BOSTON PROPERTIES INC, 424B5, 2000-10-11

BOSTON PROPERTIES INC
424B5, 2000-10-11
REAL ESTATE

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<PAGE>
SUBJECT TO COMPLETION, DATED OCTOBER 11, 2000.

PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED JANUARY 29, 1999.

THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT IS NOT COMPLETE AND MAY BE
CHANGED. A REGISTRATION STATEMENT HAS BEEN DECLARED EFFECTIVE BY THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 415 UNDER THE SECURITIES ACT OF 1933.
WE WILL DELIVER TO PURCHASERS OF THESE SECURITIES A FINAL PROSPECTUS SUPPLEMENT.
THIS PROSPECTUS SUPPLEMENT IS NOT AN OFFER TO SELL NOR DOES IT SEEK AN OFFER TO
BUY IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.
<PAGE>
FILED PURSUANT TO RULE
424(b)(5) REGISTRATION
NO. 333-69375

15,000,000 Shares

[BOSTON PROPERTIES, INC. LOGO]

Common Stock
------------------

Boston Properties, Inc. is offering 15,000,000 shares of common stock by
this prospectus supplement. Our common stock is listed on the New York Stock
Exchange under the symbol "BXP." The last reported sale price of our common
stock on October 10, 2000 was $41.00 per share.

SEE THE RISK FACTORS INCORPORATED BY REFERENCE IN OUR ANNUAL REPORT ON
FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1999, AS WELL AS THE RISK FACTORS
DISCUSSED UNDER "RISK FACTORS" BEGINNING ON PAGE 4 OF THE ACCOMPANYING
PROSPECTUS, TO READ ABOUT FACTORS YOU SHOULD CONSIDER BEFORE BUYING SHARES OF
OUR COMMON STOCK.
------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY BODY
HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------

<TABLE>
<CAPTION>
Per Share Total
--------- -----
<S> <C> <C>
Initial price to public..................................... $ $
Underwriting discount....................................... $ $
Proceeds, before expenses, to us............................ $ $
</TABLE>

To the extent that the underwriters sell more than 15,000,000 shares of our
common stock, the underwriters have the option to purchase up to an additional
2,250,000 shares at the initial price to public less the underwriting discount.
------------------------

The underwriters expect to deliver the shares against payment in New York,
New York on , 2000.

JOINT BOOKRUNNERS AND JOINT LEAD MANAGERS

GOLDMAN, SACHS & CO. MORGAN STANLEY DEAN WITTER
--------------------

CO-LEAD MANAGERS

MERRILL LYNCH & CO. PRUDENTIAL SECURITIES SALOMON SMITH BARNEY
--------------------

BANC OF AMERICA SECURITIES LLC DEUTSCHE BANC ALEX. BROWN LEHMAN BROTHERS
--------------------

Prospectus Supplement dated , 2000.
<PAGE>

<TABLE>
<CAPTION>
Architect model Architect model of 111 Huntington Avenue at the
of 5 Times Square Prudential Center, Boston, MA
N.Y., N.Y.
<S> <C>
Photograph of Democracy Center, Bethesda, MD Aerial photograph of Embarcadero Center, San
Francisco, CA
</TABLE>
<PAGE>
YOU SHOULD RELY ONLY ON THE INFORMATION PROVIDED IN THIS PROSPECTUS
SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS, INCLUDING INFORMATION INCORPORATED
BY REFERENCE. WE HAVE AUTHORIZED NO ONE TO PROVIDE YOU WITH DIFFERENT
INFORMATION. WE ARE NOT MAKING AN OFFER OF THESE SECURITIES IN ANY STATE WHERE
THE OFFER IS NOT PERMITTED. YOU SHOULD NOT ASSUME THAT THE INFORMATION IN THIS
PROSPECTUS SUPPPLEMENT IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE
FRONT OF THIS DOCUMENT.

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Prospectus Supplement
<S> <C>
PAGE
--------------

Forward-Looking Statements......... ii
Summary............................ S-1
The Company........................ S-7
Use of Proceeds.................... S-17
Capitalization..................... S-18
Business and Growth Strategies..... S-19
Business and Properties............ S-23
Indebtedness....................... S-35
Management......................... S-38
Additional Federal Income Tax
Considerations................... S-42
Underwriting....................... S-43
Legal Matters...................... S-45
Experts............................ S-45
Prospectus
PAGE
--------------

Available Information.............. 2
Incorporation of Certain Documents
by Reference..................... 2
Risk Factors....................... 4
The Company........................ 15
Use of Proceeds.................... 16
Description of Preferred Stock..... 17
Description of Common Stock........ 23
Description of Warrants............ 24
Restrictions on Transfer........... 25
Certain Provisions of Delaware Law
and Our Charter and Bylaws....... 29
Certain Federal Income Tax
Considerations................... 32
Ratios of Combined Earnings to
Fixed Charges and Preferred Stock
Dividends........................ 46
Plan of Distribution............... 46
Legal Matters...................... 48
Experts............................ 48
</TABLE>

i
<PAGE>
FORWARD-LOOKING STATEMENTS

This prospectus supplement, the accompanying prospectus, and other documents
incorporated by reference in this prospectus contain statements that are
"forward-looking statements" within the meaning of the federal securities laws.
When we use the words "anticipate," "assume," "believe," "estimate," "expect,"
"intend" and other similar expressions, they generally identify forward-looking
statements. Forward-looking statements include, for example, statements relating
to acquisitions and related financial information, development activities,
business strategy and prospects, future capital expenditures, sources and
availability of capital, environmental and other regulations and competition.

You should exercise caution in interpreting and relying on forward-looking
statements since they involve known and unknown risks, uncertainties and other
factors which are, in some cases, beyond our control and could materially affect
our actual results, performance or achievements. In addition to the risk factors
incorporated by reference in our annual report on Form 10-K for the year ended
December 31, 1999, as well as the risk factors discussed under "Risk Factors"
beginning on page 4 of the accompanying prospectus, some of the factors that
could cause our actual results, performance or achievements to differ materially
from those expressed or implied by forward-looking statements include, but are
not limited to, the following:

- we are subject to general risks affecting the real estate industry, such
as the need to enter into new leases or renew leases on favorable terms to
generate rental revenues and dependence on our tenants' financial
condition;

- we may fail to identify, acquire, construct or develop additional
properties; we may develop properties that do not produce a desired yield
on invested capital; or we may fail to effectively integrate acquisitions
of properties or portfolios of properties;

- financing may not be available, or may not be available on favorable
terms;

- we need to make distributions to our stockholders for us to qualify as a
real estate investment trust, and if we need to borrow the funds to make
such distributions, such borrowings may not be available on favorable
terms;

- we depend on the core markets where our properties are located and these
markets may be adversely affected by local economic and market conditions
which are beyond our control;

- we are subject to potential environmental liabilities;

- we are subject to complex regulations relating to our status as a real
estate investment trust and would be adversely affected if we failed to
qualify as a real estate investment trust; and

- market interest rates could adversely affect the market prices for our
common stock, as well as our performance and cash flow.

We caution you that, while forward-looking statements reflect our good faith
beliefs, they are not guarantees of future performance. In addition, we disclaim
any obligation to publicly update or revise any forward-looking statement,
whether as a result of new information, future events or otherwise.

You should read the accompanying prospectus, as well as the documents
incorporated by reference in the prospectus, including our financial statements
and the notes to the financial statements, before deciding whether to invest in
our common stock. Unless the context otherwise requires, all references to "we,"
"us" or "the company" refer collectively to Boston Properties, Inc. and its
subsidiaries, including Boston Properties Limited Partnership, and their
respective predecessor entities, considered as a single enterprise.

ii
<PAGE>
WE WILL PROVIDE, WITHOUT CHARGE, AT THE WRITTEN OR ORAL REQUEST OF ANYONE TO
WHOM THIS PROSPECTUS SUPPLEMENT IS DELIVERED, COPIES OF THE DOCUMENTS
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING
PROSPECTUS, OTHER THAN AN EXHIBIT TO A FILING UNLESS THAT EXHIBIT IS
SPECIFICALLY INCORPORATED BY REFERENCE INTO THAT FILING. WRITTEN REQUESTS SHOULD
BE DIRECTED TO BOSTON PROPERTIES, INC., 800 BOYLSTON STREET, SUITE 400, BOSTON,
MA 02199, ATTENTION: INVESTOR RELATIONS. TELEPHONE REQUESTS MAY BE DIRECTED TO
(617) 236-3300.

iii
<PAGE>
SUMMARY

We are a fully-integrated, self-administered and self-managed real estate
investment trust or "REIT" and one of the largest owners and developers of
office properties in the United States. We conduct substantially all our
business through our affiliate, Boston Properties Limited Partnership, in which
we are the sole general partner and hold an approximate 68% economic interest.

Our properties are concentrated in four core markets--Boston, Washington,
D.C., midtown Manhattan and San Francisco--which command higher rental rates
than any other major city in the country. As of October 9, 2000, we owned 145
properties, totaling approximately 37.2 million net rentable square feet. Our
properties consist of 133 office properties (comprised of 101 Class A office
buildings and 32 properties supporting both office and technical uses, including
18 properties we are currently developing), nine industrial properties and three
hotels. In the quarter ended June 30, 2000, we reported diluted funds from
operations per share of $0.83, a 15.3% increase over the comparable period in
1999. During the same period, property net operating income (property revenues
on a straight-line basis minus property expenses, also known as NOI) increased
7.3% for properties owned as of April 1, 1999.

Our office properties generated 92% of our NOI for the quarter ended June
30, 2000. The following chart shows a breakdown of our NOI by core market for
the quarter ended June 30, 2000:

NOI BY CORE MARKET

GRAPHIC

Our four core markets have demonstrated substantial net absorption and
rental rate increases, resulting in low vacancies and significant embedded
income growth in our portfolio. The following table sets forth information
regarding rents and vacancy rates for each central business district, also known
as CBD, corresponding to our four core markets:

<TABLE>
<CAPTION>
CBD METROPOLITAN
GROSS RENT VACANCY
RANK ----------------------
(U.S.) 2Q99 2Q00
---------- -------- --------
<S> <C> <C> <C>
San Francisco................................... 1 4.0% 1.3%
Midtown Manhattan............................... 2 3.4% 1.9%
Boston.......................................... 3 6.6% 3.3%
Washington, D.C................................. 4 5.3% 3.9%
</TABLE>

SOURCE: CB RICHARD ELLIS

S-1
<PAGE>
For the six months ended June 30, 2000, net rents (contractual base rents
less contractual base expense stops) for space in Class A office buildings
re-leased after lease expiration were, on average, approximately 44.6% greater
than the net rents previously in effect. We expect that our strength in
recapturing space quickly at higher rents will result in continued NOI growth.
The following table summarizes the amount of office and industrial space
expiring in each of our core markets, and the opportunity to re-lease at higher
gross rents:

<TABLE>
<CAPTION>
FOR THE
SIX MONTHS
ENDING
DECEMBER 31, FOR THE YEARS ENDING DECEMBER 31,
------------ -----------------------------------------
CORE MARKET 2000 2001 2002 2003 2004
----------- ------------ -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
GREATER BOSTON
Square footage of expiring leases............. 137,595 713,983 537,527 589,546 669,545
Annualized Rent per leased sq. ft. w/ future
step-ups.................................... $ 18.40 $ 27.48 $ 24.05 $ 25.61 $ 35.54
Company Quoted Rental Rate per sq. ft......... $ 43.38

GREATER WASHINGTON, D.C.
Square footage of expiring leases............. 345,143 499,975 707,207 482,668 594,618
Annualized Rent per leased sq. ft. w/ future
step-ups.................................... $ 17.93 $ 20.96 $ 24.56 $ 27.27 $ 29.77
Company Quoted Rental Rate per sq. ft......... $ 33.87

MIDTOWN MANHATTAN
Square footage of expiring leases............. 20,512 125,823 901,949 185,331 12,725
Annualized Rent per leased sq. ft. w/ future
step-ups.................................... $ 63.94 $ 55.19 $ 53.29 $ 38.15 $ 56.08
Company Quoted Rental Rate per sq. ft......... $ 66.63

GREATER SAN FRANCISCO
Square footage of expiring leases............. 85,427 378,940 334,243 648,377 938,952
Annualized Rent per leased sq. ft. w/ future
step-ups.................................... $ 25.84 $ 26.49 $ 29.12 $ 36.91 $ 32.66
Company Quoted Rental Rate per sq. ft......... $ 71.20
</TABLE>

S-2
<PAGE>
We are creating significant value through our development pipeline. Since
our initial public offering in June 1997, we have completed the development or
redevelopment of 17 properties for a total investment of approximately $418.4
million, of which $307.9 million was our share, and an average stabilized NOI
return on development of 14.8%. Stabilized NOI return on development is the
annualized property NOI for the first quarter after the property reaches 95%
occupancy divided by the total investment for the development of that property.
Each of the 17 properties was stabilized prior to June 30, 2000.

We are currently developing the following 18 office properties, comprised of
16 Class A office buildings and two properties supporting both office and
technical uses, totaling more than 4.6 million square feet, for a total
projected investment of approximately $1.4 billion, of which $1.3 billion will
be invested by us. As of June 30, 2000, we had invested approximately $468.4
million. We expect an average stabilized NOI return on current development of
approximately 12%:
<TABLE>
<CAPTION>
ANTICIPATED NET INVESTMENT
INITIAL NUMBER RENTABLE AS OF ANTICIPATED
OCCUPANCY OF SQUARE JUNE 30, TOTAL
DEVELOPMENT PROPERTIES DATE LOCATION BUILDINGS FEET 2000 INVESTMENT
---------------------- ----------- --------------- --------- --------- ---------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
OFFICE PROPERTIES
Market Square North................. Q1 2000 Washington, DC 1 409,843 $101,312 $ 123,262
New Dominion Tech Park,
Building One...................... Q4 2000 Herndon, VA 1 235,201 29,916 48,770
302 Carnegie Center................. Q4 2000 Princeton, NJ 1 64,565 8,006 12,867
140 Kendrick Street................. Q1 2001 Needham, MA 3 381,000 62,318 80,856
2600 Tower Oaks Boulevard........... Q2 2001 Rockville, MD 1 178,216 12,036 38,295
Broad Run Business Park, Building
E................................. Q2 2001 Dulles, VA 1 124,650 1,026 14,696
Orbital Sciences, Building Two...... Q2 2001 Dulles, VA 1 160,502 5,065 27,618
ANDOVER OFFICE PARK,
BUILDING ONE...................... Q2 2001 ANDOVER, MA 1 120,000 1,487 17,381
Quorum Office Park.................. Q3 2001 Chelmsford, MA 2 259,918 4,079 41,747
111 Huntington Avenue............... Q3 2001 Boston, MA 1 890,000 111,056 291,637
ITT EDUCATIONAL SERVICES BUILDING... Q4 2001 SPRINGFIELD, VA 1 32,000 619 5,740
5 Times Square...................... Q4 2001 New York, NY 1 1,099,154 216,019 536,115
ONE AND TWO DISCOVERY SQUARE........ Q4 2001 RESTON, VA 2 362,868 1,262(3) 85,994
WALTHAM WESTON CORPORATE CENTER..... Q4 2001 WALTHAM, MA 1 295,000 11,586 95,446
-- --------- -------- ----------
Total/Weighted Average.............. 18 4,612,917 $565,787 $1,420,424
== ========= ======== ==========

Boldface type denotes properties on which we have commenced development since June 30, 2000, totaling 809,868 square
feet and requiring a total anticipated investment of $204.6 million.

PERCENT
PERCENT LEASED OR
DEVELOPMENT PROPERTIES OWNERSHIP COMMITTED(1)
---------------------- -------------------- ------------

<S> <C> <C>
OFFICE PROPERTIES
Market Square North................. 50% 100%
New Dominion Tech Park,
Building One...................... 100% 100%
302 Carnegie Center................. 100% 56%
140 Kendrick Street................. 25%(2) 100%
2600 Tower Oaks Boulevard........... 100% 100%
Broad Run Business Park, Building
E................................. 100% 100%
Orbital Sciences, Building Two...... 100% 100%
ANDOVER OFFICE PARK,
BUILDING ONE...................... 100% 50%
Quorum Office Park.................. 100% 100%
111 Huntington Avenue............... 100% 86%
ITT EDUCATIONAL SERVICES BUILDING... 100% 100%
5 Times Square...................... 100% 100%
ONE AND TWO DISCOVERY SQUARE........ 50% 49%
WALTHAM WESTON CORPORATE CENTER..... --(4) 0%
-------------------- ---
Total/Weighted Average.............. 82% 85%
==================== ===
Boldface type denotes properties on
feet and requiring a total anticipat
</TABLE>

-----------------------------

(1) These percentages include properties currently under lease agreements, as
well as those properties subject to letters of intent or similar
arrangements reflecting tenant commitment.

(2) Our share of distributions from this project may be as much as 50% upon
achievement of specific return objectives.

(3) We have contributed 100% of this investment to date.

(4) The former land holder has a 50% profit interest in this property after we
receive a preferred return equal to 110% of our capital investment.

S-3
<PAGE>
We currently control the following sites that will support approximately
13.6 million square feet of office development. We anticipate beginning
construction on these projects over the next three years with significant
pre-leasing, although some development may begin on a speculative basis. We
estimate that these developments will require a total investment of
$3.7 billion:

<TABLE>
<CAPTION>
ANTICIPATED APPROXIMATE
PROJECT NET ANTICIPATED
START RENTABLE NUMBER OF TOTAL CONTROL
DEVELOPMENT PIPELINE LOCATION DATE SQUARE FEET BUILDINGS INVESTMENT STATUS(1)
-------------------- -------- ----------- ------------ ---------- -------------- --------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
GREATER BOSTON
The Prudential Center
--Belvedere
Condominium/Retail
Project(2)................. Boston, MA 2000 20,000 N/A $ 2,000 Own
--Huntington Avenue Retail... Boston, MA 2001 52,000 1 19,500 Own
--Boylston Street Office
Building................... Boston, MA 2002 257,000 1 96,375 Own
--Boylston Street
Residential/Retail......... Boston, MA 2002 370,000 1 148,000 Own
Andover Office Park, Building
Two.......................... Andover, MA 2002 110,000 1 16,500 Own
Seven Cambridge Center......... Cambridge, MA 2002 165,000 1 39,600 Under Contract
MASS TURNPIKE METROWEST........ FRAMINGHAM, MA 2002 300,000 2 60,000 UNDER CONTRACT
CRANE MEADOW................... MARLBOROUGH, MA 2001 400,000 3 72,000 UNDER CONTRACT
THE CORPORATE CENTER WESTON.... WESTON, MA 2001 350,000 1 91,000 UNDER CONTRACT
----------- --- ----------
2,024,000 11 544,975

GREATER WASHINGTON, D.C.
901 NEW YORK AVENUE(3)......... WASHINGTON, DC 2001 550,000 1 165,960 UNDER CONTRACT
Washingtonian North............ Gaithersburg, MD 2002 850,000 3 187,000 Own
Tower Oaks..................... Rockville, MD 2001 960,000(4) 5 230,400 Own
Decoverly Business Park........ Rockville, MD 2002 300,000 3 60,000 Own
Broad Run Business Park........ Dulles, VA 2001 937,000 8 168,660 Own
DULLES WORLD CENTER............ DULLES, VA 2002 2,500,000 10 600,000 UNDER CONTRACT
New Dominion Tech Park,
Building Two................. Herndon, VA 2001 248,000 1 55,000 Own
599 Van Buren Street........... Herndon, VA 2001 135,000 1 27,000 Own
Reston Gateway................. Reston, VA 2002 540,000 2 135,000 Own
Reston, Parcel E............... Reston, VA 2003 180,000 1 39,600 Own
Virginia 95 Business Park,
Building 12B................. Springfield, VA 2002 40,000 1 6,400 Own
----------- --- ----------
7,240,000 36 1,675,020

MIDTOWN MANHATTAN
Times Square Tower............. New York, NY 2001 1,200,000 1 640,000 Under Contract

GREATER SAN FRANCISCO
611 and 681 Gateway
Boulevard.................... S. San Francisco, CA 2000 370,000 2 111,000 Own
Plaza at Almaden............... San Jose, CA 2001 841,000 3 295,000 Under Contract
----------- --- ----------
1,211,000 5 406,000

OTHER
Carnegie Center................ Princeton, NJ 2001 1,900,000 14 418,000 Under Contract
----------- --- ----------

Total.......................... 13,575,000 67 $3,683,995
=========== === ==========

Boldface type denotes sites we control that we have not previously disclosed, totaling 4.1 million square feet and requiring a
total anticipated investment of approximately $1 billion.
</TABLE>

-----------------------------

(1) While we anticipate closing on the properties under contract, there can be
no assurances that we will acquire these properties.

(2) Excluding development of condominiums by third parties.

(3) We have an agreement to acquire a 25% equity interest in this site and to
develop it through our joint venture with the New York State Common
Retirement Fund.

(4) We own land that will support approximately 900,000 square feet of
development, and we have agreed to acquire land that will support the
remaining 60,000 square feet of development.

S-4
<PAGE>
We were formed to succeed to the real estate development, redevelopment,
acquisition, operating and leasing businesses associated with a predecessor
company founded by Mortimer B. Zuckerman and Edward H. Linde in 1970. Over our
30 year history we have completed the development of 86 properties totaling
approximately 15.8 million square feet. We believe that we have created
significant value for our tenants and investors by developing well-located
properties that meet the demands of today's office tenants, redeveloping
underperforming assets, and continually improving the marketing and management
of our assets.

We have full-service offices in Boston, New York, Washington, D.C., San
Francisco and Princeton, NJ, and achieve efficiencies of scale by operating a
centralized financial control and data center at our Boston headquarters. As a
full-service real estate company, we have substantial in-house expertise and
resources in development, acquisitions, financing, construction management,
property management, marketing, leasing, risk management, information systems,
accounting, tax and legal services. We have over 600 employees. Our 25 senior
officers, together with Mr. Zuckerman, Chairman of our Board of Directors, and
Mr. E. Linde, our President and CEO, have an average of 24 years experience in
the real estate industry and an average of 14 years tenure with us.

The cities corresponding to our four core markets command higher rental
rates than any other major city in the U.S. in terms of gross rents per square
foot due to their desirability as long-term, central locations for office
tenants and other users of space. Within our core markets, we focus on
submarkets where there are significant barriers to entry and where we have
significant expertise, which helps protect the value of our existing assets and
provides us with a competitive advantage in developing new properties. When
selecting new development sites, we carefully target those that have the
potential to command the highest rents in their markets. These premier sites are
typically located in in-fill locations, which places a premium on our
development expertise and financial strength and also reduces the likelihood of
competing projects.

We believe that our properties are well positioned to provide a base for
continued growth. Our tenants operate in a variety of industries and we believe
that their creditworthiness and diversity, and our strong relationship with them
give us a competitive advantage. In general, our office and industrial
properties are located in submarkets with high tenant demand and low vacancy
rates, resulting in rising rents. Through our in-house marketing, leasing,
tenant construction and property management programs, we have historically
achieved high occupancy rates and efficient re-leasing of vacated space.

S-5
<PAGE>
RECENT EVENTS

For the quarter ended June 30, 2000, we reported funds from operations per
share of $0.83, a 15.3% increase over the comparable period in 1999. During the
same period, property NOI increased 7.3% for properties owned as of April 1,
1999.

Due to strong demand in our core markets, we have accelerated a substantial
amount of our development pipeline. In addition to development projects we have
previously disclosed, we have commenced development of properties totaling
809,868 square feet and requiring a total anticipated investment of
$204.6 million, and entered into agreements to acquire sites that will support
4.1 million square feet, requiring a total anticipated investment of
approximately $1 billion (see "The Company--Properties Currently Under
Development" and "The Company--Properties in Our Development Pipeline").

On September 13, 2000, we acquired a 35% interest in 265 Franklin Street in
Boston, a 21-story, 326,714-square foot Class A office building, from an
affiliate of Westbrook for approximately $34.3 million. We completed this
acquisition through our joint venture with the New York State Common Retirement
Fund, commonly known as NYSCRF. We anticipate implementing a capital improvement
and repositioning plan and re-leasing the approximately 187,000 square feet of
space expiring through May 2001.

On September 29, 2000, we sold 910 and 930 Clopper Road for approximately
$24.1 million. These two properties supporting both office and technical uses
are located in Gaithersburg, MD and total 240,596 square feet.

On September 18, 2000, we declared a dividend of $0.53 per share of our
common stock for the period July 1, 2000 through September 30, 2000, payable on
October 27, 2000 to our shareholders of record on September 29, 2000. Similarly,
we declared and paid a dividend of $0.53 per share of our common stock for the
second quarter of 2000. Each of these dividends represents an approximate 18%
increase over the dividend of $0.45 per share we declared and paid for the first
quarter of 2000.

We have recently increased our unsecured line of credit with Fleet National
Bank, as agent, to allow us to borrow up to $605 million. Our unsecured line of
credit is a recourse obligation of Boston Properties Limited Partnership. We use
our unsecured line of credit principally to fund our development pipeline, other
land and property acquisitions and for working capital purposes. As of
October 9, 2000, we had an outstanding balance of $221 million (see
"Indebtedness").

THE OFFERING

All of the shares of our common stock offered hereby are being sold by us.

<S> <C>
Common stock offered hereby................................ 15,000,000
Common stock outstanding after the offering(1)............. 84,319,499
Use of proceeds............................................ To fund our current and planned
development activities, to create
availability under our unsecured line
of credit and to fund other land and
property acquisitions
NYSE Symbol................................................ BXP
</TABLE>

--------------------

(1) Excludes shares reserved for issuance upon the exercise of outstanding
options, the conversion of preferred shares and the exchange of units of
Boston Properties Limited Partnership (see "Capitalization").

S-6
<PAGE>
THE COMPANY

GENERAL

We are a fully integrated, self-administered and self-managed real estate
investment trust or "REIT" and one of the largest owners and developers of
office properties in the United States. We conduct substantially all our
business through our affiliate, Boston Properties Limited Partnership, in which
we are the sole general partner and hold an approximate 68% economic interest.

Our properties are concentrated in four core markets--Boston, Washington,
D.C., midtown Manhattan and San Francisco--which command higher rental rates
than any other major city in the country. As of October 9, 2000, we owned 145
properties, totaling approximately 37.2 million net rentable square feet. Our
properties consist of 133 office properties (comprised of 101 Class A office
buildings and 32 properties supporting both office and technical uses, including
18 office buildings we are currently developing), nine industrial properties and
three hotels. We consider Class A office buildings to be centrally located
buildings that are professionally managed and maintained, attract high-quality
tenants and command upper-tier rental rates, and that are modern structures or
have been modernized to compete with newer buildings.

We are creating significant value through our development pipeline. In 1999,
we completed the development of 10 properties. We currently have an additional
18 office properties under development (comprised of 16 Class A office
properties and two properties supporting both office and technical uses),
totaling more than 4.6 million square feet for a total anticipated investment of
$1.4 billion. These properties are 85% pre-leased on a weighted average basis.
Our largest development property is 5 Times Square in midtown Manhattan. The
office space in this building is 100% pre-leased to Ernst & Young. In addition,
we control sites that will support approximately 13.6 million square feet of
office properties that we estimate will require a total investment of
approximately $3.7 billion.

Our office properties generated 92% of our NOI for the quarter ended June
30, 2000. The following chart shows a breakdown of our NOI by core market for
the quarter ended June 30, 2000:

NOI BY CORE MARKET

GRAPHIC

SOURCE: CB RICHARD ELLIS

S-7
<PAGE>
We were formed to succeed to the real estate development, redevelopment,
acquisition, operating and leasing businesses associated with a predecessor
company founded by Messrs. Zuckerman and E. Linde in 1970. Over our 30 year
history we have completed the development of 86 properties totaling
approximately 15.8 million square feet. We believe that we have created
significant value for our tenants and investors by developing well-located
properties that meet the demands of today's office tenants, redeveloping
underperforming assets, and continually improving the marketing and management
of our assets.

We have full-service offices in Boston, New York, Washington, D.C., San
Francisco and Princeton, NJ, and achieve efficiencies of scale by operating a
centralized financial control and data center at our Boston headquarters that is
responsible for operating budgets, billing and payments for all of our existing
and development properties. As a result, we believe that we have the capacity to
increase the number of properties we own and manage with less than a
proportional increase in overhead costs. As a full-service real estate company,
we have substantial in-house expertise and resources in development,
acquisitions, financing, construction management, property management,
marketing, leasing, risk management, information systems, accounting, tax and
legal services. We have over 600 employees. Our 25 senior officers, together
with Mr. Zuckerman, Chairman of our Board of Directors, and Mr. E. Linde, our
President and CEO, have an average of 24 years experience in the real estate
industry and an average of 14 years tenure with us.

We believe we have superior access to potential development and acquisition
opportunities by virtue of our long-standing reputation and relationships, both
nationally and in our core markets, with brokers, tenants, financial
institutions, property owners, institutional investors, development agencies and
contractors. We utilize our experience with, and understanding of, the
development and management of a range of commercial property types to
opportunistically pursue developments and acquisitions within our existing and
new markets. In addition to developing Class A office buildings, our extensive
experience includes the development of suburban office parks, properties
supporting both office and technical uses, hotels and industrial parks. The
properties that we have developed and redeveloped have won numerous development,
design and building management awards, including "Developer of the Year" from
the New York chapter of the National Association of Corporate Real Estate
Executives, in recognition of the 5 Times Square development, which was awarded
in February 2000; "Developer of the Year" from the Greater Washington Commercial
Association of Realtors, in recognition of our numerous development projects in
the Greater Washington, D.C. area, which was awarded in May 2000; and the
National Commercial Real Estate Customer Service Award for Excellence from a
leading provider of real estate benchmarking and performance services throughout
the United States, which was awarded in March 2000.

On a selective basis we also capitalize on opportunities to leverage our
experience and reputation by entering into joint ventures with institutions that
supply a large percentage of the required equity while we receive a more than
proportional return on our investment by virtue of development management,
property management and leasing fees and other performance-related promotes. We
recently announced a joint venture pursuant to which NYSCRF will contribute up
to $270 million to acquire and develop properties in partnership with us. During
the term of the agreement, NYSCRF has the right to participate in all of our
future acquisition opportunities that meet certain criteria and any development
projects that we choose to pursue with an institutional partner. We will manage
the development and operation of all joint venture properties.

The cities corresponding to our four core markets command higher rental
rates than any other major city in the U.S. in terms of gross rents per square
foot due to their desirability as

S-8
<PAGE>
long-term, central locations for office tenants and other users of space. Within
our core markets, we focus on submarkets where there are significant barriers to
entry and where we have significant expertise, which helps protect the value of
our existing assets and provides us with a competitive advantage in developing
new properties. When selecting new development sites, we carefully target those
that have the potential to command the highest rents in their markets. These
premier sites are typically located in in-fill locations, which places a premium
on our development expertise and financial strength and also reduces the
likelihood of competing projects.

We believe that our properties are well positioned to provide a base for
continued growth. Our tenants operate in a variety of industries, and we believe
that their creditworthiness and diversity, and our strong relationships with
them, give us a competitive advantage. In general, our office and industrial
properties are located in submarkets with high tenant demand and low vacancy
rates, resulting in rising rents. Through our in-house marketing, leasing,
tenant construction and property management programs, we have historically
achieved high occupancy rates and efficient re-leasing of vacated space.

We believe that our experienced personnel, established market position and
relationships, hands-on approach to development and management, and substantial
portfolio of existing properties and development sites, will enhance our
capacity for growth and allow us to exploit the competitive advantages that we
enjoy as one of the ten largest publicly-traded REITs (as measured by total
market capitalization). These advantages include favorable access to debt and
equity financing and the ability to acquire properties and sites through the
issuance of stock and partnership units, which can be of particular value to
potential tax-sensitive sellers. We also believe that, because of our size and
reputation, we will be an attractive buyer for institutions or individuals
wishing to sell individual properties or portfolios of properties in exchange
for an equity position in a publicly-traded real estate company.

As an example of our ability to successfully attract sellers of desirable
assets, in 1999 we acquired the approximately four million-square foot
Embarcadero Center complex in San Francisco from the family of David Rockefeller
and The Prudential Insurance Company of America. As part of this transaction,
these two groups acquired more than $400 million of our equity securities (based
on liquidation value), including more than $300 million in units of Boston
Properties Limited Partnership.

S-9
<PAGE>
DEVELOPMENT PROPERTIES DELIVERED SINCE OUR INITIAL PUBLIC OFFERING

Since our initial public offering in June 1997, we have completed the
development or redevelopment of the following properties, for a total investment
of approximately $418.4 million, of which $307.9 million was invested by us, and
an average stabilized NOI return on development of 14.8%(1):

<TABLE>
<CAPTION>
NET
INITIAL RENTABLE
OCCUPANCY NUMBER OF SQUARE TOTAL PERCENT PERCENT
DELIVERED PROPERTIES DATE LOCATION BUILDINGS FEET INVESTMENT OWNERSHIP LEASED
-------------------- --------- ------------------ --------- --------- -------------- --------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
OFFICE PROPERTIES
Sugarland Business Park,
Building One................. 6/97 Herndon, VA 1 52,797 $ 5,962 100% 100%
Sugarland Business Park,
Building Two................. 6/97 Herndon, VA 1 59,215 5,373 100% 100%
7700 Boston Boulevard, Building
Twelve....................... 10/97 Springfield, VA 1 82,224 10,327 100% 100%
7501 Boston Boulevard, Building
Seven........................ 11/97 Springfield, VA 1 75,756 11,640 100% 100%
201 Spring Street.............. 11/97 Lexington, MA 1 102,500 12,968 100% 100%
One and Two Reston Overlook.... 2/99 Reston, VA 2 444,279 65,556 100%(2) 100%
181 Spring Street.............. 5/99 Lexington, MA 1 53,595 12,325 100% 100%
The Arboretum.................. 5/99 Reston, VA 1 95,584 14,676 100% 100%
200 West Street................ 5/99 Waltham, MA 1 248,341 44,907 100% 100%
Eight Cambridge Center......... 6/99 Cambridge, MA 1 177,226 26,199 100% 100%
1301 New York Avenue........... 9/99 Washington, DC 1 168,371 47,981(3) 100% 100%
502 Carnegie Center............ 10/99 Princeton, NJ 1 116,374 19,020(4) 100% 98%
One Freedom Square............. 11/99 Reston, VA 1 414,296 81,842(5) 25% 100%
Orbital Sciences, Buildings One
and Three.................... 6/00 Dulles, VA 2 174,832 30,885(6) 100% 100%
-- --------- -------- --- ---
16 2,265,390 389,661 84% 100%

HOTEL
Residence Inn by
Marriott-Registered Trademark-... 2/99 Cambridge, MA 1 187,474 28,782 100% N/A
-- --------- -------- --- ---

Total/Weighted Average......... 17 2,452,864 $418,443 85% 100%
== ========= ======== === ===
</TABLE>

-------------------------

(1) Stabilized NOI return on development is the annualized property NOI for the
first quarter after the property is 95% occupied divided by total investment
to develop that property. Each of these properties was stabilized before
June 30, 2000.

(2) Return is based on our 25% investment in the property during development.

(3) Includes $2.7 million of anticipated finishing costs.

(4) Includes $1.0 million of anticipated finishing costs.

(5) Includes $2.5 million of anticipated finishing costs.

(6) Includes $0.7 million of anticipated finishing costs.

SUGARLAND BUSINESS PARK, BUILDINGS ONE AND TWO. These single-story
buildings totaling 112,012 square feet are located in Herndon, VA, and support
both office and technical uses. We purchased these buildings vacant in 1996 and
completed improvements to them in June 1997. These buildings are 100% leased to
six tenants.

7700 BOSTON BOULEVARD, BUILDING TWELVE AND 7501 BOSTON BOULEVARD, BUILDING
SEVEN. These properties totaling 157,980 square feet are located in our
Virginia 95 Office Park in Springfield, VA, and support both office and
technical uses. We developed these buildings for, and lease them 100% to
Autometric, a subsidiary of Boeing, and the United States government. Their
leases expire in 2012 and 2007, respectively.

S-10
<PAGE>
201 SPRING STREET. This 102,500-square foot Class A office building is
located in Lexington, MA. This building, which was built on a speculative basis,
is 100% leased to AT&T Broadband with a lease expiring in 2007.

ONE AND TWO RESTON OVERLOOK. This two-building, 444,279-square foot
Class A office complex is located in Reston, VA. We developed this property
through a joint venture agreement with an affiliate of Westbrook and
subsequently purchased our joint venture partner's interest in January 2000.
Both buildings are 100% leased. The major tenant is TRW with a lease expiring in
2011.

181 SPRING STREET. This 53,595-square foot Class A office building is
located adjacent to our 191 and 201 Spring Street properties in Lexington, MA.
This building was built on a speculative basis and is 100% leased to Excelergy
and ABT Associates. Their leases expire in 2005 and 2009, respectively.

THE ARBORETUM. This 95,584-square foot Class A office building is located
in Reston, VA, adjacent to our other Reston-area properties. This building was
100% pre-leased to Landmark Systems prior to the commencement of development,
with a lease expiring in 2011.

200 WEST STREET. This 248,341-square foot Class A office building is
located across the street from our 195 West Street property in Waltham, MA. This
building was started on a speculative basis and is 100% leased. The major tenant
is Parexel International with a lease expiring in 2009.

EIGHT CAMBRIDGE CENTER. This 177,226-square foot Class A office building is
located in our Cambridge Center development in Cambridge, MA. This building was
100% pre-leased to Cambridge Technology Partners prior to the commencement of
development, with a lease expiring in 2009.

1301 NEW YORK AVENUE. This 168,371-square foot Class A office building is
located in Washington, D.C. We purchased and renovated it, then placed it back
in service in 1999. This building is 100% pre-leased to the United States
government with a lease expiring in 2009.

502 CARNEGIE CENTER. This 116,374-square foot Class A office building is
located in our Carnegie Center development in Princeton, NJ. This building was
started on a speculative basis and is 98% leased. The major tenant is Summit
Bank with a lease expiring in 2009.

ONE FREEDOM SQUARE. We have a 25% interest in this 414,296-square foot
Class A office building in Reston, VA that we developed with an affiliate of
Westbrook through a joint venture. This building is 100% leased and is managed
by us. The major tenant is Andersen Consulting with a lease expiring in 2011.

ORBITAL SCIENCES, BUILDINGS ONE AND THREE. This two-building,
174,832-square foot Class A office complex is located in Dulles, VA, and was
100% pre-leased to Orbital Sciences prior to the commencement of development.
This lease expires in 2015.

RESIDENCE INN BY MARRIOTT-REGISTERED TRADEMARK-. This 221-room limited
service, extended-stay hotel is located in our Cambridge Center development in
Cambridge, MA. The Residence Inn division of Marriott International manages this
hotel. As with our other hotel properties, we lease this hotel to a related
party and participate in its gross receipts.

S-11
<PAGE>
PROPERTIES CURRENTLY UNDER DEVELOPMENT

We are currently developing the following 18 office properties, comprised of
16 Class A office buildings and two properties supporting both office and
technical uses, totaling more than 4.6 million square feet, for a total
projected investment of approximately $1.4 billion, of which $1.3 billion will
be invested by us. As of June 30, 2000, we had invested approximately
$468.4 million. We expect an average stabilized NOI return on current
development of approximately 12%:
<TABLE>
<CAPTION>
ANTICIPATED NET INVESTMENT
INITIAL NUMBER RENTABLE AS OF ANTICIPATED
OCCUPANCY OF SQUARE JUNE 30, TOTAL PERCENT
DEVELOPMENT PROPERTIES DATE LOCATION BUILDINGS FEET 2000 INVESTMENT OWNERSHIP
---------------------- ----------- --------------- --------- --------- ---------- ----------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
OFFICE PROPERTIES
Market Square North................. Q1 2000 Washington, DC 1 409,843 $101,312 $ 123,262 50%
New Dominion Tech Park,
Building One...................... Q4 2000 Herndon, VA 1 235,201 29,916 48,770 100%
302 Carnegie Center................. Q4 2000 Princeton, NJ 1 64,565 8,006 12,867 100%
140 Kendrick Street................. Q1 2001 Needham, MA 3 381,000 62,318 80,856 25%(2)
2600 Tower Oaks Boulevard........... Q2 2001 Rockville, MD 1 178,216 12,036 38,295 100%
Broad Run Business Park, Building
E................................. Q2 2001 Dulles, VA 1 124,650 1,026 14,696 100%
Orbital Sciences, Building Two...... Q2 2001 Dulles, VA 1 160,502 5,065 27,618 100%
ANDOVER OFFICE PARK,
BUILDING ONE...................... Q2 2001 ANDOVER, MA 1 120,000 1,487 17,381 100%
Quorum Office Park.................. Q3 2001 Chelmsford, MA 2 259,918 4,079 41,747 100%
111 Huntington Avenue............... Q3 2001 Boston, MA 1 890,000 111,056 291,637 100%
ITT EDUCATIONAL SERVICES BUILDING... Q4 2001 SPRINGFIELD, VA 1 32,000 619 5,740 100%
5 Times Square...................... Q4 2001 New York, NY 1 1,099,154 216,019 536,115 100%
ONE AND TWO DISCOVERY SQUARE........ Q4 2001 RESTON, VA 2 362,868 1,262(3) 85,994 50%
WALTHAM WESTON CORPORATE CENTER..... Q4 2001 WALTHAM, MA 1 295,000 11,586 95,446 --(4)
-- --------- -------- ---------- ---
Total/Weighted Average.............. 18 4,612,917 $565,787 $1,420,424 82%
== ========= ======== ========== ===

Boldface type denotes properties on which we have commenced development since June 30, 2000, totaling 809,868 square feet and
requiring a total anticipated investment of $204.6 million.

PERCENT
LEASED OR
DEVELOPMENT PROPERTIES COMMITTED(1)
---------------------- ------------

<S> <C>
OFFICE PROPERTIES
Market Square North................. 100%
New Dominion Tech Park,
Building One...................... 100%
302 Carnegie Center................. 56%
140 Kendrick Street................. 100%
2600 Tower Oaks Boulevard........... 100%
Broad Run Business Park, Building
E................................. 100%
Orbital Sciences, Building Two...... 100%
ANDOVER OFFICE PARK,
BUILDING ONE...................... 50%
Quorum Office Park.................. 100%
111 Huntington Avenue............... 86%
ITT EDUCATIONAL SERVICES BUILDING... 100%
5 Times Square...................... 100%
ONE AND TWO DISCOVERY SQUARE........ 49%
WALTHAM WESTON CORPORATE CENTER..... 0%
---
Total/Weighted Average.............. 85%
===
Boldface type denotes properties on
requiring a total anticipated invest
</TABLE>

-----------------------------

(1) These percentages include properties currently under lease agreements, as
well as those properties subject to letters of intent or similar
arrangements reflecting tenant commitment.

(2) Our share of distributions from this project may be as much as 50% upon
achievement of specific return objectives.

(3) We have contributed 100% of this investment to date.

(4) The former land holder has a 50% profit interest in this property after we
receive a preferred return equal to 110% of our capital investment.

MARKET SQUARE NORTH. We have a 50% ownership interest in this
409,843-square foot Class A office building located in Washington, D.C. We are
developing this building through a joint venture with a local developer, with
whom we co-manage the development. This building is 100% leased to 13 tenants.
Stabilization is expected in the fourth quarter of 2000.

NEW DOMINION TECH PARK, BUILDING ONE. This 235,201-square foot Class A
office building is located in Herndon, VA. This building is 100% pre-leased to
the United States government for twenty years. Occupancy is expected in the
fourth quarter of 2000.

302 CARNEGIE CENTER. This 64,565-square foot Class A office property is
located in our Carnegie Center complex in Princeton, NJ. This building, which
was started on a speculative basis, is approximately 23% leased, and an
additional 33% is committed. Initial occupancy is expected in the fourth quarter
of 2000, and stabilization is expected in the second quarter of 2001.

140 KENDRICK STREET. This three-building, 381,000-square foot Class A
office complex is located in Needham, MA. We are developing this complex through
our joint venture with

S-12
<PAGE>
NYSCRF. Our share of distributions from this project may be as much as 50% upon
achievement of specific return objectives. We manage this development. This
complex is 100% pre-leased to Parametric Technology with a lease expiring in
2012. Occupancy is expected in the first quarter of 2001.

2600 TOWER OAKS BOULEVARD. This 178,216-square foot Class A office building
is located in Rockville, MD. It is the first building to be developed in our
planned office park totaling approximately 1,100,000 square feet. This building
is approximately 53% leased to OTG Software and 18% leased to American Express
for ten and seven years, respectively. The remaining space is 100% committed.
Initial occupancy is expected in the first quarter of 2001, with stabilization
expected in the second quarter of 2001.

BROAD RUN BUSINESS PARK, BUILDING E. This 124,650-square foot Class A
office building is located in Dulles, VA. This building is the first building to
be developed in our planned office park totaling approximately 1,062,000 square
feet. We began construction of this building on a speculative basis in May 2000.
This building is 100% leased to Telegis, with a lease expiring in 2016.
Occupancy is expected in the second quarter of 2001.

ORBITAL SCIENCES, BUILDING TWO. This 160,502-square foot Class A office
building is located in Dulles, VA. This building is the second phase of a
335,334-square foot development project (see "Development Properties Delivered
Since Our Initial Public Offering--ORBITAL SCIENCES, BUILDINGS ONE AND THREE").
The project was, prior to commencement of construction, 100% pre-leased to
Orbital Sciences for 15 years. Occupancy is expected in the second quarter of
2001.

ANDOVER OFFICE PARK, BUILDING ONE. This 120,000-square foot Class A office
building is located in Andover, MA. We began construction in July 2000. This
building is 50% pre-leased to Agilent for ten years, with initial occupancy
expected in the second quarter of 2001.

QUORUM OFFICE PARK. This two-building, 259,918-square foot Class A office
development is located in Chelmsford, MA. This project was, prior to the
commencement of construction, 100% pre-leased to Tellabs with a lease expiring
in 2011. Occupancy of these two buildings is expected in the third and fourth
quarters of 2001.

111 HUNTINGTON AVENUE. This 890,000-square foot Class A office tower is
located at our mixed-use Prudential Center complex in Boston, MA. The building
is 58% pre-leased and 28% committed, with initial occupancy expected in the
third quarter of 2001. Stabilization is expected in the fourth quarter of 2002.

ITT EDUCATIONAL SERVICES BUILDING. This 32,000-square foot building
supporting both office and technical uses is located at our Virginia 95 Business
Park in Springfield, VA. This building is 100% pre-leased to ITT Educational
Service, with a lease expiring in 2012. Occupancy is expected in the fourth
quarter of 2001.

5 TIMES SQUARE. This 1,099,154-square foot Class A office tower is located
in midtown Manhattan. The office space is 100% pre-leased to Ernst & Young, with
initial occupancy expected in the fourth quarter of 2001. Stabilization is
expected in the second quarter of 2002.

ONE AND TWO DISCOVERY SQUARE. We have a 50% interest in this two-building,
362,868-square foot Class A office complex, located in Reston, VA. This project
is being developed through a joint venture with an affiliate of Westbrook. We
manage this development. This project is approximately 49% committed, with
stabilization expected in the second quarter of 2002.

WALTHAM WESTON CORPORATE CENTER. This 295,000-square foot Class A office
building is located in Waltham, MA. It is being developed through a joint
venture with the former land holder in which our joint venture partner has a 50%
profit interest after we receive a preferred return equal

S-13
<PAGE>
to our capital investment plus 10%. We manage this development. We began
construction of this building on a speculative basis in September 2000 in
response to the demand for office space in the Waltham area. Initial occupancy
is expected in the fourth quarter of 2001, with stabilization expected in the
fourth quarter of 2002.

PROPERTIES IN OUR DEVELOPMENT PIPELINE

We currently control the following sites that will support approximately
13.6 million square feet of office development. We anticipate beginning
construction on these projects over the next three years with significant
pre-leasing, although some development may begin on a speculative basis. We
estimate that these developments will require a total investment of
$3.7 billion:

<TABLE>
<CAPTION>
ANTICIPATED APPROXIMATE
PROJECT NET ANTICIPATED
START RENTABLE NUMBER OF TOTAL CONTROL
DEVELOPMENT PIPELINE LOCATION DATE SQUARE FEET BUILDINGS INVESTMENT STATUS(1)
-------------------- -------- ----------- ----------- ---------- -------------- --------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
GREATER BOSTON
The Prudential Center
--Belvedere Condominium/Retail
Project(2).................. Boston, MA 2000 20,000 N/A $ 2,000 Own
--Huntington Avenue Retail.... Boston, MA 2001 52,000 1 19,500 Own
--Boylston Street Office
Building.................... Boston, MA 2002 257,000 1 96,375 Own
--Boylston Street
Residential/Retail.......... Boston, MA 2002 370,000 1 148,000 Own
Andover Office Park, Building
Two........................... Andover, MA 2002 110,000 1 16,500 Own
Seven Cambridge Center.......... Cambridge, MA 2002 165,000 1 39,600 Under Contract
MASS TURNPIKE METROWEST......... FRAMINGHAM, MA 2002 300,000 2 60,000 UNDER CONTRACT
CRANE MEADOW.................... MARLBOROUGH, MA 2001 400,000 3 72,000 UNDER CONTRACT
THE CORPORATE CENTER WESTON..... WESTON, MA 2001 350,000 1 91,000 UNDER CONTRACT
---------- --- ----------
2,024,000 11 544,975

GREATER WASHINGTON, D.C.
901 NEW YORK AVENUE(3).......... WASHINGTON, DC 2001 550,000 1 165,960 UNDER CONTRACT
Washingtonian North............. Gaithersburg, MD 2002 850,000 3 187,000 Own
Tower Oaks...................... Rockville, MD 2001 960,000(4) 5 230,400 Own
Decoverly Business Park......... Rockville, MD 2002 300,000 3 60,000 Own
Broad Run Business Park......... Dulles, VA 2001 937,000 8 168,660 Own
DULLES WORLD CENTER............. DULLES, VA 2002 2,500,000 10 600,000 UNDER CONTRACT
New Dominion Tech Park, Building
Two........................... Herndon, VA 2001 248,000 1 55,000 Own
599 Van Buren Street............ Herndon, VA 2001 135,000 1 27,000 Own
Reston Gateway.................. Reston, VA 2002 540,000 2 135,000 Own
Reston, Parcel E................ Reston, VA 2003 180,000 1 39,600 Own
Virginia 95 Business Park,
Building 12B.................. Springfield, VA 2002 40,000 1 6,400 Own
---------- --- ----------
7,240,000 36 1,675,020

MIDTOWN MANHATTAN
Times Square Tower.............. New York, NY 2001 1,200,000 1 640,000 Under Contract

GREATER SAN FRANCISCO
611 and 681 Gateway Boulevard... S. San Francisco, CA 2000 370,000 2 111,000 Own
Plaza at Almaden................ San Jose, CA 2001 841,000 3 295,000 Under Contract
---------- --- ----------
1,211,000 5 406,000

OTHER
Carnegie Center................. Princeton, NJ 2001 1,900,000 14 418,000 Under Contract
---------- --- ----------

Total........................... 13,575,000 67 $3,683,995
========== === ==========

Boldface type denotes sites we control that we have not previously disclosed, totaling 4.1 million square feet and requiring a
total anticipated investment of approximately $1 billion.
</TABLE>

-----------------------------

(1) While we anticipate closing on the properties under contract, there can be
no assurances that we will acquire these properties.

(2) Excluding development of condominiums by third parties.

(3) We have an agreement to acquire a 25% equity interest in this site and to
develop it through our joint venture with NYSCRF.

(4) We own land that will support approximately 900,000 square feet of
development, and we have agreed to acquire the land that will support the
remaining 60,000 square feet of development.

S-14
<PAGE>
GREATER BOSTON

THE PRUDENTIAL CENTER. This 23-acre site, located in Boston, MA, consists
of two Class A office buildings totaling approximately 1.7 million square feet,
a retail complex totaling 486,428 square feet, 2,700 underground parking spaces
and 111 Huntington Avenue, an approximately 890,000-square foot Class A office
building that is currently under construction (see "--Properties Currently Under
Development--111 HUNTINGTON AVENUE"). This site also has entitlements for the
following four additional development projects totaling approximately 850,000
square feet:

Belvedere Condominium/Retail Project--We are in the process of
finalizing a ground lease of a parcel of land to a national condominium
developer. We will act as the third-party development manager for the
construction of 65 condominium units and approximately 20,000 square feet of
retail space. We will retain ownership of all retail space. We expect to
commence development in October 2000.

Huntington Avenue Retail--We are completing the design and planning for
an approximately 52,000-square foot retail development on Huntington Avenue.
We are in discussions with a tenant for the entire project and plan to
commence construction in the second quarter of 2001.

Boylston Street Office Building--We are designing the last remaining
approved office development at the Prudential Center, an approximately
257,000-square foot building. We anticipate commencing construction in the
third quarter of 2002.

Boylston Street Residential/Retail--This project will support
approximately 300,000 square feet of residential use and approximately
70,000 square feet of retail space.

ANDOVER OFFICE PARK, BUILDING TWO. This site is located in Andover, MA. The
site is able to support an approximately 110,000-square foot Class A office
building. This building will share parking with Andover Office Park, Building
One, which we are currently developing (see "--Properties Currently Under
Development--ANDOVER OFFICE PARK, BUILDING ONE").

SEVEN CAMBRIDGE CENTER. This approximately 165,000-square foot Class A
office building with a parking structure is the last remaining project planned
for our Cambridge Center development in Cambridge, MA. When completed, Cambridge
Center will be a 15-building, multi-use complex totaling approximately
2.8 million square feet. We currently own six office buildings, a parking
structure, the 431-room Cambridge Marriott Hotel and the 221-room Residence Inn
by Marriott-Registered Trademark- in this development. There is a moratorium on
development in effect in Cambridge through July 2001 to allow Cambridge to
consider possible zoning changes which, if enacted, may have an adverse effect
on our ability to develop the currently planned office building on this site.

MASS TURNPIKE METRO WEST. This 26.8 acre site is located at the
intersection of Route 9 and Interstate 90 in Framingham, MA. This site is able
to support two Class A office buildings totaling approximately 300,000 square
feet and a 150-room limited service hotel.

CRANE MEADOW. This 50-acre site is located off Interstate 495 in
Marlborough, MA. This site is able to support three Class A office buildings
totaling approximately 400,000 square feet.

THE CORPORATE CENTER WESTON. This 74-acre site is located at the
intersection of Route 20 and Route 128 in Weston, MA. This site is able to
support an approximately 350,000-square foot Class A office building.

S-15
<PAGE>
GREATER WASHINGTON, D.C.

901 NEW YORK AVENUE. We are under contract to acquire this site through our
joint venture with the NYSCRF, pursuant to which we will have a 25% equity
interest in the site. The site is located in Washington, D.C. This site will
support an approximately 550,000-square foot, Class A office building that will
be developed through the joint venture, through which we would manage the
property.

WASHINGTONIAN NORTH. This 28-acre parcel is located off Interstate 270 in
Gaithersburg, MD and can support three Class A office buildings totaling
approximately 850,000 square feet.

TOWER OAKS. This 34-acre site is adjacent to Interstate 270 in Rockville,
MD. This site is the location of 2600 Tower Oaks Boulevard, which is currently
under construction, and can support five additional Class A office buildings
totaling approximately 960,000 square feet.

DECOVERLY BUSINESS PARK. This 17-acre site is located in Rockville, MD.
This site can support three buildings totaling approximately 300,000 square
feet. We have granted the National Association of Securities Dealers options to
ground lease portions of the site which could support two of the buildings
totaling approximately 200,000 square feet. These options expire in 2001 and
2003, respectively.

BROAD RUN BUSINESS PARK. This 162-acre site is located in Dulles, VA. This
site is the location of Building E, which is currently under construction (see
"--Properties Currently Under Development--BROAD RUN BUSINESS PARK,
BUILDING E"), and can support eight additional Class A office buildings totaling
approximately 937,000 square feet.

DULLES WORLD CENTER. This 82-acre site is located in Dulles, VA. This site
can support approximately 2,500,000 square feet of office development.

NEW DOMINION TECH PARK, BUILDING TWO. This site, located in Herndon, VA,
can support an additional office building. Until November 10, 2001, the United
States government, the current tenant of Building One on this site (see
"--Properties Currently Under Development--NEW DOMINION TECH PARK, BUILDING
ONE"), has an option to require us to develop a building consisting of 240,000
to 280,000 square feet. If the United States government exercises this option,
Building Two will be 100% pre-leased to it. The building lease will run for a
minimum of ten years and a maximum of twenty years.

599 VAN BUREN STREET. This site is located in Herndon, VA. This site can
support a single Class A office building of approximately 135,000 square feet.

RESTON GATEWAY. This site is located in Reston, VA. This site is part of
our existing Reston Corporate Center project, which currently includes two
buildings totaling approximately 261,000 square feet. This site can support two
additional Class A office buildings totaling approximately 540,000 square feet.

RESTON, PARCEL E. This site is located in Reston, VA. This site can support
an additional Class A office building of approximately 180,000 square feet.

VIRGINIA 95 BUSINESS PARK, BUILDING 12B. This site is located in
Springfield, VA. We have one remaining site at this park that can support an
office building. Until December 31, 2001, Autometric, a subsidiary of Boeing,
the current tenant of two other buildings at this park (see "--Development
Properties Delivered Since Our Initial Public Offering--7700 BOSTON BOULEVARD,
BUILDING TWELVE AND 7501 BOSTON BOULEVARD, BUILDING SEVEN"), has an option to
require

S-16
<PAGE>
us to develop a building consisting of at least 38,500 square feet. If
Autometric exercises this option, the building will be 100% pre-leased to it for
ten years or until the expiration of Autometric's current lease of 7700 Boston
Boulevard, Building Twelve, whichever is longer.

MIDTOWN MANHATTAN

TIMES SQUARE TOWER. This site is located at the intersection of 42nd Street
and Seventh Avenue in Times Square and will support an approximately
1.2 million-square foot, Class A office building. While we hold an option to
acquire this site through a joint venture with The Prudential Insurance Company
of America, Prudential has elected not to exercise their right to participate in
the development of Times Square Tower. Under the joint venture agreement, if we
do not acquire the site by December 15, 2000, Prudential will have another
opportunity at that time to elect to participate in the development, with an
interest of up to 33.34%. If Prudential makes that election, they will then be
obligated to contribute their full proportionate share of the capital required
to fund development. In any event, we will manage the project.

GREATER SAN FRANCISCO

611 AND 681 GATEWAY BOULEVARD. This site is located in South San Francisco,
CA. It is part of our Gateway Center office complex which we acquired in 1999.
This site can support two additional Class A office buildings totaling
approximately 370,000 square feet. Construction on 611 Gateway Boulevard is
expected to start in the fourth quarter of 2000 without a pre-leasing commitment
in response to significant demand for office space in the San Francisco
Peninsula submarket. Initial occupancy is expected in the second quarter of
2002.

PLAZA AT ALMADEN. This 3.6-acre site is located at the interchange of
Interstate 280 and Highway 87 in San Jose, CA. This site can support three
Class A office buildings totaling approximately 841,000 square feet.

OTHER

CARNEGIE CENTER. These sites are located in Princeton, NJ. As part of our
Carnegie Center acquisition in 1998, we acquired a 20-year option to purchase
sites that can support up to 2.1 million square feet of additional office
development adjacent to our existing buildings. To date, we have developed two
buildings (see "--Properties Currently Under Development--302 CARNEGIE CENTER"
and "--Development Properties Delivered Since Our Initial Public Offering--502
CARNEGIE CENTER") and have sites remaining under the option agreement that can
support an additional 1.9 million square feet of office development.

USE OF PROCEEDS

We expect to receive net proceeds from this offering of approximately
$582.6 million after payment of all anticipated issuance costs and assuming a
public offering price of $41.00 per share. We intend to use substantially all of
the net proceeds to fund a portion of our development pipeline. Additionally, we
may use some of the net proceeds to fund other land and property acquisitions
and for other working capital purposes. Immediately after this offering and
until such developments and/or acquisitions require our capital, we will use the
net proceeds to reduce borrowings under our unsecured credit facility and to
increase our cash and cash equivalents (see "Indebtedness").

S-17
<PAGE>
CAPITALIZATION

The following table sets forth our cash and cash equivalents and our
capitalization as of June 30, 2000, and as adjusted to give effect to the sale
by us of the 15,000,000 shares of common stock we are offering by this
prospectus supplement, after deducting the estimated underwriting discount and
offering expenses payable by us and assuming a public offering price of $41.00
per share and the application of the net proceeds as described under "Use of
Proceeds."

<TABLE>
<CAPTION>
HISTORICAL AS ADJUSTED
---------- -----------
(IN THOUSANDS)
<S> <C> <C>
Cash and cash equivalents................................... $ 6,319 $ 367,950
========== ==========

Capitalization:
Debt:
Mortgage notes............................................ $3,157,068 $3,157,068
Unsecured line of credit.................................. 238,000 --(1)
Minority interests.......................................... 797,451 876,167
Series A Convertible Redeemable Preferred Stock, liquidation
preference $50.00 per share, 2,000,000 shares issued and
outstanding............................................... 100,000 100,000
Stockholders' equity:
Excess stock, $.01 par value, 150,000,000 shares
authorized, none issued or outstanding.................. -- --
Common stock, $.01 par value, 250,000,000 shares
authorized, 68,026,797 historical and 83,026,797 as
adjusted shares issued and outstanding(2)(3)............ 680 830
Additional paid-in capital................................ 1,076,593 1,580,358
Dividends in excess of earnings........................... (11,670) (11,670)
Unearned compensation..................................... (954) (954)
Accumulated other comprehensive income.................... 9,528 9,528
---------- ----------
Total capitalization................................ $5,366,696 $5,711,327
========== ==========
</TABLE>

--------------------

(1) Reflects the net effect of the historical balance as adjusted for net
repayments of $17.0 million subsequent to June 30, 2000.

(2) Excludes 8,552,813 shares of our common stock subject to options granted
under our stock option plan and a total of 34,841,156 common units of Boston
Properties Limited Partnership, of which 10,375,937 common units are
issuable upon conversion of all outstanding Series One, Series Two and
Series Three preferred units as if they had been converted in full on
June 30, 2000 (although some of them were not then convertible under their
terms). Common units are redeemable by holders for cash or, at our election,
may be exchanged for shares of our common stock on a one-for-one basis.

(3) Excludes the issuance of 1,292,702 shares of our common stock subsequent to
June 30, 2000, of which 505,776 shares were issued in exchange for units of
Boston Properties Limited Partnership.

S-18
<PAGE>
BUSINESS AND GROWTH STRATEGIES

BUSINESS STRATEGY

Our primary business objective is to maximize return on investment so as to
provide our stockholders with the greatest possible total return. Our strategy
to achieve this objective is:

- To concentrate on a few carefully selected markets and to be one of, if
not the leading, owner and developer in each of those markets. We select
markets and submarkets where tenants have demonstrated a preference for
high quality office buildings and other facilities.

- To emphasize markets and submarkets within those markets where there are
barriers to the creation of new supply and where skill, financial strength
and diligence are required to successfully develop and manage high quality
office, research and development and/or industrial space.

- To take on complex, technically challenging projects, leveraging the
skills of our management team to successfully develop, acquire or
reposition properties which other organizations may not have the capacity
or resources to pursue.

- To concentrate on high quality, state-of-the-art real estate designed to
meet the demands of today's knowledge-based tenants and to manage those
facilities so as to become the landlord of choice for both existing and
prospective clients.

- To opportunistically acquire assets which increase our penetration in the
markets in which we have chosen to concentrate and which exhibit an
opportunity to improve returns through repositioning, changes in
management focus and re-leasing as existing leases terminate.

EXTERNAL GROWTH STRATEGY

We believe that we are well positioned to realize significant growth through
external asset development and acquisition. We believe that our development
experience and our organizational depth position us to continue to develop a
range of property types, from single-story suburban office properties to
high-rise urban developments, within budget and on schedule. Other factors that
contribute to our competitive position include:

- the significant increase in demand for new, high quality office space in
our markets;

- our control of sites (including sites owned or under contract) in our
markets that will support approximately 13.6 million square feet of new
office development;

- our reputation gained through the stability and strength of our existing
portfolio of properties;

- our relationships with leading national corporations and public
institutions seeking new facilities and development services;

- our relationships with nationally recognized financial institutions that
provide capital to the real estate industry; and

- the substantial amount of commercial real estate owned by domestic and
foreign institutions, private investors and corporations who are seeking
to sell these assets in our market areas.

S-19
<PAGE>
We have targeted three areas of development and acquisition as significant
opportunities to execute our external growth strategy:

- PURSUE DEVELOPMENT IN SELECTED SUBMARKETS. We believe that development of
well-positioned office buildings and research and development properties
is and will continue to be justified in many of our submarkets. We believe
in acquiring land in response to market conditions that allow for its
development in the relative near term. While we purposely concentrate in
markets with high barriers to entry, we have demonstrated over our 30 year
history an ability to make carefully timed land acquisitions in submarkets
where we can become one of the market leaders in establishing rent and
other business terms. We believe that there are opportunities in our
existing and other markets for a well capitalized developer to acquire
land with development potential at key locations.

In the past, we have been particularly successful at acquiring sites or
options to purchase sites that require governmental approval. Because of
our development expertise, knowledge of the governmental approval process
and reputation for quality development with local government regulatory
bodies, we generally have been able to secure the permits necessary to
allow development, and profit from the resulting increase in land value.
We seek out complex projects where we can add value through the efforts of
our experienced and skilled management team leading to significantly
enhanced returns on investment.

As an example of our ability to identify and capitalize on highly complex
development opportunities, in August 1999 we acquired 5 Times Square, our
first site in Times Square, New York, which will be a 1.1 million-square
foot, 37-story tower. Prior to construction commencement in January 2000,
the office space was 100% pre-leased to Ernst & Young for 20 years. This
project required a $420 million construction loan involving 17 banks from
around the world. The building is currently under construction, with rent
commencement and stabilization expected in the second quarter of 2002.

- ACQUIRE ASSETS AND PORTFOLIOS OF ASSETS FROM INSTITUTIONS OR
INDIVIDUALS. We believe that due to our size, management strength and
reputation, we are in an advantageous position to acquire portfolios of
assets or individual properties from institutions or individuals. Since
our initial public offering in June 1997, we have completed acquisitions
totaling $3.9 billion and representing more than 15.6 million square feet,
including:

- the $1.2 billion acquisition of the Embarcadero Center in San Francisco
in February 1999;

- the $546 million acquisition of the Prudential Center in Boston in
July 1998;

- the $258 million acquisition of the Mulligan/Griffin Portfolio in
Greater Washington, D.C., in February 1998; and

- the $323 million acquisition of 280 Park Avenue in midtown Manhattan in
September 1997.

We may acquire properties for cash, but we believe that we are
particularly well positioned to appeal to sellers wishing to convert on a
tax-deferred basis their ownership of property to the ownership of equity
in a diversified real estate operating company that offers liquidity
through access to the public equity markets. In addition, we may pursue
mergers with and acquisitions of compatible real estate firms. Our ability
to offer units in Boston Properties Limited Partnership to sellers who
would otherwise recognize a gain upon a sale

S-20
<PAGE>
of assets for cash or our common stock may facilitate this type of
transaction on a tax-efficient basis.

As an example of our ability to successfully attract sellers of desirable
assets, in 1999 we acquired the approximately four million-square foot
Embarcadero Center complex in San Francisco from the family of David
Rockefeller and The Prudential Insurance Company of America. As part of
this transaction, these two groups acquired more than $400 million of our
equity securities (based on liquidation value), including more than
$300 million units of Boston Properties Limited Partnership.

- ACQUIRE UNDERPERFORMING ASSETS AND PORTFOLIOS OF ASSETS. We continue to
actively pursue opportunities to acquire existing buildings that, while
currently generating income, are either underperforming the market due to
poor management or are currently leased at below market rents with
anticipated roll-over of space. These opportunities may include the
acquisition of entire portfolios of properties. We believe that because of
our in-depth market knowledge and development experience in each of our
markets, our national reputation with brokers, financial institutions and
others involved in the real estate market and our access to
competitively-priced capital, we are well positioned to identify and
acquire existing, underperforming properties for competitive prices and to
add significant additional value to such properties through our effective
marketing strategies and responsive property management program.

As an example of our ability to substantially improve property operating
performance, we acquired the Prudential Center in Boston in July 1998 for
total consideration of $546 million, including $27 million allocated to a
50% interest in the development rights, and invested in upgrading and
re-tenanting the retail portion of the property to increase its overall
appeal to office tenants. Since completing the improvement program, NOI at
the property for the six months ended June 30, 2000 increased by 17.6%
over the NOI for the same period in 1999.

INTERNAL GROWTH STRATEGY

We believe that significant opportunities exist to increase cash flow from
our existing properties because they are of high quality and in desirable
locations in markets that, in general, are experiencing rising rents, low
vacancy rates and increasing demand for office and industrial space. In
addition, our properties are in markets where, in general, supply is limited by
the lack of available sites and the difficulty of receiving the necessary
approvals for development on vacant land. Our strategy for maximizing the
benefits from these opportunities is two-fold: (1) to provide high quality
property management services using our own employees in order to encourage
tenants to renew, expand and relocate in our properties, and (2) to achieve
speed and transaction cost efficiency in replacing departing tenants through the
use of in-house services for marketing, lease negotiation and design and
construction of tenant improvements. In addition, we believe that our hotel
properties will add to our internal growth because of their desirable locations
in the downtown Boston and East Cambridge submarkets, which are experiencing
high occupancy rates and continued growth in room rates. The effective
management of Marriott International has resulted in high occupancy, guest
satisfaction and growth in room rates while limiting increases in operating
costs. We expect to continue our internal growth as a result of our ability to:

- CULTIVATE EXISTING SUBMARKETS. In choosing locations for our properties,
we have paid particular attention to transportation and commuting
patterns, physical environment, adjacency to established business centers,
proximity to sources of business growth and other local factors.

S-21
<PAGE>
Many of these submarkets are experiencing increasing rents and, as a
result, current market rates often exceed the rents currently being paid
by our tenants. For the six months ended June 30, 2000, net rental
increases on expiring leases for Class A office buildings were, on
average, approximately 44.6% greater than the net rents previously in
effect. Based on leases in place at June 30, 2000, leases with respect to
13.6% of our office properties and 13.7% of our industrial properties will
expire after June 30, 2000, in calendar years 2000 and 2001. Although we
expect that leases expiring over the next three years in these submarkets
will be renewed, or space re-let, at higher rents, the actual rental rates
at which available space will be renewed or re-let will depend on
prevailing market factors at the time.

- DIRECTLY MANAGE PROPERTIES TO MAXIMIZE THE POTENTIAL FOR TENANT
RETENTION. We provide property management services ourselves, rather than
contracting for this service, to maintain awareness of and responsiveness
to tenant needs. We and our properties also benefit from cost efficiencies
produced by an experienced work force attentive to preventive maintenance
and energy management and from our continuing programs to assure that our
property management personnel at all levels remain aware of their
important role in tenant relations. Our philosophy has not been to invest
significant capital in technology, but to form alliances to provide better
tenant service and realize potential incremental revenues with little
additional capital investment. For example, we established early
relationships with Allied Riser, Captivate Network, Cypress
Communications, Teligent and Winstar to provide the most current
technology requested by office tenants.

- REPLACE TENANTS QUICKLY AT BEST AVAILABLE MARKET TERMS AND LOWEST POSSIBLE
TRANSACTION COSTS. We believe that we have a competitive advantage in
attracting new tenants and achieving rental rates at the higher end of our
markets as a result of our well located, well designed and well maintained
properties, our reputation for high quality building services and
responsiveness to tenants, and our ability to offer expansion and
relocation alternatives within our markets.

S-22
<PAGE>
BUSINESS AND PROPERTIES

GENERAL

As of October 9, 2000, we owned 145 properties, consisting of 133 office
properties, nine industrial properties and three hotel properties, including
18 properties we are currently developing. The total square footage of the
properties is approximately 37.2 million square feet, including (1) 101 Class A
office buildings totaling approximately 27.5 million net rentable square feet,
with approximately 5.8 million square feet of structured parking for 16,726
vehicles, (2) 32 buildings supporting both office and technical uses totaling
approximately 1.8 million net rentable square feet, (3) nine industrial
properties totaling approximately 925,000 net rentable square feet and
(4) three hotel properties with 1,054 rooms, totaling approximately 930,000
square feet.

SUMMARY PROPERTY DATA

Set forth below is a summary of information regarding our properties,
including properties under development:

<TABLE>
<CAPTION>
NUMBER OF NET RENTABLE
PROPERTY NAME SUB MARKET BUILDINGS SQUARE FEET
------------- --------------------------- --------- ------------
<S> <C> <C> <C> <C>
OFFICE PROPERTIES:
CLASS A OFFICE BUILDINGS:
265 Franklin Street (35% ownership)......... CBD Boston, MA 1 326,714
The Prudential Center....................... CBD Boston, MA 3 2,149,958
One Cambridge Center........................ East Cambridge, MA 1 215,385
Eight Cambridge Center...................... East Cambridge, MA 1 177,226
Ten Cambridge Center........................ East Cambridge, MA 1 152,664
Three Cambridge Center...................... East Cambridge, MA 1 107,484
Eleven Cambridge Center..................... East Cambridge, MA 1 79,616
University Place............................ Mid-Cambridge, MA 1 195,282
Reservoir Place............................. Route 128 Mass Turnpike, MA 1 529,991
200 West Street............................. Route 128 Mass Turnpike, MA 1 248,341
Waltham Office Center....................... Route 128 Mass Turnpike, MA 3 131,479
170 Tracer Lane............................. Route 128 Mass Turnpike, MA 1 73,258
195 West Street............................. Route 128 Mass Turnpike, MA 1 63,500
204 Second Avenue........................... Route 128 Mass Turnpike MA 1 40,974
Lexington Office Park....................... Route 128 Northwest, MA 2 167,328
191 Spring Street........................... Route 128 Northwest, MA 1 162,700
10 & 20 Burlington Mall Road................ Route 128 Northwest, MA 2 156,416
91 Hartwell Avenue.......................... Route 128 Northwest, MA 1 122,135
201 Spring Street........................... Route 128 Northwest, MA 1 102,500
Bedford Business Park....................... Route 128 Northwest, MA 1 90,000
33 Hayden Avenue............................ Route 128 Northwest, MA 1 79,564
32 Hartwell Avenue.......................... Route 128 Northwest, MA 1 69,154
100 Hayden Avenue........................... Route 128 Northwest, MA 1 55,924
181 Spring Street........................... Route 128 Northwest, MA 1 53,595
92 Hayden Avenue............................ Route 128 Northwest, MA 1 30,980
Newport Office Park......................... Route 128 South, MA 1 168,829
Sumner Square............................... CBD Washington, DC 1 209,507
Metropolitan Square (51% ownership)......... East End Washington, DC 1 578,598
1301 New York Avenue........................ East End Washington, DC 1 168,371
Two Independence Square..................... Southwest Washington, DC 1 579,665
Capital Gallery............................. Southwest Washington, DC 1 396,776
One Independence Square..................... Southwest Washington, DC 1 337,794
500 E. Street, N.W.......................... Southwest Washington, DC 1 244,268
2300 N. Street, N.W......................... West End Washington, DC 1 276,930
Democracy Center............................ Montgomery County, MD 3 680,475
Montvale Center............................. Montgomery County, MD 1 120,815
Decoverly Two............................... Montgomery County, MD 1 77,747
Decoverly Three............................. Montgomery County, MD 1 77,040
One Freedom Square (25% ownership).......... Fairfax County, VA 1 414,296
One and Two Reston Overlook................. Fairfax County, VA 2 444,279
NIMA Building............................... Fairfax County, VA 1 263,870
</TABLE>

S-23
<PAGE>

<TABLE>
<CAPTION>
NUMBER OF NET RENTABLE
PROPERTY NAME SUB MARKET BUILDINGS SQUARE FEET
------------- --------------------------- --------- ------------
<S> <C> <C> <C> <C>
Reston Corporate Center..................... Fairfax County, VA 2 261,046
Lockheed Martin Building.................... Fairfax County, VA 1 255,244
The Arboretum............................... Fairfax County, VA 1 95,584
Orbital Sciences, Buildings One and Three... Loudoun County, VA 2 174,832
875 Third Avenue............................ East Side, NY 1 687,876
280 Park Avenue............................. Park Avenue, NY 1 1,156,161
599 Lexington Avenue........................ Park Avenue, NY 1 1,000,069
Embarcadero Center One...................... CBD San Francisco, CA 1 820,817
Embarcadero Center Two...................... CBD San Francisco, CA 1 779,173
Embarcadero Center Three.................... CBD San Francisco, CA 1 774,568
Embarcadero Center Four..................... CBD San Francisco, CA 1 935,519
West Tower.................................. CBD San Francisco, CA 1 475,120
Federal Reserve............................. CBD San Francisco, CA 1 149,592
601 and 651 Gateway Boulevard............... South San Francisco, CA 2 506,395
100 East Pratt Street....................... Baltimore, MD 1 634,236
Candler Building............................ Baltimore, MD 1 537,363
One Tower Center............................ East Brunswick, NJ 1 417,129
510 Carnegie Center......................... Princeton, NJ 1 234,160
206 Carnegie Center......................... Princeton, NJ 1 161,763
210 Carnegie Center......................... Princeton, NJ 1 159,498
214 Carnegie Center......................... Princeton, NJ 1 152,214
506 Carnegie Center......................... Princeton, NJ 1 150,888
212 Carnegie Center......................... Princeton, NJ 1 150,069
508 Carnegie Center......................... Princeton, NJ 1 131,085
202 Carnegie Center......................... Princeton, NJ 1 130,554
504 Carnegie Center......................... Princeton, NJ 1 126,190
101 Carnegie Center......................... Princeton, NJ 1 124,049
502 Carnegie Center......................... Princeton, NJ 1 116,374
104 Carnegie Center......................... Princeton, NJ 1 102,758
105 Carnegie Center......................... Princeton, NJ 1 69,648
211 Carnegie Center......................... Princeton, NJ 1 47,025
201 Carnegie Center......................... Princeton, NJ - 6,500
Riverfront Plaza............................ Richmond, VA 1 892,581
--- ----------
SUBTOTAL FOR CLASS A OFFICE BUILDINGS........... 85 23,037,508
--- ----------

OFFICE/TECHNICAL PROPERTIES:
Fourteen Cambridge Center................... East Cambridge, MA 1 67,362
Bedford Business Park....................... Route 128 Northwest, MA 2 383,704
164 Lexington Road.......................... Route 128 Northwest, MA 1 64,140
17 Hartwell Avenue.......................... Route 128 Northwest, MA 1 30,000
Fullerton Square............................ Fairfax County, VA 2 178,294
7601 Boston Boulevard....................... Fairfax County, VA 1 103,750
7435 Boston Boulevard....................... Fairfax County, VA 1 103,557
8000 Grainger Court......................... Fairfax County, VA 1 90,465
7700 Boston Boulevard....................... Fairfax County, VA 1 82,224
7500 Boston Boulevard....................... Fairfax County, VA 1 79,971
7501 Boston Boulevard....................... Fairfax County, VA 1 75,756
7600 Boston Boulevard....................... Fairfax County, VA 1 69,832
7450 Boston Boulevard....................... Fairfax County, VA 1 60,827
Sugarland Business Park, Building Two....... Fairfax County, VA 1 59,215
7374 Boston Boulevard....................... Fairfax County, VA 1 57,321
Sugarland Business Park, Building One....... Fairfax County, VA 1 52,797
8000 Corporate Court........................ Fairfax County, VA 1 52,539
7451 Boston Boulevard....................... Fairfax County, VA 1 47,001
7375 Boston Boulevard....................... Fairfax County, VA 1 28,780
Hilltop Office Center....................... South San Francisco, CA 9 144,366
--- ----------
SUBTOTAL FOR OFFICE/TECHNICAL PROPERTIES........ 30 1,831,901
--- ----------
</TABLE>

S-24
<PAGE>

<TABLE>
<CAPTION>
NUMBER OF NET RENTABLE
PROPERTY NAME SUB MARKET BUILDINGS SQUARE FEET
------------- --------------------------- --------- ------------
<S> <C> <C> <C> <C>
INDUSTRIAL PROPERTIES:
40-46 Harvard Street........................ Route 128 Southwest, MA 1 169,273
25-33 Dartmouth Road........................ Route 128 Southwest, MA 1 78,045
6201 Columbia Park Road..................... Prince Georges County, MD 1 100,337
2000 South Club Drive....................... Prince Georges County, MD 1 83,608
1950 Stanford Court(1)...................... Prince Georges County, MD 1 53,250
560 Forbes Boulevard........................ South San Francisco, CA 1 40,000
430 Rozzi Place............................. South San Francisco, CA 1 20,000
2391 West Winton Avenue..................... Hayward, CA 1 220,213
38 Cabot Boulevard.......................... Bucks County, PA 1 161,000
--- ----------
SUBTOTAL FOR INDUSTRIAL PROPERTIES.............. 9 925,726
--- ----------
TOTAL FOR IN-SERVICE OFFICE AND INDUSTRIAL
PROPERTIES.................................... 124 25,795,135
--- ----------

DEVELOPMENT PROPERTIES:
CLASS A OFFICE BUILDINGS:
111 Huntington Avenue....................... CBD Boston, MA 1 890,000
Waltham Weston Corporate Center............. Route 128 Mass Turnpike, MA 1 295,000
140 Kendrick Street (25% ownership)......... Route 128 Mass Turnpike, MA 3 381,000
Quorum Office Park.......................... Route 495/93 North, MA 2 259,918
Andover Office Park, Building One........... Route 495/93 North, MA 1 120,000
Market Square North (50% ownership)......... East End Washington, DC 1 409,843
2600 Tower Oaks Boulevard................... Montgomery County, MD 1 178,216
New Dominion Tech Park, Building One........ Fairfax County, VA 1 235,201
One and Two Discovery Square................ Fairfax County, VA 2 362,868
Orbital Sciences, Building Two.............. Loudoun County, VA 1 160,502
5 Times Square.............................. Times Square, NY 1 1,099,154
302 Carnegie Center......................... Princeton, NJ 1 64,565
--- ----------
SUBTOTAL FOR CLASS A OFFICE DEVELOPMENT
PROPERTIES.................................... 16 4,456,267
--- ----------
OFFICE/TECHNICAL PROPERTIES:
ITT Educational Services Building........... Fairfax County, VA 1 32,000
Broad Run Business Park, Building E......... Loudoun County, VA 1 124,650
--- ----------
SUBTOTAL FOR OFFICE/TECHNICAL DEVELOPMENT
PROPERTIES.................................... 2 156,650
--- ----------
TOTAL FOR DEVELOPMENT PROPERTIES................ 18 4,612,917
--- ----------
</TABLE>

<TABLE>
<CAPTION>
NUMBER OF
ROOMS
----------
<S> <C> <C> <C> <C>
HOTEL PROPERTIES
Long Wharf Marriott......................... CBD Boston, MA 1 420,000 402
Cambridge Center Marriott................... East Cambridge, MA 1 320,000 431
Residence Inn by East Cambridge, MA
Marriott-Registered Trademark-............ 1 187,474 221
--- ---------- ----------
TOTAL FOR HOTEL PROPERTIES...................... 3 927,474 1,054
--- ---------- ==========
</TABLE>

<TABLE>
<CAPTION>
NUMBER OF
SPACES
----------
<S> <C> <C> <C> <C>
TOTAL STRUCTURED PARKING........................ - 5,851,221 16,726
--- ---------- ==========
TOTAL FOR ALL PROPERTIES........................ 145 37,186,747
=== ==========
</TABLE>

-------------------------

(1) Currently under contract to be sold.

S-25
<PAGE>
LOCATION OF PROPERTIES

The following chart shows the geographic location of our in-service office
and industrial properties and lists net rentable square feet (excluding storage
space) and annualized rent as of June 30, 2000:
<TABLE>
<CAPTION>
NET RENTABLE SQUARE FEET OF
OFFICE AND INDUSTRIAL PROPERTIES
------------------------------------------------------------
NUMBER CLASS A OFFICE/ PERCENT
OF OFFICE TECHNICAL INDUSTRIAL OF
MARKET/SUBMARKET PROPERTIES BUILDINGS PROPERTIES PROPERTIES TOTAL TOTAL
---------------- ---------- ---------- ---------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
GREATER BOSTON
CBD Boston, MA (2).............. 3 2,149,958 -- -- 2,149,958 8.4%
East Cambridge, MA.............. 6 732,375 67,362 -- 799,737 3.1%
Mid-Cambridge, MA............... 1 195,282 -- -- 195,282 0.8%
Route 128 Mass Turnpike, MA
Waltham, MA................... 8 1,087,543 -- -- 1,087,543 4.2%
Route 128 Northwest, MA
Bedford, MA................... 3 90,000 383,704 -- 473,704 1.8%
Billerica, MA................. 1 -- 64,140 -- 64,140 0.2%
Burlington, MA................ 2 156,416 -- -- 156,416 0.6%
Lexington, MA................. 11 843,880 30,000 -- 873,880 3.4%
Route 128 South, MA
Quincy, MA.................... 1 168,829 -- -- 168,829 0.7%
Route 128 Southwest, MA
Westwood, MA.................. 2 -- -- 247,318 247,318 1.0%
---- ---------- --------- ------- ---------- -----
Subtotal.......................... 38 5,424,283 545,206 247,318 6,216,807 24.2%
GREATER WASHINGTON, D.C.
CBD Washington, DC.............. 1 209,507 -- -- 209,507 0.8%
East End Washington, DC......... 2 746,969 -- -- 746,969 2.9%
SW Washington, DC............... 4 1,558,503 -- -- 1,558,503 6.1%
West End Washington, DC......... 1 276,930 -- -- 276,930 1.1%
Montgomery County, MD
Bethesda, MD.................. 3 680,475 -- -- 680,475 2.6%
Gaithersburg, MD(3)........... 3 120,815 240,596 -- 361,411 1.4%
Rockville, MD................. 2 154,787 -- -- 154,787 0.6%
Prince Georges County, MD
Landover, MD.................. 3 -- -- 237,195 237,195 0.9%
Fairfax County, VA
Herndon, VA................... 2 -- 112,012 -- 112,012 0.4%
Reston, VA.................... 8 1,734,319 -- -- 1,734,319 6.7%
Springfield, VA............... 14 -- 1,030,317 -- 1,030,317 4.0%
Loudoun County, VA
Dulles, VA.................... 2 174,832 -- -- 174,832 0.7%
---- ---------- --------- ------- ---------- -----
Subtotal.......................... 45 5,657,137 1,382,925 237,195 7,277,257 28.2%
MIDTOWN MANHATTAN
East Side, NY................... 1 687,876 -- -- 687,876 2.7%
Park Avenue, NY................. 2 2,156,230 -- -- 2,156,230 8.4%
---- ---------- --------- ------- ---------- -----
Subtotal.......................... 3 2,844,106 -- -- 2,844,106 11.1%
GREATER SAN FRANCISCO
CBD San Francisco, CA........... 6 3,934,789 -- -- 3,934,789 15.3%
Hayward, CA..................... 1 -- -- 220,213 220,213 0.9%
South San Francisco, CA......... 13 506,395 144,366 60,000 710,761 2.8%
---- ---------- --------- ------- ---------- -----
Subtotal.......................... 20 4,441,184 144,366 280,213 4,865,763 19.0%
OTHER
Baltimore, MD................... 2 1,171,599 -- -- 1,171,599 4.6%
East Brunswick, NJ.............. 1 417,129 -- -- 417,129 1.6%
Princeton, NJ................... 14 1,862,775 -- -- 1,862,775 7.2%
Bucks County, PA................ 1 -- -- 161,000 161,000 0.6%
Richmond, VA.................... 1 892,581 -- -- 892,581 3.5%
---- ---------- --------- ------- ---------- -----
Subtotal.......................... 19 4,344,084 -- 161,000 4,505,084 17.5%
---- ---------- --------- ------- ---------- -----
TOTAL............................. 125 22,710,794 2,072,497 925,726 25,709,017 100.0%
==== ========== ========= ======= ========== =====
PERCENT OF TOTAL.................. 88.3% 8.1% 3.6% 100.0%
NUMBER OF OFFICE AND INDUSTRIAL
PROPERTIES...................... 84 32 9 125

<CAPTION>
ANNUALIZED RENT OF OFFICE AND
INDUSTRIAL PROPERTIES (1)
-------------------------------------------------------------------
CLASS A OFFICE/ PERCENT
OFFICE TECHNICAL INDUSTRIAL OF
MARKET/SUBMARKET BUILDINGS PROPERTIES PROPERTIES TOTAL TOTAL
---------------- ------------ ----------- ------------ ------------ --------
<S> <C> <C> <C> <C> <C>
GREATER BOSTON
CBD Boston, MA (2).............. $ 68,895,812 -- -- $ 68,895,812 8.9%
East Cambridge, MA.............. 22,798,551 $ 1,295,391 -- 24,093,942 3.1%
Mid-Cambridge, MA............... 6,156,011 -- -- 6,156,011 0.8%
Route 128 Mass Turnpike, MA
Waltham, MA................... 31,502,211 -- -- 31,502,211 4.0%
Route 128 Northwest, MA
Bedford, MA................... 1,890,098 3,429,668 -- 5,319,766 0.7%
Billerica, MA................. -- 584,697 -- 584,697 0.1%
Burlington, MA................ 3,682,128 -- -- 3,682,128 0.5%
Lexington, MA................. 22,288,662 292,500 -- 22,581,162 2.9%
Route 128 South, MA
Quincy, MA.................... 3,929,070 -- -- 3,929,070 0.5%
Route 128 Southwest, MA
Westwood, MA.................. -- -- $ 1,836,318 1,836,318 0.2%
------------ ----------- ------------ ------------ -----
Subtotal.......................... 161,142,543 5,602,256 1,836,318 168,581,117 21.7%
GREATER WASHINGTON, D.C.
CBD Washington, DC.............. 6,237,057 -- -- 6,237,057 0.8%
East End Washington, DC......... 26,359,961 -- -- 26,359,961 3.4%
SW Washington, DC............... 55,821,708 -- -- 55,821,708 7.2%
West End Washington, DC......... 13,364,254 -- -- 13,364,254 1.7%
Montgomery County, MD
Bethesda, MD.................. 18,373,276 -- -- 18,373,276 2.4%
Gaithersburg, MD(3)........... 2,548,255 3,615,742 -- 6,163,997 0.8%
Rockville, MD................. 3,383,400 -- -- 3,383,400 0.4%
Prince Georges County, MD
Landover, MD.................. -- -- 1,252,970 1,252,970 0.2%
Fairfax County, VA
Herndon, VA................... -- 2,345,108 -- 2,345,108 0.3%
Reston, VA.................... 54,591,867 -- -- 54,591,867 7.0%
Springfield, VA............... -- 13,217,690 -- 13,217,690 1.7%
Loudoun County, VA
Dulles, VA.................... 3,983,023 -- -- 3,983,023 0.5%
------------ ----------- ------------ ------------ -----
Subtotal.......................... 184,662,801 19,178,540 1,252,970 205,094,311 26.4%
MIDTOWN MANHATTAN
East Side, NY................... 32,700,302 -- -- 32,700,302 4.2%
Park Avenue, NY................. 106,196,656 -- -- 106,196,656 13.6%
------------ ----------- ------------ ------------ -----
Subtotal.......................... 138,896,958 -- -- 138,896,958 17.8%
GREATER SAN FRANCISCO
CBD San Francisco, CA........... 137,040,026 -- -- 137,040,026 17.6%
Hayward, CA..................... -- -- 1,008,360 1,008,360 0.1%
South San Francisco, CA......... 16,460,370 1,769,568 611,064 18,841,002 2.4%
------------ ----------- ------------ ------------ -----
Subtotal.......................... 153,500,396 1,769,568 1,619,424 156,889,388 20.1%
OTHER
Baltimore, MD................... 26,758,751 -- -- 26,758,751 3.4%
East Brunswick, NJ.............. 13,140,734 -- -- 13,140,734 1.7%
Princeton, NJ................... 48,112,137 -- -- 48,112,137 6.2%
Bucks County, PA................ -- -- 714,844 714,844 0.1%
Richmond, VA.................... 20,034,437 -- -- 20,034,437 2.6%
------------ ----------- ------------ ------------ -----
Subtotal.......................... 108,046,059 -- 714,844 108,760,903 14.0%
------------ ----------- ------------ ------------ -----
TOTAL............................. $746,248,757 $26,550,364 $ 5,423,556 $778,222,677 100.0%
============ =========== ============ ============ =====
PERCENT OF TOTAL.................. 95.9% 3.4% 0.7% 100.0%
NUMBER OF OFFICE AND INDUSTRIAL
PROPERTIES...................... 84 32 9 125
</TABLE>

-----------------------------
(1) Includes rent received with respect to retail space.
(2) Excludes 265 Franklin Street, which we acquired on September 13, 2000.
(3) Includes 910 and 930 Clopper Road, which we sold on September 29, 2000.

S-26
<PAGE>
TENANTS

DIVERSIFICATION

Our properties have over 1,600 tenants from a variety of businesses,
including financial services, investment banking, publishing, computer
technology, health care services, accounting and law, as well as government
offices. The following table sets forth information regarding the leases with
respect to the 20 largest tenants at our properties, based on the annualized
rental income as of June 30, 2000:

<TABLE>
<CAPTION>
BY RENTAL INCOME
-------------------------------------------------------------------------------------
PERCENTAGE OF ANNUALIZED
RANK TENANT (1) RENTAL INCOME
---- ------------------------------- ------------------------
<C> <S> <C>
1 U.S. Government 8.0%
2 Lockheed Martin 3.3%
3 Shearman & Sterling 2.6%
4 Gillette 2.1%
5 Debevoise & Plimpton 2.1%
6 Shaw Pittman 1.4%
7 Orrick, Herrington & Sutcliffe 1.3%
8 Washington Group International 1.3%
9 Donaldson, Lufkin & Jenrette 1.3%
10 Marsh & McLennan 1.3%
11 AT&T 1.3%
12 Deutsche Bank 1.2%
13 National Football League 1.0%
14 T. Rowe Price Associates 1.0%
15 Jones, Day, Reavis & Pogue 1.0%
16 Covance 1.0%
17 Andersen Consulting 1.0%
18 Hunton & Williams 1.0%
19 Parexel International 0.9%
20 TRW 0.9%
----
Total 35.0%
====
</TABLE>

--------------------

(1) Includes tenants or guarantors for their obligations.

S-27
<PAGE>
LEASE EXPIRATIONS FOR OFFICE AND INDUSTRIAL PROPERTIES

For the six months ended June 30, 2000, net rental increases on expiring
leases for Class A office buildings were, on average, approximately 44.6%
greater than the net rents previously in effect, and expiring leases for all of
our properties were, on average, approximately 39.9% greater than the net rents
previously in effect. We expect our strength in recapturing space quickly at
higher rents will result in continued NOI growth. The following table sets forth
a schedule of lease expirations for leases in place as of June 30, 2000, for the
six months ending December 31, 2000 and for each of the eight years beginning
January 1, 2001, for our office and industrial properties, on an aggregate basis
by property type and submarket, assuming that none of our tenants exercises
renewal options and excluding an aggregate of 392,295 square feet of unleased
space:
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDING DECEMBER 31,
OFFICE PROPERTIES ENDING ---------------------------------------
(MARKET/SUBMARKET) DECEMBER 31, 2000 2001 2002 2003
------------------ ----------------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
CLASS A OFFICE BUILDINGS
GREATER BOSTON
CBD BOSTON, MA (1)
Square footage of expiring leases....................... 8,000 147,028 38,861 249,751
Annualized Rent (2)..................................... $ 189,862 $ 3,215,190 $ 1,297,479 $ 7,039,518
Annualized Rent w/ future step-ups (3).................. $ 189,862 $ 5,155,888 $ 1,297,479 $ 7,534,994
Annualized Rent per leased sq. ft....................... $ 23.73 $ 21.87 $ 33.39 $ 28.19
Annualized Rent per leased sq. ft. w/ future step-ups... $ 23.73 $ 35.07 $ 33.39 $ 30.17
Company Quoted Rental Rate per sq. ft. (4).............. $ 59.22

EAST CAMBRIDGE, MA
Square footage of expiring leases....................... 3,965 8,137 28,836 66,635
Annualized Rent (2)..................................... $ 132,866 $ 285,585 $ 1,005,454 $ 2,279,282
Annualized Rent w/ future step-ups (3).................. $ 132,866 $ 285,585 $ 1,005,454 $ 2,967,647
Annualized Rent per leased sq. ft....................... $ 33.51 $ 35.10 $ 34.87 $ 34.21
Annualized Rent per leased sq. ft. w/ future step-ups... $ 33.51 $ 35.10 $ 34.87 $ 44.54
Company Quoted Rental Rate per sq. ft. (4).............. $ 59.41

MID-CAMBRIDGE, MA
Square footage of expiring leases....................... 2,559 5,901 -- --
Annualized Rent (2)..................................... $ 87,300 $ 197,650 -- --
Annualized Rent w/ future step-ups (3).................. $ 87,300 $ 197,650 -- --
Annualized Rent per leased sq. ft....................... $ 34.11 $ 33.49 -- --
Annualized Rent per leased sq. ft. w/ future step-ups... $ 34.11 $ 33.49 -- --
Company Quoted Rental Rate per sq. ft. (4)(5)........... $ 30.00

ROUTE 128 MASS TURNPIKE, MA
Square footage of expiring leases....................... 43,970 248,299 139,166 49,902
Annualized Rent (2)..................................... $ 1,187,297 $ 7,004,393 $ 4,210,956 $ 1,573,590
Annualized Rent w/ future step-ups (3).................. $ 1,187,297 $ 7,016,917 $ 4,391,708 $ 1,702,425
Annualized Rent per leased sq. ft....................... $ 27.00 $ 28.21 $ 30.26 $ 31.53
Annualized Rent per leased sq. ft. w/ future step-ups... $ 27.00 $ 28.26 $ 31.56 $ 34.12
Company Quoted Rental Rate per sq. ft. (4).............. $ 43.91

ROUTE 128 NORTHWEST, MA
Square footage of expiring leases....................... 11,885 222,911 119,169 44,449
Annualized Rent (2)..................................... $ 294,121 $ 4,986,074 $ 3,000,363 $ 1,285,761
Annualized Rent w/ future step-ups (3).................. $ 294,121 $ 5,057,084 $ 3,005,169 $ 1,367,439
Annualized Rent per leased sq. ft....................... $ 24.75 $ 22.37 $ 25.18 $ 28.93
Annualized Rent per leased sq. ft. w/ future step-ups... $ 24.75 $ 22.69 $ 25.22 $ 30.76
Company Quoted Rental Rate per sq. ft. (4).............. $ 41.85

ROUTE 128 SOUTH, MA
Square footage of expiring leases....................... -- 70,878 93,451 --
Annualized Rent (2)..................................... -- $ 1,780,871 $ 2,130,199 --
Annualized Rent w/ future step-ups (3).................. -- $ 1,780,871 $ 2,130,199 --
Annualized Rent per leased sq. ft....................... -- $ 25.13 $ 22.79 --
Annualized Rent per leased sq. ft. w/ future step-ups... -- $ 25.13 $ 22.79 --
Company Quoted Rental Rate per sq. ft. (4).............. $ 29.00

<CAPTION>
YEAR ENDING DECEMBER 31,
OFFICE PROPERTIES ------------------------------------------------------ 2008 &
(MARKET/SUBMARKET) 2004 2005 2006 2007 BEYOND
------------------ ----------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
CLASS A OFFICE BUILDINGS
GREATER BOSTON
CBD BOSTON, MA (1)
Square footage of expiring leases....................... 257,879 278,823 42,091 15,566 542,135
Annualized Rent (2)..................................... $ 9,584,871 $ 8,522,055 $ 891,336 $ 494,189 $ 17,548,426
Annualized Rent w/ future step-ups (3).................. $10,544,978 $ 8,589,309 $ 1,799,501 $ 556,453 $ 21,371,370
Annualized Rent per leased sq. ft....................... $ 37.17 $ 30.56 $ 21.18 $ 31.75 $ 32.37
Annualized Rent per leased sq. ft. w/ future step-ups... $ 40.89 $ 30.81 $ 42.75 $ 35.75 $ 39.42
Company Quoted Rental Rate per sq. ft. (4)..............
EAST CAMBRIDGE, MA
Square footage of expiring leases....................... 23,180 99,935 82,424 41,365 376,414
Annualized Rent (2)..................................... $ 949,137 $ 4,109,130 $ 2,918,386 $ 1,675,288 $ 9,443,423
Annualized Rent w/ future step-ups (3).................. $ 949,137 $ 4,323,832 $ 3,106,579 $ 1,840,737 $ 11,297,307
Annualized Rent per leased sq. ft....................... $ 40.95 $ 41.12 $ 35.41 $ 40.50 $ 25.09
Annualized Rent per leased sq. ft. w/ future step-ups... $ 40.95 $ 43.27 $ 37.69 $ 44.50 $ 30.01
Company Quoted Rental Rate per sq. ft. (4)..............
MID-CAMBRIDGE, MA
Square footage of expiring leases....................... 75,667 42,704 16,899 -- 50,494
Annualized Rent (2)..................................... $ 2,529,821 $ 1,322,490 $ 505,125 -- $ 1,458,981
Annualized Rent w/ future step-ups (3).................. $ 2,750,925 $ 1,429,247 $ 589,789 -- $ 2,624,453
Annualized Rent per leased sq. ft....................... $ 33.43 $ 30.97 $ 29.89 -- $ 28.89
Annualized Rent per leased sq. ft. w/ future step-ups... $ 36.36 $ 33.47 $ 34.90 -- $ 51.98
Company Quoted Rental Rate per sq. ft. (4)(5)...........
ROUTE 128 MASS TURNPIKE, MA
Square footage of expiring leases....................... 167,445 22,494 78,889 73,258 207,094
Annualized Rent (2)..................................... $ 5,057,643 $ 736,180 $ 2,384,949 $ 2,930,484 $ 6,313,806
Annualized Rent w/ future step-ups (3).................. $ 5,456,683 $ 741,937 $ 2,632,360 $ 2,930,484 $ 7,133,066
Annualized Rent per leased sq. ft....................... $ 30.20 $ 32.73 $ 30.23 $ 40.00 $ 30.49
Annualized Rent per leased sq. ft. w/ future step-ups... $ 32.59 $ 32.98 $ 33.37 $ 40.00 $ 34.44
Company Quoted Rental Rate per sq. ft. (4)..............
ROUTE 128 NORTHWEST, MA
Square footage of expiring leases....................... 145,374 230,803 162,700 102,500 22,095
Annualized Rent (2)..................................... $ 3,806,001 $ 6,039,581 $ 4,462,274 $ 2,929,793 $ 714,773
Annualized Rent w/ future step-ups (3).................. $ 4,096,255 $ 6,300,283 $ 4,755,134 $ 3,288,543 $ 814,201
Annualized Rent per leased sq. ft....................... $ 26.18 $ 26.17 $ 27.43 $ 28.58 $ 32.35
Annualized Rent per leased sq. ft. w/ future step-ups... $ 28.18 $ 27.30 $ 29.23 $ 32.08 $ 36.85
Company Quoted Rental Rate per sq. ft. (4)..............
ROUTE 128 SOUTH, MA
Square footage of expiring leases....................... -- -- -- -- --
Annualized Rent (2)..................................... -- -- -- -- --
Annualized Rent w/ future step-ups (3).................. -- -- -- -- --
Annualized Rent per leased sq. ft....................... -- -- -- -- --
Annualized Rent per leased sq. ft. w/ future step-ups... -- -- -- -- --
Company Quoted Rental Rate per sq. ft. (4)..............

OFFICE PROPERTIES
(MARKET/SUBMARKET)
------------------
<S> <C>
CLASS A OFFICE BUILDINGS
GREATER BOSTON
CBD BOSTON, MA (1)
Square footage of expiring leases.......................
Annualized Rent (2).....................................
Annualized Rent w/ future step-ups (3)..................
Annualized Rent per leased sq. ft.......................
Annualized Rent per leased sq. ft. w/ future step-ups...
Company Quoted Rental Rate per sq. ft. (4)..............
EAST CAMBRIDGE, MA
Square footage of expiring leases.......................
Annualized Rent (2).....................................
Annualized Rent w/ future step-ups (3)..................
Annualized Rent per leased sq. ft.......................
Annualized Rent per leased sq. ft. w/ future step-ups...
Company Quoted Rental Rate per sq. ft. (4)..............
MID-CAMBRIDGE, MA
Square footage of expiring leases.......................
Annualized Rent (2).....................................
Annualized Rent w/ future step-ups (3)..................
Annualized Rent per leased sq. ft.......................
Annualized Rent per leased sq. ft. w/ future step-ups...
Company Quoted Rental Rate per sq. ft. (4)(5)...........
ROUTE 128 MASS TURNPIKE, MA
Square footage of expiring leases.......................
Annualized Rent (2).....................................
Annualized Rent w/ future step-ups (3)..................
Annualized Rent per leased sq. ft.......................
Annualized Rent per leased sq. ft. w/ future step-ups...
Company Quoted Rental Rate per sq. ft. (4)..............
ROUTE 128 NORTHWEST, MA
Square footage of expiring leases.......................
Annualized Rent (2).....................................
Annualized Rent w/ future step-ups (3)..................
Annualized Rent per leased sq. ft.......................
Annualized Rent per leased sq. ft. w/ future step-ups...
Company Quoted Rental Rate per sq. ft. (4)..............
ROUTE 128 SOUTH, MA
Square footage of expiring leases.......................
Annualized Rent (2).....................................
Annualized Rent w/ future step-ups (3)..................
Annualized Rent per leased sq. ft.......................
Annualized Rent per leased sq. ft. w/ future step-ups...
Company Quoted Rental Rate per sq. ft. (4)..............
</TABLE>

----------------------------------

See notes on page S-33.

S-28
<PAGE>
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDING DECEMBER 31,
OFFICE PROPERTIES ENDING ---------------------------------------
(MARKET/SUBMARKET) DECEMBER 31, 2000 2001 2002 2003
------------------ ----------------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
GREATER WASHINGTON, D.C.

CBD WASHINGTON, DC
Square footage of expiring leases....................... -- 12,016 -- --
Annualized Rent (2)..................................... -- $ 384,477 -- --
Annualized Rent w/ future step-ups (3).................. -- $ 384,477 -- --
Annualized Rent per leased sq. ft....................... -- $ 32.00 -- --
Annualized Rent per leased sq. ft. w/ future step-ups... -- $ 32.00 -- --
Company Quoted Rental Rate per sq. ft. (4).............. $ 38.00

EAST END WASHINGTON, DC
Square footage of expiring leases....................... -- 33,578 32,033 2,373
Annualized Rent (2)..................................... -- $ 1,225,478 $ 1,048,539 $ 75,252
Annualized Rent w/ future step-ups (3).................. -- $ 1,237,204 $ 1,086,625 $ 78,336
Annualized Rent per leased sq. ft....................... -- $ 36.50 $ 32.73 $ 31.71
Annualized Rent per leased sq. ft. w/ future step-ups... -- $ 36.85 $ 33.92 $ 33.01
Company Quoted Rental Rate per sq. ft. (4).............. $ 47.30

SOUTHWEST WASHINGTON, DC
Square footage of expiring leases....................... 26,335 45,842 34,842 70,119
Annualized Rent (2)..................................... $ 910,102 $ 1,598,269 $ 1,100,580 $ 2,482,601
Annualized Rent w/ future step-ups (3).................. $ 910,102 $ 1,611,603 $ 1,123,865 $ 2,545,054
Annualized Rent per leased sq. ft....................... $ 34.56 $ 34.86 $ 31.59 $ 35.41
Annualized Rent per leased sq. ft. w/ future step-ups... $ 34.56 $ 35.16 $ 32.26 $ 36.30
Company Quoted Rental Rate per sq. ft. (4).............. $ 43.59

WEST END WASHINGTON, DC
Square footage of expiring leases....................... -- 39,651 -- --
Annualized Rent (2)..................................... -- $ 1,202,404 -- --
Annualized Rent w/ future step-ups (3).................. -- $ 1,220,440 -- --
Annualized Rent per leased sq. ft....................... -- $ 30.32 -- --
Annualized Rent per leased sq. ft. w/ future step-ups... -- $ 30.78 -- --
Company Quoted Rental Rate per sq. ft. (4).............. $ 42.00

MONTGOMERY COUNTY, MD
Square footage of expiring leases....................... 132,928 108,575 169,468 103,667
Annualized Rent (2)..................................... $ 3,399,942 $ 2,572,956 $ 4,114,503 $ 2,325,122
Annualized Rent w/ future step-ups (3).................. $ 3,399,942 $ 2,615,671 $ 4,354,221 $ 2,542,159
Annualized Rent per leased sq. ft....................... $ 25.58 $ 23.70 $ 24.28 $ 22.43
Annualized Rent per leased sq. ft. w/ future step-ups... $ 25.58 $ 24.09 $ 25.69 $ 24.52
Company Quoted Rental Rate per sq. ft. (4).............. $ 32.62

<CAPTION>
YEAR ENDING DECEMBER 31,
OFFICE PROPERTIES ------------------------------------------------------ 2008 &
(MARKET/SUBMARKET) 2004 2005 2006 2007 BEYOND
------------------ ----------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
GREATER WASHINGTON, D.C.
CBD WASHINGTON, DC
Square footage of expiring leases....................... -- 43,861 -- -- 132,379
Annualized Rent (2)..................................... -- $ 1,342,182 -- -- $ 4,491,620
Annualized Rent w/ future step-ups (3).................. -- $ 1,376,363 -- -- $ 5,117,167
Annualized Rent per leased sq. ft....................... -- $ 30.60 -- -- $ 33.93
Annualized Rent per leased sq. ft. w/ future step-ups... -- $ 31.38 -- -- $ 38.66
Company Quoted Rental Rate per sq. ft. (4)..............
EAST END WASHINGTON, DC
Square footage of expiring leases....................... 64,558 128,873 -- 13,425 440,866
Annualized Rent (2)..................................... $ 2,416,293 $ 4,621,947 -- $ 367,493 $ 15,224,620
Annualized Rent w/ future step-ups (3).................. $ 2,668,905 $ 5,362,003 -- $ 440,145 $ 17,822,091
Annualized Rent per leased sq. ft....................... $ 37.43 $ 35.86 -- $ 27.37 $ 34.53
Annualized Rent per leased sq. ft. w/ future step-ups... $ 41.34 $ 41.61 -- $ 32.79 $ 40.43
Company Quoted Rental Rate per sq. ft. (4)..............
SOUTHWEST WASHINGTON, DC
Square footage of expiring leases....................... 75,170 8,994 347,130 218,042 701,731
Annualized Rent (2)..................................... $ 2,939,876 $ 353,643 $13,495,659 $ 6,684,370 $ 25,564,912
Annualized Rent w/ future step-ups (3).................. $ 3,038,833 $ 349,801 $13,816,472 $ 6,684,370 $ 27,513,457
Annualized Rent per leased sq. ft....................... $ 39.11 $ 39.32 $ 38.88 $ 30.66 $ 36.43
Annualized Rent per leased sq. ft. w/ future step-ups... $ 40.43 $ 38.89 $ 39.80 $ 30.66 $ 39.21
Company Quoted Rental Rate per sq. ft. (4)..............
WEST END WASHINGTON, DC
Square footage of expiring leases....................... -- -- 204,154 33,125 --
Annualized Rent (2)..................................... -- -- $11,130,195 $ 1,031,655 --
Annualized Rent w/ future step-ups (3).................. -- -- $12,695,535 $ 1,277,442 --
Annualized Rent per leased sq. ft....................... -- -- $ 54.52 $ 31.14 --
Annualized Rent per leased sq. ft. w/ future step-ups... -- -- $ 62.19 $ 38.56 --
Company Quoted Rental Rate per sq. ft. (4)..............
MONTGOMERY COUNTY, MD
Square footage of expiring leases....................... 39,088 189,755 133,152 -- 91,243
Annualized Rent (2)..................................... $ 949,946 $ 5,146,622 $ 3,247,474 -- $ 2,446,142
Annualized Rent w/ future step-ups (3).................. $ 1,025,047 $ 5,662,500 $ 3,756,787 -- $ 2,977,216
Annualized Rent per leased sq. ft....................... $ 24.30 $ 27.12 $ 24.39 -- $ 26.81
Annualized Rent per leased sq. ft. w/ future step-ups... $ 26.22 $ 29.84 $ 28.21 -- $ 32.63
Company Quoted Rental Rate per sq. ft. (4)..............

OFFICE PROPERTIES
(MARKET/SUBMARKET)
------------------
<S> <C>
GREATER WASHINGTON, D.C.
CBD WASHINGTON, DC
Square footage of expiring leases.......................
Annualized Rent (2).....................................
Annualized Rent w/ future step-ups (3)..................
Annualized Rent per leased sq. ft.......................
Annualized Rent per leased sq. ft. w/ future step-ups...
Company Quoted Rental Rate per sq. ft. (4)..............
EAST END WASHINGTON, DC
Square footage of expiring leases.......................
Annualized Rent (2).....................................
Annualized Rent w/ future step-ups (3)..................
Annualized Rent per leased sq. ft.......................
Annualized Rent per leased sq. ft. w/ future step-ups...
Company Quoted Rental Rate per sq. ft. (4)..............
SOUTHWEST WASHINGTON, DC
Square footage of expiring leases.......................
Annualized Rent (2).....................................
Annualized Rent w/ future step-ups (3)..................
Annualized Rent per leased sq. ft.......................
Annualized Rent per leased sq. ft. w/ future step-ups...
Company Quoted Rental Rate per sq. ft. (4)..............
WEST END WASHINGTON, DC
Square footage of expiring leases.......................
Annualized Rent (2).....................................
Annualized Rent w/ future step-ups (3)..................
Annualized Rent per leased sq. ft.......................
Annualized Rent per leased sq. ft. w/ future step-ups...
Company Quoted Rental Rate per sq. ft. (4)..............
MONTGOMERY COUNTY, MD
Square footage of expiring leases.......................
Annualized Rent (2).....................................
Annualized Rent w/ future step-ups (3)..................
Annualized Rent per leased sq. ft.......................
Annualized Rent per leased sq. ft. w/ future step-ups...
Company Quoted Rental Rate per sq. ft. (4)..............
</TABLE>

----------------------------------

See notes on page S-33.

S-29
<PAGE>
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDING DECEMBER 31,
OFFICE PROPERTIES ENDING ---------------------------------------
(MARKET/SUBMARKET) DECEMBER 31, 2000 2001 2002 2003
------------------ ----------------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
FAIRFAX COUNTY, VA
Square footage of expiring leases....................... -- -- 255,244 263,870
Annualized Rent (2)..................................... -- -- $10,140,072 $11,527,080
Annualized Rent w/ future step-ups (3).................. -- -- $ 7,066,668 $ 7,518,200
Annualized Rent per leased sq. ft....................... -- -- $ 39.73 $ 43.68
Annualized Rent per leased sq. ft. w/ future step-ups... -- -- $ 27.69 $ 28.49
Company Quoted Rental Rate per sq. ft. (4).............. $ 36.89
LOUDOUN COUNTY, VA
Square footage of expiring leases....................... -- -- -- --
Annualized Rent (2)..................................... -- -- -- --
Annualized Rent w/ future step-ups (3).................. -- -- -- --
Annualized Rent per leased sq. ft....................... -- -- -- --
Annualized Rent per leased sq. ft. w/ future step-ups... -- -- -- --
Company Quoted Rental Rate per sq. ft. (4).............. $ 25.27
MIDTOWN MANHATTAN
EAST SIDE, NY
Square footage of expiring leases....................... -- 52,000 449,375 152,410
Annualized Rent (2)..................................... -- $ 2,757,041 $22,666,778 $ 5,149,990
Annualized Rent w/ future step-ups (3).................. -- $ 2,777,103 $22,683,278 $ 5,149,990
Annualized Rent per leased sq. ft....................... -- $ 53.02 $ 50.44 $ 33.79
Annualized Rent per leased sq. ft. w/ future step-ups... -- $ 53.41 $ 50.48 $ 33.79
Company Quoted Rental Rate per sq. ft. (4).............. $ 65.52
PARK AVENUE, NY
Square footage of expiring leases....................... 20,512 73,823 452,574 32,921
Annualized Rent (2)..................................... $ 1,311,480 $ 4,167,524 $25,277,748 $ 1,919,943
Annualized Rent w/ future step-ups (3).................. $ 1,311,480 $ 4,167,524 $25,385,693 $ 1,919,943
Annualized Rent per leased sq. ft....................... $ 63.94 $ 56.45 $ 55.85 $ 58.32
Annualized Rent per leased sq. ft. w/ future step-ups... $ 63.94 $ 56.45 $ 56.09 $ 58.32
Company Quoted Rental Rate per sq. ft. (4).............. $ 66.99
GREATER SAN FRANCISCO
CBD SAN FRANCISCO, CA
Square footage of expiring leases....................... 60,493 243,041 232,999 363,243
Annualized Rent (2)..................................... $ 1,751,871 $ 8,216,523 $ 7,460,278 $14,967,097
Annualized Rent w/ future step-ups (3).................. $ 1,751,871 $ 8,214,336 $ 7,419,535 $15,295,791
Annualized Rent per leased sq. ft....................... $ 28.96 $ 33.81 $ 32.02 $ 41.20
Annualized Rent per leased sq. ft. w/ future step-ups... $ 28.96 $ 33.80 $ 31.84 $ 42.11
Company Quoted Rental Rate per sq. ft. (4).............. $ 79.28
SOUTH SAN FRANCISCO, CA
Square footage of expiring leases....................... 13,434 41,202 58,758 254,970
Annualized Rent (2)..................................... $ 329,363 $ 1,060,523 $ 1,615,569 $ 8,071,876
Annualized Rent w/ future step-ups (3).................. $ 329,363 $ 1,107,878 $ 1,768,347 $ 8,172,047
Annualized Rent per leased sq. ft....................... $ 24.52 $ 25.74 $ 27.50 $ 31.66
Annualized Rent per leased sq. ft. w/ future step-ups... $ 24.52 $ 26.89 $ 30.10 $ 32.05
Company Quoted Rental Rate per sq. ft. (4).............. $ 60.00

<CAPTION>
YEAR ENDING DECEMBER 31,
OFFICE PROPERTIES ------------------------------------------------------ 2008 &
(MARKET/SUBMARKET) 2004 2005 2006 2007 BEYOND
------------------ ----------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
FAIRFAX COUNTY, VA
Square footage of expiring leases....................... 301,658 43,587 90,982 740,764
Annualized Rent (2)..................................... $ 9,305,866 $ 1,460,071 $ 2,838,845 $ 19,215,299
Annualized Rent w/ future step-ups (3).................. $ 9,414,779 $ 1,641,386 $ 3,024,580 $ 23,710,227
Annualized Rent per leased sq. ft....................... $ 30.85 $ 33.50 $ 31.20 $ 25.94
Annualized Rent per leased sq. ft. w/ future step-ups... $ 31.21 $ 37.66 $ 33.24 $ 32.01
Company Quoted Rental Rate per sq. ft. (4)..............
LOUDOUN COUNTY, VA
Square footage of expiring leases....................... -- -- -- -- 174,833
Annualized Rent (2)..................................... -- -- -- -- $ 3,983,023
Annualized Rent w/ future step-ups (3).................. -- -- -- -- $ 5,268,096
Annualized Rent per leased sq. ft....................... -- -- -- -- $ 22.78
Annualized Rent per leased sq. ft. w/ future step-ups... -- -- -- -- $ 30.13
Company Quoted Rental Rate per sq. ft. (4)..............
MIDTOWN MANHATTAN
EAST SIDE, NY
Square footage of expiring leases....................... -- 6,000 -- -- --
Annualized Rent (2)..................................... -- $ 189,150 -- -- --
Annualized Rent w/ future step-ups (3).................. -- $ 189,150 -- -- --
Annualized Rent per leased sq. ft....................... -- $ 31.53 -- -- --
Annualized Rent per leased sq. ft. w/ future step-ups... -- $ 31.53 -- -- --
Company Quoted Rental Rate per sq. ft. (4)..............
PARK AVENUE, NY
Square footage of expiring leases....................... 12,725 46,420 24,365 553,185 907,813
Annualized Rent (2)..................................... $ 713,589 $ 2,205,061 $ 1,103,042 $ 26,201,722 $ 40,824,947
Annualized Rent w/ future step-ups (3).................. $ 713,589 $ 2,300,323 $ 1,166,042 $ 27,986,164 $ 49,236,274
Annualized Rent per leased sq. ft....................... $ 56.08 $ 47.50 $ 45.27 $ 47.37 $ 44.97
Annualized Rent per leased sq. ft. w/ future step-ups... $ 56.08 $ 49.55 $ 47.86 $ 50.59 $ 54.24
Company Quoted Rental Rate per sq. ft. (4)..............
GREATER SAN FRANCISCO
CBD SAN FRANCISCO, CA
Square footage of expiring leases....................... 643,822 237,799 836,425 343,379 572,314
Annualized Rent (2)..................................... $25,674,379 $ 8,340,353 $27,335,877 $ 11,571,609 $ 22,413,196
Annualized Rent w/ future step-ups (3).................. $25,811,251 $ 8,821,155 $30,787,095 $ 13,968,318 $ 27,531,163
Annualized Rent per leased sq. ft....................... $ 39.88 $ 35.07 $ 32.68 $ 33.70 $ 39.16
Annualized Rent per leased sq. ft. w/ future step-ups... $ 40.09 $ 37.10 $ 36.81 $ 40.68 $ 48.10
Company Quoted Rental Rate per sq. ft. (4)..............
SOUTH SAN FRANCISCO, CA
Square footage of expiring leases....................... 94,917 26,394 10,010 -- --
Annualized Rent (2)..................................... $ 3,391,317 $ 1,340,229 $ 570,570 -- --
Annualized Rent w/ future step-ups (3).................. $ 3,633,810 $ 1,551,867 $ 694,186 -- --
Annualized Rent per leased sq. ft....................... $ 35.73 $ 50.78 $ 57.00 -- --
Annualized Rent per leased sq. ft. w/ future step-ups... $ 38.28 $ 58.80 $ 69.35 -- --
Company Quoted Rental Rate per sq. ft. (4)..............

OFFICE PROPERTIES
(MARKET/SUBMARKET)
------------------
<S> <C>
FAIRFAX COUNTY, VA
Square footage of expiring leases.......................
Annualized Rent (2).....................................
Annualized Rent w/ future step-ups (3)..................
Annualized Rent per leased sq. ft.......................
Annualized Rent per leased sq. ft. w/ future step-ups...
Company Quoted Rental Rate per sq. ft. (4)..............
LOUDOUN COUNTY, VA
Square footage of expiring leases.......................
Annualized Rent (2).....................................
Annualized Rent w/ future step-ups (3)..................
Annualized Rent per leased sq. ft.......................
Annualized Rent per leased sq. ft. w/ future step-ups...
Company Quoted Rental Rate per sq. ft. (4)..............
MIDTOWN MANHATTAN
EAST SIDE, NY
Square footage of expiring leases.......................
Annualized Rent (2).....................................
Annualized Rent w/ future step-ups (3)..................
Annualized Rent per leased sq. ft.......................
Annualized Rent per leased sq. ft. w/ future step-ups...
Company Quoted Rental Rate per sq. ft. (4)..............
PARK AVENUE, NY
Square footage of expiring leases.......................
Annualized Rent (2).....................................
Annualized Rent w/ future step-ups (3)..................
Annualized Rent per leased sq. ft.......................
Annualized Rent per leased sq. ft. w/ future step-ups...
Company Quoted Rental Rate per sq. ft. (4)..............
GREATER SAN FRANCISCO
CBD SAN FRANCISCO, CA
Square footage of expiring leases.......................
Annualized Rent (2).....................................
Annualized Rent w/ future step-ups (3)..................
Annualized Rent per leased sq. ft.......................
Annualized Rent per leased sq. ft. w/ future step-ups...
Company Quoted Rental Rate per sq. ft. (4)..............
SOUTH SAN FRANCISCO, CA
Square footage of expiring leases.......................
Annualized Rent (2).....................................
Annualized Rent w/ future step-ups (3)..................
Annualized Rent per leased sq. ft.......................
Annualized Rent per leased sq. ft. w/ future step-ups...
Company Quoted Rental Rate per sq. ft. (4)..............
</TABLE>

----------------------------------

See notes on page S-33.

S-30
<PAGE>
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDING DECEMBER 31,
OFFICE PROPERTIES ENDING ---------------------------------------
(MARKET/SUBMARKET) DECEMBER 31, 2000 2001 2002 2003
------------------ ----------------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
OTHER
BALTIMORE, MD
Square footage of expiring leases....................... -- 46,762 115,874 158,175
Annualized Rent (2)..................................... -- $ 1,020,591 $ 2,764,862 $ 3,321,350
Annualized Rent w/ future step-ups (3).................. -- $ 1,146,623 $ 2,788,572 $ 3,404,413
Annualized Rent per leased sq. ft....................... -- $ 21.83 $ 23.86 $ 21.00
Annualized Rent per leased sq. ft. w/ future step-ups... -- $ 24.52 $ 24.07 $ 21.52
Company Quoted Rental Rate per sq. ft. (4).............. $ 25.41

EAST BRUNSWICK, NJ
Square footage of expiring leases....................... 86,595 214,160 -- --
Annualized Rent (2)..................................... $ 2,676,651 $ 6,914,701 -- --
Annualized Rent w/ future step-ups (3).................. $ 2,676,651 $ 6,914,701 -- --
Annualized Rent per leased sq. ft....................... $ 30.91 $ 32.29 -- --
Annualized Rent per leased sq. ft. w/ future step-ups... $ 30.91 $ 32.29 -- --
Company Quoted Rental Rate per sq. ft. (4).............. $ 30.50

PRINCETON, NJ
Square footage of expiring leases....................... 22,786 225,257 30,959 129,132
Annualized Rent (2)..................................... $ 677,525 $ 6,118,121 $ 889,142 $ 3,329,693
Annualized Rent w/ future step-ups (3).................. $ 677,525 $ 6,260,246 $ 889,142 $ 3,336,265
Annualized Rent per leased sq. ft....................... $ 29.73 $ 27.16 $ 28.72 $ 25.79
Annualized Rent per leased sq. ft. w/ future step-ups... $ 29.73 $ 27.79 $ 28.72 $ 25.84
Company Quoted Rental Rate per sq. ft. (4).............. $ 30.25
RICHMOND, VA
Square footage of expiring leases....................... 6,819 107,489 58,977 23,256
Annualized Rent (2)..................................... $ 135,697 $ 2,550,138 $ 1,241,043 $ 486,390
Annualized Rent w/ future step-ups (3).................. $ 135,697 $ 2,563,862 $ 1,289,648 $ 514,477
Annualized Rent per leased sq. ft....................... $ 19.90 $ 23.72 $ 21.04 $ 20.91
Annualized Rent per leased sq. ft. w/ future step-ups... $ 19.90 $ 23.85 $ 21.87 $ 22.12
Company Quoted Rental Rate per sq. ft. (4).............. $ 23.75

TOTAL CLASS A OFFICE BUILDINGS
Square footage of expiring leases....................... 440,281 1,946,550 2,310,586 1,964,873
Annualized Rent (2)..................................... $13,084,077 $57,258,509 $89,963,565 $65,834,545
Annualized Rent w/ future step-ups (3).................. $13,084,077 $59,715,663 $87,685,603 $64,049,180
Annualized Rent per leased sq. ft....................... $ 29.72 $ 29.42 $ 38.94 $ 33.51
Annualized Rent per leased sq. ft. w/ future step-ups... $ 29.72 $ 30.68 $ 37.95 $ 32.60
Company Quoted Rental Rate per sq. ft. (4).............. $ 50.61

OFFICE/TECHNICAL PROPERTIES
GREATER BOSTON
EAST CAMBRIDGE, MA
Square footage of expiring leases....................... -- -- -- --
Annualized Rent (2)..................................... -- -- -- --
Annualized Rent w/ future step-ups (3).................. -- -- -- --
Annualized Rent per leased sq. ft....................... -- -- -- --
Annualized Rent per leased sq. ft. w/ future step-ups... -- -- -- --
Company Quoted Rental Rate per sq. ft. (4).............. $ 45.00

<CAPTION>
YEAR ENDING DECEMBER 31,
OFFICE PROPERTIES ------------------------------------------------------ 2008 &
(MARKET/SUBMARKET) 2004 2005 2006 2007 BEYOND
------------------ ----------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
OTHER
BALTIMORE, MD
Square footage of expiring leases....................... 50,876 69,784 375,051 37,539 278,443
Annualized Rent (2)..................................... $ 1,080,358 $ 1,907,227 $ 9,799,161 $ 1,527,490 $ 4,494,044
Annualized Rent w/ future step-ups (3).................. $ 1,136,694 $ 2,192,350 $10,892,046 $ 1,565,029 $ 5,821,468
Annualized Rent per leased sq. ft....................... $ 21.24 $ 27.33 $ 26.13 $ 40.69 $ 16.14
Annualized Rent per leased sq. ft. w/ future step-ups... $ 22.34 $ 31.42 $ 29.04 $ 41.69 $ 20.91
Company Quoted Rental Rate per sq. ft. (4)..............
EAST BRUNSWICK, NJ
Square footage of expiring leases....................... -- -- -- 37,970 78,404
Annualized Rent (2)..................................... -- -- -- $ 1,209,022 $ 2,340,360
Annualized Rent w/ future step-ups (3).................. -- -- -- $ 1,221,193 $ 2,575,572
Annualized Rent per leased sq. ft....................... -- -- -- $ 31.84 $ 29.85
Annualized Rent per leased sq. ft. w/ future step-ups... -- -- -- $ 32.16 $ 32.85
Company Quoted Rental Rate per sq. ft. (4)..............
PRINCETON, NJ
Square footage of expiring leases....................... 401,848 133,542 39,462 -- 854,667
Annualized Rent (2)..................................... $11,012,817 $ 3,318,880 $ 1,126,555 -- $ 21,445,939
Annualized Rent w/ future step-ups (3).................. $11,024,370 $ 3,515,931 $ 1,205,603 -- $ 24,481,849
Annualized Rent per leased sq. ft....................... $ 27.41 $ 24.85 $ 28.55 -- $ 25.09
Annualized Rent per leased sq. ft. w/ future step-ups... $ 27.43 $ 26.33 $ 30.55 -- $ 28.64
Company Quoted Rental Rate per sq. ft. (4)..............
RICHMOND, VA
Square footage of expiring leases....................... 66,935 267,154 300,114 -- 42,621
Annualized Rent (2)..................................... $ 1,319,534 $ 5,720,879 $ 7,537,468 -- $ 784,785
Annualized Rent w/ future step-ups (3).................. $ 1,455,649 $ 5,814,411 $ 8,198,517 -- $ 927,334
Annualized Rent per leased sq. ft....................... $ 19.71 $ 21.41 $ 25.12 -- $ 18.41
Annualized Rent per leased sq. ft. w/ future step-ups... $ 21.75 $ 21.76 $ 27.32 -- $ 21.76
Company Quoted Rental Rate per sq. ft. (4)..............
TOTAL CLASS A OFFICE BUILDINGS
Square footage of expiring leases....................... 2,421,142 1,876,922 2,743,848 1,469,354 6,214,310
Annualized Rent (2)..................................... $80,731,448 $56,675,680 $89,346,916 $ 56,623,115 $198,708,296
Annualized Rent w/ future step-ups (3).................. $83,720,905 $60,161,848 $99,120,227 $ 61,758,878 $236,222,311
Annualized Rent per leased sq. ft....................... $ 33.34 $ 30.20 $ 32.56 $ 38.54 $ 31.98
Annualized Rent per leased sq. ft. w/ future step-ups... $ 34.58 $ 32.05 $ 36.12 $ 42.03 $ 38.01
Company Quoted Rental Rate per sq. ft. (4)..............
OFFICE/TECHNICAL PROPERTIES
GREATER BOSTON
EAST CAMBRIDGE, MA
Square footage of expiring leases....................... -- -- -- -- 67,362
Annualized Rent (2)..................................... -- -- -- -- $ 1,295,391
Annualized Rent w/ future step-ups (3).................. -- -- -- -- $ 1,601,888
Annualized Rent per leased sq. ft....................... -- -- -- -- $ 19.23
Annualized Rent per leased sq. ft. w/ future step-ups... -- -- -- -- $ 23.78
Company Quoted Rental Rate per sq. ft. (4)..............

OFFICE PROPERTIES
(MARKET/SUBMARKET)
------------------
<S> <C>
OTHER
BALTIMORE, MD
Square footage of expiring leases.......................
Annualized Rent (2).....................................
Annualized Rent w/ future step-ups (3)..................
Annualized Rent per leased sq. ft.......................
Annualized Rent per leased sq. ft. w/ future step-ups...
Company Quoted Rental Rate per sq. ft. (4)..............
EAST BRUNSWICK, NJ
Square footage of expiring leases.......................
Annualized Rent (2).....................................
Annualized Rent w/ future step-ups (3)..................
Annualized Rent per leased sq. ft.......................
Annualized Rent per leased sq. ft. w/ future step-ups...
Company Quoted Rental Rate per sq. ft. (4)..............
PRINCETON, NJ
Square footage of expiring leases.......................
Annualized Rent (2).....................................
Annualized Rent w/ future step-ups (3)..................
Annualized Rent per leased sq. ft.......................
Annualized Rent per leased sq. ft. w/ future step-ups...
Company Quoted Rental Rate per sq. ft. (4)..............
RICHMOND, VA
Square footage of expiring leases.......................
Annualized Rent (2).....................................
Annualized Rent w/ future step-ups (3)..................
Annualized Rent per leased sq. ft.......................
Annualized Rent per leased sq. ft. w/ future step-ups...
Company Quoted Rental Rate per sq. ft. (4)..............
TOTAL CLASS A OFFICE BUILDINGS
Square footage of expiring leases.......................
Annualized Rent (2).....................................
Annualized Rent w/ future step-ups (3)..................
Annualized Rent per leased sq. ft.......................
Annualized Rent per leased sq. ft. w/ future step-ups...
Company Quoted Rental Rate per sq. ft. (4)..............
OFFICE/TECHNICAL PROPERTIES
GREATER BOSTON
EAST CAMBRIDGE, MA
Square footage of expiring leases.......................
Annualized Rent (2).....................................
Annualized Rent w/ future step-ups (3)..................
Annualized Rent per leased sq. ft.......................
Annualized Rent per leased sq. ft. w/ future step-ups...
Company Quoted Rental Rate per sq. ft. (4)..............
</TABLE>

----------------------------------

See notes on page S-33.

S-31
<PAGE>
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDING DECEMBER 31,
OFFICE PROPERTIES ENDING ---------------------------------------
(MARKET/SUBMARKET) DECEMBER 31, 2000 2001 2002 2003
------------------ ----------------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
ROUTE 128 NORTHWEST, MA
Square footage of expiring leases....................... -- -- 94,140 50,704
Annualized Rent (2)..................................... -- -- $ 877,197 $ 599,458
Annualized Rent w/ future step-ups (3).................. -- -- $ 892,197 $ 599,458
Annualized Rent per leased sq. ft....................... -- -- $ 9.32 $ 11.82
Annualized Rent per leased sq. ft. w/ future step-ups... -- -- $ 9.48 $ 11.82
Company Quoted Rental Rate per sq. ft. (4).............. $ 18.05

GREATER WASHINGTON, D.C.
MONTGOMERY COUNTY, MD (6)
Square footage of expiring leases....................... -- 23,029 39,629 --
Annualized Rent (2)..................................... -- $ 386,569 $ 686,147 --
Annualized Rent w/ future step-ups (3).................. -- $ 386,569 $ 704,574 --
Annualized Rent per leased sq. ft....................... -- $ 16.79 $ 17.31 --
Annualized Rent per leased sq. ft. w/ future step-ups... -- $ 16.79 $ 17.78 --
Company Quoted Rental Rate per sq. ft. (4).............. $ 17.93

FAIRFAX COUNTY, VA
Square footage of expiring leases....................... 179,755 237,284 175,991 23,439
Annualized Rent (2)..................................... $ 1,851,337 $ 2,949,259 $ 2,969,185 $ 330,438
Annualized Rent w/ future step-ups (3).................. $ 1,851,336 $ 3,025,715 $ 3,031,278 $ 347,548
Annualized Rent per leased sq. ft....................... $ 10.30 $ 12.43 $ 16.87 $ 14.10
Annualized Rent per leased sq. ft. w/ future step-ups... $ 10.30 $ 12.75 $ 17.22 $ 14.83
Company Quoted Rental Rate per sq. ft. (4).............. $ 15.72

GREATER SAN FRANCISCO
SOUTH SAN FRANCISCO, CA
Square footage of expiring leases....................... 11,500 34,697 42,486 30,164
Annualized Rent (2)..................................... $ 125,831 $ 426,466 $ 526,105 $ 428,554
Annualized Rent w/ future step-ups (3).................. $ 125,831 $ 460,658 $ 545,994 $ 464,832
Annualized Rent per leased sq. ft....................... $ 10.94 $ 12.29 $ 12.38 $ 14.21
Annualized Rent per leased sq. ft. w/ future step-ups... $ 10.94 $ 13.28 $ 12.85 $ 15.41
Company Quoted Rental Rate per sq. ft. (4).............. $ 17.25

TOTAL OFFICE/TECHNICAL PROPERTIES
Square footage of expiring leases....................... 191,255 295,010 352,246 104,307
Annualized Rent (2)..................................... $ 1,977,168 $ 3,762,294 $ 5,058,634 $ 1,358,450
Annualized Rent w/ future step-ups (3).................. $ 1,977,168 $ 3,872,942 $ 5,174,043 $ 1,411,838
Annualized Rent per leased sq. ft....................... $ 10.34 $ 12.75 $ 14.36 $ 13.02
Annualized Rent per leased sq. ft. w/ future step-ups... $ 10.34 $ 13.13 $ 14.69 $ 13.54
Company Quoted Rental Rate per sq. ft. (4).............. $ 18.18

<CAPTION>
YEAR ENDING DECEMBER 31,
OFFICE PROPERTIES ------------------------------------------------------ 2008 &
(MARKET/SUBMARKET) 2004 2005 2006 2007 BEYOND
------------------ ----------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
ROUTE 128 NORTHWEST, MA
Square footage of expiring leases....................... -- -- 203,000 50,000 --
Annualized Rent (2)..................................... -- -- $ 2,355,210 $ 475,000 --
Annualized Rent w/ future step-ups (3).................. -- -- $ 2,467,710 $ 675,000 --
Annualized Rent per leased sq. ft....................... -- -- $ 11.60 $ 9.50 --
Annualized Rent per leased sq. ft. w/ future step-ups... -- -- $ 12.16 $ 13.50 --
Company Quoted Rental Rate per sq. ft. (4)..............
GREATER WASHINGTON, D.C.
MONTGOMERY COUNTY, MD (6)
Square footage of expiring leases....................... 22,060 90,433 -- -- 59,838
Annualized Rent (2)..................................... $ 428,497 $ 1,214,583 -- -- $ 899,946
Annualized Rent w/ future step-ups (3).................. $ 409,856 $ 1,214,583 -- -- $ 981,557
Annualized Rent per leased sq. ft....................... $ 19.42 $ 13.43 -- -- $ 15.04
Annualized Rent per leased sq. ft. w/ future step-ups... $ 18.58 $ 13.43 -- -- $ 16.40
Company Quoted Rental Rate per sq. ft. (4)..............
FAIRFAX COUNTY, VA
Square footage of expiring leases....................... 57,221 57,897 -- 107,895 218,009
Annualized Rent (2)..................................... $ 804,944 $ 833,779 -- $ 2,260,513 $ 3,563,343
Annualized Rent w/ future step-ups (3).................. $ 896,995 $ 935,317 -- $ 2,306,696 $ 4,168,705
Annualized Rent per leased sq. ft....................... $ 14.07 $ 14.40 -- $ 20.95 $ 16.34
Annualized Rent per leased sq. ft. w/ future step-ups... $ 15.68 $ 16.15 -- $ 21.38 $ 19.12
Company Quoted Rental Rate per sq. ft. (4)..............
GREATER SAN FRANCISCO
SOUTH SAN FRANCISCO, CA
Square footage of expiring leases....................... -- 22,519 -- -- --
Annualized Rent (2)..................................... -- $ 262,612 -- -- --
Annualized Rent w/ future step-ups (3).................. -- $ 329,614 -- -- --
Annualized Rent per leased sq. ft....................... -- $ 11.66 -- -- --
Annualized Rent per leased sq. ft. w/ future step-ups... -- $ 14.64 -- -- --
Company Quoted Rental Rate per sq. ft. (4)..............
TOTAL OFFICE/TECHNICAL PROPERTIES
Square footage of expiring leases....................... 79,281 170,849 203,000 157,895 345,209
Annualized Rent (2)..................................... $ 1,233,441 $ 2,310,974 $ 2,355,210 $ 2,735,513 $ 5,758,680
Annualized Rent w/ future step-ups (3).................. $ 1,306,851 $ 2,479,514 $ 2,467,710 $ 2,981,696 $ 6,752,150
Annualized Rent per leased sq. ft....................... $ 15.56 $ 13.53 $ 11.60 $ 17.32 $ 16.68
Annualized Rent per leased sq. ft. w/ future step-ups... $ 16.48 $ 14.51 $ 12.16 $ 18.88 $ 19.56
Company Quoted Rental Rate per sq. ft. (4)..............

OFFICE PROPERTIES
(MARKET/SUBMARKET)
------------------
<S> <C>
ROUTE 128 NORTHWEST, MA
Square footage of expiring leases.......................
Annualized Rent (2).....................................
Annualized Rent w/ future step-ups (3)..................
Annualized Rent per leased sq. ft.......................
Annualized Rent per leased sq. ft. w/ future step-ups...
Company Quoted Rental Rate per sq. ft. (4)..............
GREATER WASHINGTON, D.C.
MONTGOMERY COUNTY, MD (6)
Square footage of expiring leases.......................
Annualized Rent (2).....................................
Annualized Rent w/ future step-ups (3)..................
Annualized Rent per leased sq. ft.......................
Annualized Rent per leased sq. ft. w/ future step-ups...
Company Quoted Rental Rate per sq. ft. (4)..............
FAIRFAX COUNTY, VA
Square footage of expiring leases.......................
Annualized Rent (2).....................................
Annualized Rent w/ future step-ups (3)..................
Annualized Rent per leased sq. ft.......................
Annualized Rent per leased sq. ft. w/ future step-ups...
Company Quoted Rental Rate per sq. ft. (4)..............
GREATER SAN FRANCISCO
SOUTH SAN FRANCISCO, CA
Square footage of expiring leases.......................
Annualized Rent (2).....................................
Annualized Rent w/ future step-ups (3)..................
Annualized Rent per leased sq. ft.......................
Annualized Rent per leased sq. ft. w/ future step-ups...
Company Quoted Rental Rate per sq. ft. (4)..............
TOTAL OFFICE/TECHNICAL PROPERTIES
Square footage of expiring leases.......................
Annualized Rent (2).....................................
Annualized Rent w/ future step-ups (3)..................
Annualized Rent per leased sq. ft.......................
Annualized Rent per leased sq. ft. w/ future step-ups...
Company Quoted Rental Rate per sq. ft. (4)..............
</TABLE>

----------------------------------

See notes on page S-33.

S-32
<PAGE>
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDING DECEMBER 31,
INDUSTRIAL PROPERTIES ENDING ---------------------------------------
(MARKET/SUBMARKET) DECEMBER 31, 2000 2001 2002 2003
--------------------- ----------------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
GREATER BOSTON
ROUTE 128 SOUTHWEST, MA
Square footage of expiring leases....................... 67,216 10,829 23,904 128,105
Annualized Rent (2)..................................... $ 639,711 $ 127,969 $ 207,563 $ 861,075
Annualized Rent w/ future step-ups (3).................. $ 639,711 $ 127,969 $ 207,563 $ 925,127
Annualized Rent per leased sq. ft....................... $ 9.52 $ 11.82 $ 8.68 $ 6.72
Annualized Rent per leased sq. ft. w/ future step-ups... $ 9.52 $ 11.82 $ 8.68 $ 7.22
Company Quoted Rental Rate per sq. ft. (4).............. $ 10.63
GREATER WASHINGTON, D.C.
PRINCE GEORGE'S COUNTY, MD
Square footage of expiring leases....................... 6,125 -- -- 19,200
Annualized Rent (2)..................................... $ 27,563 -- -- $ 128,832
Annualized Rent w/ future step-ups (3).................. $ 27,563 -- -- $ 128,832
Annualized Rent per leased sq. ft....................... $ 4.50 -- -- $ 6.71
Annualized Rent per leased sq. ft. w/ future step-ups... $ 4.50 -- -- $ 6.71
Company Quoted Rental Rate per sq. ft. (4).............. $ 7.34
GREATER SAN FRANCISCO
HAYWARD, CA
Square footage of expiring leases....................... -- 60,000 -- --
Annualized Rent (2)..................................... -- $ 256,085 -- --
Annualized Rent w/ future step-ups (3).................. -- $ 256,085 -- --
Annualized Rent per leased sq. ft....................... -- $ 4.27 -- --
Annualized Rent per leased sq. ft. w/ future step-ups... -- $ 4.27 -- --
Company Quoted Rental Rate per sq. ft. (4).............. $ 4.56
SOUTH SAN FRANCISCO, CA
Square footage of expiring leases....................... -- -- -- --
Annualized Rent (2)..................................... -- -- -- --
Annualized Rent w/ future step-ups (3).................. -- -- -- --
Annualized Rent per leased sq. ft....................... -- -- -- --
Annualized Rent per leased sq. ft. w/ future step-ups... -- -- -- --
Company Quoted Rental Rate per sq. ft. (4).............. $ 8.40
OTHER
BUCKS COUNTY, PA
Square footage of expiring leases....................... -- -- 161,000 --
Annualized Rent (2)..................................... -- -- $ 714,844 --
Annualized Rent w/ future step-ups (3).................. -- -- $ 714,844 --
Annualized Rent per leased sq. ft....................... -- -- $ 4.44 --
Annualized Rent per leased sq. ft. w/ future step-ups... -- -- $ 4.44 --
Company Quoted Rental Rate per sq. ft. (4).............. $ 4.25
TOTAL INDUSTRIAL PROPERTIES
Square footage of expiring leases....................... 73,341 70,829 184,904 147,305
Annualized Rent (2)..................................... $ 667,274 $ 384,054 $ 922,407 $ 989,907
Annualized Rent w/ future step-ups (3).................. $ 667,274 $ 384,054 $ 922,407 $ 1,053,959
Annualized Rent per leased sq. ft....................... $ 9.10 $ 5.42 $ 4.99 $ 6.72
Annualized Rent per leased sq. ft. w/ future step-ups... $ 9.10 $ 5.42 $ 4.99 $ 7.15
Company Quoted Rental Rate per sq. ft. (4).............. $ 7.09
TOTAL OFFICE AND INDUSTRIAL PROPERTIES
Square footage of expiring leases....................... 704,877 2,312,389 2,847,736 2,216,485
Annualized Rent (2)..................................... $15,728,519 $61,404,857 $95,944,606 $68,182,902
Annualized Rent w/ future step-ups (3).................. $15,728,519 $63,972,659 $93,782,053 $66,514,977
Annualized Rent per leased sq. ft....................... $ 22.31 $ 26.55 $ 33.69 $ 30.76
Annualized Rent per leased sq. ft. w/ future step-ups... $ 22.31 $ 27.67 $ 32.93 $ 30.01
Company Quoted Rental Rate per sq. ft. (4).............. $ 46.48

<CAPTION>
YEAR ENDING DECEMBER 31,
INDUSTRIAL PROPERTIES ------------------------------------------------------ 2008 &
(MARKET/SUBMARKET) 2004 2005 2006 2007 BEYOND
--------------------- ----------- ----------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
GREATER BOSTON
ROUTE 128 SOUTHWEST, MA
Square footage of expiring leases....................... -- -- -- -- --
Annualized Rent (2)..................................... -- -- -- -- --
Annualized Rent w/ future step-ups (3).................. -- -- -- -- --
Annualized Rent per leased sq. ft....................... -- -- -- -- --
Annualized Rent per leased sq. ft. w/ future step-ups... -- -- -- -- --
Company Quoted Rental Rate per sq. ft. (4)..............
GREATER WASHINGTON, D.C.
PRINCE GEORGE'S COUNTY, MD
Square footage of expiring leases....................... 34,863 20,500 -- -- 83,608
Annualized Rent (2)..................................... $ 228,725 $ 125,698 -- -- $ 742,152
Annualized Rent w/ future step-ups (3).................. $ 245,374 $ 140,832 -- -- $ 815,347
Annualized Rent per leased sq. ft....................... $ 6.56 $ 6.13 -- -- $ 8.88
Annualized Rent per leased sq. ft. w/ future step-ups... $ 7.04 $ 6.87 -- -- $ 9.75
Company Quoted Rental Rate per sq. ft. (4)..............
GREATER SAN FRANCISCO
HAYWARD, CA
Square footage of expiring leases....................... 160,213 -- -- --
Annualized Rent (2)..................................... $ 752,275 -- -- --
Annualized Rent w/ future step-ups (3).................. $ 790,726 -- -- --
Annualized Rent per leased sq. ft....................... $ 4.70 -- -- --
Annualized Rent per leased sq. ft. w/ future step-ups... $ 4.94 -- -- --
Company Quoted Rental Rate per sq. ft. (4)..............
SOUTH SAN FRANCISCO, CA
Square footage of expiring leases....................... 40,000 -- -- 20,000
Annualized Rent (2)..................................... $ 388,608 -- -- $ 222,456
Annualized Rent w/ future step-ups (3).................. $ 427,008 -- -- $ 258,783
Annualized Rent per leased sq. ft....................... $ 9.72 -- -- $ 11.12
Annualized Rent per leased sq. ft. w/ future step-ups... $ 10.68 -- -- $ 12.94
Company Quoted Rental Rate per sq. ft. (4)..............
OTHER
BUCKS COUNTY, PA
Square footage of expiring leases....................... -- -- -- -- --
Annualized Rent (2)..................................... -- -- -- -- --
Annualized Rent w/ future step-ups (3).................. -- -- -- -- --
Annualized Rent per leased sq. ft....................... -- -- -- -- --
Annualized Rent per leased sq. ft. w/ future step-ups... -- -- -- -- --
Company Quoted Rental Rate per sq. ft. (4)..............
TOTAL INDUSTRIAL PROPERTIES
Square footage of expiring leases....................... 235,076 20,500 -- 20,000 83,608
Annualized Rent (2)..................................... $ 1,369,608 $ 125,698 -- $ 222,456 $ 742,152
Annualized Rent w/ future step-ups (3).................. $ 1,463,108 $ 140,832 -- $ 258,783 $ 815,347
Annualized Rent per leased sq. ft....................... $ 5.83 $ 6.13 -- $ 11.12 $ 8.88
Annualized Rent per leased sq. ft. w/ future step-ups... $ 6.22 $ 6.87 -- $ 12.94 $ 9.75
Company Quoted Rental Rate per sq. ft. (4)..............
TOTAL OFFICE AND INDUSTRIAL PROPERTIES
Square footage of expiring leases....................... 2,735,499 2,068,271 2,946,848 1,647,249 6,643,127
Annualized Rent (2)..................................... $83,334,497 $59,112,352 $ 91,702,126 $59,581,084 $205,209,128
Annualized Rent w/ future step-ups (3).................. $86,490,864 $62,782,194 $101,587,937 $64,999,357 $243,789,808
Annualized Rent per leased sq. ft....................... $ 30.46 $ 28.58 $ 31.12 $ 36.17 $ 30.89
Annualized Rent per leased sq. ft. w/ future step-ups... $ 31.62 $ 30.35 $ 34.47 $ 39.46 $ 36.70
Company Quoted Rental Rate per sq. ft. (4)..............

INDUSTRIAL PROPERTIES
(MARKET/SUBMARKET)
---------------------
<S> <C>
GREATER BOSTON
ROUTE 128 SOUTHWEST, MA
Square footage of expiring leases.......................
Annualized Rent (2).....................................
Annualized Rent w/ future step-ups (3)..................
Annualized Rent per leased sq. ft.......................
Annualized Rent per leased sq. ft. w/ future step-ups...
Company Quoted Rental Rate per sq. ft. (4)..............
GREATER WASHINGTON, D.C.
PRINCE GEORGE'S COUNTY, MD
Square footage of expiring leases.......................
Annualized Rent (2).....................................
Annualized Rent w/ future step-ups (3)..................
Annualized Rent per leased sq. ft.......................
Annualized Rent per leased sq. ft. w/ future step-ups...
Company Quoted Rental Rate per sq. ft. (4)..............
GREATER SAN FRANCISCO
HAYWARD, CA
Square footage of expiring leases.......................
Annualized Rent (2).....................................
Annualized Rent w/ future step-ups (3)..................
Annualized Rent per leased sq. ft.......................
Annualized Rent per leased sq. ft. w/ future step-ups...
Company Quoted Rental Rate per sq. ft. (4)..............
SOUTH SAN FRANCISCO, CA
Square footage of expiring leases.......................
Annualized Rent (2).....................................
Annualized Rent w/ future step-ups (3)..................
Annualized Rent per leased sq. ft.......................
Annualized Rent per leased sq. ft. w/ future step-ups...
Company Quoted Rental Rate per sq. ft. (4)..............
OTHER
BUCKS COUNTY, PA
Square footage of expiring leases.......................
Annualized Rent (2).....................................
Annualized Rent w/ future step-ups (3)..................
Annualized Rent per leased sq. ft.......................
Annualized Rent per leased sq. ft. w/ future step-ups...
Company Quoted Rental Rate per sq. ft. (4)..............
TOTAL INDUSTRIAL PROPERTIES
Square footage of expiring leases.......................
Annualized Rent (2).....................................
Annualized Rent w/ future step-ups (3)..................
Annualized Rent per leased sq. ft.......................
Annualized Rent per leased sq. ft. w/ future step-ups...
Company Quoted Rental Rate per sq. ft. (4)..............
TOTAL OFFICE AND INDUSTRIAL PROPERTIES
Square footage of expiring leases.......................
Annualized Rent (2).....................................
Annualized Rent w/ future step-ups (3)..................
Annualized Rent per leased sq. ft.......................
Annualized Rent per leased sq. ft. w/ future step-ups...
Company Quoted Rental Rate per sq. ft. (4)..............
</TABLE>

------------------------------
(1) Excludes 265 Franklin, which we acquired September 13, 2000.
(2) Annualized Rent is the monthly contractual rent under existing leases as of
June 30, 2000 multiplied by twelve. This amount reflects total rent before
any rent abatements and includes expense reimbursements, which may be
estimates as of such date.
(3) Annualized Rent with Future Step-Ups represents Annualized Rent as
described in footnote (2) above, and also reflects contractual increases in
monthly base rent that occur after June 30, 2000.
(4) Represents weighted average rental rates per square foot quoted by us as of
September 1, 2000, based on total net rentable square feet of our
properties in the submarket.
(5) All expiring space reverts to a master lease at predetermined rates.
(6) Includes 910 and 930 Clopper Road, which we sold on September 29, 2000.

S-33
<PAGE>
HISTORICAL TENANT IMPROVEMENTS AND LEASING COMMISSIONS

The following table sets forth historical information regarding recurring
tenant improvement and leasing commission costs for tenants at our office and
industrial properties during the years ended December 31, 1995 through
December 31, 1999 and the six months ended June 30, 2000:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------
TOTAL TENANT IMPROVEMENTS AND LEASING COMMISSIONS PER SQUARE FOOT 1995 1996 1997 1998 1999
----------------------------------------------------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
OFFICE PROPERTIES
Class A office buildings... $10.66 $11.40 $10.83 $9.82 $10.60
Office/technical properties... 6.99 10.45 2.22 3.32 1.94

INDUSTRIAL PROPERTIES... 1.00 1.71 0.99 1.13 0.60
------ ------ ------ ----- ------
Weighted average of total tenant improvements and leasing
commissions per square foot... $ 7.77 $10.31 $ 8.06 $6.57 $ 9.34
====== ====== ====== ===== ======

<CAPTION>
SIX MONTHS
ENDED WEIGHTED
TOTAL TENANT IMPROVEMENTS AND LEASING COMMISSIONS PER SQUARE FOOT JUNE 30, 2000 AVERAGE
----------------------------------------------------------------- ------------- --------
<S> <C> <C>
OFFICE PROPERTIES
Class A office buildings... $12.96 $11.29
Office/technical properties... 0.57 4.46
INDUSTRIAL PROPERTIES... 1.22 1.08
------ ------
Weighted average of total tenant improvements and leasing
commissions per square foot... $10.17 $ 9.01
====== ======
</TABLE>

HISTORICAL CAPITAL EXPENDITURES

The following data sets forth historical information regarding recurring
capital expenditures at our office and industrial properties for the years ended
December 31, 1995 through December 31, 1999 and the six months ended June 30,
2000:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, SIX MONTHS
---------------------------------------------------- ENDED
1995 1996 1997 1998 1999 JUNE 30, 2000
-------- -------- -------- -------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>
Recurring capital expenditures (in thousands)........... $1,618 $1,083 $1,125 $3,543 $11,611 $4,333
</TABLE>

The following data sets forth historical capital expenditures at our hotel
properties incurred for the years ended December 31, 1995 through December 31,
1999 and the six months ended June 30, 2000:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, SIX MONTHS
---------------------------------------------------- ENDED
1995 1996 1997 1998 1999 JUNE 30, 2000
-------- -------- -------- -------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>
Hotel improvements, equipment upgrades and replacements
(in thousands)......................................... $4,420 $3,041 $2,625 $3,872 $2,346 $1,181
</TABLE>

S-34
<PAGE>
HOTEL PROPERTIES

The following table sets forth historical information regarding occupancy
and rental rates at our hotel properties for the years ended December 31, 1996
through December 31, 1999 and the six months ended June 30, 2000:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, SIX MONTHS
-------------------------------------------------- ENDED
1996 1997 1998 1999 JUNE 30, 2000
-------- -------- -------- -------- -------------
<S> <C> <C> <C> <C> <C>
LONG WHARF MARRIOTT
Occupancy........................................... 86.0% 87.1% 87.5% 87.7% 90.1%
Average daily rate.................................. $201.18 $218.23 $226.46 $240.79 $232.84
REVPAR (1).......................................... $173.01 $190.08 $198.15 $211.17 $209.79
REVPAR percent change............................... 9.9% 4.2% 6.6% 10.8%(2)

CAMBRIDGE CENTER MARRIOTT
Occupancy........................................... 82.1% 85.3% 83.6% 83.7% 85.7%
Average daily rate.................................. $150.52 $163.77 $181.15 $191.63 $195.57
REVPAR (1).......................................... $123.58 $139.70 $151.44 $160.39 $167.60
REVPAR percent change............................... 13.0% 8.4% 5.9% 11.5%(2)

RESIDENCE INN BY MARRIOTT-REGISTERED TRADEMARK- (3)
Occupancy........................................... 84.6% 90.5%
Average daily rate.................................. $154.64 $164.29
REVPAR (1).......................................... $130.83 $148.68
REVPAR percent change............................... 30.0%(2)
</TABLE>

-------------------------

(1) REVPAR is determined by dividing room revenue by available rooms for the
applicable period. We believe that REVPAR is an industry standard measure
used to present hotel operating data.

(2) Represents change from June 30, 1999 to June 30, 2000.

(3) Operational on February 1, 1999.

INDEBTEDNESS

UNSECURED LINE OF CREDIT

We maintain an unsecured line of credit through Fleet National Bank, as
agent, allowing us to borrow up to $605 million. Our unsecured line of credit is
a recourse obligation of Boston Properties Limited Partnership, and bears
interest at a floating rate (currently 7.875% annually). Our unsecured line of
credit matures on March 31, 2003 and could be terminated by our lenders upon the
occurrence of customary events of default.

We use our unsecured line of credit principally to fund our development
pipeline, other land and property acquisitions and for working capital purposes.
As of October 9, 2000, we had an outstanding balance of $221 million. We expect
to use a portion of the proceeds of this offering to reduce this outstanding
balance.

S-35
<PAGE>
MORTGAGE INDEBTEDNESS

As of June 30, 2000, we had outstanding approximately $3.2 billion of
indebtedness secured by our properties listed below:

<TABLE>
<CAPTION>
BALANCE AT
INTEREST RATE PRINCIPAL MATURITY MATURITY(1)
PROPERTIES (PER ANNUM) (IN THOUSANDS) DATE (IN THOUSANDS)
---------- ---------------- -------------- -------- --------------
<S> <C> <C> <C> <C>
FIXED RATE DEBT
214 Carnegie Center(2)(3)....................... 8.19% $ 13,126 10/31/00 $ 13,010
202 Carnegie Center(3).......................... 7.25% 19,017 12/01/00 18,865
212 Carnegie Center(3).......................... 7.25% 20,453 12/10/00 20,291
Newport Office Park............................. 8.13% 6,076 07/01/01 5,764
One Independence Square(4)...................... 8.12% 74,743 08/21/01 73,938
10 and 20 Burlington Mall Road(5)............... 8.33% 37,000 10/01/01 37,000
280 Park Avenue................................. 7.00% 213,000 09/11/02 200,200
875 Third Avenue(6)............................. 8.00% 151,977 12/31/02 146,684
Two Independence Square(4)...................... 8.09% 117,354 02/27/03 113,844
2300 N Street................................... 6.88% 66,000 08/03/03 66,000
One and Two Reston Overlook..................... 7.45% 68,468 09/01/04 65,328
599 Lexington Avenue(7)......................... 7.00% 225,000 07/19/05 225,000
Embarcadero Center West Tower................... 6.50% 98,196 01/01/06 90,416
101 Carnegie Center............................. 7.66% 8,513 04/01/06 6,516
Capital Gallery................................. 8.24% 57,677 08/15/06 49,703
191 Spring Street............................... 8.50% 22,959 09/01/06 20,428
Reservoir Place(8).............................. 6.88% 74,777 11/01/06 60,570
Montvale Center................................. 8.59% 7,627 12/01/06 6,556
Embarcadero Center Three........................ 6.40% 147,243 01/01/07 132,726
510 Carnegie Center............................. 7.39% 27,912 01/01/08 23,520
504, 506 & 508 Carnegie Center.................. 7.39% 48,772 01/01/08 40,915
Riverfront Plaza................................ 6.61% 116,788 02/01/08 94,713
Embarcadero Center Four......................... 6.79% 155,889 02/01/08 129,351
Reston Corporate Center......................... 6.56% 25,046 05/01/08 20,264
NIMA Building................................... 6.51% 21,700 06/01/08 17,504
Lockheed Martin Building........................ 6.61% 26,536 06/01/08 21,456
Prudential Center............................... 6.72% 293,639 07/01/08 256,756
100 East Pratt Street........................... 6.73% 92,619 11/01/08 75,981
Bedford Business Park........................... 8.50% 21,970 12/10/08 15,891
Embarcadero Center One, Two & Federal Reserve... 6.70% 314,748 12/10/08 273,170
Democracy Center................................ 7.05% 108,342 04/01/09 90,454
1301 New York Avenue(9)......................... 7.19% 33,135 08/15/09 20,524
201 Carnegie Center............................. 7.08% 506 02/01/10 --
Ten Cambridge Center............................ 8.27% 35,927 05/01/10 29,354
Eight Cambridge Center.......................... 7.73% 28,587 07/15/10 22,477
Hilltop Business Center......................... 6.81% 5,816 03/01/19 --
University Place................................ 6.94% 25,525 08/01/21 --
---------- -----------
$2,812,663 $ 2,485,169
========== ===========
</TABLE>

-------------------------

See notes on page S-37.

S-36
<PAGE>

-------------------------

(1) Assumes that total construction loans are fully drawn. Some of our
construction loans have repayment and completion guarantees that are
recourse obligations of ours.

(2) The principal amount and interest rate shown has been adjusted to reflect
the effective rate on the loan. The actual principal balance at June 30,
2000 was $13,115 and the interest rate was 8.40% per annum.

(3) We have replaced these loans with a $63 million loan encumbering 202, 206
and 214 Carnegie Center for ten years bearing interest at a fixed rate of
8.13% per annum.

(4) The principal amount and interest rate shown has been adjusted to reflect
the effective rates on the loans. The actual principal balances at June 30,
2000 were $74,938 and $117,594, respectively. The actual interest rates are
8.50% per annum and continue at such rate through the loan expiration.

(5) Includes outstanding indebtedness secured by 91 Hartwell Avenue and 92 and
100 Hayden Avenue.

(6) The principal amount and interest rate shown has been adjusted to reflect
the fair value of the note. The actual principal balance at June 30, 2000
was $149,473 and the interest rate was 8.75% per annum.

(7) At maturity the lender has the option to purchase a 33.33% interest in this
property in exchange for the cancellation of the principal balance of
approximately $225 million.

(8) The principal amount and interest rate shown has been adjusted to reflect
the fair value of the note. The actual principal balance at June 30, 2000
was $65,774 and the interest rate was 9.65% per annum.

(9) Includes outstanding principal in the amounts of $20,000, $8,742 and $4,393
that bear interest at fixed rates of 6.70%, 8.54% and 6.75% per annum,
respectively.

(10) We have replaced this mortgage with a ten-year mortgage for a principal
amount of $90 million that bears interest at a fixed rate of 8.4% per annum.

(11) We have entered into a commitment to replace this construction loan. If
consummated, this new 20-year bond financing will be for a principal amount
of $57.6 million and bear interest at a rate equivalent to 7.58% per annum.

As of June 30, 2000, the aggregate balances that will be due on maturity of
our fixed and variable mortgage indebtedness for each of the following years
were as follows:
<TABLE>
<CAPTION>
2000 2001 2002 2003 2004 2005 2006 2007 2008 AND BEYOND
-------- -------- -------- -------- -------- -------- -------- -------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Fixed................ $ 52,166 $116,702 $346,884 $179,844 $65,328 $225,000 $234,189 $132,726 $1,132,330
Variable............. 75,000 48,600 262,000 455,056 30,000 -- -- -- --
-------- -------- -------- -------- ------- -------- -------- -------- ----------
Total................ $127,166 $165,302 $608,884 $634,900 $95,328 $225,000 $234,189 $132,726 $1,132,330
======== ======== ======== ======== ======= ======== ======== ======== ==========

<CAPTION>
TOTAL
----------
<S> <C>
Fixed................ $2,485,169
Variable............. 870,656
----------
Total................ $3,355,825
==========
</TABLE>

S-37
<PAGE>
MANAGEMENT

The following table sets forth certain information with respect to our
directors and executive officers as of October 9, 2000:

<TABLE>
<CAPTION>
NAME AGE POSITION
---- -------- --------
<S> <C> <C>
Mortimer B. Zuckerman..................... 63 Chairman of the Board
Edward H. Linde........................... 59 President, Chief Executive Officer and
Director
Alan J. Patricof.......................... 65 Director
Ivan G. Seidenberg........................ 53 Director
Martin Turchin............................ 59 Director
Alan B. Landis............................ 57 Director
Richard E. Salomon........................ 57 Director
Robert E. Burke........................... 62 Executive Vice President for Operations
Raymond A. Ritchey........................ 50 Executive Vice President and National
Director of Acquisitions and Development
Bryan J. Koop............................. 42 Senior Vice President and Regional Manager
of our Boston Office
Douglas T. Linde.......................... 37 Senior Vice President, Chief Financial
Officer and Treasurer
E. Mitchell Norville...................... 42 Senior Vice President and Operations
Manager of our Washington, D.C. Office
Robert E. Pester.......................... 43 Senior Vice President and Regional Manager
of our San Francisco Office
Robert E. Selsam.......................... 54 Senior Vice President and Regional Manager
of our New York Office
</TABLE>

The following is a biographical summary of the experience of our directors
and executive and senior officers:

MR. MORTIMER B. ZUCKERMAN serves as Chairman of our Board of Directors and
has been a director since June 23, 1997. Mr. Zuckerman co-founded Boston
Properties in 1970 after spending seven years at Cabot, Cabot & Forbes where he
rose to the position of Senior Vice President and Chief Financial Officer.
Mr. Zuckerman serves as a trustee of New York University, a trustee of Memorial
Sloan-Kettering Cancer Institute, a trustee of the Institute for Advanced
Studies at Princeton and a member of the Council on Foreign Relations and the
International Institute for Strategic Studies. He is also Chairman and
Editor-in-Chief of U.S. News & World Report, Chairman and Co-Publisher of the
New York Daily News and Chairman of the Board of Applied Graphics Technologies
and a member of the Board of Directors of Snyder Communications, Chase Manhattan
Corporation National Advisory Board, Loews Cineplex and WNET/Channel Thirteen.
Mr. Zuckerman is a graduate of McGill University in Montreal where he received
an undergraduate degree in 1957 and a degree in law in 1961. He received an MBA
with distinction from the Wharton School, University of Pennsylvania in 1961 and
an LLM from Harvard University in 1962. He has also received three honorary
degrees. He is 63 years old.

MR. EDWARD H. LINDE serves as President, Chief Executive Officer and has
been a director since June 23, 1997. Mr. Linde co-founded Boston Properties in
1970 after spending five years at Cabot, Cabot & Forbes, where he became Vice
President and Senior Project Manager. Mr. Linde serves as a trustee of the
Boston Symphony Orchestra and a Director of Jobs for Massachusetts. He is also a
member of the Board of Directors of the John Hancock Mutual Life Insurance

S-38
<PAGE>
Company and Homeruns.com. Mr. Linde received a BS in Civil Engineering from MIT
in 1962 and an MBA from Harvard Business School, where he was a Baker Scholar,
in 1964. He is 59 years old. Mr. Linde's son, Douglas T. Linde, serves as our
Senior Vice President, Chief Financial Officer and Treasurer.

MR. ALAN J. PATRICOF has been a director since June 23, 1997. Mr. Patricof
is Chairman of the Board of Directors of Patricof & Co. Ventures, the company
that he founded in 1969. He serves as a director of CoreComm, Johnny Rockets
Group and NTL. Mr. Patricof received a BS in finance from The Ohio State
University and an MBA from Columbia University Graduate School of Business,
where he is currently on the Board of Overseers. He is 65 years old.

MR. IVAN G. SEIDENBERG has been a director since June 23, 1997.
Mr. Seidenberg has served as the President and Co-Chief Executive Officer for
Verizon Communications since its formation by the merger of Bell Atlantic and
GTE. Prior to this merger, Mr. Seidenberg served as the Chairman and Chief
Executive Officer for Bell Atlantic since 1998. From 1997 through
December 1998, Mr. Seidenberg served as the Vice Chairman, President and Chief
Operating Officer of Bell Atlantic. Prior to the merger of Bell Atlantic and
NYNEX, from 1995 to 1997, Mr. Seidenberg served as the Chairman and Chief
Executive Officer of NYNEX where he held various positions since 1991. As a
chief executive, he has led efforts during two of the largest mergers in
business history--Bell Atlantic's merger with NYNEX in August 1997 and the
recently completed Verizon merger. Mr. Seidenberg is a member of the Board of
Directors of Honeywell International, American Home Products, CVS, Pace
University, The Museum of Television and Radio, The National Urban League, The
New York Hall of Science, The New York Hospital, Verizon Communications and
Viacom. Mr. Seidenberg received a BA in mathematics from City University of New
York and an MBA from Pace University. He is 53 years old.

MR. MARTIN TURCHIN has been a director since June 23, 1997. Since 1985,
Mr. Turchin has served as Vice-Chairman of Insignia/ESG, a subsidiary of
Insignia Financial Group, one of the nation's largest commercial real estate
brokerage, consulting and management firms. Prior to joining Insignia/ESG, he
spent 14 years with Kenneth E. Laub & Company, where he was involved in real
estate acquisition, financing, leasing and consulting. Mr. Turchin has more than
30 years experience as a commercial real estate broker, consultant and advisor
and has been involved in some of the largest real estate transactions in the
United States. During his career, he has orchestrated more than 50 million
square feet of real estate transactions. Mr. Turchin is a three time recipient
of the Real Estate Board of New York's "Most Ingenious Deal of the Year Award"
and a recipient of the "Robert T. Lawrence Award." Mr. Turchin holds a BS from
City College of the University of New York and a JD from St. John's Law School.
He is 59 years old.

MR. ALAN B. LANDIS has been a director since June 30, 1998. He also serves
as the Chief Executive Officer of The Landis Group, a real estate development
and management organization which is the developer of Carnegie Center located in
Princeton, NJ. Since 1967, Mr. Landis has held various positions with The Landis
Group or its predecessors. He has served as the Co-Chairman of the Foundation
Fighting Blindness Celebrity Golf Classic since 1988 and has been appointed to
the Advisory Board to Prevent Child Abuse. He was named a trustee to the Hun
School at Princeton in 1988. Mr. Landis has been the recipient of several
awards, including The Urban Land Institute Award for Excellence, The American
and National Planning Association Awards, The American Institute of Architects
Award for Precedent Setting Achievements in Land Use and Development, The
American Society of Landscape Architects Environmental Enhancement Award, The
National Association of Industrial Office Parks Impact Award/ Developer of the
Year Award, the MSM Community Development Award and the Israel Peace Medal. He
received a BS in Accounting from New York University in 1965. He is 57 years
old.

S-39
<PAGE>
Mr. Landis was appointed to the Board of Directors pursuant to a directorship
agreement in connection with our acquisition of a portfolio of properties in New
Jersey. We agreed that the Board of Directors will nominate Mr. Landis for
re-election as a director at each annual meeting of stockholders in a year in
which his term expired as long as Mr. Landis (together with parties related to
him) continue to beneficially own at least one percent of the aggregate number
of outstanding shares of common stock and units of limited partnership interest
in Boston Properties Limited Partnership. Additionally, Mr. Landis must comply
with the policies of our Board of Directors and attend a certain number of the
meetings of the Board of Directors.

MR. RICHARD E. SALOMON has been a director since November 12, 1998. He is a
Managing Director of Spears, Benzak, Salomon & Farrell, an investment advisory
firm. Mr. Salomon has been with Spears, Benzak, Salomon & Farrell since 1982.
Mr. Salomon serves as Senior Advisor to Mr. David Rockefeller. He represented
Rockefeller interests on the Executive Committee of Embarcadero Center from
1977-98. In addition, he is Chairman of the Advisory Board of Blackstone
Alternative Asset Management. He is a director of Cousins Properties,
Rockefeller & Associates Realty, Rockefeller Center and Strategic Hotel Capital.
He is a trustee of the Museum of Modern Art, The New York Public Library and
Rockefeller University. Mr. Salomon serves as the Chairman of the Investment
Committee of Rockefeller University and is a member of the Investment Committee
at The Council of Foreign Relations, The New York Public Library, the Museum of
Modern Art and the Sloan Foundation. He received a BA from Yale University in
1964 and an MBA from Columbia University Graduate School of Business in 1967.
Mr. Salomon is 57 years old.

MR. ROBERT E. BURKE serves as Executive Vice President for Operations, with
responsibility for administrative policy and day-to-day control of our
operations. Prior to his appointment in April 1998 to this position, he served
for 12 years as Senior Vice President and Co-Manager of our Washington, D.C.
office. He joined us in 1979 to open our Washington area office, serving as
General Manager in charge of operations of that office until 1998. Prior to
1979, Mr. Burke spent over seven years as General Manager of the development of
the John Fitzgerald Kennedy Library Corporation. He received dual degrees in
1960 when he earned a BS from Bates College and a Bachelor of Civil Engineering
degree from Rensselaer Polytechnic Institute. He is 62 years old.

MR. RAYMOND A. RITCHEY serves as Executive Vice President and National
Director of Acquisitions and Development. He also is principal in charge of our
Washington, D.C. office. Prior to his appointment in April 1998 to this
position, he served as Senior Vice President and Co-Manager of our Washington,
D.C. office. In his current position, Mr. Ritchey is responsible for all
business development, leasing and marketing as well as new opportunity
origination in the Washington, D.C. area. He also directly oversees similar
activities on a national basis. Mr. Ritchey joined us in 1980, leading our
expansion to become one of the dominant real estate firms in the Washington,
D.C. metropolitan area. For four years prior to joining us, Mr. Ritchey was one
of the leading commercial real estate brokers in the Washington, D.C. area with
Coldwell Banker. He is a 1972 graduate of the U.S. Naval Academy and a 1973
graduate of the U.S. Naval Post Graduate School in Monterey, CA. He is 50 years
old.

MR. BRYAN J. KOOP serves as Senior Vice President and Regional Manager of
our Boston office. Mr. Koop is responsible for overseeing the operation of our
existing assets and development activities. His responsibilities further include
identifying, seizing and capitalizing on new business opportunities. Prior to
joining us in 1999, Mr. Koop was at Trammel Crow, where he served as Managing
Director and City Leader of the New England commercial and retail division.
Mr. Koop received a BBA in 1980 and an MBA in 1982 from Texas Christian
University. He is 42 years old.

S-40
<PAGE>
MR. DOUGLAS T. LINDE serves as Senior Vice President and was recently
appointed Chief Financial Officer and Treasurer. He previously served as Senior
Vice President for Financial and Capital Markets. Mr. Linde oversees the
accounting, control and financial management departments and is also responsible
for capital raising, financial strategy, planning and acquisitions. In addition,
Mr. Linde has played a key role in our acquisition program, including the
purchase and financing of the Prudential Center in Boston, the Embarcadero
Center in San Francisco, the Carnegie Center Portfolio in Princeton, NJ,
University Place in Cambridge, MA and Reservoir Place in Waltham, MA. He joined
us in January 1997 as Vice President of Acquisitions and New Business to help
identify and execute acquisitions and to develop new business opportunities.
Prior to joining us, Mr. Linde served from 1993 to 1997 as President of Capstone
Investments, a Boston real estate investment company. From 1989 to 1993, he
served as Project Manager and Assistant to the Chief Financial Officer of Wright
Runstad and Company, a private real estate developer in Seattle, WA. He began
his career in the real estate industry with Salomon Brothers' Real Estate
Finance Group. Mr. Linde received a BA from Wesleyan University and an MBA from
Harvard Business School. Mr. Linde is on the Board of Overseers for the Beth
Israel Deaconess Medical Center. He is 37 years old. Mr. Linde's father, Edward
H. Linde, serves as President, Chief Executive Officer and a director.

MR. E. MITCHELL NORVILLE serves as Senior Vice President and Operations
Manager of our Washington, D.C. office. He is in charge of all development
activities as well as being responsible for all administrative, project,
construction and property management activities for our Washington, D.C. office,
with a staff of more than 200 people. From 1994 to 1998, he served as Senior
Vice President and Senior Project Manager of our Washington, D.C. office, with
responsibilities for various project developments. Mr. Norville has been
directly responsible for over four million square feet of new development and
renovation projects. Prior to joining us in 1984, Mr. Norville worked as a
process engineer with Exxon in Baytown, TX. He received a BS in Mechanical
Engineering from Clemson University in 1980 and an MBA from the University of
Virginia in 1984. He is 42 years old.

MR. ROBERT E. PESTER serves as Senior Vice President and Regional Manager of
our San Francisco office, with responsibility for all of our activities on the
West Coast. Mr. Pester is responsible for overseeing existing operations at the
Embarcadero Center and the Gateway Center in South San Francisco and developing
new business opportunities in the area. Prior to joining us in 1998, he served
as Executive Vice President and Chief Investment Officer of Bedford Property
Investors, a real estate investment trust in Lafayette, CA, where he led the
acquisitions and development program. Prior to 1994, he was President of Bedford
Property Development, a private West Coast development concern that held more
than $2 billion in real estate assets. From 1980 to 1989, he was a leading
commercial real estate broker with Cushman & Wakefield in northern California,
where he last served as Vice President. He is a graduate of the University of
California at Santa Barbara with a BA in economics and political science. He is
43 years old.

MR. ROBERT E. SELSAM serves as Senior Vice President and Regional Manager of
our New York office. He oversees all aspects of our New York activities,
including development, acquisitions, leasing and building operations. He joined
us as a Vice President in 1984, prior to which he was Director of Planning for
the Metropolitan Transportation Authority of the State of New York. Mr. Selsam
is a member of the Board of Governors and serves as Chairman of the
Transportation Committee of the Real Estate Board of New York. He is a board
member of the New York Building Congress, is Executive Vice President and past
Co-Chairman of the Associated Builders and Owners of Greater New York, a member
of the Executive Committee of the Association for a Better New York and a
trustee of the Salvadori Center. He received a BA from the University of
Pennsylvania in 1968 and an MS in Urban Planning from the Columbia University
School of Architecture in 1970. He is 54 years old.

S-41
<PAGE>
ADDITIONAL FEDERAL INCOME TAX CONSIDERATIONS

The following is a supplemental discussion of the material federal income
tax considerations and consequences associated with an investment in our common
stock, which supplements the considerations discussed under "Certain Federal
Income Tax Considerations," beginning on page 32 of the accompanying prospectus.

WE URGE YOU, AS A PROSPECTIVE INVESTOR, TO CONSULT YOUR OWN TAX ADVISOR WITH
RESPECT TO THE SPECIFIC FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX
CONSEQUENCES TO YOU OF THE PURCHASE, HOLDING AND SALE OF OUR COMMON STOCK.

The REIT Modernization Act, effective for taxable years beginning after
December 31, 2000, reduced the minimum distribution requirement necessary in
order for us to be taxed as a REIT from 95% of our "REIT taxable income" to 90%
of our "REIT taxable income" (calculated, in each case, without regard to our
dividends paid deduction or capital gain). In addition, the REIT Modernization
Act liberalized the asset tests which we must satisfy in order to qualify to be
taxed as a REIT. As of January 1, 2001, the REIT Modernization Act permits us to
own up to 100% of the voting securities or value of any issuer provided that the
issuer elects to be a "taxable REIT subsidiary." In general, "taxable REIT
subsidiaries" are subject to corporate taxation and are permitted to render
non-customary services to our tenants (in addition to engaging in any other
activity), without causing income we receive from our tenants to fail to qualify
as "rents from real property."

S-42
<PAGE>
UNDERWRITING

We and Goldman, Sachs & Co. and Morgan Stanley and Co. Incorporated, as the
co-representatives of the underwriters for the offering, have entered into an
underwriting agreement with respect to the shares being offered by this
prospectus supplement. Subject to conditions, we have agreed to sell to the
underwriters, and the underwriters have agreed to purchase from us, the
15,000,000 shares of our common stock offered hereby.

<TABLE>
<CAPTION>
UNDERWRITERS NUMBER OF SHARES
------------ ----------------
<S> <C>
Goldman, Sachs & Co.........................................
Morgan Stanley and Co. Incorporated.........................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated......................................
Prudential Securities Incorporated..........................
Salomon Smith Barney Inc....................................
Banc of America Securities LLC..............................
Deutsche Bank Securities Inc................................
Lehman Brothers Inc.........................................
----------
Total..................................................... 15,000,000
==========
</TABLE>

If the underwriters sell more shares than the total number set forth in the
table above, the underwriters have an option to buy up to an additional
2,250,000 shares from us to cover such sales. They may exercise that option for
30 days. If any shares are purchased pursuant to this option, the underwriters
will severally purchase shares in approximately the same proportion as set forth
in the table above.

The following table shows the per share and total underwriting discount to
be paid to the underwriters by us. Such amounts are shown assuming both no
exercise and full exercise of the underwriters' option to purchase 2,250,000
additional shares.

<TABLE>
<CAPTION>
PAID BY ISSUER NO EXERCISE FULL EXERCISE
-------------- ----------- -------------
<S> <C> <C>
Per Share............................................ $ $
Total................................................ $ $
</TABLE>

Shares sold by the underwriters to the public will initially be offered at
the initial price to public set forth on the cover of this prospectus
supplement. Any shares sold by the underwriters to securities dealers may be
sold at a discount of up to $ per share from the initial price to public. Any
such securities dealers may resell any shares purchased from the underwriters to
certain other brokers or dealers at a discount of up to $ per share from the
initial price to public. If all the shares are not sold at the initial price to
public, the co-representatives may change the offering price and the other
selling terms.

In connection with the offering, the underwriters may purchase and sell
shares of common stock in the open market. These transactions may include short
sales, stabilizing transactions and purchases to cover positions created by
short sales. Short sales involve the sale by the underwriters of a greater
number of shares than they are required to purchase in the offering. "Covered"
short sales are sales made in an amount not greater than the underwriters'
option to purchase additional shares from us in the offering. The underwriters
may close out any covered short position by either exercising their option to
purchase additional shares or purchasing shares in the open

S-43
<PAGE>
market. In determining the source of shares to close out the covered short
position, the underwriters will consider, among other things, the price of
shares available for purchase in the open market as compared to the price at
which they may purchase shares through the overallotment option. "Naked" short
sales are any sales in excess of such option. The underwriters must close out
any naked short position by purchasing shares in the open market. A naked short
position is more likely to be created if the underwriters are concerned that
there may be downward pressure on the price of the common stock in the open
market after pricing that could adversely affect investors who purchase in the
offering. Stabilizing transactions consist of various bids for or purchases of
common stock made by the underwriters in the open market prior to the completion
of the offering.

The underwriters may also impose a penalty bid. This occurs when a
particular underwriter repays to the underwriters a portion of the underwriting
discount received by it because the co-representatives have repurchased shares
sold by or for the account of such underwriter in stabilizing or short covering
transactions.

Purchases to cover a short position and stabilizing transactions may have
the effect of preventing or retarding a decline in the market price of our
common stock, and together with the imposition of the penalty bid, may
stabilize, maintain or otherwise affect the market price of the common stock. As
a result, the price of the common stock may be higher than the price that
otherwise might exist in the open market. If these activities are commenced,
they may be discontinued at any time. These transactions may be effected on the
New York Stock Exchange, in the over-the-counter market or otherwise.

We have agreed with the underwriters not to dispose of or hedge any of our
common stock or securities convertible into or exchangeable for shares of such
common stock during the period from the date of this prospectus supplement
continuing through the date 90 days after the date of this prospectus
supplement, except with the prior written consent of the underwriters, other
than (A) the granting of stock options or the issuance of stock under our
current employee benefit plans, (B) the issuance of shares of our common stock
in exchange for outstanding partnership units of Boston Properties Limited
Partnership in accordance with terms of the partnership agreement of Boston
Properties Limited Partnership and (C) the issuance of shares of our common
stock or partnership units of Boston Properties Limited Partnership in
connection with the acquisition of properties in the ordinary course of
business. Mr. Zuckerman, Chairman, and Mr. E. Linde, President and Chief
Executive Officer, have entered into similar agreements with the underwriters.

A prospectus in electronic format may be made available on the web sites
maintained by one or more of the underwriters. The co-representatives may agree
to allocate a number of shares to underwriters for sale to their online
brokerage account holders. Internet distributions will be allocated by the
co-representatives to underwriters that may make Internet distributions on the
same basis as other allocations.

We estimate that our total share of expenses for the offering, excluding
underwriting discount, will be approximately $850,000.

We have agreed to indemnify the underwriters against certain liabilities,
including liabilities under the Securities Act of 1933.

The underwriters have provided from time to time, and may provide in the
future, investment banking and other financial services to us. In the ordinary
course of business, the underwriters may actively trade our securities for their
own accounts or for accounts of customers and, accordingly, they may at any time
hold long or short positions in those securities. In addition,

S-44
<PAGE>
affiliates of Prudential Securities Incorporated have in the past several years
been parties to a variety of property disposition, equity financing and debt
financing transactions with us and our affiliates, including the following
material transactions: our acquisition of the Embarcadero Center complex in San
Francisco in which affiliates of Prudential Securities Incorporated acquired in
the aggregate $108.4 million of our equity securities; our acquisition of the
Prudential Center in Boston and the associated development rights in which
affiliates of Prudential Securities Incorporated acquired in the aggregate
$180.5 million of our equity securities; and our acquisition of the 5 Times
Square development site in midtown Manhattan in which affiliates of Prudential
Securities Incorporated received in the aggregate $152.5 million in cash.

LEGAL MATTERS

Certain legal matters, including the validity of our common stock offered
through this prospectus supplement will be passed upon for us by Goodwin,
Procter & Hoar LLP. Gilbert G. Menna, the sole stockholder of Gilbert G. Menna,
P.C., a partner of Goodwin, Procter & Hoar LLP, serves as one of our Assistant
Secretaries. Mr. Menna and other partners of Goodwin, Procter & Hoar LLP,
together own approximately 20,000 shares of our common stock. Goodwin,
Procter & Hoar LLP occupies approximately 26,000 square feet at our property at
599 Lexington Avenue, New York, NY under a lease that expires in 2002. Skadden,
Arps, Slate, Meagher & Flom LLP, New York, NY has represented the underwriters
in this transaction. Skadden, Arps, Slate, Meagher & Flom LLP occupies
approximately 41,000 square feet at our property at Four Embarcadero Center, San
Francisco, CA, under a lease that expires in 2001.

EXPERTS

The financial statements of Boston Properties, Inc. as of December 31, 1999
and 1998 and for the years ended December 31, 1999 and 1998 and for the period
from June 23, 1997 to December 31, 1997, and of the Boston Properties
predecessor group for the period from January 1, 1997 to June 22, 1997, all
incorporated by reference in our annual report on Form 10-K for the year ended
December 31, 1999, have been so incorporated in reliance upon the reports of
PricewaterhouseCoopers LLP, independent accountants given on the authority of
said firm as experts in accounting and auditing.

S-45
<PAGE>
PROSPECTUS

$1,500,000,000

BOSTON PROPERTIES, INC.

PREFERRED STOCK
COMMON STOCK
WARRANTS

------------------

Boston Properties, Inc. develops, acquires, owns and manages a diverse
portfolio of office, industrial and hotel properties in the United States. Our
properties are predominantly located in Greater Boston; Midtown Manhattan;
Greater Washington, D.C.; San Francisco, California; Princeton/ East Brunswick,
New Jersey; Richmond, Virginia; and Baltimore, Maryland. We are one of the
largest owners and developers of office properties in the United States. We are
a self-administered and self-managed real estate investment trust.

By this prospectus we may offer Preferred Stock, Common Stock and Warrants.
Throughout this prospectus we will refer to our Preferred Stock, Common Stock
and Warrants as "Securities." This prospectus refers to and incorporates certain
filings we have made with the Securities and Exchange Commission. This
prospectus, together with those filings, provides a general description of the
Securities we may offer. Each time we sell Securities we will provide a
prospectus supplement that will contain specific information about the terms of
such offering. That prospectus supplement may also add, update or change
information in this prospectus. You should read this prospectus and any
prospectus supplement carefully before you invest in our Securities. This
prospectus may not be used to consummate sales of Securities unless it is
accompanied by a prospectus supplement.

We may sell the offered Securities: (a) directly to one or more purchasers;
(b) through agents; or (c) through underwriters or dealers. If we sell
Securities through agents or underwriters, we will name them in a prospectus
supplement and describe in that prospectus supplement any applicable purchase
price, fees, commissions or discounts.

SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR CERTAIN FACTORS YOU SHOULD
CONSIDER BEFORE YOU INVEST IN OUR SECURITIES.

------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

The date of this prospectus is January 29, 1999
<PAGE>
AVAILABLE INFORMATION

We have filed with the Securities and Exchange Commission (the "SEC") a
Registration Statement on Form S-3 (the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
Securities. This prospectus is part of the Registration Statement. This
prospectus does not contain all the information contained in the Registration
Statement because we have omitted certain parts of the Registration Statement in
accordance with the rules and regulations of the SEC. For further information,
we refer you to the Registration Statement, which you may read and copy at the
public reference facilities maintained by the SEC at Judiciary Plaza, 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549, and at the SEC's Regional
Offices at 7 World Trade Center, 13th Floor, New York, New York 10048, and
Citicorp Center, 500 W. Madison Street, Suite 1400, Chicago, Illinois
60661-2511. You may also obtain copies at the prescribed rates from the Public
Reference Section of the SEC at its principal office in Washington, D.C. You may
call the SEC at 1-800-SEC-0330 for further information about the public
reference rooms. The SEC maintains a web site that contains reports, proxy and
information statements and other information regarding registrants, including
Boston Properties, Inc., that file electronically with the SEC. You may access
the SEC's web site at http://www.sec.gov.

We are subject to the informational requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act") and we are required to file reports
and proxy statements and other information with the SEC. Such reports, proxy
statements and other information can be inspected and copied at the locations
described above. Copies of such materials can be obtained by mail from the
Public Reference Section of the SEC at Judiciary Plaza, 450 Fifth Street, N.W.,
Room 1024, Washington, D.C. 20549, at prescribed rates. Our Common Stock is
listed on the New York Stock Exchange ("NYSE"). You may also read our reports,
proxy and other information statements and other information which we file at
the offices of the NYSE, 20 Broad Street, New York, New York 10005.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

We file annual, quarterly and special reports, proxy statements and other
information with the SEC. The SEC allows us to "incorporate by reference" the
information we file with the SEC, which means that we can disclose in this
prospectus important information to you by referring you to those documents. The
information below is incorporated in this prospectus by reference and is an
important part of this prospectus, and certain information that we file after
the date of this prospectus with the SEC will automatically be incorporated in
this prospectus and update and supersede this information. We incorporate by
reference the documents listed below and any future filings made with the SEC
under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act until we sell all
of the Securities.

- Our Annual Report on Form 10-K for the year ended December 31, 1997.

- Our Quarterly Reports on Form 10-Q for the quarters ended March 31, 1998,
June 30, 1998 and September 30, 1998 and our Report on Form 10-Q/A filed
on December 1, 1998, amending the Report on Form 10-Q for the quarter
ending September 30, 1998.

- The description of the Common Stock contained in our Registration
Statement on Form 8-A, filed on June 12, 1997, and all amendments and
reports updating the description.

- The description of the rights to purchase shares of the Company's
Series E Junior Participating Cumulative Preferred Stock contained in our
Registration Statement on Form 8-A, filed on June 12, 1997, and the
description contained in our Registration Statement on Form 8-A/A filed on
June 16, 1997 amending such description, and all amendments and reports
updating such description.

- Our Current Reports on Form 8-K filed on September 26, 1997, November 6,
1997, November 26, 1997, December 16, 1997, January 12, 1998, January 26,
1998, February 6, 1998,

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June 9, 1998, July 15, 1998, July 17, 1998, July 27, 1998, October 27,
1998 and November 25, 1998 and our Current Reports on Form 8-K/A filed on
November 14, 1997 and November 25, 1997, amending our Current Report on
Form 8-K filed on September 26, 1997, our Current Reports on Form 8-K/A
filed on November 14, 1997 and December 4, 1997, amending our Current
Report on Form 8-K filed on November 6, 1997 and our Current Report on
Form 8-K/A filed on August 25, 1998, amending our Current Reports on
Form 8-K filed on July 15, 1998, July 17, 1998 and July 27, 1998.

WE WILL PROVIDE, WITHOUT CHARGE, AT THE WRITTEN OR ORAL REQUEST OF ANYONE TO
WHOM THIS PROSPECTUS IS DELIVERED, COPIES OF THE DOCUMENTS INCORPORATED BY
REFERENCE IN THIS PROSPECTUS, OTHER THAN AN EXHIBIT TO A FILING UNLESS THAT
EXHIBIT IS SPECIFICALLY INCORPORATED BY REFERENCE INTO THAT FILING. WRITTEN
REQUESTS SHOULD BE DIRECTED TO BOSTON PROPERTIES, INC., 800 BOYLSTON STREET,
BOSTON, MASSACHUSETTS 02199, ATTENTION: CHIEF FINANCIAL OFFICER. TELEPHONE
REQUESTS MAY BE DIRECTED TO (617) 236-3300.

You should rely only on the information incorporated by reference or
provided in this prospectus. We have not authorized anyone to provide you with
different information. Any statement contained in this prospectus or in a
document incorporated by reference in this prospectus shall be deemed to be
modified or superseded to the extent that a statement contained in this
prospectus (in the case of a statement in a previously filed document
incorporated by reference herein), in any applicable prospectus supplement or in
any other subsequently filed document which also is incorporated by reference
herein modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this prospectus or any accompanying prospectus supplement.
Subject to the foregoing, all information appearing in this prospectus and each
accompanying prospectus supplement is qualified in its entirety by the
information appearing in the documents incorporated by reference.

We are not making an offer of these Securities in any state where the offer
is not permitted. You should not assume that the information in this prospectus
is accurate as of any date other than the date on the front of those documents.

Statements contained in this prospectus as to the contents of any contract
or other document are not necessarily complete, and in each instance, reference
is made to the copy of such contract or document filed as an exhibit to the
Registration Statement or as an exhibit to another filing, each such statement
being qualified in all respects by such reference and the exhibits and schedules
thereto.

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RISK FACTORS

BEFORE YOU INVEST IN OUR SECURITIES, YOU SHOULD BE AWARE THAT THERE ARE
VARIOUS RISKS IN MAKING SUCH AN INVESTMENT, INCLUDING THOSE DESCRIBED BELOW. YOU
SHOULD CONSIDER CAREFULLY THESE RISK FACTORS TOGETHER WITH ALL OF THE
INFORMATION INCLUDED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS BEFORE YOU
DECIDE TO PURCHASE OUR SECURITIES. THIS SECTION INCLUDES OR REFERS TO CERTAIN
FORWARD-LOOKING STATEMENTS; YOU SHOULD REFER TO THE EXPLANATION OF THE
QUALIFICATIONS AND LIMITATIONS ON SUCH FORWARD-LOOKING STATEMENTS DISCUSSED ON
PAGE 14.

UNLESS THE CONTEXT OTHERWISE REQUIRES, ALL REFERENCES TO "WE," "US" OR THE
"COMPANY" REFER (I) TO BOSTON PROPERTIES, INC., A DELAWARE CORPORATION, AND ITS
SUBSIDIARIES, INCLUDING BOSTON PROPERTIES LIMITED PARTNERSHIP, A DELAWARE
LIMITED PARTNERSHIP (THE "OPERATING PARTNERSHIP"), OF WHICH BOSTON
PROPERTIES, INC. IS THE SOLE GENERAL PARTNER, AND (II) TO THE PREDECESSORS
THEREOF (THE "PREDECESSOR"). ALL ACTIVITIES PRIOR TO JUNE 23, 1997 REFER TO
ACTIVITIES OF THE PREDECESSOR.

OUR PERFORMANCE AND VALUE IS SUBJECT TO RISKS ASSOCIATED WITH THE REAL ESTATE
INDUSTRY

GENERAL REAL ESTATE OWNERSHIP RISKS

Our economic performance and the value of our real estate assets are subject
to the following risks generally associated with the ownership and operation of
real estate:

- changes in national economic conditions;

- increased operating costs (including real estate taxes and utilities);

- changes in interest rates and the availability of financing;

- other market and economic conditions that may affect regional real estate
markets, which are described below; and

- changes in laws and governmental regulations (including those governing
real estate usage, zoning and taxes).

If our properties do not generate sufficient income to meet operating
expenses, including future debt service costs, it will adversely affect our
ability to make distributions to our stockholders.

RISKS ASSOCIATED WITH LOCAL MARKET CONDITIONS

Currently, our properties are located primarily in seven markets: Greater
Boston; Midtown Manhattan; Greater Washington, D.C.; San Francisco, California;
Princeton/East Brunswick, New Jersey; Richmond, Virginia; and Baltimore,
Maryland. Local real estate market conditions may include a large supply of
competing space, and we will need to compete for tenants based on rental rates,
attractiveness and location of a property, and quality of maintenance and
management services. Local economic conditions may affect the ability of our
tenants to make lease payments. The economic condition of each of these local
markets may be dependent on one or more industries, and therefore an economic
downturn in one of these industry sectors may adversely affect our performance
in such market.

DIFFICULTY OF SELLING REAL ESTATE INVESTMENTS

Real estate investments can be hard to sell, especially if local market
conditions are poor. This may limit our ability to change our portfolio promptly
in response to economic or other conditions. In addition, certain significant
expenditures, such as debt service costs (if any), real estate taxes, and
operating and maintenance costs, generally are not reduced when market
conditions are poor, resulting in a reduction in income from the investment
under such circumstances. These and any other factors or events that would
impede the Company from responding to changes in the performance of our
investments could adversely affect our financial condition and results of
operations.

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INABILITY TO RENEW LEASES OR RE-LEASE SPACE

We may not be able to renew leases or obtain new tenants to whom space may
be re-leased as leases expire, and the terms of a renewal or a new lease
(including the cost of required renovations or concessions to tenants) may be
less favorable than current lease terms. If we are unable to re-lease
substantial amounts of vacant space promptly, if the rental rates upon a renewal
or new lease are significantly lower than expected, or if reserves for costs of
re-leasing prove inadequate, then our cash flow will decrease and our ability to
make distributions to our stockholders will be adversely affected.

RISKS ASSOCIATED WITH OPERATING HOTEL PROPERTIES

At present we own two hotel properties and are developing a third hotel
property. We lease the hotel properties to a lessee ("ZL Hotel LLC") in which
Messrs. Zuckerman and Linde are the sole member-managers. Messrs. Zuckerman and
Linde have a 9.8% economic interest in such lessee and two unaffiliated public
charities have a 90.2% economic interest. Marriott International, Inc. manages
the two in-service hotel properties under the Marriott(-Registered Trademark-)
name pursuant to a management agreement with ZL Hotel LLC. ZL Hotel LLC pays us
a percentage of the gross receipts that the hotel properties receive. We intend
to make similar arrangements with respect to a third hotel property under
development. Because the lease payments to the Company are based on a
participation in the gross receipts of the hotel properties, if the hotel
properties do not generate sufficient receipts, our cash flow would be decreased
and it could adversely affect our ability to pay distributions to our
stockholders. The following factors, among others, are common to the hotel
industry, and may reduce the receipts generated by our hotel properties:

- our hotel properties compete for guests with other hotels and a number of
these hotels have greater marketing and financial resources than our hotel
operating business partners;

- if there is an increase in operating costs resulting from inflation and
other factors, ZL Hotel LLC may be unable to offset such increase by
increasing room rates;

- our hotels are subject to the fluctuating and seasonal demands of business
and commercial travelers and tourism;

- increases in energy costs and other expenses of travel may reduce the
travel by potential guests of our hotels; and

- our hotels are subject to general and local economic conditions that may
affect demand for travel.

AMERICANS WITH DISABILITIES ACT COMPLIANCE

The Americans with Disabilities Act (the "ADA") generally requires that
public accommodations, including office buildings and hotels, be accessible to
disabled persons. We believe that our properties are in substantial compliance
with the ADA and that we will not be required to make substantial capital
expenditures to address the requirements of the ADA. However, in the event that
we are not in compliance with the ADA, the federal government could fine the
Company or private litigants could be awarded damages against the Company. If,
pursuant to the ADA, we are required to make substantial alterations in one or
more of our properties, our financial condition and results of operations, as
well as the amount of cash available for distribution to our stockholders, could
be adversely affected.

UNINSURED LOSSES

We carry comprehensive liability, fire, flood, extended coverage and rental
loss insurance, as applicable, with respect to our properties. We believe our
coverage is of the type and amount customarily obtained for or by an owner of
such properties. We believe all of our properties are adequately insured.
However, there are certain types of losses (such as from wars or catastrophic
acts

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of nature) for which we cannot obtain insurance or for which we cannot obtain
insurance at a reasonable cost. In the event of an uninsured loss or a loss in
excess of our insurance limits, we could lose the revenues generated from the
affected property, as well as the capital we have invested in the affected
property. We would continue to be obligated to repay any mortgage indebtedness
or other obligations related to the property. Any such loss could materially and
adversely affect our business and financial condition and results of operations.

OBTAINING NEW OWNER'S TITLE INSURANCE POLICIES IN CONNECTION WITH CERTAIN
PROPERTIES

We acquired from our Predecessor certain properties at the completion of our
initial public offering of Common Stock on June 23, 1997 (the "Initial
Offering"). Each of these acquired properties was, prior to its acquisition by
us, insured by title insurance policies that insured the owner of the property.
New owner's title insurance policies were not obtained in connection with our
acquisition of such properties. Nevertheless, because in many instances we
acquired the owner of the property and the owner remained in existence, certain
of these title insurance policies may continue to benefit subsidiaries of the
Company, although each such title insurance policy may be in an amount less than
the current value of the applicable property. If there was a title defect
related to any of these properties, or to any of the properties acquired at the
time of the Initial Offering that no longer are covered by title insurance
policies, we could lose both our capital invested in and our anticipated profits
from such property. We have obtained title insurance policies for any properties
that we acquired after the Initial Offering.

CHANGES IN TAX AND ENVIRONMENTAL LAWS

Generally, our leases provide the ability to pass costs resulting from
increases in real estate taxes through to tenants. However, we generally do not
pass increases in income, service or transfer taxes through to our tenants.
Similarly, changes in laws increasing the potential liability for environmental
conditions existing on our properties or increasing the restrictions on
discharges or other conditions may result in significant unanticipated
expenditures. These increased costs could adversely affect our financial
condition and results of operations and the amount of cash available for
distribution to stockholders.

RISKS ASSOCIATED WITH PROPERTY ACQUISITIONS

Since the Initial Offering, we have made large acquisitions of properties
and portfolios of properties. We intend to continue to investigate and pursue
acquisitions of properties and portfolios of properties, including large
portfolios that could continue to significantly increase our size and alter our
capital structure. Our ability to manage our growth effectively requires us to
integrate successfully new acquisitions into our existing operations. We cannot
assure our stockholders that we will be able to quickly and efficiently
integrate such new acquisitions, particularly acquisitions of portfolios of
properties. If we are unable to successfully manage our growth or integrate our
new acquisitions, our results of operations and financial condition could be
adversely affected.

Newly acquired properties may fail to perform as expected. We may
underestimate the costs necessary to bring an acquired property up to standards
established for its intended market position. Additionally, we expect that other
real estate investors with significant capital will compete with us for
attractive investment opportunities. This competition has increased prices for
properties of the type we would likely pursue. We expect to acquire properties
with cash from secured or unsecured financings and proceeds from offerings of
equity or debt. We may not be in a position or have the opportunity in the
future to make suitable property acquisitions on favorable terms.

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OUR INVESTMENTS IN PROPERTY DEVELOPMENT MAY BE MORE COSTLY THAN ANTICIPATED

We intend to continue to develop and substantially renovate office,
industrial and hotel properties. To the extent that we engage in such
development activities, we will be subject to the risks normally associated with
such activities. These risks include, among others, the following:

- occupancy rates and rents at newly completed properties may not be
sufficient to enable us to achieve our intended return on investment;

- expenses of operating a completed development may be higher than
anticipated;

- we may be unsuccessful or delayed in obtaining necessary zoning, land use,
building, occupancy, and other governmental permits and regulatory
approvals;

- we may incur construction costs for developing a property which exceed our
estimates due to factors beyond our control, such as weather, labor
conditions or material shortages; and

- we may not be able to obtain construction financing on favorable terms.

These risks could result in substantial unanticipated delays or expense that
could prevent completion or cause us to abandon development activities which we
have already begun to explore. If any of these events occur, it could adversely
affect our ability to achieve our projected yields on properties under
development and could prevent us from making expected distributions to our
stockholders.

In addition, development and construction activities, regardless of whether
or not they are ultimately successful, typically require a substantial portion
of management's time and attention.

We intend to develop properties in joint ventures with other persons or
entities. The use of a joint venture vehicle creates a risk of a dispute or a
risk that we will have to acquire a joint venturer's interest in a development
for a price or at a time that we would otherwise not purchase such interest.

WE DEPEND ON KEY PERSONNEL WHOSE CONTINUED SERVICE IS NOT GUARANTEED

We depend on the efforts of key personnel, particularly Mortimer B.
Zuckerman, Chairman of the Board of Directors, and Edward H. Linde, President
and Chief Executive Officer. Among the reasons that Messrs. Zuckerman and Linde
are important to the success of the Company is that each has a national
reputation which attracts business and investment opportunities and assists us
in negotiations with lenders. If we lost their services, our relationships with
lenders, potential tenants and industry personnel would diminish. The other
executive officers of the Company who serve as managers of the Company's offices
have strong regional reputations. Their strong regional reputations aid us in
identifying opportunities, having opportunities brought to us, and negotiating
with tenants and build-to-suit prospects. While we believe that we could find
replacements for these key personnel, the loss of their services could
materially and adversely effect our operations because of diminished
relationships with lenders, prospective tenants and industry personnel.

Mr. Linde and the Company's other executive officers have employment
agreements in which they agree to devote substantially all of their business
time to the Company's business and affairs and not to have substantial outside
business interests. Because these officers may resign or be terminated at any
time, these employment agreements cannot guarantee that they will remain with
the Company for any particular period of time. The Company does not have an
employment agreement with Mr. Zuckerman. Mr. Zuckerman has substantial outside
business interests, including, serving as Chairman of the Board of Directors of
U.S. NEWS & WORLD REPORT, THE ATLANTIC MONTHLY, THE NEW YORK DAILY NEWS and
Applied Graphics Technologies, and serving as a member of the Board of Directors
of Snyder Communications. Such outside business interests could interfere with
his ability to devote time to the Company's business and affairs. Over the last
twenty years, Mr. Zuckerman has devoted a significant portion, although not a
majority, of his business time to the affairs of the Company. He cannot assure
the Company that he

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will continue to devote any specific portion of his time to the Company and has
therefore declined to enter into an employment agreement with the Company. At
present, Mr. Zuckerman has no commitments which would prevent him from
maintaining his current level of involvement with the Company.

POTENTIAL LIABILITY FOR ENVIRONMENTAL MATTERS COULD ADVERSELY AFFECT OUR
FINANCIAL CONDITION

Under various federal, state and local laws, ordinances and regulations, a
current or previous owner or operator of real property may be required (often
regardless of knowledge or responsibility) to investigate and remediate the
effects of hazardous or toxic substances or petroleum product releases at a
property, and may be held liable to a governmental entity or to third parties
for property damage and for investigation and remediation costs incurred by them
in connection with such contamination. These costs and liabilities could be
substantial and could exceed the value of the affected real estate. If such
substances were present on one of our properties, our ability to borrow against,
sell or rent the affected property could be adversely affected. We have not been
notified by any governmental authority of any noncompliance, liability or other
claim in connection with any of our properties, and we are not aware of any
other environmental condition with respect to any of our properties that we
believe would have a material adverse effect on our business, assets, or results
of operations.

Some of our properties are located in urban and industrial areas where fill
or current or historic industrial uses of the areas have caused site
contamination. Independent environmental consultants have been retained in the
past to conduct or update Phase I environmental assessments (which generally do
not involve invasive techniques such as soil or groundwater sampling) and
asbestos surveys on all of our properties. These environmental surveys have not
revealed any environmental conditions that we believe will have a material
adverse effect on our business, assets or results of operations, and we are not
aware of any other environmental condition with respect to any of our properties
which we believe would have such a material adverse effect. However, we are
aware of environmental conditions at three of our properties that may require
remediation:

- With respect to 17 Hartwell Avenue in Lexington, Massachusetts, we
received a Notice of Potential Responsibility from the state regulatory
authority on January 9, 1997, related to groundwater contamination. In
addition, we received Notices of Downgradient Property Status Submittals
from third parties concerning contamination at two downgradient
properties. On January 15, 1997, we notified the state regulatory
authority that we would cooperate with and monitor the tenant at the
property (which investigated the matter and undertook remedial actions).
That investigation identified the presence of hazardous substances in and
near a catch basin along the property line. The tenant completed an
Immediate Response Action at the site in April 1998. We expect the tenant
will likewise take any additional necessary response actions.

- The 91 Hartwell Avenue property in Lexington, Massachusetts was listed by
the state regulatory authority as an unclassified Confirmed Disposal Site
in connection with groundwater contamination. We engaged a specially
licensed environmental consultant to perform the necessary investigation
and assessment and to prepare submittals to the state regulatory
authority. On August 1, 1997, such consultant submitted to the state
regulatory authority a Phase I--Limited Site Investigation Report and
Downgradient Property Status Opinion. This Opinion concluded that the
property qualifies for Downgradient Property Status under the state
regulatory program, which eliminates certain deadlines for conducting
response actions at a site and may qualify us for liability relief under
recent statutory amendments. Although we believe that the current or
former owners of the upgradient source properties may ultimately be
responsible for some or all of the costs of such response actions, we will
take any necessary further response actions.

- An investigation at the 200 West Street property in Waltham, Massachusetts
identified groundwater contamination. We engaged a specially licensed
environmental consultant to

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perform the necessary investigation and assessment and to prepare
submittals to the state regulatory authority. On March 11, 1998, the
consultant submitted to the state regulatory authority a Release
Notification and Downgradient Property Status Opinion. This Opinion
concluded that the property qualifies for Downgradient Property Status
under the state regulatory program, which eliminates certain deadlines for
conducting response actions at a site and may qualify us for liability
relief under recent statutory amendments. Although we believe that the
current or former owners of the upgradient source properties may
ultimately be responsible for some or all of the costs of such response
actions, we will take any necessary further response actions.

No assurance can be given that the environmental assessments and updates
identified all potential environmental liabilities, that no prior owner created
any material environmental condition not known to us or the independent
consultants preparing the assessments, that no environmental liabilities may
have developed since such environmental assessments were prepared, or that
future uses or conditions (including, without limitation, changes in applicable
environmental laws and regulations) will not result in imposition of
environmental liability.

OUR USE OF DEBT TO FINANCE ACQUISITIONS AND DEVELOPMENTS COULD ADVERSELY AFFECT
OUR CASH FLOW

REQUIRED REPAYMENT OF DEBT OR PAYMENT OF INTEREST ON DEBT

We currently have, and may in the future incur, indebtedness that bears
interest at variable rates. Variable rate debt creates higher debt service
requirements if market rates increase, which could adversely affect our cash
flow and the amounts available to pay distributions to our stockholders. We are
subject to risks normally associated with debt financing, including the risk
that our cash flow will be insufficient to make required payments of principal
and interest, the risk that any indebtedness will not be able to be refinanced,
the risk that the terms of any refinancing will not be as favorable as the terms
of such indebtedness and the risk of a default under the terms of any
indebtedness and an acceleration resulting from such default.

NO LIMITATION ON DEBT

We do not have a policy limiting the amount of debt that we may incur.
Accordingly, our management and Board of Directors have discretion to increase
the amount of the Company's outstanding debt at any time. We could become more
highly leveraged, resulting in an increase in debt service costs that could
adversely affect our cash flow and the amount available for distribution to our
stockholders. If we increase our debt we may also increase the risk of default
on our debt.

FINANCIAL COVENANTS COULD ADVERSELY AFFECT OUR FINANCIAL CONDITION.

If a property is mortgaged to secure payment of indebtedness and we are
unable to meet mortgage payments, the mortgagee could foreclose on the property,
resulting in loss of income and asset value. The mortgages on our properties
contain customary negative covenants which, among other things, limit our
ability, without the prior consent of the lender, to further mortgage the
property or to discontinue insurance coverage. In addition, our credit
facilities contain certain customary restrictions, requirements and other
limitations on our ability to incur indebtedness, including total debt to assets
ratios, secured debt to total asset ratios, debt service coverage ratios and
minimum ratios of unencumbered assets to unsecured debt. Foreclosure on
mortgaged properties or an inability to refinance existing indebtedness would
likely have a negative impact on our financial condition and results of
operations.

OUR DEGREE OF LEVERAGE COULD LIMIT OUR ABILITY TO OBTAIN ADDITIONAL
FINANCING.

Our Debt to Market Capitalization Ratio (total debt as a percentage of total
debt plus the market value of the outstanding Common Stock, OP Units and
Preferred Units (assuming conversion of all

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Preferred Units)) is approximately 43.6% as of September 30, 1998. A real estate
company's degree of leverage could have important consequences to its security
holders, because leverage affects a company's ability to obtain additional
financing for working capital, capital expenditures, acquisitions, development
or other general corporate purposes and makes a company more vulnerable to a
downturn in the economy generally.

To qualify as a REIT, we must distribute to our stockholders each year at
least 95% of our net taxable income (excluding any net capital gain). See
"Certain Federal Income Tax Considerations" below. Because of these distribution
requirements, it is not likely that we will be able to fund all future capital
needs, including for acquisitions and developments, from income from operations.
We therefore will have to rely on third-party sources of capital, which may or
may not be available on favorable terms or at all. Our access to third-party
sources of capital depends on a number of things, including the market's
perception of our growth potential and our current and potential future
earnings. Moreover, additional equity offerings may result in substantial
dilution of security holders' interests, and additional debt financing may
substantially increase our leverage.

FAILURE TO QUALIFY AS A REIT WOULD CAUSE US TO BE TAXED AS A CORPORATION

The Company is a real estate investment trust as defined in the Internal
Revenue Code (the "Code"). Entities that have this characterization under the
Code are also known as "REITs." In general, qualification as a REIT enables us
to deduct from our federal taxable income the amount of any dividends paid to
our stockholders and requires us to pay to our stockholders a certain amount of
our taxable income. If we fail to qualify as a REIT, we will be taxed as a
corporation for both current and past years. Qualification as a REIT involves
the application of highly technical and complex provisions under the Code, as to
which there are only limited judicial and administrative interpretations, and
involves the determination of various factual matters and circumstances not
entirely within our control. Therefore, although we believe that we are
organized and operate as a REIT, there is a risk that we will fail to maintain
our status as a REIT. In addition, we cannot assure you that future legislation,
new regulations, administrative interpretations or court decisions will not
significantly change the tax laws (or their application) with respect to
qualification as a REIT for federal income tax purposes or the federal income
tax consequences of such qualification.

If, in any taxable year, we failed to qualify as a REIT, we will be subject
to federal income tax (including any applicable alternative minimum tax) on our
taxable income at regular corporate rates. In addition, unless entitled to
relief under certain statutory provisions, we would be disqualified from
treatment as a REIT for the four taxable years following the year during which
qualification is lost. The additional tax liability resulting from the failure
to qualify as a REIT would significantly reduce or eliminate the amount of funds
available for distribution to our stockholders. In addition, we would no longer
be required to make distributions to our stockholders. See "Certain Federal
Income Tax Considerations" on page 32.

THE ABILITY OF OUR STOCKHOLDERS TO CONTROL OUR POLICIES AND AFFECT A CHANGE OF
CONTROL OF THE COMPANY IS LIMITED, WHICH MAY NOT BE IN THE STOCKHOLDERS' BEST
INTERESTS

CHANGE IN COMPANY POLICIES WITHOUT STOCKHOLDERS' APPROVAL

Our operating and financial policies, including the Company's policies with
respect to acquisitions, growth, operations, indebtedness, capitalization and
distributions, are determined by the Company's Board of Directors. Accordingly,
as a stockholder, you will have little direct control over our policies.

ENGAGEMENT IN INVESTMENT ACTIVITY WITHOUT STOCKHOLDERS' APPROVAL

We expect to continue to acquire additional real estate assets pursuant to
our investment strategies and consistent with our investment policies. As a
stockholder, you will generally not be entitled to vote on any such
acquisitions. You will not receive past financial statements regarding the real
estate assets

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to be acquired. Instead, our stockholders must rely entirely on the decisions of
management (although in the case of material acquisitions, we will, as required
by federal securities law, provide financial information following the
acquisition in filings with the SEC.)

STOCK OWNERSHIP LIMIT

To maintain qualification as a REIT for federal income tax purposes, not
more than 50% in value of the Company's outstanding capital stock may be owned,
directly or indirectly, by five or fewer individuals (as defined in the federal
income tax laws applicable to REITs) at any time during the last half of any
year. See "Certain Federal Income Tax Considerations" on page 32. The Company's
Amended and Restated Certificate of Incorporation (the "Charter") generally
prohibits ownership, directly or by virtue of the attribution provisions of the
Code, by any single stockholder (which does not include certain pension plans or
mutual funds) of more than 6.6% of the issued and outstanding shares of the
Company's Common Stock (the "Ownership Limit"). The Board of Directors may waive
or modify the Ownership Limit with respect to one or more persons if it is
satisfied that ownership in excess of this limit will not jeopardize the
Company's status as a REIT for federal income tax purposes. Notwithstanding the
above, the Charter provides that each of Messrs. Zuckerman and Linde, along with
certain family members and affiliates of each of Messrs. Zuckerman and Linde,
respectively, as well as, in general, pension plans and mutual funds, may
actually and beneficially own up to 15% of the outstanding shares of Common
Stock. The Ownership Limit may have the effect of inhibiting or impeding a
change in control and, therefore, could adversely affect our stockholders'
ability to realize, in connection with such a transaction, a premium over the
then-prevailing market price for the Common Stock. See "Restrictions on
Transfer" on page 25.

CHARTER AND BYLAW PROVISIONS

Certain provisions of the Company's Charter and bylaws, as amended and
restated (the "Bylaws"), could make it more difficult for someone to acquire
control of the Company. The Company's Board of Directors is divided into three
classes, with the members of each class serving a three-year term. The Charter
authorizes the Board of Directors to issue up to 50 million shares of Preferred
Stock without stockholder approval. The Board of Directors may establish the
preferences and rights of any Preferred Stock issued. These and other
restrictions may preclude acquisitions that could otherwise provide our
stockholders with the opportunity to realize a premium over the then-prevailing
market price of such shares.

OPERATING PARTNERSHIP AGREEMENT

We are the sole general partner of the Operating Partnership and, in
connection with most matters which could require a consent or vote of the
Operating Partnership's partners, hold approximately 65.0% of the voting power
therein (assuming conversion of all preferred units of limited partnership
("Preferred Units")). We have agreed in the limited partnership agreement of the
Operating Partnership (the "Operating Partnership Agreement") not to engage in
certain business combinations unless the limited partners who hold the remaining
common units of limited partnership ("Common Units" or "OP Units") receive, or
have the opportunity to receive, the same consideration per OP Unit as our
holders of Common Stock receive per share of Common Stock in the transaction. If
holders of OP Units do not receive such consideration, we cannot engage in the
transaction unless 75% of the limited partners (other than the Company) vote to
approve the transaction. In addition, we have agreed in the Operating
Partnership Agreement that we will not consummate certain business combinations
in which we conducted a vote of the stockholders unless (i) a vote of holders of
OP Units is conducted and (ii) the matter would have been approved had holders
of OP Units been able to vote as stockholders on the transaction. The Operating
Partnership Agreement does not enable us or require us to engage in a business
combination requiring our stockholders' approval if our stockholders do not in
fact give the required approval. Rather, if our stockholders approve a business
combination that

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requires a vote of stockholders, we are therefore authorized under the Charter
to engage in such transaction but we are contractually prohibited under the
Operating Partnership Agreement from consummating the transaction unless:

- holders of OP Units (including the Company) vote on the matter;

- the Company votes the OP Units it holds in the Operating Partnership
(which at all times equals the number of shares of Common Stock
outstanding) in the same proportion as our stockholders voted on the
matter at the stockholder vote; and

- the result of such vote of the OP Unit holders (including the
proportionate vote of the Company's OP Units) is such that had such vote
been a vote of stockholders holding a number of shares equal to the number
of outstanding OP Units, the business combination would have been approved
by our stockholders.

As a result of these provisions of the Operating Partnership, a third party
may be deterred from making an acquisition proposal that it would otherwise make
and we may be prohibited by contract from engaging in a proposed business
combination even though the Company's stockholders approve of the combination
and we have the authority to engage in the combination under our Charter.

SHAREHOLDER RIGHTS AGREEMENT

We have adopted a Shareholder Rights Agreement. Under the terms of this
agreement, we can in effect prevent a person or group from acquiring more than
15% of the outstanding shares of our Common Stock (an "Acquiring Person")
because, unless we approve of the Acquiring Person's purchase, after the
Acquiring Person acquires more than 15% of the outstanding Common Stock, all
stockholders (other than the Acquiring Person) will have the right to purchase
securities from us at a price that is less than their then fair market value.
Such purchases by the other stockholders would substantially reduce the value
and influence of the shares of our Common Stock owned by the Acquiring Person.
However, the Board of Directors can prevent the Shareholder Rights Agreement
from operating in this manner and thus has significant discretion to approve of
an acquiror's efforts to acquire a large interest in the Company. See
"Restrictions on Transfer--Shareholder Rights Agreement" on page 26.

PROVISIONS OF DELAWARE LAW

As a Delaware corporation, we are subject to the provisions of the Delaware
General Corporation Law (the "DGCL"), which imposes restrictions on certain
business combinations and requires compliance with certain procedures before
certain mergers and acquisitions can occur. The DGCL may delay or prevent offers
to acquire us and increase the difficulty of consummating any such offers, even
if an acquisition would be in our stockholders' best interest.

CONFLICTS OF INTEREST EXIST BETWEEN THE COMPANY AND CERTAIN HOLDERS OF OP UNITS
AND PREFERRED UNITS IN CONNECTION WITH THE OPERATION OF THE COMPANY

SALES OF PROPERTIES AND REPAYMENT OF RELATED INDEBTEDNESS WILL HAVE
DIFFERENT EFFECTS ON OP UNITHOLDERS THAN ON STOCKHOLDERS

Certain holders of OP Units and Preferred Units, including
Messrs. Zuckerman and Linde, will incur adverse tax consequences upon the sale
of certain of our properties and on the repayment of related indebtedness which
are different from the tax consequences to the Company and our stockholders.
Consequently, such holders of OP Units and Preferred Units may have different
objectives regarding the appropriate pricing and timing of any such sale or
repayment of indebtedness. While the Company has exclusive authority under the
Operating Partnership Agreement to determine whether, when, and on what terms to
sell a property (subject, in the case of certain properties, to the contractual
commitments described below) or when to refinance or repay indebtedness, any
such

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decision would require the approval of the Board of Directors. As directors and
executive officers of the Company, Messrs. Zuckerman and Linde have substantial
influence with respect to any such decision. Their influence could be exercised
in a manner inconsistent with the interests of some, or a majority, of our
stockholders, including in a manner which could prevent completion of a sale of
a property or the repayment of indebtedness.

AGREEMENT NOT TO SELL CERTAIN PROPERTIES

Under the terms of the Operating Partnership Agreement, we have agreed not
to sell or otherwise transfer certain of our properties, prior to specified
dates, in any transaction that would trigger taxable income, without first
obtaining the consent of Messrs. Zuckerman and Linde. However, we are not
required to obtain their consent if, during the applicable period, each of them
does not hold at least 30% of his original OP Units. In addition, we have
entered into similar agreements with respect to other properties that we have
acquired for partnership interests in the Operating Partnership. There are a
total of 16 properties subject to these restrictions, and those 16 properties
are estimated to have accounted for approximately 68% of the Company's total
revenue on a pro forma basis for the year ended December 31, 1997.

The Operating Partnership has also entered into agreements providing
Messrs. Zuckerman and Linde and others with the right to guarantee additional
and/or substitute indebtedness of the Company in the event that certain other
indebtedness is repaid or reduced.

The agreements described above may hinder actions that the Company would
otherwise desire to take because the Company would be required to make payments
to the beneficiaries of such agreements if the Company violates these
agreements.

MESSRS. ZUCKERMAN AND LINDE WILL CONTINUE TO ENGAGE IN OTHER ACTIVITIES

Messrs. Zuckerman and Linde have a broad and varied range of investment
interests. Either one could acquire an interest in a company which is not
currently involved in real estate investment activities but which may acquire
real property in the future. However, pursuant to Mr. Linde's employment
agreement and Mr. Zuckerman's non-compete agreement with the Company,
Messrs. Zuckerman and Linde will not, in general, have management control over
such companies and, therefore, they may not be able to prevent one or more such
companies from engaging in activities that are in competition with our
activities.

POSSIBLE ADVERSE IMPACT OF MARKET CONDITIONS ON MARKET PRICE

As with other publicly traded equity securities, the value of our Common
Stock depends on various market conditions which may change from time to time.
Among the market conditions that may affect the value of our publicly traded
securities are the following: the extent of institutional investor interest in
the Company; the reputation of REITs and office REITs generally and the
attractiveness of their equity securities in comparison to other equity
securities (including securities issued by other real estate companies); our
financial condition and performance; and general financial market conditions.

One of the factors that investors may consider important in deciding whether
to buy or sell shares of a REIT is the dividend with respect to such REIT's
shares (as a percentage of the price of such shares) relative to market interest
rates. If market interest rates go up, prospective purchasers of REIT shares may
expect a higher distribution rate. Higher market interest rates would not,
however, result in more funds for us to distribute and, in fact, would likely
increase our borrowing costs and potentially decrease funds available for
distribution. Thus, higher market interest rates could cause the market price of
our publicly traded securities to go down in order to increase our dividend as a
percentage of the price of a share.

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FORWARD-LOOKING STATEMENTS

Certain statements incorporated by reference or made under the captions
"Risk Factors" and "The Company" and elsewhere in this prospectus are
"forward-looking statements" within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act. Such forward-looking statements
include, without limitation, statements relating to acquisitions (including
related pro forma financial information) and other business development
activities, future capital expenditures, financing sources and availability and
the effects of regulations (including environmental regulation) and competition.
When we use the words "anticipate," "assume," "believe," "estimate," "expect,"
"intend" and other similar expressions in this prospectus, they are generally
forward-looking statements. You should exercise caution in interpreting and
relying on forward-looking statements since they involve known and unknown
risks, uncertainties and other factors which are, in some cases, beyond our
control and could materially affect our actual results, performance or
achievements. Factors that could cause our actual results, performance or
achievements to differ materially from those expressed or implied by such
forward-looking statements include, but are not limited to, the following:

- we are subject to general risks affecting the real estate industry such as
the need to enter into new leases or renew leases on favorable terms to
generate rental revenues and dependence on our tenants' financial
condition;

- financing may not be available, or may not be available on favorable
terms;

- we need to make distributions to our stockholders for us to qualify as a
REIT and if we need to borrow the funds to make such distributions such
borrowings may not be available on favorable terms;

- we depend on the primary markets where our properties are located and
these markets may be adversely affected by local economic and market
conditions which are beyond our control;

- we are subject to potential environmental liabilities;

- we are subject to complex regulations relating to our status as a REIT and
would be adversely affected if we failed to qualify as a REIT; and

- market interest rates could adversely affect the market prices for our
Common Stock and our performance and cash flow.

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THE COMPANY

BOSTON PROPERTIES, INC.

Boston Properties, Inc., a Delaware corporation, develops, acquires, owns
and manages a diverse portfolio of office, industrial and hotel properties in
the United States. We are one of the largest owners and developers of office
properties in the United States, with a significant presence in Greater Boston;
Midtown Manhattan; Greater Washington, D.C.; San Francisco, California;
Princeton/East Brunswick, New Jersey; Richmond, Virginia; and Baltimore,
Maryland. As of December 14, 1998, we owned 121 properties aggregating over
31.4 million square feet (including nine properties currently under development
that will aggregate approximately 1.9 million square feet). The Company's
properties consist of 108 office properties, including 76 "Class A" office
properties (including nine under development) and 31 "research and development"
properties; nine industrial properties; three hotels (including one under
development); and one parking garage. The Company considers Class A office
properties to be centrally located buildings that are professionally managed and
maintained, attract high-quality tenants and command upper-tier rental rates,
and that are modern structures or have been modernized to compete with newer
buildings. The Company considers research and development properties to be
properties that are designed to address the market for research and development
and other technical uses as well as to be suitable for office use.

We are a self-administered and self-managed REIT. We have elected to be
treated as a REIT under the Code beginning with our taxable year ended
December 31, 1997. We are listed on the NYSE under the symbol "BXP."

Our initial public offering of Common Stock was in June 1997.
Contemporaneously with such offering, the Company and its Operating Partnership
subsidiary were formed to succeed to the ownership of real estate, and the real
estate development, redevelopment, acquisition, management, operating and
leasing businesses, associated with the predecessor organization founded by
Messrs. Zuckerman and Linde in 1970.

We are a full-service real estate company, with substantial in-house
expertise and resources in acquisitions, development, financing, construction
management, property management, marketing, leasing, accounting, tax and legal
services. Our headquarters are located at 800 Boylston Street, Boston,
Massachusetts 02199 and our telephone number is (617) 236-3300. In addition, we
have regional offices at the U.S. International Trade Commission Building at 500
E. Street, SW, Washington, D.C. 20024, at 599 Lexington Avenue, New York, New
York 10022, at Four Embarcadero Center, Suite 2600, San Francisco, California,
94111 and 101 Carnegie Center, Princeton, New Jersey 08540. The Company's
headquarters and regional offices are located in properties owned by the
Company.

BOSTON PROPERTIES LIMITED PARTNERSHIP

Boston Properties Limited Partnership, a Delaware limited partnership (the
"Operating Partnership"), owns all of our assets (either directly or through
subsidiaries) and is the entity through which we conduct substantially all of
our business. This structure is commonly referred to as an umbrella partnership
REIT or UPREIT. Boston Properties, Inc. is the sole general partner of the
Operating Partnership and thus manages the affairs of the Operating Partnership.
On December 14, 1998, Boston Properties, Inc. owned an approximate 65.0% general
and limited partnership interest in the Operating Partnership (assuming
conversion of all preferred units). The other partners of the Operating
Partnership are the investors who contributed their direct or indirect interests
in certain properties to the Operating Partnership in exchange for an interest
in the Operating Partnership, either at the completion of the Initial Offering
or upon subsequent acquisitions of other properties or interests therein by the
Operating Partnership.

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Partnership interests in the operating partnership are denominated as
"common units of partnership interest" (also referred to as "OP Units" or
"Common Units") and preferred units of limited partnership ("Preferred Units").
A holder of an OP Unit may present such OP Unit to the Operating Partnership for
redemption at any time (subject to agreements upon the issuance of OP Units to
particular holders that may restrict such right for a period of time, generally
not less than one year). Upon presentation of an OP Unit for redemption, the
Operating Partnership must redeem such OP Unit for cash equal to the then value
of a share of common stock of the Company ("Common Stock"), except that the
Company may, at its election, in lieu of a cash redemption acquire such OP Unit
for one share of Common Stock. With each such redemption or acquisition, our
percentage ownership interest in the Operating Partnership will increase. In
addition, whenever we sell or issue shares of Common Stock, we will be obligated
to contribute any net proceeds from such sale or issuance to the Operating
Partnership, and the Operating Partnership will be obligated to issue an
equivalent number of OP Units to us. Because the number of shares of Common
Stock outstanding at all times equals the number of OP Units that the Company
owns, one share of Common stock is generally the economic equivalent of one OP
Unit, and the quarterly distribution that may be paid to the holder of an OP
Unit equals the quarterly dividend that may be paid to the holder of a share of
Common Stock. Each series of Preferred Units bears a distribution that is set in
accordance with an amendment to the partnership agreement of the Operating
Partnership. Preferred Units may also be convertible into OP Units at the
election of the holder thereof or the Company.

All references in this prospectus to the Company or to "we" or similar terms
refer to Boston Properties, Inc. and its subsidiaries, including the Operating
Partnership, collectively, unless the context otherwise requires.

Generally, pursuant to the terms of the Operating Partnership Agreement, we
have the exclusive power to manage and conduct the business of the Operating
Partnership. Under the Operating Partnership Agreement, we generally have the
maximum rights and powers permitted to the general partner of a Delaware limited
partnership. Limited partners of the Operating Partnership generally have only
such rights and powers as are reserved to limited partners expressly by Delaware
law, and have no authority to transact business for, or participate in the
management activities or decisions of, the Operating Partnership. The limited
partners do not have the right to remove us as general partner. The limited
partners of the Operating Partnership do have the right to vote, under certain
circumstances, on business combinations of Boston Properties, Inc. or the
Operating Partnership.

USE OF PROCEEDS

Except as we may describe otherwise in the applicable prospectus supplement,
we intend to use the net proceeds from the sale of Securities for general
corporate and working capital purposes, including, without limitation, to repay
debt, to acquire or invest in new properties and to develop and maintain
currently-owned properties.

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DESCRIPTION OF PREFERRED STOCK

This section describes the general terms and provisions of the Preferred
Stock that we may offer by this prospectus. We may issue Preferred Stock in one
or more series; each series of Preferred Stock will have its own rights and
preferences. We will describe in a prospectus supplement (1) the specific terms
of the series of any Preferred Stock offered through that prospectus supplement
and (2) any general terms outlined in this section that will not apply to those
shares of Preferred Stock. This summary of terms is not complete. For additional
information before you buy any Preferred Stock you should read our Charter and
Bylaws that are in effect on the date that we offer any Preferred Stock, as well
as any applicable amendment to our Charter designating terms of a series of
Preferred Stock (a "Designating Amendment").

GENERAL

Under the Company's Charter, the Company has the authority to issue up to
250 million shares of Common Stock, 150 million shares of Excess Stock ("Excess
Stock") and 50 million shares of Preferred Stock. Prior to issuing shares of
Preferred Stock of a particular series, the Company's Board of Directors will
determine or fix the terms of that series of Preferred Stock, as described below
(see "Terms").

When we issue shares of Preferred Stock, they will be fully paid and
nonassessable. This means the full purchase price for the outstanding Preferred
Stock will be paid at issuance and that you, as the purchaser of such shares of
Preferred Stock, will not be required later to pay us any additional monies for
such Preferred Stock. The Preferred Stock will have no preemptive rights to
subscribe for any additional securities which we may issue in the future. This
means, you will not receive any rights, as holder of Preferred Stock, to buy any
portion of the securities which we may issue in the future. Because the Board of
Directors has the power to establish the preferences and rights of each class or
series of Preferred Stock, the Board of Directors may grant the holders of any
series or class of Preferred Stock preferences, powers and rights, voting or
otherwise, senior to the rights of holders of shares of Common Stock. The
issuance or possibility of issuance of Preferred Stock could have the effect of
delaying or preventing a change in control of the Company.

TERMS

The Preferred Stock will have the dividend, liquidation, redemption, voting
and conversion rights described in this section unless we state otherwise in the
applicable prospectus supplement. You should read the prospectus supplement
relating to the particular series of the Preferred Stock for specific terms,
including:

- the title and liquidation preference of such Preferred Stock and the
number of shares offered;

- the initial offering price of such Preferred Stock;

- the dividend rate or rates (or method of calculation), the dividend
periods, the date(s) on which dividends will be payable and whether the
dividends will be cumulative or noncumulative, and, if cumulative, the
dates from which the dividends will start to cumulate;

- procedures for any auction and remarketing, if any;

- any listing of such Preferred Stock on any securities exchange;

- any conversion provisions;

- any other specific terms, preferences, rights, limitations or restrictions
of such Preferred Stock;

- discussion of federal income tax considerations applicable to such
Preferred Stock;

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- relative ranking and preference of such Preferred Stock as to dividend
rights and rights upon liquidation, dissolution or winding up of our
business;

- any limitations on issuance of any series of Preferred Stock ranking
senior to or on a parity with such series of Preferred Stock as to
dividend rights and rights upon liquidation, dissolution or winding up of
our business; and

- any limitations on direct or beneficial ownership and restrictions on
transfer, in each case as may be appropriate to preserve our status as a
REIT.

RANK

Unless we state otherwise in the applicable prospectus supplement, each
series of Preferred Stock will, with respect to dividend rights and rights upon
liquidation, dissolution or winding up of the Company, rank:

- senior to our Common Stock and any of our other equity securities ranking
junior to such series of Preferred Stock;

- on a parity with all our equity securities which according to their terms
rank on a parity with the Preferred Stock; and

- junior to all our equity securities which according to their terms rank
senior to such series of Preferred Stock.

The term "equity securities" does not include any convertible debt
securities we may issue.

DIVIDENDS

As a holder of shares of Preferred Stock, you will be entitled to receive
cash dividends, if declared by the Board of Directors, out of our assets that we
can legally use to pay dividends. The prospectus supplement relating to a
particular series of Preferred Stock will state the dividend rates and dates on
which the dividends will be payable for such series. We will pay dividends to
the holders of record as they appear on our stock transfer books on the record
dates fixed by the Board of Directors.

The applicable prospectus supplement will also state whether the dividends
on any series of the Preferred Stock are cumulative or non-cumulative.
Dividends, if cumulative, will accumulate from and after the dates stated in the
applicable prospectus supplement. If the Board of Directors does not declare a
dividend payable on a dividend payment date on any series of the Preferred Stock
for which dividends are non-cumulative, then the holders of such series of the
Preferred Stock will have no right to receive a dividend for the dividend period
ending on such dividend payment date and we will not be obligated to pay the
dividend accrued for such period, even if the Board of Directors declares a
dividend in the future.

The Company will not pay a dividend on any class or series of stock ranking
as to dividends equal with or junior to a series of Preferred Stock unless:

- if such series of Preferred Stock has a cumulative dividend, full
cumulative dividends have been or contemporaneously are declared and paid
(or declared and sufficient money is set apart for payment); or

- if such series of Preferred Stock does not have a cumulative dividend,
full dividends for the then current dividend period have been or
contemporaneously are declared and paid (or declared and sufficient money
is set apart for the payment).

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If at any time full dividends will not be paid (or declared and sufficient
money set apart for payment) on all shares of Preferred Stock ranking equal as
to dividends, then:

- we will declare any dividends pro rata among all shares of Preferred Stock
ranking equal as to dividends. This means that the dividends we declare
per share on each series of such Preferred Stock (which will not include
any accumulation in respect of unpaid dividends for prior dividend periods
if such Preferred Stock does not have a cumulative dividend) will bear the
same relationship to each other that the full accrued dividends per share
on each such series of Preferred Stock bear to each other;

- other than pro rata dividends, we will not declare or pay any dividends or
set any money aside for payment of dividends (except dividends paid in the
form of securities ranking junior to the Preferred Stock as to dividends
and upon liquidation) or declare or make any distributions upon any
security ranking junior to or equal with the Preferred Stock as to
dividends or upon liquidation; and

- we will not redeem, purchase or otherwise acquire (or set aside money for
a sinking fund for) any securities ranking junior to or equal with the
Preferred Stock as to dividends or upon liquidation (except by conversion
into or exchange for shares junior to the Preferred Stock as to dividends
and upon liquidation).

REDEMPTION

A series of Preferred Stock may be redeemable, in whole or in part, at our
option and may be subject to mandatory redemption pursuant to a sinking fund, or
otherwise, as we may describe in the applicable prospectus supplement.

If a series of Preferred Stock is subject to mandatory redemption, we will
specify the following in the applicable prospectus supplement:

- the date on which such mandatory redemption shall commence and the number
of shares of such Preferred Stock that we will redeem each year after such
date;

- the redemption price; and

- whether the redemption price will be paid in cash or other property
together with an amount equal to all accrued and unpaid dividends (which
shall not include any accumulation in respect of unpaid dividends for
prior dividend periods if such Preferred Stock does not have a cumulative
dividend) to the date of redemption.

If we are only permitted to pay the redemption price of a series of Preferred
Stock from the net proceeds of the issuance of shares of our capital stock and
the proceeds from such issuance are insufficient or no such issuance has
occurred, then the terms of that series may provide that such Preferred Stock
will automatically and mandatorily be converted into shares of our capital stock
pursuant to conversion provisions which we will specify in the applicable
prospectus supplement.

Even if the terms of a series of Preferred Stock permit us to redeem such
shares of Preferred Stock in whole or in part, if any dividends, including
accumulated dividends, on that series are past due, we will not:

- redeem any Preferred Stock of that series unless we simultaneously redeem
all outstanding shares of Preferred Stock of that series; and

- purchase or otherwise acquire any Preferred Stock of that series (except
by conversion into or exchange for shares of our capital stock ranking
junior to such Preferred Stock as to dividends and upon liquidation).

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The prohibitions regarding redemption discussed in the prior sentence will not
restrict us from purchasing or acquiring Preferred Stock of any series to
preserve our REIT status or pursuant to a purchase or exchange offer made on the
same terms to all holders of that series.

If fewer than all of the outstanding shares of any series of Preferred Stock
are to be redeemed, the Board of Directors will determine the number of shares
to be redeemed. Except when such redemption is to preserve our status as a REIT,
we may redeem the shares pro rata from the holders of record in proportion to
the number of such shares held by them or for which such holder requested
redemption (with adjustments to avoid redemption of fractional shares) or by any
other equitable manner that we determine.

We will give notice of redemption by mailing a notice to each record holder
of shares to be redeemed between 30 and 60 days prior to the date fixed for
redemption. Each notice shall state:

- the redemption date;

- the number of shares and series of the Preferred Stock to be redeemed;

- the redemption price;

- the place or places where the holders of such Preferred Stock may
surrender the certificates for payment of the redemption price;

- that dividends on the shares to be redeemed will cease to accrue on the
redemption date; and

- the date upon which the holder's conversion rights, if any, will
terminate.

If we redeem fewer than all shares of any series of Preferred Stock, we will
specify in the notice to each holder the number of shares to be redeemed from
such holder. If we have given notice of redemption of any Preferred Stock and we
have set aside the funds necessary for the payment of the redemption price, then
beginning on the redemption date, the dividends on the Preferred Stock called
for redemption will no longer accrue and the holders will no longer have any
rights as stockholders except to receive the redemption price.

LIQUIDATION RIGHTS

Unless we state otherwise in the applicable prospectus supplement, if we
voluntarily or involuntarily liquidate, dissolve or wind up the Company, the
holders of each series of Preferred Stock will be entitled to receive:

- liquidating distributions, if any, in the amount or proportion stated in
the applicable prospectus supplement; and

- all accrued and unpaid dividends (which will not include any accumulation
in respect of unpaid dividends for prior dividend periods if such
Preferred Stock does not have a cumulative dividend).

We will pay these amounts to the holders of shares of each series of the
Preferred Stock, and all amounts owing on any other class or series of our
capital stock ranking senior to or equally with such series of Preferred Stock
as to distributions upon liquidation, out of our assets legally available for
distribution to our stockholders before we make any distribution or payment to
holders of any of our securities ranking junior to such series of Preferred
Stock. After we pay the full amount of the liquidating distributions to the
holders of Preferred Stock to which they are entitled, such holders will have no
right or claim to any of our remaining assets

If we voluntarily or involuntarily liquidate, dissolve or wind up the
Company and our available assets are insufficient to pay the amount of the
liquidating distributions on all outstanding shares of each series of Preferred
Stock and any other shares of our stock ranking senior to or equal with such

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series as to any such distribution, then we will only make pro rata
distributions to the holders of all shares ranking equal as to distributions
upon dissolution, liquidation or winding up of the Company.

If we have paid the full liquidation preference to all holders of Preferred
Stock, we will distribute our remaining assets among the holders of any other
classes or series of our capital stock ranking junior to the Preferred Stock
upon liquidation, dissolution or winding up of the Company, according to their
respective rights and preferences. For such purposes, our consolidation with or
into any other corporation, trust or entity, or the sale, lease or conveyance of
all or substantially all of our property or business, will not be considered a
liquidation, dissolution or winding up of the Company.

VOTING RIGHTS

As a holder of Preferred Stock, you will not have any voting rights, except
as we describe in this section or in the applicable prospectus supplement or as
required by law.

Unless we receive the consent of at least two-thirds of all the outstanding
shares of such series of Preferred Stock (except as provided otherwise for any
series of Preferred Stock), we will not:

- authorize or create, or increase the authorized or issued amount of, any
class or series of shares of capital stock ranking senior to such series
of Preferred Stock with respect to payment of dividends or the
distribution of assets upon liquidation, dissolution or winding up of our
business;

- reclassify any authorized capital stock into such shares of capital stock
ranking senior to such series of Preferred Stock with respect to payment
of dividends or the distribution of assets upon liquidation, dissolution
or winding up of our business;

- create, authorize or issue any obligation or security convertible into or
evidencing the right to purchase shares of capital stock ranking senior to
such series of Preferred Stock with respect to payment of dividends or the
distribution of assets upon liquidation, dissolution or winding up of our
business; or

- amend, alter or repeal our Charter, whether by merger, consolidation or
otherwise (such occurrence, an "Event"), so as to materially and adversely
affect any right, preference, privilege or voting power of such series of
Preferred Stock or the holders of that stock.

As a holder of Preferred Stock, you may give your consent in person or by
proxy, either in writing or at a meeting (each series voting separately as a
class). We are not required to obtain your consent, as a holder of Preferred
Stock, for the following actions as such actions will be deemed in the
Designating Amendment not to adversely affect any right, preference, or voting
power of your series of Preferred Stock:

- if upon the occurrence of an Event, such series of Preferred Stock remain
outstanding with its terms materially unchanged, taking into account that
upon the occurrence of an Event, we may not be the surviving entity;

- any increase in the amount of the authorized Preferred Stock, or the
creation or issuance of any other series of Preferred Stock (provided such
series of Preferred Stock ranks equal with or junior to your series of
Preferred Stock); or

- any increase in the amount of authorized shares of a series of Preferred
Stock, in each case ranking equal with or junior to the Preferred Stock of
such series with respect to payment of dividends, or the distribution of
our assets upon liquidation, dissolution or winding-up of the Company.

The foregoing voting provisions will not apply if we redeem or call for
redemption all shares of a series of Preferred Stock outstanding at or prior to
the time when the act with respect to which such

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vote would otherwise be required shall be effected. All outstanding shares of a
series of Preferred Stock will be deemed to have been redeemed or called for
redemption provided sufficient funds will have been deposited in trust to effect
such redemption.

CONVERSION RIGHTS

We will specify in the applicable prospectus supplement the terms and
conditions, if any, upon which any series of Preferred Stock is convertible into
Common Stock. Such terms will include:

- the number of shares of Common Stock to be received on conversion of each
share of such Preferred Stock;

- the conversion price or rate (or method of calculation);

- the conversion period;

- whether conversion is at our and/or at the option of the holder of
Preferred Stock;

- any events resulting in adjustment of the conversion price; and

- rights of conversion in the event we call for redemption such series of
Preferred Stock.

RESTRICTIONS ON OWNERSHIP

For us to maintain our qualification as a REIT for federal income tax
purposes, not more than 50% in value of our outstanding capital stock may be
owned, directly or indirectly, by five or fewer individuals (as defined for
federal income tax purposes to include certain entities) during the last half of
a taxable year. To assist us in meeting this requirement and to otherwise
protect us from the consequences of a concentration of ownership among our
stockholders, our Charter provides that, in general, no one person may own more
than 6.6% of the outstanding shares of any class or series of capital stock,
including any series of Preferred Stock. See "Restrictions on Transfer" on page
25.

TRANSFER AGENT

We will name the transfer agent and registrar for the Preferred Stock in the
applicable prospectus supplement.

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DESCRIPTION OF COMMON STOCK

THIS SECTION DESCRIBES THE GENERAL TERMS AND PROVISIONS OF THE SHARES OF THE
COMPANY'S COMMON STOCK THAT WE MAY OFFER BY THIS PROSPECTUS. THE SUMMARY IS NOT
COMPLETE. WE HAVE INCORPORATED BY REFERENCE OUR CHARTER AND BYLAWS AS EXHIBITS
TO THIS REGISTRATION STATEMENT. YOU SHOULD READ OUR CHARTER AND BYLAWS BEFORE
YOU ACQUIRE ANY COMMON STOCK.

GENERAL

As of December 14, 1998, our authorized Common Stock was 250,000,000 shares,
of which 63,527,819 shares were issued and outstanding. All shares of Common
Stock will, when issued, be duly authorized, fully paid and nonassessable. This
means that the full price for our Common Stock will be paid at issuance and that
you, as a purchaser of such shares of Common Stock, will not be later required
to pay us any additional monies for such Common Stock.

DIVIDENDS

As a holder of Common Stock, you may receive dividends, out of our funds
that we can legally use to pay dividends, when and if such dividends are
declared by the Company's Board of Directors.

VOTING RIGHTS

Subject to the provisions of our Charter regarding Excess Stock, as a holder
of Common Stock you have the exclusive power to vote on all matters presented to
our stockholders unless Delaware law or the Designating Amendment for an
outstanding series of Preferred Stock gives the holders of any outstanding
Preferred Stock the right to vote on certain matters or generally. As a holder
of Common Stock, you are entitled to one vote per share. There is no cumulative
voting in the election of our Directors which means that at any meeting of our
stockholders the holders of a majority of the outstanding shares of Common Stock
can cast all of their votes for each Director to be elected at such meeting,
thus electing all of the Directors then standing for election, and the votes
held by the holders of the remaining Common Stock will not be sufficient to
elect any Director.

OTHER RIGHTS

Subject to the provisions of our Charter regarding Excess Stock, each share
of Common Stock has equal dividend, distribution, liquidation and other rights,
and has no preference, appraisal (except as provided by Delaware law) or
exchange rights.

As a holder of Common Stock, you have no conversion, sinking fund or
redemption rights, or preemptive rights to subscribe for any securities of the
Company.

We intend to furnish our stockholders with annual reports containing our
audited consolidated financial statements and an opinion thereon expressed by an
independent public accounting firm.

Pursuant to Delaware law, a merger or consolidation involving a Delaware
corporation, such as the Company, generally requires the approval of a majority
of the outstanding shares that are entitled to vote on such matters. However,
Delaware law provides that no vote of our stockholders is required to authorize
a merger in which we are the surviving corporation following the merger if:

- our Charter is not amended in any respect by the merger;

- each share of stock outstanding prior to the merger is to be an identical
share of stock after the effective date of the merger; and

- any shares of common stock (together with any other securities convertible
into shares of common stock) to be issued or delivered under the plan of
merger aggregate to no more than

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20% of the number of shares of common stock outstanding immediately prior
to the effective date of the merger.

TRANSFER AGENT

The transfer agent and registrar for our Common Stock is BankBoston, N.A.

DESCRIPTION OF WARRANTS

We have no Warrants or other share purchase rights outstanding (other than
options issued under our 1997 Stock Option and Incentive Plan). Each OP Unit
issued by our Operating Partnership subsidiary, however, may generally be
redeemed by the holder thereof for cash equal to the fair market value of one
share of Common Stock, except that the Company may at its election acquire any
OP Unit so presented for redemption for one share of Common Stock. In addition,
as of December 14, 1998, the Operating Partnership had outstanding Preferred
Units that at present or at a future date may be converted into an aggregate of
10,454,301 OP Units, with each such OP Unit having the right described in the
preceding sentence.

We may issue Warrants for the purchase of Preferred Stock or Common Stock by
this prospectus. Warrants may be issued independently, together with any other
Securities offered by any prospectus supplement or through a dividend or other
distribution to our stockholders and may be attached to or separate from such
Securities. We may issue Warrants under a warrant agreement to be entered into
between us and a warrant agent. We will name any warrant agent in the applicable
prospectus supplement. The warrant agent will act solely as our agent in
connection with the Warrants of a particular series and will not assume any
obligation or relationship of agency or trust for or with any holders or
beneficial owners of Warrants. In the applicable prospectus supplement, we will
describe the terms of the Warrants and applicable warrant agreement, including,
where applicable, the following:

- the title of such Warrants;

- their aggregate number;

- the price or prices at which we will issue them;

- the designation, number and terms of the Preferred Stock or Common Stock
that can be purchased upon exercise of them;

- the designation and terms of the other Securities, if any, with which such
Warrants are issued and the number of such Warrants issued with each such
Security;

- the date, if any, on and after which they and the related Preferred Stock
or Common Stock, if any, will be separately transferable;

- the price at which each share of Preferred Stock or Common Stock that can
be purchased upon exercise of such Warrants may be purchased;

- the date on which the right to exercise them shall commence and the date
on which such right shall expire;

- the minimum or maximum amount of such Warrants which may be exercised at
any one time;

- information with respect to book-entry procedures, if any;

- a discussion of certain federal income tax considerations, and

- any other terms of such Warrants, including terms, procedures and
limitations relating to the transferability, exchange and exercise of such
Warrants.

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RESTRICTIONS ON TRANSFER

OWNERSHIP LIMIT. Among the requirements that we must meet to qualify as a
REIT under the Code is that not more than 50% in value of our outstanding
capital stock may be owned, directly or indirectly, by five or fewer individuals
(as defined in the federal income tax laws applicable to REITs) during the last
half of a taxable year (other than the first year). Additionally, such shares of
capital stock must be beneficially owned by 100 or more persons during at least
335 days of a taxable year of 12 months (other than the first year) or during a
proportionate part of a shorter taxable year. In order to protect us against the
risk of losing our status as a REIT and to otherwise protect us from the
consequences of a concentration of ownership among our stockholders, our
Charter, subject to certain exceptions, provides that no single person (which
includes any "group" of persons) (other than "Related Parties," as defined
below, and certain "Look-Through Entities," as defined below), may "beneficially
own" more than 6.6% (the "Ownership Limit") of the aggregate number of
outstanding shares of any class or series of capital stock. Under our Charter, a
person generally "beneficially owns" shares if (i) such person has direct
ownership of such shares, (ii) such person has indirect ownership of such shares
taking into account the constructive ownership rules of Section 544 of the Code,
as modified by Section 856(h)(1)(B) of the Code, or (iii) such person would be
deemed to "beneficially own" such shares pursuant to Rule 13d-3 under the
Exchange Act. These ownership limitations may have the effect of precluding
acquisition of control of the Company.

RELATED PARTY OWNERSHIP LIMIT. The effect of clause (iii) of the preceding
paragraph is that a person will generally be deemed, for purposes of the
Ownership Limit, to beneficially own any shares with respect to which such
person has the direct or indirect power to vote or cause their disposition.
Notwithstanding the above, (a) a Related Party will not be deemed to
beneficially own shares by virtue of clause (iii) of the preceding paragraph;
and (b) a "group" of which a Related Party is a member will generally not have
attributed to the group's beneficial ownership any shares beneficially owned by
such Related Party. Each of Mr. Zuckerman and his respective heirs, legatees and
devises, and any other person whose beneficial ownership of shares of Common
Stock would be attributed under the Code to Mr. Zuckerman, is a "Related Party,"
and such persons are subject to a "Related Party Ownership Limit" of 15%, such
that none of such persons shall be deemed to beneficially own shares in excess
of the Ownership Limit unless, in the aggregate, such persons own shares of any
class or series of capital stock in excess of 15% of the number of shares of
such class or series outstanding. A similar Related Party Ownership Limit is
applied to Mr. Linde and persons with a similar relationship to Mr. Linde, all
of whom are also Related Parties under our Charter.

LOOK-THROUGH OWNERSHIP LIMIT. Our Charter provides that pension plans
described in Section 401(a) of the Code and mutual funds registered under the
Investment Company Act of 1940 ("Look-Through Entities") are subject to a 15%
"Look-Through Ownership Limit." Pension plans and mutual funds are among the
entities that are not treated as holders of stock under the Five or Fewer
Requirement and the beneficial owners of such entities will be counted as
holders for this purpose.

WAIVER OF OWNERSHIP LIMITS BY THE BOARD OF DIRECTORS. The foregoing
restrictions on transferability and ownership will not apply if the Board of
Directors determines that it is no longer in the best interests of the Company
to attempt to qualify, or to continue to qualify, as a REIT. The Board of
Directors may, in its sole discretion, waive the Ownership Limit, the
Look-Through Ownership Limit and the Related Party Ownership Limit in any
particular instance if evidence satisfactory to the Board of Directors is
presented that the waiver of the Limit will not jeopardize our REIT status and
the Board of Directors otherwise decides that such action is in our best
interest.

TRANSFERS IN VIOLATION OF OUR TRANSFER RESTRICTIONS WILL BE NULL AND
VOID. Any purported transfer of shares of capital stock or of any security
convertible into shares of capital stock that would create a direct or indirect
ownership of shares of capital stock in excess of the Ownership Limit, the
Look-Through Ownership Limit or the Related Party Ownership Limit, as
applicable, or that would

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<PAGE>
result in our disqualification as a REIT, including any transfer that results in
the shares of capital stock being owned by fewer than 100 persons or results in
the Company being "closely held" within the meaning of Section 856(h) of the
Code or results in the Company constructively owning 10% or more of the
ownership interests in a tenant of ours within the meaning of Section 318 of the
Code as modified by Section 856(d)(5) of the Code, shall be null and void and of
no force or effect with respect to the purported transferee (the "Prohibited
Transferee") as to that number of shares in excess of the applicable limit. The
Prohibited Transferee will acquire no right or interest (or, in the case of any
event other than a purported transfer, the person or entity holding record title
to any such shares in excess of the applicable limit (the "Prohibited Owner")
will cease to own any right or interest) in such excess shares. Any such excess
shares described above will be converted automatically into an equal number of
shares of Excess Stock (the "Excess Shares"). The Excess Shares will be
transferred automatically, by operation of law, to a trust, the beneficiary of
which will be a qualified charitable organization selected by us (the
"Beneficiary"). Such automatic transfer will be deemed to be effective as of the
close of business on the Trading Day (as defined in our Charter) prior to the
date of such violative transfer. As soon as practical after the transfer of
shares to the trust, the trustee of the trust (who shall be designated by us and
be unaffiliated with us and any Prohibited Transferee or Prohibited Owner) will
be required to sell such Excess Shares to a person or entity who could own such
shares without violating the applicable limit, and distribute to the Prohibited
Transferee an amount equal to the lesser of the price paid by the Prohibited
Transferee for such Excess Shares or the sales proceeds received by the trust
for such Excess Shares. In the case of any Excess Shares resulting from any
event other than a transfer, or from a transfer for no consideration (such as a
gift), the trustee will be required to sell such Excess Shares to a qualified
person or entity and distribute to the Prohibited Owner an amount equal to the
lesser of the fair market value of such Excess Shares as of the date of such
event or the sales proceeds received by the trust for such Excess Shares. In
either case, any proceeds in excess of the amount distributable to the
Prohibited Transferee or Prohibited Owner, as applicable, will be distributed to
the Beneficiary. Prior to a sale of any such Excess Shares by the trust, the
trustee will be entitled to receive in trust for the Beneficiary all dividends
and other distributions paid by us with respect to such Excess Shares.

In addition, shares of stock of the Company held in the trust will be deemed
to have been offered for sale to the Company, or its designee, at a price per
share equal to the lesser of (i) the price per share in the transaction that
resulted in such transfer to the trust (or, in the case of a devise or gift, the
market price at the time of such devise or gift) and (ii) the market price on
the date we, or our designee, accepts such offer. We will have the right to
accept such offer for a period of 90 days. Upon such a sale to us, the interest
of the Beneficiary in the shares sold will terminate and the trustee shall
distribute the net proceeds of the sale to the Prohibited Transferee (or, in the
case of a devise or gift, the Prohibited Owner).

These restrictions do not preclude settlement of transactions through the
NYSE.

DISCLOSURE OF STOCK OWNERSHIP BY OUR STOCKHOLDERS. Our Charter provides
that our stockholders are required upon demand to disclose to us in writing any
information with respect to their direct, indirect and constructive ownership of
capital stock as the Board of Directors deems necessary to comply with the
provisions of the Code applicable to REITs, to comply with the requirements of
any taxing authority or governmental agency or to determine any such compliance.

SHAREHOLDER RIGHTS AGREEMENT

On June 11, 1997, the Board of Directors adopted a Shareholder Rights
Agreement (the "Rights Agreement"). The adoption of the Rights Agreement could
make it more difficult for a third party to acquire, or could discourage a third
party from acquiring, the Company or a large block of the Company's Common
Stock.

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In accordance with the Rights Agreement, one Preferred Stock Purchase Right
(a "Right") is attached to each outstanding share of Common Stock, and one Right
will be attached to each share of Common Stock issued before the Distribution
Date (as defined below). Under certain conditions, each Right entitles the
registered holder to purchase from the Company one one-thousandth (1/1000) of a
share (a "Series E Unit") of Series E Junior Participating Cumulative Preferred
Stock, par value $.01 per share, of the Company (the "Series E Preferred
Stock"), at a cash exercise price of $100.00 per Series E Unit (the "Exercise
Price"), subject to adjustment. The Company has designated 200,000 shares of
Series E Preferred Stock and has reserved such shares for issuance under the
Rights Agreement.

The Rights are not exercisable until the Distribution Date and will expire
on June 11, 2007, unless previously redeemed or exchanged by the Company as
described below. Until a Right is exercised, the holder will have no rights as a
stockholder of the Company (beyond those as an existing stockholder), including
the right to vote or to receive dividends. While the distribution of the Rights
will not be taxable to stockholders or to the Company, stockholders may,
depending upon the circumstances, recognize taxable income in the event that the
Rights become exercisable for Series E Units, other securities of the Company,
other consideration or for common stock of an acquiring company.

Initially, the Rights are attached to and trade with the outstanding shares
of Common Stock. The Rights will separate from the Common Stock and will become
exercisable upon the earlier of the close of business on:

(i) the tenth calendar day following the first public announcement that a
person or a group of affiliated or associated persons (an "Acquiring
Person") has acquired beneficial ownership of more than 15% of the sum
of the outstanding shares of Common Stock and Excess Stock ("Common
Shares") (the date of said announcement being referred to as the "Stock
Acquisition Date"); or

(ii) the tenth business day (or such other calendar day as the Board of
Directors may determine) following the commencement of a tender offer
or exchange offer that would result upon its consummation in a person
or group becoming the beneficial owner of more than 15% of the
outstanding Common Shares (the earlier of such dates being herein
referred to as the "Distribution Date").

Under the Rights Agreement, shares of Common Stock that may be issued in
exchange for outstanding OP Units are not included in the definition of
beneficial ownership. Also, a person who became a partner of the Operating
Partnership at the time of the Initial Offering will not be an Acquiring Person
if such person does not acquire a greater percentage of (A) the sum of (i) the
outstanding shares of Common Stock plus (ii) the outstanding OP Units held by
persons other than the Company than (B) the percentage that such person had at
the completion of the Initial Offering. Furthermore, no "group" of which a
Related Party is a member will be deemed to beneficially own the Common Shares
beneficially owned by such Related Party.

In the event that a Stock Acquisition Date occurs, proper provision will be
made so that each holder of a Right (other than an Acquiring Person or its
associates or affiliates, whose Rights shall become null and void) will
thereafter have the right to receive upon exercise that number of Series E Units
of Series E Preferred Stock having a market value of two times the exercise
price of the Right (such right being referred to as the "Subscription Right").
In addition, if at anytime following the Stock Acquisition Date the Company
engages in certain business combinations with an acquiring company, each holder
of a Right shall have the right to receive, upon exercise, common stock of the
acquiring

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<PAGE>
company having a market value equal to two times the exercise price of the Right
(such right being referred to as the "Merger Right") if:

(i) the Company consolidates with, or merges with and into, any other
person, and the Company is not the continuing or surviving corporation;

(ii) any person consolidates with the Company, or merges with and into the
Company and the Company is the continuing or surviving corporation of
such merger and, in connection with such merger, all or part of the
shares of Common Stock are changed into or exchanged for stock or
other securities of any other person or cash or any other property; or

(iii) 50% or more of the Company's assets or earning power is sold,
mortgaged or otherwise transferred.

The holder of a Right will continue to have the Merger Right whether or not such
holder has exercised the Subscription Right.

The Exercise Price payable, and the number of Series E Units of Series E
Preferred Stock or other securities or property issuable, upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution.

At any time after the Stock Acquisition Date, the Board of Directors may, at
its option, exchange all or any part of the then outstanding and exercisable
Rights for shares of Common Stock or Units of Series E Preferred Stock at an
exchange ratio of one share of Common Stock or one Unit of Series E Preferred
Stock per Right. However, the Board of Directors generally will not be empowered
to effect such exchange at any time after any person becomes the beneficial
owner of 50% or more of the Common Stock of the Company.

The Rights may be redeemed in whole, but not in part, at a price of $0.001
per Right (payable in cash, Common Stock or other consideration deemed
appropriate by the Board of Directors) by the Board of Directors only until the
earlier of (i) the close of business on the tenth calendar day after the Stock
Acquisition Date, or (ii) the expiration date of the Rights Agreement.
Immediately upon the action of the Board of Directors ordering redemption of the
Rights, the Rights will terminate and thereafter the only right of the holders
of Rights will be to receive the redemption price.

Until the Distribution Date (or earlier redemption, exchange or expiration
of the Rights), (a) the Rights will be evidenced by the Common Stock
certificates and will be transferred with and only with such Common Stock
certificates, (b) new Common Stock certificates issued after the Record Date
will contain a notation incorporating the Shareholder Rights Agreement by
reference, and (c) the surrender for transfer of any certificates for Common
Stock will also constitute the transfer of the Rights associated with the Common
Stock represented by such certificate.

As soon as practicable after the Distribution Date, Rights Certificates will
be mailed to holders of record of Common Stock as of the close of business on
the Distribution Date and, thereafter, the separate Rights Certificates alone
will represent the Rights. Except as otherwise determined by the Board of
Directors, only shares of Common Stock issued prior to the Distribution Date
will be issued with Rights.

The Board of Directors in its sole discretion may amend the Rights Agreement
until the Distribution Date. After the Distribution Date, the Board of Directors
may, subject to certain limitations set forth in the Rights Agreement, amend the
Rights Agreement only to cure any ambiguity, defect or inconsistency, to shorten
or lengthen any time period, or to make changes that do not adversely affect the
interests of Rights holders (excluding the interests of an Acquiring Person or
its associates or affiliates).

A copy of the Rights Agreement has been filed with the SEC. A copy of the
Rights Agreement is also available from the Company upon written request. The
foregoing description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, which is
incorporated herein by reference.

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CERTAIN PROVISIONS OF DELAWARE LAW AND
OUR CHARTER AND BYLAWS

The Company's Charter and Bylaws contain certain provisions that could make
more difficult an acquisition of the Company by means of a tender offer, a proxy
contest or otherwise. These provisions are expected to discourage certain types
of coercive takeover practices and inadequate takeover bids and to encourage
persons seeking to acquire control of the Company to negotiate first with the
Board of Directors. We believe that the benefits of these provisions outweigh
the potential disadvantages of discouraging such proposals because, among other
things, negotiation of such proposals might result in an improvement of their
terms. The description set forth below is intended as a summary only and is
qualified in its entirety by reference to our Charter and Bylaws, which have
been filed with the SEC. See also "Restrictions on Transfers" on page 25.

AMENDMENT OF OUR CHARTER AND BYLAWS

Amendments to the Charter must be approved by the Board of Directors and
generally by the vote of a majority of the votes entitled to be cast at a
meeting of stockholders. However, amendments dealing with certain articles of
our Charter (for example, articles relating to stockholder action; the powers,
election of, removal of and classification of directors; limitation of
liability; and amendment of our Bylaws or Charter) require the affirmative vote
of not less than 75% of the outstanding votes entitled to be cast on the matter.
Unless otherwise required by law, the Board of Directors may amend our Bylaws by
the affirmative vote of a majority of the directors then in office. Our Bylaws
may also be amended by our stockholders, at an annual meeting or at a special
meeting called for such purpose, by the affirmative vote of at least
seventy-five percent of the votes entitled to be cast on the matter; provided,
that if the Board of Directors recommends that our stockholders approve such
amendment at such meeting, such amendment will require the affirmative vote of
only a majority of the shares present at such meeting and entitled to vote.

DISSOLUTION OF THE COMPANY

The DGCL and our Charter permit the Company to be dissolved by (i) the
affirmative vote of 75% of the directors then in office declaring such
dissolution to be advisable and directing that the proposed dissolution be
submitted for consideration at an annual or special meeting of our stockholders,
and (ii) upon proper notice, stockholder approval by the affirmative vote of a
majority of the votes entitled to be cast on the matter.

MEETINGS OF STOCKHOLDERS

Under our Bylaws, we will hold annual meetings of our stockholders at such
date and time as determined by the Board of Directors, the Chairman of our Board
or our President. Our Bylaws establish an advance notice procedure for our
stockholders to make nominations of candidates for directors or bring other
business before an annual meeting of stockholders. Special meetings of our
stockholders may be called only by a majority of the Directors then in office
and only matters set forth in the notice of the meeting may be considered and
acted upon at such a meeting.

BOARD OF DIRECTORS

Our Charter provides that the Company's Board of Directors will initially
consist of five directors and thereafter the number of directors of the Company
may be established by the Board of Directors. However, the number of directors
may not be fewer than the minimum number required by the DGCL nor more than
eleven. Subject to the rights, if any, of the holders of any series of Preferred
Stock to elect directors and to fill vacancies in the Board of Directors
relating thereto, any vacancy will be filled, including any vacancy created by
an increase in the number of directors, at any regular meeting or at

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<PAGE>
any special meeting called for the purpose, by a majority of the remaining
directors. Pursuant to the terms of our Charter, the directors are divided into
three classes. As the term of each class expires, directors in that class will
be elected for a term of three years and until their successors are duly elected
and qualified. The use of a classified board of directors may render more
difficult a change in control of the Company or removal of incumbent management.
We believe, however, that classification of the Board of Directors will help to
assure the continuity and stability of our business strategies and policies.

Our Charter provides that the affirmative vote of more than 75% of the
directors then in office is required to approve certain transactions or actions,
including a change of control (as defined) of the Company or of the Operating
Partnership, any amendment to the Operating Partnership Agreement, any waiver of
the limitations on ownership contained in our Charter, certain issuances of
equity securities by the Company or termination of our status as a REIT.

SHAREHOLDER RIGHTS PLAN AND OWNERSHIP LIMITATIONS

We have adopted a Shareholder Rights Agreement. In addition, our Charter
contains provisions that limit the ownership by any person of shares of any
class or series of capital stock of the Company. See "Restrictions on
Transfer--Shareholder Rights Agreement" on page 26 and "Restrictions on
Transfer" on page 25).

LIMITATION OF LIABILITY AND INDEMNIFICATION

Our Charter generally limits the liability of our directors to the Company
to the fullest extent permitted from time to time by Delaware law. The DGCL
permits, but does not require, a corporation to indemnify its directors,
officers, employees or agents and expressly provides that the indemnification
provided for under the DGCL shall not be deemed exclusive of any indemnification
right under any bylaw, vote of stockholders or disinterested directors, or
otherwise. The DGCL permits indemnification against expenses and certain other
liabilities arising out of legal actions brought or threatened against such
persons for their conduct on behalf of a corporation, provided that each such
person acted in good faith and in a manner that he or she reasonably believed
was in or not opposed to such corporation's best interests and, in the case of a
criminal proceeding, provided such person had no reasonable cause to believe his
or her conduct was unlawful. The DGCL does not allow indemnification of
directors in the case of an action by or in the right of a corporation
(including stockholder derivative suits) unless the directors successfully
defend the action or indemnification is ordered by the court.

Our Bylaws provide that our directors and officers will be, and, in the
discretion of the Board of Directors, non-officer employees may be, indemnified
by the Company to the fullest extent authorized by Delaware law, as it now
exists or may in the future be amended, against all expenses and liabilities
actually and reasonably incurred in connection with service for or on behalf of
the Company. Our Bylaws also provide that the right of directors and officers to
indemnification shall be a contract right and shall not be exclusive of any
other right now possessed or hereafter acquired under any bylaw, agreement, vote
of stockholders, or otherwise. Our Charter contains a provision permitted by
Delaware law that generally eliminates the personal liability of directors for
monetary damages for breaches of their fiduciary duty, including breaches
involving negligence or gross negligence in business combinations, unless the
director has breached his or her duty of loyalty, failed to act in good faith,
engaged in intentional misconduct or a knowing violation of law, paid a dividend
or approved a stock repurchase in violation of the DGCL or obtained an improper
personal benefit. This provision does not alter a director's liability under the
federal securities laws. In addition, this provision does not affect the
availability of equitable remedies, such as an injunction or rescission, for
breach of fiduciary duty.

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Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling the Company
pursuant to the foregoing provisions, we have been informed that in the opinion
of the SEC such indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable.

BUSINESS COMBINATIONS

We are subject to the provisions of section 203 ("Section 203") of the DGCL.
Section 203 provides, with certain exceptions, that a Delaware corporation may
not engage in any of a broad range of business combinations with a person or
affiliate, or associate of such person, who is an "interested stockholder" for a
period of three years from the date that such person became an interested
stockholder unless:

- the transaction resulting in a person becoming an interested stockholder,
or the business combination, was approved by the board of directors of the
corporation before the consummation of such transaction;

- the interested stockholder owned 85% or more of the outstanding voting
stock of the corporation immediately after the transaction in which it
became an interested stockholder (excluding shares owned by persons who
are both officers and directors of the corporation, and shares held by
certain employee stock ownership plans); or

- on or after the date the person becomes an interested stockholder, the
business combination is approved by the corporation's board of directors
and by the holders of at least 66 2/3% of the corporation's outstanding
voting stock at an annual or special meeting, excluding shares owned by
the interested stockholder.

Under Section 203, an "interested stockholder" is defined (with certain
exceptions) as any person who, together with affiliates and associates, owns or
within the prior three years did own, 15% or more of the corporation's
outstanding voting stock.

INDEMNIFICATION AGREEMENTS

We have entered into indemnification agreements with each of our directors
and executive officers. The indemnification agreements require, among other
things, that we indemnify our directors and executive officers to the fullest
extent permitted by law and advance to our directors and executive officers all
related expenses, subject to reimbursement if it is subsequently determined that
indemnification is not permitted. Under these agreements, we must also indemnify
and advance all expenses incurred by our directors and executive officers
seeking to enforce their rights under the indemnification agreements and may
cover our directors and executive officers under our directors' and officers'
liability insurance. Although the form of indemnification agreement offers
substantially the same scope of coverage afforded by law, it provides greater
assurance to our directors and executive officers that indemnification will be
available, because, as a contract, it cannot be modified unilaterally in the
future by the Board of Directors or stockholders to eliminate the rights it
provides.

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CERTAIN FEDERAL INCOME TAX CONSIDERATIONS

THE FOLLOWING IS A GENERAL SUMMARY OF THE MATERIAL FEDERAL INCOME TAX
CONSIDERATIONS ASSOCIATED WITH AN INVESTMENT IN THE SECURITIES. IN THIS SECTION
WHEN WE REFER TO "THE CODE" WE MEAN THE INTERNAL REVENUE CODE, AS AMENDED. THE
FOLLOWING DISCUSSION IS NOT EXHAUSTIVE OF ALL POSSIBLE TAX CONSIDERATIONS AND IS
NOT TAX ADVICE. MOREOVER, THIS SUMMARY DOES NOT DEAL WITH ALL TAX ASPECTS THAT
MIGHT BE RELEVANT TO YOU, AS A PARTICULAR PROSPECTIVE STOCKHOLDER IN LIGHT OF
YOUR PERSONAL CIRCUMSTANCES; NOR DOES IT DEAL WITH PARTICULAR TYPES OF
STOCKHOLDERS THAT ARE SUBJECT TO SPECIAL TREATMENT UNDER THE CODE, SUCH AS
INSURANCE COMPANIES, FINANCIAL INSTITUTIONS AND BROKER-DEALERS. THE CODE
PROVISIONS GOVERNING THE FEDERAL INCOME TAX TREATMENT OF REITS ARE HIGHLY
TECHNICAL AND COMPLEX. THIS SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE
APPLICABLE CODE PROVISIONS, RULES AND REGULATIONS PROMULGATED THEREUNDER, AND
ADMINISTRATIVE AND JUDICIAL INTERPRETATIONS THEREOF. THE FOLLOWING DISCUSSION IS
BASED ON CURRENT LAW. UNLESS THE CONTEXT REQUIRES OTHERWISE, REFERENCES TO "US,"
"WE," AND THE "COMPANY" IN THIS "CERTAIN FEDERAL INCOME TAX CONSIDERATIONS"
SECTION REFER ONLY TO BOSTON PROPERTIES, INC.

WE URGE YOU, AS A PROSPECTIVE INVESTOR, TO CONSULT YOUR OWN TAX ADVISER
REGARDING THE SPECIFIC TAX CONSEQUENCES TO YOU OF THE PURCHASE, OWNERSHIP AND
SALE OF THE SECURITIES AND OF OUR ELECTION TO BE TAXED AS A REIT, INCLUDING THE
FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX CONSEQUENCES OF SUCH PURCHASE,
OWNERSHIP AND SALE.

OPINION OF TAX COUNSEL

In the opinion of our counsel, Goodwin, Procter & Hoar LLP, commencing with
our taxable year ended December 31, 1997, we qualified to be taxed as a REIT
under the Code, provided that the Company and the Operating Partnership operated
and continue to operate in accordance with various assumptions and factual
representations made by the Company and the Operating Partnership concerning
their business, properties and operations. It must be emphasized that Goodwin,
Procter & Hoar LLP's opinion is based on various assumptions and is conditioned
upon such assumptions and representations made by the Company and the Operating
Partnership concerning their business and properties. In addition, Goodwin,
Procter & Hoar LLP's opinion is based upon the factual representations of the
Company and the Operating Partnership concerning its business and properties.
Moreover, such qualification and taxation as a REIT depends upon our ability to
meet, through actual annual operating results, distribution levels and diversity
of stock ownership, the various qualification tests imposed under the Code
discussed below, the results of which will not be reviewed by Goodwin,
Procter & Hoar LLP. Accordingly, no assurance can be given that the actual
results of our operations for any one taxable year will satisfy such
requirements. See "Risk Factors--Failure to Qualify as a REIT" on page 10.

The opinion of Goodwin, Procter & Hoar LLP is also based upon existing law
as currently applicable, Internal Revenue Service ("IRS") regulations, currently
published administrative positions of the IRS and judicial decisions, which are
subject to change either prospectively or retroactively. No assurance can be
given that any such changes would not modify the conclusions expressed in their
opinion. Moreover, unlike a tax ruling (which we will not seek), an opinion of
counsel is not binding on the IRS and no assurance can be given that the IRS
will not successfully challenge our status as a REIT.

If we qualify for taxation as a REIT, we generally will not be subject to
federal corporate income taxes on that portion of our ordinary income or capital
gain that we distribute currently to our stockholders. The REIT provisions of
the Code generally allow a REIT to deduct dividends paid to its stockholders.
This substantially eliminates the federal "double taxation" on earnings
(taxation at both the corporate level and stockholder level) that usually
results from investments in a corporation.

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Even if we qualify for taxation as a REIT, we will be subject to federal
income tax, as follows:

- we will be taxed at regular corporate rates on our undistributed REIT
taxable income, including undistributed net capital gains;

- under certain circumstances, we will be subject to the "alternative
minimum tax";

- if we have net income from the sale or other disposition of "foreclosure
property" that is held primarily for sale to customers in the ordinary
course of business or other non-qualifying income from foreclosure
property, we will be subject to tax at the highest corporate rate on such
income;

- if we have net income from prohibited transactions (which are, in general,
certain sales or other dispositions of property other than foreclosure
property held primarily for sale to customers in the ordinary course of
business), such income will be subject to a 100% tax;

- if we fail to satisfy either the 75% or 95% gross income test (discussed
below) but have nonetheless maintained our qualification as a REIT because
certain other requirements have been met, we will be subject to a 100% tax
on the net income attributable to the greater of the amount by which we
fail the 75% or 95% test, multiplied by a fraction intended to reflect our
profitability;

- if we fail to distribute during each year at least the sum of (i) 85% of
our REIT ordinary income for such year, (ii) 95% of our REIT capital gain
net income for such year and (iii) any undistributed taxable income from
prior periods, we will be subject to a 4% excise tax on the excess of such
required distribution over the amounts actually distributed; and

- if we acquire any asset from a C corporation (i.e., a corporation
generally subject to full corporate-level tax) in a carryover-basis
transaction and we subsequently recognize gain on the disposition of such
asset during the ten-year period (the "Recognition Period") beginning on
the date on which we acquired the asset, then, to the extent of the excess
of (a) the fair market value of the asset as of the beginning of the
applicable Recognition Period over (b) our adjusted basis in such asset as
of the beginning of such Recognition Period (the "Built-In Gain"), such
gain will be subject to tax at the highest regular corporate rate,
pursuant to guidelines issued by the IRS (the "Built-In Gain Rules").

REQUIREMENTS FOR QUALIFICATION

We elected to be taxable as a REIT for our taxable year ended December 31,
1997. In order for us to have so qualified, we must have met and we must
continue to meet the requirements, discussed below relating to our organization,
source of income, nature of assets and distributions of income to our
stockholders.

ORGANIZATIONAL REQUIREMENTS

DEFINITION OF REIT UNDER THE CODE

The Code defines a REIT as a corporation, trust or association:

- (i) that is managed by one or more directors or trustees;

- (ii) the beneficial ownership of which is evidenced by transferable
shares or by transferable certificates of beneficial interest;

- (iii) that would be taxable as a domestic corporation but for the REIT
requirements;

- (iv) that is neither a financial institution nor an insurance company
subject to certain provisions of the Code;

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- (v) the beneficial ownership of which is held by 100 or more persons;
and

- (vi) during the last half of each taxable year not more than 50% in value
of the outstanding stock of which is owned, directly or indirectly
through the application of certain attribution rules, by five or
fewer individuals (as defined in the Code to include certain
entities). In addition, certain other tests, described below,
regarding the nature of its income and assets also must be
satisfied.

The Code provides that conditions (i) through (iv), inclusive, must be met
during the entire taxable year and that condition (v) must be met during at
least 335 days of a taxable year of 12 months, or during a proportionate part of
a taxable year of less than 12 months. Conditions (v) and (vi) (the "100
Stockholder Requirement" and "Five or Fewer Requirement", respectively) will not
apply until after the first taxable year for which an election is made to be
taxed as a REIT. For purposes of conditions (v) and (vi), pension funds and
certain other tax-exempt entities are treated as individuals, subject to a
"look-through" exception in the case of condition (vi).

PROTECTION FROM STOCK OWNERSHIP CONCENTRATION

In order to protect us from a concentration of ownership of stock that would
cause us to fail the Five or Fewer Requirement, our Charter provides that stock
owned, or deemed to be owned or transferred to a stockholder in excess of the
Ownership Limit or the Look-Through Ownership Limit will automatically be
converted into Excess Stock (as defined below) and transferred to a charity for
resale. The original stockholder is entitled to receive certain proceeds from
such a resale. See "Restrictions on Transfers" on page 25. Excess Stock is a
separate class of our capital stock that is entitled to no voting rights but
shares ratably with the Common Stock in dividends and rights upon dissolution.
Because of the absence of authority on this issue, however, we cannot assure you
that the operation of the Excess Stock or other provisions contained in our
Charter will, as a matter of law, prevent a concentration of ownership of stock
in excess of the Ownership Limit from causing us to violate the Five or Fewer
Requirement. If there were such a concentration of ownership and the operation
of the Excess Stock or other provisions contained in our Charter were not held
to cure such violation, we would be disqualified as a REIT. In rendering its
opinion that we are organized in a manner that permits us to qualify as a REIT,
Goodwin, Procter & Hoar LLP is relying on our representation that the ownership
of our stock (without regard to the Excess Stock provisions) satisfies the Five
or Fewer Requirement. Goodwin, Procter & Hoar LLP expresses no opinion as to
whether, as a matter of law, the Excess Stock or other provisions contained in
our Charter preclude us from failing the Five or Fewer Requirement.

CALENDAR YEAR REQUIREMENT

A corporation may not elect to become a REIT unless its taxable year is the
calendar year. Our taxable year is the calendar year.

CERTAIN TREASURY REGULATIONS RELATING TO OUR STATUS AS A REIT AND PARTNER

In the case of a REIT that is a partner in a partnership, Treasury
Regulations provide that the REIT is deemed to own its proportionate share
(based on its interest in partnership capital) of the assets of the partnership
and is deemed to be entitled to the income of the partnership attributable to
such share. In addition, the character of the assets and gross income of the
partnership shall retain the same character in the hands of the REIT for
purposes of Section 856 of the Code, including satisfying the gross income tests
and asset tests. Thus, our proportionate share of the assets, liabilities and
items of income of the Operating Partnership (including the Operating
Partnership's share of the assets and liabilities and items of income with
respect to any partnership in which it holds an interest) are treated as our
assets, liabilities and items of income for purposes of applying the
requirements described herein.

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INCOME TESTS

GROSS INCOME REQUIREMENTS

To maintain our qualification as a REIT, we must satisfy annually two gross
income requirements.

- At least 75% of our gross income for each taxable year must be derived
directly or indirectly from investments relating to real property or
mortgages on real property. Gross income includes "rents from real
property" and, in certain circumstances, interest, but excludes gross
income from certain disposition or property held primarily for sale to
customers in the ordinary course of a trade or business ("prohibited
transactions").

- At least 95% of our gross income (excluding gross income from prohibited
transactions) for each taxable year must be derived from such real
property investments described above and from dividends, interest and gain
from the sale or disposition of stock or securities or from any
combination of the foregoing.

RENTS FROM REAL PROPERTY

The rents we receive or that we are deemed to receive qualify as "rents from
real property" in satisfying the gross income requirements for a REIT described
above only if the following conditions are met.

- The amount of rent generally must not be based in whole or in part on the
income or profits of any person. An amount received or accrued generally
will not be excluded from the term "rents from real property," however,
solely by reason of being based on a fixed percentage or percentages of
gross receipts or sales.

- The Code provides that rents received from a tenant will not qualify as
"rents from real property" in satisfying the gross income tests if the
REIT, or an owner of 10% or more of the REIT, directly or constructively
owns 10% or more of such tenant (a "Related Party Tenant") or a subtenant
of such tenant (in which case only rent attributable to the subtenant is
disqualified).

- If rent attributable to personal property, leased in connection with a
lease of real property, is greater than 15% of the total rent received
under the lease, then the portion of rent attributable to the personal
property will not qualify as "rents from real property."

- For rents to qualify as "rents from real property" the REIT must not
operate or manage the property or furnish or render services to tenants,
other than through an "independent contractor" who is adequately
compensated and from whom the REIT does not derive any income. However, a
REIT may provide services with respect to its properties and the income
will qualify as "rents from real property" if the services are "usually or
customarily rendered" in connection with the rental of room or other space
for occupancy only and are not otherwise considered "rendered to the
occupant." Even if the services with respect to a property are
impermissible tenant services the income will qualify as "rent from real
property" if the income from such services does not exceed one percent of
all amounts received or accrued with respect to that property. In
establishing the amount of impermissible tenant services income, such
amount must be at least 150 percent of the direct cost of providing the
tenant services, or managing or operating the property.

We do not charge rent that is based in whole or in part on the income or
profits of any person (except by reason of being based on a fixed percentage or
percentages of receipts or sales consistent with the rule described above). We
do not derive, and do not anticipate deriving, rent attributable to personal
property leased in connection with real property that exceeds 15% of the total
rents.

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RENTS FROM REAL PROPERTY WITH RESPECT TO HOTEL PROPERTY LEASES

Pursuant to leases with respect to two hotel properties, ZL Hotel LLC leases
from the Operating Partnership the two hotel properties under a 10 year lease.
The hotel leases provide that ZL Hotel LLC is obligated to pay to the Operating
Partnership (i) the greater of a "Base Rent" or a "Participating Rent"
(collectively, the "Rents") and (ii) certain additional charges (as defined in
the Leases). Participating Rent is calculated by multiplying fixed percentages
by various revenue categories for each of the hotel properties. Both Base Rent
and the thresholds in the Participating Rent formulas adjust for inflation. Base
Rent accrues and is required to be paid monthly. Participating Rent is payable
monthly, in the form of monthly adjustments based on actual results.

In order for the Rents and Additional Charges to constitute "rents from real
property," the leases must be respected as true leases for federal income tax
purposes and not treated as service contracts, joint ventures or some other type
of arrangement. The determination of whether the leases are true leases depends
on an analysis of all the surrounding facts and circumstances. In making such a
determination, courts have considered a variety of factors, including the
following:

- the intent of the parties;

- the form of the agreement;

- the degree of control over the property that is retained by the property
owner (e.g., whether the lessee has substantial control over the operation
of the property or whether the lessee was required simply to use its best
efforts to perform its obligations under the agreement); and

- the extent to which the property owner retains the risk of loss with
respect to the property (e.g., whether the lessee bears the risk of
increases in operating expenses or the risk of damage to the property) or
the potential for economic gain (e.g., appreciation) with respect to the
property.

In addition, Code section 7701(e) provides that a contract that purports to
be a service contract (or a partnership agreement) is treated instead as a lease
of property if the contract is properly treated as such, taking into account all
relevant factors, including whether or not:

- the service recipient is in physical possession of the property;

- the service recipient controls the property;

- the service recipient has a significant economic or possessory interest in
the property (e.g., the property's use is likely to be dedicated to the
service recipient for a substantial portion of the useful life of the
property, the recipient shares the risk that the property will decline in
value, the recipient shares in any appreciation in the value of the
property, the recipient shares in savings in the property's operating
costs, or the recipient bears the risk of damage to or loss of the
property);

- the service provider does not bear any risk of substantially diminished
receipts or substantially increased expenditures if there is
nonperformance under the contract;

- the service provider does not use the property concurrently to provide
significant services to entities unrelated to the service recipient; and

- the total contract price does not substantially exceed the rental value of
the property for the contract period.

Since the determination whether a service contract should be treated as a lease
is inherently factual, the presence or absence of any single factor may not be
dispositive in every case. The hotel leases were structured to qualify as true
leases for federal income tax purposes.

You should be aware that there are no controlling Treasury Regulations,
published rulings, or judicial decisions involving leases with terms
substantially the same as the hotel leases that discuss

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whether such leases constitute true leases for federal income tax purposes.
Therefore, there can be no complete assurance that the IRS will not assert a
contrary position. If the leases are recharacterized as service contracts or
partnership agreements, rather than true leases, part or all of the payments
that the Operating Partnership receives from the lessee would not be considered
rent or would not otherwise satisfy the various requirements for qualification
as "rents from real property." In that case, we likely would not be able to
satisfy either the 75% or 95% gross income tests and, as a result, would lose
our REIT status.

As indicated above, "rents from real property" must not be based in whole or
in part on the income or profits of any person. The Participating Rent should
qualify as "rents from real property" since it is based on percentages of
receipts or sales which percentages are fixed at the time the leases are entered
into, provided (i) the leases are not renegotiated during the term of the leases
in a manner that has the effect of basing Participating Rent on income or
profits and (ii) the leases conform with normal business practice. More
generally, the Participating Rent will not qualify as "rents from real property"
if, considering the hotel leases and all the surrounding circumstances, the
arrangement does not conform with normal business practice, but is in reality
used as a means of basing the Participating Rent on income or profits. Since the
Participating Rent is based on fixed percentages of the gross revenues from the
hotels that are established in the hotel leases, and we have represented that
the percentages (i) will not be renegotiated during the terms of the leases in a
manner that has the effect of basing the Participating Rent on income or profits
and (ii) conform with normal business practice, the Participating Rent should
not be considered based in whole or in part on the income or profits of any
person. Furthermore, we have represented that, with respect to other hotel
properties that we acquire in the future, we will not charge rent for any
property that is based in whole or in part on the income or profits of any
person (except by reason of being based on a fixed percentage of gross revenues,
as described above.)

RENTS FROM REAL PROPERTY WITH RESPECT TO PARKING LEASES AND PARKING MANAGEMENT
AGREEMENTS

Pursuant to leases with independent third parties, the Operating Partnership
or certain subsidiary partnerships lease certain garage property and the garage
portions of certain office properties to independent third parties for periods
between one to three years. The parking leases provide that the Operating
Partnership will receive rent based on the gross receipts of the parking garage.
The same "true lease" and "rent from real property" analysis applies with
respect to the parking leases as is described above for the hotel leases. These
garage leases also have been structured to qualify as true leases for federal
income tax purposes. As is the case with respect to the hotel leases, there can
be no complete assurance that the IRS will not assert a contrary position, which
if successful could result in the loss of our status as a REIT.

Additionally, the Company has engaged independent contractors to manage and
operate, for a fee, certain parking facilities that the Company owns and that
are not subject to the leases described in the preceding paragraph. These
Management Agreements were the subject of a private letter ruling received by
the Company from the Internal Revenue Service which concluded that certain
arrangements with such independent contractors (as described in the private
letter ruling) do not preclude either the rental income from the tenants of such
properties or the income from operating the parking facilities from qualifying
as rents from real property.

INCOME FROM USUALLY OR CUSTOMARILY RENDERED SERVICES

We provide certain services with respect to our properties through the
Operating Partnership. The Operating Partnership is not an "independent
contractor." We believe (and have represented to Goodwin, Procter & Hoar LLP)
that all such services are considered "usually or customarily rendered" in
connection with the rental of space for occupancy only. Therefore, our provision
of such services does not jeopardize the qualification of rent from the
Properties as "rents from real property." In

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rendering its opinion on our ability to qualify as a REIT, Goodwin, Procter &
Hoar LLP is relying on such representations. In the case of any services that
are not "usual and customary" under the foregoing rules, we intend to employ
"independent contractors" to provide such services.

NON-QUALIFYING INCOME RECEIVED BY THE OPERATING PARTNERSHIP

The Operating Partnership may receive certain types of income with respect
to the properties it owns that will not qualify under the 75% or 95% gross
income test. We believe, however, that the aggregate amount of such
non-qualifying income in any taxable year will not cause us to exceed the limits
on non-qualifying income under the 75% and 95% gross income tests.

ELIGIBILITY FOR RELIEF UNDER THE CODE IF WE FAIL TO QUALIFY AS A REIT

If we fail to satisfy one or both of the 75% or 95% gross income tests for
any taxable year, we may still qualify as a REIT for that year if we are
eligible for relief under certain provisions of the Code. These relief
provisions generally will be available if:

- our failure to meet these tests was due to reasonable cause and not due to
willful neglect;

- we attach a schedule of our income sources to our federal income tax
return; and

- any incorrect information on the schedule is not due to fraud with intent
to evade tax.

It is not possible, however, to state whether, in all circumstances, we would be
entitled to the benefit of these relief provisions. For example, if we fail to
satisfy the gross income tests because nonqualifying income that we
intentionally incur exceeds the limits on such income, the IRS could conclude
that our failure to satisfy the tests was not due to reasonable cause. As
discussed above in "Opinion of Tax Counsel," even if these relief provisions
apply, a tax would be imposed with respect to the excess net income.

For taxable years prior to January 1, 1998, a REIT had to satisfy an additional
gross income test annually--less than 30% of the company's gross income could
consist of short-term gain from the sale or other disposition of stock or
securities, gain from prohibited transactions and gain from the sale or other
disposition of real property held for less than four years. No mitigation
provision was applicable if we were to fail to satisfy the 30% income test for
our taxable year ended December 31, 1997. See "Risk Factors--Failure to Qualify
as a REIT" on page 10.

ASSET TESTS

At the close of each quarter of our taxable year, we also must satisfy three
tests relating to the nature and diversification of our assets.

- First, at least 75% of the value of our total assets must be represented
by real estate assets, cash, cash items and government securities.

- Second, no more than 25% of our total assets may be represented by
securities other than those in the 75% asset class.

- Third, of the investments included in the 25% asset class, the value of
any one issuer's securities that we own may not exceed 5% of the value of
our total assets. Additionally, we may not own more than 10% of any one
issuer's outstanding voting securities.

The 5% test must generally be met for any quarter in which we acquire
securities of an issuer. After initially meeting the asset tests at the close of
any quarter, we will not lose our status as a REIT for failure to satisfy the
asset tests at the end of a later quarter solely by reason of changes in asset
values. If the failure to satisfy the asset tests results from an acquisition of
securities or other property during a quarter, we can cure the failure by
disposition of sufficient nonqualifying assets within 30 days

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after the close of that quarter. We maintain, and will continue to maintain,
adequate records of the value of our assets to ensure compliance with the asset
tests and will take such other actions within 30 days after the close of any
quarter as may be required to cure any noncompliance.

ANNUAL DISTRIBUTION REQUIREMENTS

In order to be taxed as a REIT, we are required to distribute dividends
(other than capital gain dividends) to our stockholders. The amount of these
distributions must be at least equal to:

- the sum of 95% of our "REIT taxable income" (computed without regard to
the dividends-paid deduction and our capital gain) and 95% of the net
income, if any, from foreclosure property in excess of the special tax on
income from foreclosure property

- minus the sum of certain items of cash income.

We must pay such distributions in the taxable year to which they relate.
Alternatively, we may pay such distributions in the following taxable year if
declared before we timely file our federal income tax return for such year and
if paid on or before the first regular dividend payment after such declaration.
Even if we satisfy the foregoing distribution requirements, to the extent that
we do not distribute all of our net capital gain or "REIT taxable income" as
adjusted, we will be subject to tax thereon at regular capital gains or ordinary
corporate tax rates. Furthermore, if we should fail to distribute during each
calendar year at least the sum of (a) 85% of our ordinary income for that year,
(b) 95% of our capital gain net income other than such capital gain net income
which we elect to retain and pay tax on for that year and (c) any undistributed
taxable income from prior periods, we would be subject to a 4% excise tax on the
excess of such required distribution over the amounts actually distributed.

ELECTION TO RETAIN OUR LONG-TERM CAPITAL GAINS

Pursuant to recently enacted legislation, we may elect to retain, rather
than distribute our net long-term capital gains for tax years beginning after
August 5, 1997. The effect of such an election is that:

- we are required to pay the tax on such gains;

- common stockholders, while required to include their proportionate share
of the undistributed long-term capital gains in income, will receive a
credit or refund for their share of the tax paid by the REIT; and

- the basis of such stockholders' Common Stock would be increased by the
amount of the undistributed long-term capital gains (minus the amount of
capital gains tax paid by the Company) included in the domestic
stockholders' long-term capital gains.

In addition, if we dispose of any asset subject to the Built-in Gain Rules
during the applicable Recognition Period, we will be required, pursuant to
guidance issued by the IRS, to distribute at least 95% of the Built-In Gain
(after tax), if any, recognized on the disposition of the asset.

We believe we have made and we intend to continue to make timely
distributions sufficient to satisfy the annual distribution requirements. In
this regard, the Operating Partnership Agreement authorizes us, as general
partner, to take such steps as may be necessary to cause the Operating
Partnership to distribute to its partners an amount sufficient to permit us to
meet these distribution requirements.

We expect that our REIT taxable income will be less than our cash flow due
to the allowance of depreciation and other non-cash charges in computing REIT
taxable income. Accordingly, we anticipate that we will generally have
sufficient cash or liquid assets to enable us to satisfy the 95% distribution
requirement. It is possible, however, we, from time to time, may not have
sufficient cash or other liquid assets to meet the 95% distribution requirement
or to distribute such greater amount as may be

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necessary to avoid income and excise taxation. This could occur as a result of
timing differences between (i) the actual receipt of income and actual payment
of deductible expenses and (ii) the inclusion of such income and deduction of
such expenses in arriving at our taxable income, or as a result of nondeductible
expenses such as principal amortization or capital expenditures in excess of
noncash deductions. In the event that such timing differences occur, we may find
it necessary to arrange for borrowings or, if possible, pay taxable stock
dividends in order to meet the dividend requirement.

DEFICIENCY DIVIDENDS

Under certain circumstances, we may be able to rectify a failure to meet the
distribution requirement for a year by paying "deficiency dividends" to our
stockholders in a later year, which may be included in our deduction for
dividends paid for the earlier year. Thus, we may be able to avoid being taxed
on amounts distributed as deficiency dividends. We will, however, be required to
pay interest based upon the amount of any deduction taken for deficiency
dividends.

FAILURE TO QUALIFY

If we fail to qualify for taxation as a REIT in any taxable year and the
relief provisions do not apply, we will be subject to tax (including any
applicable alternative minimum tax) on our taxable income at regular corporate
rates. Distributions to our stockholders in any year in which we fail to qualify
will not be deductible, nor will they be required to be made. In such event, to
the extent of current or accumulated earnings and profits, all distributions to
our stockholders will be dividends, taxable as ordinary income, and subject to
certain limitations of the Code, corporate distributees may be eligible for the
dividends-received deduction. Unless we are entitled to relief under specific
statutory provisions, we also will be disqualified from taxation as a REIT for
the four taxable years following the year during which qualification was lost.
It is not possible to state whether in all circumstances we would be entitled to
such statutory relief. For example, if we fail to satisfy the gross income tests
because nonqualifying income that we intentionally incur exceeds the limit on
such income, the IRS could conclude that our failure to satisfy the tests was
not due to reasonable cause. See "Risk Factors--Failure to Qualify as a REIT
Would Cause Us to be Taxed as a Corporation" on page 10.

TAXATION OF DOMESTIC STOCKHOLDERS

DEFINITION

In this section, the phrase "domestic stockholder" means a holder of Common
Stock and Preferred Stock that for United States federal income tax purposes:

- is a citizen or resident of the United States;

- is a corporation, partnership or other entity created or organized in or
under the laws of the United States or of any political subdivision
thereof;

- is an estate or trust, the income of which is subject to United States
federal income taxation regardless of its source; or

- a trust if a United States court is able to exercise primary supervision
over the administration of such trust and one or more United States
persons have the authority to control all substantial decisions of such
trust.

For any taxable year for which we qualify for taxation as a REIT, amounts
distributed to taxable domestic stockholders will be taxed as follows.

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DISTRIBUTIONS GENERALLY

Distributions to domestic stockholders, other than capital gain dividends
discussed below, will constitute dividends up to the amount of our current or
accumulated earnings and profits and will be taxable to the stockholders as
ordinary income. These distributions are not eligible for the dividends-
received deduction for corporations. To the extent that we make a distribution
in excess of our current or accumulated earnings and profits, the distribution
will be treated first as a tax-free return of capital, reducing the tax basis in
each domestic stockholder's Common Stock, and the amount of such distribution in
excess of a domestic stockholder's tax basis in its Common Stock will be taxable
as gain realized from the sale of its Common Stock. Dividends that we declare in
October, November or December of any year payable to a stockholder of record on
a specified date in any such month will be treated as both paid by the Company
and received by the stockholder on December 31 of the year, provided that we
actually pay the dividend during January of the following calendar year.
Stockholders may not include any of our losses on their own federal income tax
returns.

We will be treated as having sufficient earnings and profits to treat as a
dividend any distribution by the Company up to the amount required to be
distributed in order to avoid imposition of the 4% excise tax, discussed in the
section titled "Opinion of Tax Counsel" above. Moreover, any "deficiency
dividend" will be treated as an ordinary or capital gain dividend, as the case
may be, regardless of our earnings and profits. As a result, stockholders may be
required to treat certain distributions that would otherwise result in a
tax-free return of capital as taxable dividends.

CAPITAL GAIN DIVIDENDS

Dividends to domestic stockholders that we properly designate as capital
gain dividends will be treated as long-term capital gains (to the extent they do
not exceed our actual net capital gain) for the taxable year without regard to
the period for which the stockholder has held his stock.

PASSIVE ACTIVITY LOSS AND INVESTMENT INTEREST LIMITATIONS

Distributions from the Company and gain from the disposition of the
Securities will not be treated as passive activity income, and therefore
stockholders may not be able to apply any "passive losses" against such income.
Dividends from the Company (to the extent they do not constitute a return of
capital) will generally be treated as investment income for purposes of the
investment income limitation. Net capital gain from the disposition of
Securities and capital gain dividends generally will be included in investment
income for purposes of the investment interest deduction limitations only if and
to the extent you so elect, in which case such capital gains will be taxed as
ordinary income.

CERTAIN DISPOSITIONS OF SECURITIES

Losses incurred on the sale or exchange of Securities that you hold for less
than six months (after applying certain holding period rules) will be deemed
capital losses to the extent of any capital gain dividends received by you from
those shares.

TREATMENT OF TAX-EXEMPT STOCKHOLDERS

Distributions from the Company to a tax-exempt employee pension trust or
other domestic tax-exempt stockholder generally, will not constitute "unrelated
business taxable income" ("UBTI") unless the stockholder has borrowed to acquire
or carry its Securities. Qualified trusts that hold more than 10% (by value) of
the shares of certain REITs, however, may be required to treat a certain
percentage of such a REIT's distributions as UBTI. This requirement will apply
only if (i) the REIT would not qualify as such for federal income tax purposes
but for the application of the "look-through" exception to the Five or Fewer
Requirement applicable to shares held by qualified trusts and (ii) the REIT is
"predominantly held" by qualified trusts. A REIT is predominantly held by
qualified trusts if

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either (i) a single qualified trust holds more than 25% by value of the
interests in the REIT or (ii) one or more qualified trusts, each owning, more
than 10% by value of the interests in the REIT, hold in the aggregate more than
50% of the interests in the REIT. The percentage of any REIT dividend treated as
UBTI is equal to the ratio of (a) the UBTI earned by the REIT (treating the REIT
as if it were a qualified trust and therefore subject to tax on UBTI) to
(b) the total gross income (less certain associated expenses) of the REIT. A de
minimis exception applies where the ratio set forth in the preceding sentence is
less than 5% for any year. For these purposes, a qualified trust is any trust
described in section 401(a) of the Code and exempt from tax under section 501
(a) of the Code. The provisions requiring qualified trusts to treat a portion of
REIT distributions as UBTI will not apply if the REIT is able to satisfy the
Five or Fewer Requirement without relying upon the "look-through" exception.

SPECIAL TAX CONSIDERATIONS FOR FOREIGN STOCKHOLDERS

The rules governing United States income taxation of non-resident alien
individuals, foreign corporations, foreign partnerships and foreign trusts and
estates (collectively, "foreign stockholders") are complex. The following
discussion is intended only as a summary of these rules. Prospective foreign
stockholders should consult with their own tax advisors to determine the impact
of federal, state and local income tax laws on an investment in the Company,
including any reporting requirements.

TAXATION IF EFFECTIVELY CONNECTED WITH A UNITED STATES TRADE OR BUSINESS

In general, foreign stockholders will be subject to regular United States
federal income tax with respect to their investment in the Company if the
investment is "effectively connected" with the foreign stockholder's conduct of
a trade or business in the United States. A corporate foreign stockholder that
receives income that is (or is treated as) effectively connected with a United
States trade or business also may be subject to the branch profits tax under
section 884 of the Code, which is payable in addition to regular United States
federal corporate income tax. The following discussion will apply to foreign
stockholders whose investment in the Company is not so effectively connected.

DISTRIBUTIONS NOT ATTRIBUTABLE TO GAIN FROM THE SALE OR EXCHANGE OF A UNITED
STATES REAL PROPERTY INTEREST

A distribution by the Company that is not attributable to gain from the sale
or exchange by the Company of a United States real property interest and that we
do not designate as a capital gain dividend will be treated as an ordinary
income dividend to the extent that it is made out of current or accumulated
earnings and profits. Generally, any ordinary income dividend will be subject to
a United States federal income tax equal to 30% of the gross amount of the
dividend unless this tax is reduced by an applicable tax treaty. Such a
distribution in excess of our earnings and profits will be treated first as a
return of capital that will reduce each foreign stockholder's basis in its
Common Stock (but not below zero) and then as gain from the disposition of such
shares, the tax treatment of which is described under the rules discussed below
with respect to dispositions of Common Stock.

DISTRIBUTIONS ATTRIBUTABLE TO GAIN FROM THE SALE OR EXCHANGE OF A UNITED STATES
REAL PROPERTY INTEREST

Distributions by the Company that are attributable to gain from the sale or
exchange of a United States real property interest will be taxed to a foreign
stockholder under the Foreign Investment in Real Property Tax Act of 1980
("FIRPTA"). Under FIRPTA, such distributions are taxed to a foreign stockholder
as if the distributions were gains "effectively connected" with a United States
trade or business. Accordingly, a foreign stockholder will be taxed at the
normal capital gain rates applicable to a domestic stockholder (subject to any
applicable alternative minimum tax and a special alternative minimum tax in the
case of non-resident alien individuals). Distributions subject to FIRPTA also
may

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be subject to a 30% branch profits tax when made to a foreign corporate
stockholder that is not entitled to treaty exemptions.

WITHHOLDING OBLIGATIONS FROM DISTRIBUTIONS TO FOREIGN STOCKHOLDERS

Although tax treaties may reduce our withholding obligations, we generally
will be required to withhold from distributions to foreign stockholders, and
remit to the IRS, (i) 35% of designated capital gain dividends (or, if greater,
35% of the amount of any distributions that could be designated as capital gain
dividends) and (ii) 30% of ordinary dividends paid out of earnings and profits.
In addition, if we designate prior distributions as capital gain dividends,
subsequent distributions, up to the amount of such prior distributions, will be
treated as capital gain dividends for purposes of withholding. A distribution in
excess of our earnings and profits will be subject to 30% dividend withholding
if at the time of the distribution it cannot be determined whether the
distribution will be in an amount in excess of our current or accumulated
earnings and profits. If the amount of tax withheld by the Company with respect
to a distribution to a foreign stockholder exceeds the stockholder's United
States tax liability with respect to such distribution, the foreign stockholder
may file for a refund of such excess from the IRS.

SALE OF OUR SECURITIES BY A FOREIGN STOCKHOLDER

Unless our Securities constitute a "United States real property interest"
within the meaning of FIRPTA, a sale of our Securities by a foreign stockholder
generally will be subject to United States federal income taxation. Our
Securities will not constitute a United States real property interest if we are
a "domestically controlled REIT." A domestically controlled REIT is a REIT in
which at all times during a specified testing period less than 50% in value of
its shares is held directly or indirectly by foreign stockholders. We currently
anticipate that we will be a domestically controlled REIT. Therefore, sales of
our Securities will not be subject to taxation under FIRPTA. However, because
our Securities will be publicly traded, no assurance can be given that we will
continue to be a domestically controlled REIT. If we were not a domestically
controlled REIT, whether a foreign stockholder's sale of our Securities would be
subject to tax under FIRPTA as a sale of a United States real property interest
would depend on whether our Securities were "regularly traded" on an established
securities market (such as the NYSE on which our Common Stock will be listed)
and on the size of the selling stockholder's interest in the Company. If the
gain on the sale of Securities were subject to taxation under FIRPTA, the
foreign stockholder would be subject to the same treatment as a domestic
stockholder with respect to the gain (subject to any applicable alternative
minimum tax and a special alternative minimum tax in the case of non-resident
alien individuals). In addition, distributions that are treated as gain from the
disposition of Securities and are subject to tax under FIRPTA also may be
subject to a 30% branch profit tax when made to a corporate foreign stockholder
that is not entitled to treaty exemptions. In any event, a purchaser of
Securities from a foreign stockholder will not be required to withhold under
FIRPTA on the purchase price if the purchased Securities is "regularly traded"
on an established securities market (such as the NYSE) or if we are a
domestically controlled REIT. Otherwise, under FIRPTA the purchaser of our
Securities may be required to withhold 10% of the purchase price and remit this
amount to the IRS. Capital gains not subject to FIRPTA will be taxable to a
foreign stockholder if the foreign stockholder is a non-resident alien
individual who is present in the United States for 183 days or more during the
taxable year and certain other conditions apply, in which case the non-resident
alien individual will be subject to a 30% tax on his or her U.S. source capital
gains.

On October 6, 1997, the U.S. Treasury Department issued final Treasury
regulations governing information reporting and the certification procedures
regarding withholding and backup withholding on certain amounts paid to foreign
stockholders after December 31, 1999. The new Treasury regulations may alter the
procedures for claiming the benefits of an income tax treaty. Our foreign

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stockholders should consult their tax advisors concerning the effect, if any, of
such new Treasury regulations on an investment in our Common Stock.

INFORMATION REPORTING REQUIREMENTS AND BACKUP WITHHOLDING TAX

BACKUP WITHHOLDING TAX FOR DOMESTIC STOCKHOLDERS

Under certain circumstances, domestic stockholders may be subject to backup
withholding at a rate of 31% on payments made with respect to, or cash proceeds
of a sale or exchange of, Common Stock. Backup withholding will apply only if
the holder:

- fails to furnish his or her taxpayer identification number ("TIN") (which,
for an individual, would be his or her Social Security Number);

- furnishes an incorrect TIN;

- is notified by the IRS that he or she has failed properly to report
payments of interest and dividends or is otherwise subject to backup
withholding; or

- under certain circumstances, fails to certify, under penalties of perjury,
that he or she has furnished a correct TIN and (a) that he or she has not
been notified by the IRS that he or she is subject to backup withholding
for failure to report interest and dividend payments or (b) that he or she
has been notified by the IRS that he or she is no longer subject to backup
withholding.

Backup withholding will not apply with respect to payments made to certain
exempt recipients, such as corporations and tax-exempt organizations.

Domestic stockholders should consult their own tax advisors regarding their
qualifications for exemption from backup withholding and the procedure for
obtaining such an exemption. Backup withholding is not an additional tax.
Rather, the amount of any backup withholding with respect to a payment to a
domestic stockholder will be allowed as a credit against the domestic
stockholder's United States federal income tax liability and may entitle the
domestic stockholder to a refund, provided that the required information is
furnished to the IRS.

BACKUP WITHHOLDING TAX FOR FOREIGN STOCKHOLDERS

Additional issues may arise pertaining to information reporting and backup
withholding for foreign stockholders. Foreign stockholders should consult their
tax advisors with regard to U.S. information reporting and backup withholding.

OTHER TAX CONSIDERATIONS

EFFECT OF TAX STATUS OF OPERATING PARTNERSHIP ON REIT QUALIFICATION

Substantially all of our investments are through the Operating Partnership.
In addition, the Operating Partnership holds interests in certain of our
properties through subsidiary partnerships. Our interest in these partnerships
may involve special tax considerations. Such considerations include (i) the
allocations of items of income and expense, which could affect the computation
of our taxable income, (ii) the status of the Operating Partnership, and other
subsidiary partnerships as partnerships (as opposed to associations taxable as
corporations) for federal income tax purposes and (iii) the taking of actions by
the Operating Partnership and subsidiary partnerships that could adversely
affect our qualifications as a REIT. In the opinion of Goodwin, Procter & Hoar
LLP, based on certain representations of the Company and our subsidiaries, each
of the Operating Partnership, and the other subsidiary partnerships in which the
Operating Partnership has an interest will be treated for federal income tax
purposes as a partnership (and not as an association taxable as a corporation).
If any of the Operating Partnership, or other subsidiary partnerships in which
the Operating Partnership has an

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interest were treated as an association taxable as a corporation, we would fail
to qualify as a REIT for a number of reasons.

TAX ALLOCATIONS WITH RESPECT TO THE PROPERTIES

When property is contributed to a partnership in exchange for an interest in
the partnership, the partnership generally takes a carryover basis in that
property for tax purposes equal to the adjusted basis of the contributing
partner in the property, rather than a basis equal to the fair market value of
the property at the time of contribution. Pursuant to section 704(c) of the
Code, income, gain, loss and deduction attributable to such contributed property
must be allocated in a manner such that the contributing partner is charged
with, or benefits from, respectively, the unrealized gain or unrealized loss
associated with the property at the time of the contribution. The amount of such
unrealized gain or unrealized loss is generally equal to the difference between
the fair market value of the contributed property at the time of contribution
and the adjusted tax basis of such property at the time of contribution (this
difference is referred to as a "Book-Tax Difference"). Such allocations are
solely for federal income tax purposes. Such allocations do not affect the book
capital accounts or other economic or legal arrangements among the partners. The
Operating Partnership was formed by way of contributions of appreciated property
(including certain of our properties). Consequently, the Operating Partnership
Agreement requires such allocations to be made in a manner consistent with
section 704(c) of the Code. Final and temporary Regulations under
Section 704(c) of the Code provide partnerships with a choice of several methods
of accounting for Book-Tax Differences for property contributed to a partnership
on or after December 21, 1993. The choices include the retention of the
"traditional method" that was available under prior law or the election of
certain alternative methods. Currently, we generally have elected and intend to
continue to elect the "traditional method with curative allocations" of
Section 704(c) allocations. Under the traditional method, which is the least
favorable method from our perspective, the carryover basis of contributed
interests in our properties in the hands of the Operating Partnership could
cause us (i) to be allocated lower amounts of depreciation deductions for tax
purposes than would be allocated to us if all properties were to have a tax
basis equal to their fair market value at the time of the contribution (the
"ceiling rule") and (ii) to be allocated taxable gain in the event of a sale of
such contributed interests in our properties in excess of the economic or book
income allocated to the Company as a result of such sale, with a corresponding
benefit to the other partners in the Operating Partnership. For properties with
respect to which we elect the "traditional method with curative allocations" the
Operating Partnership Agreement will specially allocate taxable gain on sale of
such properties to the contributing partners up to the aggregate amount of
depreciation deductions with respect to each such property that the "ceiling
rule" prevented the Company from being allocated. In addition, with respect to
at least one property, the Company has elected the "remedial method" of
allocations under Section 704(c) of the Code.

Interests in our properties purchased for cash by the Operating Partnership
simultaneously with or subsequent to our admission to the Operating Partnership
initially had a tax basis equal to their fair market value. Thus,
Section 704(c) of the Code does not apply to such interests.

STATE AND LOCAL TAX

We and our operating subsidiaries may be subject to state and local tax in
states and localities in which we or they do business or own property. The tax
treatment of the Company and our operating subsidiaries and the holders of our
Common Stock in such jurisdictions may differ from the federal income tax
treatment described above.

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RATIOS OF COMBINED EARNINGS TO FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS

The following table sets forth the consolidated ratios of earnings to fixed
charges and Preferred Stock Dividends for the Company and the Predecessor for
the periods shown:

<TABLE>
<CAPTION>
COMPANY PREDECESSOR
--------------------------------------------------------------- -------------------------------------------
YEARS ENDED DECEMBER 31,
NINE MONTHS ENDED JUNE 23, 1997- JANUARY 1, 1997- -------------------------------------------
SEPTEMBER 30, 1998 DECEMBER 31, 1997(1) JUNE 22, 1997(1) 1996(1) 1995(1) 1994(1)(2) 1993
------------------- --------------------- ----------------- -------- -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio................ 2.08x 1.93x 1.07x 1.07x 0.95x 1.08x 1.19x
</TABLE>

------------------------

(1) Ratios for the period January 1--June 22, 1997 and the years ended
December 31, 1996, 1995, 1994 and 1993 are of the Predecessor and reflect
periods prior to the Initial Offering on June 23, 1997.

The ratios of earnings to fixed charges were computed by dividing earnings by
fixed charges. For this purpose, earnings consist of net income (loss) before
minority interest, gain on sale of real estate assets and extraordinary items,
plus fixed charges (excluding capitalized interest). Fixed charges consist of
interest expense, capitalized interest, credit enhancement fees and loan cost
amortization. To date, we have not issued any Preferred Stock; therefore, the
ratios of earnings to combined fixed charges and Preferred Stock dividend
requirements are the same as the ratios of earnings to fixed charges presented
above.

PLAN OF DISTRIBUTION

We may sell Securities to or through one or more underwriters or dealers for
public offering and sale by or through them; directly to one or more individual,
institutional or other purchasers; through agents; or through a combination of
any such methods of sale. Direct sales to investors may also be accomplished
through subscription rights distributed to our stockholders on a pro rata basis,
which may or may not be transferable. In connection with any distribution of
subscription rights to stockholders, if all of the underlying Securities are not
subscribed for, we may sell the unsubscribed Securities directly to third
parties or may engage the services of one or more underwriters, dealers or
agents, including standby underwriters, to sell the unsubscribed Securities to
third parties.

The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices, which may be changed, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices, or at negotiated prices (any of which may represent a discount
from the prevailing market prices).

In connection with the sale of Securities, underwriters or agents may
receive compensation from the Company or from purchasers of Securities, for whom
they may act as agents, in the form of discounts, concessions or commissions.
Underwriters may sell Securities to or through dealers, and such dealers may
receive compensation in the form of discounts, concessions or commissions from
the underwriters and/or commissions from the purchasers for whom they may act as
agents. Underwriters, dealers, and agents that participate in the distribution
of Securities may be deemed to be underwriters under the Securities Act, and any
discounts or commissions they receive from the Company and any profit on the
resale of Securities they realize may be deemed to be underwriting discounts and
commissions under the Securities Act. Any such underwriter or agent will be
identified, and any such compensation received from the Company will be
described, in the applicable prospectus supplement.

Unless otherwise specified in the related prospectus supplement, each series
of Securities will be a new issue with no established trading market, other than
the shares of Common Stock which are listed on the NYSE. Any shares of Common
Stock sold pursuant to a prospectus supplement will be listed on the NYSE,
subject to official notice of issuance. We may elect to list any series of
Preferred Stock on

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an exchange, but we are not obligated to do so. It is possible that one or more
underwriters may make a market in a series of Securities, but one will not be
obligated to do so and any underwriter may discontinue any market making at any
time without notice. Therefore, no assurance can be given as to the liquidity
of, or the trading market for, the Securities.

Until the distribution of the Securities is completed, rules of the SEC may
limit the ability of any underwriters and selling group members to bid for and
purchase the Securities. As an exception to these rules, underwriters are
permitted to engage in certain transactions that stabilize the price of the
Securities. Such transactions consist of bids or purchases for the purpose of
pegging, fixing or maintaining the price of the Securities.

If any underwriters create a short position in the Securities in connection
with an offering, I.E., if they sell more Securities than are set forth on the
cover page of the applicable prospectus supplement, the underwriters may reduce
that short position by purchasing Securities in the open market.

The lead underwriters may also impose a penalty bid on certain other
underwriters and selling group members participating in an offering. This means
that if the lead underwriters purchase Securities in the open market to reduce
the underwriters' short position or to stabilize the price of the Securities,
they may reclaim the amount of any selling concession from the underwriters and
selling group members who sold those Securities as part of the offering.

In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher than
it might be in the absence of such purchases. The imposition of a penalty bid
might also have an effect on the price of a security to the extent that it were
to discourage resales of the security before the distribution is completed.

We do not make any representation or prediction as to the direction or
magnitude of any effect that the transactions described above might have on the
price of the Securities. In addition, we do not make any representation that
underwriters will engage in such transactions or that such transactions, once
commenced, will not be discontinued without notice.

Under agreements into which we may enter, underwriters, dealers and agents
who participate in the distribution of Securities may be entitled to
indemnification by the Company against certain liabilities, including
liabilities under the Securities Act.

Underwriters, dealers and agents may engage in transactions with, or perform
services for, or be tenants of, the Company in the ordinary course of business.

If so indicated in the applicable prospectus supplement, we will authorize
dealers or other persons acting as our agents to solicit offers by certain
institutions to purchase Securities from the Company at the public offering
price set forth in such prospectus supplement pursuant to delayed delivery
contracts ("Contracts") providing for payment and delivery on the date or dates
stated in such prospectus supplement. Institutions with which such Contracts,
when authorized, may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and other institutions, but will in all cases be subject to our
approval. The obligations of any purchaser under any such contracts will be
subject to the condition that the purchase of the Securities shall not at the
time of delivery be prohibited under the laws of the jurisdiction to which such
purchase is subject. The underwriters and such other agents will not have any
responsibility in respect of the validity or performance of such Contracts.

In order to comply with the securities laws of certain states, if
applicable, the Securities offered hereby will be sold in such jurisdictions
only through registered or licensed brokers or dealers. In addition, in certain
states securities may not be sold unless they have been registered or qualified
for sale in the applicable state or an exemption from the registration or
qualification requirement is available and is complied with.

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LEGAL MATTERS

Certain legal matters, including the legality of the Securities, will be
passed upon for the Company by Goodwin, Procter & Hoar LLP. Gilbert G. Menna,
the sole shareholder of Gilbert G. Menna, P.C., a partner of Goodwin, Procter &
Hoar LLP, serves as an Assistant Secretary of the Company. Certain partners of
Goodwin, Procter & Hoar LLP or their affiliates, together with Mr. Menna, own
approximately 20,000 shares of Common Stock. Goodwin, Procter & Hoar LLP
occupies approximately 26,000 square feet at 599 Lexington Avenue, New York
under a lease that expires in 2002.

EXPERTS

The financial statements and schedules for the year ended December 31, 1997
referred to and incorporated by reference in this Prospectus or elsewhere in the
Registration Statement of which this Prospectus is a part have been audited by
PricewaterhouseCoopers LLP, independent accountants, and are incorporated herein
in reliance upon the authority of said firm as experts in accounting and
auditing.

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