As filed with the Securities and Exchange Commission on May 22, 1998

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


                                    FORM 8-K

                                 CURRENT REPORT

     Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


          Date of Report (Date of Earliest Event Reported) May 14, 1998
                                                           ------------


                                  CAPITAL TRUST
                                  -------------
             (Exact name of registrant as specified in its charter)


California                      1-8063                                94-6181186
- --------------------------------------------------------------------------------
(State or other                 (Commission                     (I.R.S. Employer
jurisdiction of                 File Number)                 Identification No.)
incorporation)


605 Third Avenue, 26th Floor
New York, New York                                                      10016
- --------------------------------------------------------------------------------
(Address of principal executive offices)                              (Zip Code)


                                 (212) 655-0220
- --------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)



- --------------------------------------------------------------------------------
          (Former name or former address, if changed since last report)


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ITEM 2.   Acquisition or Disposition of Assets

     On May 14,  1998,  the  Registrant  acquired a  subordinate  $32.5  million
interest in a combined  $82.6  million  floating  rate  mortgage loan and tenant
improvement  facility (the "Loan") made to the owner of the  Wanamaker  Building
located in Philadelphia, Pennsylvania (the "Property"). The Registrant purchased
approximately   $19   million  of  trust   certificates   (the   "Certificates")
representing the junior tranches issued by the trust which holds the Loan and in
connection  therewith assumed a $13.5 million unfunded lending  obligation under
the tenant improvement facility.

     The Loan is secured by the Property  which contains 1.4 million square feet
of rentable space  (approximately 70% office and 30% retail).  Proceeds from the
Loan were used by the existing  borrower to acquire and  renovate the  Property.
Future fundings by the Registrant  pursuant to the tenant  improvement  facility
will be used to reimburse the borrower for tenant  improvements  and other costs
associated with approved leases at the Property.

     The purchase of the  Certificates was funded with a combination of existing
cash (20%) and financing (80%) through a repurchase obligation with an affiliate
of Merrill  Lynch & Company at a specified  rate above LIBOR.  The  Certificates
mature in April 2000, with two one-year  extension  periods,  subject to certain
terms and conditions.  The Certificates  bear interest at a specified rate above
LIBOR.  The  Certificates  are  prepayable  at  par  at any  time  subject  to a
prepayment fee.




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                                   SIGNATURES

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


                                  CAPITAL TRUST
                                   (Registrant)


Date: May 22, 1998                By:    /s/ Edward L. Shugrue III
                                     -------------------------------
                                  Name:  Edward L. Shugrue III
                                  Title: Chief Financial Officer



715066.4