SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-Q/A

(Mark One)

(x)   QUARTERLY  REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

For the quarterly period ended            SEPTEMBER 30, 1995
                                ----------------------------

                                       OR

( )   TRANSITION  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE CHANGE ACT OF 1934

For the transition period from                    to


Commission file number     1-12708


                     FRANKLIN SELECT REAL ESTATE INCOME FUND
             (Exact name of registrant as specified in its charter)


                  CALIFORNIA                                   94-3095938
(State or other jurisdiction of incorporation or organization)(I.R.S.Employer
Identification No.)


        P. O. BOX 7777,  SAN MATEO, CALIFORNIA              94403-7777
 (Address of principal executive offices)                   (Zip Code)


Registrant's telephone number, including area code      (415) 312-2000


                                            N/A
Former name, former address and former fiscal year, if changed since last report

   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 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

Common Stock Shares Outstanding as of September 30, 1995, Series A 5,383,439
Common Stock Shares Outstanding as of September 30, 1995, Series B 185,866

                         PART I - FINANCIAL INFORMATION

                         Item 2. Management's Discussion
                       and Analysis of Financial Condition
                            AND RESULTS OF OPERATIONS

INTRODUCTION

Management's discussion and analysis of financial condition and results of
operations should be read in conjunction with the Financial Statements and Notes
thereto.

RESULTS OF OPERATIONS

COMPARISON OF THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 1995 AND 1994

Net income for the nine month period ended September 30, 1995 increased $89,000,
or 9%, compared to 1994 due to the following factors: an increase in rental
revenue of $53,000; an increase in interest and dividends of $86,000; an
increase in depreciation and amortization of $25,000; a decrease in operating
expenses of $32,000; an increase in related party expenses of $68,000; an
increase in consolidation expense of $66,000; a decrease in general and
administrative expense of $64,000 and a decrease in loss on sale of
mortgage-backed securities of $13,000. Explanations of the material changes are
as follows:

Rental revenue for the nine month period ended September 30, 1995 increased
$53,000, or 2%, primarily due to increased rental revenue at the Shores Office
Complex, as a result of an increase in average occupancy and rental rates. The
average occupancy rate at the Shores Office Complex during the nine month
periods ended September 30, 1995 and 1994 was 98% and 91%, respectively. The
occupancy rate at the Data General Building was 100% for both periods.

Interest and dividend income for the nine month period ended September 30, 1995
increased $86,000, or 31%, due to higher yields realized on investments in
mortgage-backed securities.

Total expenses for the nine month period ended September 30, 1995, increased by
$50,000, or 2%, from $2,665,000 in 1994 to $2,715,000. The increase in total
expenses is attributable to the following factors: an increase in depreciation
and amortization of $25,000, or 2%; a decrease in operating expenses of $32,000,
or 3%; an increase in related party expenses of $68,000, or 25%; an increase in
consolidation expense of $66,000, or 100%; a decrease in general and
administrative expense of $64,000, or 31%; and a decrease in loss on sale of
mortgage-backed securities of $13,000.

Depreciation and amortization increased $25,000 for the nine month period ended
September 30, 1995, reflecting tenant improvement costs at the Shores Office
Complex related to new leases commencing in late 1994.

Operating expenses for the nine month period ended September 30, 1995 decreased
$32,000, primarily due to a decrease in property tax expense at the Data General
Building.

Related party expense for the nine month period ended September 30, 1995
increased $68,000, primarily due to an increase in advisory fees related to the
conversion of the Company to an infinite life REIT on October 1, 1994.




                         PART I - FINANCIAL INFORMATION

                         Item 2. Management's Discussion
                       and Analysis of Financial Condition
                            AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS (Continued)

Consolidation expense for the nine month period ended September 30, 1995 of
$66,000 relates to the proposed consolidation.

General and administrative expense for the nine month period ended September 30,
1995 decreased $64,000 primarily due to a decrease in nonrecurring costs
associated with listing the Company's stock on the American Stock Exchange in
January, 1994 of $68,000.

LIQUIDITY AND CAPITAL RESOURCES

The Company's principal source of capital for the acquisition and major
renovation of properties has been the proceeds from the initial public offering
of its stock. The Company's funds from operations have been its principal source
of capital for minor property improvements, leasing costs and the payment of
quarterly dividends. At September 30, 1995, the Company's cash reserves,
including mortgage-backed securities, aggregated $8,554,000.

The Company is currently examining the possibility of raising additional capital
through arranging debt financing on its existing portfolio. Any capital raised
in this manner would be used to acquire additional properties and for other
corporate purposes.

As of September 30, 1995, the Company had no formal borrowing arrangements with
a bank and has no long-term debt. Each of the Company's properties is owned free
and clear of mortgage indebtedness.

Management continues to evaluate other properties for acquisition by the
Company. In the short-term and in the long term, management believes that the
Company's current sources of capital will continue to be adequate to meet both
its operating requirements and the payment of dividends.

Net cash flow provided by operating activities for the nine month period ended
September 30, 1995 was $2,211,000 which was substantially unchanged from the
same period in 1994.

Funds from Operations for the nine month period ended September 30, 1995
increased $101,000, or 5%, to $2,163,000 compared to the same period in 1994.
The increase is primarily due to the improvement in net income as described
under "Results of Operations" above. The Company believes that Funds from
Operations is helpful in understanding a property portfolio in that such
calculation reflects income from operating activities and the properties'
ability to support general operating expenses and interest expense before the
impact of certain activities, such as gains and losses from property sales and
changes in the accounts receivable and accounts payable. However, it does not
measure whether income is sufficient to fund all of the Company's cash needs
including principal amortization, capital improvements and distributions to
shareholders. Funds from Operations should not be considered an alternative to
net income or any other GAAP measurement of performance or as an alternative to
cash flows from operating, investing, or financing activities as a measure of
liquidity. As defined by the National Association of Real Estate Investment
Trusts, Funds from Operations is net income ( computed in accordance with GAAP
), excluding gains or losses from debt restructuring and sales of property, plus
depreciation and amortization, and after adjustment for unconsolidated joint
ventures.

                         PART I - FINANCIAL INFORMATION

                         Item 2. Management's Discussion
                       and Analysis of Financial Condition
                            AND RESULTS OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES (Continued)

IMPACT OF INFLATION
The Company's management believes that inflation may have a positive effect on
the Company's property portfolio, but this effect generally will not be fully
realized until such properties are sold or exchanged. The Company's policy of
negotiating leases which incorporate operating expense "pass-through" provisions
is intended to protect the Company against increased operating costs resulting
from inflation.

DIVIDENDS
Dividends are declared quarterly at the discretion of the Board of Directors.
The Company's present dividend policy is to at least annually evaluate the
current dividend rate in light of anticipated tenant turnover over the next two
or three years, the estimated level of associated improvements and leasing
commissions, planned capital expenditures, any debt service requirements and the
Company's other working capital requirements. After balancing these
considerations, and considering the Company's earnings and cash flow, the level
of its liquid reserves and other relevant factors, the Company seeks to
establish a dividend rate which:

       i)   provides  a stable  dividend  which is  sustainable  despite
           short term fluctuations in  property cash flows;
       ii)  maximizes  the  amount of cash  flow  paid out as  dividends
           consistent with the above listed objective;  and
       iii)complies with the Internal Revenue Code requirement that a REIT
           annually pay out as dividends not less than 95% of its taxable
           income.

During the nine-month period ended September 30, 1995, the Company declared
dividends totaling $1,776,000.

On November 2, 1995 the Board of Directors of the Company and of two other real
estate investment trusts that Franklin Properties, Inc. advises, Franklin Real
Estate Income Fund ("FREIF") and Franklin Advantage Real Estate Income Fund
("Advantage"), authorized the execution of a Merger Agreement and the filing of
a Joint Proxy Statement/Registration Statement with the Securities and Exchange
Commission. The Registration Statement was filed on November 13, 1995.

In the proposed merger, the FREIF and/or Advantage would be merged into the
Company, which would be renamed Franklin Select Realty Trust. The shares of the
Company will be offered to shareholders of the FREIF and Advantage in exchange
for their shares on the basis described in the Joint Proxy
Statement/Registration Statement. The merger is subject to certain conditions
including approval by a majority of the shareholders of the Company, FREIF,
and/or Advantage. A special meeting of the shareholders of each REIT will be
held to vote on the proposed merger upon the effectiveness of the Registration
Statement and the close of the solicitation period.





                                    SIGNATURE


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 thereunto duly authorized.




                              FRANKLIN SELECT REAL ESTATE INCOME FUND


                              By:       /S/    DAVID P. GOSS
                                        David P. Goss
                                        Chief Executive Officer


                              Date:       JANUARY 10, 1996