Schedule 14-A
                       (Rule 14a-101)
           INFORMATION REQUIRED IN PROXY STATEMENT
                              
                  SCHEDULE 14A INFORMATION
 Proxy Statement Pursuant to Section 14(a) of the Securities
                    Exchange Act of 1934

Filed by the Registrant X
Filed by a Party Other than the Registrant

Check the appropriate box:
Preliminary Proxy Statement   Confidential, for Use of the
Definitive Proxy Statement    Commission Only (as permitted
X Definitive Additional       by Rule 14a-6(e) (2))
   Materials                  
Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-
12


             AMERICAN INDUSTRIAL PROPERTIES REIT
      (Name of Registrant as Specified in Its Charter)


Payment of Filing Fee (Check the appropriate box):
   $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
   or 14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
   $500 per each party to the controversy pursuant to
   Exchange Act Rule 14a-6(i)(3).
   Fee computed below on table below per Exchange Act Rules
   14a-6(i)(4) and 0-11.


(1)Title of each class of securities to which transaction
applies:

(2)Aggregate number of securities to which transaction
applies:

(3)Per unit price or other underlying value to transaction
computed pursuant to Exchange Act Rule 0-11:

(4)Proposed maximum aggregate value of transaction:

(5)Total fee paid:

X Fee paid previously.

Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously.  Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.

(1)Amount previously paid:

(2)Form, Schedule or Registration Statement No.:

(3)Filing Party:

(4)Date Filed:

AMERICAN INDUSTRIAL PROPERTIES REIT LETTERHEAD APPEARS HERE

Dear Fellow Shareholders:

As you are aware, we have recently distributed a proxy that covers  a
number  of  important  proposed changes  to  your  company,  American
Industrial Properties REIT (the "Trust"). These changes are  designed
to  enable  the Trust to raise new capital to grow in size and  value
for the benefit of all shareholders.

            PLEASE SIGN, DATE AND RETURN YOUR PROXY TODAY

During  recent  telephone  calls,  a  number  of  shareholders   have
requested that we distribute a second proxy card to ensure  that  all
shareholder  votes are tabulated at the Annual Meeting scheduled  for
June  30,  1997.  The important proposals to increase the  authorized
common share limit of the Trust and to approve the equity investments
by  USAA  Real  Estate Company ("USAA REALCO") and by Morgan  Stanley
Asset Management, Inc. ("MSAM") require the affirmative vote of  two-
thirds (66-2/3%) of all outstanding shares.
                                  
              EVERY VOTE, INCLUDING YOURS, IS IMPORTANT

We  believe USAA REALCO and MSAM are recognized leaders in  the  real
estate  industry. They are seeking to invest with you and  the  other
shareholders  in the common equity shares of the Trust.  USAA  REALCO
and   MSAM  will  receive  their  return  on  investment  from   cash
distributions and price appreciation on the common shares, just  like
everyone  else.  We believe that the sponsorship of USAA  REALCO  and
MSAM will add to the value of the Trust.

              TO INCREASE IN VALUE, THE TRUST MUST GROW

You  may  have  read recently of the strong growth  taking  place  in
today's  real  estate  investment trust  industry.  We  believe  that
American  Industrial Properties REIT can participate in this  growth.
USAA  REALCO  and  MSAM,  as  significant  shareholders  and  through
representation on the Trust's board, will be in a position to provide
positive direction to the Trust.

             FOR YOUR OWN BENEFIT, PLEASE RESPOND TODAY

Our  greatest challenge is in motivating all shareholders  to  return
their  proxies.  By  voting today, you can  help  us  to  reduce  the
considerable  costs  of future solicitations.  If  you  have  already
voted,  you do not need to return a second proxy, unless you wish  to
reconsider  an  earlier vote. Any subsequent proxy will  supersede  a
previous proxy.

If  you have any questions or comments, please call me direct at  our
toll-free number, 1-800-550-6053.

                              Very truly yours,

                              /s/ Charles W. Wolcott
                              Charles W. Wolcott
                              President and CEO
[PROXY CARD]

AMERICAN INDUSTRIAL PROPERTIES REIT
ANNUAL MEETING TO BE HELD JUNE 30, 1997

THIS PROXY IS SOLICITED ON BEHALF OF THE TRUST MANAGERS OF
AMERICAN INDUSTRIAL PROPERTIES REIT

The undersigned hereby appoints Charles W. Wolcott and Marc A.
Simpson, and each of them, jointly and severally, as Proxies,
each with full power of substitution, to vote all of the
undersigned's Common Shares of Beneficial Interest in the
Trust, held of record on May 12, 1997, at the Annual Meeting of
Shareholders or at any postponements or adjournments thereof,
on the proposals set forth below and on the reverse side, as
directed.

1.  Authorization of additional Common Shares.
/ /    FOR  / /    AGAINST   / /    ABSTAIN

2.  Adoption of the Third Amended and Restate Declaration of
Trust which includes provisions limiting share ownership,
dealing with business combinations, allowing dividends to be
paid in cash or shares and allowing the Board to take any
action necessary to preserve the Trust's REIT status.
/ /    FOR  / /   AGAINST    / /  ABSTAIN

3.  Authorization of Preferred Shares.
/ /    FOR  / /   AGAINST    / /  ABSTAIN

4.   Elimination of Cumulative Voting.
/ /    FOR  / /   AGAINST    / /  ABSTAIN

5.   Conversion of debt to USAA REALCO into Common Shares and,
if proposal one is not approved, authorization of additional
Common Shares to permit such conversion.
/ /    FOR  / /   AGAINST    / /  ABSTAIN

6.   Conversion of debt to Morgan Stanley affiliates and
clients into Common Shares and, if proposal one is not
approved, authorization of additional Common Shares to permit
such conversion.
/ /    FOR  / /   AGAINST    / /  ABSTAIN

7.   Issuance of up to $15 million of convertible debt
securities and, if proposal one is not approved, authorization
of additional Common Shares to permit such conversion.
/ /  FOR    / /   AGAINST    / /  ABSTAIN

8.   Adoption of the Employee and Trust Manager Incentive Plan.
/ /  FOR    / /   AGAINST    / /  ABSTAIN

9.   Election of Trust Managers.
     Nominees:  William H. Bricker, T. Patrick Duncan, Robert
E. Giles, Edward B. Kelley, Charles W. Wolcott.
/ / FOR         / /  WITHHOLD AUTHORITY

(Instruction: To withhold authority to vote for any individual
nominee, strike a line through that nominee's name above.)

10.  Ratification of selection of Ernst & Young LLP as
independent auditors.
/ /  FOR    / /   AGAINST    / /  ABSTAIN

11.  Postponement or adjournment of the Annual Meeting for the
solicitation of additional votes, if necessary.
/ /  FOR    / /   AGAINST    / /  ABSTAIN

12.  IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE
UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE ANNUAL
MEETING OR ANY POSTPONEMENTS OR ADJOURNMENTS THEREOF.

This Proxy, when properly executed, will be voted in accordance
with the direction made above and on the reverse side of the
Proxy card.  If no direction is made, this Proxy will be voted
FOR proposals one through eleven.  The Proxies will vote with
respect to the twelfth proposal according to their best
judgment.  Please sign exactly as your name appears on your
Share certificate.

By signing and returning this Proxy, the undersigned
acknowledges receipt of the Notice of Annual Meeting and Proxy
Statement delivered herewith.

Dated                1997

Signature

Signature (if held jointly)

Title

Please sign exactly as name appears hereon.  When Shares are
held by joint tenants, both should sign.  When signing as an
attorney, executor, administrator, trustee or guardian, please
give full title of such.  If a corporation, please sign in
corporate name by President or other authorized officer.  If a
partnership, please sign in partnership name by authorized
person.

PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING
THE ENCLOSED PRE-PAID ENVELOPE OR DELIVER TO: The Herman Group,
Inc., 2121 San Jacinto Street, 26th Floor, Dallas, Texas,
75201.  Facsimile copies of the Proxy, properly completed and
duly executed, will be accepted at (214) 999-9393 or (214) 999-
9348.  If you have any questions, please call The Herman Group,
Inc. at (800) 555-6433.