1986 to June
                                                              1986); Associate, Merrill Lynch Hubbard
                                                              Co. (May 1985 to January, 1986)


         Officers of the Trust are elected annually by the Trustees.

         Mr.  Urstadt has been the  Chairman of the Trustees  since 1986,  and a
Trustee since 1975. Mr. Urstadt also serves as the President of Urstadt Property
Company, Inc. (formerly Pearce,  Urstadt,  Mayer & Greer Inc.) and has served in
such capacity for more than five years.

Item XI.    Executive Compensation.

         The Trust has filed with the  Securities  and Exchange  Commission  its
definitive  Proxy Statement for its Annual Meeting of Shareholders to be held on
March 15,  1995.  The  information  required by this Item is included  under the
caption "Compensation and Transactions with Management and Others" of such Proxy
Statement and is incorporated herein by reference.

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

         The Trust has filed with the  Securities  and Exchange  Commission  its
definitive  Proxy Statement for its Annual Meeting of Shareholders to be held on
March 15,  1995.  The  information  required by this Item is included  under the
caption "Security Ownership of Certain Beneficial Owners and Management" of such
Proxy Statement and is incorporated herein by reference.

Item XIII.  Certain Relationships and Related Transactions.

         The Trust has filed with the  Securities  and Exchange  Commission  its
definitive  Proxy Statement for its Annual Meeting of Shareholders to be held on
March 15,  1995.  The  information  required by this Item is included  under the
caption "Compensation and Transactions with Management and Others" of such Proxy
Statement and is incorporated herein by reference.



                                    PART IV

Item XIV.   Exhibits, Financial Statement
            Schedules and Reports on Form 8-K.

         A. Financial Statements and Financial Statement Schedules

                  1.       Financial Statements --

                           The consolidated  financial  statements listed in the
                           accompanying index to financial statements on Page 18
                           are filed as part of this Annual Report.

                  2.       Financial Statement Schedules --

                           The financial  statement  schedules  required by this
                           Item are filed with this report and are listed in the
                           accompanying  index to financial  statements  on Page
                           18.  All  other  financial  statement  schedules  are
                           inapplicable.

         B. Reports on Form 8-K

            No reports on Form 8-K were filed by the Registrant during the  last
            quarter of the fiscal year ended October 31, 1994.

         C. Exhibits.

            Listed below are all Exhibits filed as part of this report.  Certain
            Exhibits are  incorporated  by reference from  documents  previously
            filed by the  Trust  with the  Securities  and  Exchange  Commission
            pursuant to Rule 12b-32 under the  Securities  Exchange Act of 1934,
            as amended.

Exhibit

(3)      Articles of Incorporation and By-laws.

         3.1      Fourth Amended and Restated Declaration of Trust of the Trust,
                  as amended, to date.

         3.2      By-laws of the Trust, as amended (incorporated by reference to
                  Exhibit 4.2 of the Registrant's Registration Statement on Form
                  S-8 (No. 33-41408)).

(4)      Instruments Defining the Rights of
         Security Holders, Including Indentures:

         4.1      Common Shares:  See Exhibit 3.1 hereto.

         4.2      Preferred Shares:  See Exhibit 3.1 hereto.

         4.3      Preferred Share Purchase Rights:  See  Exhibits  3.1  and 10.3
                  hereto.
                  
(10)     Material Contracts.

         10.1            Form of Indemnification  Agreement entered into between
                         the  Registrant and each of its Trustees and for future
                         use  with   Trustees   and   officers   of  the   Trust
                         (incorporated  herein by  reference  to Exhibit 10.1 of
                         the  Registrant's  Annual  Report  on Form 10-K for the
                         year ended October 31, 1989).*


         10.2            Amended  and  Restated  Change  of  Control   Agreement
                         between  the   Registrant  and  James  R.  Moore  dated
                         November 15, 1990 (incorporated  herein by reference to
                         Exhibit 10.3 of the Registrant's  Annual Report on Form
                         10-K for the year ended October 31, 1990).*



         10.3            Rights  Agreement  between  the  Trust  and  The  First
                         National Bank of Boston,  as Rights Agent,  dated as of
                         October 28, 1988  (incorporated  herein by reference to
                         Exhibit 1 of the  Registrant's  Current  Report on Form
                         8-K dated October 28, 1988).

         10.4            Change of Control  Agreement  dated as of June 12, 1990
                         between   the   Registrant   and   Raymond  P.   Argila
                         (incorporated  herein by  reference  to Exhibit 10.7 of
                         the  Registrant's  Annual  Report  on Form 10-K for the
                         year ended October 31, 1990).*

         10.4.1          Agreement   dated   December   19,  1991   between  the
                         Registrant and Raymond P. Argila amending the Change of
                         Control Agreement dated as of June 12, 1990 between the
                         Registrant and Raymond P. Argila  (incorporated  herein
                         by  reference  to  Exhibit  10.6.1 of the  Registrant's
                         Annual  Report on Form 10-K for the year ended  October
                         31, 1991).*

         10.5            Change of Control  Agreement  dated as of December  20,
                         1990  between the  Registrant  and  Charles J.  Urstadt
                         (incorporated  herein by  reference  to Exhibit 10.8 of
                         the  Registrant's  Annual  Report  on Form 10-K for the
                         year ended October 31, 1990).*

         10.6            Amended and Restated HRE  Properties  Stock Option Plan
                         (incorporated  herein by  reference  to Exhibit 10.8 of
                         the  Registrant's  Annual  Report  on Form 10-K for the
                         year ended October 31, 1991).*

         10.6.1          Amendments  to HRE  Properties  Stock Option Plan dated
                         June 9, 1993.*

         10.7            Purchase and Sale Agreement  between the Registrant and
                         Aetna Life  Insurance  Company dated December 22, 1993,
                         relating to the  Registrant's  acquisition  of Townline
                         Center Shopping Center, Meriden, Connecticut.

         10.8            Second  Purchase and Sale  Agreement  dated  January 6,
                         1995 between the  Registrant  and Aetna Life  Insurance
                         Company  relating to the  Registrant's  acquisition  of
                         Danbury Square Mall, Danbury, Connecticut (incorporated
                         herein by  reference  to Exhibit 1 of the  Registrant's
                         Current Report on Form 8-K dated January 6, 1995). 

(21)     Subsidiaries.

         21.1            List of Trust's subsidiaries (incorporated by reference
                         to Exhibit 22.1 of the  Registrant's  Annual  Report on
                         Form 10-K for the year ended October 31, 1988).

(23)     Consents of Experts and Counsel.

         23.1            The consent of Arthur Andersen LLP to the incorporation
                         by reference of their reports  included or incorporated
                         by   reference   herein   and   in   the   Registrant's
                         Registration  Statements  on Form S-3  (No.  33-57119),
                         Form S-8  (No.2-93146)  and Form S-8 (No. 33- 41408) is
                         filed herewith as part of this report.

(27)     Financial Data Schedule.

         27.1            Financial Data Schedule

*Management  contract,  compensatory plan or arrangement required to be filed as
an exhibit to this Annual Report on Form 10-K pursuant to Item 14(c).


                                 HRE PROPERTIES

                   Item 14a.INDEX TO FINANCIAL STATEMENTS AND
                         FINANCIAL STATEMENT SCHEDULES



                                                                                                  Page

                                                                                             
                 Consolidated Balance Sheets at October 31, 1994 and 1993                          20

                 Consolidated Statements of Income for each of the
                   three years ended October 31, 1994                                              21

                 Consolidated Statements of Cash Flows for each of the
                   three years ended October 31, 1994                                              22

                 Consolidated Statements of Shareholders' Equity
                   for each of the three years ended October 31, 1994                              23

                 Notes to Consolidated Financial Statements                                        24-30

                 Report of Independent Public Accountants                                          30

Schedule

II               Amounts Receivable from Related Parties and
                   Underwriters, Promoters and Employees
                   Other Than Related Parties - For the
                   three years ended October 31, 1994                                              31

IX               Short-Term Borrowings - For the
                   three years ended October 31, 1994                                              32

X                Supplementary Income Statement Information -
                   For the three years ended October 31, 1994                                      33

XI               Real Estate and Accumulated Depreciation -
                   October 31, 1994                                                                34-37

XII              Mortgage Loans on Real Estate - October 31,
                   1994                                                                            38-39



  CONSOLIDATED BALANCE SHEETS
  (In thousands, except share data)


                                                                                        October 31,
                                                                                     -----------------

  ASSETS                                                                             1994         1993
                                                                                     ----         ----


                                                                                                 
Real Estate Investments:
    Properties owned-- at cost, net of accumulated depreciation and recoveries      $ 120,631     $ 99,279
    Investments in and loans to unconsolidated joint ventures                              --          250
    Mortgage notes receivable                                                           7,763        8,917
                                                                                      -------     --------
                                                                                      128,394      108,446
Cash and cash equivalents                                                               8,738        7,061
Interest and rent receivable                                                            2,343        1,304
Deferred charges, net of accumulated amortization                                       2,108        1,796
Other assets                                                                              976          723
                                                                                     --------     --------
                                                                                     $142,559     $119,330
  LIABILITIES AND SHAREHOLDERS' EQUITY

  Liabilities:
Mortgage notes payable and bank loan                                                $  51,386    $  24,227
Accounts payable and accrued expenses                                                   1,024          847
Deferred trustees' fees                                                                   521          602
Other liabilities                                                                       1,147          958
                                                                                    ---------    ---------
                                                                                       54,078       26,634
Shareholders' Equity:

    Preferred  shares,  without par value;  2,000,000  shares  authorized;  none
    issued -- -Common shares,  without par value;  unlimited shares  authorized;
    5,520,044
       and 5,498,454 issued in 1994 and 1993, respectively                            123,507      123,205
    Less 178,348 common shares held in treasury, at cost                              (2,861)      (2,861)
Distributions in excess of accumulated net income                                    (32,165)     (27,648)
                                                                                     --------     --------
                                                                                       88,481       92,696
                                                                                     $142,559     $119,330
                                                                                     ========     ========


  The accompanying  notes to consolidated  financial  statements are an integral
part of these balance sheets.





CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)



                                                                                 Year Ended October 31,

                                                                             1994       1993         1992
                                                                           -------    -------      -------
                                                                                              
Revenues:
    Operating leases                                                       $16,498    $13,763      $14,477
    Financing leases                                                         1,392      1,520        1,638
    Interest                                                                 1,079      1,122        1,232
    Interest from and equity in losses of unconsolidated
      joint ventures                                                            --      (243)        (405)
                                                                            ------     ------       ------

                                                                            18,969     16,162       16,942
                                                                            ------     ------       ------

  Operating Expenses:
    Real estate operations                                                   7,205      6,311        6,426
    Interest                                                                 3,775      2,494        2,318
    Depreciation and amortization                                            4,075      4,363        4,481
    General and administrative expenses                                      1,423      1,723        1,885
    Trustees' fees and expenses                                                163        149          131
    Consulting fee                                                              --        145          138
    Write-down in carrying value of investments                              1,086      8,285           --
                                                                            ------     ------       ------

                                                                            17,727     23,470       15,379
                                                                            ------     ------       ------


  Operating Income(Loss) before Minority Interests                           1,242    (7,308)       1,563

  Minority Interests in Results of Consolidated Joint Ventures                  20         15          25
                                                                            ------     ------       -----

  Operating Income(Loss)                                                     1,262    (7,293)       1,588

  Gains on Sales of Properties                                                  82      2,330          ---
                                                                            ------     ------       ------

    Net Income(Loss)                                                       $ 1,344   $(4,963)       $1,588
                                                                           =======   ========       ======

  Net Income(Loss) Per Common Share:

    Operating income(loss)                                                 $  .24     $ (1.38)      $ .30
    Gains on sales of properties                                              .02         .44          -
                                                                           ------      -------     ------
    Net Income(Loss)                                                       $  .26      $ (.94)     $  .30
                                                                           ======      =======     ======

  Weighted Average Number of Common Shares Outstanding                      5,330       5,296       5,285
                                                                           ======       =====     =======



The accompanying  notes  to consolidated  financial  statements are  an integral
part of these statements.


CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)


                                                                                 Year Ended October 31,

                                                                             1994        1993         1992
                                                                             ----        ----         ----
                                                                                               
Operating Activities:
    Net income(loss)                                                      $ 1,344    $ (4,963)      $ 1,588
    Adjustments to reconcile net income(loss) to net cash provided
      by operating activities:

      Depreciation and amortization                                         4,151       4,448         4,568
      Recovery of investment in properties owned
           subject to financing leases                                      1,471       1,342         1,225
      Equity in losses of unconsolidated joint venture                         --         269           506
      Minority interests in results of consolidated joint ventures            (20)        (15)          (25)
      Gains on sales of properties                                            (82)     (2,330)           --
      Write-down in carrying value of investments                           1,086       8,285            --
                                                                          -------      ------        ------

                                                                            7,950       7,036         7,862

    Changes in operating assets and liabilities:
      (Increase) decrease in interest and rent receivable                   (1039)       (286)          142
      Increase (decrease) in accounts payable and accrued expenses             97        (463)          114
      (Increase) decrease in other assets and other liabilities, net         (619)        253          (236)
                                                                          -------      ------        ------

      Net Cash Provided by Operating Activities                             6,389       6,540         7,882
                                                                          -------      ------        ------

  Investing Activities:
    Acquisition of properties owned                                       (25,816)     (6,197)       (15,881)
    Improvements to existing properties owned and deferred charges         (1,764)     (1,521)        (1,564)
    Investments in and loans to unconsolidated joint ventures                  --        (100)        (1,624)
    Proceeds from sales of properties and investment in
       unconsolidated joint venture and contract deposit                    1,204       3,231            --
    Payments received on mortgage notes receivable                             68          61            53
    Miscellaneous                                                              (4)         66          (204)
                                                                          -------     -------        ------

      Net Cash Used in Investing Activities                               (26,312)     (4,460)       (19,220)
                                                                          -------     -------        ------

  Financing Activities:
    Proceeds from mortgage notes and bank loan                             27,500       6,600         11,650
    Dividends paid                                                         (5,861)     (5,718)        (6,129)
    Proceeds from sales of additional common shares                           302         459            245
    Payments on mortgage notes and other                                     (341)       (818)          (199)
                                                                          -------     -------        -------

      Net Cash Provided by Financing Activities                            21,600         523          5,567
                                                                          -------     -------         ------

  Net Increase (Decrease) In Cash and Cash Equivalents                      1,677       2,603         (5,771)
  Cash and Cash Equivalents at Beginning of Year                            7,061       4,458         10,229
                                                                          -------     -------        -------

  Cash and Cash Equivalents at End of Year                                $ 8,738     $ 7,061        $ 4,458
                                                                          =======    ========        =======


  The accompanying  notes to consolidated  financial  statements are an integral
part of these statements.


CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(In thousands, except shares and per share data)



                                                                 Common Shares
                                                                                     (Distributions
                                                                          Treasury   In Excess of
                                               Outstanding     Issued     Shares,     Accumulated
                                                  Number       Amount     at Cost     Net Income)        Total
                                                -----------    ------     ---------   ------------      --------


                                                                                              
Balances-- October 31, 1991                      5,276,569     $122,345    $(2,705)       $(12,426)     $107,214
  Net income                                            --           --          --           1,588        1,588

  Cash dividends declared ($1.16 per share)             --           --          --         (6,129)      (6,129)

  Sale of additional common shares under
  dividend reinvestment plan                        19,540          245          --              --          245
                                                 ---------     --------    --------       ---------     --------

Balances-- October 31, 1992                      5,296,109      122,590     (2,705)        (16,967)      102,918

  Net (loss)                                            --           --          --         (4,963)      (4,963)


  Cash dividends declared ($1.08 per share)             --           --          --         (5,718)      (5,718)

  Sale of additional common shares under
    dividend reinvestment plan                      32,247          459          --              --          459
  Common shares acquired in cancellation
    of stock option loan                           (8,250)          156       (156)              --           --
                                                 ---------     --------    --------       ---------      -------

Balances-- October 31, 1993                      5,320,106      123,205     (2,861)        (27,648)       92,696

  Net Income                                            --           --          --           1,344        1,344


  Cash dividends declared ($1.10 per share)             --           --          --         (5,861)      (5,861)

  Sale of additional common shares under
    dividend reinvestment plan                      18,048          261          --              --          261
  Common shares issued upon
    exercise of stock options                        3,542           41          --              --           41
                                                   -------     --------    --------       ---------     --------


Balances-- October 31, 1994                      5,341,696     $123,507    $(2,861)       $(32,165)      $88,481
                                                 =========     ========    ========       =========      =======



The accompanying notes to consolidated financial statements are an integral part
of these statements.





NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation
The  consolidated  financial  statements  include the accounts of HRE Properties
(the Trust), its wholly-owned  subsidiary,  and certain joint ventures where the
Trust has the  ability to control the affairs of the  venture.  All  significant
intercompany transactions and balances have been eliminated in consolidation.

Accounting for Leases
The Trust  accounts  for its  leases of real  property  in  accordance  with the
provisions of Financial  Accounting  Standards Statement No. 13, "Accounting for
Leases," as amended. This Statement sets forth specific criteria for determining
whether  a lease  should  be  accounted  for as an  operating  lease or a direct
financing  lease. In general,  the financing lease method applies where property
is under long-term  lease to a creditworthy  tenant and the present value of the
minimum  required  lease payments at the inception of a lease is at least 90% of
the market  value of the property  leased.  Other  leases are  accounted  for as
operating leases.

Federal Income Taxes
The Trust  believes  it  qualifies  and intends to continue to qualify as a real
estate  investment  trust  under  the  Internal  Revenue  Code.  The  Trust  has
distributed  all of its  taxable  income  for the  fiscal  years  through  1994.
Accordingly,  no  provision  has  been  made  for  Federal  income  taxes in the
accompanying consolidated financial statements.

Taxable  income of the Trust prior to the dividends paid deduction for the years
ended October 31, 1994, 1993 and 1992 was approximately  $2,200,000,  $3,900,000
and $2,000,000,  respectively.  The difference  between net income for financial
reporting  purposes  and  taxable  income  results  from,  among  other  things,
different  methods of accounting  for leases,  depreciable  lives related to the
properties owned and accounting  differences  related to the Trust's investments
in joint  ventures.  At October 31, 1994,  the Trust had available  capital loss
carryovers of approximately $5,000,000 which expire in 1999.

Depreciation and Amortization
The Trust uses the  straight-line  method  for  depreciation  and  amortization.
Acquisition  costs  and  general  improvement  costs  are  depreciated  over the
estimated  useful  lives of the  properties,  which  range  from 30 to 45 years.
Furniture and equipment are depreciated over their estimated useful lives, which
range  from 3 to 20  years.  Tenant  improvements,  deferred  leasing  costs and
leasehold  improvements  are amortized over the life of the related leases.  All
other  deferred  charges are amortized over the terms of the agreements to which
they relate.

Capitalization
The Trust  capitalizes  all direct  costs  relating to the  acquisition  of real
estate  investments and costs relating to improvements to properties.  The Trust
also capitalizes all direct costs relating to its successful leasing activities.

Income Recognition
Rental income is generally  recognized based on the terms of leases entered into
with  tenants.  Rental  income from  leases with  scheduled  rent  increases  is
recognized on a straight-line basis over the lease term.  Additional rents which
are  provided  for in leases,  are  recognized  as income  when earned and their
amounts can be  reasonably  estimated.  Interest  income is  recognized as it is
earned.  Gains  on sales of  properties  are  recorded  when  the  criteria  for
recognizing such gains under generally accepted accounting  principles have been
met.

Statements of Cash Flows
The Trust considers short-term investments with maturities of 90 days or less to
be cash equivalents.

Allowance For Possible Investment Losses
The Trust's real estate  investments  are  recorded at the lower of  depreciated
historical  cost or estimated  net  realizable  values.  The Trust  periodically
reviews  each of its  investments  for  declines in net  realizable  values,  to
amounts below recorded  balances,  based on its present  investment  strategies.
Future changes in such investment  strategies and other circumstances may affect
estimates  of net  realizable  values  and  therefore  the  carrying  amount  of
investments.

Net Income Per Common Share
Computations  of net income per common share are based on the  weighted  average
number  of  common  shares  outstanding  during  the  respective  periods.   The
additional  shares issuable upon exercise of stock options (see Note 7) have not
been included in the computations since their effect is immaterial.

(2) REAL ESTATE INVESTMENTS

The Trust's investments in real estate were composed of the following at October
31, 1994 and 1993 (in thousands):




                                                      Mortgage
                                 Properties              Notes        1994          1993
                                      Owned         Receivable      Totals        Totals

                                                                         
Retail                            $  80,819            $ 4,013   $  84,832     $  61,860
Office                               22,947              3,750      26,697        27,862
Distribution and Service             15,361                 --      15,361        17,220
Undeveloped Land                      1,504                 --       1,504         1,504
                                  ---------            -------   ---------      --------

                                   $120,631            $ 7,763   $ 128,394      $108,446
                                   ========            =======   =========      ========


The Trust's investments at October 31, 1994, consisted of equity interests in 23
properties which are located in various regions throughout the United States and
mortgage  notes.  The following is a summary of the geographic  locations of the
Trust's investments at October 31, 1994 and 1993 (in thousands):


                                                                      1994          1993
                                                                   -------       -------
                                                                               
Northeast                                                          $66,963       $43,953
Southeast                                                           22,464        23,225
Midwest                                                             13,124        14,321
Rocky Mountain                                                      11,887        11,954
Southwest                                                           10,678        11,295
Pacific Coast                                                        2,070         2,369
Pacific Northwest                                                    1,208         1,329
                                                                  --------      --------
                                                                  $128,394      $108,446


(3) PROPERTIES OWNED

Space at properties owned by the Trust is generally leased to various individual
tenants  under  short-and  intermediate  term leases which are  accounted for as
operating leases.  Certain properties have been leased on a long-term basis to a
single  tenant;  these leases are generally  accounted  for as direct  financing
leases.

Prior to fiscal 1994,  the Trust had a 92% joint  venture  interest in an office
building,  which property was subject to a nonrecourse  first mortgage loan with
an outstanding  principal balance of $13,540,000.  During fiscal 1993, the joint
venture  elected not to make  required  debt  service  payments in an attempt to
renegotiate the mortgage loan with the lender. Subsequently,  the lender refused
to  renegotiate  the terms of the mortgage loan and  foreclosed on the property.
The Trust wrote down the carrying  amount in this property to its estimated fair
value which  approximated  the related mortgage note payable balance at the time
of foreclosure.  This write-down  amounted to approximately  $2.6 million and is
included in "Write-down in carrying value of  investments"  in the  accompanying
1993 consolidated  statements of income. The foreclosure of the property and the
satisfaction  of the  mortgage  note  payable  represented  a noncash  financing
activity and therefore was not included in the  accompanying  1993  consolidated
statement of cash flows.

In 1994, the Trust  acquired two  properties for an aggregate  purchase price of
$25.8 million.  The acquisitions  were financed  principally from available cash
and cash equivalents and a $15 million nonrecourse first mortgage loan.


At October 31, 1994 and 1993,  properties  owned  consisted of the following (in
thousands):



                                                                                                1994             1993
                                                                                                       

Properties owned subject to operating leases                                               $ 105,912         $  83,089
Properties owned subject to direct financing leases                                           14,719            16,190
                                                                                           ---------         ---------

                                                                                           $ 120,631         $  99,279
                                                                                           =========         =========

Operating Leases
The components of properties  owned subject to operating  leases were as follows
(in thousands):

                                                                                                1994              1993

Land                                                                                       $  21,047         $  16,085
Buildings and improvements                                                                   111,038            89,841
                                                                                           ---------         ---------

                                                                                             132,085           105,926
Accumulated depreciation                                                                     (26,173)         (22,837)

                                                                                           $ 105,912         $  83,089
                                                                                           =========         =========


Minimum  rental  payments  on  noncancellable  operating  leases  become  due as
follows:  1995 -  $13,300,000;  1996 - $12,717,000;  1997 - $11,661,000;  1998 -
$10,414,000; 1999 - $9,369,000; and thereafter - $41,719,000.

In addition to minimum  rental  payments,  certain  tenants are  required to pay
additional  rental  amounts  based on increases in property  operating  expenses
and/or  their share of the costs of  maintaining  common  areas.  Certain of the
Trust's leases provide for the payment of additional  rent based on a percentage
of the tenant's  revenues.  Such additional  rents are included in rental income
and aggregated approximately $515,000,  $559,000, and $529,000 in 1994, 1993 and
1992, respectively.


Direct Financing Leases
The components of properties  owned subject to direct  financing  leases were as
follows (in thousands):



                                                                                                1994              1993

                                                                                                             
Total remaining minimum lease payments to be received                                        $11,465           $14,328
Assumed residual values of leased property                                                     6,675             6,675
Unearned income                                                                              (3,421)           (4,813)
                                                                                             -------           -------

Investment in property subject to financing leases                                           $14,719           $16,190
                                                                                             =======           =======

Original cost of property subject to financing leases                                        $26,737           $26,737
                                                                                             =======           =======


Assumed  residual  values  are  based  upon a  depreciated  cost  concept  using
estimated useful lives and thus do not contain an element of appreciation  which
may result by reason of inflation or other factors.

Minimum lease  payments  receivable on direct  financing  leases become due at a
rate of $2,810,000 in 1995,  $2,454,000 in 1996,  $1,734,000 in 1997, $1,468,000
in 1998, $1,468,000 in 1999, and $1,531,000 thereafter.

Annual  rental  payments of  approximately  $2.5 million are  received  from one
tenant  which  leases   distribution   space  under   direct   financing   lease
arrangements.


(4) INVESTMENTS IN AND LOANS TO UNCONSOLIDATED JOINT VENTURES

In 1993, the Trust sold its 50% interest in an  unconsolidated  joint venture to
its partner for proceeds of $250,000 and  wrote-off an $800,000  loan to another
unconsolidated  joint venture which loan became  non-performing  as to principal
and interest.  In this  connection,  the Trust recorded charges of $5,685,000 to
reflect the Trust's  investments in the  unconsolidated  joint ventures at their
net  realizable  values which  charges are included in  "Write-down  in carrying
value of investments" in the accompanying 1993 consolidated statement of income.


(5) MORTGAGE NOTES RECEIVABLE

The  Trust's  portfolio  of  mortgage  notes  receivable  consists of fixed rate
mortgages  and  one   participating   mortgage.   The   participating   mortgage
($4,836,000) entitles the Trust to a fixed rate of interest plus a participation
in increases in the property's  income and market value. In December,  1994, the
Trust sold the  participating  mortgage  note  receivable  for net  proceeds  of
$3,750,000.  In this  connection  the Trust  recorded a charge of  $1,086,000 to
reflect the Trust's investment in mortgage note receivable at its net realizable
value which charge is included in "Write-down in carrying value of  investments"
in the  accompanying  consolidated  statements of income.  The components of the
mortgage  notes  receivable  at October  31,  1994 and 1993 were as follows  (in
thousands):



                                                                                                 1994            1993

                                                                                                            
Remaining principal balance                                                                   $ 9,946         $10,066
less: Reserve for Uncollectible Mortgage Note Receivable                                      (1,086)              --
Unamortized  discounts to reflect market interest rates at time of acceptance of
notes                                                                                         (1,097)          (1,149) 
                                                                                              -------         -------

                                                                                              $ 7,763         $ 8,917
                                                                                              =======         =======


Principal payments on mortgage notes receivable become due as follows:

1995 - $132,000;  1996 -  $144,000;  1997 -  $158,000;  1998 - $172,000;  1999 -
$189,000; thereafter - $ 9,151,000.

At  October  31,  1994,  the  remaining  principal  balance  was due  from  four
borrowers.  The amount due from the largest  individual  borrower at October 31,
1994 was $4,836,000.

The  contractual  interest rates on mortgage notes  receivable  range from 9% to
14%, and the weighted  average  interest  rate of all such  mortgages was 12% at
October 31, 1994 and 1993.


(6) MORTGAGE NOTES PAYABLE AND BANK LINE OF CREDIT

Mortgage  notes payable  consisted of the following at October 31, 1994 and 1993
(in thousands):




                                                                                                1994              1993

                                                                                                             
7 1/2% note with interest only due monthly, until 11/1/95; thereafter installments
   of principal and interest of $120,840 due monthly until maturity in 1998.                $ 15,000         $      --

7.56% note with principal installments of $12,500 plus interest due monthly until
   maturity in 2001.                                                                           2,888                --

9 3/4% note with installments of principal and interest of $39,143 due monthly
   until maturity in 2001.                                                                     4,497                --

8 1/4% note with installments of principal and interest of $4,731 due monthly until
   maturity in 1998.                                                                             592               599

9 5/8% note with interest only due monthly; the principal is due at maturity
   in 1997.                                                                                    9,100            9,100

8 1/2% note with installments of principal and interest of $19,607 due monthly

  until maturity in 1997.                                                                      2,506             2,528

9 3/4% note with interest only due monthly; the principal is due at  maturity
   in 1997.                                                                                    6,000             6,000

Variable rate note with principal installments of $16,419 plus interest at prime minus
   1/4% due monthly until maturity in 2000.(See below).                                        5,803             6,000
                                                                                             -------           -------

                                                                                             $46,386           $24,227


Mortgage  notes payable are  collateralized  by various real estate  investments
having a net carrying  value of $73,481,000 as of October 31, 1994. All mortgage
notes payable are nonrecourse  except the variable rate note for which the Trust
has  guaranteed  the  repayment of $1.5 million of principal  and all unpaid and
accrued interest  thereon.  In connection with the variable rate note, the Trust
has entered into an interest  rate swap  agreement in the notional  amount of $6
million.  Under the  terms of the swap  agreement,  the Trust has  agreed to pay
interest  at an annual  rate of 7.55% on the  notional  amount in  exchange  for
interest  at prime  minus 1/4% on the  notional  amount.  This  agreement  which
matures in 2000,  effectively  fixes the interest  rate at 7.55% for the term of
the note.

Scheduled  principal payments during the next five years are as follows:  1995 -
$411,000;  1996 -  $765,000;  1997 -  $18,326,000;  1998 -  $15,234,000;  1999 -
$394,000; and thereafter -- $11,256,000.

At October 31, 1994,  the Trust had available $15 million in unsecured  lines of
credit with two commercial banks and in December,  1994, increased one such line
of credit from $5 million to $7 million.  The lines of credit  expire at various
dates in fiscal 1995 and bear interest at rates tied to the prime rate or LIBOR.
The  Trust  pays fees of 1/4% per annum on the  unused  portions  of the line of
credit  commitments.  In connection with one of the  commitments,  the Trust has
agreed to maintain  certain deposit account balances with a bank. At October 31,
1994 the Trust had outstanding borrowings of $5,000,000 under the line of credit
agreements.

Interest  paid for the  years  ended  October  31,  1994,  1993  and  1992  was,
$3,775,000, $2,494,000 and $2,318,000 respectively.


(7) STOCK OPTIONS AND SHAREHOLDER RIGHTS PLAN

At October 31, 1994, 460,333 shares of the Trust's authorized but unissued stock
were   reserved  for  issuance  to  key  employees  of  the  Trust  and  certain
non-employee  trustees under the Trust's stock option plan.  Options are granted
at fair market value on the date of the grant and are generally  exercisable  in
installments  over a maximum  period  of four  years  from the date of grant.  A
summary of stock options at October 31, 1994 and 1993 is as follows:



                                                                                        Number            Option Price
                                                                                     of Shares               Per Share
                                                                                                      
Outstanding at October 31,
  1994                                                                                 331,082           $11.38-$27.00
  1993                                                                                 270,917           $11.38-$27.00
  Exercisable at October 31, 1994                                                      194,729           $11.38-$27.00


No accounting recognition is given to stock options until they are exercised, at
which time the proceeds are credited to shareholders'  equity.  During the years
ended October 31, 1994 and 1993,  options to purchase  3,542 common shares (none
in 1993) were exercised.

Stock  appreciation  rights may be issued in tandem with the stock  options,  in
which case, either the option or the right can be exercised. Such rights entitle
the grantee to payment in cash or a combination  of common shares and cash equal
to the  increase  in the value of the shares  covered by the option to which the
stock  appreciation  right is  related.  The plan  limits the value of the stock
appreciation  rights to 150% of the option  price for the  related  shares.  The
excess of the  market  price of the  shares  over the  exercise  price of vested
options is charged to expense.  For the years ended  October 31, 1994,  l993 and
1992, there were no amounts charged to expense.

The Board of Trustees adopted a Preferred Share Purchase Rights Plan in 1988. In
this connection,  the Board of Trustees declared a dividend  distribution of one
preferred share purchase right for each  outstanding  common share.  The rights,
which expire on November 13, 1998, are not currently exercisable.  When they are
exercisable,  the  holder  will be  entitled  to  purchase  from the  Trust  one
one-hundredth of a share of a newly-established Series A Participating Preferred
Stock at a price of $65 per one  one-hundredth of a preferred share,  subject to
certain  adjustments.  The rights will become exercisable 10 days after a person
or group either acquires 20% ("acquiring person") or more of the Trust's shares,
or announces an offer the  consummation  of which would result in such person or
group  owning 30% or more of the  shares.  Following  any such 20%  acquisition,
shareholders  other than the acquiring person will be entitled to use the rights
to purchase common shares of the Trust at 50% of market value.

If the Trust is involved in a merger or other  business  combination at any time
after the rights  become  exercisable,  the rights will be modified to entitle a
holder other than the acquiring  person to purchase a number of shares of common
stock of the acquiring company having a market value of twice the exercise price
of each right.


(8) SALES OF PROPERTIES

In fiscal  1994,  the Trust sold an  industrial  property net leased to a single
tenant for a cash price of $450,000  resulting  in a gain on sale of property of
$82,000.

In fiscal 1993,  the Trust sold a retail  property net leased to a single tenant
for a cash  price  of  $3,250,000  resulting  in a gain on sale of  property  of
$2,330,000.

(9) COMMITMENTS, CONTINGENCY AND OTHER MATTERS

In November 1994, the Trust entered into a contract to purchase a 193,000 square
foot retail  shopping center located in Danbury,  Connecticut.  The property was
acquired at a purchase  price of  $19,250,000,  subject to a  nonrecourse  first
mortgage of $11,250,000.  The mortgage loan will bear interest at 9.5% per annum
for a five-year term.

In  November  1994,  the  Trust  entered  into a  contract  to sell  four of its
distribution and service facilities to a single purchaser for an aggregate sales
price of approximately $13.5 million.  The Trust also entered into a contract to
sell its 106,000 square foot retail property located in Manassas,  Virginia at a
sale price of $7.5 million.

The Trust leases its executive  office space under an agreement which expires in
1995.  Annual base rents are subject to escalation as provided for in the lease.
Minimum annual rentals are $292,700  through the end of the lease.  Rent expense
for the  fiscal  years  ended  October  31,  1994,  1993 and 1992 was  $400,000,
$401,000, and $384,000, respectively.

A  consulting  fee was paid to a trustee  (and  former  officer)  pursuant to an
employment  and  consulting  agreement  between  the trustee and the Trust which
agreement  expired in November  1993.  Certain  trustees  have  elected to defer
payment of fees  earned as  trustees  until  their  termination  as a trustee or
revocation of their election.  Deferred fees earn interest at rates set annually
by the Board of Trustees, currently 7.5% per annum.

(10) QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

The unaudited  quarterly  results of operations  for the years ended October 31,
1994 and 1993 are as follows (in thousands, except per share data):



                                        Year Ended October 31, 1994                 Year Ended October 31, 1993
                                               Quarter Ended                                Quarter Ended
                                   Jan 31     Apr 30   July 31   Oct 31          Jan 31    Apr 30   July 31    Oct 31
                                   ------     ------   -------   ------          ------    ------   -------    ------

                                                                                          
Revenues                          $ 4,362    $ 4,885   $ 4,819 $  4,903         $ 4,382  $  4,441  $  3,497    $3,841
                                  =======    =======   ======= ========         =======  ========  ========    ======

Income (loss) before gains
   on sales of properties (1)     $   545    $   571   $   584 $  (438)         $    94  $(3,060)  $(4,648)    $  322
Gains on sales of properties           --         82        --       --              --     2,330        --        --

Net Income (loss)                 $   545    $   653   $   584 $  (438)         $    94  $  (730)  $(4,648)    $  322
                                  =======    =======   ======= ========         =======  ========  ========    ======

Per share:
Income (loss) before gains
   on sales of properties         $   .10    $   .10   $   .11  $ (.08)        $    .02   $  (.58) $  (.88)   $   .06
Gains on sales of properties           --        .02        --       --              --       .44        --        --
                                  -------    -------   -------   ------        --------  --------  -------- ---------

Net Income (loss)                 $   .10    $   .12   $   .11  $ (.08)        $    .02  $  (.14)  $  (.88)   $   .06
                                  =======    =======   =======  =======        ========  ========  ========   =======
<FN>
(1) Quarter  ended  October 31, 1994 results  include a charge of  $1,086,000 to
reflect  the  Trust's  investment  in a  mortgage  note  receivable  at its  net
realizable value. The mortgage note was sold subsequent to year end.


REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Shareholders of HRE Properties:

We have audited the accompanying  consolidated  balance sheets of HRE Properties
(the Trust), a Massachusetts voluntary association, and subsidiary as of October
31, 1994 and 1993, and the related consolidated statements of income, cash flows
and shareholders' equity for each of the three years in the period ended October
31, 1994. These financial statements and the schedules referred to below are the
responsibility of the Trust's  management.  Our  responsibility is to express an
opinion on these financial statements and schedules 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 financial position of HRE Properties and subsidiary
as of October 31, 1994 and 1993,  and the results of their  operations and their
cash flows for each of the three years in the period  ended  October 31, 1994 in
conformity with generally accepted accounting principles.

Our  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial  statements taken as a whole. The schedules listed in the accompanying
index to financial  statements  are presented for purposes of complying with the
Securities  and  Exchange  Commission's  rules  and  are not  part of the  basic
financial  statements.  These  schedules  have been  subjected  to the  auditing
procedures  applied in the audits of the basic financial  statements and, in our
opinion, fairly state in all material respects the financial data required to be
set forth  therein in  relation  to the basic  financial  statements  taken as a
whole.



                                                         ARTHUR ANDERSEN LLP

New York, New York
December 14, 1994


SCHEDULE II -- AMOUNTS RECEIVABLE FROM RELATED PARTIES AND UNDERWRITERS,
PROMOTERS, AND EMPLOYEES OTHER THAN RELATED PARTIES




                                                        HRE PROPERTIES
                                              Three Years Ended October 31, 1994
                                                        (In thousands)

- ---------------------------------------------------------------------------------------------------------------------------------
- -
Col.A                               Col.B           Col.C                   Col.D                               Col.E
- ---------------------------------------------------------------------------------------------------------------------------------

                                                                                                        Balance at
                                    Balance at                       DEDUCTIONS                         End of Period (c)
                                    Beginning of                    Amounts      Amounts                            Not
Name of Debtor                      Period        Additions         Collected    Written off             Current    Current
- --------------                      -------       ---------         ---------    -----------            --------    -------
- ---------------------------------------------------------------------------------------------------------------------------------



                                                                                                        
Year Ended October 31, 1992:
Stephen C. Hagen (a) (b)                $156             $0              $0            $0                   $156          $0
                                        ====             ==              ==            ==                   ====          ==

Year Ended October 31, 1993:
Stephen C. Hagen (a) (b)                $156             $0            $156            $0                     $0          $0
                                        ====             ==            ====            ==                     ==          ==

Year Ended October 31, 1994:              $0             $0              $0            $0                     $0          $0
- ----------------------------              ==             ==              ==            ==                     ==          ==




NOTES:
(a) The amounts  receivable  are notes that bear interest at a rate equal to the
base rate of the First  National  Bank of Boston.  The interest rate is adjusted
quarterly. Interest is payable each March 31 and September 30.

(b) The notes, as amended in 1990, were nonrecourse,  were due in December, 1992
and were secured by an aggregate of 8,250 shares of the Trust's  common  shares,
issued under the Trust's  stock option plan.  In December  1992,  pursuant to an
arrangement with Mr. Hagen,  the notes were cancelled in  consideration  for the
transfer of such 8,250 common shares to the Trust.

(c) Amounts  receivable at end of periods have been deducted from  shareholders'
equity in the Trust's consolidated balance sheets.

HRE PROPERTIES
OCTOBER 31, 1994
SCHEDULE IX - SHORT TERM BORROWINGS
- --------------------------------------------------------------------------------





- --------------------------------------------------------------------------------------------------------------------
              COL. A                   COL. B         COL. C          COL.D           COL. E            COL. F
- --------------------------------------------------------------------------------------------------------------------
                                                                     Maximum          Average          Weighted
                                      Balance        Weighted        Amount           Amount            Average
       Category of Aggregate         at End of       Average       Outstanding      Outstanding      Interest Rate
       Short Term Borrowings           Period     Interest Rate   During Period  During Period (2) During Period (3)


                                                                                                 
    Year Ended October 31,1992                $0            ----             $0                 $0             ----

    Year Ended October 31,1993:
           Bank Loan (1)                      $0            7.00%    $2,500,000           $105,200             7.00%

    Year Ended October 31,1994:
           Bank Loan (1)              $5,000,000            6.98%    $5,000,000         $4,315,000             6.81%

<FN>
(1) Bank Loan represent borrowings under line of credit borrowing arrangement that matures in fiscal 1995 and is
    reviewed annually for renewal .

(2) The average amount outstanding during the period was computed by dividing the total daily
    outstanding principal balance by 365.

(3) The weighted average interest rate during the period was computed by dividing the actual interest expense by
    the average amount outstanding.


              


                 SCHEDULE X-SUPPLEMENTARY INCOME STATEMENT INFORMATION

                                     HRE PROPERTIES
                           Three Years Ended October 31, 1994
                                     (In thousands)


- -----------------------------------------------------------------------------------------------------

                       COL. A                                      COL. B
- -----------------------------------------------------------------------------------------------------
                       Item                                        Charged to
                               Costs and Expenses
- -----------------------------------------------------------------------------------------------------

                             Year Ended October, 31

                                                              1994           1993         1992
                                                            ------         -------      ------

                                                                                    
1.        Maintenance and repairs                           $  785           $ 619        $  470

2.        Amortization of deferred charges                  $  545           $ 866        $  725

3.        Real estate taxes                                 $1,960          $1,735        $1,636

4.        Royalties                                           None            None          None

5.        Advertising costs                                    (a)             (a)           (a)



- -------------------------------------
<FN>
(a)       Amounts for advertising are not presented as such amounts are less than 1% of total revenues.




HRE PROPERTIES
OCTOBER 31, 1994
SCHEDULE XI- REAL ESTATE AND ACCUMULATED DEPRECIATION
- -------------------------------------------------------------------------------

(In thousands)






- --------------------------------------------------------------------------------------------------------------------------------
              COL. A               COL. B           COL. C               COL. D                                   COL. E        
- --------------------------------------------------------------------------------------------------------------------------------
                                                                                                                              
 Life on which
                                                                                                                               
 depreciation 
                                                                       Cost Capitalized Subsequent     Amount at Which Carried   
                                               Initial Cost to Trust            to Acquisition           at Close of Period     
                                             ------------------------  --------------------------    ---------------------------
                                                       Building &     Carrying    Building &                      Building &  
  Description and Location   Encumbrances     Land    Improvements     Costs     Improvements          Land      Improvements  
- ---------------------------- --------------------------------------  --------------------------    -----------------------------

REAL ESTATE SUBJECT TO OPERATING 
LEASES (Note (a) ):                                      
- -------------------------------------------------------

OFFICE BUILDINGS:

                                                                                                         
  Denver, Colorado                    $0      $1,155     $10,257            $0        $1,257            $1,155       $11,514     
  Houston, Texas                       0         900       2,758             0         2,158               900         4,916     
  Greenwich, Connecticut             592         199         795             0             0               199           795     
  Greenwich, Connecticut               0         111         444             0             0               111           444     
  Southfield, Michigan                 0       1,000      10,280             0           675             1,000        10,955     
                                ---------     -------     -------       -------     -------           ---------     ---------    
                                     592       3,365      24,534             0         4,090             3,365        28,624     
                                ---------     -------     -------       -------     -------           ---------     ---------   
SHOPPING CENTERS:

  Clearwater, Florida              5,803       3,689      17,273             0         2,753             3,689        20,026     
  Springfield, Massachusetts           0       1,372       3,656             0         7,380             1,372        11,036   
  Farmingdale, New York             2888       1,029       4,176             0            39             1,029         4,215 
  Somers, New York                 2,506         821       2,600             0            30               821         2,630 
  Wayne, New Jersey                9,100       2,492       9,966             0            93             2,492        10,059 
  Meriden, Connecticut            15,000       5,000      20,309             0             0             5,000        20,309 
                                ---------     -------     -------       -------     -------           ---------     ---------
                                  35,297      14,403      57,980             0        10,295            14,403        68,275 
                                ---------     -------     -------       -------     -------           ---------     --------- 
DEPARTMENT STORES:

  Tempe, Arizona                       0         378       1,518             0           970               378         2,488 
  Mesa, Arizona                        0         440       1,631             0           989               440         2,620 
  Manassas, Virginia                   0         283       1,723             0            42               283         1,765 
                               ---------     -------     -------       -------     -------           ---------     ---------
                                       0       1,101       4,872             0         2,001             1,101         6,873 
                               ---------     -------     -------       -------     -------           ---------     ---------



====================
TABLE CONTINUED



- ----------------------------------------------------------------------- --------------------------- -----------------
                        COL. A                                COL. E      COL. F        COL. G/H         COL. I
- ----------------------------------------------------------------------- --------------------------- -----------------
                                                                                                   Life on which
                                                                                                   depreciation 
                                                     Amount at Which Carried                       for buildings 
                                                       at Close of Period                          and improvements
                                                          ----------   Accumulated       Date      in latest income
                                                                      Depreciation   Constructed   statements is
               Description and Location                       Total      (Note (b))   or Acquired  computed (Note (d))
- -------------------------------------------------------   -------------------------------------------------------------

REAL ESTATE SUBJECT TO OPERATING 
LEASES (Note (a) ):                                      
- -------------------------------------------------------

                                                                                                  
 OFFICE BUILDINGS:

 Denver, Colorado                                           $12,669         $2,977          1983                45
  Houston, Texas                                              5,816          2,565          1975                40
  Greenwich, Connecticut                                        555              8          1994              31.5
  Southfield, Michigan                                       11,955          3,470          1983                35
                                                            -------        -------
                                                             31,989          9,043  
                                                            -------        -------
SHOPPING CENTERS:

  Clearwater, Florida                                        23,715          5,204          1985                40
  Springfield, Massachusetts                                 12,408          4,533          1970                40
  Farmingdale, New York                                       5,244            147          1993              31.5
  Somers, New York                                            3,451            176          1992              31.5
  Wayne, New Jersey                                          12,551            515          1992              31.5
  Meriden, Connecticut                                       25,309            555          1993              31.5
                                                            -------        -------
                                                             82,678         11,130
                                                            -------        -------
DEPARTMENT STORES:

  Tempe, Arizona                                              2,866          1,252          1970                40
  Mesa, Arizona                                               3,060          1,316          1971                40
  Manassas, Virginia                                          2,048          1,150          1972                40
                                                            -------        -------
                                                              7,974          3,718
                                                            -------        -------



                                                                            
HRE PROPERTIES
OCTOBER 31, 1994
SCHEDULE XI- REAL ESTATE AND ACCUMULATED DEPRECIATION
- -------------------------------------------------------------------------------

(In thousands)






- ----------------------------------------------------------------------------------------------------------------------------------
                        COL. A                              COL. B           COL. C                    COL. D                    
- ---------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                 
                                                                                                                                 
                                                                                                 Cost Capitalized Subsequent      
                                                                      Initial Cost to Trust            to Acquisition            
                                                                      ------------------------  --------------------------    
                                                                                   Building &     Carrying    Building &       
               Description and Location                  Encumbrances     Land    Improvements     Costs     Improvements      
 ---------------------------------------------------------------------------------------
REAL ESTATE SUBJECT TO OPERATING 
LEASES (Note (a) ):                                      
- -------------------------------------------------------

                                                                                                           
INDUSTRIAL SERVICE CENTER:

  Syracuse, New York                                               $0        $253        $530            $0            $0     
                                                             ---------     -------     -------       -------     --------       
                                                                    0         253         530             0             0       
                                                             ---------     -------     -------       -------     --------        

MIXED USE FACILITY: RETAIL/OFFICE:
 
  Newington, New Hampshire                                      4,497         421       1,997             0         4,739
                                                             ---------     -------     -------       -------     -------
                                                                                                                       
  
LAND:

  Newington, New Hampshire                                          0         305           0             0             0       
  Denver, Colorado                                                  0       1,199           0             0             0      
                                                             ---------     -------     -------       -------     -------
                                                                    0       1,504           0             0             0       
                                                             ---------     -------     -------       -------     -------         
                                                                                                                       
  
                                                                                                                            
  
TOTAL REAL ESTATE SUBJECT TO                                 ---------     -------     -------       -------     -------         
  OPERATING LEASES..................                          $40,386     $21,047     $89,913            $0       $21,125        
                                                             ---------     -------     -------       -------     -------        



====================
TABLE CONTINUED                        





- ----------------------------------------------------------------------------------------------------------------------------------
                        COL. A                             COL. E                    COL. F        COL. G/H         COL. I
- ----------------------------------------------------------------------------------------------------------------------------------
                                                                                                               Life on which
                                                                                                                depreciation 
                                                       Amount at Which Carried                                  for buildings 
                                                         at Close of Period                                    and improvements
                                                  ----------------------------------------  Accumulated      Date in latest income
                                                   Building &               Depreciation   Constructed         statements is or
               Description and Location              Land      Improvements    Total      (Note (b))  Acquired computed (Note (d))
- ----------------------------------------------------------------------------------------------------------------------------------
REAL ESTATE SUBJECT TO OPERATING 
LEASES (Note (a) ):                                      
- --------------------------------------------

                                                                                                          
INDUSTRIAL SERVICE CENTER:

  Syracuse, New York                                $253          $530        $783           $141     1973/1985                40
                                               ---------     ---------     -------     --------
                                                     253           530         783            141
                                               ---------     ---------     -------     --------

MIXED USE FACILITY: RETAIL/OFFICE:
 
  Newington, New Hampshire                           421         6,736       7,157          2,141          1979                40
                                               ---------     ---------     -------     --------                              
                                                                                                                                
LAND:

  Newington, New Hampshire                           305             0         305              0          1981                 -
  Denver, Colorado                                 1,199             0       1,199              0          1988                 -
                                               ---------     ---------     ---------     ---------       -------         -------- 
                                                   1,504             0       1,504              0
                                                ---------     ---------     ---------     ---------
                                                                                                                        
  
                                                                                                                          
  
TOTAL REAL ESTATE SUBJECT TO                  ---------      ---------      -------      ---------
  OPERATING LEASES..................            $21,047       $111,038     $132,085        $26,173
                                              ---------      ---------      -------      ---------



                                                                           
HRE PROPERTIES
OCTOBER 31, 1994
SCHEDULE XI- REAL ESTATE AND ACCUMULATED DEPRECIATION
- -------------------------------------------------------------------------------

(In thousands)






- ------------------------------------------------------------------------------------------------------------------------------
                        COL. A                              COL. B           COL. C                    COL. D                     
- -------------------------------------------------------------------------------------------------------------------------------

 
                                                                                                 Cost Capitalized Subsequent     
                                                                      Initial Cost to Trust            to Acquisition            
                                                        --------------------------------------  --------------------------    
                                                                                                                              
                                                                                   Building &     Carrying    Building &     
               Description and Location                  Encumbrances     Land    Improvements     Costs     Improvements      
- -------------------------------------------------------  -----------   ----------- ------------- -------------------------   
REAL ESTATE SUBJECT TO FINANCING                                                                                               
LEASES  (Notes (c) and (e)):                                                                                                   
- -------------------------------------------------------                                                                        
                                                                                                                    
                                                                                                             
INDUSTRIAL DISTRIBUTION CENTERS:                                                                                            
(Leased to Chrysler Corporation)


  Orlando, Florida                                                 $0        $717      $2,206            $0            $0      
  St. Louis, Missouri                                               0         523       2,253             0         2,363      
  Memphis, Tennessee                                                0         265       2,426             0             0      
  Dallas, Texas                                                 6,000         193       2,266             0         4,195      
  Denver, Colorado                                                  0         174       1,783             0             0      
  Beaverton, Oregon                                                 0         168       2,263             0             0      
  Deferred Lease Renewal Rights                                     0           0           0             0           764      
                                                             ---------     -------     -------       -------     --------      
                                                                6,000       2,040      13,197             0         7,322     
                                                             ---------     -------     -------       -------     --------     

INDUSTRIAL DISTRIBUTION CENTER:                                                                              

  (Leased to Firestone Tire and 
  Rubber Company):
  Albany, Georgia                                                   0         835       3,343             0             0      
                                                             ---------     -------     -------       -------     ---------     
 


TOTAL REAL ESTATE SUBJECT TO                                 ---------     -------     -------       -------     ---------      
  FINANCING LEASES..................                           $6,000      $2,875     $16,540            $0        $7,322      
                                                             ---------     -------     -------       -------     ---------    


=============================
TABLE CONTINUED



- ----------------------------------------------------------------------------------------------
                        COL. A                                                      COL. E
- ------------------------------------------------------------------------------------------------

 
                                                                      Amount at Which Carried
                                                                         at Close of Period
                                                          ----------------------------------------Net Investment 
                                                            Remaining                              in Properties      Date
                                                           Minimum Lease    Residual     Unearned    Subject to    Constructed
               Description and Location                      Payments       Value        Income   Financing Lease or Acquired
- -------------------------------------------------------  ------------- ------------- ----------- -----------   --------------
REAL ESTATE SUBJECT TO FINANCING                                                                                               
LEASES  (Notes (c) and (e)):                                                                                                   
- -------------------------------------------------------                                                                        
                                                                                                                       
                                                                                                            
INDUSTRIAL DISTRIBUTION CENTERS:                                                                                          
(Leased to Chrysler Corporation)


  Orlando, Florida                                                 $589        $1,348       ($275)        $1,662          1970
  St. Louis, Missouri                                             2,641         1,166        (791)         3,016          1970
  Memphis, Tennessee                                                636           959        (250)         1,345          1970
  Dallas, Texas                                                   4,076           841      (1,094)         3,823          1970
  Denver, Colorado                                                  412           683        (160)           935          1970
  Beaverton, Oregon                                                 511           814        (191)         1,134          1970
  Deferred Lease Renewal Rights                                       0           764           0            764          1981
                                                               ---------     ---------     -------      --------
                                                                  8,865         6,575      (2,761)        12,679
                                                               ---------     ---------     -------      --------

INDUSTRIAL DISTRIBUTION CENTER:                                                                              

  (Leased to Firestone Tire and 
  Rubber Company):
  Albany, Georgia                                                2,600           100        (660)          2,040          1972
                                                              ---------     ---------     -------       --------
 


TOTAL REAL ESTATE SUBJECT TO                                  ---------     ---------     -------       --------
  FINANCING LEASES..................                            $11,465        $6,675     ($3,421)       $14,719  
                                                              ---------     ---------     -------       --------



HRE PROPERTIES
OCTOBER 31, 1994
SCHEDULE XI- REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
- -------------------------------------------------------------------------------
(In thousands)




NOTES:                                                       1994         1993        1992
                                                         ---------     ---------   --------
  (a) RECONCILIATION OF PROPERTIES OWNED SUBJECT TO OPERATING         (In thousands)
        LEASES 

                                                                                 
        Balance at beginning of year                         $105,926    $124,404    $108,168

          Property improvements during the year                   907       1,091       1,210

          Property acquired during the year                    25,816       6,197      15,881

          Property sold or disposed of during the year           (564)    (25,766)       (855)
                                                           ---------     ---------------------
        Balance at end of year                               $132,085    $105,926    $124,404
                                                           =========     =====================


  (b) RECONCILIATION OF ACCUMULATED DEPRECIATION

        Balance at beginning of year                          $22,837     $27,985     $25,170

          Provision during the year charged to income           3,531       3,497       3,670

          Property sold or disposed of during the year           (195)     (8,645)       (855)
                                                            ---------     ---------------------
        Balance at end of year                                $26,173     $22,837     $27,985
                                                            =========     =====================


  (c) RECONCILIATION OF PROPERTIES OWNED SUBJECT TO
        FINANCING LEASES-




        Balance at beginning of year                          $16,190     $17,532     $18,757

          Recovery of investment in property owned subject to
            financing leases                                   (1,471)     (1,342)     (1,225)






                                                            ---------     ---------   --------
        Balance at end of year                                $14,719     $16,190     $17,532
                                                            =========     =========   ========
<FN>

  (d) Tenant improvement costs are depreciated over the life of 
      the related leases, which range from 3 to 25 years.
 
  (e) The difference between the "Initial Costs to the Trust" 
      and "Costs Capitalized Subsequent to Acquisition" and the "Amount
      at Which Carried at Close of Period" represents accumulated
      depreciation for the period prior to classification of these 
      assets as financing leases and accumulated recoveries for
      the period thereafter.



HRE PROPERTIES
OCTOBER 31, 1994
SCHEDULE XII- MORTGAGE LOANS ON REAL ESTATE
- ----------------------------------------------------------------------





- ----------------------------------------------------------------------------------------------------------------------------
              COL. A               COL. B                   COL. C           COL.D           COL. E              COL. F
- ----------------------------------------------------------------------------------------------------------------------------

                                                                                           Face Amount       Carrying Amount
                                                                                          of Mortgages        of Mortgages
                                          Interest Rate  Final Maturit      Periodic       (Note (b) )         (Note (a) )
            Description                  Coupon Effective    Date        Payment Terms    (In Thousands)     (In Thousands)
- ----------------------------------------------------------------------------------------------------------------------------
I. FIRST MORTGAGE LOANS ON BUSINESS PROPERTIES (NOTE (c) and (d):

                                                                                                         
Department Store:
      Clayton County, Georgia          9%              9% 10-30-1999  Principal payable           $143                 $143
                                                                      In full at maturity.
Retail Store:                                                         Interest paid currently.

     Fall River, Massachusetts         9%             14% 04-01-2013  Payable in monthly         1,285                  943
                                                                      installments of $11,920.
Retail Store:
        Erie, Pennsylvania             9%             14% 07-01-2013  Payable in monthly         1,172                  857
                                                                      installments of $10,787.
Retail Store:
       Riverside, California           9%             12% 01-15-2013  Payable in quarterly       2,110                1,702
                                                                      installments of $54,313.
Office Building:
        Syracuse, New York          10.5%           10.5% 04-01-2010  Principal payable          4,836                3,750 (f)
                                                                      In full at maturity.
                                                                      Interest is payable
                                                                      monthly at 8%; an
                                                                      additional 2.5% is due
                                                                      monthly under certain
                                                                      circumstances.
                                                                                             -------------      ---------------
Tot   First Mortgage Loans                                                                       9,546                7,395
                                                                                             -------------      ---------------

II. SECOND MORTGAGE LOAN ON BUSINESS PROPERTY (Notes (c) and (e) ):

Retail Store:
       Riverside, California           9%             12% 01-15-2001  Payable in quarterly
                                                                      installments of $21,         400                  368
                                                                                          -------------      ---------------
TOTAL MORTGAGE LOANS ON REAL ESTATE                                                             $9,946               $7,763
                                                                                          =============      ===============


SCHEDULE XII- MORTGAGE  LOANS ON REAL ESTATE (continued)

NOTES TO SCHEDULE XII



                                                                      Year Ended October 31,
Reconciliation of Mortgage Loans on Real Estate          ----------------------------------------------
                                                              1994            1993            1992
                                                          ----------       ----------     -------------
                                                                                      
(a) Balance at beginning of period:                            $8,917          $8,978       $9,031


      Deductions during current period:

   Collections of principal and
     amortization of discounts                                    (68)            (61)         (53)

 Reserve for Uncollectible Amount                              (1,086)           ----         ----
                                                              --------        --------     --------
    Balance at close of period:                                $7,763           $8,917       $8,978
                                                              ========        ========     ========
<FN>
(b) The aggregate cost basis for Federal income tax purposes is equal to the face amount of the mortgages.
(c)  At October 31,1994 no mortgage loans were delinquent in payment of currently due principal or interest.
(d)  There are no prior liens for any of the First Mortgage Loans on Real Estate.
(e)  The First Mortgage Loan on this property is held by the Trust.
(f)  This Mortgage loan was sold in December 1994 at its carrying amount.







                                   SIGNATURES

          Pursuant to the  requirements of Section 13 or 15(d) 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.

                                                    HRE PROPERTIES



                                                By:  /S/ CHARLES J. URSTADT
                                                   --------------------------
                                                        Charles J. Urstadt
                                                       Chairman and President


Dated: January 26, 1995



          Pursuant to the  requirements of the Securities  Exchange Act of 1934,
this  Report has been  signed  below by the  following  persons on behalf of the
Registrant and in the capacities and on the date indicated.


                                                                                                 
/s/ CHARLES J. URSTADT                                                                             January 26, 1995
- --------------------------------------                                                                             
Charles J. Urstadt
President and Trustee
(Principal Executive Officer)


/s/ JAMES R. MOORE                                                                                 January 26, 1995
- --------------------------------------                                                                             
James R. Moore
Senior Vice President - Chief
  Financial Officer
(Principal Financial Officer
and Principal Accounting Officer)


/s/ E. VIRGIL CONWAY                                                                               January 26, 1995
- --------------------------------------                                                                             
E. Virgil Conway
Trustee


/s/ ROBERT R. DOUGLASS                                                                             January 26, 1995
- --------------------------------------                                                                             
Robert R. Douglass
Trustee


/s/ PETER HERRICK                                                                                  January 26, 1995
- --------------------------------------
Peter Herrick
Trustee


/s/ GEORGE H. C. LAWRENCE                                                                          January 26, 1995
- --------------------------------------                                                                             
George H. C. Lawrence
Trustee


/s/ PAUL D. PAGANUCCI                                                                              January 26, 1995
- ---------------------------------------                                                                            
Paul D. Paganucci
Trustee


/s/ JAMES O. YORK                                                                                  January 26, 1995
- ---------------------------------------                                                                            
James O. York
Trustee



                               INDEX TO EXHIBITS

Exhibit

(3)      Articles of Incorporation and By-laws.

         3.1      Fourth Amended and Restated Declaration of Trust of the Trust,
                  as amended, to date.

         3.2      By-laws of the Trust, as amended (incorporated by reference to
                  Exhibit 4.2 of the Registrant's Registration Statement on Form
                  S-8 (No. 33-41408)).

(4)      Instruments Defining the Rights of
         Security Holders, Including Indentures:

         4.1      Common Shares:  See Exhibit 3.1 hereto.

         4.2      Preferred Shares:  See Exhibit 3.1 hereto.

         4.3      Preferred Share Purchase Rights:  See  Exhibits  3.1  and 10.3
                  hereto.
                                              


(10)     Material Contracts.

         10.1            Form of Indemnification  Agreement entered into between
                         the  Registrant and each of its Trustees and for future
                         use  with   Trustees   and   officers   of  the   Trust
                         (incorporated  herein by  reference  to Exhibit 10.1 of
                         the  Registrant's  Annual  Report  on Form 10-K for the
                         year ended October 31, 1989).*


         10.2            Amended  and  Restated  Change  of  Control   Agreement
                         between  the   Registrant  and  James  R.  Moore  dated
                         November 15, 1990 (incorporated  herein by reference to
                         Exhibit 10.3 of the Registrant's  Annual Report on Form
                         10-K for the year ended October 31, 1990).*


         10.3            Rights  Agreement  between  the  Trust  and  The  First
                         National Bank of Boston,  as Rights Agent,  dated as of
                         October 28, 1988  (incorporated  herein by reference to
                         Exhibit 1 of the  Registrant's  Current  Report on Form
                         8-K dated October 28, 1988).


         10.4            Change of Control  Agreement  dated as of June 12, 1990
                         between   the   Registrant   and   Raymond  P.   Argila
                         (incorporated  herein by  reference  to Exhibit 10.7 of
                         the  Registrant's  Annual  Report  on Form 10-K for the
                         year ended October 31, 1990).*


         10.4.1          Agreement   dated   December   19,  1991   between  the
                         Registrant and Raymond P. Argila amending the Change of
                         Control Agreement dated as of June 12, 1990 between the
                         Registrant and Raymond P. Argila  (incorporated  herein
                         by  reference  to  Exhibit  10.6.1 of the  Registrant's
                         Annual  Report on Form 10-K for the year ended  October
                         31, 1991).*

         10.5            Change of Control  Agreement  dated as of December  20,
                         1990  between the  Registrant  and  Charles J.  Urstadt
                         (incorporated  herein by  reference  to Exhibit 10.8 of
                         the  Registrant's  Annual  Report  on Form 10-K for the
                         year ended October 31, 1990).*


         10.6            Amended and Restated HRE  Properties  Stock Option Plan
                         (incorporated  herein by  reference  to Exhibit 10.8 of
                         the  Registrant's  Annual  Report  on Form 10-K for the
                         year ended October 31, 1991).*


         10.6.1          Amendments  to HRE  Properties  Stock Option Plan dated
                         June 9, 1993.*


         10.7            Purchase and Sale Agreement  between the Registrant and
                         Aetna Life  Insurance  Company dated December 22, 1993,
                         relating to the  Registrant's  acquisition  of Townline
                         Center Shopping Center, Meriden, Connecticut.


         10.8            Second  Purchase and Sale  Agreement  dated  January 6,
                         1995 between the  Registrant  and Aetna Life  Insurance
                         Company  relating to the  Registrant's  acquisition  of
                         Danbury Square Mall, Danbury, Connecticut (incorporated
                         herein by  reference  to Exhibit 1 of the  Registrant's
                         Current Report on Form 8-K dated January 6, 1995).

(21)     Subsidiaries.

         21.1            List of Trust's subsidiaries (incorporated by reference
                         to Exhibit 22.1 of the  Registrant's  Annual  Report on
                         Form 10-K for the year ended October 31, 1988).

(23)     Consents of Experts and Counsel.

         23.1            The consent of Arthur Andersen LLP to the incorporation
                         by reference of their reports  included or incorporated
                         by   reference   herein   and   in   the   Registrant's
                         Registration  Statements  on Form S-3  (No.  33-57119),
                         Form S-8  (No.2-93146)  and Form S-8 (No. 33- 41408) is
                         filed herewith as part of this report.

(27)     Financial Data Schedule.

         27.1            Financial Data Schedule

*Management  contract,  compensatory plan or arrangement required to be filed as
an exhibit to this Annual Report on Form 10-K pursuant to Item 14(c).