8-K

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                      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 26, 1994

                                      
                            ______________________


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


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


     6220 NORTH BELTLINE, SUITE 205, IRVING, TEXAS                75063
     (Address of Principal Executive Offices)                   (zip code)


Registrant's telephone number, including area code: (214) 550-6053

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ITEM 5. OTHER EVENTS

     On May 26, 1994, Registrant entered into an Agreement of Interest Deferral
with The Manufacturers Life Insurance Company ("MLI"). Pursuant to the
Agreement, the $1,974,164 due and payable by the Registrant on May 27, 1994 may
be satisfied as follows: (i) $1,000,000 will be paid to MLI on May 27, 1994;
and (ii) $974,164 will be paid by June 27, 1994 or $974,164 plus interest at
11.7% per annum will be paid after June 27, 1994. In no event may the balance
owing, plus interest if any, be made later than August 26, 1994. If Registrant
makes the interest payments as described above, the deferral of a portion of
the interest payment due May 27, 1994 will not constitute an event of default
under the Note Purchase Agreement dated February 27, 1992 between MLI and
Registrant.

ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS

     (C) EXHIBITS

           99.1   Agreement of Interest Deferral dated May 26, 1994 between
                  Registrant and The Manufacturers Life Insurance Company.




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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.



                                     AMERICAN INDUSTRIAL PROPERTIES REIT


                                     /s/ CHARLES W. WOLCOTT
                                     __________________________________________
                                     Charles W. Wolcott
                                     President and Chief Executive Officer
DATE:  May 26, 1994


114312




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                              INDEX TO EXHIBITS


                                                                    Sequentially
Exhibit No.    Description                                         Numbered Page
- - -----------    -----------                                         -------------
  *99.1        Agreement of Interest Deferral dated May 26, 1994
               between Registrant and The Manufacturers Life
               Insurance Company.



_____________________
  * Filed herewith





114312

EX-99.1

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                                                                EXHIBIT 99.1


                        AGREEMENT OF INTEREST DEFERRAL



     Pursuant to the Note Purchase Agreement (the "Agreement") dated February
27, 1992 between American Industrial Properties REIT (formerly known as
Trammell Crow Real Estate Investors), a real estate investment trust duly
organized and existing under the laws of the State of Texas (the "REIT") and
The Manufacturers Life Insurance Company ("Manulife"), a corporation duly
organized and existing under the laws of Canada, REIT and Manulife hereby agree
upon the following:

1.  A semi-annual interest payment in the amount of $1,974,164 is due on May 
27, 1994. In satisfaction of that interest payment:

     a)  REIT will pay $1,000,000 on May 27, 1994; and

     b)  REIT will pay the balance owing as follows:

          -     if paid by June 27, 1994:  $974,164;
          -     if paid after June 27, 1994, $974,164 plus interest at 11.7%
                per annum.    

In no event shall payment of the balance owing, plus interest if any, be made
later than August 26, 1994.

2.  If REIT makes the payments as set forth above, such deferral of a portion
of the interest payment due May 27, 1994 will not constitute an Event of
Default as contemplated in Section 6.1(a) of the Agreement.

3.  REIT understands that Manulife reserves all rights with respect to, and
will require full compliance with, all of the other terms and conditions of the
Agreement, that all of the terms and conditions of the Agreement not
specifically waived as set out above remain in full force and effect, and that
Manulife expressly reserves all of its rights and remedies with respect to any
other Defaults that may have occurred or that may occur in the future.

AGREED AND ACCEPTED:

The Manufacturers Life Insurance Company     American Industrial Properties REIT

By:   /s/ BRUCE MONUS                        By:   /s/ CHARLES WOLCOTT
      ----------------------------                 ---------------------------- 
Its:  V. P. Investment                       Its:  President
      ----------------------------                 ---------------------------- 
Date: May 25, 1994                           Date: May 26, 1994
      ----------------------------                 ----------------------------