8-K

               SECURITIES AND EXCHANGE COMMISSION

                      WASHINGTON, DC 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 1, 1997



              AMERICAN INDUSTRIAL PROPERTIES REIT
     (Exact name of registrant as specified in its charter)

         Texas            1-9016            75-6335572
    (State or Other  (Commission File    (I.R.S. Employer
    Jurisdiction of      Number)          Identification
    Incorporation)                           Number)


6220 North Beltline, Suite 205, Irving, Texas     75063
  (Address of principal executive offices)     (zip code)
                      
               (972) 550-6053
  (Registrant's telephone number, including
                 area code)



Item 5.  Other Events

       On  May 1, 1997, the Trust entered into an agreement  with
Morgan Stanley Asset Management Inc. ("MSAM") and an affiliate of
MSAM  whereby  such affiliate and clients of MSAM  (collectively,
the  "Purchasers") have agreed to purchase up to  $20,000,000  of
senior  convertible debt securities (the "Debt")  of  the  Trust,
subject  to  certain  conditions,  including  the  execution   of
definitive agreements.


Item  7.   Financial Statements, Pro Forma Financial  Information
and Exhibits

     (c)  Exhibits

                    99.1 Press Release dated May 2, 1997



                           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.


                              AMERICAN INDUSTRIAL PROPERTIES REIT
                              
                              

                          /s/ Charles W. Wolcott
                         Charles W. Wolcott
                         President and Chief Executive Officer

DATE:  May 13, 1997




                       Index to Exhibits

                                                 Sequentially
Exhibit No.     Description                      Numbered Pages
  99.1          Press Release dated May 2, 1997  

EX-99.1

                        NEWS RELEASE
Released by PR Newswire                For Immediate Release


             AMERICAN INDUSTRIAL PROPERTIES REIT
               ANNOUNCES $20 MILLION PLACEMENT
            OF SENIOR CONVERTIBLE DEBT SECURITIES


      Dallas,  Texas,  May  2, 1997  -  American  Industrial
Properties  REIT  [NYSE:IND]  (the "Trust") today  announced
that  an agreement has been signed with Morgan Stanley Asset
Management  Inc. ("MSAM") and an affiliate of  MSAM  whereby
such  affiliate  and  clients  of  MSAM  (collectively,  the
"Purchasers")  have agreed to purchase up to $20,000,000  of
senior  convertible  debt securities  (the  "Debt")  of  the
Trust,   subject  to  certain  conditions,   including   the
execution  of  definitive agreements.  The  Trust  will  use
these   proceeds   for  the  acquisition  of   real   estate
properties.  The Debt will be acquired by the Purchasers  as
the   Trust  identifies  properties  to  acquire  and   such
properties  are  approved  for  purchase  by  MSAM  and  the
Investment  Committee of the Board of Trust Managers.   Upon
receipt  of shareholder approval for the conversion  of  the
Debt, the Board of Trust Managers will be expanded from  the
current   five   members   to   seven   members   and    two
representatives of MSAM will be added to the Board.

      The Debt will be non interest-bearing and, subject  to
shareholder approval,  convertible into common shares of the
Trust  at  the rate of $2.45 per share. The Trust  currently
expects  to  present  its  shareholders  with  proposals  to
approve  the  conversion of the Debt  and  to  increase  the
authorized  shares  of the Trust at its  Annual  Meeting  of
Shareholders  to  be  held  on  June  30,  1997.   If  these
proposals  are  not approved by the Shareholders,  the  Debt
will  begin  to  accrue interest at 10% per  annum,  payable
quarterly, with the full principal amount due in two  years.
If  the  Shareholders approve these proposals and  the  full
amount of the Debt has been advanced (the amount of the Debt
will  be limited such that the Purchasers' ownership in  the
aggregate  after  conversion will not exceed  37.8%  of  the
common    shares   outstanding   immediately   after    such
conversion),  the Debt will be converted into a  maximum  of
8,163,265 common shares of the Trust. In addition to various
other  conditions,  the Trust in certain instances  will  be
restricted  from  issuing additional debt or  senior  equity
securities without the consent of MSAM.

      Charles  W. Wolcott, President and CEO of  the  Trust,
stated  "We  are  pleased  to  have  received  this  funding
commitment  from  Morgan Stanley Asset  Management  and  its
affiliates.  Morgan Stanley is one of the premier  names  in
real  estate investing and their involvement in  our  growth
plan, including participation on the Trust's Board, will add
immeasurably to our success."

      Prudential  Securities, Inc. served as  the  financial
advisor to the Trust in connection with this transaction.

       American  Industrial  Properties  REIT  is  a   self-
administered  equity real estate investment trust  that  has
acquired,   managed  and  improved  industrial   and   other
commercial properties since 1985.

      The Debt will not be and has not been registered under
the Securities Act of 1933 and may not be offered or sold in
the  United  States  absent registration  or  an  applicable
exemption from registration requirements.


For information, contact:
Charles W. Wolcott
President
(972) 550-6053