CARRAMERICA REALTY L P, 10-12G/A, 1997-10-01

CARRAMERICA REALTY L P
10-12G/A, 1997-10-01
REAL ESTATE

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As filed with the Securities and Exchange Commission on October 1, 1997

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10/A

GENERAL FORM FOR REGISTRATION OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF
THE SECURITIES EXCHANGE ACT OF 1934

CARRAMERICA REALTY, L.P.
------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)

Delaware 52-1976308
- - ------------------------------- -------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)

1700 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
----------------------------------------
(Address of Principal Executive Offices)

(202) 624-7500
----------------------------------------------------
(Registrant's telephone number, including area code)

Securities to be registered pursuant to Section 12(b) of the Act:

Title of Each Class Name of Each Exchange on Which
to be so Registered Each Class is to be Registered
- - --------------------- ------------------------------
Not applicable Not applicable

Securities to be registered pursuant to Section 12(g) of the Act:

Units of Partnership Interest
-----------------------------
(Title of Class)

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<PAGE>

Table of Contents

Page No.

Item 1. Business......................................................... 1
Item 2. Financial Information............................................ 4
Item 3. Properties....................................................... 8
Item 4. Security Ownership of Certain Beneficial Owners and Management...14
Item 5. Directors and Executive Officers.................................15
Item 6. Executive Compensation...........................................15
Item 7. Certain Relationships and Related Transactions...................16
Item 8. Legal Proceedings................................................16
Item 9. Market Price of and Distributions on the Registrant's Common
Equity and Related Security Holder Matters.......................16
Item 10. Recent Sales of Unregistered Securities..........................16
Item 11. Description of Registrant's Securities to be Registered..........17
Item 12. Indemnification of Directors and Officers........................22
Item 13. Financial Statements and Supplementary Data......................23
Item 14. Changes in and Disagreements With Accountants on Accounting
and Financial Disclosure.........................................23
Item 15. Financial Statements and Exhibits................................24

<PAGE>

Item 1. Business

GENERAL

CarrAmerica Realty, L.P., a Delaware limited partnership (the
"Partnership"), was organized in March 1996 and its activities as of August 31,
1997 included the acquisition, development, ownership and operation of office
properties primarily in select suburban growth markets across the United States.
The Partnership's portfolio, as of August 31, 1997, consisted of (i) 46
operating properties containing approximately 4.1 million rentable square feet
of office space located in Austin, Texas, Southeast Denver, suburban Dallas,
suburban Salt Lake City, suburban Chicago and Southern California (the
"Properties"), (ii) four properties under construction that will contain
approximately 410,000 square feet of office space, and (iii) land and options to
acquire land that will support the future development of up to 1.4 million
square feet of office space. See "Recent Sales of Unregistered Securities." The
Properties owned as of June 30, 1997 were 91.2% leased as of that date. Each of
the Properties is wholly owned by the Partnership.

The Partnership is managed indirectly by CarrAmerica Realty Corporation,
a Maryland corporation ("CarrAmerica"). CarrAmerica indirectly serves as the
sole general partner of the Partnership and indirectly owned approximately 87%
of the units of partnership interest ("Units") in the Partnership as of June 30,
1997. CarrAmerica is a real estate investment trust (a "REIT") for federal
income tax purposes and its shares of common stock, $.01 par value per share
("Common Stock"), are listed on the New York Stock Exchange under the symbol
"CRE."

CarrAmerica and its predecessor, The Oliver Carr Company, have been in
the real estate business in the Washington, D.C. metropolitan area for more than
35 years. In late 1995, in connection with the formation of a strategic alliance
with Security Capital U.S. Realty, a European real estate operating company
(together with its wholly-owned subsidiary, "SC-USREALTY"), CarrAmerica shifted
its focus from downtown Washington, D.C. to a national business strategy. As of
August 31, 1997, SC-USREALTY owned approximately 42.7% of the outstanding Common
Stock of CarrAmerica (34.0% on a fully diluted basis).

CarrAmerica is engaged in acquiring, developing, owning and operating
office properties primarily in select suburban growth markets located across the
United States. As of August 31, 1997, CarrAmerica owned interests in 230
operating properties containing approximately 17.6 million square feet of office
space located in 13 markets, twelve properties under construction that will
contain approximately 1.9 million square feet of office space, and land and
options to acquire land that will support the development of up to 5.0 million
square feet of office space. CarrAmerica owns these interests (i) directly, (ii)
indirectly through wholly owned subsidiaries, (iii) through the Partnership, and
(iv) through Carr Realty, L.P., another Delaware limited partnership in which
CarrAmerica is the sole general partner and owned, as of August 31, 1997,
approximately 75% of the interests therein ("Carr Realty"). CarrAmerica also
owns substantially all of the economic interest in various other subsidiaries
that conduct management, leasing and development operations.

Generally, CarrAmerica currently acquires office properties located in
its Austin, Texas, Southeast Denver, suburban Dallas and suburban Salt Lake City
target markets through the Partnership. In addition, CarrAmerica currently
utilizes the Partnership as the acquisition vehicle in transactions where some
or all of the sellers desire to receive consideration in the form of partnership
interests rather than cash. As of August 31, 1997, such transactions have been
effected in the Southeast Denver, Austin, Texas, suburban Salt Lake City,
suburban Chicago and Southern California markets. CarrAmerica currently expects
that future acquisitions will be effected through the Partnership in the
circumstances described above, although there can be no assurance that
CarrAmerica will elect to acquire any additional office properties through the
Partnership, or that CarrAmerica will not acquire office properties through the
Partnership under different circumstances. All such decisions will be made by
CarrAmerica, either directly or indirectly.

<PAGE>

The Partnership is capitalized through the issuance of Units.
CarrAmerica, through its wholly owned subsidiary, CarrAmerica Realty GP
Holdings, Inc., a Delaware corporation ("GP Holdings"), serves as the sole
general partner of the Partnership and owned a 1.0% general partner interest (in
the form of Units) in the Partnership as of June 30, 1997. In addition,
CarrAmerica, through its wholly owned subsidiary, CarrAmerica Realty LP
Holdings, Inc., a Delaware corporation ("LP Holdings"), owned an approximate 86%
limited partnership interest (in the form of Units) in the Partnership as of
June 30, 1997. The remaining Units are owned by persons who received such Units
in connection with the contribution to the Partnership of interests in certain
Properties. The Partnership has approximately 70 employees, including
approximately 50 on-site employees.

Business Strategy

CarrAmerica's primary business objective is to achieve long-term
sustainable per share cash flow growth through a strategy of (i) acquiring,
developing, owning and operating office properties primarily in suburban markets
throughout the United States that exhibit strong, long-term growth
characteristics and (ii) developing a national operating system that satisfies
and capitalizes on the financial and operational demands of corporate office
space users. CarrAmerica seeks to acquire properties characterized by highly
functional physical environments, strategic suburban locations in close
proximity to key transportation arteries, residential areas and other amenities,
and low initial and long-term costs of occupancy.

CarrAmerica has focused its acquisition activity in the Pacific,
Mountain, Central and Southeast regions of the United States, regions which
generally possess strong growth characteristics. Within these regions,
CarrAmerica is targeting specific submarkets in which operating costs for
businesses are relatively low, long-term population and job growth generally are
expected to exceed the national average, large, well-educated employment pools
exist, and barriers to entry exist for new supplies of office space. CarrAmerica
has established a local presence in each of its existing target markets through
its investment activity and through the relationships established by its
experienced market officers. CarrAmerica's target markets include the following:
Northern California; metropolitan Washington, D.C.; suburban Atlanta; Southern
California; Southeast Denver; Austin, Texas; suburban Chicago; suburban Seattle;
suburban Phoenix; suburban Dallas; suburban Portland, Oregon; suburban Salt Lake
City; and Florida.

CarrAmerica has established a set of general guidelines and physical
characteristics to evaluate the acquisition opportunities available in each
identified target market. These guidelines include (i) the purchase price of an
office property typically should be at a discount to the replacement cost of a
comparable office property, (ii) rents of existing customers with leases
expiring in the near-term typically should be at or below the current market
rents for the given target market, and (iii) an office property generally should
be low-rise, with flexible floor plates that are conducive to accommodating a
variety of office space user needs. In addition, CarrAmerica looks for office
properties that have ample parking and that are conveniently located near
amenities and major transportation arteries.

RECENT DEVELOPMENTS

Recent Acquisitions

Sorenson Research Park Land. On August 28, 1997, the Partnership
acquired eight acres of land which will support the future development of
123,000 square feet of office space, located in suburban Salt Lake City. The
aggregate purchase price of Sorenson Land was approximately $2.2 million in
cash.

Draper Park North Land. On August 26, 1997, the Partnership acquired
nine acres of land which will support the future development of 120,000 square
feet of office space, located in suburban Salt Lake City. The aggregate purchase
price of Draper Park North Land was $2.6 million in cash.

Two Mission Park. On July 31, 1997, the Partnership acquired one
operating property known as Two Mission Park containing approximately 76,000
square feet of office space located in suburban Dallas, Texas. The purchase
price for Two Mission Park was approximately $5.1 million in cash. The building
was 91.1% leased at June 30, 1997.

<PAGE>

Panorama Corporate Center. On June 30, 1997, CarrAmerica contributed its
holdings in Panorama Corporate Center, located in the Southeast I-25 Corridor
submarket of Denver, to the Partnership in exchange for Units with an aggregate
value of approximately $25.0 million. Panorama Corporate Center consists of a
101,000 square foot operating office property, a 101,000 square foot office
property currently under construction and options to acquire land which will
support the future development of over 462,000 square feet of office space.
Panorama Corporate Center has been designed as a technologically advanced
development, enabling the Partnership to deliver state-of-the-art technological
benefits, and to accommodate the expansion needs of its customers in the same
development.

Draper Park North. On June 26, 1997, the Partnership acquired three
operating office properties, known as Draper Park North, containing
approximately 178,000 square feet of office space, located in the Draper
submarket of suburban Salt Lake City. The aggregate purchase price was
approximately $18.7 million, which was paid through the assumption of
approximately $13 million in debt and the payment of approximately $5.7 million
in cash. As of June 30, 1997, the three buildings comprising Draper Park North
were 100% leased to seven tenants.

Bannockburn IV. On June 19, 1997, the Partnership acquired one operating
office property known as Bannockburn IV, containing approximately 108,000 square
feet of office space, located in suburban Chicago. The aggregate purchase price
of Bannockburn IV was approximately $14.3 million in cash. The property was
83.7% leased at June 30, 1997.

Tollhill East & West. On April 16, 1997, the Partnership acquired two
operating office properties, known as Tollhill East & West, containing a total
of approximately 238,000 square feet of office space, located in the LBJ/North
Dallas sub-market of Dallas, Texas. The aggregate purchase price of Tollhill
East and West was approximately $21.7 million in cash. As of June 30, 1997, the
two buildings comprising Tollhill East & West were approximately 87.3% leased.

Sorenson Research Park. On April 15, 1997, the Partnership acquired five
operating office properties, known as Sorenson Research Park, containing a total
of approximately 283,000 square feet of office space, located in suburban Salt
Lake City. The aggregate purchase price of Sorenson Research Park was
approximately $28.1 million, and was paid through a combination of the issuance
of Units (with a value of approximately $13 million), and the assumption of
approximately $4.5 million in debt consisting of two loans which bear interest
at annual rates of 8.88% and 7.75% respectively and mature in May 2017 and July
2011, respectively, and the payment of approximately $10.6 million in cash. As
of June 30, 1997, the five properties comprising Sorenson Research Park were
100% leased.

Pending Acquisitions

2600 West Olive. The Partnership has entered into an agreement to
acquire one building, known as 2600 West Olive, containing approximately 143,000
square feet of office space, located in the Tri-City submarket of Los Angeles,
California. The aggregate purchase price is approximately $31.1 million, which
will be paid through the assumption of approximately $19.5 million in debt and
the issuance of Units (with a value of approximately $11.6 million). The
property was 100% leased at June 30, 1997. The closing of this pending
acquisition is subject to the Partnership's due diligence and certain other
closing conditions. The Partnership expects to close the transaction within 60
days, although there can be no assurance that this transaction will be
consummated.

Rosewood Land. The Partnership has entered into an agreement to acquire
23 acres of land which will support the future development of 524,000 square
feet of office space for approximately $10.2 million. The closing of this
pending acquisition is subject to the Partnership's due diligence and certain
other closing conditions. The Partnership expects to close the transaction
within 60 days, although there can be no assurance that this transaction will be
consummated.

Royal Ridge Land. The Partnership has entered into an agreement to
acquire 19 acres of land which will support the future development of 250,000
square feet of office space for approximately $3.2 million. The closing of this
pending acquisition is subject to the Partnership's due diligence and certain
other closing conditions. The Partnership expects to close the transaction
within 60 days, although there can be no assurance that this transaction will be
consummated.

<PAGE>

Item 2. Financial Information

The following table sets forth selected financial and operating
information for the Partnership as of and for the six months ended June 30,
1997, as of December 31, 1996 and for the period from March 6, 1996 (date of
inception) to December 31, 1996 and for the period from March 6, 1996 (date of
inception) to June 30, 1996. The operating data, balance sheet data and certain
other data as of and for the six months ended June 30, 1997 and for the period
from March 6, 1996 (date of inception) to June 30, 1996 have been derived from
the unaudited financial statements of the Partnership. In the opinion of the
management of GP Holdings, as general partner of the Partnership, the operating
and balance sheet data for the unaudited periods noted above include all
adjustments (consisting only of normal recurring adjustments) necessary to
present fairly the information set forth therein.

The following selected financial and operating information should be
read in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations" included in this Form 10 and the financial
statements and notes thereto included in this Form 10.

Pro forma Six March 6, 1996 March 6, 1996
Six Months Months Ended (date of inception) (date of inception)
Ended June 30, 1997 to June 30, 1996 through
June 30, 1997 (unaudited) (unaudited) December 31, 1996
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(amounts in thousands except Other Data)
<S> <C> <C> <C> <C>
Operating Data:
Real estate operating revenue $ 27,454 $ 23,019 $959 $ 13,376
Real estate operating expenses:
Property operating expenses 11,129 9,986 381 6,546
Interest expense 1,485 2,346 271 1,475
General and administrative expenses 552 1,130 8 680
Depreciation and amortization 6,301 5,118 318 3,148
Real estate operating income 7,987 4,439 (19) 1,527
Net income 8,041 4,495 (18) 1,556
Cash distributions paid to Unit holders -- 322 -- 2,050
Balance Sheet Data (at period end):
Real estate, before accumulated depreciation $ 448,340 $ 438,345 $ 238,073
Total assets 451,233 440,898 241,217
Mortgages and notes payable 89,711 118,288 51,744
Total Unit holders' (partners') capital 345,081 305,393 180,933
Other Data (at period end):
Units outstanding 12,892,879 11,710,151 1,383,612 7,520,401
Number of properties 42 44 7 25
Square footage 3,544,000 3,816,000 856,000 2,295,000

</TABLE>

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of the financial condition and
results of operations should be read in conjunction with the selected financial
and operating information and the Financial Statements and Notes thereto
included in this Form 10.

Results of Operations

The Partnership was formed on March 6, 1996 and purchased its first
Properties in May 1996. During 1996, the Partnership acquired 25 operating
office Properties, land and options to acquire land in four markets across the
United States. During the six months ended June 30, 1997, the Partnership
acquired 18 operating Properties and one operating Property was contributed by
CarrAmerica, and the Partnership expanded into a fifth market. The following
discussion focuses on the results of the Partnership's operations from March 6,
1996 (date of inception) to June 30, 1997. The comparability of the periods
presented is affected because the Partnership did not have a full six months of
operations for the period ended June 30, 1996 with which to compare the six
months ended June 30, 1997, and the balance sheets and results of operations for
the periods presented reflect differing numbers of properties owned.

Balance Sheet. During 1996, the Partnership acquired 25 operating
Properties containing 2.3 million square feet of office space, one Property in
the construction phase and land which will support the future development of
approximately 1.0 million rentable square feet of office space. During the first
six months of 1997, the Partnership acquired 19 properties containing
approximately 1.5 million square feet and placed an additional project into
development which will support approximately 128,000 rentable square feet of
office space. As a result of the acquisitions and development activity in the
first six months of 1997, rental property prior to accumulated depreciation
increased $162.2 million, or 75.0%, to $378.5 million as of June 30, 1997 as
compared to $216.3 million as of December 31, 1996. This increase was due to the
acquisitions and the contribution of the 101,000 square foot operating property
at Panorama Corporate Center by CarrAmerica during the six months ended June 30,
1997. Land held for development and construction in progress increased $38.1
million or 175.6%, to $59.8 million as of June 30, 1997 as compared to $21.7
million as of December 31, 1996. The increase was due to the expenditure of
construction costs on the JD Edwards project in southeast Denver which was
purchased in December 1996, the commencement of construction activity on the
City View Center project in Austin, Texas and the contribution of the property
under construction and the options to acquire land at Panorama Corporate Center.

<PAGE>

Results of Operations - Six Months Ended June 30, 1997 and for the period from
March 6, 1996 (date of inception) to June 30, 1996

Real Estate Operating Revenue. As of June 30, 1997, the Partnership
owned 44 operating Properties containing approximately 3.8 million square feet.
Twenty-five of these Properties containing approximately 2.3 million square
feet, were in service for the full six months ended June 30, 1997. As a
comparison only seven Properties were acquired during the period from March 6,
1996 to June 30, 1996. None of these properties were in service for the full
period ended June 30, 1996. As a result, total real estate operating revenue
increased $22.0 million, to $23.0 million for the six months ended June 30, 1997
as compared to $1.0 million for the period ended June 30, 1996. The increase in
revenue was primarily attributable to approximately $5.0 million from properties
which were operational for a full six months in 1997 as opposed to a partial
period in 1996 combined with approximately $17.0 million in additional revenues
from the 37 operating Property acquisitions from July 1, 1996 to June 30, 1997.

Real Estate Operating Expenses. Total real estate operating expenses
increased $17.6 million for the six months ended June 30, 1997, to $18.6 million
as compared to $1.0 million for the period ended June 30, 1996. The net increase
in operating expenses was attributable to a $9.6 million increase in property
operating expenses, a $2.1 million increase in interest expense, a $1.1 million
increase in general and administrative expenses, and a $4.8 million increase in
depreciation and amortization. The increase in property operating expenses and
depreciation and amortization was primarily attributable to additional expenses
associated with owning the seven operating Properties purchased during the
period ended June 30, 1996, for the full six months in 1997, and the additional
expenses associated with the 37 operating Property acquisitions from July 1,
1996 to June 30, 1997. The increase in the Partnership's interest expense is
primarily related to borrowings for real estate acquisitions since June 30,
1996. The increase in general and administrative expenses is predominately a
result of the addition of staff to implement the Partnership's business strategy
and inflation.

Net Income. Net income of $4.5 million was earned for the six months
ended June 30, 1997 as compared to a loss of $.02 million during the period
ended June 30, 1996. The comparability of net income between the two periods is
impacted by the increase in operating Properties owned by the Partnership and
the other changes described above.

<PAGE>

Cash Flows

Net cash provided by operating activities increased $13.7 million, to
$15.7 million for the six months ended June 30, 1997 as compared to $1.9 million
for the period ended June 30, 1996, primarily as a result of the acquisitions
made by the Company. Net cash used by investing activities increased $64.6
million, to $129.8 million for the six months ended June 30, 1997 as compared to
$65.2 million for the period ended June 30, 1996, primarily as a result of
capital deployed by the Company for acquisitions of office properties, land held
for future development, and construction in process. Net cash provided by
financing activities increased $51.7 million to $115.5 million provided for the
six months ended June 30, 1997 as compared to $63.9 million used for the period
ended June 30, 1996, primarily as a result of proceeds from the sale of common
stock and the net borrowings necessary for the Company's acquisitions.

Acquisitions

During the six months ended June 30, 1997, the Partnership acquired
eighteen operating Properties totaling approximately 1.4 million square feet.
The properties were located in suburban Dallas, Texas (7), suburban Salt Lake
City, Utah (8), and suburban Chicago, Illinois (3). The Properties were acquired
through the assumption of $53 million in debt, the issuance of $17.4 million in
Units and the payment of $79.4 million in cash. In addition, on June 30, 1997,
CarrAmerica contributed one operating office Property containing approximately
101,000 square feet, one property currently under construction which will
contain approximately 101,000 square feet of office space and options to acquire
land which will support the future development of four operating office
properties.

Liquidity and Capital Resources

The Partnership's total indebtedness at June 30, 1997 was $118.3
million, of which $16.0 million, or 13.5%, had a LIBOR-based floating interest
rate. The Partnership's fixed rate indebtedness had an effective weighted
average interest rate of 8.5% and had a weighted average term to maturity of 7.7
years. At June 30, 1997, the Partnership was jointly and severally liable with
CarrAmerica on a $325.0 million unsecured revolving line of credit. Under this
line of credit, CarrAmerica has predominantly selected an interest rate equal to
112.5 basis points above the 30-day LIBOR rate. At June 30, 1997, on this line
of credit, the Partnership had $16.0 million outstanding directly and had a
joint and several guarantee on the total of the outstanding balance of $272.0
million. At June 30, 1997 CarrAmerica had total borrowing capacity under its
unsecured line of credit of $325.0 million, allowing CarrAmerica and the
Partnership to borrow up to an additional $53.0 million. At June 30, 1997, the
total book value of the Partnership's assets was $449.5 million. The
Partnership's debt as a percentage of total book value of its assets was 26.3%
at June 30, 1997. Subsequent to June 30, 1997, CarrAmerica increased the
borrowing capacity under its unsecured line of credit to $450.0 million and
reduced the interest rate to 100 basis points above the 30-day LIBOR rate.

The Partnership will require capital to invest in its existing portfolio
of operating assets for major capital projects such as large-scale renovations,
routine capital expenditures and deferred maintenance on certain Properties
recently acquired and tenant related capital expenditures, such as tenant
improvements and allowances and leasing commissions. With respect to major
capital projects, the Partnership is planning a renovation of a 323,000 square
foot Property in southeast Denver during 1997, which renovation is expected to
cost approximately $2.0 million, or approximately $5.09 per square foot. In
addition, with regard to its Dallas portfolio, the Partnership is planning on
completing several lighting retrofits on which the Partnership expects to spend
approximately $0.9 million. With respect to routine capital expenditures and
deferred maintenance on certain properties recently acquired, the Partnership
anticipates spending approximately $0.52 per square foot, during 1997 on its
portfolio of operating assets owned as of December 31, 1996. The Partnership
expects this amount to decrease in subsequent years as deferred maintenance
activities are completed on recently acquired Properties and as the emphasis of
the Partnership's growth shifts from acquiring existing office properties to
developing new properties. The Partnership anticipates that this shift from
acquiring properties to developing properties will increase its need for
short-term borrowings. The Partnership expects to meet these anticipated
additional borrowing needs through the use of its newly expanded unsecured line
of credit (as described in the immediately preceding paragraph). The
Partnership's capital requirements for tenant related capital expenditures are
dependent upon a number of factors, including square feet under expiring leases,
tenant retention ratios and whether the expiring leases are in central business
district properties or suburban properties. As of June 30, 1997, the Partnership
has

7
<PAGE>

249,558 square feet under leases expiring on or before December 31, 1997. The
Partnership intends to use cash flow from operations and its unsecured revolving
line of credit facility to meet its working capital needs for its existing
portfolio of operating assets.

The Partnership also will require a substantial amount of capital for
development projects currently underway and planned for the future. As of August
31, 1997 the Partnership currently has four development projects underway in
which the Partnership has invested $21.5 million and with respect to which the
Partnership expects to require a total investment by the Partnership of
approximately $52.5 million. The Partnership intends to use cash flow from
operations and its unsecured revolving line of credit facility to meet its
working capital needs for its existing portfolio of operating assets.

The Partnership anticipates that adequate cash will be available to fund
its operating and administrative expenses, to continue debt service obligations,
to pay dividends in accordance with REIT requirements, to acquire additional
properties and land, and to pay for construction in progress. The Partnership
anticipates adequate cash will be available to fund both expenses and capital
expenditure projects currently underway and expected to be incurred in the
shortterm (i.e., the next 12 months), as well as those operating expenses and
capital expenditure requirements projected to be incurred in the longterm (i.e.,
subsequent to the next 12 months and through the next 36 months).

Item 3. Properties

The 46 Properties owned as of August 31, 1997 contain a total of
approximately 4.1 million rentable square feet of office space. Twelve
Properties are located in Southeast Denver (representing 29.6% of the
portfolio's net rentable square feet), eleven Properties are located in Austin,
Texas (representing 23.8%), ten Properties are located in suburban Dallas, Texas
(representing 23.6%), eight Properties are located in suburban Salt Lake City
(representing 11.3%), three Properties are located in suburban Chicago
(representing 7.8%) and two Properties are located in Southern California
(representing 3.9%). Each of the Properties is wholly owned by the Partnership.
The Properties range in size from approximately 76,000 square feet to
approximately 258,000 square feet. The Partnership acquired each of the
Properties at various times between May 1996 and August 31, 1997. All of the
Properties are managed by a wholly owned subsidiary of CarrAmerica. In addition,
as of August 31, 1997, the Partnership owned four properties under construction
that will contain approximately 410,000 square feet, and land and options to
acquire land that will support the future development of up to 1.4 million
square feet of office space.

The following table sets forth certain additional information relating
to those properties owned as of June 30, 1997 (except where noted, the
Partnership holds fee title to both the land and the improvements thereon):

<PAGE>

<TABLE>
<CAPTION>
The Net Total Average Base
Partnership's Rentable Annualized Rent Per
Number of Property Area (Square Percent Base Rent (4) Leased
Projects (1) Properties Ownership Feet) (2) Leased (3) (in thousands) Square Foot (5)
- - ------------ --------- --------- ---------- ---------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Southeast Denver
Harlequin Plaza 2 100.0% 323,258 91.4% $ 3,941 $13.34
Quebec Court I & II 2 100.0 285,829 100.0 2,877 10.07
The Quorum 2 100.0 123,895 95.6 1,741 14.71
Greenwood Centre 1 100.0 75,866 94.2 1,097 15.34
Quebec Center 3 100.0 106,796 95.6 1,362 13.34
Panorama Corporate
Center I 1 100.0 100,619 96.4 1,969 20.31

Austin
The Littlefield Complex(7) 2 100.0 120,815 77.0 835 8.98
First State Bank 1 100.0 258,344 69.8 1,875 10.40
Norwood Tower 1 100.0 111,994 72.7 740 9.09
Great Hills Plaza 1 100.0 135,333 100.0 2,073 15.31
The Setting 3 100.0 136,183 95.3 2,166 16.69
Park North 2 100.0 132,778 95.3 2,033 16.07
Balcones Center 1 100.0 75,761 83.5 970 15.33

Suburban Dallas
The Greyhound Building 1 100.0 92,890 100.0 845 9.10
Search Plaza 1 100.0 151,048 96.5 2,383 16.34
Quorum North 1 100.0 117,790 81.4 1,484 15.49
Cedar Maple 3 100.0 112,177 92.0 1,798 17.42
Quorum Place 1 100.0 176,562 80.6 1,882 13.23
Tollhill East & West 2 100.0 237,894 87.3 2,758 13.28

Suburban Salt Lake City, Utah
Sorensen Research Park 5 100.0 282,534 100.0 3,255 11.52
Draper Park North 3 100.0 178,098 100.0 2,020 11.34

Suburban Chicago
Bannockburn Lake I & II 2 100.0 209,900 98.6 3,209 15.50
Bannockburn IV 1 100.0 108,476 83.7 1,444 15.91

Southern California
South Coast Executive Center 2 100.0 161,301 95.6 3,106 20.15
-- ------- ----- -------- -------
Total 44 3,816,141 $47,863
== ========= =======
Weighted Average 91.2% $13.75
===== ======
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
Project (1) Significant Tenants (6)
- - ------------ -----------------------
<S> <C>
Southeast Denver
Harlequin Plaza Bellco First Federal Credit Union (12%)
Quebec Court I & II Intelligent Electronics (45%), Alert Centre (37%), TCI Digital Satellite (17%)
The Quorum Chatfield Dean (21%), Colorado Mortgage Prof. (16%)
Greenwood Centre General Motors (33%), Wakefield & Assoc. (14%)
Quebec Center Gordon Gumeson & Associates (12%), Walberg & Dagner (11%)
Panarama Corporate Center I Teleport Communications Group (70%), Sprint Spectrum, LP (11%)
Austin
The Littlefield Complex (7) Excel Fitness (13%), Business Suites (Greatfields) (19%)
First State Bank Southern Union Gas Co. (12%), First State Bank (10%)
Norwood Tower City of Austin (21%), George, Donaldson & Ford (19%)
Great Hills Plaza First USA Management, Inc. (48%), Blue Cross
(24%), Skjerven Morrill, Macpherson (13%), Executive Suites (11%)
The Setting Holt Rinehart (76%), Barter Exchange (13%)
Park North Samsung Austin Semiconductor (10%)
Balcones Center Medianet (37%), Austin Diagnostic Clinic (15%),
Amil International Inc. (11%)
Suburban Dallas
The Greyhound Building Greyhound Lines, Inc. (100%)
Search Plaza Basic Capital Management (30%)
Quorum North Digital Matrix Systems (20%), HQ Dallas Quorum North (13%)
Cedar Maple Fidelity National Bank (13%)
Quorum Place VHA Southwest (22%)
Tollhill East & West Digital Equipment Corporation (22%)
Suburban Salt Lake City, Utah
Sorensen Research Park Foundation Health Corp. (24%), Matrix Marketing, Inc. (22%),
Data Chem Laboratories, Inc. (20%), Dayna Communications, Inc. (15%),
ITT Educational Services (12%)
Draper Park North Advanta Financial Corp. (28%), Times Mirror Training, Inc. (23%),
Fonix Corp. (14%), Keytex Corp. (14%), Novus Credit Services, Inc. (12%)
Suburban Chicago
Bannockburn Lake I & II Deutsche Credit Corp. (36%), IMC Global, Inc. (36%)
Bannockburn IV Odesta Systems (23%), Abbott Laboratories (11%)
Southern California
South Coast Executive Center State Compensation Insurance Fund (32%)
Total
Weighted Average
</TABLE>

- - -------------------
(1) Two Mission Park was not included on this table because it was acquired
after June 30, 1997. As of August 31, 1997 it had the following
characteristics: (i) Number of Buildings was one; (ii) The Partnership's
Effective Property Ownership was 100.0%; (iii) Net Rentable Area (Square
Feet) was 76,348; (iv) Percent Leased was 89.7%, (v) Total Annualized Base
Rent (in thousands) was $767; (vi) Average Base Rent Per Leased Square Foot
was $11.20; and (vii) Significant Tenants were Bland Garvey (16%), Honors
Credit (20%).

(2) Includes office and retail space but excludes storage space.
(3) Includes space for leases that have been executed and have commenced
as of June 30, 1997.
(4) Total Annualized Base Rent is based on executed and commenced leases
as of June 30, 1997. Total Annualized Base Rent equals total original
base rent, including historical contractual increases and excluding
(i) percentage rents, (ii) additional rent payable by tenants such as
common area maintenance, real estate taxes and other expense
reimbursements, (iii) future contractual or contingent rent
escalations, and (iv) parking rents.
(5) Calculated as Total Annualized Base Rent divided by Net Rentable Area
(Square Feet) leased as of June 30, 1997.
(6) Includes tenants leasing 10% or more of rentable square footage (with
the percentage of rentable square footage in parentheses).
(7) The Partnership owns the improvements on the land and has a leasehold
interest in a portion of the underlying land.

9
<PAGE>

The following table sets out a schedule of the lease expirations for
leases in place at those Properties owned as of June 30, 1997:

<TABLE>
<CAPTION>
Percentage
Net Rentable Annual Base of Total
Number of Area Subject Rent under Annual Base
Tenants with to Expiring Expiring Rent
Year of Lease Expiring Leases Leases (1) Represented by
Expiration Leases (Square Feet) (in thousands) Expiring Leases
- - ---------- ------------ ------------- -------------- ---------------
<S> <C> <C> <C> <C>
1997.................... 77 249,558 $3,416 7.1%
1998.................... 98 522,999 7,757 16.2
1999.................... 85 497,089 7,080 14.8
2000.................... 64 357,470 5,759 12.0
2001.................... 62 752,453 9,588 20.0
2002.................... 30 408,311 5,862 12.3
2003.................... 12 203,065 2,483 5.2
2004.................... 5 145,284 1,481 3.1
2005.................... 1 2,171 36 0.1
2006.................... 6 178,351 2,663 5.6
2007 and thereafter..... 7 163,150 1,738 3.6

</TABLE>

- - ------------
(1) Excludes reimbursements from tenants for operating expenses.

The following table sets forth certain information relating to the
Properties as of June 30, 1997 and as of December 31, 1996:

<TABLE>
<CAPTION>
Total Annualized
Net Rentable Area Base Rent Average Base Rent per
Date (Square Feet) Total Percent Leased (in thousands) Leased Square Foot (1)
---- ------------- -------------------- -------------- ----------------------
<S> <C> <C> <C> <C>
June 30, 1997 3,816,141 91.2% $47,863 $13.75
December 31, 1996 2,295,379 89.7% $27,066 $13.15

</TABLE>

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

(1) Calculated as Total Annualized Base Rent (in thousands) divided by Net
Rentable Area (square feet) leased as of the applicable date.

As noted above, the Partnership currently has four properties under
construction that will contain approximately 410,000 square feet. These projects
will be financed through draws on CarrAmerica's revolving credit facility. The
Partnership also owns land and options to acquire land that will support the
future development of up to 1.4 million square feet of office space. The
Partnership will continually analyze the viability of development office
properties on these parcels of land and, when appropriate, develop such office
properties. Any such developments likely will be financed through draws on
CarrAmerica's revolving credit facility.

In the opinion of the general partner of the Partnership, the Properties
are adequately covered by insurance.

Harlequin Plaza. Because the aggregate gross revenues of the two
Properties that constitute Harlequin Plaza were in excess of 10% of the
Partnership's total gross revenues for the period from March 6, 1996 (the date
of the Partnership's inception) to December 31, 1996, additional information
regarding Harlequin Plaza is provided below.

Harlequin Plaza was developed in 1981. The complex includes two
operating office properties located on Orchard Road in Engelwood, Colorado, in
the Southeast submarket of Denver. The Partnership currently plans to renovate
Harlequin Plaza's common areas, plaza and entrance. The Partnership believes
that Harlequin Plaza is adequately covered by insurance.

<PAGE>

As of June 30, 1997, approximately 91.4% of the rentable square footage
in the two operating office properties constituting Harlequin Plaza was leased,
and the average base rent per leased square foot as of June 30, 1997 was $13.34.
The net effective rent per leased square foot (i.e., the total original base
rent adjusted for historical contractual increases, future contractual increases
and rental abatements, for leases executed and commenced as of June 30, 1997) as
of June 30, 1997 for Harlequin Plaza was $13.79. The Total Percent Leased and
Average Annualized Base Rent per Leased Square Foot (excluding storage space)
for the past five years for Harlequin Plaza are not available because Harlequin
Plaza was purchased by the Partnership in May 1996. At June 30, 1997, Bellco
First Federal Credit Union at Harlequin Plaza North occupied approximately
39,000 square feet (12% of the rentable square footage at Harlequin Plaza)
pursuant to a lease which expires in 2003. Bellco has two five-year options to
extend its lease at 95% of the then prevailing current market rates. In
addition, Bellco has a right of first refusal on any rentable square footage
which becomes available on the fourth floor. No other tenant at Harlequin Plaza
occupied over 10% of the rentable square footage.

10
<PAGE>

The following table sets out a schedule of the lease expirations for
leases in place at Harlequin Plaza beginning with 1997 and thereafter:

<TABLE>
<CAPTION>
Number Annual Base Percentage
of Tenants Net Rentable Rent under of Total
Year with Area Subject to Expiring Annual Base Rent
of Lease Expiring Expiring Leases Leases (1) Represented by
Expiration Leases (Square Feet) (in thousands) Expiring Leases
---------- ------ ------------- -------------- ---------------
<S> <C> <C> <C> <C>
1997 2 30,878 $ 295 7.5%
1998 5 28,688 416 10.5
1999 10 100,734 1,254 31.8
2000 3 8,601 127 3.2
2001 4 53,143 885 22.5
2002 1 6,122 116 3.0
2003 3 67,180 848 21.5
</TABLE>

- - ------------------------
(1) Excludes reimbursements from tenants for operating expenses.

The aggregate tax basis of depreciable real property of the office
Properties constituting Harlequin Plaza for federal income tax purposes was
$7,547,000 as of December 31, 1996. Depreciation is computed on the Modified
Accelerated Cost Recovery System (MACRS) over the estimated useful lives of the
real property over 39 years. The aggregate tax basis of depreciable personal
property associated with the two office properties constituting Harlequin Plaza
for federal income tax purposes was $2,000 as of December 31, 1996. Depreciation
and amortization are computed on the double declining balance method or
straight-line method over the estimated useful life of the personal property
over seven years.

The current realty tax rate for Harlequin Plaza is $1.35 per $100 of
assessed value. The total annual tax at this rate for 1997 is approximately
$567,000 at an assessed value of $14,500,000.

Quebec Court I & II. Because the aggregate gross revenues of the two
Properties that constitute Quebec Court I & II were in excess of 10% of the
Partnership's total gross revenues for the period from March 6, 1996 (the date
of the Partnership's inception) to December 31, 1996, additional information
regarding Quebec Court I & II is provided below.

Quebec Court I & II was developed in 1979 and 1980. The complex includes
two properties located on S. Quebec Street in Engelwood, Colorado, in the
Southeast submarket of Denver. The Partnership has no immediate plans to
renovate Quebec Court I & II (other than for routine capital maintenance) and
believes that Quebec Court I & II is adequately covered by insurance.

<PAGE>

As of June 30, 1997, approximately 100.0% of the rentable square footage
in the two properties constituting Quebec Court I & II was leased, and the
average base rent per leased square foot as of June 30, 1997 was $10.07. The net
effective rent per leased square foot (i.e., the total original base rent
adjusted for historical contractual increases, future contractual increases and
rental abatements, for leases executed and commenced as of June 30, 1997) as of
June 30, 1997 for Quebec Court I & II was $10.89. The percent leased and Average
Annualized Base Rent per Leased Square Foot (excluding storage space) for the
past five years for Quebec Court I & II is not available because Quebec Court I
& II was purchased by the Partnership in May 1996. At June 30, 1997, Alert
Centre, Inc. ("Alert Centre") occupied approximately 105,820 square feet
(approximately 37% of the rentable square footage at Quebec Court I & II)
pursuant to a lease which expires in 2001, and Intelligent Electronics, Inc.
("Intelligent Electronics") occupied approximately 130,000 square feet
(approximately 45% of the rentable square footage at Quebec Court I & II)
pursuant to a lease which expires in 2001. In addition, at June 30, 1997 TCI
Digital Satellite ("TCI") occupied 50,000 square feet (approximately 17% of the
rentable square footage at Quebec Court I & II) pursuant to a lease which
expires in 2001. Alert Centre, Inc. has one five-year option to extend its lease
at 90% of the then prevailing market rates.

<PAGE>

provided notice is given no later than July 1, 2000, twelve months prior to the
expiration of its lease. Intelligent Electronics has one seven-year option to
extend its lease at 95% of the then prevailing market rates provided notice is
given by July 1, 2001, six months prior to the expiration of its lease. TCI has
one five-year option to extend its lease at 90% of the then prevailing market
rates provided notice is given thirteen months prior to the expiration of its
lease. No other tenant at Quebec Court I & II occupied over 10% of the rentable
square footage.

In February, 1997, the Partnership initiated an action against Alert
Centre, Inc., a tenant at Quebec Court II, and ADT Security Services, Inc.,
Alert Centre's owner, in the District Court of Arapahoe County, Colorado,
regarding outstanding rent payments.

In addition, Intelligent Electronics, a tenant at Quebec Court I, has
announced publicly that it has entered into a definitive agreement to sell one
of its divisions. The Partnership has been advised by Intelligent Electronics
that, in connection with this proposed sale, Intelligent Electronics intends to
vacate its space at Quebec Court I in the next six to 12 months. Intelligent
Electronics' lease term extends until 2001, with no termination rights.
The Partnership, if necessary, will pursue its legal remedies against
Intelligent Electronics.

The following table sets out a schedule of the lease expirations for
leases in place at Quebec Court I & II as of June 30, 1997:

<TABLE>
<CAPTION>
Number Annual Base Percentage
of Tenants Net Rentable Rent Under of Total
Year With Area Subject to Expiring Annual Base Rent
of Lease Expiring Expiring Leases Leases (1) Represented by
Expiration Leases (square feet) (in thousands) Expiring Leases
---------- ------ ------------- -------------- ---------------

- - ------------------------
(1) Excludes reimbursments from tenants for operating expenses.

The aggregate tax basis of depreciable real property of the office
properties constituting Quebec Court I & II for federal income tax purposes was
$10,654,000 as of December 31, 1996. Depreciation is computed on the Modified
Accelerated Cost Recovery System (MACRS) over the estimated useful lives of the
real property over 39 years. No personal property was purchased with these
office properties.

The current realty tax rate for Quebec Court I & II is approximately
$1.31 per $100 of assessed value. The total annual tax at this rate for 1997 is
approximately $435,000 at an assessed value of $11,350,000.

Markets

The following table sets forth certain information about each
Property owned by the Partnership as of August 31, 1997 and the market in which
each Property is located:

<PAGE>

<TABLE>
<CAPTION>
Partnership
---------------------------------
Square Feet % of Total Office
Owned in Partnership's Square Footage
Market/ Total in Market
Submarket Square at
Partnership's Market/Submarket at August 31, 1997 Footage March 31, 1997 (1)
- - -------------------------------------- ------------------ ------------- -----------------
<S> <C> <C> <C>
Suburban Chicago 318,000 7.8% 188,678,000
Tri-State/Northbrook 318,000 7.8 5,088,000

Southeast Denver 1,210,000 29.6 66,281,000
Southeast I-25 Corridor 1,210,000 29.6 18,697,000

Austin, Texas 974,000 23.8 20,702,000
Northwest Suburban 344,000 8.4 7,925,000
Southwest Suburban 136,000 3.3 3,171,000
Central Business District 494,000 12.1 6,608,000

Suburban Dallas 965,000 23.6 112,022,000
LBJ/Quorum 626,000 15.3 25,281,000
Oaklawn/Turtle Creek 112,000 2.7 6,455,000
North Central Expressway 151,000 3.7 4,435,000
Richardson/Plano (2) 76,000 1.9 6,168,000

Suburban Salt Lake City 461,000 11.3 17,305,000
5300 South & I-15 283,000 6.9 3,033,000
Draper 178,000 4.4 909,000

Southern California-Orange County 161,000 3.9 49,829,000
Greater Airport Area 161,000 3.9 26,006,000
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
Market
Market Vacancy Rates,
Vacancy Rates Year Ended December 31 (1)
at -------------------------------------------
March 31, 1997 1996 1995 1994
-------------- ----------- ---------- ------------
<S> <C> <C> <C> <C>
Suburban Chicago 13.6% 14.0% 15.1% 16.6%
Tri-State/Northbook 6.1 6.7 8.8 10.8

Southeast Denver 9.5 10.8 11.9 12.7
Southeast I-25 Corridor 5.3 5.2 6.1 9.3

Austin, Texas 8.8 9.2 10.6 11.1
Northwest Suburban 5.9 7.4 5.9 6.5
Southwest Suburban 3.8 9.7 11.8 9.7
Central Business District 14.0 14.7 18.4 19.4

Suburban Dallas 15.9 17.0 19.3 21.1
LBJ/Quorum 7.2 7.2 9.4 15.5
Oaklawn/Turtle Creek 11.9 14.9 14.2 13.7
North Central Expressway 11.4 13.5 23.7 28.0
Richardson/Plano (2) 7.5 9.8 8.9 17.8

Suburban Salt Lake City 6.5 6.2 7.1 8.9
5300 South & I-15 3.1 2.4 5.6 5.8
Draper (2) 3.4 6.3 1.1 9.0

Southern California 11.8 12.6 14.6 16.6
Greater Airport Area 7.5 8.6 11.5 14.3

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

(1) Derived from publicly available information provided by Torto Wheaton/CB
Commercial upon payment of a prescribed fee. Represents the total available
square footage of office space (defined under specific guidelines) in the
market or submarket at March 31, 1997.
(2) See "Recent Developments--Pending Acquisitions."

</TABLE>

All of the Partnership's properties are located in developed areas that
include other office buildings. Thus, the Partnership faces competition in each
of its markets, in some cases from competitors who may have even greater access
to capital than CarrAmerica. The degree of competition in any particular market
may adversely affect the ability of the Partnership to lease space at profitable
rents.

<PAGE>

Mortgage Debt

The existing mortgage indebtedness on the Properties as of June 30, 1997
is set forth in the table below:

<TABLE>
<CAPTION>
Principal Estimated
Balance as Annual Debt Balance Due
Interest of 6/30/97 Service Maturity at Maturity
Property (1) Rate (in thousands) (in thousands) Date (1) (in thousands)
- - ------------ ------- -------------- -------------- -------- --------------
<S> <C> <C> <C> <C> <C>
First State Bank 7.4% $ 9,549 $ 868 March 1, 1999 $ 9,259
South Coast Executive
Center 9.0 10,279 1,015 May 31, 1999 10,103
Quorum North 8.3 6,709 640 December 10, 2001 6,258
Quorum Place 7.0 7,781 665 November 15, 2000 7,327
Bannockburn Lake I & II 9.5 20,930 2,801 August 31, 2001 16,835
Harlequin Plaza and
Quebec Court I & II 8.5 29,606 2,899 May 31, 2011 19,586
Sorenson Research Park 7.8 2,803 328 May 1, 2017 0
Sorenson Research Park 8.9 1,699 182 July 1, 2011 0
Draper Park North 8.2 12,932 1,220 January 2, 2007 10,569
---------- -------- ----------
TOTAL $ 102,288 $ 10,618 $ 79,937
========== ======== ==========
</TABLE>

- - ----------------
(1) Each loan may be prepaid at any time, subject to the payment of certain
prepayment penalties and certain other provisions.

CarrAmerica, the Partnership and Carr Realty, L.P. have established a
revolving line of credit providing for unsecured borrowings of up to $325
million. As of August 31, 1997, approximately $117 million had been drawn under
this facility. Borrowings under the facility currently bear interest at a
floating rate of 112.5 basis points over LIBOR. See "Financial Information--
Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources." The line of credit contains
various covenants with which CarrAmerica must comply at specific dates during
the year, including: (i) CarrAmerica must maintain an annual EBITDA level of at
least 1.5 times its debt service plus replacement reserve; (ii) CarrAmerica's
maximum total debt may not exceed 55% of its tangible fair market value; (iii)
CarrAmerica's maximum total debt, excluding debt of Carr Realty, L.P., may not
exceed 60% of its tangible fair market value, excluding Carr Realty, L.P.; (iv)
Carr Realty, L.P.'s maximum total debt may not exceed 60% of Carr Realty, L.P.'s
tangible fair market value; (v) CarrAmerica must maintain an annual EBITDA level
of at least 2.25 times interest coverage; (vi) CarrAmerica must maintain an
annual EBITDA level of at least 1.25 times debt service and capital
expenditures; (vii) CarrAmerica may not declare annual dividends in excess of
90% of annual funds from operations; (viii) CarrAmerica may not draw funds in
excess of 50% of the value of its borrowing base properties; (ix) CarrAmerica,
excluding Carr Realty, L.P., may not draw funds in excess of 50% of the value of
its borrowing base properties; (x) Carr Realty, L.P. may not draw funds in
excess of 50% of the value of Carr Realty, L.P.'s borrowing base properties;
(xi) CarrAmerica must maintain a net operating cash flow level generated by its
borrowing base properties of 2.0 times its pro forma debt service (xii)
CarrAmerica's consolidate tangible net worth will at no time be less than 90% of
the consolidated tangible net worth on the closing date. At June 30, 1997,
CarrAmerica was in compliance with these covenants. Availability under the line
of credit is also limited to a specified percentage of the unsecured properties
of CarrAmerica (including properties held indirectly by CarrAmerica, such as the
Properties). CarrAmerica and the Partnership are jointly and severally liable
for all obligations under the line of credit.

On July 1, 1997, CarrAmerica sold to institutional investors an
aggregate principal amount of $275 million of its long-term debt, in the form of
$150 million aggregate principal amount of 7.20% unsecured notes yielding 7.249%
due 2004 and $125 million aggregate principal amount of 7.375% unsecured notes
yielding 7.422% due 2007. The notes contain various covenants, including the
following: (i) neither CarrAmerica nor any Subsidiary (as defined in the
indenture relating to the notes (the "Indenture")) will incur any Indebtedness
(as defined in the Indenture) if, after giving effect thereto, the aggregate
principal amount of all outstanding Indebtedness of CarrAmerica and its
Subsidiaries on a consolidated basis is greater than 60% of Adjusted Total
Assets (as defined in the Indenture); (ii) neither CarrAmerica nor any
Subsidiary will incur any Indebtedness secured by any Encumbrance (as defined in
the Indenture) upon the property of CarrAmerica or any Subsidiary if,
immediately after giving effect to the incurrence of the additional
Indebtedness, the aggregate amount of all outstanding Indebtedness of
CarrAmerica and its Subsidiaries on a consolidated basis which is secured by any
Encumbrance on property of CarrAmerica or any Subsidiary is greater than 40% of
Adjusted Total Assets; (iii) neither CarrAmerica nor any Subsidiary will incur
any Indebtedness if Consolidated Income Available for Debt Service (as defined
in the Indenture) for the four consecutive fiscal quarters most recently ended
prior to the date of the incurrence of the Indebtedness, on a pro forma basis,
would be less than 1.5 times the Annual Service Charge (as defined in the
Indenture) on all Indebtedness outstanding immediately after the incurrence of
the Indebtedness; and (iv) CarrAmerica and its Subsidiaries will not at any time
own Total Unencumbered Assets (as defined in the Indenture) equal to less than
150% of the aggregate outstanding principal amount of the Unsecured Indebtedness
(as defined in the Indenture) of CarrAmerica and its Subsidiaries on a
consolidated basis. The notes are unconditionally guaranteed by the Partnership.

Policies with Respect to Certain Activities

The following is a discussion of the Partnership's policies with respect
to investments, financing and certain other activities. These policies have been
determined by CarrAmerica, through its wholly owned subsidiary, GP Holdings,
which serves as the sole general partner of the Partnership. These policies may
be amended or revised from time to time at the discretion of CarrAmerica,
through GP Holdings, without notice to or a vote of the limited partners.

Investment Policies

Investments in Real Estate or Interests in Real Estate. CarrAmerica is
engaged, directly or indirectly (including through the Partnership), in
acquiring, developing, owning and operating office properties primarily in
select suburban growth markets located across the United States. Generally,
CarrAmerica currently acquires office properties located in its Austin, Texas,
Southeast Denver, suburban Dallas and suburban Salt Lake City target markets
through the Partnership. In addition, CarrAmerica currently utilizes the
Partnership as the acquisition vehicle in transactions where some or all of the
sellers desire to receive consideration in the form of partnership interests
rather than cash. CarrAmerica currently expects that future acquisitions will be
effected through the Partnership in the circumstances described above, although
there can be no assurance that CarrAmerica will elect to acquire any additional
office properties through the Partnership, or that CarrAmerica will not acquire
office properties through the Partnership under different circumstances. All
such decisions will be made by CarrAmerica, either directly or indirectly. See
"Business."

CarrAmerica acquires properties, directly or indirectly (including
through the Partnership) primarily for income. The Partnership has no policy as
to the amount or percentage of its assets which may be invested in any specific
property. As of June 30, 1997, no Property comprises more than 10% of the total
assets of the Partnership.

The Partnership may own properties directly or indirectly and may own
partial interests in properties through ownership of interests in other
entities. Future investments activities will not be limited to any geographic
area or to a specified percentage of the Partnership's assets. The Partnership
also may participate with other entities in property ownership through joint
venture or other types of co-ownership. Equity investments may be subject to
existing mortgage financing and other indebtedness or such financing or
indebtedness may be incurred in connection with acquiring investments. Any such
financing or indebtedness will have priority over the Partnership's equity
interest in such property.

The Partnership's properties are operated by certain subsidiaries of
CarrAmerica as part of the national operating system that CarrAmerica is
developing. In certain circumstances, a newly acquired property may be operated
by a third party for a short transition period after the completion of the
acquisition.

Where appropriate, and subject to restrictions applicable to CarrAmerica
for REIT qualification (as well as any applicable contractual restrictions), the
Partnership may sell certain of its properties.

Investments in Real Estate Mortgages. While its emphasis will be on
equity real estate investments, the Partnership may invest in mortgages on
office properties and other similar interests. It is not anticipated that the
Partnership will invest a significant extent in mortgages or deeds of trust, but
the Partnership may acquire mortgages as a strategy for acquiring ownership of a
property or the economic equivalent thereof, subject to the investment
restrictions applicable to CarrAmerica for REIT qualification. In addition, the
Partnership may invest in mortgage-related securities.

Securities of or Interests in Persons Primarily Engaged in Real Estate
Activities and Other Issuers. Although it is not currently anticipated that the
Partnership would make such an investment, the Partnership also may legally
invest in securities of entities engaged in real estate activities or securities
of other issuers, including for the purpose of exercising control over such
entities, subject to certain gross income and asset tests applicable to
CarrAmerica for REIT qualification. The Partnership may acquire all or
substantially all of the securities or assets of other REITs or similar entities
where such investments would be consistent with the Partnership's investment
policies. In any event, it is not anticipated that the Partnership's investments
in securities will require it to register as an "investment company" under the
Investment Partnership Act of 1940, as amended.

Other Activities. The Partnership may offer additional Units or other
equity interests in the Partnership in exchange for property and to repurchase
or otherwise reacquire its securities. Such additional equity interests in the
Partnership may be senior to Units (including, without limitation, with respect
to allocations of items of Partnership income and loss, the right to share in
Partnership distributions, and rights upon dissolution and liquidation of the
Partnership), and generally would be exchangeable into shares of Common Stock or
preferred stock of CarrAmerica. The Partnership also may make loans to joint
ventures in which it may participate in the future. The Partnership will not
engage in trading, underwriting or the agency distribution or sale of securities
of other issuers. At all times, the Partnership will make investments in such a
manner as to be consistent with the requirements of the Code for CarrAmerica to
qualify as a REIT unless, because of circumstances or changes in the Code (or
the regulations promulgated thereunder), the Board of Directors of CarrAmerica
determines that it is no longer in the best interests of CarrAmerica to continue
to qualify as a REIT.

Financing Policies

The Partnership Agreement does not impose, and the Partnership has not
adopted, any specific limitations on the incurrence of indebtedness. The
Partnership may borrow money and issue and guarantee debt as GP Holdings, as
general partner of the Partnership, deems necessary for the conduct of the
activities of the Partnership. See "Description of Registrant's Securities to be
Registered--Borrowing by the Partnership." The indebtedness issued or guaranteed
by the Partnership may be recourse, non-recourse or cross-collateralized and may
contain cross-default provisions. The Partnership does not have a policy
limiting the number or amount of mortgages that may be placed on any particular
property, although mortgage financing instruments usually limit additional
indebtedness on such properties. CarrAmerica, the Partnership and Carr Realty
have established a revolving line of credit providing for unsecured borrowings
of up to $450 million. See "Properties--Mortgage Debt." In the future, the
Partnership may seek to obtain credit facilities or lines of credit for the
purpose of making acquisitions or capital improvements or providing working
capital or enabling CarrAmerica to make distributions in an amount sufficient to
permit CarrAmerica, so long as it qualifies as a REIT, to avoid the payment of
any federal income tax. An aggregate principal amount of $275 million of
CarrAmerica's long-term debt currently is unconditionally guaranteed by the
Partnership. See "Properties--Mortgage Debt."

Lending Policies

The Partnership may lend money as GP Holdings, as general partner of the
Partnership, deems necessary for the conduct of the activities of the
Partnership. The Partnership may consider offering purchase money financing in
connection with the sale of certain of its properties where the provision of
such financing will increase the value received by the Partnership for the
property sold.

Reports

The Partnership Agreement (as defined below) requires GP Holdings, as
general partner of the Partnership, to mail to each limited partner in the
Partnership, not later than the date on which CarrAmerica mails its annual
report to its stockholders, an annual report containing financial statements of
the Partnership (or of CarrAmerica if such statements are prepared solely on a
consolidated basis with CarrAmerica) for such calendar year. If CarrAmerica
mails quarterly reports to its stockholders, the Partnership Agreement also
requires GP Holdings, as general partner of the Partnership, to mail to each
limited partner in the Partnership, not later than the date on which CarrAmerica
mails such reports to its stockholders, a report containing unaudited financial
statements of the Partnership (or of CarrAmerica if such statements are prepared
solely on a consolidated basis with CarrAmerica) as of the last day of such
calendar quarter. GP Holdings currently does not anticipate being required to
distribute quarterly reports to the limited partners in the Partnership.

Item 4. Security Ownership of Certain Beneficial Owners and Management

The following table sets forth information, as of June 30, 1997,
regarding the beneficial ownership of Units by each person known by the
Partnership to be the beneficial owner of more than five percent of the
Partnership's outstanding Units. As of June 30, 1997, no director or executive
officer of GP Holdings or CarrAmerica beneficially owned any Units. Each person
named in the table has sole voting and investment power with respect to all
Units shown as beneficially owned by such person, except as otherwise set forth
in the notes to the table.

<PAGE>

Name and Business Number of Percent of
Address of Beneficial Owner Units Units (1)
- - --------------------------- --------- ---------

CarrAmerica Realty Corporation................ 10,220,447 (2) 87.3%
CarrAmerica Realty LP Holdings, Inc........... 10,103,345 86.3%
1700 Pennsylvania Avenue, N.W
Washington, D.C. 20006

- - -------------------
(1) Based on 11,710,151 Units outstanding as of June 30, 1997.
(2) Includes 10,103,345 Units held by LP Holdings and 117,102 Units held by GP
Holdings, each of which is a wholly owned subsidiary of CarrAmerica.

Item 5. Directors and Executive Officers

The Partnership has no directors or executive officers. The Partnership
is managed by GP Holdings, as the sole general partner of the Partnership. The
following table sets forth certain information with respect to the directors and
executive officers of GP Holdings:

Name Age Positions and Offices Held
- - ---- --- --------------------------

<S> <C> <C>
Thomas A. Carr..................... 38 President and Director

Brian K. Fields.................... 37 Chief Financial Officer, Treasurer, Vice President and Director

Robert G. Stuckey.................. 35 Managing Director and Vice President

Philip L. Hawkins.................. 41 Managing Director, Vice President, and Director

</TABLE>

CarrAmerica is the sole stockholder of GP Holdings. The additional
information required by this item with respect to directors and executive
officers of CarrAmerica and GP Holdings is hereby incorporated by reference to
the material appearing under the heading "Election of Directors (Item 1)," pages
3-6, in CarrAmerica's definitive proxy statement for the annual meeting of its
stockholders held on May 8, 1997 (the "1997 CarrAmerica Proxy Statement") and
under the headings "Directors of the Company" and "Executive Officers and
Certain Key Employees of the Company," pages 4-11 in CarrAmerica's Annual Report
on Form 10-K for the year ended December 31, 1996.

In addition to the biographies of the executive officers and certain key
employees of CarrAmerica included in the information incorporated by reference
above, the biographies of two key employees who recently joined CarrAmerica
follow:

Kent C. Gregory, 47, has been the Company's Managing Director of
National Accounts since July 1997. Prior to that time, Mr. Gregory was employed
by Opus since 1992, serving as Senior Vice President of National Accounts. Prior
to that, Mr. Gregory was the Vice President for Trammell Crow Corporate
Services. He holds a Masters in Business Administration from Pace University and
a Bachelor of Arts degree in Business Admistration from St. Thomas University.

Jeffrey S. Pace, 34, has been CarrAmerica's Vice President, Market
Officer for Austin, Texas since May 1997. Mr. Pace has over 12 years of
experience in the real estate and marketing field. Mr. Pace's most recent
experience was with the Trammell Crow Company as Marketing Director. Prior to
that, Mr. Pace held the position of Marketing Representative in the Dallas and
Austin markets for Carlisle Property Company, Stockton, Luedmann, French & West
and Trammell Crow Company. Mr. Pace holds a Masters of Business Administration
from the University of Texas at Arlington and a Bachelor of Science from the
University of Texas at Austin.

<PAGE>

Item 6. Executive Compensation

The Partnership has no directors or executive officers. The Partnership
is managed by GP Holdings, as the sole general partner of the Partnership. GP
Holdings has not paid any compensation

<PAGE>

to its directors or officers. CarrAmerica is the sole stockholder of GP
Holdings. The information required by this item with respect to CarrAmerica's
executive officers is hereby incorporated by reference to the material appearing
in the 1997 CarrAmerica Proxy Statement under the headings "Executive
Compensation" and "Report on Executive Compensation," pages 9-14.

Item 7. Certain Relationships and Related Transactions

The Partnership has no directors or executive officers. The Partnership
is managed by GP Holdings, as the sole general partner of the Partnership. There
were no related party transactions between the Partnership and any director or
officer of GP Holdings. CarrAmerica is the sole stockholder of GP Holdings. The
information required by this item with respect to CarrAmerica is hereby
incorporated by reference to the material appearing in the 1997 CarrAmerica
Proxy Statement under the headings "Executive Compensation Committee Interlocks
and Insider Participation" and "Certain Relationships and Related Transactions,"
pages 14 and 19.

Item 8. Legal Proceedings

The Partnership, GP Holdings and LP Holdings are not parties to any
legal proceedings. CarrAmerica and its affiliates are parties to a variety of
legal proceedings arising in the ordinary course of their businesses. All of
these matters, taken together, are not expected to have a material adverse
impact on CarrAmerica. See Item 3 "Properties" for a discussion of litigation
filed by the Partnership against a tenant at Quebec Court II and the
Partnership's current intent to pursue litigation against another tenant at
Quebec Court I under certain circumstances.

Item 9. Market Price of and Distributions on the Registrant's Common Equity and
Related Security Holder Matters

There is no established public trading market for the Units. As of June
30, 1997, there were 13 holders of record of Units. As of June 30, 1997, there
were no options or warrants to purchase Units outstanding. In addition, as of
June 30, 1997, there were no Units that could be sold pursuant to Rule 144 under
the Securities Act of 1993, as amended (the "Securities Act"), or that the
Partnership has agreed to register under the Securities Act for sale by Unit
holders, and there were no Units that are being, or have been publicly proposed
to be, publicly offered by the Partnership.

The Partnership has made regular quarterly distributions of $.4375 per
Class A Unit (prorated where appropriate to reflect ownership of Units for less
than the full period to which such distribution relates) since the second
quarter of 1996. A distribution of $.4375 per Class B Unit also was made for
each of the second and third quarters of 1996. The Partnership's ability to make
distributions depends on a number of factors, including its net cash provided by
operating activities, capital commitments and debt repayment schedules. Holders
of Units are entitled to receive distributions when, as and if declared by the
Board of Directors of GP Holdings, its sole general partner, out of any funds
legally available for that purpose.

Item 10. Recent Sales of Unregistered Securities

Since its formation in March 1996, the Partnership has issued Units in
private placements exempt from registration under the Securities Act pursuant to
Section 4(2) thereof in the amounts, for the consideration and at the times set
forth below:

o In May 1996, an aggregate of 11,452 Class A Units (with a value of
approximately $280,000) were issued to Plaza Developers Holdings LLC
in connection with the contribution to the Partnership of interests
in the Harlequin Plaza and Quebec Court I &

16
<PAGE>
II Properties. In connection with this transaction, 1,593,031 Class
A Units also were issued to ColTel I, Inc. and ColTel II, Inc.,
which Units were subsequently purchased by CarrAmerica.

o In August 1996, an aggregate of 355,384 Class A Units and 539,593
Class C Units (with an aggregate value of approximately $21.6
million) were issued to Littlefield Liquidating Trust in connection
with the contribution to the Partnership of interests in the
Littlefield Complex, First State Bank, Great Hills Plaza, The
Setting, Park North and Balcones Center Properties, and land
holdings at Riata and City View Centre.

o In December 1996, an aggregate of 3,781 Class A Units (with a value
of approximately $100,000) were issued to Bristol Plaza in
connection with the contribution to the Partnership of interests in
the South Coast Executive Center Property.

o In March 1997, an aggregate of 144,094 Class A Units (with a value
of approximately $4.6 million) were issued to Bannockburn General
Partnership in connection with the contribution to the Partnership
of interests in the Bannockburn Lake I & II Property.

o In April 1997, an aggregate of 435,400 Class A Units (with a value
of approximately $12.8 million) were issued to the owners of
interests in Sorenson Associates, L.L.C. in connection with the
contribution to the Partnership of interests in the Sorenson
Research Park Property.

o At various times since its formation, the Partnership has issued
Class B Units (with an aggregate value of approximately $276
million) to GP Holdings and LP Holdings in connection with various
cash and non-cash contributions by GP Holdings and LP Holdings to
the Partnership.

Item 11. Description of Registrant's Securities to be Registered

General

Holders of Units (other than GP Holdings, as general partner of the
Partnership) hold limited partner interests in the Partnership, and all holders
of Units (including GP Holdings as general partner of the Partnership) are
entitled to share in cash distributions from, and in the profits and losses of,
the Partnership.

GP Holdings, a wholly owned subsidiary of CarrAmerica, is the sole
general partner of the Partnership and owned a 1.0% general partner interest in
the Partnership as of June 30, 1997. In addition, LP Holdings owned
approximately 86.3% of the outstanding Units as of June 30, 1997. Holders of
Units (including GP Holdings, as general partner of the Partnership, and LP
Holdings as a limited partner of the Partnership) are entitled to share in cash
distributions from, and in the profits and losses of, the Partnership. Holders
of Class A Units are entitled to receive distributions in proportion to their
percentage interests in the Partnership in an amount equal to the quarterly
dividend received by holders of shares of Common Stock (as described below).

The Second Amended and Restated Agreement of Limited Partnership of the
Partnership, as amended from time to time (the "Partnership Agreement"),
currently authorizes the Partnership to issue from time to time three classes of
Units: (i) Class A Units (which generally are issued to third-party partners in
transactions in which such partners contribute their interests in real property
to the Partnership); (ii) Class B Units (which generally are issued to GP
Holdings and LP Holdings in exchange for capital contributions); and (iii) Class
C Units (which were issued to certain limited partners in connection with a
specific acquisition). GP Holdings, as general partner of the Partnership, also
is authorized to issue additional classes of Units.

17
<PAGE>
The Units have not been registered pursuant to the federal or state
securities laws and have not been listed on any exchange or quoted on any
national market system. Holders of Units who are admitted to the Partnership
have the rights of limited partners under the Partnership Agreement and the
Delaware Revised Uniform Limited Partnership Act (the "Act"). The Partnership
Agreement imposes certain restrictions on the transfer of Units, as described
below.

The following description is only a summary of certain provisions of the
Partnership Agreement and is subject to, and qualified in its entirety by, the
Partnership Agreement.

Purposes, Business and Management

The purpose of the Partnership includes the conduct of any business that
may be conducted lawfully by a limited partnership formed under the Act, except
that the Partnership Agreement requires the business of the Partnership to be
conducted in such a manner that will permit CarrAmerica to be classified as a
REIT under Section 856 of the Internal Revenue Code of 1986, as amended, unless
CarrAmerica ceases to qualify as a REIT for reasons other than the conduct of
the business of the Partnership. Subject to the foregoing limitation, the
Partnership may enter into partnerships, joint ventures or similar arrangements
and may own interests in any other entity.

GP Holdings, as the sole general partner of the Partnership, has the
exclusive power and authority to conduct the business of the Partnership,
subject to the consent of the limited partners in certain limited circumstances
discussed below. No limited partner may take part in the operation, management
or control of the business of the Partnership by virtue of being a holder of
Units.

Ability to Engage in Other Businesses; Conflicts of Interest

GP Holdings and its affiliates (including officers, directors, employees
and agents of GP Holdings, and CarrAmerica and LP Holdings) may acquire assets
directly and engage in business activities outside of the Partnership, including
activities in direct or indirect competition with the Partnership, and are not
required to present any business opportunities to the Partnership.

Distributions; Allocations of Income and Loss

The Partnership Agreement provides for the quarterly distribution of
100% of Available Cash (as defined below), as determined in the manner provided
in the Partnership Agreement, generally according to the following rights: (i)
holders of Class A Units are entitled to receive distributions in proportion to
their percentage interests in the Partnership in an amount equal to the
quarterly dividend received by holders of shares of Common Stock; and (ii)
holders of Class B Units (i.e., GP Holdings and LP Holdings) are entitled to
receive the remaining Available Cash, if any. In the event that there is not
sufficient Available Cash to pay the distributions in accordance with clause (i)
above, such deficit cumulates and accrues interest at a rate of 8% per annum,
and no other distribution (other than pursuant to the redemption of Units) may
be made until all such accrued but unpaid distributions (including any accrued
interest thereon) have been paid to holders of Class A Units. Holders of Class C
Units are not entitled to any distributions with respect to any Class C Unit.
"Available Cash" is defined generally as cash reserves and funds received from
whatever source (excluding the proceeds of any capital contribution) plus the
amount of any reduction in reserves, minus interest, principal and other
payments on debt, cash expenditures (including capital expenditures),
investments in any entity and the amount of any increase in reserves.

The Partnership Agreement provides for the quarterly allocation to GP
Holdings and the limited partners of items of Partnership income, generally
according to the following rights: (i) holders of Class A Units are entitled to
be allocated net income in proportion to their percentage interests in the
Partnership in an amount equal to the quarterly distributions received by such
holders; (ii) holders of Class C Units are not entitled to any allocations of
net income, except in

18
<PAGE>
certain limited circumstances; and (iii) holders of Class B Units (i.e., GP
Holdings and LP Holdings) are entitled to be allocated the remaining net income,
if any. The Partnership Agreement generally provides for the quarterly
allocation of items of Partnership losses, generally according to the following
rights: (i) partners are entitled to be allocated net losses in accordance with
their representative percentage interests in the Partnership, subject to certain
limitations; (ii) holders of Class C Units are not entitled to any allocations
of net losses, except in certain limited circumstances; and (iii) GP Holdings is
entitled to be allocated the remaining net losses, if any.

Borrowing by the Partnership

GP Holdings is authorized to cause the Partnership to borrow money and
to issue and guarantee debt as it deems necessary for the conduct of the
activities of the Partnership. Such debt may be secured by mortgages, deeds of
trust, liens or encumbrances on properties of the Partnership or its
subsidiaries. GP Holdings may pledge any or all of the assets of the Partnership
to secure a loan or other financing for the benefit of GP Holdings or
CarrAmerica (the proceeds of which are not required to be contributed or loaned
to the Partnership). GP Holdings also may use the assets of the Partnership to,
among other things, finance the conduct of the operations of GP Holdings,
CarrAmerica or the Partnership, and lend funds to other persons or entities
(including CarrAmerica's subsidiaries). In addition, GP Holdings also may cause
the Partnership to borrow money to enable the Partnership to make distributions
in an amount sufficient to permit CarrAmerica, so long as it qualifies as a
REIT, to avoid the payment of any federal income tax.

Reimbursement of General Partner; Transactions with GP Holdings and its
Affiliates

GP Holdings does not receive any compensation for its services as
general partner of the Partnership. GP Holdings, however, has the right to
allocations and distributions described above. In addition, the Partnership will
reimburse GP Holdings for all expenses incurred by it related to the operation
of, or for the benefit of, the Partnership. In the event that certain expenses
are incurred for the benefit of the Partnership and other entities (including GP
Holdings), GP Holdings, as general partner of the Partnership, will allocate
such expenses to the Partnership and such other entities in a manner as GP
Holdings, as general partner of the Partnership, in its sole and absolute
discretion deems fair and reasonable. The Partnership will reimburse GP Holdings
for all expenses incurred by it relating to any other offering of additional
Units.

Except as expressly permitted by the Partnership Agreement, GP Holdings
and its affiliates may not engage in any transactions with the Partnership
except on terms that are fair and reasonable and no less favorable to the
Partnership than would be obtained from an unaffiliated third party.

Liability of General Partner and Limited Partners

GP Holdings, as the sole general partner of the Partnership, is liable
for all general recourse obligations of the Partnership to the extent not paid
by the Partnership. GP Holdings is not liable for the nonrecourse obligations of
the Partnership.

The limited partners of the Partnership are not required to make
additional contributions to the Partnership. Assuming that a limited partner
does not take part in the control of the business of the Partnership and
otherwise acts in conformity with the provisions of the Partnership Agreement,
the liability of the limited partner for obligations of the Partnership under
the Partnership Agreement and the Act is limited, subject to certain limited
exceptions, generally to the loss of the limited partner's investment in the
Partnership represented by his or her Units. Under the Act, a limited partner
may not receive a distribution from the Partnership if, at the time of the
distribution and after giving effect thereto, the liabilities of the Partnership
(other than liabilities to parties on account of their interests in the
Partnership and liabilities for which recourse is limited to specified

19
<PAGE>

property of the Partnership) exceed the fair value of the Partnership's assets
(other than the fair value of any property subject to nonrecourse liabilities of
the Partnership but only to the extent of such liabilities). The Act provides
that a limited partner who receives a distribution knowing at the time that it
violates the foregoing prohibition is liable to the Partnership for the amount
of the distribution. Unless otherwise agreed, such a limited partner will not be
liable for the return of such distribution after the expiration of three years
from the date of such distribution.

The Partnership Agreement generally provides that GP Holdings, as
general partner of the Partnership, will incur no liability to the Partnership
or any limited partner for losses sustained or liabilities incurred as a result
of errors in judgment or of any act or omission if GP Holdings carried out its
duties in good faith. In addition, GP Holdings is not responsible for any
misconduct or negligence on the part of its agents, provided GP Holdings
appointed such agents in good faith. GP Holdings may consult with legal counsel,
accountants, appraisers, management consultants, investment bankers and other
consultants and advisors, and any action it takes or omits to take in reliance
upon the opinion of such persons, as to matters that GP Holdings reasonably
believes to be within their professional or expert competence, will be
conclusively presumed to have been done or omitted in good faith and in
accordance with such opinion.

The Partnership is qualified to conduct business in several states, and
may qualify to conduct business in the future in certain other jurisdictions.
Maintenance of limited liability may require compliance with certain legal
requirements of those jurisdictions and certain other jurisdictions. Limitations
on the liability of a limited partner for the obligations of a limited
partnership have not been clearly established in many jurisdictions.
Accordingly, if it were determined that the right, or exercise of the right by
the limited partners, to make certain amendments to the Partnership Agreement or
to take other action pursuant to the Partnership Agreement constituted "control"
of the Partnership's business for the purposes of the statutes of any relevant
jurisdiction, the limited partners might be held personally liable for the
Partnership's obligations. The Partnership will operate in a manner that GP
Holdings, as general partner of the Partnership, deems reasonable, necessary and
appropriate to preserve the limited liability of the limited partners.

Sales of Assets

Under the Partnership Agreement, GP Holdings generally has the exclusive
authority to determine whether, when and on what terms the assets of the
Partnership will be sold. The Partnership, however, is prohibited under certain
contractual agreements from selling several of the Properties for various
lengths of time, except in certain limited circumstances.

Removal of GP Holdings; Transfer of GP Holdings' Interest

The Partnership Agreement provides that the limited partners may not
remove GP Holdings as general partner of the Partnership. In addition, GP
Holdings may not transfer any of its interests as general partner in the
Partnership except to an affiliate of GP Holdings or in connection with a merger
or sale of all or substantially all of the Partnership's assets.

Restrictions on Transfer of Units by Limited Partners

Unit holders may not transfer, except in certain limitations, the
economic rights associated with their Units without the consent of the general
partner. In addition, a transferee will not be admitted to the Partnership as a
substituted limited partner without the consent of the general partner. Holders
of Class A Units may dispose of their Units by exercising their rights to have
their Units redeemed for cash or for shares of Common Stock, at the option of GP
Holdings. See "Redemption of Units" below.

<PAGE>

Redemption of Units

Each holder of Class A Units may, subject to certain limitations,
require that the Partnership redeem his or her Class A Units, by delivering a
redemption notice to GP Holdings, as general partner of the Partnership. Upon
redemption, such Unit holder will receive, at the option of the Partnership,
with respect to each Unit tendered, either (i) cash in an amount equal to the
market value of one share of Common Stock (subject to certain anti-dilution
adjustments) or (ii) one share of Common Stock. The market value of the Common
Stock for this purpose will be equal to the average of the closing trading price
of the Common Stock (or substitute information, if no such closing price is
available) for the ten trading days before the day on which the redemption
notice was received by GP Holdings.

In lieu of the Partnership redeeming Class A Units for cash, CarrAmerica
has the right to assume directly and satisfy the redemption right of a Unit
holder described in the preceding paragraph. The determination whether to pay
cash or issue shares of Common Stock upon redemption of Units will be made by
CarrAmerica at the time Units are tendered for redemption. Such an acquisition
of Units by CarrAmerica will be treated as a sale of the Units to CarrAmerica
for federal income tax purposes. Upon redemption, such Unit holder's right to
receive distributions with respect to the Units redeemed will cease (but if such
right is exchanged for shares of Common Stock, the Unit holder will have rights
as a stockholder of CarrAmerica from the time of his or her acquisition of such
shares of Common Stock).

Holders of Class B Units and Class C Units are not entitled to exercise
the redemption right described above.

Issuance of Additional Limited Partnership Interests

GP Holdings, as general partner of the Partnership, is authorized,
without the consent of the limited partners, to cause the Partnership to issue
additional Units to limited partners or to other persons (other than itself) for
such consideration and on such terms and conditions as GP Holdings deems
appropriate. GP Holdings, as the sole general partner of the Partnership,
may, in its sole and absolute discretion, make a capital contribution to the
Partnership in exchange for additional Units without a corresponding issuance of
shares of Common Stock by CarrAmerica. In addition, GP Holdings may cause the
Partnership to issue to GP Holdings additional partnership interests in
different series or classes, which may be senior to the Units. Consideration for
additional partnership interests may be cash or any property or other assets
permitted by the Act. No limited partner has preemptive, preferential or similar
rights with respect to additional capital contributions to the Partnership or
the issuance or sale of any partnership interests therein.

Notice of Extraordinary Transaction of CarrAmerica

CarrAmerica may not make any extraordinary distributions of cash or
property to its stockholders or effect a merger or sale of all or substantially
all of its assets without notifying the limited partners of its intention to do
so at least twenty business days prior to the record date to determine
stockholders eligible to receive such distribution or to vote upon the approval
of such merger or sale.

Meetings; Voting

Meetings of the limited partners may be called only by GP Holdings, on
its own motion, or upon written request of limited partners owning at least 25%
of the outstanding Units. Limited partners may vote either in person or by proxy
at meetings. Any action that is required or permitted to be taken by the limited
partners of the Partnership may be taken either at a meeting of the limited
partners or without a meeting if consents in writing setting forth the action so
taken are

21
<PAGE>
signed by limited partners owning not less than the minimum Units that would be
necessary to authorize or take such action at a meeting of the limited partners
at which all limited partners entitled to vote on such action were present. On
matters in which limited partners are entitled to vote, each limited partner
(including GP Holdings to the extent it holds Units) will have a vote equal to
the number of Units such limited partner holds in the Partnership. The
Partnership Agreement does not provide for annual meetings of the limited
partners.

Amendment of the Partnership Agreement

Amendments to the Partnership Agreement may be proposed by GP Holdings
or by limited partners owning at least 25% of the outstanding Units. Generally,
the Partnership Agreement may be amended with the approval of GP Holdings, as
general partner, and limited partners (including GP Holdings) holding a majority
of the Units. Certain amendments that affect the fundamental rights of a limited
partner (e.g., the limited liability of a limited partner, or the right to
receive any distributions) must be approved by GP Holdings and each limited
partner that would be adversely affected by such amendment. Notwithstanding the
foregoing, GP Holdings, as general partner, has the power, without the consent
of the limited partners, to amend the Partnership Agreement in certain
circumstances. Certain amendments (e.g., amendments which would convert a
limited partner's interest in the Partnership into a general partner's interest,
or would modify the limited liability of a limited partner) may not be adopted
without the unanimous approval of all partners.

Dissolution, Winding Up and Termination

The Partnership will continue until December 31, 2095, unless sooner
dissolved and terminated. The Partnership will be dissolved prior to the
expiration of its term, and its affairs wound up upon the occurrence of the
earliest of: (i) the withdrawal of GP Holdings as general partner without the
permitted transfer of GP Holdings' interest to a successor general partner
(except in certain limited circumstances); (ii) an election to dissolve the
Partnership made by GP Holdings; (iii) the entry of a decree of judicial
dissolution of the Partnership pursuant to the provisions of the Act or the
entry of a final order for relief in a bankruptcy proceeding of the general
partner; (iv) the sale of all or substantially all of the Partnership's assets
and properties in exchange for cash; and (v) the entry of a final judgment
ruling that the general partner is bankrupt or insolvent. Upon dissolution, GP
Holdings, as general partner, or any liquidator will proceed to liquidate the
assets of the Partnership and apply the proceeds therefrom in the order of
priority set forth in the Partnership Agreement.

Item 12. Indemnification of Directors and Officers

In general, the Partnership Agreement provides for indemnification of
each Indemnitee (as hereinafter defined) against any losses, claims, damages,
liabilities, joint or several, expenses (including legal fees and expenses)
judgments, fines, settlements, and other amounts that relate to the operations
of the Partnership in which such Indemnitee may be involved, or is threatened to
be involved, as a party or otherwise, unless it is established that: (i) the act
or omission of the Indemnitee was material to the matter giving rise to the
proceeding and either was committed in bad faith or was the result of active and
deliberate dishonesty; (ii) the Indemnitee actually received an improper
personal benefit in money, property or services; or (iii) in the case of any
criminal proceeding, the Indemnitee had reasonable cause to believe that the act
or omission was unlawful. Under certain circumstances, reasonable expenses
incurred by an Indemnitee who is a party to a proceeding may be paid or
reimbursed by the Partnership in advance of the final disposition of the
proceeding. In general, an "Indemnitee" is (i) any person made a party to a
proceeding by reason of his status as (A) the general partner (i.e., GP
Holdings) or an affiliate of the general partner (e.g., CarrAmerica and LP
Holdings), (B) a limited partner of the Partnership, and (C) a director or
officer of an entity described in (A), and (ii) such other persons (including
affiliates of the general partner or

22
<PAGE>
the Partnership) as the general partner may designate from time to time (whether
before or after the event giving rise to potential liability) in its sole and
absolute discretion.

GP Holdings' officers and directors are and will be indemnified under
Delaware law and the charter and bylaws of GP Holdings. The charter and bylaws
of GP Holdings require that GP Holdings shall, to the fullest extent authorized
by the Delaware General Corporation Law (the "DGCL") as in effect from time to
time indemnify any person who is or was, or is the legal representative of a
person who was, a director or officer of GP Holdings against any expenses,
liabilities and losses, as long as the person seeking indemnification in
connection with a proceeding was authorized by the board of directors of GP
Holdings.

Under Delaware law, a corporation formed in Delaware is permitted to
limit, by provision in its bylaws, the liability of directors and officers so
that no director or officer of GP Holdings will be liable to GP Holdings or to
any shareholder for money damages except liability (a) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (b) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (c) under Section 174 of the DGCL, or (d) for any
transaction from which the director derived an improper personal benefit.

In addition, CarrAmerica's officers and directors are and will be
indemnified under Maryland and Delaware law, the charter and by-laws of
CarrAmerica and the partnership agreement of Carr Realty. The charter and
by-laws of CarrAmerica require that CarrAmerica will, to the fullest extent
permitted by Section 2-418 of the Maryland General Corporation Law (the "MGCL")
as in effect from time to time, indemnify any person who is or was, or is the
personal representative of a deceased person who was, a director or officer of
CarrAmerica against any judgments, penalties, fines, settlements and reasonable
expenses and any other liabilities; provided, that, unless applicable law
otherwise requires, indemnification will be contingent upon a determination, by
the Board of Directors of CarrAmerica by a majority vote of a quorum consisting
of directors not, at the time, parties to the proceeding, or, if such a quorum
cannot be obtained, then by a majority vote of a committee of the Board of
Directors consisting solely of two or more directors not, at the time, parties
to such proceeding and who were duly designated to act in the matter by a
majority vote of the full Board of Directors in which the designated directors
who are parties may participate or by special legal counsel selected by and if
directed by the Board of Directors as set forth above, that indemnification is
proper in the circumstances because such director, officer, employee or agent
has met the applicable standard of conduct prescribed by Section 2-418(b) of the
MGCL.

Under Maryland law, a corporation formed in Maryland is permitted to
limit, by provision in its charter, the liability of directors and officers so
that no director or officer of CarrAmerica will be liable to CarrAmerica or to
any shareholder for money damages except to the extent that (i) the director or
officer actually received an improper benefit in money, property or services,
for the amount of the benefit or profit in money, property or services actually
received, or (ii) a judgment or other final adjudication adverse to the director
or officer is entered in a proceeding based on a finding in a proceeding that
the director's or officer's action was the result of active and deliberate
dishonesty and was material to the cause of action adjudicated in the
proceeding.

Item 13. Financial Statements and Supplementary Data

See "Index to Financial Statements and Schedule" on page F-1 of this
Form 10.

Item 14. Change in and Disagreements with Accountants on Accounting
and Financial Disclosure

Not applicable.

23
<PAGE>

Item 15. Financial Statements and Exhibits
(a) Financial Statements and Financial Statement Schedules

See "Index to Financial Statements and Schedule" on page F-1 of
this Form 10.

(b) Exhibits

4.1 Second Amended and Restated Agreement of Limited
Partnership of CarrAmerica Realty, L.P. dated as of
May 9, 1997 (incorporated by reference to Exhibit 10.1
of CarrAmerica's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1997).

10.1 Stockholders Agreement, dated April 30, 1996, by and
among Carr Realty Corporation, Carr Realty, L.P.,
Security Capital Holdings, S.A. and Security Capital
U.S. Realty (incorporated by reference to Exhibit 2.2
of Security Capital U.S. Realty's Schedule 13D dated
April 30, 1996).

10.2 Amended and Restated Credit Agreement, dated August 23,
1996, by and among CarrAmerica Realty Corporation,
CarrAmerica Realty, L.P., Carr Realty, L.P. and Morgan
Guaranty Trust Company of New York (incorporated by
reference to Exhibit 10.15 of CarrAmerica's Annual
Report on Form 10-K for the year ended December 31,
1996).

10.3 First Amendment to Amended and Restated Revolving
Credit Agreement, dated October 18, 1996, by and among
CarrAmerica Realty Corporation, CarrAmerica Realty,
L.P., Carr Realty, L.P., Morgan Guaranty Trust Company
of New York, Commerzbank Aktiengesellschaft, New York
Branch, NationsBank, N.A., Wells Fargo Realty Advisors
Funding, Inc. (incorporated by reference to Exhibit
10.1 to CarrAmerica's Current Report on Form 8-K dated
and filed October 24, 1996).

21.1 List of Subsidiaries.

27.1 Financial Data Schedule.

27.2 Financial Data Schedule.

99.1 Certificate of Incorporation of CarrAmerica Realty GP
Holdings, Inc.

99.2 Bylaws of CarrAmerica Realty GP Holdings, Inc.

99.3 Amendment and Restatement of Articles of Incorporation
of CarrAmerica Realty Corporation, as amended and as
supplemented (incorporated by reference to Exhibit 3.1
to CarrAmerica's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1997).

99.4 Second Amendment and Restatement of By-laws of
CarrAmerica Realty Corporation (incorporated by
reference to Exhibit 3.1 to CarrAmerica's Current
Report on Form 8-K dated and filed February 12, 1997).

99.5 "The Company," pages S-8 through S-11, in CarrAmerica's
Prospectus Supplement (to Prospectus dated August 5,
1997) dated August 7, 1997, filed pursuant to Rule
424(b) of Regulation C under the Securities Act,
relating to CarrAmerica's Registration Statement on
Form S-3, File No. 333-22353.

<PAGE>

99.6 "Voting Securities and Principal Holders Thereof,"
pages 15 through 18, in CarrAmerica's Proxy Statement
dated March 25, 1997, delivered to CarrAmerica's
stockholders in connection with the 1997 Annual Meeting
of Stockholders.

99.7 "Election of Directors (Proposal 1)," pages 3 through
6, in CarrAmerica's Proxy Statement dated March 25,
1997, delivered to CarrAmerica's stockholders in
connection with the 1997 Annual Meeting of
Stockholders.

99.8 "Directors of the Company," pages 5 through 8, from
CarrAmerica's Annual Report on Form 10-K for the year
ended December 31, 1996.

99.9 "Executive Officers and Certain Key Employees of the
Company," pages 8 through 13, from CarrAmerica's Annual
Report on Form 10-K for the fiscal year ended December
31, 1996.

99.10 "Executive Compensation," pages 9 through 12, from
CarrAmerica's Proxy Statement dated March 25, 1997,
delivered to CarrAmerica's stockholders in connection
with the 1997 Annual Meeting of Stockholders.

99.11 "Report on Executive Compensation," pages 13 through
14, in CarrAmerica's Proxy Statement dated March 25,
1997, delivered to CarrAmerica's stockholders in
connection with the 1997 Annual Meeting of
Stockholders.

99.12 "Executive Compensation Committee Interlocks and
Insider Participation," page 14, in CarrAmerica's Proxy
Statement dated March 25, 1997, delivered to
CarrAmerica's stockholders in connection with the 1997
Annual Meeting of Stockholders.

99.13 "Certain Relationships and Related Transactions," page
19, in CarrAmerica's Proxy Statement dated March 25,
1997, delivered to CarrAmerica's stockholders in
connection with the 1997 Annual Meeting of
Stockholders.

<PAGE>

CARRAMERICA REALTY, L.P.
INDEX TO FINANCIAL STATEMENTS AND SCHEDULE

The following Financial Statements and Schedule of CarrAmerica Realty,
L.P. and the Independent Auditors' Reports thereon are attached hereto:

<S> <C>
CarrAmerica Realty, L.P. Pro Forma Financial Information
Introduction to pro forma financial statements, pro forma condensed consolidated balance
sheet (unaudited) at June 30, 1997 and pro forma condensed consolidated
statements of operations (unaudited) for the six months ended June 30, 1997
and the year ended December 31, 1996, relating to the partnership........................... F-3

CarrAmerica Realty, L.P. Financial Statements
Balance Sheets as of June 30, 1997 (unaudited) and December 31, 1996.................................. F-9
Statements of Operations for the Six Months Ended June 30, 1997 (unaudited), the Period from
March 6, 1996 (date of inception) to June 30, 1996 (unaudited) and the Period from
March 6, 1996 (date of inception) to December 31, 1996...................................... F-10
Statements of Partners' Capital for the Six Months Ended June 30, 1997 (unaudited), the Period
from March 6, 1996 (date of inception) to June 30, 1996 (unaudited) and the Period from
March 6, 1996 (date of inception) to December 31, 1996...................................... F-11
Statements of Cash Flows for the Six Months Ended June 30, 1997 (unaudited), the Period from
March 6, 1996 (date of inception) to June 30, 1996 (unaudited) and the Period from
March 6, 1996 (date of inception) to December 31, 1996...................................... F-12
Notes to Financial Statements......................................................................... F-13
Independent Auditors' Report.......................................................................... F-21
Schedule III: Real Estate and Accumulated Depreciation as of December 31, 1996 for
CarrAmerica Realty, L.P..................................................................... F-22
Independent Auditors' Report.......................................................................... F-23

CarrAmerica Realty GP Holdings, Inc.
Balance Sheet as of December 31, 1996 with accompanying notes and Independent Auditors'
Report...................................................................................... F-24

Historical Summaries
Historical Summaries of Operating Revenue and Expenses for 2600 West Olive for the
six months ended June 30, 1997 (unaudited) and the year ended December 31,
1996 with accompanying notes and Independent Auditor's Report............................... F-28
Historical Summary of Operating Revenue and Expenses for Cedar Maple Plaza for
the year ended December 31, 1996 with accompanying notes and
Independent Auditors' Report................................................................ F-33
Historical Summaries of Operating Revenue and Expenses for Bannockburn IV for the three
months ended March 31, 1997 (unaudited) and the year ended December 31, 1996 with
accompanying notes and Independent Auditors' Report......................................... F-38
Historical Summaries of Operating Revenue and Expenses for Tollhill East and West for the three
months ended March 31, 1997 (unaudited) and the year ended December 31, 1996 with
accompanying notes and Independent Auditors' Report......................................... F-43
Historical Summaries of Operating Revenue and Expenses for Draper Park North for the three
months ended March 31, 1997 (unaudited) and the year ended December 31, 1996 with
accompanying notes and Independent Auditors' Report......................................... F-48
Historical Summaries of Operating Revenue and Expenses for Sorenson Research Park for the
three months ended March 31, 1997 (unaudited) and the year ended December 31, 1996
with accompanying notes and Independent Auditors' Report.................................... F-52
Historical Summary of Operating Revenue and Expenses for Quorum Place for the
year ended December 31, 1996 with accompanying notes and Independent
Auditors' Report............................................................................ F-57
Historical Summary of Operating Revenue and Expenses for Bannockburn Lake
Office Plaza for the year ended December 31, 1996 with accompanying
notes and Independent Auditors' Report...................................................... F-61
Historical Summaries of Operating Revenue and Expenses for Search Plaza and Quorum North for
the nine months ended September 30, 1996 (unaudited) and the year ended December 31,
1995 with accompanying notes and Independent Auditors' Report............................... F-65

F-1

<PAGE>

Historical Summaries of Operating Revenue and Expenses for South Coast Executive Centre for
the nine months ended September 30, 1996 (unaudited) and the year ended December 31,
1995 with accompanying notes and Independent Auditors' Report............................... F-70
Historical Summaries of Operating Revenue and Expenses for the Consolidated Littlefield Real
Estate Partnerships for the three months ended March 31, 1996 (unaudited) and the
year ended December 31, 1995 with accompanying notes and Independent Auditors' Report....... F-75
Historical Summaries of Operating Revenue and Expenses for Harlequin Plaza North, Harlequin
Plaza South, Quebec Court I and Quebec Court II for the three months ended March 31,
1996 (unaudited) and the year ended December 31, 1995 with accompanying notes and
Independent Auditors' Report................................................................ F-80
Historical Summaries of Operating Revenue and Expenses for The Greyhound Building for the
nine months ended September 30, 1996 (unaudited) and the year ended December 31,
1995 with accompanying notes and Independent Auditors' Report............................... F-85
Historical Summaries of Operating Revenue and Expenses for The Quorum for the three months
ended March 31, 1996 (unaudited) and the year ended December 31, 1995 with
accompanying notes and Independent Auditors' Report......................................... F-90
Historical Summaries of Operating Revenue and Expenses for Greenwood Center for the three
months ended March 31, 1996 (unaudited) and the year ended December 31, 1995 with
accompanying notes and Independent Auditors'Report.......................................... F-95

</TABLE>

All other schedules are omitted because they are not applicable, or because the
required information is included in the financial statements or notes thereto.

F-2

<PAGE>

CARRAMERICA REALTY, L.P.
INTRODUCTION TO PRO FORMA FINANCIAL STATEMENTS

The Unaudited Pro Forma Condensed Balance Sheet of the Partnership as of June
30, 1997 is presented as if A) certain properties were owned as of June 30, 1997
(operating properties - Two Mission Park and 2600 West Olive; and land held for
development - Draper Park North, Sorenson Research Park, Rosewood and Royal
Ridge), and B) certain operating properties were sold as of June 30, 1997 (First
State Bank, The Littlefield Complex and Norwood Tower).

The Unaudited Pro Forma Condensed Statements of Operations for the six months
ended June 30, 1997 and for the year ended December 31, 1996 are presented as if
A) certain properties were owned at the beginning of the periods presented
(operating properties - Cedar Maple, Bannockburn IV, Tollhill East & West,
Quorum Place, Bannockburn Lake I & II, Search Plaza, Quorum North, South Coast
Executive Center, Great Hills Plaza, The Setting, Park North, Balcones Center,
Harlequin Plaza, Quebec Court I & II, The Greyhound Building, The Quorum,
Greenwood Centre, Two Mission Park, Panorama Corporate Center I, Sorenson
Research Park, Draper Park North, Quebec Center and 2600 West Olive; land held
for development - Littlefield-Riata, Riata, Cedar Maple, Quorum, Panorama Phase
IV- VII, Draper Park North, Sorenson Research Park, Rosewood and Royal Ridge;
and property under construction - City View Center, JD Edwards and Panorama
Phase II).

In management's opinion, all material adjustments necessary to reflect the
purchases and sales of these properties are presented in the pro forma
adjustments columns, which are further described in the notes to the Unaudited
Pro Forma Condensed Financial Statements. The Unaudited Pro Forma Condensed
Financial Statements are not necessarily indicative of what the Partnership's
financial position or results of operations actually would have been if all the
properties were, in fact, owned or sold on such dates presented. Additionally,
the pro forma information does not purport to project the Partnership's
financial position or results of operations at any future date or for any future
period. The Unaudited Pro Forma Condensed Financial Statements should be read
in conjunction with the historical financial statements and related notes
thereto of the Partnership, which are included elsewhere in the Form 10.

F-3

<PAGE>

CARRAMERICA REALTY, L.P.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands)

<TABLE>
<CAPTION>
At June 30, 1997 (Unaudited)
--------------------------------------------------------------------
Pro Forma Adjustments
---------------------
Acquired Probable Probable Pro Forma
Historical (A) Properties (B) Acquisitions (C) Dispositions (D) Consolidated
-------------- -------------- ---------------- ---------------- ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Rental property, net $ 370,132 $ 5,200(1) $ 30,928(4) $ (42,347)(7) $ 363,913
Development property 59,834 4,747(1) 12,924(4) - 77,505
Restricted and unrestricted cash 3,903 - - - 3,903
Other assets 7,029 5 - (1,122)(8) 5,912
---------- ---------- ---------- ---------- -----------
Total assets $ 440,898 $ 9,952 $ 43,852 $ (43,469) $ 451,233
========== ========== ========== ========== ===========

LIABILITIES
Mortgages and notes payable $ 118,288 $ - $ 19,500(5) $ (48,077)(9) $ 89,711
Other liabilities 17,217 8(2) - (784)(8) 16,441
---------- ---------- ---------- ---------- -----------
Total liabilities 135,505 8 19,500 (48,861) 106,152

PARTNERS' CAPITAL 305,393 9,944(3) 24,352(6) 5,392 (10) 345,081
---------- ---------- ---------- ---------- -----------
Total liabilities and
partners' capital $ 440,898 $ 9,952 $ 43,852 $ (43,469) $ 451,233
========== ========== ========== ========== ===========
</TABLE>

F-4

<PAGE>

CARRAMERICA REALTY, L.P.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED
BALANCE SHEET

June 30, 1997
(Unaudited)

Adjustments (dollars in thousands):
(A) Reflects the Partnership's unaudited historical condensed consolidated
balance sheet as of June 30, 1997.

(B) Reflects the following pro forma adjustments related to the acquired
properties:
(1) total acquisition costs of $9,952 ($5,200 related to Two Mission Park,
$2,584 related to Draper Park North land and $2,168 related to
Sorenson Research Park land);
(2) the assumption of other liabilities totaling $8; and
(3) capital contributions of $9,944 from partners.

(C) Reflects the following pro forma adjustments related to the anticipated
effects of the probable acquisitions:
(4) total acquisition costs of $43,852 ($30,928 related to 2600 West
Olive, $9,814 related to Rosewood Land and $3,110 related to Royal
Ridge Land);
(5) the assumption of existing debt of $19,500 related to 2600 West
Olive; and
(6) capital contributions of $24,532 from partners.

(D) Reflects the following pro forma adjustments related to the anticipated
effects of the probable dispositions:
(7) total cost of rental property of $42,347 ($21,846 related to First
State Bank, $10,940 related to Littlefield Complex and $9,561
related to Norwood Tower);
(8) the transfer of net assets of $338 ($1,122 in other assets and $784
in other liabilities) in connection with the sale of the properties;
(9) the repayment of debt related to First State Bank of $9,549 and the
repayment of other partnership debt of $38,528 with the estimated
sales proceeds of $48,077 from the properties to be sold; and
(10) the recognition of a $5,392 gain on disposition of the properties.

F-5

<PAGE>

CARRAMERICA REALTY, L.P.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands)

<TABLE>
<CAPTION>
For the six months ended June 30, 1997 (Unaudited)
-----------------------------------------------------------------------------
Pro Forma Adjustments
---------------------
Acquired Probable Probable Pro Forma
Historical (A) Properties (B) Acquisitions (C) Dispositions (D) Consolidated
-------------- -------------- ---------------- ---------------- ------------
<S> <C> <C> <C> <C> <C>
Real estate operating revenue:
Rental revenue $ 22,341 $ 6,326(1) $ 1,862(6) $ (3,075)(10) $ 27,454
Real estate service income - - - - -
---------- ----------- ------- -------- ---------
Total revenues 22,341 6,326 1,862 (3,075) 27,454
---------- ----------- ------- -------- ---------

Real estate operating expenses:
Property operating expenses 9,986 2,206(4) 606(9) (1,669)(10) 11,129
Interest expense 2,346 690(2) 440(7) (1,991)(11) 1,485
General and administrative 452 100(5) - - 552
Depreciation and amortization 5,118 1,594(3) 448(8) (859)(12) 6,301
---------- ----------- ------- -------- ---------
Total operating expenses 17,902 4,590 1,494 (4,519) 19,467
---------- ----------- ------- -------- ---------

Real estate operating income 4,439 1,736 368 1,444 7,987

Other operating income (expense), net 56 - - (2)(10) 54
---------- ----------- ------- -------- ---------
Net income $ 4,495 $ 1,736 $ 368 $ 1,442 $ 8,041
========== =========== ======= ======== =========
</TABLE>

F-6

<PAGE>

CARRAMERICA REALTY, L.P.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands)

<TABLE>
<CAPTION>
For the year ended December 31, 1996 (Unaudited)
-------------------------------------------------------------------------
Pro Forma Adjustments
---------------------
Acquired Probable Probable Pro Forma
Historical (A) Properties (B) Acquisitions (C) Dispositions(D) Consolidated
-------------- -------------- ---------------- --------------- ------------
<S> <C> <C> <C> <C> <C>
Real estate operating revenue:
Rental revenue $ 13,376 $ 33,316(1) $ 3,813(6) $ (2,546)(10) $ 47,959
Real estate service income - - - - -
--------- --------- ------ --------- ---------
Total revenues 13,376 33,316 3,813 (2,546) 47,959
--------- --------- ------ ---------

Real estate operating expenses:
Property operating expenses 6,546 13,861(4) 1,263(9) (1,483)(10) 20,187
Interest expense 1,475 6,172(2) 860(7) (3,983)(11) 4,524
General and administrative 680 325(5) - - 1,005
Depreciation and amortization 3,148 6,886(3) 896(8) (634)(12) 10,296
--------- --------- ------ -------- ---------
Total operating expenses 11,849 27,244 3,019 (6,100) 36,012
--------- --------- ------ -------- ---------

Real estate operating income 1,527 6,072 794 3,554 11,947

Other operating income (expense), net 29 (1)(1) - (1)(10) 27
--------- --------- ------ -------- ---------

Net income $ 1,556 $ 6,071 $ 794 $ 3,553 $ 11,974
========= ========= ====== ======== =========
</TABLE>

F-7

<PAGE>

CARRAMERICA REALTY, L.P.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
For the Six Months Ended June 30, 1997 and the
Year Ended December 31, 1996
(Unaudited)

Adjustments (dollars in thousands):
(A) Reflects the Partnership's historical condensed consolidated statements of
operations for the six months ended June 30, 1997 and the year ended
December 31, 1996.

(B) Pro forma adjustments for the purchases of the acquired properties reflect:
(1) the historical operating activity of the properties acquired;
(2) the additional interest expense on debt of $118,288, at a weighted
average interest rate of 8.3%, incurred for the acquisitions ($2,578
of interest costs, net of $1,888 capitalized for development property
for the six months ended June 30, 1997 and $8,802 of interest costs,
net of $2,630 capitalized for development property for the year ended
December 31, 1996);
(3) the depreciation expense for the acquisitions based on the new
accounting basis for the rental property acquired based on a 30 year
useful life;
(4) the historical operating activity of the rental properties acquired
reduced by the elimination of management fee expenses that are no
longer incurred by the Partnership upon purchase of the properties;
and
(5) the estimated incremental general and administrative expenses
associated with the Partnership's asset growth.

(C) Pro forma adjustment for probable acquisitions reflects:
(6) the historical operating activity of the rental property acquired;
(7) the additional interest expense on debt of $19,500, at an interest
rate of 9.4%, incurred for the acquisitions ($914 of interest costs,
net of $474 capitalized for development property for the six months
ended June 30, 1997 and $1,829 of interest costs, net of $969
capitalized for development property for the year ended December 31,
1996);
(8) the depreciation expense for the acquisitions based on the new
accounting basis for the rental property acquired based on a 30 year
useful life; and
(9) the historical operating activity of the rental property acquired
reduced by the elimination of management fee expenses that are no
longer incurred by the Partnership upon purchase of the property.
(D) Pro forma adjustment for the probable dispositions reflects:
(10) the elimination of the historical operating activity of the properties
sold;
(11) the reduction of interest expense from the repayment of $48,077 in
debt, at a weighted average interest rate of 8.3%, from the proceeds
of sold properties; and
(12) the elimination of the historical depreciation expense of the
properties sold.

F-8

<PAGE>

CARRAMERICA REALTY, L.P.
Balance Sheets
As of June 30, 1997 (unaudited) and December 31, 1996
- - --------------------------------------------------------------------------------

(In thousands)
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
---- ----
(Unaudited)
<S> <C> <C>
Assets
Rental property (notes 2 and 7):
Land $ 47,974 26,404
Buildings 319,865 182,856
Tenant improvements 10,590 7,068
Furniture, fixtures, and equipment 82 6
---------- --------
378,511 216,334
Less - accumulated depreciation (8,379) (3,104)
---------- --------
Total rental property 370,132 213,230

Land held for development 18,216 13,254
Construction in progress 41,618 8,485
Cash and cash equivalents 3,903 2,478
Accounts receivable 2,802 1,888
Accrued straight-line rents 1,632 733
Tenant leasing costs, net of accumulated amortization of
$186 at June 30, 1997 and $35 at December 31, 1996 2,219 881
Prepaid expenses and other assets, net of accumulated
depreciation of $23 at June 30, 1997 and $9 at
December 31, 1996 376 268
---------- --------
$ 440,898 241,217
========== ========
Liabilities and Partners' Capital
Liabilities:
Mortgages and notes payable (note 2) $ 88,682 21,952
Note payable to affiliate (note 2) 29,606 29,792
Accounts payable and accrued expenses 11,191 4,441
Due to affiliates (note 6) 3,379 2,774
Rent received in advance and security deposits 2,647 1,325
---------- --------
Total liabilities 135,505 60,284

Partners' capital (note 3):
General partners 3,054 1,809
Limited partners 302,339 179,124
---------- -------
Total partners' capital 305,393 180,933

Commitments (note 4)
---------- --------
$ 440,898 241,217
========== ========
</TABLE>

See accompanying notes to financial statements

F-9

<PAGE>

CARRAMERICA REALTY, L.P.
Statements of Operations
For the Six Months Ended June 30, 1997 (unaudited),
the Period from March 6, 1996 (date of inception) to June 30, 1996 (unaudited)
and the Period from March 6, 1996 (date of inception) to December 31, 1996
- - --------------------------------------------------------------------------------
(In thousands)
<TABLE>
<CAPTION>
Six months March 6, 1996 March 6, 1996
ended to June 30, to December 31,
June 30, 1997 1996 1996
------------- ---- ----
(Unaudited) (Unaudited)
<S> <C> <C> <C>
Rental revenue (note 4):
Minimum base rent $ 18,821 812 11,220
Recoveries from tenants 2,956 143 1,790
Other tenant charges 1,242 4 366
-------- ---- -------
Total rental revenue 23,019 959 13,376
-------- ---- -------

Real estate operating expenses:
Property operating expenses:
Operating expenses (note 6) 7,811 247 4,873
Real estate taxes 2,175 134 1,673
Interest expense 2,346 271 1,475
General and administrative 1,130 8 680
Depreciation and amortization 5,118 318 3,148
-------- ---- -------
Total operating expenses 18,580 978 11,849
-------- ---- -------

Real estate operating income 4,439 (19) 1,527

Other operating income - interest income 56 1 29
-------- ---- -------
Net income $ 4,495 (18) 1,556
======== ==== =======
Net income attributable to general partner $ 45 -- 15
======== ==== =======
Net income attributable to limited partners $ 4,450 (18) 1,541
======== ==== =======
</TABLE>

See accompanying notes to financial statements

F-10

<PAGE>

CARRAMERICA REALTY, L.P.
Statements of Partners' Capital
For the Six Months Ended June 30, 1997 (unaudited) and the Period from
March 6, 1996 (date of inception) to December 31, 1996
- - --------------------------------------------------------------------------------
(In thousands)

<TABLE>
<CAPTION>
General Partner Limited Partners
------------------- --------------------------------------
CarrAmerica CarrAmerica
Realty GP Realty LP Other Limited
Holdings, Inc. Holdings, Inc. Partners Total
-------------- -------------- ------------- -----
<S> <C> <C> <C> <C>
Capital contributions $1,814 161,620 17,993 $181,427
Capital distributions (20) (1,924) (106) (2,050)
Net income 15 1,318 223 1,556
------ ------- ------ --------

Partners' capital at December 31, 1996 1,809 161,014 18,110 180,933

Capital contributions 1,200 101,711 17,376 120,287
Capital distributions -- -- (322) (322)
Net income 45 3,879 571 4,495
------ ------- ------ --------

Partners' capital at June 30, 1997 $3,054 266,604 35,735 $305,393
====== ======= ====== ========
</TABLE>

See accompanying notes to financial statements

F-11

<PAGE>

CARRAMERICA REALTY, L.P.
Statements of Cash Flows
For the Six Months Ended June 30, 1997 (unaudited), the Period from
March 6, 1996 (date of inception) to June 30, 1996 (unaudited) and the
Period from March 6, 1996 (date of inception) to December 31, 1996
- - --------------------------------------------------------------------------------
(in thousands)

<TABLE>
<CAPTION>
Six months March 6, 1996 March 6, 1996 to
ended June 30, (date of inception) December 31,
1997 to June 30, 1996 1996
---- ---------------- ----
(Unaudited) (Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 4,495 (18) 1,556
-------- ------- --------
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Depreciation and amortization 5,118 318 3,148
Increase in accounts receivable (914) (25) (1,816)
Increase in accrued straight-line rents (899) (61) (805)
Additions to tenant leasing costs (1,489) (5) (916)
Increase in prepaid expenses and other assets (122) (13) (277)
Increase in accounts payable and accrued expenses 6,750 1,518 4,441
Increase in due to affiliates 605 -- 2,774
Increase in rent received in advance and security deposits 1,322 211 1,325
-------- ------- --------
Total adjustments 10,371 1,943 7,874
-------- ------- --------
Net cash provided by operating activities 14,866 1,925 9,430
-------- ------- --------

Cash flows from investing activities:
Additions to rental property (2,249) -- (98)
Acquisitions of rental property (77,119) (65,169) (178,239)
Land purchased for future development (1,448) -- (13,254)
Additions to construction in progress (22,877) -- (8,485)
-------- ------- --------
Net cash used by investing activities (103,693) (65,169) (200,076)
-------- ------- --------

Cash flows from financing activities:
Capital contributions 77,126 33,890 163,433
Capital distributions (322) -- (2,050)
Net borrowings (repayments) on unsecured line of credit 14,000 -- 2,000
Borrowings on notes payable to affiliates -- 30,000 30,000
Repayments on notes and mortgages payable (552) -- (259)
-------- ------- --------
Net cash provided by financing activities 90,252 63,890 193,124
-------- ------- --------
Increase in cash and cash equivalents 1,425 646 2,478

Cash and cash equivalents, beginning of the period 2,478 -- --
-------- ------- --------
Cash and cash equivalents, end of the period $ 3,903 646 2,478
======== ======= ========
</TABLE>

Supplemental disclosure of cash flow information:
Cash paid for interest (net of capitalized interest of
$1,326 for the six months ended June 30, 1997, $0 for the
period March 6, 1996 to June 30, 1996 and $1,619 for the
period ended December 31, 1996)
<PAGE>

Supplemental disclosure of noncash investing and financing activities:

During the six months ended June 30, 1997, the period from March 6, 1996 to
June 30, 1996 and the period from March 6, 1996 to December 31, 1996, the
Partnership funded a portion of the aggregate purchase price of its
property acquisitions by assuming $53.0 million, $0 and $20.0 million of
debt and liabilities, respectively, and by issuing $17.4, $0.3 and $18.0
million of Units in the Partnership, respectively. Additionally, during the
six months ended June 30, 1997, CarrAmerica contributed land to the
Partnership with a book value of $25.3 million.

See accompanying notes to financial statements

F-12

<PAGE>
CARRAMERICA REALTY, L.P.
Notes to Financial Statements
June 30, 1997 (unaudited) and December 31, 1996
- - --------------------------------------------------------------------------------

(1) Description of Business and Summary of Significant Accounting Policies

(a) Business

CarrAmerica Realty, L.P. (the "Partnership") is a Delaware
limited partnership formed on March 6, 1996 to own, acquire,
develop, and operate office buildings across the United States.
At June 30, 1997, the Partnership owned 44 operating properties
and three properties under development. At December 31, 1996,
the Partnership owned 25 operating properties and one property
under development, which are located in Austin, Texas, suburban
Dallas, Southeast Denver, and Southern California.

The Partnership's general partner is CarrAmerica Realty GP
Holdings, Inc. (the "General Partner"), a wholly owned
subsidiary of CarrAmerica Realty Corporation ("CARC"), a
self-administered and self-managed real estate investment trust.
The General Partner owned a 1% interest in the Partnership at
December 31, 1996. The Partnership's limited partners are
CarrAmerica Realty LP Holdings, Inc., a wholly owned subsidiary
of CARC, which owned an approximate 87% interest in the
Partnership at December 31, 1996, and various other individuals
and entities which collectively owned an approximate 12%
interest in the Partnership at December 31, 1996.

(b) Basis of Presentation

The Partnership's financial statements are prepared using the
accrual basis of accounting and in accordance with generally
accepted accounting principles. Management of the Partnership
has made a number of estimates and assumptions relating to the
reporting of assets and liabilities and revenues and expenses,
and the disclosure of contingent assets and liabilities to
prepare these financial statements in conformity with generally
accepted accounting principles. Actual results could differ from
those estimates.

Rental property is recorded at cost less accumulated
depreciation (which is less than the net realizable value of the
rental property). Depreciation is computed on the straight-line
basis over the estimated useful lives of the assets, as follows:

Base Building..........................30 years
Building components....................7 to 20 years
Tenant improvements....................Terms of the leases or
useful lives, whichever
is shorter
Furniture, fixtures and equipment......5 to 15 years

Expenditures for maintenance and repairs are charged to
operations as incurred. Significant renovations are capitalized.

Management reviews the Partnership's long-lived assets, such as
rental property, for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may
not be recoverable. Recoverability of assets to be held and used
is measured by a comparison of the carrying amount of an asset
to future net cash flows expected to be generated by the asset.
If such assets are considered to be impaired, the impairment to
be recognized is measured by the amount by which the carrying
amount of the assets exceeds the fair value of the assets.

F-13
<PAGE>

CARRAMERICA REALTY, L.P.
Notes to Financial Statements
June 30, 1997 (unaudited) and December 31, 1996
- - --------------------------------------------------------------------------------

(d) Development Property

Land held for development and construction in progress is
carried at cost. Specifically identifiable direct and indirect
acquisition, development and construction costs are capitalized
including, where applicable, salaries and related costs, real
estate taxes, interest and certain pre-construction costs
essential to the development of a property.

(e) Tenant Leasing Costs

Fees and costs incurred in the successful negotiation of leases
have been deferred and are being amortized on a straight-line
basis over the terms of the respective leases.

(f) Fair Value of Financial Instruments

The carrying amount of the following financial instruments
approximates fair value because of their short-term maturity:
cash and cash equivalents; accounts and notes receivable;
accounts payable, accrued expenses and other liabilities.

(g) Revenue Recognition

The Partnership reports base rental revenue for financial
statement purposes straight-line over the terms of the
respective leases. Accrued straight-line rents represent the
amount that straight-line rental revenue exceeds rents collected
in accordance with the lease agreements. Management, considering
current information and events regarding the tenants' ability to
fulfill their lease obligations, considers accrued straight-line
rents to be impaired if it is probable that the Partnership will
be unable to collect all rents due according to the contractual
lease terms. If accrued straight-line rents associated with a
tenant are considered to be impaired, the amount of the
impairment is measured based on the present value of expected
future cash flows. Impairment losses, if any, are recorded
through a loss on the write-off of assets. Cash receipts on
impaired accrued straight-line rents are applied to reduce the
remaining outstanding balance and, thereafter, as rental
revenue.

(h) Income Taxes

No provision has been made for federal and state income taxes
because each partner reports his or her share of the
Partnership's taxable income or loss and any available tax
credits on his or her income tax return.

(i) Cash Equivalents

For purposes of reporting cash flows, the Partnership considers
all highly liquid investments with a maturity of three months or
less at the time of purchase to be cash equivalents.

F-14

<PAGE>

CARRAMERICA REALTY, L.P.
Notes to Financial Statements
June 30, 1997 (unaudited) and December 31, 1996
- - --------------------------------------------------------------------------------

(2) Mortgages and Notes Payable

Mortgages and notes payable generally are collateralized by certain
rental properties and generally require monthly principal and/or
interest payments. Following is a summary of the Partnership's mortgages
and notes payable as of the end of each period (in thousands):

<TABLE>
<CAPTION>
June 30, 1997 December 31, 1996
------------- -----------------
(Unaudited)
<S> <C> <C>
Note payable to Morgan Guaranty Trust Company of New York, as
agent for a group of banks ("Morgan"); $325.0 million
unsecured revolving credit facility bearing interest, as
selected by CRC, at either (i) the higher of the prime
interest rate or .5 percent plus the Federal Funds Rate for
such day or (ii) 1.125 percent above the London Interbank
Offered Rate (LIBOR) for such day. The weighted average
interest rate at June 30, 1997 and December 31, 1996 was
6.8% and 7.3%, respectively. The note matures in July
1998, with an option to extend for one year. $ 16,000 2,000

Mortgage payable to Metropolitan Life Insurance Company;
bearing interest at 7.375 percent; principal and interest
payments of $72 thousand are due monthly through maturity
in March 1999. 9,549 9,630

Mortgage payable to Windy City Holdings, Inc.; bearing interest
at 9.01 percent; principal and interest payments of $85
thousand are due monthly through maturity in May 1999. 10,279 10,322

Mortgage payable to Principal Life Insurance Company; bearing
interest at 6.99 percent; principal and interest payments
of $55 thousand are due monthly through maturity
in November 2000. 7,781 --

Mortgage payable to Manulife Financial; bearing interest at
8.27 percent; principal and interest payments of $53
thousand are due monthly through maturity in December 2001. 6,709 --

Mortgage payable to GE Capital Corporation; bearing interest at
9.52 percent; principal and interest payments of $233
thousand are due monthly through maturity in August 2001. 20,930 --

Mortgage payable to Business Men's Assurance Corporation;
bearing interest at 7.8 percent, principal and interest
payments of $27 thousand are due monthly through maturity
in July 2011. 2,803 --

Mortgage payable to Berkshire Life Insurance Corporation;
bearing interest at 8.9 percent; principal and interest
payments of $15 thousand are due monthly through maturity
in May 2017. 1,699 --

F-15

<PAGE>

<CAPTION>
CARRAMERICA REALTY, L.P.
Notes to Financial Statements
June 30, 1997 (unaudited) and December 31, 1996
- - --------------------------------------------------------------------------------

<S> <C> <C>
Mortgage payable to Teacher's Insurance and Annuity Association
of America; bearing interest at 8.2 percent; principal and
interest payments of $102 thousand are due monthly until
maturity in January 2007. 12,932 --
-------- -------
$ 88,682 21,952
======== =======
</TABLE>

On May 24, 1996, the Partnership entered into a $30 million loan
agreement with CARC. The note payable bears interest at 8.5% and
requires monthly principal and interest payments of $242 thousand. The
loan matures on May 31, 2011. The note is secured by certain office
properties and other assets of the Partnership. The outstanding balance
of the note payable to affiliate was $29.6 million (unaudited) and
$29.8 million, at June 30, 1997 and December 31, 1996, respectively.

The $325.0 million unsecured revolving credit facility with Morgan is
available to CARC, the Partnership and Carr Realty, L.P. The line of
credit contains a number of financial and other covenants, including,
but not limited to, covenants relating to ratios of annual EBITDA
(Earnings Before Interest, Taxes, Depreciation and Amortization) to
interest expense, annual EBITDA to debt service, and total debt to
tangible fair market value of CARC's assets and restrictions on the
ability of CARC to make dividend distributions in excess of 90% of funds
from operations. Availability under the line of credit is also limited
to a specified percentage of the Partnership's unencumbered properties.
CARC and the Partnership are jointly and severally liable for all
obligations under the line of credit. As of June 30, 1997 and December
31, 1996, approximately $272.0 million (unaudited) and $215.0 million,
respectively, had been drawn under this facility.

As of December 31, 1996, the scheduled maturity of all mortgages and
notes payable are as follows (in thousands):

1997......................... $ 633
1998......................... 2,686
1999......................... 19,879
2000......................... 491
2001......................... 535
Thereafter................... 27,520
-------
$51,744
=======

Based on the borrowing rates available to the Partnership for mortgages
and notes payable with similar terms and average maturities, the
estimated fair value, as determined by management, of the Partnership's
mortgages and notes payable approximates the carrying amount.

(3) Partners' Capital Contributions, Distributions,
and Participation Percentages

The Second Amended and Restated Agreement of Limited Partnership of the
Partnership (the "Partnership Agreement") details the rights of
ownership in the Partnership. Ownership in the Partnership is expressed
in partnership units ("Units"). Units currently are designated as Class
A, B, or C Units. Class A Units have first preference and Class B Units
have second preference as to the allocation of Available Cash, as
defined in the Partnership Agreement. Class C units do not share in the
allocation of Available Cash. Upon the third anniversary of the date of
issuance of Class C Units, they may be converted to Class A Units based
on a conversion factor described in the Partnership Agreement.

Upon the first anniversary of the date of issuance, each holder of Class
A Units may, subject to certain limitations, require that the
Partnership redeem his or her Class A Units. Upon redemption, a Class A
Unit holder will receive, at the option of the Partnership, with respect
to each Class A Unit tendered, either (i) cash in an amount equal to the
market value of one share of

F-16

<PAGE>

CARRAMERICA REALTY, L.P.
Notes to Financial Statements
June 30, 1997 (unaudited) and December 31, 1996
- - --------------------------------------------------------------------------------

CARC common stock (subject to certain anti-dilution adjustments) or (ii)
one share of CARC common stock. In lieu of the Partnership redeeming
Class A Units for cash, CARC has the right to assume directly and
satisfy the redemption right of a Unit holder. Holders of Class B Units
and Class C Units are not entitled to exercise this redemption right.

At December 31, 1996, there were 361,677 Class A Units, 6,619,131 Class
B Units, and 539,593 Class C Units outstanding.

F-17

<PAGE>
CARRAMERICA REALTY, L.P.
Notes to Financial Statements
June 30, 1997 (unaudited) and December 31, 1996
- - --------------------------------------------------------------------------------

(4) Lease Agreements

The following table summarizes future minimum base rent to be received
under noncancelable tenant leases and the percentage of total rentable
space expiring each year, as of December 31, 1996 (in thousands):

Future Percentage
Minimum of Total Leased
Rent Space Expiring
---- --------------

1997 $23,062 24.0%
1998 19,778 20.6
1999 16,000 16.7
2000 12,424 12.9
2001 7,834 8.2
2002 and thereafter 16,970 17.6
-------
$96,068
=======

The leases also provide for additional rent based on increases in the
Consumer Price Index (CPI) and increases in operating expenses. These
increases are generally payable in equal installments throughout the
year, based on estimated increases, with any differences being adjusted
in the succeeding year.

The Partnership's largest tenant is Intelligent Electronics, Inc.
("Intelligent Electronics") which leases approximately 130,000 square
feet of office space. This lease represented 5.7% of net rentable space
in the Partnership's operating office properties at December 31, 1996.
No other single tenant occupies more than 5% of the net rentable space
in Quebec Court I. Intelligent Electronics has announced publicly that
it has entered into a definitive agreement to sell one of its divisions.
The Partnership has been advised by Intelligent Electronics that, in
connection with this proposed sale, Intelligent Electronics intends to
vacate its space at Quebec Court I in the next six to 12 months.
Intelligent Electronics' lease term extends until 2001, with no
termination rights. The Partnership, if necessary, will pursue its legal
remedies against Intelligent Electronics.

At December 31, 1996, Alert Centre, Inc. occupied approximately 106,000
square feet of office space. This lease represents 4.6% of the net
rentable space in the Partnership's operating office properties at
December 31, 1996. In February 1997, the Partnership initiated an action
against Alert Centre, Inc., a tenant in Quebec Court II, and ADT
Security Service, Inc., Alert Centre's owner, in the District Court of
Arapahoe County, Colorado, regarding outstanding rent payments.

The Company leases land beneath two office properties located in Austin,
Texas. The lease expires in February 2078. The minimum base annual
rental payment associated with this lease is $171 thousand.

(5) Employee Benefits

Employees of the Partnership are eligible to participate in CARC's
401(k) plan for employees. The plan matches 50% of employee
contributions up to the first 4% of an employee's pay and will make a
base contribution of 3% of pay for participants who remain employed on
December 31, the end of the plan year. Employer contributions are
subject to a five-year graduated vesting schedule. Partnership
contributions to the plan amounted to approximately $3 thousand in 1996.

F-18

<PAGE>

CARRAMERICA REALTY, L.P.
Notes to Financial Statements
June 30, 1997 (unaudited) and December 31, 1996
- - --------------------------------------------------------------------------------

(6) Transactions With Affiliates

CarrAmerica Realty Services, Inc. (CARSI), a wholly owned subsidiary of
CARC, provides management and leasing services to all of the office
properties owned by the Partnership. During 1996, the Partnership
incurred management fees of $430 thousand for services performed by
CARSI. Additionally, CARSI reimburses CARLP for certain services CARLP
personnel provide to CARSI. These reimbursements amounted to $221
thousand in 1996.

CARC pays on behalf of the Partnership certain administrative costs and
certain costs related to the acquisitions of properties which are billed
to the Partnership, and makes working capital advances to the
Partnership. Amounts due to CARC were $3.4 million at June 30, 1997
and $2.8 million at December 31, 1996.

(7) Acquisition and Development Activities

During 1996, the Partnership acquired 25 operating office properties
containing approximately 2.3 million square feet for an aggregate
purchase price of $216.2 million. In addition, as of December 31, 1996,
the Partnership had one property under development and three properties
held for development. Land held for development was purchased for an
aggregate purchase price of $13.3 million. Costs incurred during 1996
for properties under construction were $8.5 million.

From January 1 to June 30, 1997, the Partnership acquired 18 operating
office properties for an aggregate purchase price of $149.8 million.
Costs incurred during 1997 for properties under construction were $24.5
million. In addition, CarrAmerica contributed one operating office
property, one office property under construction and options to acquire
land which will support the future development of approximately four
office properties.

All acquisitions have been accounted for as purchases. Operations of
acquired properties have been included in the accompanying financial
statements from their respective dates of acquisition.

The following unaudited pro forma summary presents information as if the
Partnership's formation and acquisitions through December 31, 1996 had
occurred at the beginning of 1996. The pro forma information is provided
for informational purposes only. It is based on historical information
and does not necessarily reflect the actual results that would have
occurred nor is it necessarily indicative of future results of
operations of the Partnership.

Pro forma information (unaudited):
(in thousands)
Total revenue $ 49,977
Net income $ 8,627

(8) Subsequent Events

Since June 30, 1997, the Partnership has acquired one operating office
property containing approximately 76,000 square feet for approximately
$5.1 million. The purchase of this property was financed through the
payment of $5.1 million in cash.

In addition, the Partnership has acquired 17 acres of land which will
support the future development of 243,000 square feet of office space
for approximately $4.8 million. The purchase of the land was financed
through the payment of $4.8 million in cash. The Partnership has also
placed into service one operating office property containing 189,000
square feet that was under construction as of June 30, 1997.

F-19

<PAGE>

CARRAMERICA REALTY, L.P.
Notes to Financial Statements
June 30, 1997 (unaudited) and December 31, 1996
- - --------------------------------------------------------------------------------

(9) Quarterly Financial Information (unaudited)

The following is a summary of quarterly results of operations for 1996
since inception and 1997:

(in thousands)

<TABLE>
<CAPTION>
1996 1997
--------------------------------------------- -----------------------
First Second Third Fourth First Second
Quarter Quarter Quarter Quarter Quarter Quarter
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Rental revenue $-- 959 6,216 6,201 9,479 13,540
=== === ===== ===== ===== ======
Real estate operating income $-- (19) 236 1,310 1,749 2,690
=== === ===== ===== ===== =====
Net income $-- (18) 241 1,333 1,757 2,738
=== === ===== ===== ===== =====
</TABLE>

F-20

<PAGE>

INDEPENDENT AUDITORS' REPORT
CarrAmerica Realty, L.P.
- - --------------------------------------------------------------------------------

The Partners
CarrAmerica Realty, L.P.:

We have audited the accompanying balance sheet of
CarrAmerica Realty, L.P. as of December 31, 1996 and
the related statements of operations, partners'
capital, and cash flows for the period from March 6,
1996 (date of inception) to December 31, 1996. These
financial statements are the responsibility of
CarrAmerica Realty, L.P.'s management. Our
responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with generally
accepted auditing standards. Those standards require
that we plan and perform the audit to obtain
reasonable assurance about whether the financial
statements are free of material misstatement. An
audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the
financial statements. An audit also includes
assessing the accounting principles used and
significant estimates made by management, as well as
evaluating the overall financial statement
presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements referred to
above present fairly, in all material respects, the
financial position of CarrAmerica Realty, L.P. as of
December 31, 1996 and the results of its operations
and its cash flows for the period from March 6, 1996
(date of inception) to December 31, 1996, in
conformity with generally accepted accounting
principles.

KPMG Peat Marwick LLP
Washington, D.C.
June 3, 1997

F-21

<PAGE>

CARRAMERICA REALTY, L.P.
Real Estate and Accumulated Depreciation
December 31, 1996
(in thousands)

<TABLE>
<CAPTION>
Gross Amount at Which
Initial Cost Carried at Close of Period
------------------------ Costs Capitalized ------------------------------
Buildings and Subsequent to Buildings and
Properties Encumbrances Land Improvements Acquisition Land Improvements Total
- - ---------- ------------ ---- ------------- ----------------- ---- ------------ -----
<S> <C> <C> <C> <C> <C> <C> <C>
Southern California:
South Coast Executive Center $ 10,322 $ 3,324 17,212 31 3,324 17,243 $ 20,567

Southeast Denver:
The Quorum -- 1,299 7,887 90 1,299 7,977 9,276
Quebec Center -- 1,423 5,659 101 1,423 5,760 7,183
Greenwood Center -- 289 6,619 48 289 6,667 6,956
Quebec Court I & II 29,792(2) 2,368 19,819 272 2,368 20,091 22,459
Harlequin Plaza (2) 4,746 21,344 401 4,746 21,745 26,491
Quorum Land -- 484 -- 18 502 -- 502
JD Edwards -- 3,006 3,484 1,995 3,006 5,479 8,485

Austin, Texas:
Balcones -- 949 7,649 38 949 7,687 8,636
Great Hills -- 1,680 13,545 403 1,680 13,948 15,628
Park North -- 1,671 13,471 85 1,671 13,556 15,227
Setting I, II & III -- 1,718 13,854 735 1,718 14,589 16,307
First State Bank 9,630 1,985 19,977 490 1,985 20,467 22,452
Littlefield Complex (1) -- 967 9,736 171 967 9,907 10,874
Norwood Tower -- 851 8,570 268 851 8,838 9,689
Riata - Land -- 10,121 -- 492 10,613 -- 10,613
Setting IV & V - Land -- 1,890 -- 248 2,138 -- 2,138

Dallas, Texas:
Greyhound -- 1,312 7,999 72 1,312 8,071 9,383
Search Plaza -- 1,822 13,362 23 1,822 13,385 15,207
--------- -------- ------- ----- ------ ------- ---------
TOTAL $ 49,744 $ 41,905 190,187 5,981 42,663 195,410 $ 238,073
========= ======== ======= ===== ====== ======= =========

<CAPTION>
Accumulated Date of Year of
Properties Depreciation Construction Acquisition
- - ---------- ------------ ------------ -----------
<S> <C> <C> <C>
Southern California:
South Coast Executive Center $ -- 1987 1996

Southeast Denver:
The Quorum 171 1975 1996
Quebec Center 111 1985 1996
Greenwood Center 116 1982 1996
Quebec Court I & II 562 1979/1980 1996
Harlequin Plaza 571 1981 1996
Quorum Land -- N/A 1996
JD Edwards -- N/A 1996

Austin, Texas:
Balcones 130 1985 1996
Great Hills 265 1985 1996
Park North 217 1981 1996
Setting I, II & III 282 1985 1996
First State Bank 290 1980/1995 1996
Littlefield Complex (1) 186 1910/1980 1996
Norwood Tower 150 1929/1982 1996
Riata - Land -- N/A 1996
Setting IV & V - Land -- N/A 1996

Dallas, Texas:
Greyhound 34 1962 1996
Search Plaza 19 1985 1996
-------
TOTAL $ 3,104
=======
</TABLE>

<PAGE>

- - ----------------
(1) The Partnership owns the improvements on the land and has a leasehold
interest in all or a portion of the underlying land.
(2) Secured by Quebec Court I & II and Harlequin Plaza.

Depreciation and amortization of the investment in building and improvements
reflected in the statements of operations are calculated over the estimated
lives of the assets as follows:

Base Building 30 years
Building components 7 to 20 years
Tenant improvements Terms of leases or useful
lives, whichever is shorter
Furniture, fixtures and equipment 5 to 15 years

The aggregate cost for federal income tax purposes was approximately $198,300
(in thousands) at December 31, 1996.

<TABLE>
<CAPTION>
Total Real Accumulated
Estate Assets Depreciated
------------- -----------
1996 1996
------------- -----------
<S> <C> <C> <C>
Balance, beginning of period $ -- Balance, beginning of period $ --
Acquisitions 232,092
Improvements 5,981 Depreciation for the period 3,104
Retirements and write-offs -- Retirements and write-offs --
-------- ------
$238,073 $3,104
======== ======
</TABLE>

F-22

<PAGE>

INDEPENDENT AUDITORS' REPORT
CarrAmerica Realty, L.P.
- - --------------------------------------------------------------------------------

The Partners
CarrAmerica Realty, L.P.:

Under date of June 3, 1997, we reported on the
balance sheet of CarrAmerica Realty, L.P. as of
December 31, 1996, and the related statements of
operations, partners' capital, and cash flows for the
period from March 6, 1996 (date of inception) to
December 31, 1996, which are included in this Form
10. In connection with our audit of the
aforementioned financial statements, we also audited
the related financial statement schedule in this Form
10. This financial statement schedule is the
responsibility of CarrAmerica Realty, L.P.'s
management. Our responsibility is to express an
opinion on this financial statement schedule based on
our audit.

In our opinion, this financial statement schedule,
when considered in relation to the basic financial
statements taken as a whole, presents fairly, in all
material respects, the information set forth therein.

KPMG Peat Marwick LLP
Washington, D.C.
June 3, 1997

F-23

<PAGE>

CARRAMERICA REALTY GP HOLDINGS, INC.

Balance Sheet

December 31, 1996

(With Independent Auditors' Report Thereon)

F-24

<PAGE>

Independent Auditors' Report

The Stockholders
CarrAmerica Realty GP Holdings, Inc.:

We have audited the accompanying balance sheet of CarrAmerica Realty GP
Holdings, Inc. as of December 31, 1996. This financial statement is the
responsibility of the Company's management. Our responsibility is to express an
opinion on this financial statement based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the balance sheet is free of material misstatement. An
audit of a balance sheet includes examining, on a test basis, evidence
supporting the amounts and disclosures in that balance sheet. An audit of a
balance sheet also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
balance sheet presentation. We believe that our audit of the balance sheet
provides a reasonable basis for our opinion.

In our opinion, the balance sheet referred to above presents fairly, in all
material respects, the financial position of CarrAmerica Realty GP Holdings,
Inc. as of December 31, 1996, in conformity with generally accepted accounting
principles.

KPMG Peat Marwick LLP

Washington, D.C.
June 3, 1997

F-25

<PAGE>

CARRAMERICA REALTY GP HOLDINGS, INC.

Balance Sheet
December 31, 1996
(In thousands, except share amounts)

<S> <C>
Assets:
Cash $ 1
Accounts receivable 10
Investments in CarrAmerica Realty, L.P. 1,809
----------

Total Assets 1,820
==========

Liabilities and Stockholder's Equity:
Liabilities - amounts due to affiliates 10

Stockholder's Equity
Common Stock, $0.01 par value, authorized 1,000 shares,
issued and outstanding 1,000 shares at December 31, 1996 --
Additional paid in capital 1,814
Retained earnings (4)
----------

Total stockholder's equity 1,810
----------

Total Liabilities and Stockholder's Equity $ 1,820
==========
</TABLE>

See accompanying note to balance sheet.

F-26

<PAGE>

CARRAMERICA REALTY GP HOLDINGS, INC.

Note to Balance Sheet
December 31, 1996

(1) Summary of Significant Accounting Policies

CarrAmerica Realty GP Holdings, Inc. (the Company), organized during
1996 under the laws of Delaware, holds the 1% general partnership
interest in CarrAmerica Realty, L.P. (CARLP). CARLP owns, acquires,
develops, and operates office buildings across the United States. The
Company is a wholly owned subsidiary of CarrAmerica Realty
Corporation.

The Company records it's investment in CARLP using the equity method
of accounting for investments.

F-27

<PAGE>

2600 West Olive

Historical Summaries
of Operating Revenue and Expenses

Six Months Ended June 30, 1997 (Unaudited)
and Year Ended December 31, 1996

(With Independent Auditors' Report Thereon)

F-28

<PAGE>

Independent Auditors' Report

The Partners
CarrAmerica Realty, L.P.:

We have audited the accompanying historical summary of operating revenue and
expenses, as defined in note 2(a), of 2600 West Olive (the Property) for the
year ended December 31, 1996. This historical summary is the responsibility of
the management of the Property. Our responsibility is to express an opinion on
the historical summary based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the historical summary is free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the historical summary. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the historical summary. We believe
that our audit provides a reasonable basis for our opinion.

The accompanying historical summary was prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission and is
not intended to be a complete presentation of the revenue and expenses of the
Property.

In our opinion, the historical summary referred to above presents fairly, in all
material respects, the operating revenue and expenses, as described in note
2(a), of 2600 West Olive for the year ended December 31, 1996, in conformity
with generally accepted accounting principles.

KPMG Peat Marwick LLP

Washington, DC
September 10, 1997

F-29

<PAGE>

2600 West Olive

Historical Summaries of Operating Revenue and Expenses

For the six months ended June 30, 1997 (unaudited) and the
year ended December 31, 1996

(Dollars in thousands)

Six months
ended Year ended
June 30, December 31,
1997 1996
---- ----

Operating revenue:
Rental revenue $ 1,772 3,624
Expense reimbursments 90 189
--------- --------
Total operating revenue 1,862 3,813
--------- --------

Operating expenses:
Utilities 175 394
Repair and maintenance 164 339
Management fees 57 116
Security services 51 99
Administrative and other 35 68
Insurance 13 26
--------- --------
Total operating expenses 495 1,042
--------- --------
Operating revenue in excess of
operating expenses $ 1,367 2,771
========= ========

See accompanying notes to historical summaries

of operating revenue and expenses.

F-30

<PAGE>

2600 West Olive

Notes to Historical Summaries of Operating Revenue and Expenses

Six months ended June 30, 1997 (unaudited)
and the year ended December 31, 1996

(1) Description of the Property

2600 West Olive (the Property) is located in Burbank, California, and
contains approximately 143,000 square feet of office space available for
lease. At June 30, 1997, the Property was 100% leased.

(2) Summary of Significant Accounting Policies

(a) Basis of Presentation

The accompanying historical summaries of operating revenue and
expenses are not representative of the actual operations for the
periods presented as certain revenue and expenses, which may not be
comparable to those expected to be incurred by CarrAmerica Realty,
L.P. in the proposed future operations of the Property, have been
excluded. Interest income has been excluded from revenue, and real
estate taxes, interest, depreciation and amortization, and other
costs not directly related to the future operations of the Property
have been excluded from expenses.

In accordance with current California tax law, management expects
that real estate taxes will be reassessed upon transfer of
ownership based on the purchase price of the Property. Therefore,
historical real estate tax expenses are not comparable to those
expected to be incurred by the Property's new owner. Real estate
taxes for the six months ended June 30, 1997 and the year ended
December 31, 1996 were $111,000 and $221,000 respectively. Upon
reassessment, annual real estate taxes are expected to increase by
approximately $92,000. Management is not aware of any other
material factors that would cause the historical summaries of
operating revenue and expenses to not be indicative of the future
operating results of the Property.

(b) Revenue Recognition

Revenue from rental operations is recognized straight-line over the
terms of the respective leases.

The accompanying unaudited financial information for the six months
ended June 30, 1997 has been prepared consistent with the rules and
regulations of the Securities and Exchange Commission governing the
preparation of the amounts for the year ended December 31, 1996.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to
such rules and regulations, although management believes that the
disclosures are adequate to make the information presented not
misleading. In the opinion of management, all adjustments,
consisting only of normal recurring accruals, necessary to present
fairly

(Continued)

F-31

<PAGE>

(2) Continued

the historical summaries of operating revenue and expenses for the
six months ended June 30, 1997, have been included. The results of
operations for the six-month period ended June 30, 1997 are not
necessarily indicative of the results for the full year.

(3) Rental Revenue

The Property is leased to tenants under various arrangements classified as
operating leases. The leases generally provide for base rent and
reimbursement of various expenses such as common area maintenance, real
estate taxes and insurance.

Approximately 90% of the net rentable area of the Property is leased to a
corporation which has the option to modify its lease by terminating
portions of the lease, which represent approximately 16% of the net
rentable area of the Property. The option expires in November, 1997.

Minimum future rentals (excluding modification and renewal options) on
noncancelable leases are as follows for the years ending December 31 (in
thousands):

1997 $ 2,816
1998 2,757
1999 2,809
2000 2,809
2001 2,801
6,714
--------
Thereafter
$ 20,706
========

(4) Pro Forma Taxable Operating Results and Cash Available from Operations
(Unaudited)

The unaudited pro forma table reflects the taxable operating results and
cash available from operations of 2600 West Olive for the 12 months ended
June 30, 1997, as adjusted for certain items which can be factually
supported. For purposes of presenting pro forma net taxable operating
income, revenue is recognized when it is either collectible under the
lease terms or collected. Tax depreciation for the buildings is computed
on the modified accelerated cost recovery system method over a 39-year
life based on the anticipated total purchase cost. Real estate taxes
included reflect the anticipated reassessment described in note 2(a).
This statement does not purport to forecast actual operating results for
any period in the future (dollars in thousands).

Pro forma net operating income (exclusive of
depreciation and amortization expense) $ 2,550
Less estimated depreciation and amortization expense 793
------

Pro forma taxable operating income $ 1,757
======
Pro forma cash available from operations $ 2,550
======

F-32

<PAGE>

CEDAR MAPLE PLAZA

Historical Summaries
of Operating Revenue and Expenses

Year Ended December 31, 1996

(With Independent Auditors' Report Thereon)

F-33

<PAGE>

Independent Auditors' Report

The Partners
CarrAmerica Realty, L.P.:

We have audited the accompanying historical summary of operating revenue and
expenses, as defined in note 2(a), of Cedar Maple Plaza for the year ended
December 31, 1996. This historical summary is the responsibility of the
management of Cedar Maple Plaza. Our responsibility is to express an opinion on
the historical summary based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the historical summary is free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the historical summary. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the historical summary. We believe
that our audit provides a reasonable basis for our opinion.

In our opinion, the historical summary referred to above presents fairly, in all
material respects, the operating revenue and expenses described in note 2(a)
Cedar Maple Plaza for the year ended December 31, 1996, in conformity with
generally accepted accounting principles.

KPMG Peat Marwick LLP

Washington, DC
August 1, 1997

F-34

<PAGE>

CEDAR MAPLE PLAZA

Historical Summary of Operating Revenue and Expenses

For the year ended December 31, 1996
(dollars in thousands)

Year
ended
December 31,
1996
------------
Operating revenue:
Building rental $1,771
Recovery of operating expenses 68
------

Total operating revenue 1,839
------

Operating expenses:
Maintenance 107
Utilities 216
Real estate taxes 205
Insurance 9
Management fees 72
General operating 174
Administrative 132
------

Total operating expenses 915
------

Operating revenue in excess of operating expenses $ 924
======

See accompanying notes to historical summary
of operating revenue and expenses.

F-35

<PAGE>

CEDAR MAPLE PLAZA

Notes to Historical Summary of Operating Revenue and Expenses

Year ended December 31, 1996
(dollars in thousands)

(1) Description of the Property

Cedar Maple Plaza consists of three buildings located in Dallas, Texas,
containing approximately 113,000 square feet of office space available
for lease. At March 31, 1997, the property was 90% leased.

(2) Summary of Significant Accounting Policies

(a) Basis of Presentation

The accompanying historical summary of operating revenue and
expenses are not representative of the actual operations for the
periods presented as certain revenue and expenses, which may not be
comparable to those expected to be incurred by CarrAmerica Realty,
L.P. in the proposed future operations of the property, have been
excluded. Interest income has been excluded from revenue, and
interest, depreciation and amortization, and other costs not
directly related to the future operations of Cedar Maple Plaza have
been excluded from expenses. Management is not aware of any other
material factors that would cause the historical summary of
operating revenue and expenses to not be indicative of the future
operating results of the buildings.

(b) Revenue Recognition

Revenue from rental operations is recognized straight-line over the
terms of the respective leases.

(Continued)

F-36

<PAGE>

CEDAR MAPLE PLAZA

Notes to Historical Summary of Operating Revenue and Expenses
(dollars in thousands)

(3) Pro Forma Taxable Operating Results and Cash Available from Operations
(Unaudited)

The unaudited pro forma table reflects the taxable operating results and
cash available from operations of Cedar Maple Plaza for the year ended
December 31, 1996, as adjusted for certain items which can be
factually supported. For purposes of presenting pro forma net taxable
operating income, revenue is recognized when it is either collectible
under the lease terms or collected. Tax depreciation for the buildings is
computed on the modified accelerated cost recovery system method over a
39-year life. This statement does not purport to forecast actual
operating results for any period in the future.

Pro forma net operating income (exclusive of
depreciation and amortization expense) $ 835
Less estimated depreciation and amortization expense 266
---------

Pro forma taxable operating income $ 569
=========

Pro forma cash available from operations $ 835
=========

F-37

<PAGE>

BANNOCKBURN IV

Historical Summaries
of Operating Revenue and Expenses

Three Months Ended March 31, 1997 (Unaudited)
and Year Ended December 31, 1996

(With Independent Auditors' Report Thereon)

F-38

<PAGE>

Independent Auditors' Report

The Partners
CarrAmerica Realty, L.P.:

We have audited the accompanying historical summary of operating revenue and
expenses, as defined in note 2(a), of Bannockburn IV for the year ended December
31, 1996. This historical summary is the responsibility of the management of
Bannockburn IV. Our responsibility is to express an opinion on the historical
summary based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the historical summary is free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the historical summary. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the historical summary. We believe
that our audit provides a reasonable basis for our opinion.

In our opinion, the historical summary referred to above presents fairly, in all
material respects, the operating revenue and expenses described in note 2(a) of
Bannockburn IV for the year ended December 31, 1996, in conformity with
generally accepted accounting principles.

KPMG Peat Marwick LLP

Washington, DC
July 31, 1997

F-39

<PAGE>

BANNOCKBURN IV

Historical Summaries of Operating Revenue and Expenses

For the three months ended March 31, 1997 (unaudited)
and the year ended December 31, 1996
(dollars in thousands)

Three months Year
ended ended
March 31, December 31,
1997 1996
------------ ------------
<S> <C> <C>
Operating revenue:
Building rental $ 371 $ 1,382
Recovery of operating expenses 154 539
Other -- 17
--------- ---------

Total operating revenue 525 1,938
--------- ---------

Operating expenses:
Maintenance 38 124
Utilities 25 102
Real estate taxes 27 106
Insurance 4 18
Management fees 22 68
General operating 48 103
Administrative 16 67
Food court 19 69
--------- ---------

Total operating expenses 199 657
--------- ---------

Operating revenue in excess of operating expenses $ 326 $ 1,281
========= =========
</TABLE>

See accompanying notes to historical summaries
of operating revenue and expenses.

F-40

<PAGE>

BANNOCKBURN IV

Notes to Historical Summaries of Operating Revenue and Expenses

Three months ended March 31, 1997 (unaudited)
and the year ended December 31, 1996
(dollars in thousands)

(1) Description of the Property

Bannockburn IV (the Property) is located in Bannockburn, Illinois, a
suburb of Chicago, and contains approximately 109,000 square feet of
office space available for lease. At March 31, 1997, the Property was 86%
leased.

(2) Summary of Significant Accounting Policies

(a) Basis of Presentation

The accompanying historical summaries of operating revenue and
expenses are not representative of the actual operations for the
periods presented as certain revenue and expenses, which may not be
comparable to those expected to be incurred by CarrAmerica Realty,
L.P. in the proposed future operations of the Property, have been
excluded. Interest income has been excluded from revenue, and
interest, depreciation and amortization, and other costs not
directly related to the future operations of the Property have been
excluded from expenses. Management is not aware of any other
material factors that would cause the historical summaries of
operating revenue and expenses to not be indicative of the future
operating results of the Property.

(b) Revenue Recognition

Revenue from rental operations is recognized straight-line over the
terms of the respective leases.

The accompanying unaudited financial information for the three
months ended March 31, 1997 has been prepared consistent with the
rules and regulations of the Securities and Exchange Commission
governing the preparation of the amounts for the year ended
December 31, 1996. Certain information and footnote disclosures
normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed
or omitted pursuant to such rules and regulations, although
management believes that the disclosures are adequate to make the
information presented not misleading. In the opinion of management,
all adjustments, consisting only of normal recurring accruals,
necessary to present fairly the historical summaries of operating
revenue and expenses for the three months ended March 31, 1997,
have been included. The results of operations for the three-month
period ended March 31, 1997 are not necessarily indicative of the
results for the full year.
(Continued)

F-41

<PAGE>

BANNOCKBURN IV

Notes to Historical Summaries of Operating Revenue and Expenses
(dollars in thousands)

(3) Pro Forma Taxable Operating Results and Cash Available from Operations
(Unaudited)

The unaudited pro forma table reflects the taxable operating results and
cash available from operations of Bannockburn IV for the 12 months ended
March 31, 1997, as adjusted for certain items which can be factually
supported. For purposes of presenting pro forma net taxable operating
income, revenue is recognized when it is either collectible under the
lease terms or collected. Tax depreciation for the buildings is computed
on the modified accelerated cost recovery system method over a 39-year
life. This statement does not purport to forecast actual operating
results for any period in the future.

Pro forma net operating income (exclusive of
depreciation and amortization expense) $ 1,141
Less estimated depreciation and amortization expense 455
---------

Pro forma taxable operating income $ 686
=========

Pro forma cash available from operations $ 1,141
=========

F-42

<PAGE>

TOLLHILL EAST AND WEST

Historical Summaries
of Operating Revenue and Expenses

Three Months Ended March 31, 1997 (Unaudited)
and Year Ended December 31, 1996

(With Independent Auditors' Report Thereon)

F-43

<PAGE>

Independent Auditors' Report

The Partners
CarrAmerica Realty, L.P.:

We have audited the accompanying historical summary of operating revenue and
expenses, as defined in note 2(a), of Tollhill East and West for the year ended
December 31, 1996. This historical summary is the responsibility of the
management of Tollhill East and West. Our responsibility is to express an
opinion on the historical summary based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the historical summary is free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the historical summary. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the historical summary. We believe
that our audit provides a reasonable basis for our opinion.

In our opinion, the historical summary referred to above presents fairly, in all
material respects, the operating revenue and expenses described in note 2(a) of
Tollhill East and West for the year ended December 31, 1996, in conformity with
generally accepted accounting principles.

KPMG Peat Marwick LLP

Washington, DC
May 16, 1997

F-44

<PAGE>

TOLLHILL EAST AND WEST

Historical Summaries of Operating Revenue and Expenses

For the three months ended March 31, 1997 (unaudited) and the year ended
December 31, 1996
(dollars in thousands)

Three months Year
ended ended
March 31, December 31,
1997 1996
----------- ------------

Operating revenue:
Building rental $ 768 $ 2,464
Recovery of operating expenses 18 35
Other income 8 37
----- -------

Total operating revenue 794 2,536
----- -------

Operating expenses:
Maintenance 89 238
Utilities 114 470
Real estate taxes 70 278
Insurance 8 32
Management fees 38 125
General operating 22 87
Administrative 53 210
----- -------

Total operating expenses 394 1,440
----- -------
Operating revenue in excess of
operating expenses $ 400 $ 1,096
===== =======

See accompanying notes to historical summaries
of operating revenue and expenses.

F-45

<PAGE>

TOLLHILL EAST AND WEST

Notes to Historical Summaries of Operating Revenue and Expenses

For the three months ended March 31, 1997 (unaudited) and the year ended
December 31, 1996
(dollars in thousands)

(1) Description of the Property

Tollhill East and West consists of two buildings located in Suburban
Dallas, Texas, containing approximately 238,000 square feet of office space
available for lease. At March 31, 1997, Tollhill East and West was 90% leased.

(2) Summary of Significant Accounting Policies

(a) Basis of Presentation

The accompanying historical summaries of operating revenue and expenses
are not representative of the actual operations for the periods presented as
certain revenue and expenses, which may not be comparable to those expected to
be incurred by CarrAmerica Realty Corporation in the proposed future operations
of the property, have been excluded. Interest income has been excluded from
revenue, and interest, depreciation and amortization, and other costs not
directly related to the future operations of Tollhill East and West have been
excluded from expenses. Management is not aware of any other material factors
that would cause the historical summaries of operating revenue and expenses to
not be indicative of the future operating results of the buildings.

(b) Revenue Recognition

Revenue from rental operations is recognized straight-line over the
terms of the respective leases.

The accompanying unaudited financial information for the three months
ended March 31, 1997 has been prepared consistent with the rules and regulations
of the Securities and Exchange Commission governing the preparation of the
amounts for the year ended December 31, 1996. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations, although management believes that the
disclosures are adequate to make the information presented not misleading. In
the opinion of management, all adjustments, consisting only of normal recurring
accruals, necessary to present fairly the historical summary of operating
revenue and expenses for the three months ended March 31, 1996, have been
included. The results of operations for the three-month period ended March 31,
1996 are not necessarily indicative of the results for the full year.

(3) Pro Forma Taxable Operating Results and Cash Available from Operations
(Unaudited)

F-46

<PAGE>

The unaudited pro forma table reflects the taxable operating results
and cash available from operations of Tollhill East and West for the 12 months
ended March 31, 1997, as adjusted for certain items which can be factually
supported. For purposes of presenting pro forma net taxable operating income,
revenue is recognized when it is either collectible under the lease terms or
collected. Tax depreciation for the buildings is computed on the modified
accelerated cost recovery system method over a 39-year life. This statement does
not purport to forecast actual operating results for any period in the future.

Pro forma net operating income
(exclusive of depreciation and amortization expense) $1,151
Less estimated depreciation and amortization expense 499
------

Pro forma taxable operating income $ 652
======

Pro forma cash available from operations $ 954
======

F-47

<PAGE>

DRAPER PARK NORTH

Historical Summaries
of Operating Revenue and Expenses

Three Months Ended March 31, 1997 (Unaudited)
and Year ended December 31, 1996

(With Independent Auditors' Report Thereon)

F-48

<PAGE>

Independent Auditors' Report

The Partners
CarrAmerica Realty, L.P.:

We have audited the accompanying historical summary of operating revenue and
expenses, as defined in note 2(a), of Draper Park North for the year ended
December 31, 1996. This historical summary is the responsibility of the
management of Draper Park North. Our responsibility is to express an opinion on
the historical summary based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the historical summary is free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the historical summary. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the historical summary. We believe
that our audit provides a reasonable basis for our opinion.

In our opinion, the historical summary referred to above presents fairly, in all
material respects, the operating revenue and expenses, described in note 2(a),
of Draper Park North for the year ended December 31, 1996, in conformity with
generally accepted accounting principles.

KPMG Peat Marwick LLP

Salt Lake City, Utah
March 21, 1997

F-49

<PAGE>

DRAPER PARK NORTH

Historical Summaries of Operating Revenue and Expenses

For the three months ended March 31, 1997 (unaudited)
and the year ended December 31, 1996
(dollars in thousands)

Three months Year
ended ended
March 31, December 31,
1997 1996
------------ ------------
Operating revenue:
Building rental $447 $784
Recovery of operating expenses 160 197
---- ----
Total operating revenue 607 981
---- ----
Operating expenses:
Common area maintenance 85 149
Management fees 17 30
Real estate tax, insurance and other 58 18
---- ----
Total operating expenses 160 197
---- ----
Operating revenue in excess of expenses $447 $784
==== ====

See accompanying notes to historical summaries
of operating revenue and expenses.

F-50

<PAGE>

DRAPER PARK NORTH

Notes to Historical Summaries of Operating Revenue and Expenses

Three months ended March 31, 1997 (unaudited)
and year ended December 31, 1996
(dollars in thousands)

(1) Description of the Property

Draper Park North consists of three buildings located in Draper, Utah,
containing approximately 179,000 square feet of office space available for
lease. Construction of each of the buildings was completed and operations
commenced in 1996. At December 31, 1996, Draper Park North was 93% leased.

(2) Summary of Significant Accounting Policies

(a) Basis of Presentation

The accompanying historical summary of operating revenue and expenses
is not representative of the actual operations for the year ended December 31,
1996, as certain revenue and expenses, which may not be comparable to those
expected to be incurred by CarrAmerica Realty Corporation in the proposed future
operations of the property, have been excluded. Interest income has been
excluded from revenue, and interest, depreciation and amortization, and other
costs not directly related to the future operations of Draper Park North have
been excluded from expenses. Management is not aware of any other material
factors that would cause the historical summary of operating revenue and
expenses to not be indicative of the future operating results of the buildings.

(b) Revenue Recognition

Revenue from rental operations is recognized straight-line over the
terms of the respective leases. The historical summary for the year ended
December 31, 1996 reflects revenues and expenses for the period since the
buildings' operations commenced.

(3) Pro Forma Taxable Operating Results and Cash Available from Operations
(Unaudited)

The unaudited pro forma table reflects the taxable operating results
and cash available from operations of the Draper Park North for the year ended
March 31, 1997, as adjusted for certain items which can be factually supported.
For purposes of presenting pro forma net taxable operating income, revenue is
recognized when it is either collectible under the lease terms or collected. Tax
depreciation for the buildings is computed on the modified accelerated cost
recovery system method over a 39-year life. This statement does not purport to
forecast actual operating results for any period in the future.

Pro forma net operating income (exclusive of interest,
depreciation and amortization expenses) $1,393
Less estimated depreciation and amortization expense 529
------
Pro forma taxable operating income $ 864
======
Pro forma cash available from operations $1,393
======

F-51

<PAGE>

SORENSON RESEARCH PARK

Historical Summaries of Operating Revenue and Expenses

Three Months Ended March 31, 1997 (Unaudited)
and Year Ended December 31, 1996

(With Independent Auditors' Report Thereon)

F-52

<PAGE>

Independent Auditors' Report

The Partners
CarrAmerica Realty, L.P.:

We have audited the accompanying historical summary of operating revenue and
expenses, as defined in note 2(a), of Sorenson Research Park for the year ended
December 31, 1996. This historical summary is the responsibility of the
management of Sorenson Research Park. Our responsibility is to express an
opinion on the historical summary based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the historical summary is free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the historical summary. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the historical summary. We believe
that our audit provides a reasonable basis for our opinion.

In our opinion, the historical summary referred to above presents fairly, in all
material respects, the operating revenue and expenses, described in note 2(a),
of Sorenson Research Park for the year ended December 31, 1996, in conformity
with generally accepted accounting principles.

KPMG Peat Marwick LLP

Salt Lake City, Utah
March 21, 1997

F-53

<PAGE>

SORENSON RESEARCH PARK

Historical Summaries of Operating Revenue and Expenses

For the three months ended March 31, 1997 (unaudited)
and the year ended December 31, 1996
(dollars in thousands)

Three months Year
ended ended
March 31, December 31,
1997 1996
----------- ------------

Operating revenue:
Building rental $ 470 $ 1,978
Recovery of operating expenses 34 411
------ -------
Total operating revenue 504 2,389
------ -------

Operating expenses:
Maintenance -- 92
Utilities -- 94
Real estate and other taxes 33 185
Insurance -- 13
General operating 1 27
------ -------

Total operating expenses 34 411
------ -------

Operating revenue in excess of operating expenses $ 470 $ 1,978
====== =======

See accompanying notes to historical summaries
of operating revenue and expenses.

F-54

<PAGE>

SORENSON RESEARCH PARK

Notes to Historical Summaries of Operating Revenue and Expenses

Three months ended March 31, 1997 (unaudited)
and year ended December 31, 1996
(dollars in thousands)

(1) Description of the Property

Sorenson Research Park consists of five office buildings located in
Salt Lake City, Utah. One of the five buildings is currently under construction
and is expected to be completed in 1997. The other four operating office
buildings were constructed between 1987 and 1996 and contain approximately
178,000 square feet of office space available for lease. At December 31, 1996,
each of the four operating office buildings were 100% leased under triple-net,
single tenant lease agreements. Management pays certain operating expenses on
behalf of the tenants which are fully reimbursed by the tenants.

(2) Summary of Significant Accounting Policies

(a) Basis of Presentation

The accompanying historical summary of operating revenue and expenses
is not representative of the actual operations for the year ended December 31,
1996, as certain revenue and expenses, which may not be comparable to those
expected to be incurred by CarrAmerica Realty Corporation in the proposed future
operations of the property, have been excluded. Interest income has been
excluded from revenue, and interest, depreciation and amortization, and other
costs not directly related to the future operations of Sorenson Research Park
have been excluded from expenses. Management is not aware of any other material
factors that would cause the historical summary of operating revenue and
expenses to not be indicative of the future operating results of the buildings.

(b) Revenue Recognition

Revenue from rental operations is recognized straight-line over the
terms of the respective leases.

(3) Related Party

A principal of the owner of Sorenson Research Park is also a principal
in a company that leases approximately 58,000 square feet of office space in
Sorenson Research Park. Rental revenue from this lease amounted to $733 thousand
for the year ended December 31, 1996.

(4) Management Fees

Management of Sorenson Research Park is provided by an affiliate and
management fees are not charged to Sorenson Research Park. Therefore, management
fees are not included in the accompanying historical summary.

F-55

<PAGE>

(5) Pro Forma Taxable Operating Results and Cash Available from Operations
(Unaudited)

The unaudited pro forma table reflects the taxable operating results
and cash available from operations of Sorenson Research Park for the year ended
March 31, 1997, as adjusted for certain items which can be factually supported.
For purposes of presenting pro forma net taxable operating income, revenue is
recognized when it is either collectible under the lease terms or collected. Tax
depreciation for the buildings is computed on the modified accelerated cost
recovery system method over a 39-year life. This statement does not purport to
forecast actual operating results for any period in the future.

Pro forma net operating income (exclusive of
depreciation and amortization expense) $1,830
Less estimated depreciation and amortization expense 672
------

Pro forma taxable operating income $1,158
======

Pro forma cash available from operations $1,830
======

F-56

<PAGE>

QUORUM PLACE

Historical Summary
of Operating Revenue and Expenses

For the Year Ended December 31, 1996

(With Independent Auditors' Report Thereon)

F-57

<PAGE>

Independent Auditors' Report

The Partners
CarrAmerica Realty, L.P.:

We have audited the accompanying historical summary of operating revenue and
expenses, as defined in note 2(a), of Quorum Place for the year ended December
31, 1996. This historical summary is the responsibility of the management of
Quorum Place. Our responsibility is to express an opinion on the historical
summary based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the historical summary is free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the historical summary. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the historical summary. We believe
that our audit provides a reasonable basis for our opinion.

In our opinion, the historical summary referred to above presents fairly, in all
material respects, the operating revenue and expenses described in note 2(a) of
Quorum Place for the year ended December 31, 1996, in conformity with generally
accepted accounting principles.

KPMG Peat Marwick LLP

Washington, DC
June 3, 1997

F-58

<PAGE>

QUORUM PLACE

Historical Summary of Operating Revenue and Expenses

For the year ended December 31, 1996
(dollars in thousands)

Operating revenue:

Building rental $ 2,140
Recovery of operating expenses 146
Other operating income 32
-------

Total operating revenue 2,318
-------

Operating expenses:

Maintenance 168
Utilities 327
Real estate taxes 282
Insurance 30
Management fees 65
General operating 44
Administrative 204
-------

Total operating expenses 1,120
-------

Operating revenue in excess of operating expenses $ 1,198
=======

See accompanying notes to historical summary
of operating revenue and expenses.

F-59

<PAGE>

QUORUM PLACE

Notes to Historical Summary of Operating Revenue and Expenses

For the year ended December 31, 1996
(dollars in thousands)

(1) Description of the Property

Quorum Place is a multi-tenant office building located in suburban
Dallas, Texas. The building contains approximately 177,000 square feet of office
space available for lease. At December 31, 1996, Quorum Place was 96% leased.

(2) Summary of Significant Accounting Policies

(a) Basis of Presentation

The accompanying historical summary of operating revenue and expenses
is not representative of the actual operations for 1996 as certain revenue and
expenses, which may not be comparable to those expected to be incurred by
CarrAmerica Realty Corporation in the proposed future operations of the
property, have been excluded. Interest income has been excluded from revenue,
and interest, depreciation and amortization, and other costs not directly
related to the future operations of Quorum Place have been excluded from
expenses. Management is not aware of any other material factors that would cause
the historical summary of operating revenue and expenses to not be indicative of
the future operating results of the building.

(b) Revenue Recognition

Revenue from rental operations is recognized straight-line over the
terms of the respective leases.

(3) Pro Forma Taxable Operating Results and Cash Available from Operations
(Unaudited)

The unaudited pro forma table reflects the taxable operating results
and cash available from operations of Quorum Place for the year ended December
31, 1996, as adjusted for certain items which can be factually supported. For
purposes of presenting pro forma net taxable operating income, revenue is
recognized when it is either collectible under the lease terms or collected. Tax
depreciation for the building is computed on the modified accelerated cost
recovery system method over a 39-year life. This statement does not purport to
forecast actual operating results for any period in the future.

Pro forma net operating income (exclusive of
depreciation and amortization expense) $ 1,037
Less estimated depreciation and amortization expense 366
-------

Pro forma taxable operating income $ 671
=======

Pro forma cash available from operations $ 1,010
=======

F-60

<PAGE>

BANNOCKBURN LAKE OFFICE PLAZA

Historical Summary of Operating Revenue and Expenses

For the Year Ended December 31, 1996

(With Independent Auditors' Report Thereon)

F-61

<PAGE>

Independent Auditors' Report

The Partners
CarrAmerica Realty, L.P.:

We have audited the accompanying historical summary of operating revenue and
expenses, as defined in note 2(a), of Bannockburn Lake Office Plaza for the year
ended December 31, 1996. This historical summary is the responsibility of the
management of Bannockburn Lake Office Plaza. Our responsibility is to express an
opinion on the historical summary based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the historical summary is free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the historical summary. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the historical summary. We believe
that our audit provides a reasonable basis for our opinion.

In our opinion, the historical summary referred to above presents fairly, in all
material respects, the operating revenue and expenses, described in note 2(a),
of Bannockburn Lake Office Plaza for the year ended December 31, 1996, in
conformity with generally accepted accounting principles.

KPMG Peat Marwick LLP

Washington, DC
March 19, 1997

F-62

<PAGE>

BANNOCKBURN LAKE OFFICE PLAZA

Historical Summary of Operating Revenue and Expenses

For the year ended December 31, 1996
(dollars in thousands)

Operating revenue:
Building rental $ 2,889
Recovery of operating expenses 931
-------
Total operating revenue 3,820

Operating expenses:
Maintenance 371
Utilities 189
Real estate taxes 209
Insurance 32
Management fees - related party 183
General operating 194
Administrative 196
-------
Total operating expenses 1,374
-------
Operating revenue in excess of operating expenses $ 2,446
=======

See accompanying notes to historical summary
of operating revenue and expenses.

F-63

<PAGE>

BANNOCKBURN LAKE OFFICE PLAZA

Notes to Historical Summary of Operating Revenue and Expenses

For the year ended December 31, 1996
(dollars in thousands)

(1) Description of the Property

Bannockburn Lake Office Plaza consists of two buildings located in
Northbrook, Illinois, a suburb of Chicago, containing approximately 212,000
square feet of office space available for lease. At December 31, 1996,
Bannockburn Lake Office Plaza was 97% leased.

(2) Summary of Significant Accounting Policies

(a) Basis of Presentation

The accompanying historical summary of operating revenue and expenses
is not representative of the actual operations for the year ended December 31,
1996, as certain revenue and expenses, which may not be comparable to those
expected to be incurred by CarrAmerica Realty Corporation in the proposed future
operations of the property, have been excluded. Interest income has been
excluded from revenue, and interest, depreciation and amortization, and other
costs not directly related to the future operations of Bannockburn Lake Office
Plaza have been excluded from expenses. Management is not aware of any other
material factors that would cause the historical summary of operating revenue
and expenses to not be indicative of the future operating results of the
buildings.

(b) Revenue Recognition

Revenue from rental operations is recognized straight-line over the
terms of the respective leases.

(3) Pro Forma Taxable Operating Results and Cash Available from Operations
(Unaudited)

The unaudited pro forma table reflects the taxable operating results
and cash available from operations of Bannockburn Lake Office Plaza for the year
ended December 31, 1996, as adjusted for certain items which can be factually
supported. For purposes of presenting pro forma net taxable operating income,
revenue is recognized when it is either collectible under the lease terms or
collected. Tax depreciation for the buildings is computed on the modified
accelerated cost recovery system method over a 39-year life. This statement does
not purport to forecast actual operating results for any period in the future.

Pro forma net operating income (exclusive of interest
depreciation and amortization expense) $ 1,738
Less estimated depreciation and amortization expense 615
-------

Pro forma taxable operating income $ 1,123
=======

Pro forma cash available from operations $ 1,738
=======

F-64

<PAGE>

SEARCH PLAZA AND QUORUM NORTH

Historical Summaries
of Operating Revenue and Expenses

Nine Months Ended September 30, 1996 (Unaudited)
and Year Ended December 31, 1995

(With Independent Auditors' Report Thereon)

F-65

<PAGE>

Independent Auditors' Report

The Partners
CarrAmerica Realty, L.P.:

We have audited the accompanying historical summary of operating revenue and
expenses, as defined in note 2(a), of Search Plaza and Quorum North for the year
ended December 31, 1995. This historical summary is the responsibility of the
management of Search Plaza and Quorum North. Our responsibility is to express an
opinion on the historical summary based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the historical summary is free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the historical summary. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the historical summary. We believe
that our audit provides a reasonable basis for our opinion.

In our opinion, the historical summary referred to above presents fairly, in all
material respects, the operating revenue and expenses described in note 2(a) of
Search Plaza and Quorum North for the year ended December 31, 1995, in
conformity with generally accepted accounting principles.

KPMG Peat Marwick LLP

Washington, DC
October 25, 1996

F-66

<PAGE>

SEARCH PLAZA AND QUORUM NORTH

Historical Summaries of Operating Revenue and Expenses

For the nine months ended September 30, 1996 (unaudited)
and the year ended December 31, 1995
(dollars in thousands)

Nine months Year
ended ended
September 30, December 31,
1996 1995
------------ ------------
Operating revenue:
Building rental $ 2,611 $ 3,371
Recovery of operating expenses 258 237
------- -------

Total operating revenue 2,869 3,608
------- -------

Operating expenses:
Maintenance 422 458
Utilities 339 449
Real estate taxes 253 351
Insurance 26 31
Management fees 137 173
General operating 123 159
Administrative 66 75
------- -------

Total operating expenses 1,366 1,696
------- -------

Operating revenue in excess of
operating expenses $ 1,503 $ 1,912
======= =======

See accompanying notes to historical summaries
of operating revenue and expenses.

F-67

<PAGE>

SEARCH PLAZA AND QUORUM NORTH

Notes to the Historical Summaries of Operating Revenue and Expenses

Nine months ended September 30, 1996 (unaudited)
and year ended December 31, 1995
(dollars in thousands)

(1) Description of the Property

Search Plaza is a seven-story Class A office building located in
Dallas, Texas, containing 151,985 square feet of office space available for
lease. The building was constructed in 1985. At September 30, 1996, Search Plaza
was 97% leased.

Quorum North is a five-story Class B+ office building located in
Addison, Texas, containing 116,318 square feet of office space available for
lease. The building was constructed in 1983. At September 30, 1996, Quorum North
was 75% leased.

During the nine months ended September 30, 1996 and the year ended
December 31, 1995, the buildings were under common ownership.

(2) Summary of Significant Accounting Policies

(a) Basis of Presentation

The accompanying historical summaries of operating revenue and expenses
are not representative of the actual operations for the periods presented as
certain revenue and expenses, which may not be comparable to those expected to
be incurred by CarrAmerica Realty Corporation in the future operations of the
property, have been excluded. Interest income has been excluded from revenue,
and interest, depreciation and amortization, and other costs not directly
related to the future operations of Search Plaza and Quorum North have been
excluded from expenses.

(b) Revenue Recognition

Revenue from rental operations is recognized straight-line over the
terms of the respective leases.

F-68

<PAGE>

management, all adjustments, consisting only of normal recurring accruals,
necessary to present fairly the historical summary of operating revenue and
expenses for the nine months ended September 30, 1996 have been included. The
results of operations for the nine-month period ended September 30, 1996 are not
necessarily indicative of the results for the full year.

(3) Pro Forma Taxable Operating Results and Cash Available from Operations
(Unaudited)

The unaudited pro forma table reflects the taxable operating results
and cash available from operations of Search Plaza and Quorum North for the 12
months ended September 30, 1996, as adjusted for certain items which can be
factually supported. For purposes of presenting pro forma net taxable operating
income, revenue is recognized when it is either collectible under the lease
terms or collected. Tax depreciation for the building is computed on the
modified accelerated cost recovery system method over a 39-year life. This
statement does not purport to forecast actual operating results for any period
in the future.

Pro forma net operating income (exclusive of
depreciation and amortization expense) $ 1,824
Less estimated depreciation and amortization expense 594
-------

Pro forma taxable operating income $ 1,230
=======

Pro forma cash available from operations $ 1,678
=======

F-69

<PAGE>

SOUTH COAST EXECUTIVE CENTRE

Historical Summaries
of Operating Revenue and Expenses

Nine Months Ended September 30, 1996 (Unaudited)
and Year Ended December 31, 1995

(With Independent Auditors' Report Thereon)

F-70

<PAGE>

Independent Auditors' Report

The Partners
CarrAmerica Realty, L.P.:

We have audited the accompanying historical summary of operating revenue and
expenses, as defined in note 2(a), of South Coast Executive Centre for the year
ended December 31, 1995. This historical summary is the responsibility of South
Coast Executive Centre's management. Our responsibility is to express an opinion
on the historical summary based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the historical summary is free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the historical summary. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the historical summary. We believe
that our audit provides a reasonable basis for our opinion.

In our opinion, the historical summary referred to above presents fairly, in all
material respects, the operating revenue and expenses described in note 2(a) of
South Coast Executive Centre for the year ended December 31, 1995, in conformity
with generally accepted accounting principles.

KPMG Peat Marwick LLP

Washington, D.C.
October 31, 1996

F-71

<PAGE>

SOUTH COAST EXECUTIVE CENTRE

Historical Summaries of Operating Revenue and Expenses

For the nine months ended September 30, 1996 (unaudited)
and the year ended December 31, 1995
(dollars in thousands)

Nine months Year
ended ended
September 30, December 31,
1996 1995
------------- ------------

Operating revenue - Building rental $ 2,239 $ 2,861

Operating expenses:
Cleaning 115 139
Utilities 212 300
Maintenance 168 234
General operating 155 197
Administrative 52 109
Property management fees 94 131
Insurance 30 34
Real estate taxes 109 144
------- -------

Total operating expenses 935 1,288
------- -------

Operating revenue in excess of operating expenses $ 1,304 $ 1,573
======= =======

See accompanying notes to historical summaries
of operating revenue and expenses.

F-72

<PAGE>

SOUTH COAST EXECUTIVE CENTRE

Notes to the Historical Summaries of Operating Revenue and Expenses

Nine months ended September 30, 1996 (unaudited)
and year ended December 31, 1995
(dollars in thousands)

(1) Description of the Property

South Coast Executive Centre consists of two office buildings located
in Costa Mesa, California, containing 161,778 square feet of office and retail
space available for lease. The buildings were constructed in 1987. At September
30, 1996, South Coast Executive Centre was 96% leased.

(2) Summary of Significant Accounting Policies

(a) Basis of Presentation

The accompanying historical summaries of operating revenue and expenses
are not representative of the actual operations for the periods presented as
certain revenues and expenses, which may not be comparable to those expected to
be incurred by CarrAmerica Realty Corporation in the proposed future operations
of the buildings, have been excluded. Interest income has been excluded from
revenue, and interest, depreciation and amortization, and other costs not
directly related to the future operations of South Coast Executive Centre have
been excluded from expenses.

In accordance with current California tax law, management expects that
real estate taxes will be reassessed upon transfer of ownership based on the
purchase price of the buildings. Management is not aware of any material factors
relating to South Coast Executive Centre that would cause the historical
summaries of operating revenue and expenses to not be indicative of future
operating results of the buildings.

(b) Revenue Recognition

Revenue from rental operations is recognized straight-line over the
terms of the respective leases.

F-73

<PAGE>

management, all adjustments, consisting only of normal recurring accruals,
necessary to present fairly the historical summary of operating revenue and
expenses for the nine months ended September 30, 1996, have been included. The
results of operations for the nine-month period ended September 30, 1996 are not
necessarily indicative of the results for the full year.

(3) Pro Forma Taxable Operating Results and Cash Available from Operations
(Unaudited)

The unaudited pro forma table reflects the taxable operating results
and cash available from operations of South Coast Executive Centre for the
twelve months ended September 30, 1996, as adjusted for certain items which can
be factually supported. For purposes of presenting pro forma net taxable
operating income, revenue is recognized when it is either collectible under the
lease terms or collected. Tax depreciation for the buildings is computed on the
modified accelerated cost recovery system method over a 31.5-year life. This
statement does not purport to forecast actual operating results for any period
in the future.

Pro forma net operating income (exclusive of
depreciation and amortization expense) $ 1,697
Less - estimated depreciation and amortization expense 440
-------

Pro forma taxable operating income $ 1,257
=======

Pro forma cash available from operations $ 1,697
=======

F-74

<PAGE>

THE CONSOLIDATED LITTLEFIELD REAL ESTATE PARTNERSHIPS

Historical Summaries
of Operating Revenue and Expenses

Three Months Ended March 31, 1996 (Unaudited)
and the Year Ended December 31, 1995

(With Independent Auditors' Report Thereon)

F-75

<PAGE>

Independent Auditors' Report

The Partners
CarrAmerica Realty, L.P.:

We have audited the accompanying historical summary of consolidated operating
revenue and expenses, as defined in note 1, of the consolidated Littlefield Real
Estate Partnerships ("Partnership") for the year ended December 31, 1995. This
historical summary is the responsibility of the Partnership's management. Our
responsibility is to express an opinion on the historical summary based on our
audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the historical summary is free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the historical summary. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the historical summary. We believe
that our audit provides a reasonable basis for our opinion.

In our opinion, the historical summary referred to above presents fairly, in all
material respects, the operating revenue and expenses described in note 1 of the
Consolidated Littlefield Real Estate Partnerships for the year ended December
31, 1995, in conformity with generally accepted accounting principles.

KPMG Peat Marwick LLP

Austin, Texas
July 3, 1996

F-76

<PAGE>

THE CONSOLIDATED LITTLEFIELD REAL ESTATE PARTNERSHIPS

Historical Summaries of Consolidated Operating Revenue and Expenses

For the three months ended March 31, 1996 (Unaudited) and
the year ended December 31, 1995

1996 1995
--------- --------

Operating revenue:
Building rental $2,653,296 $ 9,835,401
Recovery of operating expenses 338,534 1,208,428
Other 17,574 54,608
---------- -----------

Total operating revenue 3,009,404 11,098,437
---------- -----------

Operating expenses:
Cleaning 116,367 510,827
Utilities 415,573 1,683,301
Repairs and maintenance 223,757 949,486
General operating 183,533 434,348
Administrative 12,319 435,827
Salaries 166,536 695,243
Management Fees 159,528 540,585
Real estate taxes 332,522 1,231,872
Insurance 30,518 106,908
---------- -----------

Total operating expenses 1,640,653 6,588,397
---------- -----------

Operating revenue in excess of
operating expenses $1,368,751 $ 4,510,040
========== ===========

See accompanying notes to historical summary of consolidated
operating revenue and expenses.

F-77

<PAGE>

THE CONSOLIDATED LITTLEFIELD REAL ESTATE PARTNERSHIPS

Notes to Historical Summaries of Consolidated Operating Revenue and Expenses

For the Three Months Ended March 31, 1996 (Unaudited) and
the Year Ended December 31, 1995

(1) Summary of Significant Accounting Policies

(a) Description of the Properties

The consolidated Littlefield Real Estate Partnerships consist of ten
office properties located in Austin, Texas containing approximately 894,000
rentable square feet. At March 31, 1996, the properties' occupancy ranged from
48 to 100 percent of the properties' available building space under lease with
an average of 77 percent under lease.

(b) Basis of Presentation

The accompanying historical summaries of consolidated operating revenue
and expenses are not representative of the actual operations for the periods
presented as certain revenues and expenses, which may not be comparable to those
expected to be incurred by CarrAmerica Realty Corporation in the proposed future
operations of the building, have been excluded. Interest income has been
excluded from revenue, and interest, depreciation and amortization, and other
costs not directly related to the future operations of the Consolidated
Littlefield Real Estate Partnerships have been excluded from expenses.
Management is not aware of any material factors relating to the Consolidated
Littlefield Real Estate Partnerships that would cause the historical summaries
of consolidated operating revenue and expenses to not be indicative of future
operating results of the buildings.

Revenue from rental operations is recognized straight-line over the
terms of the respective leases.

(d) Interim Unaudited Financial Information

The accompanying unaudited financial information has been prepared
pursuant to the rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations, although
management believes that the disclosures are adequate to make the information
presented not misleading. In the opinion of management, all adjustments
consisting only of normal recurring accruals, necessary to present fairly the
historical summaries of consolidated operating revenue and expenses for the
three months ended March 31, 1996, have been included. The results of operations
for the three month period ended March 31, 1996 are not necessarily indicative
of the results for the full year.

F-78

<PAGE>

(2) Pro forma Taxable Consolidated Operating Results and Cash Available
from Operations (Unaudited)

The unaudited pro forma table reflects the taxable operating results
and cash available from operations of the consolidated Littlefield Real Estate
Partnerships for the twelve months ended March 31, 1996, as adjusted for certain
items which can be factually supported. For purposes of presenting pro forma net
taxable operating income, revenue is recognized when it is either collectible
under the lease terms or collected. Tax depreciation for the building is
computed on the modified accelerated cost recovery system method over a 39-year
life.

This statement does not purport to forecast actual operating results
for any period in the future (in thousands).

Pro forma net operating income (exclusive of
depreciation and amortization expense) $ 4,691

Less - estimated depreciation and amortization expense 2,169
-------

Pro forma taxable operating income $ 2,522
=======

Pro forma cash available from operations $ 4,691
=======

F-79

<PAGE>

HARLEQUIN PLAZA NORTH, HARLEQUIN PLAZA SOUTH,
QUEBEC COURT I AND QUEBEC COURT II

Historical Summaries
of Operating Revenue and Expenses

Three Months Ended March 31, 1996 (Unaudited)
and the Year Ended December 31, 1995

(With Independent Auditors' Report Thereon)

F-80

<PAGE>

Independent Auditors' Report

The Partners
CarrAmerica Realty, L.P.:

We have audited the accompanying combined historical summary of operating
revenue and expenses, as defined in Note 1, of Harlequin Plaza North, Harlequin
Plaza South, Quebec Court I and Quebec Court II (the Properties) for the year
ended December 31, 1995. This combined historical summary is the responsibility
of the Properties' management. Our responsibility is to express an opinion on
the combined historical summary based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the combined historical summary is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the combined historical summary. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall presentation of the combined
historical summary. We believe that our audit provides a reasonable basis for
our opinion.

The accompanying combined historical summary was prepared for the purpose of
complying with the rules and regulations of the Securities and Exchange
Commission and is not intended to be a complete presentation of the revenue and
expenses of the Properties.

In our opinion, the combined historical summary referred to above presents
fairly, in all material respects, the operating revenue and expenses described
in Note 1 of Harlequin Plaza North, Harlequin Plaza South, Quebec Court I and
Quebec Court II for the year ended December 31, 1995, in conformity with
generally accepted accounting principles.

KPMG Peat Marwick LLP

Washington, D.C.
June 19, 1996

F-81

<PAGE>

HARLEQUIN PLAZA NORTH, HARLEQUIN PLAZA SOUTH,
QUEBEC COURT I AND QUEBEC COURT II (the Properties)

Combined Historical Summaries of Operating Revenue and Expenses

For the Three Months Ended March 31, 1996 (Unaudited)
and the Year Ended December 31, 1995
(Dollars in thousands)

1996 1995
--------- ---------

Operating revenue:
Building rental $1,618 $6,170
Recovery of operating expenses 343 1,151
Other 12 32
------ ------

Total operating revenue 1,973 7,353
------ ------

Operating expenses:
Real estate taxes 285 1,218
Utilities 262 957
Repairs and maintenance 117 545
Janitorial 110 389
General operating services 69 304
Management fees 77 274
Insurance 10 37
Accounting 19 28
------ ------

Total operating expenses 949 3,752
------ ------

Operating revenue in excess of
operating expenses $1,024 $3,601
====== ======

See accompanying notes to combined historical summaries
of operating revenue and expenses.

F-82

<PAGE>

HARLEQUIN PLAZA NORTH, HARLEQUIN PLAZA SOUTH,
QUEBEC COURT I AND QUEBEC COURT II (the Properties)

Notes to Combined Historical Summaries of Operating
Revenue and Expenses

For the Three Months Ended March 31, 1996 (Unaudited)
and the Year Ended December 31, 1995
(Dollars in thousands)

(1) Summary of Significant Accounting Policies

(a) Description of the Properties

Harlequin Plaza North, Harlequin Plaza South, Quebec Court I and Quebec
Court II (the Properties) are office buildings located in Englewood, Colorado.
At March 31, 1996, occupancy percentages were as follows:

Harlequin Plaza North - 89%
Harlequin Plaza South - 98%
Quebec Court I - 100%
Quebec Court II - 100%

(b) Basis of Presentation

The accounts of the Properties have been included in the combined
historical summaries of operating revenue and expenses.

The accompanying combined historical summaries of operating revenue and
expenses are not representative of the actual operations for the periods
presented as certain revenues and expenses, which may not be comparable to those
expected to be incurred by CarrAmerica Realty Corporation in the proposed future
operations of the buildings, have been excluded. Interest income has been
excluded from revenue, and interest, depreciation and amortization, and other
costs not directly related to the future operations of the Properties have been
excluded from expenses. Management is not aware of any material factors relating
to the Properties that would cause the historical summaries of operating revenue
and expenses to not be indicative of future operating results of the Properties.

Revenue from rental operations is recognized straight-line over the
terms of the respective leases.

(d) Interim Unaudited Financial Information

F-83

<PAGE>

generally accepted accounting principles have been condensed or omitted pursuant
to such rules and regulations, although management believes that the disclosures
are adequate to make the information presented not misleading. In the opinion of
management, all adjustments consisting only of normal recurring accruals,
necessary to present fairly the historical summaries of operating revenue and
expenses for the three months ended March 31, 1996, have been included. The
results of operations for the three-month period ended March 31, 1996 are not
necessarily indicative of the results for the full year. (continued)

(2) Acquisition Transaction

CarrAmerica Realty Corporation acquired the Properties on May 24, 1996.

(3) Pro forma Taxable Operating Results and Cash Available from Operations
(Unaudited)

The unaudited pro forma table reflects the taxable operating results
and cash available from operations of the Properties for the twelve months ended
March 31, 1996, as adjusted for certain items which can be factually supported.
For purposes of presenting pro forma net taxable operating income, revenue is
recognized when it is either collectible under the lease terms or collected. Tax
depreciation for the building is computed on the modified accelerated cost
recovery system method over a 39-year life. This statement does not purport to
forecast actual operating results for any period in the future.

Pro forma net operating income (exclusive of
depreciation and amortization expense) $ 3,402
Less - estimated depreciation and amortization expense 964
-------
Pro forma taxable operating income $ 2,438
=======

Pro forma cash available from operations $ 3,402
=======

F-84

<PAGE>

THE GREYHOUND BUILDING

Historical Summaries
of Operating Revenue and Expenses

Nine Months Ended September 30, 1996 (Unaudited)
and Year Ended December 31, 1995

(With Independent Auditors' Report Thereon)

F-85

<PAGE>

Independent Auditors' Report

The Partners
CarrAmerica Realty, L.P.:

We have audited the accompanying historical summary of operating revenue and
expenses, as defined in note 2(a), of The Greyhound Building (the Building) for
the year ended December 31, 1995. This historical summary is the responsibility
of the management of The Greyhound Building. Our responsibility is to express an
opinion on the historical summary based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the historical summary is free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the historical summary. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the historical summary. We believe
that our audit provides a reasonable basis for our opinion.

In our opinion, the historical summary referred to above presents fairly, in all
material respects, the operating revenue and expenses described in note 2(a) of
The Greyhound Building for the year ended December 31, 1995, in conformity with
generally accepted accounting principles.

KPMG Peat Marwick LLP

Washington, DC
August 5, 1997

F-86

<PAGE>

THE GREYHOUND BUILDING

Historical Summaries of Operating Revenue and Expenses

For the nine months ended September 30, 1996 (unaudited)
and the year ended December 31, 1995

(Dollars in thousands)

<TABLE>
<CAPTION>
Nine months Year
ended ended
September 30, December 31,
1996 1995
---- ----
<S> <C> <C>
Operating revenue - Building rental $ 737 $ 983

Operating expenses - General and administrative 4 6
------------ -----------

Operating revenue in excess of operating expenses $ 733 $ 977
============ ===========
</TABLE>

See accompanying notes to historical summaries
of operating revenue and expenses.

F-87

<PAGE>

THE GREYHOUND BUILDING

Notes to Historical Summaries of Operating Revenue and Expenses

Nine months ended September 30, 1996 (unaudited)
and the year ended December 31, 1995

(Dollars in thousands)

(1) Description of the Property

The Greyhound Building (the Building) is located in Dallas, Texas, and
contains approximately 93,000 square feet of office space available for
lease. At September 30, 1996, the Property was 100% leased to Greyhound
Lines, Inc. under a triple-net lease.

(2) Summary of Significant Accounting Policies

(a) Basis of Presentation

The accompanying historical summaries of operating revenue and
expenses are not representative of the actual operations for the
periods presented as certain revenue and expenses, which may not be
comparable to those expected to be incurred by CarrAmerica Realty,
L.P. in the proposed future operations of the Building, have been
excluded. Interest income has been excluded from revenue, and
interest, depreciation and amortization, and other costs not
directly related to the future operations of the Building have been
excluded from expenses. Management is not aware of any other
material factors that would cause the historical summaries of
operating revenue and expenses to not be indicative of the future
operating results of the Building.

(b) Revenue Recognition

Revenue from rental operations is recognized straight-line over the
terms of the respective leases.

The accompanying unaudited financial information for the nine
months ended September 30, 1996 has been prepared consistent with
the rules and regulations of the Securities and Exchange Commission
governing the preparation of the amounts for the year ended
December 31, 1995. Certain information and disclosures normally
included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations, although management
believes that the disclosures are adequate to make the information
presented not misleading. In the opinion of management, all
adjustments, consisting only of normal recurring accruals,
necessary to present fairly the historical summary of operating
revenue and expenses for the nine months ended September 30, 1996,
have been included. The results of operations for the nine-month
period ended September 30, 1996 are not necessarily indicative of
the results for the full year.

(Continued)

F-88

<PAGE>

THE GREYHOUND BUILDING

Notes to Historical Summaries of Operating Revenue and Expenses

(Dollars in thousands)

(3) Pro Forma Taxable Operating Results and Cash Available from Operations
(Unaudited)

The unaudited pro forma table reflects the taxable operating results and
cash available from operations of the Building for the 12 months ended
September 30, 1996, as adjusted for certain items which can be factually
supported. For purposes of presenting pro forma net taxable operating
income, revenue is recognized when it is either collectible under the
lease terms or collected. Tax depreciation for the Building is computed
on the modified accelerated cost recovery system method over a 39-year
life. This statement does not purport to forecast actual operating
results for any period in the future.

Pro forma net operating income (exclusive of
depreciation and amortization expense) $ 840
Less estimated depreciation and amortization expense 206
------

Pro forma taxable operating income $ 634
======

Pro forma cash available from operations $ 840
======

F-89

<PAGE>

THE QUORUM

Historical Summaries
of Operating Revenue and Expenses

Three Months Ended March 31, 1996 (Unaudited)
and Year Ended December 31, 1995

(With Independent Auditors' Report Thereon)

F-90

<PAGE>

Independent Auditors' Report

The Partners
CarrAmerica Realty, L.P.:

We have audited the accompanying historical summary of operating revenue and
expenses, as defined in note 2(a), of The Quorum for the year ended December 31,
1995. This historical summary is the responsibility of the management of The
Quorum. Our responsibility is to express an opinion on the historical summary
based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the historical summary is free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the historical summary. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the historical summary. We believe
that our audit provides a reasonable basis for our opinion.

In our opinion, the historical summary referred to above presents fairly, in all
material respects, the operating revenue and expenses described in note 2(a) of
The Quorum for the year ended December 31, 1995, in conformity with generally
accepted accounting principles.

KPMG Peat Marwick LLP

Washington, DC
August 6, 1997

F-91

<PAGE>

THE QUORUM

Historical Summaries of Operating Revenue and Expenses

For the three months ended March 31, 1996 (unaudited)
and the year ended December 31, 1995

(Dollars in thousands)

<TABLE>
<CAPTION>
Three months Year
ended ended
March 31, December 31,
1996 1995
---- ----
<S> <C> <C>
Operating revenue:
Building rental $ 328 1,309
Recovery of operating expenses 5 25
------------ -----------

Total operating revenue 333 1,334
------------ -----------

Operating expenses:
Maintenance 59 239
Utilities 55 213
Real estate taxes 57 228
Insurance 2 9
General operating 16 62
Administrative 22 82
------------ -----------

Total operating expenses 211 833
------------ -----------

Operating revenue in excess of operating expenses $ 122 501
============ ===========
</TABLE>

See accompanying notes to historical summaries
of operating revenue and expenses.

F-92

<PAGE>

THE QUORUM

Notes to Historical Summaries of Operating Revenue and Expenses

Three months ended March 31, 1996 (unaudited)
and the year ended December 31, 1995

(Dollars in thousands)

(1) Description of the Property

The Quorum (the Property) consists of two buildings located in Englewood,
Colorado, a suburb of Denver, containing approximately 124,000 square
feet of office space available for lease. At March 31, 1996, the Property
was 79% leased.

(2) Summary of Significant Accounting Policies

(a) Basis of Presentation

The accompanying historical summaries of operating revenue and
expenses are not representative of the actual operations for the
periods presented as certain revenue and expenses, which may not be
comparable to those expected to be incurred by CarrAmerica Realty,
L.P. in the proposed future operations of the Property, have been
excluded. Interest income has been excluded from revenue, and
interest, depreciation and amortization, and other costs not
directly related to the future operations of the Property have been
excluded from expenses. Management is not aware of any other
material factors that would cause the historical summaries of
operating revenue and expenses to not be indicative of the future
operating results of the Property.

(b) Revenue Recognition

Revenue from rental operations is recognized straight-line over the
terms of the respective leases.

The accompanying unaudited financial information for the three
months ended March 31, 1996 has been prepared consistent with the
rules and regulations of the Securities and Exchange Commission
governing the preparation of the amounts for the year ended
December 31, 1995. Certain information and footnote disclosures
normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed
or omitted pursuant to such rules and regulations, although
management believes that the disclosures are adequate to make the
information presented not misleading. In the opinion of management,
all adjustments, consisting only of normal recurring accruals,
necessary to present fairly the historical summary of operating
revenue and expenses for the three months ended March 31, 1996,
have been included. The results of operations for the three-month
period ended March 31, 1996 are not necessarily indicative of the
results for the full year.

(Continued)

F-93

<PAGE>

THE QUORUM

Notes to Historical Summaries of Operating Revenue and Expenses

(Dollars in thousands)

(3) Pro Forma Taxable Operating Results and Cash Available from Operations
(Unaudited)

The unaudited pro forma table reflects the taxable operating results and
cash available from operations of The Quorum for the 12 months ended
March 31, 1996, as adjusted for certain items which can be factually
supported. For purposes of presenting pro forma net taxable operating
income, revenue is recognized when it is either collectible under the
lease terms or collected. Tax depreciation for the buildings is computed
on the modified accelerated cost recovery system method over a 39-year
life. This statement does not purport to forecast actual operating
results for any period in the future.

Pro forma net operating income (exclusive of
depreciation and amortization expense) $ 497
Less estimated depreciation and amortization expense 106
-------

Pro forma taxable operating income $ 391
=======

Pro forma cash available from operations $ 497
=======

F-94

<PAGE>

GREENWOOD CENTER

Historical Summaries
of Operating Revenue and Expenses

Three Months Ended March 31, 1996 (Unaudited)
and Year Ended December 31, 1995

(With Independent Auditors' Report Thereon)

F-95

<PAGE>

Independent Auditors' Report

The Partners
CarrAmerica Realty, L.P.:

We have audited the accompanying historical summary of operating revenue and
expenses, as defined in note 2(a), of Greenwood Center for the year ended
December 31, 1995. This historical summary is the responsibility of the
management of Greenwood Center. Our responsibility is to express an opinion on
the historical summary based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the historical summary is free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the historical summary. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the historical summary. We believe
that our audit provides a reasonable basis for our opinion.

In our opinion, the historical summary referred to above presents fairly, in all
material respects, the operating revenue and expenses described in note 2(a) of
Greenwood Center for the year ended December 31, 1995, in conformity with
generally accepted accounting principles.

KPMG Peat Marwick LLP

Washington, DC
August 6, 1997

F-96

<PAGE>

GREENWOOD CENTER

Historical Summaries of Operating Revenue and Expenses

For the three months ended March 31, 1996 (unaudited)
and the year ended December 31, 1995

(Dollars in thousands)

<TABLE>
<CAPTION>
Three months Year
ended ended
March 31, December 31,
1996 1995
---- ----
<S> <C> <C>
Operating revenue - Building rental and recovery of
operating expenses $ 282 $ 1,144
------------ -----------

Operating expenses:
Maintenance 31 122
Utilities 40 155
Real estate taxes 31 125
Insurance 3 11
General operating 14 35
Administrative 12 47
------------ -----------

Total operating expenses 131 495
------------ -----------

Operating revenue in excess of operating expenses $ 151 $ 649
============ ===========
</TABLE>

See accompanying notes to historical summaries
of operating revenue and expenses.

F-97

<PAGE>

GREENWOOD CENTER

Notes to Historical Summaries of Operating Revenue and Expenses

Three months ended March 31, 1996 (unaudited)
and the year ended December 31, 1995

(dollars in thousands)

(1) Description of the Property

Greenwood Center (the Property) is located in Englewood, Colorado, a
suburb of Denver, and contains approximately 76,000 square feet of office
space available for lease. At March 31, 1996, the Property was 97%
leased.

(2) Summary of Significant Accounting Policies

(a) Basis of Presentation

The accompanying historical summaries of operating revenue and
expenses are not representative of the actual operations for the
periods presented as certain revenue and expenses, which may not be
comparable to those expected to be incurred by CarrAmerica Realty,
L.P. in the proposed future operations of the Property, have been
excluded. Interest income has been excluded from revenue, and
interest, depreciation and amortization, and other costs not
directly related to the future operations of the Property have been
excluded from expenses. Management is not aware of any other
material factors that would cause the historical summaries of
operating revenue and expenses to not be indicative of the future
operating results of the Property.

(b) Revenue Recognition

Revenue from rental operations is recognized straight-line over the
terms of the respective leases.

The accompanying unaudited financial information for the three
months ended March 31, 1996 has been prepared consistent with the
rules and regulations of the Securities and Exchange Commission
governing the preparation of the amounts for the year ended
December 31, 1995. Certain information and footnote disclosures
normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed
or omitted pursuant to such rules and regulations, although
management believes that the disclosures are adequate to make the
information presented not misleading. In the opinion of management,
all adjustments, consisting only of normal recurring accruals,
necessary to present fairly the historical summary of operating
revenue and expenses for the three months ended March 31, 1996 have
been included. The results of operations for the three-month period
ended March 31, 1996 are not necessarily indicative of the results
for the full year.

(Continued)

F-98

<PAGE>

GREENWOOD CENTER

Historical Summaries of Operating Revenue and Expenses

(Dollars in thousands)

(3) Pro Forma Taxable Operating Results and Cash Available from Operations
(Unaudited)

The unaudited pro forma table reflects the taxable operating results and
cash available from operations of Greenwood Center for the 12 months
ended March 31, 1996, as adjusted for certain items which can be
factually supported. For purposes of presenting pro forma net taxable
operating income, revenue is recognized when it is either collectible
under the lease terms or collected. Tax depreciation for the building is
computed on the modified accelerated cost recovery system method over a
39-year life. This statement does not purport to forecast actual
operating results for any period in the future.

Pro forma net operating income (exclusive of
depreciation and amortization expense) $ 835
Less estimated depreciation and amortization expense 120
--------

Pro forma taxable operating income $ 715
========

Pro forma cash available from operations $ 835
========

F-99

<PAGE>

SIGNATURES

Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, on October
1, 1997.

CARRAMERICA REALTY, L.P.,
a Delaware limited partnership

By: CarrAmerica Realty GP Holdings, Inc.,
its general partner

By: /s/ Brian K. Fields
---------------------------
Brian K. Fields
Chief Financial Officer,
Treasurer and Vice President

<PAGE>

INDEX TO EXHIBITS

Exhibit
- - -------

4.1 Second Amended and Restated Agreement of Limited Partnership of
CarrAmerica Realty, L.P. dated as of May 9, 1997 (incorporated by
reference to Exhibit 10.1 of CarrAmerica's Quarterly Report on Form
10-Q for the quarter ended March 31, 1997).

10.1 Stockholders Agreement, dated April 30, 1996, by and among Carr
Realty Corporation, Carr Realty, L.P., Security Capital Holdings,
S.A. and Security Capital U.S. Realty (incorporated by reference to
Exhibit 2.2 of Security Capital U.S. Realty's Schedule 13D dated
April 30, 1996).

10.2 Amended and Restated Credit Agreement, dated August 23, 1996, by and
among CarrAmerica Realty Corporation, CarrAmerica Realty, L.P., Carr
Realty, L.P. and Morgan Guaranty Trust Company of New York
(incorporated by reference to Exhibit 10.15 of CarrAmerica's Annual
Report on Form 10-K for the year ended December 31, 1996).

10.3 First Amendment to Amended and Restated Revolving Credit Agreement,
dated October 18, 1996, by and among CarrAmerica Realty Corporation,
CarrAmerica Realty, L.P., Carr Realty, L.P., Morgan Guaranty Trust
Company of New York, Commerzbank Aktiengesellschaft, New York
Branch, NationsBank, N.A., Wells Fargo Realty Advisors Funding, Inc.
(incorporated by reference to Exhibit 10.1 to CarrAmerica's Current
Report on Form 8-K dated and filed October 24, 1996).

21.1 List of Subsidiaries.

27.1 Financial Data Schedule.

27.2 Financial Data Schedule.

99.1 Certificate of Incorporation of CarrAmerica Realty GP Holdings,
Inc.

99.2 Bylaws of CarrAmerica Realty GP Holdings, Inc.

99.3 Amendment and Restatement of Articles of Incorporation of
CarrAmerica Realty Corporation, as amended and as supplemented
(incorporated by reference to Exhibit 3.1 to CarrAmerica's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1997).

99.4 Second Amendment and Restatement of By-laws of CarrAmerica Realty
Corporation (incorporated by reference to Exhibit 3.1 to
CarrAmerica's Current Report on Form 8-K dated and filed February
12, 1997).

99.5 "The Company," pages S-8 through S-11, in CarrAmerica's Prospectus
Supplement (to Prospectus dated August 5, 1997) dated August 7,
1997, filed pursuant to Rule 424(b) of Regulation C under the
Securities Act, relating to CarrAmerica's Registration Statement on
Form S-3, File No. 333-22353.

<PAGE>

99.6 "Voting Securities and Principal Holders Thereof," pages 15 through
18, in CarrAmerica's Proxy Statement dated March 25, 1997, delivered
to CarrAmerica's stockholders in connection with the 1997 Annual
Meeting of Stockholders.

99.7 "Election of Directors (Proposal 1)," pages 3 through 6, in
CarrAmerica's Proxy Statement dated March 25, 1997, delivered to
CarrAmerica's stockholders in connection with the 1997 Annual
Meeting of Stockholders.

99.8 "Directors of the Company," pages 5 through 8, from CarrAmerica's
Annual Report on Form 10-K for the year ended December 31, 1996.

99.9 "Executive Officers and Certain Key Employees of the Company," pages
8 through 13, from CarrAmerica's Annual Report on Form 10-K for the
fiscal year ended December 31, 1996.

99.10 "Executive Compensation," pages 9 through 12, from CarrAmerica's
Proxy Statement dated March 25, 1997, delivered to CarrAmerica's
stockholders in connection with the 1997 Annual Meeting of
Stockholders.

99.11 "Report on Executive Compensation," pages 13 through 14, in
CarrAmerica's Proxy Statement dated March 25, 1997, delivered to
CarrAmerica's stockholders in connection with the 1997 Annual
Meeting of Stockholders.

99.12 "Executive Compensation Committee Interlocks and Insider
Participation," page 14, in CarrAmerica's Proxy Statement dated
March 25, 1997, delivered to CarrAmerica's stockholders in
connection with the 1997 Annual Meeting of Stockholders.

99.13 "Certain Relationships and Related Transactions," page 19, in
CarrAmerica's Proxy Statement dated March 25, 1997, delivered to
CarrAmerica's stockholders in connection with the 1997 Annual
Meeting of Stockholders.

LIST OF SUBSIDIARIES
NONE.

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
CARRAMERICA REALTY, L.P. BALANCE SHEET AS OF DECEMBER 31, 1996 AND FROM
CARRAMERICA REALTY, L.P. STATEMENT OF OPERATIONS FOR THE PERIOD MARCH 6,
1996 (DATE OF INCEPTION) THROUGH DECEMBER 31, 1996.

</LEGEND>
<CIK> 0001040554
<NAME> CARRAMERICA
<MULTIPLIER> 1,000
<CURRENCY> U.S. Dollars

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> MAR-6-1996<F1>
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1.000
<CASH> 2,478
<SECURITIES> 0
<RECEIVABLES> 1,888
<ALLOWANCES> 0<F2>
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 238,073
<DEPRECIATION> 3,104
<TOTAL-ASSETS> 241,217
<CURRENT-LIABILITIES> 0
<BONDS> 51,744
0
0
<COMMON> 0
<OTHER-SE> 180,933
<TOTAL-LIABILITY-AND-EQUITY> 241,217
<SALES> 0
<TOTAL-REVENUES> 13,405
<CGS> 0
<TOTAL-COSTS> 11,849
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,556
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,556
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,556
<EPS-PRIMARY> 0
<EPS-DILUTED> 0

<FN>
<F1> Date of inception.
<F2> Notes & accounts receivable are presented net of allowance for doubtful
accounts as the allowance is immaterial.
</FN>

</TABLE>

THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTACTED FROM CARRAMERICA
REALTY, L.P. BALANCE SHEET AS OF JUNE 30, 1997 AND FROM CARRAMERICA REALTY,
L.P. FOR THE SIX MONTHS ENDED JUNE 30, 1997.

</LEGEND>
<CIK> 0001040554
<NAME> CARRAMERICA
<MULTIPLIER> 1,000
<CURRENCY> U.S. Dollars

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JAN-1-1997
<PERIOD-END> JUN-30-1997
<EXCHANGE-RATE> 1
<CASH> $3,903
<SECURITIES> 0
<RECEIVABLES> 2,803
<ALLOWANCES> 0<F1>
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 438,345
<DEPRECIATION> 8,379
<TOTAL-ASSETS> 440,898
<CURRENT-LIABILITIES> 0
<BONDS> 118,288
0
0
<COMMON> 0
<OTHER-SE> 305,393
<TOTAL-LIABILITY-AND-EQUITY> 440,898
<SALES> 0
<TOTAL-REVENUES> 23,075
<CGS> 0
<TOTAL-COSTS> 18,580
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 4,495
<INCOME-TAX> 0
<INCOME-CONTINUING> 4,495
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,495
<EPS-PRIMARY> 0
<EPS-DILUTED> 0

<FN>
<F1> Notes & accounts receivable are presented net of allowance for doubtful
accounts
</FN>

</TABLE>

CERTIFICATE OF INCORPORATION

CARRAMERICA REALTY GP HOLDINGS, INC.

1. NAME

The name of this corporation is CarrAmerica Realty GP
Holdings, Inc. (the "Corporation").

2. REGISTERED OFFICE AND AGENT

The registered office of the Corporation shall be located at
Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801 in the
County of New Castle. The registered agent of the Corporation at such address
shall be The Corporation Trust Company.

3. PURPOSE AND POWERS

The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may be organized under the General
Corporation Law of the State of Delaware (the "Delaware General Corporation
Law"). The Corporation shall have all power necessary or helpful to engage in
such acts and activities.

4. CAPITAL STOCK

4.1 Authorized Shares

The aggregate number of shares of common stock (referred to in
this Certificate of Incorporation as "Common Stock") which the Corporation shall
have the authority to issue is One Thousand (1,000), with a par value of one
cent ($0.01) per share. The holders of shares of Common Stock shall be entitled
to receive, in proportion to the number of shares of Common Stock held, the net
assets of the Corporation upon dissolution.

4.2 Voting Rights

Each share of Common Stock shall have one (1) vote on each
matter submitted to a vote of the stockholders of the Corporation.

<PAGE>

5. PREEMPTIVE AND PREFERENTIAL RIGHTS

No holder of shares of any class of stock authorized or issued
pursuant hereto shall have any preemptive or preferential right of subscription
to, or purchase of, any shares of any class of stock of this Corporation, either
now or hereafter authorized, or to the obligations convertible into stock of any
class of this Corporation, other than such rights, if any, as the Board of
Directors in its discretion may from time to time determine, and at such prices
as the Board of Directors may from time to time fix pursuant to the authority
conferred by this Certificate of Incorporation.

6. INCORPORATOR; INITIAL DIRECTORS

6.1. Incorporator

The name and mailing address of the incorporator (the
"Incorporator") is E.L. Kinsler, The Corporation Trust Company, 1209 Orange
Street, Wilmington, Delaware 19801. The powers of the Incorporator shall
terminate upon the filing of this Certificate of Incorporation.

6.2. Initial Directors

The following persons, having the following mailing addresses,
shall serve as the directors of the Corporation until the first annual meeting
of the stockholders of the Corporation or until their successors are elected and
qualified:

NAME MAILING ADDRESS
---- ---------------

Thomas A. Carr 1700 Pennsylvania Avenue, N.W.
Washington, D.C. 20006

Brian K. Fields 1700 Pennsylvania Avenue, N.W.
Washington, D.C. 20006

Robert G. Stuckey 1700 Pennsylvania Avenue, N.W.
Washington, D.C. 20006

7. BOARD OF DIRECTORS

7.1. Number; Election

The number of directors of the Corporation shall be such
number as from time to time shall be fixed by, or in the manner provided in, the
Bylaws of the

<PAGE>

Corporation, so long as such number shall not be less than one (1) and not more
than fifteen (15); provided, that no change in the number of directors shall
affect the tenure of office of any director. Unless and except to the extent
that the Bylaws of the Corporation shall otherwise require, the election of
directors of the Corporation need not be by written ballot.

7.2. Limitation of Liability

The liability of the directors and officers of the Corporation
to the Corporation and its stockholders for money damages is hereby limited to
the fullest extent permitted by Section 102(b)(7) of the Delaware General
Corporation Law (or its successor), as the same may be amended from time to
time.

8. EXISTENCE

The Corporation shall have perpetual existence.

9. INDEMNIFICATION

The Corporation shall, to the fullest extent permitted by
Section 145 of the Delaware General Corporation Law (or its successor), as the
same may be amended from time to time, indemnify any and all directors and
officers of the Corporation from and against any and all of the expenses (and
shall advance expenses to the extent provided for by said section), liabilities
or other matters referred to in or covered by said section, and the
indemnification provided for herein shall not be deemed exclusive of any other
rights to which those indemnified may be entitled under any bylaw, agreement,
vote of stockholders or disinterested directors or otherwise, both as to action
in his official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director or
officer and shall inure to the benefit of the heirs, executors and
administrators of such a person.

10. BYLAWS

In furtherance and not in limitation of the powers conferred
by the Delaware General Corporation Law, the Board of Directors, except as
otherwise provided in this Certificate of Incorporation or provisions of the
Bylaws of the Corporation, is expressly authorized and empowered to adopt,
alter, amend and repeal the Bylaws of the Corporation by a vote of a majority of
the Board of Directors.

<PAGE>

11. AMENDMENT

The Corporation reserves the right to amend, alter or repeal
any provision contained in this Certificate of Incorporation upon (i) adoption
by the Board of Directors of a resolution recommending such amendment,
alteration or repeal, (ii) presentation by the Board of Directors of a
resolution at an annual or special meeting of holders of shares of Common Stock,
and (iii) approval of such resolution by the vote of the holders of a majority
of the shares of Common Stock. All rights conferred upon stockholders herein are
subject to this reservation.

IN WITNESS WHEREOF, the undersigned, being the Incorporator
hereinabove named, for the purpose of forming a corporation pursuant to the
Delaware General Corporation Law, hereby certifies that the facts hereinabove
stated are truly set forth, and accordingly executes this Certificate of
Incorporation this 24th day of June, 1996.

THE CORPORATION TRUST COMPANY
Incorporator

By: /s/ E.L. Kinsler
------------------
Name: E.L. Kinsler
Title: Incorporator

CARRAMERICA REALTY GP HOLDINGS, INC.

BYLAWS

(adopted as of June 25, 1996)
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TABLE OF CONTENTS

Page

ARTICLE 1. OFFICES............................................................1
ARTICLE 2. STOCKHOLDERS.......................................................1
Section 2.01. Annual Meeting..........................................1
Section 2.02. Special Meetings.........................................1
Section 2.03. Place of Meetings........................................1
Section 2.04. Notice of Stockholder Meetings...........................2
Section 2.05. Fixing of Record Date....................................3
Section 2.06. Quorum...................................................3
Section 2.07. Voting...................................................3
Section 2.08. Presiding Officer of Meetings............................4
Section 2.09. Secretary of Meetings....................................4
Section 2.10. Action in Lieu of Meeting................................4
Section 2.11. Proxies..................................................5
ARTICLE 3. BOARD OF DIRECTORS.................................................5
Section 3.01. Powers...................................................5
Section 3.02. Number; Election; Qualification; Term....................5
Section 3.03. Vacancies................................................5
Section 3.04. Place of Meetings........................................6
Section 3.05. Annual Meeting...........................................6
Section 3.06. Regular Meetings.........................................6
Section 3.07. Special Meetings.........................................6
Section 3.08. Notice of, and Waiver of Notice for, Special
Meetings.................................................6
Section 3.09. Organization.............................................7
Section 3.10. Quorum...................................................7
Section 3.11. Vote.....................................................7
Section 3.12. Action in Lieu of a Meeting..............................8
Section 3.13. Conference Call Meeting..................................8
Section 3.14. Removal of Director......................................8
Section 3.15. Chairman of the Board....................................8
Section 3.16. Compensation.............................................8
Section 3.17. Committees of Directors..................................8
ARTICLE 4. OFFICERS...........................................................9
Section 4.01. Positions................................................9
Section 4.02. Chairman.................................................9
Section 4.03. President................................................10
Section 4.04. Vice President...........................................10
Section 4.05. Secretary................................................10
Section 4.06. Assistant Secretary......................................10

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Section 4.07. Treasurer................................................10
Section 4.08. Assistant Treasurer......................................11
Section 4.09. Term of Office...........................................11
Section 4.10. Compensation.............................................11
Section 4.11. Fidelity Bonds...........................................11
ARTICLE 5. CAPITAL STOCK......................................................11
Section 5.01. Certificates of Stock....................................11
Section 5.02. Transfer of Stock........................................12
Section 5.03. Ownership of Stock.......................................12
Section 5.04. Lost Certificates........................................12
ARTICLE 6. MISCELLANEOUS......................................................13
Section 6.01. Corporate Seal...........................................13
Section 6.02. Fiscal Year..............................................13
Section 6.03. Insurance................................................13
Section 6.04. Inspection of Books and Records..........................13
ARTICLE 7. INDEMNIFICATION; TRANSACTIONS WITH INTERESTED
PERSONS...........................................................14
Section 7.01. Indemnification..........................................14
Section 7.02. Transactions With Interested Persons.....................14
ARTICLE 8. AMENDMENT..........................................................14

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CARRAMERICA REALTY GP HOLDINGS, INC.

BYLAWS

(adopted as of June 25, 1996)

ARTICLE 1.
OFFICES

The Corporation shall maintain a registered office in the
State of Delaware as required by law. The initial registered office of the
Corporation shall be in Wilmington, Delaware, and the initial registered agent
shall be The Corporation Trust Company. The Corporation may also have offices at
such other places, within or without the State of Delaware, as the business of
the Corporation may require.

ARTICLE 2.
STOCKHOLDERS

Section 2.01. Annual Meeting.

The annual meeting of stockholders shall be held on such date
and at such time as determined by the Board of Directors. At each annual
meeting, stockholders entitled to vote at an election of directors shall elect
the members of the Board of Directors and transact such other business as may be
properly brought before the meeting.

Section 2.02. Special Meetings.

Special meetings of stockholders for any purpose or purposes,
described in the meeting notice, may be called by the President and shall be
called by the President or the Secretary at the request in writing of a majority
of the directors or of the holders of twenty-five percent (25%) or more of the
issued and outstanding shares of Common Stock of the Corporation entitled to be
voted at the meeting. Such a request shall state the purpose or purposes of the
proposed meeting.

Section 2.03. Place of Meetings.

Meetings of stockholders shall be held at such place, within
or without the State of Delaware, as designated by the Board of Directors.

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Section 2.04. Notice of Stockholder Meetings.

(a) Required Notice. Written notice stating the place, day and
hour of any annual or special stockholder meeting shall be delivered not less
than ten (10) nor more than sixty (60) days before the date of the meeting,
either personally or by mail, by or at the direction of the President, or other
persons calling the meeting, to each stockholder of record entitled to vote at
such meeting and to any other stockholder entitled by the Delaware General
Corporation Law or the Corporation's Certificate of Incorporation to receive
notice of the meeting. Notice shall be deemed to be effective at the earlier of:
(1) when deposited in the United States mail, postage prepaid, directed to the
stockholder at his address as it appears on the record of the Corporation, (2)
on the date shown on the return receipt if sent by registered or certified mail,
return receipt requested, and the receipt is signed by or on behalf of the
addressee, (3) when received, or (4) five (5) days after deposit in the United
States mail, if mailed postpaid and correctly addressed to an address other than
that shown in the Corporation's current record of stockholders.

(b) Adjourned Meeting. If any stockholder meeting is adjourned
to a different date, time, or place, notice need not be given of the new date,
time, and place, if the new date, time, and place is announced at the meeting
before adjournment. But if the adjournment is for more than thirty (30) days or
if after the adjournment a new record date is or must be fixed for the adjourned
meeting, a notice of the adjourned meeting shall be given to each stockholder
entitled to vote at the meeting, pursuant to the requirements of Section 2.04(a)
above.

(c) Waiver of Notice. A stockholder may waive notice of the
meeting (or any notice required by the Delaware General Corporation Law, the
Corporation's Certificate of Incorporation, or these Bylaws), by a writing
signed by the stockholder entitled to the notice, which is delivered to the
Corporation (either before or after the date and time stated in the notice) for
inclusion in the minutes or filing with the corporate records.

A stockholder's attendance at a meeting:

(1) waives objection to lack of notice or
defective notice of the meeting unless the
stockholder attends a meeting for the
express purpose of objecting at the
beginning of the meeting to the transaction
of any business because the meeting is not
lawfully called or convened; and

(2) waives objection to consideration of a
particular matter at the meeting that is not
within the purpose or purposes described in
the meeting notice, unless the stockholder
objects to considering the matter when it is
presented.

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(d) Contents of Notice. The notice of each special stockholder
meeting shall include a description of the purpose or purposes for which the
meeting is called. Except as provided in this Section 2.04(d), or as provided in
the Corporation's Certificate of Incorporation, or otherwise in the Delaware
General Corporation Law, the notice of an annual stockholder meeting need not
include a description of the purpose or purposes for which the meeting is
called.

Section 2.05. Fixing of Record Date.

The President may fix, in advance, a record date not less than
ten (10) nor more than sixty (60) days before the date of any meeting of the
stockholders or any adjournment thereof. All persons who were holders of record
of shares at such time, and no others, shall be entitled to vote at such meeting
and any adjournment thereof.

Section 2.06. Quorum.

Stockholders may take action on a matter at a meeting only if
a quorum exists with respect to that matter. Except as otherwise provided by
statute or by the Corporation's Certificate of Incorporation, the holders of a
majority of the stock issued and outstanding and entitled to vote at the
meeting, and who are present in person or represented by proxy, shall constitute
a quorum at all meetings of the stockholders for the transaction of business.
Once a share is represented for any purpose at a meeting (other than solely to
object (1) to holding the meeting or transacting business at the meeting, or (2)
(if it is a special meeting) to consideration of a particular matter at the
meeting that is not within the purpose or purposes described in the meeting
notice), it is deemed present for quorum purposes for the remainder of the
meeting and for any adjournment of that meeting unless a new record date is or
must be set for the adjourned meeting. If less than a quorum is present, the
holders of a majority of the voting shares whose holders are so present or
represented may from time to time adjourn the meeting to another place, date, or
hour until a quorum is present, whereupon the meeting may be held, as adjourned,
without further notice except as required by law or by Section 2.04 hereof. At
the adjourned meeting at which a quorum shall be present or represented, any
business may be transacted that might have been transacted at the original
meeting.

Section 2.07. Voting.

When a quorum is present at a meeting of the stockholders, the
vote of the holders of a majority of the shares of Common Stock entitled to be
voted whose holders are present in person or represented by proxy shall decide
any question brought before the meeting, unless the question is one upon which,
by express provision of law or of the Corporation's Certificate of Incorporation
or of these

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Bylaws, a different vote is required. Unless otherwise provided in the Delaware
General Corporation Law or in the Corporation's Certificate of Incorporation,
each stockholder shall at a meeting of the stockholders be entitled to one (1)
vote on each matter, in person or by proxy, for each share of the Corporation's
capital stock that has voting power and that is held by such stockholder. At a
meeting of the stockholders, all questions relating to the qualifications of
voters, the validity of proxies, and the acceptance or rejection of votes shall
be decided by the presiding officer of the meeting.

Section 2.08. Presiding Officer of Meetings.

The President shall preside at all meetings of the
stockholders. In the absence of the President, the presiding officer shall be
such person as is designated by the President or, absent such designation, such
person as is elected by vote of the holders of a majority of the shares of
Common Stock entitled to vote at such meeting whose holders are present in
person or represented by proxy at the meeting.

Section 2.09. Secretary of Meetings.

The Secretary of the Corporation shall act as secretary of all
meetings of the stockholders. In the absence of the Secretary, the presiding
officer of the meeting shall appoint any other person to act as secretary of the
meeting.

Section 2.10. Action in Lieu of Meeting.

Any action required or permitted to be taken at a
stockholders' meeting may be taken without a meeting if the action is taken by
persons who would be entitled to vote at a meeting and who hold shares having
voting power to cast not less than the minimum number of votes that would be
necessary to authorize or take the action at a meeting at which all stockholders
entitled to vote were present and voted. The action must be evidenced by one (1)
or more written consents describing the action taken, signed by the stockholders
entitled to take action without a meeting, and delivered to the Corporation for
inclusion in the minute book. No consent shall be effective to take the
corporate action specified unless the number of consents required to take such
action are delivered to the Corporation within sixty (60) days of the delivery
of the earliest-dated consent. All stockholders entitled to vote on the record
date of such written consent who do not participate in taking the action shall
be given prompt written notice thereof in accordance with the Delaware General
Corporation Law.

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Section 2.11. Proxies.

At all meetings of stockholders, a stockholder may vote in
person, or vote by proxy which is executed in writing by the stockholder or
which is executed by his duly authorized attorney-in-fact. Such proxy shall be
filed with the Secretary of the Corporation or other persons authorized to
tabulate votes before or at the time of the meeting. No proxy shall be valid
after three (3) years from the date of its execution unless the proxy provides
for a longer period.

ARTICLE 3.
BOARD OF DIRECTORS

Section 3.01. Powers.

The business of the Corporation shall be managed by or under
the direction of the Board of Directors, which may exercise all such powers of
the Corporation and do all such lawful acts and things, subject to any
limitation set forth in the Corporation's Certificate of Incorporation, these
Bylaws or agreements among stockholders which are otherwise lawful.

Section 3.02. Number; Election; Qualification; Term.

(a) The number of directors which shall constitute the whole
board shall not be fewer than one (1) nor more than fifteen (15). The first
board shall consist of three (3) members. Thereafter, within the limits above
specified, the number of directors shall be determined by resolution of the
Board of Directors.

(b) The Board of Directors shall nominate candidates to stand
for election as directors; and other candidates also may be nominated by any
Corporation stockholder entitled to vote at an election of directors, provided
such other nomination(s) are submitted in writing to the Secretary of the
Corporation no later than ninety (90) days prior to the meeting of stockholders
at which such directors are to be elected, together with the identity of the
nominator and the number of shares of the Corporation's stock owned, directly or
indirectly, by the nominator. The directors shall be elected at the annual
meeting of the stockholders, except as provided in Section 3.03 hereof, and each
director elected shall hold office until such director's successor is elected
and qualified or until the director's earlier resignation or removal. Directors
need not be stockholders.

Section 3.03. Vacancies.

Vacancies and newly created directorships resulting from any
increase in the authorized number of directors may be filled by the stockholders
entitled to vote at an election of directors or by a majority of the directors
then in office,

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although fewer than a quorum, or by a sole remaining director. Each director so
chosen shall hold office until the next election of directors, and until such
director's successor is elected and qualified, or until the director's earlier
resignation or removal. In the event that one (1) or more directors resigns from
the board, effective at a future date, a majority of the directors then in
office, including those who have so resigned, shall have power to fill such
vacancy or vacancies, the vote thereon to take effect when such resignation or
resignations shall become effective, and each director so chosen shall hold
office until the next election of directors, and until such director's successor
is elected and qualified, or until the director's earlier resignation or
removal.

Section 3.04. Place of Meetings.

Any meeting of the Board of Directors may be held either
within or without the State of Delaware.

Section 3.05. Annual Meeting.

There shall be an annual meeting of the Board of Directors for
the transaction of such business as may be brought before the meeting. The
annual meeting of the Board shall be held immediately following the annual
meeting of the stockholders or any adjournment thereof, at the place where the
annual meeting of the stockholders was held or at such other place as a majority
of the directors who are then present determine. If the annual meeting is not so
held, it shall be called and held in the manner provided herein for special
meetings of the Board or conducted pursuant to Section 3.12.

Section 3.06. Regular Meetings.

Regular meetings of the Board of Directors, other than the
annual meeting, may be held without notice at such times and places as the Board
may have fixed by resolution.

Section 3.07. Special Meetings.

Special meetings of the Board of Directors may be called by
the Chairman of the Board or the President and shall be called on the written
request of any director.

Section 3.08. Notice of, and Waiver of Notice for, Special Meetings.

Unless the Corporation's Certificate of Incorporation provides
for a longer or shorter period, notice of any special director meeting shall be
given at least three (3) days prior thereto either orally or in writing. The
notice need not

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describe the purpose of any special director meeting. If mailed, notice of any
director meeting shall be deemed to be effective at the earlier of: (i) when
received, (ii) five (5) days after deposited in the United States mail, postage
prepaid, addressed to the director's business office, or (iii) the date shown on
the return receipt if sent by registered or certified mail, return receipt
requested, and the receipt is signed by or on behalf of the director. Any
director may waive notice of any meeting. Except as provided in the next
sentence, the waiver must be in writing, signed by the director entitled to the
notice, and filed with the minutes or corporate records. The attendance of a
director at a meeting shall constitute a waiver of notice of such meeting,
except where a director attends a meeting for the express purpose of objecting
to the transaction of any business and at the beginning of the meeting (or
promptly upon his arrival) objects to holding the meeting or transacting
business at the meeting, and does not thereafter vote for or assent to action
taken at the meeting.

Section 3.09. Organization.

Every meeting of the Board of Directors shall be presided over
by the Chairman of the Board or in his absence by the President. In the absence
of the Chairman of the Board and the President, a presiding officer shall be
chosen by a majority of the directors present. The Secretary of the Corporation
shall act as secretary of the meeting. In the absence of the Secretary, the
presiding officer shall appoint another person to act as secretary of the
meeting.

Section 3.10. Quorum.

The presence of a majority or more of the number of directors
fixed by Section 3.02(a) shall be necessary to constitute a quorum for the
transaction of business at a meeting of the Board of Directors. If less than a
quorum is present, a majority of the directors present may from time to time
adjourn the meeting to another time or place until a quorum is present,
whereupon the meeting may be held, as adjourned, without further notice.

Section 3.11. Vote.

The act of a majority of the directors present at any meeting
at which there is a quorum shall be the act of the Board of Directors, except as
may be otherwise specifically provided by law, by the Corporation's Certificate
of Incorporation, or by these Bylaws. Where a vote of the directors present
results in a tie, the action proposed shall not constitute an act of the Board
of Directors.

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Section 3.12. Action in Lieu of a Meeting.

Any action required or permitted to be taken at any meeting of
the Board of Directors or of any committee thereof may be taken without a
meeting, if all directors consent thereto in writing, and the writing or
writings are filed with the minutes of the proceedings of the Board or
committee.

Section 3.13. Conference Call Meeting.

Members of the Board of Directors or of any committee thereof
may participate in a meeting of the Board or committee, as the case may be, by
means of conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other, and such
participation in a meeting shall constitute presence in person at the meeting.

Section 3.14. Removal of Director.

Subject to any agreement among the stockholders to the
contrary, any director or the entire Board of Directors may be removed by the
holders of a majority of shares of Common Stock then entitled to vote at an
election of directors but only if cause exists for the removal. For purposes of
this Section 3.14, "cause" shall mean the willful and continuous failure of a
director to substantially perform such director's duties to the Corporation
(other than any such failure resulting from temporary incapacity due to physical
or mental illness) or the willful engaging by a director in gross misconduct
materially and demonstrably injurious to the Corporation.

Section 3.15. Chairman of the Board.

The Board of Directors may choose a Chairman of the Board who
shall, if present, preside at meetings of the Board and of the stockholders. The
Chairman of the Board may be an officer of the Corporation elected pursuant to
Article 4.

Section 3.16. Compensation.

Unless otherwise provided in the Corporation's Certificate of
Incorporation, no director shall receive compensation for services to the
Corporation in his capacity as a director. Officers of the Corporation or of any
stockholder of the Corporation will not be paid director fees.

Section 3.17. Committees of Directors.

The Board of Directors may by resolution create one (1) or
more committees and appoint members of the Board of Directors to serve on the

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committees at the pleasure of the Board of Directors. To the extent specified in
a resolution adopted by the Board of Directors, each committee may exercise the
full authority of the Board of Directors, except as limited by Section 141 (or
any successor section) of the Delaware General Corporation Law. All provisions
of the Delaware General Corporation Law and these Bylaws relating to meetings,
action without meetings, notice (and waiver thereof), and quorum and voting
requirements of the Board of Directors apply, as well, to such committees and
their members.

ARTICLE 4.
OFFICERS

Section 4.01. Positions.

The officers of the Corporation shall be a Chairman, a
President, a Secretary and a Treasurer, and such other officers as the Board of
Directors (or an officer authorized by the Board of Directors) from time to time
may appoint, including one (1) or more Vice Chairmen, Vice Presidents, Assistant
Secretaries and Assistant Treasurers. Each such officer shall exercise such
powers and perform such duties as shall be set forth below and such other powers
and duties as from time to time may be specified by the Board of Directors or by
any officer(s) authorized by the Board of Directors to prescribe the duties of
such other officers. Any number of offices may be held by the same person,
except that in no event shall the President and the Secretary be the same
person. Each of the Chairman, President, and/or any Vice President may execute
bonds, mortgages and other documents under the seal of the Corporation, except
where required or permitted by law to be otherwise executed and except where the
execution thereof shall be expressly delegated by the Board of Directors to some
other officer or agent of the Corporation.

Section 4.02. Chairman.

The Chairman shall be the chief executive officer of the
Corporation, shall have overall responsibility and authority for management of
the operations of the Corporation (subject to the authority of the Board of
Directors), shall (when present) preside at all meetings of the Board of
Directors and stockholders, and shall ensure that all orders and resolutions of
the Board of Directors and stockholders are carried into effect. The Chairman
may execute bonds, mortgages and other contracts, under the seal of the
Corporation, if required, except where required or permitted by law to be
otherwise signed and executed and except where the signing and execution thereof
shall be expressly delegated by the Board of Directors to some other officer or
agent of the Corporation.

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Section 4.03. President.

The President shall be the chief operating officer of the
Corporation and shall have full responsibility and authority for management of
the day-to-day operations of the Corporation, subject to the authority of the
Board of Directors and Chairman. The President may execute bonds, mortgages and
other contracts, under the seal of the Corporation, if required, except where
required or permitted by law to be otherwise signed and executed and except
where the signing and execution thereof shall be expressly delegated by the
Board of Directors to some other officer or agent of the Corporation.

Section 4.04. Vice President.

In the absence of the President, or in the event of the
President's inability or refusal to act, the Vice President or if there shall be
more than one (1), the Vice Presidents in the order determined by the Board of
Directors (or if there shall have been no such determination, then in the order
of their election) shall perform the duties of the President, and when so acting
shall have all the powers of, and be subject to all the restrictions upon, the
President. Each Vice President shall perform such other duties as may be
determined from time to time by the Board of Directors or the President.

Section 4.05. Secretary.

The Secretary shall have responsibility for preparation of
minutes of meetings of the Board of Directors and of the stockholders and for
authenticating records of the Corporation. The Secretary shall give, or cause to
be given, notice of all meetings of the stockholders and special meetings of the
Board of Directors. The Secretary or an Assistant Secretary may also attest all
instruments signed by any other officer of the Corporation.

Section 4.06. Assistant Secretary.

The Assistant Secretary, or, if there shall be more than one
(1), the Assistant Secretaries in the order determined by the Board of Directors
(or if there shall have been no such determination, then in the order of their
election), shall, in the absence of the Secretary or in the event of the
Secretary's inability or refusal to act, perform the duties and exercise the
powers of the Secretary.

Section 4.07. Treasurer.

The Treasurer shall be the chief financial officer of the
Corporation and shall have responsibility for the custody of the corporate funds
and securities and shall see to it that full and accurate accounts of receipts
and disbursements are

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kept in books belonging to the Corporation. The Treasurer shall render to the
Chairman, the President, and the Board of Directors, upon request, an account of
all financial transactions and of the financial condition of the Corporation.

Section 4.08. Assistant Treasurer.

The Assistant Treasurer, or if there shall be more than one
(1), the Assistant Treasurers in the order determined by the Board of Directors
(or if there shall have been no such determination, then in the order of their
election), shall, in the absence of the Treasurer or in the event of the
Treasurer's inability or refusal to act, perform the duties and exercise the
powers of the Treasurer.

Section 4.09. Term of Office.

The officers of the Corporation shall hold office until their
successors are chosen and qualify or until their earlier resignation or removal.
Any officer may resign at any time upon written notice to the Corporation. Any
officer elected or appointed by the Board of Directors may be removed at any
time, with or without cause, by the affirmative vote of a majority of the Board
of Directors.

Section 4.10. Compensation.

The compensation of officers of the Corporation shall be fixed
by the Board of Directors or by any officer(s) authorized by the Board of
Directors to prescribe the compensation of such other officers.

Section 4.11. Fidelity Bonds.

The Corporation may secure the fidelity of any or all of its
officers or agents by bond or otherwise.

ARTICLE 5.
CAPITAL STOCK

Section 5.01. Certificates of Stock.

Certificates for shares of capital stock of the Corporation
shall be in such form as the Board of Directors may from time to time prescribe
and shall be signed by the President or a Vice President and by the Secretary or
the Treasurer. Any or each of the signatures on a stock certificate, including
that of any transfer agent or registrar, may be a facsimile. If any officer,
transfer agent, or registrar who has signed or whose facsimile signature has
been placed upon a certificate has ceased to be such officer, transfer agent, or
registrar before the certificate is issued,

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the certificate may be issued by the Corporation with the same effect as if the
officer, transfer agent, or registrar were the officer, transfer agent, or
registrar at the date of issuance.

Section 5.02. Transfer of Stock.

Subject to restrictions provided in the Corporation's
Certificate of Incorporation and any agreement among the stockholders, shares of
stock of the Corporation shall be transferable on the books of the Corporation
only by the holder of record thereof, in person or by duly authorized attorney,
upon surrender and cancellation of a certificate or certificates for a like
number of shares, with an assignment or power of transfer endorsed thereon or
delivered therewith, duly executed, and with such proof of the authenticity of
the signature and of authority to transfer, and of payment of transfer taxes, as
the Corporation or its agents may require.

Section 5.03. Ownership of Stock.

The Corporation shall be entitled to treat the holder of
record of any share or shares of stock as the owner thereof in fact and shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of any other person, whether or not it has express
or other notice thereof, except as otherwise expressly provided by law.

Section 5.04. Lost Certificates.

The Board of Directors, Chairman, President or Secretary may
direct a new certificate of stock to be issued in place of any certificate
theretofore issued by the Corporation and alleged to have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
that the certificate of stock has been lost, stolen or destroyed. When
authorizing such issuance of a new certificate, the board or any such officer
may, as a condition precedent to the issuance thereof, require the owner of such
lost, stolen or destroyed certificate or certificates, or such owner's legal
representative, to advertise the same in such manner as the board or such
officer shall require and/or to give the Corporation a bond, in such sum as the
board or such officer may direct, as indemnity against any claim that may be
made against the Corporation on account of the certificate alleged to have been
lost, stolen or destroyed or on account of the issuance of such new certificate
or uncertificated shares.

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ARTICLE 6.
MISCELLANEOUS

Section 6.01. Corporate Seal.

The seal of the Corporation shall be circular in form and
shall contain the name of the Corporation, the year of incorporation, and the
word "Delaware."

Section 6.02. Fiscal Year.

The fiscal year of the Corporation shall be the calendar year.

Section 6.03. Insurance.

The Corporation may purchase and maintain insurance on behalf
of any person who is or was a director, officer, employee or agent of the
Corporation (or is or was serving at the request of the Corporation as a
director, officer, partner, trustee, employee or agent of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise)
against liability asserted against or incurred by such person in such capacity
or arising from such person's status as such (whether or not the Corporation
would have the power to indemnify such person against the same liability).

Section 6.04. Inspection of Books and Records.

Any stockholder, in person or by attorney or other agent,
shall, upon written demand under oath stating the purpose thereof, have the
right during the usual hours for business to inspect for any proper purpose the
Corporation's stock ledger, a list of its stockholders, and its other books and
records, and to make copies or extracts therefrom. A proper purpose shall mean a
purpose reasonably related to such person's interest as a stockholder. In every
instance where an attorney or other agent shall be the person who seeks the
right to inspection, the demand under oath shall be accompanied by a power of
attorney or such other writing which authorizes the attorney or other agent to
so act on behalf of the stockholder. The demand under oath shall be directed to
the Corporation at its registered office or at its principal place of business.

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ARTICLE 7.
INDEMNIFICATION; TRANSACTIONS
WITH INTERESTED PERSONS

Section 7.01. Indemnification.

The Corporation shall, to the fullest extent permitted by
Section 145 of the Delaware General Corporation Law, as the same may be amended
and supplemented (the "DGCL"), indemnify any and all directors and officers of
the Corporation from and against any and all of the expenses (and shall advance
expenses to the extent provided for by Section 145(e) of the DGCL), liabilities
or other matters referred to in or covered by said section, and the
indemnification provided for herein shall not be deemed exclusive of any other
rights to which those indemnified may be entitled under the Corporation's
Certificate of Incorporation or any agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office, and shall
continue as to a person who has ceased to be a director or officer and shall
inure to the benefit of the heirs, executors and administrators of such a
person.

Section 7.02. Transactions With Interested Persons.

No contract or transaction between the Corporation and any of
its directors or officers, or between the Corporation and any other corporation,
partnership, association, or other organization in which any of its directors or
officers is a director or officer or has a financial interest, shall be void or
voidable solely for that reason, or solely because the director or officer is
present at or participates in the meeting of the Board of Directors or a
committee thereof at which the contract or transaction is authorized or solely
because his vote is counted for such purpose, if the contract or transaction is
fair and reasonable as to the Corporation as of the time it is authorized,
approved, or ratified by the Board of Directors, a committee thereof, or the
stockholders.

ARTICLE 8.
AMENDMENT

Except as otherwise provided in the Corporation's Certificate
of Incorporation or provisions of these Bylaws, these Bylaws may be adopted,
altered, amended or repealed by the Board of Directors or by a majority vote of
holders of shares of Common Stock then entitled to vote.

* * * * *

<PAGE>

The undersigned, being the Secretary of CarrAmerica Realty GP
Holdings, Inc. hereby certifies the foregoing to be the Bylaws of the
Corporation adopted by the Board of Directors of the Corporation as of the
25th day of June, 1996.

/s/ Andrea F. Bradley
--------------------
Andrea F. Bradley
Secretary

THE COMPANY

The Company is a publicly traded REIT that focuses primarily on the
acquisition, development, ownership and operation of office properties in select
suburban markets across the United States. As of July 31, 1997, the Company
owned interests in 216 operating properties containing approximately 16.8
million square feet of office space located in 13 markets, nine properties under
construction that it intends to own and operate that will contain approximately
1.2 million square feet of office space, and land and options to acquire land
that will support the development of up to 5.6 million square feet of office
space. The operating properties owned by the Company as of June 30, 1997 were
96.1% leased as of that date.

The Company has maintained a strategic alliance with SC-USREALTY since
November 1995. As of June 30, 1997, SC-USREALTY owned approximately 42.6% of the
outstanding Common Stock of the Company (38.3% on a fully diluted basis). The
Company is the exclusive strategic investment of SC-USREALTY in the commercial
office property business in the United States.

The Company and its predecessor, OCCO, have been in the real estate
business in the Washington, D.C. metropolitan area for more than 35 years. In
late 1995, the Company shifted its focus from downtown Washington, D.C. to a
national business strategy. The Company provides a full range of real estate
services through a staff of over 700 employees located throughout the United
States.

The Company is a Maryland corporation that was formed in July 1992. The
principal executive offices of the Company are located at 1700 Pennsylvania
Avenue, N.W., Washington, D.C. 20006, and its telephone number is (202)
624-7500.

BUSINESS STRATEGY

The Company's primary business objective is to achieve long-term
sustainable per share cash flow growth through a strategy of (i) acquiring,
developing, owning and operating office properties primarily in suburban markets
throughout the United States that exhibit strong, long-term growth
characteristics and (ii) developing a national operating system that satisfies
and capitalizes on the financial and operational demands of corporate office
space users. The Company believes that many growth-oriented companies are
relocating to and expanding in suburban locations that offer lower operating
costs, greater convenience and a higher quality of life than traditional central
business districts. The Company seeks to provide suburban office space that will
meet the changing needs of these corporate users of office space.

Target Markets. The Company has focused its acquisition and development
activity in the Pacific, Mountain, Central and Southeast regions of the United
States, regions which generally possess strong growth characteristics. Within
these regions, the Company is targeting specific submarkets in which operating
costs for businesses are relatively low, long-term population and job growth
generally are expected to exceed the national average, large, well-educated
employment pools exist, and barriers to entry exist for new supplies of office
space. The Company has established a local presence in each of its existing
target markets through its investment activity and through the relationships
established by its experienced market officers. The Company's target markets
include the following: Northern California; metropolitan Washington, D.C.;
suburban Atlanta; Southern California; Southeast Denver; Austin, Texas; suburban
Chicago; suburban Seattle; suburban Phoenix; suburban Dallas; suburban Portland,
Oregon; suburban Salt Lake City; and Florida.

For each identified target market, the Company has established a set of
general guidelines and physical characteristics to evaluate investment
opportunities. All investment decisions are driven by real estate research,
focusing on variables such as economic base analysis, job growth and supply and
demand fundamentals. The Company's goal is to become one of the major owners and
operators of office space in each of its selected target markets. By achieving
such critical mass, the Company believes that it will be able to better serve
its customers' needs and realize certain operating efficiencies.

Acquisitions of Operating Properties. The Company has implemented a major
initiative to acquire operating properties in order to establish the operating
platform for its national business strategy. Between January 1, 1996 and July
31, 1997, the Company acquired 203 operating properties

1
<PAGE>

containing approximately 13.5 million square feet of office space, resulting in
a more than 400% increase in the total square footage of operating properties in
which the Company has a majority interest. These properties were acquired for an
aggregate purchase price of approximately $1.5 billion. See "Recent
Developments--Recent Acquisitions and Development Activity."

Development Program. The Company's development program is becoming an
increasingly important component of its growth strategy as a result of the
influx of capital into the office property market. The Company believes that
long-term investment returns resulting from developing office properties
generally will exceed those from acquiring office properties, and without the
Company assuming significantly increased investment risks. The Company minimizes
its development risk by employing extensively trained and experienced
development personnel, by not assuming significant entitlement risk in
conjunction with land acquisitions and by entering into guaranteed maximum price
(GMP) construction contracts with seasoned and credible contractors. Most
importantly, the Company carefully analyzes the supply and demand
characteristics of its target markets before commencing inventory development in
a given market. In general, the Company will only undertake inventory
development (which excludes properties under construction that have been
substantially pre-leased) in markets with strong real estate fundamentals, and
then the Company will construct prototypical office buildings attractive to a
wide range of office users. Furthermore, because the Company's inventory
development projects will typically be between 125,000 and 150,000 square feet
in size, these projects individually are not significant to the Company. The
Company does not intend to have concentrations of inventory development
exceeding 250,000 rentable square feet in any of its target markets at any given
time. Although the Company has no pre-set leasing guidelines for inventory
development, on average, the Company expects that its development projects, in
the aggregate, at any time will be between 60% and 75% leased or committed. The
Company's research-driven development program enables it to tailor its
development activities in each target market, from inventory development to
build-to-suit projects to holding raw land for future opportunities.

To implement its national development program, the Company acquired a
substantial economic interest in CarrAmerica Development & Construction, Inc.
and its experienced development staff in May 1996 and has since employed
additional development professionals in the Company's market offices where
development is taking place. The Company's development team currently consists
of approximately 40 persons who have an average of over 15 years of experience
in developing office properties across the United States. Since January 1, 1997,
the Company placed in service one development property containing approximately
101,000 rentable square feet. In addition, as of July 31, 1997, the Company had
nine office properties under construction (with an estimated development cost of
$159 million) that it intends to own and operate. The nine properties will
contain approximately 1.2 million rentable square feet. As of July 31, 1997,
these nine properties were 69% pre-leased. See "Recent Developments--Recent
Acquisitions and Development Activity."

Investments in Land for Future Development. Owning a sufficient inventory
of land for future development is critical to the Company's development program;
therefore, the Company will continue to invest in land for future development.
The Company's goal is to allocate approximately 5% of its invested capital to
investments in land. In addition to its portfolio of operating properties and
projects currently under development, the Company owned or controlled, as of
July 31, 1997, 256 acres of land for future development in twelve of its target
markets. The Company also had, as of July 31, 1997, entered into binding
agreements (subject to certain conditions) and non-binding letters of intent to
acquire an additional 97 acres of land for future development in five of its
target markets. No assurance can be given that any of these potential land
acquisitions will be consummated. The Company believes that acquiring land to
support future development provides it with a competitive advantage in
responding to customers' needs for office space in markets with low vacancy
rates.

Asset Optimization. As a component of the Company's business strategy, it
may sell assets that are inconsistent with its long-term strategic or return
objectives or where market conditions for sale are favorable, and redeploy the
proceeds into other office properties (utilizing tax-deferred exchanges where
possible). Consistent with this strategy, the Company recently sold its 2%
interest in the limited partnership that owned 1575 Eye Street, Washington, D.C.
and its 5% interest in the limited partnership

2
<PAGE>

that owns 1776 Eye Street, Washington, D.C. The Company also may consider
selling additional properties or interests in properties, some of which may be
significant.

National Operating System. As part of its business strategy, the Company
is implementing a national operating system to provide nationally coordinated
customer service, marketing and development. The Company's national operating
system consists of three components: (i) a Market Officer Group, currently
consisting of ten market officers focused on developing and maintaining strong
local relationships with the Company's customers and the brokerage community and
identifying investment opportunities for the Company; (ii) a National Marketing
Group, which, is dedicated to marketing the Company's products and services to a
targeted list of major corporate users of office space; and (iii) a National
Development Group, which is responsible for developing suburban office
properties, build-to-suit facilities and business parks. The Company's national
operating system is designed to satisfy and capitalize on the financial and
operational demands of corporate office space users. The Company believes that
through its existing portfolio of operating properties, property development
opportunities and land acquired for future development, the Company can generate
incremental demand through the relocation and expansion needs of many of its
customers, both within a target market and in multiple target markets.

FINANCING STRATEGY

In order to meet its capital requirements at a reasonable cost, the Company
will require access to diverse sources of capital, including the common and
preferred stock markets, the private market for operating partnership units, and
the public and private debt markets. In order to ensure access to these capital
sources, the Company's financial strategy is predicated on conservative
financial policies.

Common Stock, including operating partnership units that may be exchanged
for shares of Common Stock, is and will continue to be the largest component of
the Company's capital structure. Since January 1996, the Company has raised more
than $1.0 billion from the sale of shares of Common Stock (including
SC-USREALTY's initial $250 million investment in the Company) and $35.6 million
from the issuance of operating partnership units. Of the total Common Stock sold
since SC-USREALTY's initial investment in the Company, SC-USREALTY has purchased
$232 million, or 30.0%. The Company currently expects that SC-USREALTY will
continue to participate in future Common Stock offerings, although it is not
obligated to do so.

To date, preferred stock has been only a small component of the Company's
capital structure. As of July 31, 1997, the Company had approximately 1.7
million shares of Series A Cumulative Convertible Redeemable Preferred Stock
outstanding. The Company plans to increase its preferred stock capitalization
through the Offering and through future offerings; however, the Company
currently does not expect that its preferred stock capitalization will exceed
20% of its total equity capitalization.

Debt from the public and private debt markets is also a key component of
the Company's capital structure. In June 1997, the Company sold to institutional
investors unsecured notes for net proceeds of approximately $272 million. In
formulating its debt capitalization strategy, the Company considers a number of
factors, including the benefits of Company-based financings versus
asset-specific financings, floating rate debt exposure, debt maturity
management, coverage ratios and total debt outstanding as compared to asset
values. Although the Company may from time to time assume mortgage debt in
connection with property acquisitions, the Company, in accordance with its debt
capitalization strategy, plans to primarily utilize Company-based financings in
the form of long-term, unsecured, fixed rate bonds, rather than asset-specific
mortgage financings. The maturities of bonds issued will be staggered in order
to produce normalized maturities and therefore mitigate refinancing risk. For
short-term debt capitalization, the Company will continue to utilize its
unsecured, floating rate, revolving line of credit to provide the necessary
capital for acquisitions and development. With respect to floating rate debt
exposure, the Company plans to keep its average unhedged floating rate debt
outstanding to an amount less than 10% of total asset value. The Company expects
to continue operating with adequate debt service coverage ratios and to continue
maintaining a sufficient pool of unencumbered assets to service the Company's
unsecured debt.

The Company's financing strategy may be changed from time to time by its
Board of Directors without the consent of its stockholders or other
securityholders.

<PAGE>

REAL ESTATE SERVICES

The Company generally provides real estate operating services for its
properties. In certain circumstances, however, such as during a transitional
period following the acquisition of a property, the Company may use a
third-party real estate service provider. As of July 31, 1997, the Company
provided its own real estate operating services for approximately 16 million
square feet (or 98%) of its portfolio. The Company, through certain
subsidiaries, also provides fee-based real estate services for related and
unrelated parties.

VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF

The following table sets forth information regarding the beneficial
ownership of shares of Common Stock as of March 15, 1997 for (1) each person
known by the Company to be holding more than 5% of the outstanding Common Stock,
(2) each director and nominee of the Company and each Named Executive Officer,
and (3) the directors and executive officers of the Company as a group. Unless
otherwise indicated in the footnotes, all such interests are owned directly, and
the indicated person or entity has sole voting and investment power. The number
of shares reported as beneficially owned by a person represents the number of
shares of Common Stock the person holds (including shares of Common Stock that
may be issued upon exercise of options that are exercisable within 60 days of
March 15, 1997) plus the number of shares into which Class A Units of Carr
Realty, L.P. held by the person (including Class A Units of Carr Realty, L.P.
that may be issued upon the exercise of options that are exercisable within 60
days of March 15, 1997) are redeemable (if the Company elects to issue shares
rather than pay cash upon such redemption). For purposes of the following table,
the number of shares of Common Stock and Class A Units deemed outstanding
includes 48,734,335 shares of Common Stock, 4,561,284 Class A Units of Carr
Realty, L.P., 901,270 Units of CarrAmerica Realty, L.P. and 309,700 Class A
Units and 11,000 shares of Common Stock issuable upon exercise of options
exercisable within 60 days of March 15, 1997. The extent to which a person holds
shares of Common Stock, as opposed to Class A Units of Carr Realty, L.P. or
CarrAmerica Realty, L.P. or options to purchase Class A Units of Carr Realty,
L.P. or Common Stock which are exercisable within 60 days of March 15, 1997, is
set forth in the footnotes.

<TABLE>
<CAPTION>
Percent Percent of
Number and Address Number of Shares/Units of All all Shares/
of Beneficial Owner Beneficially Owned Shares(1) Units(2)
- - ------------------- ------------------ --------- --------
<S> <C> <C> <C>
Security Capital U.S. Realty
Security Capital Holdings S. A. (3)............ 19,993,877 41.0% 36.9%
69, route d'Esch
L-2953 Luxembourg

Oliver T. Carr, Jr. (4)........................ 1,571,303 3.2% 2.9%
CarrAmerica Realty Corporation
1700 Pennsylvania Avenue, N.W.
Washington, D.C. 20006

A. James Clark (5)............................. 930,575 1.9% 1.7%
Clark Enterprises, Inc.
7500 Old Georgetown Road
Bethesda, MD 20814

Thomas A. Carr (6)............................. 128,422 * *
CarrAmerica Realty Corporation
1700 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
</TABLE>

<PAGE>

Percent Percent of
Number and Address Number of Shares/Units of All all Shares/
of Beneficial Owner Beneficially Owned Shares(1) Units(2)
- - ------------------- ------------------ --------- --------
<S> <C> <C> <C>
Andrew F. Brimmer (7).......................... 2,000
Brimmer & Company
4400 MacArthur Boulevard, N.W.
Washington, D.C. 20007

David Bonderman (8)............................ 39,083 * *
Texas Pacific Group, Inc.
201 Main Street
Fort Worth, Texas 76102

William D. Sanders (9)......................... 1,000 * *
Security Capital Group
7777 Market Center Avenue
El Paso, Texas 79122

J. Marshall Peck (10).......................... 0 * *
Security Capital Investment Research Incorporated
11 South LaSalle Street
Chicago, IL 60603

Philip L. Hawkins (11)......................... 9,000 * *
CarrAmerica Realty Corporation
1700 Pennsylvania Avenue, N.W.
Washington, D.C. 20006

Anthony R. Manno, Jr. (12)..................... 11,000 * *
Security Capital Investment Research Incorporated
11 South LaSalle Street
Chicago, Illinois 60603

Robert O. Carr (13)............................ 82,619 * *
Carr Real Estate Services, Inc.
1700 Pennsylvania Avenue, N.W.
Washington, D.C. 20006

Brian K. Fields (14)........................... 57,534 * *
CarrAmerica Realty Corporation
1700 Pennsylvania Avenue, N.W.
Washington, D.C. 20006

George R. Puskar (15).......................... 12,000 * *
Equitable Real Estate Management, Inc.
1150 Lake Hearn Drive, N.E.
Suite 400
Atlanta, GA 30342
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
Percent Percent of
Number and Address Number of Shares/Units of All all Shares/
of Beneficial Owner Beneficially Owned Shares(1) Units(2)
- - ------------------- ------------------ --------- --------
<S> <C> <C> <C>
Robert G. Stuckey (16)......................... 4,000 * *
CarrAmerica Realty Corporation
1700 Pennsylvania Avenue, N.W.
Washington, DC 20007

Wesley S. Williams, Jr. (17)................... 2,200 * *
Covington & Burling
1201 Pennsylvania Avenue, N.W.
Washington, D.C. 20044

Caroline S. McBride (18)....................... 0 * *
Security Capital Investment Research Incorporated
399 Park Avenue, 23rd Floor
New York, New York 10022

- - ---------------------------------------------------
All executive officers and directors as a group 2,850,736 5.6% 5.2%
(16 persons)
</TABLE>

- - ---------------------------------------------------
*Less than 1.0%

(1) Assumes that all Class A Units of Carr Realty, L.P., held by the person,
if any, (including Class A Units of Carr Realty, L. P. issuable to such
person upon exercise of options which are exercisable within 60 days of
March 15, 1997), are redeemed for shares of Common Stock. The total
number of shares outstanding used in calculating this percentage
includes all currently issued and outstanding shares of Common Stock
plus shares of Common Stock issuable upon redemption of all Class A
Units beneficially owned by the person (including Class A Units issuable
to such person upon exercise of options which are exercisable within 60
days of March 15, 1997), but assumes that none of the Class A Units held
by other persons are redeemed for shares of Common Stock.
(2) Assumes that all Class A Units held by the person (including Class A
Units issuable to such person upon exercise of options which are
exercisable within 60 days of March 15, 1997) are redeemed for shares of
Common Stock. The total number of shares outstanding used in calculating
this percentage includes all currently issued and outstanding shares of
Common Stock and assumes that all of the Class A Units held by other
persons (including Class A Units issuable to such person upon exercise
of options which are exercisable within 60 days of March 15, 1997) are
redeemed for shares of Common Stock.
(3) Security Capital Holdings S.A., a wholly-owned subsidiary of US
Realty, holds all of its interest in shares of Common Stock. Security
Capital Holdings S.A. also owns 520,000 shares of the Company's Series
A Cumulative Convertible Redeemable Preferred Stock.
(4) The aggregate amount of shares of Common Stock beneficially owned by Mr.
Oliver T. Carr, Jr. consists of 69,005 shares of Common Stock and
284,672 Class A Units owned directly by him, and 10,000 shares of Common
Stock and 150,000 Class A Units owned by his spouse, 7,565 shares of
Common Stock owned by Mr. and Mrs. Carr as joint tenants, 2,040 shares
held by their children, 954,061 shares of Common Stock and Class A Units
owned by OCCO, of which Mr. Carr is a director, chairman of the board,
president and trustee of the majority stockholder, and Mr. Carr's
options to purchase 96,000 Class A Units which are exercisable within 60
days of March 15, 1997. Of the amount shown, Mr. Carr and OCCO hold
978,010 Class A Units and 497,293 shares of Common Stock. Mr. Carr
disclaims beneficial ownership of the 2,040 shares held in an
irrevocable trust for the benefit of his minor children.

<PAGE>

(5) The aggregate amount of shares of Common Stock beneficially owned by Mr.
A. James Clark consists of 1,000 shares of Common Stock and 358,596
Class A Units owned directly by him and 569,979 Class A Units owned by
Clark Enterprises, Inc., of which Mr. Clark is chairman, president, a
director and the majority stockholder. Mr. Clark has options to purchase
1,000 shares of Common Stock which are exercisable within 60 days of
March 15, 1997.
(6) Mr. Thomas A. Carr is a director of OCCO. Mr. Carr disclaims beneficial
ownership of the shares of Common Stock and Class A Units held by OCCO.
Mr. Carr holds 29,515 Class A Units directly and 2,907 Class A Units are
held by his children. Mr. Carr has options to purchase 96,000 Class A
Units which are exercisable within 60 days of March 15, 1997.
(7) Dr. Brimmer has options to purchase 2,000 shares of Common Stock of the
Company which are exercisable within 60 days of March 15, 1997.
(8) The aggregate amount of shares of Common Stock beneficially owned by Mr.
Bonderman consists of 22,176 Class A Units owned directly by him, 5,000
Class A Units owned by Group Management, Inc., of which Mr. Bonderman is
the controlling person, 8,084 shares of Common Stock owned directly by
Mr. Bonderman and 1,823 shares of Common Stock owned by Group
Management, Inc. Mr. Bonderman has options to purchase 2,000 shares of
Common Stock of the Company which are exercisable within 60 days of
March 15, 1997. Mr. Bonderman, whose term as a director expires at the
Meeting, is not standing for re-election to the Board of Directors.
(9) Mr. Sanders is a director of Security Capital Group, an affiliate of
Security Capital Holdings S.A., a wholly-owned subsidiary of US Realty,
but disclaims beneficial ownership of the shares held by Security
Capital Holdings, S.A. Mr. Sanders has options to purchase 1,000 shares
of common Stock of the Company which are exercisable within 60 days of
March 15,1997.
(10) Mr. Peck is an officer of Security Capital Investment Research
Incorporated, an affiliate of Security Capital Holdings, S.A., a
wholly-owned subsidiary of US Realty, but disclaims beneficial
ownership of the shares held by Security Capital Holdings, S. A.
(11) Mr. Hawkins holds 5,000 shares of Common Stock and has options to
purchase 4,000 Class A Units which are exercisable within 60 days of
March 15, 1997.
(12) Mr. Manno is an officer of Security Capital Investment Research
Incorporated, an affiliate of Security Capital Holdings, S.A., a
wholly-owned subsidiary of Security Capital US Realty, but disclaims
beneficial ownership of the shares held by Security Capital Holdings,
S.A. Mr. Manno holds 10,000 shares of Common Stock directly and has
options to purchase 1,000 shares of Common Stock. Mr. Manno, whose term
as a director expires at the Meeting, is not standing for re-election
to the Board of Directors.
(13) Mr. Robert O. Carr is a director of OCCO. Mr. Carr disclaims beneficial
ownership of the shares of Common Stock and Class A Units held by OCCO.
Mr. Carr holds 14,083 shares of Common Stock, 6,836 Class A Units and
has options to purchase 61,700 Class A Units which are exercisable
within 60 days of March 15, 1997. Mr. Carr, whose term expires at the
Meeting, is not standing for re-election to the Board of Directors.
(14) Mr. Fields holds 9,534 shares of Common Stock and has options to
purchase 48,000 Class A Units which are exercisable within 60 days of
March 15, 1997.
(15) Mr. Puskar holds all of his interest in the Company in shares of Common
Stock. The aggregate amount of shares of Common Stock beneficially owned
by Mr. Puskar consists of 5,500 shares of Common Stock owned directly by
him, 4,500 shares of Common Stock owned by his spouse and options to
purchase 2,000 shares of Common Stock of the Company which are
exercisable within 60 days of March 15, 1997.
(16) Mr. Stuckey has options to purchase 4,000 Class A Units which are
exercisable within 60 days of March 15, 1997.
(17) Mr. Williams holds all of his interest in the Company in shares of
Common Stock. Mr. Williams owns 200 shares of Common Stock and has
options to purchase 2,000 shares of Common Stock of the Company which
are exercisable within 60 days of March 15, 1997.

<PAGE>

(18) Mrs. McBride is an officer of Security Capital Investment Research
Incorporated, an affiliate of Security Capital Holdings, S.A., a
wholly-owned subsidiary of US Realty, but disclaims beneficial
ownership of the shares held by Security Capital Holdings, S.A.

ELECTION OF DIRECTORS
(Item 1)

Board of Directors

The directors of the Company are divided into three classes, with
approximately one-third of the directors elected by the stockholders annually.
On March 25, 1997, the Board approved a reduction in the number of members of
the Board of Directors from 12 to 9, effective as of the Meeting. As a result,
Messrs. David Bonderman, Robert O. Carr, and Anthony R. Manno, Jr., each of
whose term as a director will expire at the Meeting, will not stand for
re-election to the Board of Directors. Caroline S. McBride, who was elected by
the Board of Directors in July 1996, has been nominated for election at the
Meeting as a director to hold office until the 1998 Annual Meeting of
Stockholders and until her successor is elected and qualified. J. Marshall Peck,
whose term as a director will expire at the Meeting, has been nominated for
election at the Meeting as a director to hold office until the 2000 Annual
Meeting of Stockholders and until his successor is elected and qualified.

The Board of Directors of the Company recommends a vote FOR Caroline S.
McBride as a director to hold office until the 1998 Annual Meeting of
Stockholders and until her successor is elected and qualified and a vote FOR J.
Marshall Peck as a director to hold office until the 2000 Annual Meeting of
Stockholders and until his successor is elected and qualified. Should any one or
more of these nominees become unable to serve for any reason prior to the
Meeting, the Board of Directors may designate substitute nominees, in which
event the persons named in the enclosed proxy will vote for the election of such
substitute nominee or nominees, or may reduce the number of directors on the
Board of Directors.

Nominee for Election to Term Expiring 1998

Caroline S. McBride, 43, has been a director of the Company since July
26, 1996. Mrs. McBride was appointed to the Board in connection with the
investment by a wholly-owned subsidiary of Security Capital U.S. Realty ("US
Realty") of approximately $250 million in the Company (the "US Realty
Transaction"). Mrs. McBride is a Managing Director of Security Capital
Investment Research Incorporated, an affiliate of US Realty. From January 1993
to June 1996, Mrs. McBride was the director of private market investments for
the IBM Retirement Fund and from January 1992 to January 1995, she was the
director of real estate investments for such fund. Prior to joining the IBM
Retirement Fund in 1992, Mrs. McBride was director of finance, investments and
asset management for IBM's corporate real estate division. Mrs. McBride is on
the Boards of Directors of the Pension Real Estate Association (PREA) and the
Real Estate Research Institute. Mrs. McBride received her Masters in Business
Administration from New York University and a Bachelor of Arts degree from
Middlebury College. Mrs. McBride is a member of the Investment Committee and the
Audit Committee of the Board of Directors.

Nominee for Election to Term Expiring 2000

J. Marshall Peck, 45, has been a director of the Company since June 12,
1996. Mr. Peck was appointed to the Board in connection with the US Realty
Transaction. Mr. Peck is a Managing Director of Security Capital Investment
Research Incorporated, where he is responsible for the operations and oversight
of strategic investments. Prior to joining Security Capital Investment Research
Incorporated in May 1996, Mr. Peck was a Managing Director of LaSalle Partners
Limited since January 1989, where he served in various capacities over his
14-year tenure, with responsibility for operating groups within both the
investment and services businesses, and was a member of its management
committee. Prior thereto, Mr. Peck held various marketing and management
positions in the Data Processing Division of IBM. Mr. Peck is past Chairman of
the Pension Real Estate Association and serves on the National Real Estate
Advisory Board of the Nature Conservancy. Mr. Peck is on the Boards of Directors
of Regency Realty Corporation and Storage USA, Inc. Mr. Peck received his B.A.
degree from University of North Carolina at Chapel Hill. Mr. Peck is a member of
the Executive Committee and the Executive Compensation Committee of the Board of
Directors.

<PAGE>

Incumbent Directors -- Term Expiring 1998

Thomas A. Carr, 38, has been President and a director of the Company
since February 1993. In May 1995, Mr. Carr was also appointed the Chief
Operating Officer of the Company, at which time he resigned as the Company's
Chief Financial Officer, a position he had held since February 1993. Mr. Carr
was President of Carr Partners, Inc., a financial services affiliate of The
Oliver Carr Company ("OCCO"), the Company's predecessor, from 1991 until
February 1993, when Carr Partners, Inc. ceased operations. Prior to becoming
President of Carr Partners, Inc., Mr. Carr was Vice President of Suburban
Development and Regional Development Partner for Montgomery County for OCCO,
beginning in 1985. Mr. Carr is a director of OCCO. Mr. Carr holds a Masters
degree in Business Administration from Harvard Business School, and a Bachelor
of Arts degree from Brown University. Mr. Carr is a member of the Board of
Governors of the National Association of Real Estate Investment Trusts and a
director of Lafayette Square Partners, Inc. Mr. Carr is the son of Oliver T.
Carr, Jr. and the brother of Robert O. Carr. Mr. Carr is a member of the
Executive Committee and the Investment Committee of the Board of Directors. In
addition, Mr. Carr is a member of management's Operating Committee and
Investment Committee.

A. James Clark, 69, has been a director of the Company since February
1993. He has been Chairman of the Board and President of Clark Enterprises,
Inc., a Bethesda, Maryland-based company involved in real estate,
communications, and commercial and residential construction, since 1972. Mr.
Clark is a member of the University of Maryland Foundation, and serves on the
Board of Trustees of The Johns Hopkins University. He is also a member of the
PGA Tour Investments Policy Board and a director of Lockheed Martin Corporation
and Potomac Electric Power Company. Mr. Clark is a graduate of the University of
Maryland. Mr. Clark is a member of the Executive Committee, the Investment
Committee, the Executive Compensation Committee, and the Nominating Committee of
the Board of Directors.

Wesley S. Williams, Jr., 54, has been a director of the Company since
February 1993. Mr. Williams has been a partner of the law firm of Covington &
Burling since 1975. He was adjunct professor of real estate finance law at the
Georgetown University Law Center from 1971 to 1973 and is a contributing author
to several texts on banking law and on real estate finance and investment. Mr.
Williams is on the Editorial Advisory Board of the District of Columbia Real
Estate Reporter. Mr. Williams serves on the Boards of Directors of Blackstar
Communications, Inc. and its Florida, Michigan, and Oregon subsidiaries;
Blackstar LLC and its Nebraska and South Dakota subsidiaries; and the Federal
Reserve Bank of Richmond, Virginia. Mr. Williams is Chairman of the Boards of
Directors of Broadcast Capital, Inc. and Broadcast Capital Fund, Inc. and is
Vice Chairman of the Board of Directors of The Lockhart Companies, Incorporated.
Mr. Williams also is a member of the Executive Committee of the Board of
Trustees of Penn Mutual Life Insurance Company. Mr. Williams received a B.A. and
J.D. from Harvard University, an M.A. from the Fletcher School of Law and
Diplomacy and an L.L.M. from Columbia University. Mr. Williams is a member of
the Executive Compensation Committee of the Board of Directors.

Incumbent Directors -- Term Expiring 1999

Andrew F. Brimmer, 70, has been a director of the Company since
February 1993. He has been the President of Brimmer & Company, Inc., an economic
and financial consulting firm, since 1976. Since 1995, Dr. Brimmer has served as
chairman of the District of Columbia Financial Control Board. Dr. Brimmer was a
member of the Board of Governors of the Federal Reserve System from 1966 through
1974. He is also the Wilmer D. Barrett Professor of Economics at the University
of Massachusetts--Amherst. Dr. Brimmer serves as a director of BankAmerica
Corporation and Bank of America, BlackRock Investment Income Trust, Inc. (and
other funds), PHH Corporation, E.I. du Pont de Nemours & Company, Navistar
International Corporation, Gannett Company and Airborne Express. Dr. Brimmer
received a B.A. and a Masters degree in Economics from the University of
Washington and a Ph.D. in Economics from Harvard University. Dr. Brimmer is a
member of the Audit Committee of the Board of Directors.

<PAGE>

Oliver T. Carr, Jr., 71 has been the Chief Executive Officer and
Chairman of the Board of Directors of the Company since February 1993. Mr. Carr
founded OCCO in 1962 and since that time has been its Chairman of the Board and
a director. In addition, Mr. Carr has served as President of OCCO since February
1993. He was Chairman of the Board of Trustees of the George Washington
University until May 1995. Mr. Carr is the father of Thomas A. Carr and Robert
O. Carr. Mr. Carr is a member of the Executive Committee and the Investment
Committee of the Board of Directors.

George R. Puskar, 53, has been a director of the Company since February
1993. He has served as the Chairman and Chief Executive Officer of Equitable
Real Estate Investment Management, Inc. ("Equitable Real Estate") since 1989 and
a vice president of The Equitable Life Assurance Society of the United States
("ELAS"). Mr. Puskar joined ELAS in 1966 in its local field office in
Pittsburgh. Mr. Puskar became the President of Equitable Real Estate, a
diversified real estate organization which is a subsidiary of ELAS, in 1984. Mr.
Puskar serves as a director of Equitable Real Estate Capital Markets, Inc. and
is a member of the Boards of Directors of the International Council of Shopping
Centers, Clark Atlanta University, The Atlanta Chamber of Commerce, the Vice
Chairman and a member of the Board of Directors of the National Realty
Committee, and a member of the Advisory Board of the Wharton School's Real
Estate Center in Philadelphia. Mr. Puskar is a member of the Executive Committee
and the Nominating Committee of the Board of Directors.

William D. Sanders, 55, has been a director of the Company since May 1,
1996 following consummation of the US Realty Transaction. He is the Founder and
Chairman of Security Capital Group, an affiliate of US Realty. Mr. Sanders
retired on January 1, 1990 as chief executive officer of LaSalle Partners
Limited, a firm he founded in 1968. Mr. Sanders is on the Boards of Directors of
R.R. Donnelley & Sons Company, US Realty, Storage USA, Inc. and Regency Realty
Corporation. Mr. Sanders is a former trustee and member of the executive
committee of the University of Chicago and a former trustee fellow of Cornell
University. Mr. Sanders received his Bachelor of Science from Cornell
University. Mr. Sanders is a member of the Nominating Committee of the Board of
Directors.

Committees of the Board of Directors; Meetings

In accordance with the By-laws of the Company, the Board of Directors
has established an Executive Committee, an Investment Committee, an Audit
Committee, an Executive Compensation Committee and a Nominating Committee. The
membership of these Committees is set forth in the preceding section of this
Proxy Statement.

Executive Committee. The Executive Committee has the authority, subject
to the Company's conflict of interest policies, to acquire and dispose of real
property and the power to authorize, on behalf of the full Board of Directors,
the execution of certain contracts and agreements, including those related to
the borrowing of money by the Company. The Executive Committee met 11 times in
1996 and took action by unanimous written consent three times.

Investment Committee. The Investment Committee was established in April
1996 to approve agreements and other actions contemplated by and within the
amounts established in the budget for the Company approved by the Board of
Directors and to approve the acquisition of assets and the incurrence of
indebtedness and other matters treated as capital items which involve less than
$50 million for any single transaction or series of related transactions and, in
the aggregate, represent not more than 10% of the Company's total assets during
any fiscal quarter or that do not represent a material change from the Company's
business plan. The Investment Committee does not have authority to approve any
expenditure to or agreement with any member of the Investment Committee, any
member of the immediate family of a member of the Investment Committee, or any
entity in which any such person has a direct or indirect financial interest. The
Investment Committee met one time in 1996 and took action by unanimous consent
four times.

<PAGE>

Audit Committee. The Audit Committee, which consists of two independent
directors, was established to make recommendations concerning the engagement of
independent public accountants, review with the independent public accountants
the plans and results of the audit engagement, approve professional services
provided by the independent public accountants, review the independence of the
independent public accountants, consider the range of audit and non-audit fees
and review the adequacy of the Company's internal accounting controls. The Audit
Committee met one time in 1996.

Executive Compensation Committee. The Executive Compensation Committee
was established to determine compensation for the Company's executive officers
and to implement the Company's option plans. The Executive Compensation
Committee met five times in 1996.

Nominating Committee. The Nominating Committee was established to
consider and make recommendations to the Board of Directors regarding the size
of the Board and nominees for election as members of the Board of Directors of
the Company. The Committee is willing to consider nominees recommended by
stockholders. Stockholders who wish to suggest qualified candidates must comply
with the advance notice provisions and other requirements of Section 3.11 of the
Company's By-laws, which are on file with the Securities and Exchange Commission
and may be obtained from the Secretary of the Company upon request. The
Nominating Committee did not meet in 1996, but took one action by unanimous
written consent.

The Board of Directors held 9 meetings during 1996 and took action by
unanimous written consent four times. Each of the following directors attended
fewer than 75% of the aggregate of the number of meetings of the Board of
Directors during the period for which he has been a member and the number of
meetings of the committees of the Board of Directors for the period for which he
served as a member of any such committees: David Bonderman; Robert O. Carr;
George R. Puskar; and William D. Sanders.

Compensation of Directors

The Company pays fees to its directors who are not officers of the
Company for their services as directors. Directors receive annual compensation
of $12,000 plus a fee of $1,000 (plus out-of-pocket expenses) for attendance (in
person or by telephone) at each meeting of the Board of Directors. Directors who
are not officers of the Company receive a fee of $500 for attendance (in person
or by telephone) at each committee meeting held on a non-board meeting day.
Pursuant to policies of ELAS, any remuneration received by a director that
represents ELAS must be paid to ELAS.

The Company has established the Non-Employee Director Stock Option Plan
for the purpose of attracting and retaining directors who are not employees of
the Company ("Non-Employee Directors"). The stock option plan provides for the
grant of options that are exercisable at fair market value of the Company's
Common Stock on the date of grant. The stock option plan was approved by the
Company's stockholders at its Annual Meeting of Stockholders on April 28, 1995,
following which each then-serving Non-Employee Director was granted options to
purchase 3,000 shares of Common Stock of the Company. Immediately following each
annual election of directors, each then serving Non-Employee Director will
receive options to purchase 5,000 shares of Common Stock. The Non-Employee
Director stock options vest over a three year period, 33 1/3% per year.

As of December 31, 1996 the Company had 150,000 shares of Common Stock
reserved for issuance under the Non-Employee Director Stock Option Plan, of
which 61,000 options were outstanding. During 1996, a total of 2,000 options
were exercised by a total of 2 directors or former directors.

<PAGE>

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities and Exchange Act of 1934, as amended,
requires the Company's executive officers and directors, and persons who own
more than ten percent of a registered class of the Company's equity securities,
to file reports of ownership on Forms 3, 4 and 5 with the Securities and
Exchange Commission ("SEC") and the New York Stock Exchange. Executive officers,
directors and greater than ten percent stockholders are required by the SEC to
furnish the Company with copies of all Forms 3, 4 and 5 they file.

Based on the Company's review of the copies of such forms it has
received and based on written representations from certain reporting persons
that they were not required to file Forms 5 for the fiscal year, except as noted
below, the Company believes that its executive officers, directors and greater
than ten percent stockholders complied with all filing requirements applicable
to them with respect to transactions during 1996. Certain of the Company's
executive officers and directors failed to report on a timely basis certain
transactions, as follows: Thomas A. Carr, the transfer of partnership interests
in Carr Realty, L.P. to his children and a charitable organization; Philip L.
Hawkins and Robert G. Stuckey, the appointment as an executive officer of the
Company and the grant of Unit options under the 1993 Carr Realty Option Plan
upon commencement of each of their employment with the Company; and J. Marshall
Peck, appointment as a director of the Company and the grant of options to
purchase Common Stock under the Company's Non-Employee Director Stock Option
Plan. These transactions were reported on Forms 4 filed during 1996 after the
reporting deadline.

Directors of the Company

The directors of the Company are divided into three classes, with approximately
one-third of the directors elected by the stockholders annually. As of March 15,
1997, the Board of Directors of the Company consisted of the following persons:

Oliver T. Carr, Jr., 71, has been the Chief Executive Officer and Chairman
of the Board of Directors of the Company since it commenced operations in
February 1993. Mr. Carr's term as a director of the Company expires at the 1999
Annual Meeting of Stockholders. Mr. Carr founded OCCO in 1962 and since that
time has been its Chairman of the Board and a director. In addition, Mr. Carr
has served as President of OCCO since February 1993. Mr. Carr is also on the
Board of Directors of Carr Park, Inc., a subsidiary of OCCO. He was Chairman of
the Board of Trustees of The George Washington University until May 1995. Mr.
Carr is the father of Thomas A. Carr and Robert O. Carr. Mr. Carr is a member of
the Investment Committee and the Executive Committee of the Board of Directors.

Thomas A. Carr, 38, has been President and a director of the Company since
February 1993. Mr. Carr's term as a director of the Company expires at the 1998
Annual Meeting of Stockholders. In May 1995, Mr. Carr was also appointed the
Chief Operating Officer of the Company, at which time he resigned as the
Company's Chief Financial Officer, a position he had held since February 1993.
Mr. Carr was President of Carr Partners, Inc., a financial services affiliate of
OCCO, from 1991 until February 1993, when Carr Partners, Inc. ceased operations.
Prior to becoming President of Carr Partners, Inc., Mr. Carr was Vice President
of Suburban Development and Regional Development Partner for Montgomery County
for OCCO, beginning in 1985. Mr. Carr is a director of OCCO. Mr. Carr holds a
Masters degree in Business Administration from Harvard Business School, and a
Bachelor of Arts degree from Brown University. Mr. Carr is a member of the Board
of Governors of the National Association of Real Estate Investment Trusts and a
director of Lafayette Square Partners, Inc. Mr. Carr is the son of Oliver T.
Carr, Jr. and the brother of Robert O. Carr. Mr. Carr is a member of the
Investment Committee and the Executive Committee of the Board of Directors. In
addition, Mr. Carr is a member of management's Operating Committee and
Investment Committee.

Robert O. Carr, 47, has been a director of the Company and President and
Chairman of the Board of Directors of Carr Real Estate Services, Inc. ("Carr
Services, Inc."), a subsidiary of the Company, since February 1993. Mr. Carr's
term as a director of the Company expires at the 1997 Annual Meeting of
Stockholders. Mr. Carr is a director of OCCO and, from 1987 until February 1993,
served as its President and Chief Executive Officer. Mr. Carr joined OCCO in
1973 and has served in a number of positions which have included the supervision
of all development operations since 1979 and all day-to-day company operations
since 1982 as Executive Vice President. Mr. Carr is a member of the Boards of
Directors for the Greater Washington Research Center, the Corcoran School of
Art, and the National Cathedral School for Girls. Mr. Carr is also a member of
the Greater Washington Board of Trade, the Urban Land Institute, and the D.C.
Chamber of Commerce. Mr. Carr holds a Bachelor of Arts degree from Trinity
College. Mr. Carr is the son of Oliver T. Carr, Jr. and the brother of Thomas A.
Carr. Mr. Carr is a member of the Executive Committee of the Board of Directors.

David Bonderman, 54, has been a director of the Company since its
commencement of operations. Mr. Bonderman's term expires at the 1997 Annual
Meeting of Stockholders. He is the managing general partner of TPG Partners,
L.P., a private investment partnership. From October 1971 through June 1983, Mr.
Bonderman was an associate and then partner in the law firm of Arnold & Porter,
Washington, D.C. From July 1983 through August 1992, Mr. Bonderman served as the
Vice President and Chief Operating Officer of Keystone, Inc. (formerly the
Robert M. Bass Group, Inc.). Mr. Bonderman also serves as a director of Bell &
Howell Holdings Company, Washington Mutual, Inc., Denbury Resources, Inc.,
National Education Corporation and Continental Airlines, Inc. Mr. Bonderman
holds a Bachelor of Arts degree from the University of Washington and an L.L.B.
degree from Harvard University. Mr. Bonderman is a member of the Executive
Compensation Committee of the Board of Directors.

Andrew F. Brimmer, 70, has been a director of the Company since February
1993. Dr. Brimmer's term as a director of the Company expires at the 1999 Annual
Meeting of Stockholders. He has been the President of Brimmer & Company, Inc.,
an economic and financial consulting firm, since 1976. Since

<PAGE>

1995, Dr. Brimmer has served as the chairman of the District of Columbia
Financial Control Board. Dr. Brimmer was a member of the Board of Governors of
the Federal Reserve System from 1966 through 1974. He is also the Wilmer D.
Barrett Professor of Economics at the University of Massachusetts-Amherst. Dr.
Brimmer serves as a director of BankAmerica Corporation and Bank of America,
BlackRock Investment Income Trust, Inc. (and other funds), PHH Corporation, E.l.
du Pont de Nemours & Company, Navistar International Corporation, Gannett
Company, Borg-Warner Automotive, Inc. and Airborne Express. Dr. Brimmer received
a Bachelor of Arts and a Masters degree in Economics from University of
Washington and holds a Ph.D. in Economics from Harvard University. Dr. Brimmer
is a member of the Audit Committee of the Board of Directors.

A. James Clark, 69, has been a director of the Company since February 1993.
Mr. Clark's term as a director of the Company expires at the 1998 Annual Meeting
of Stockholders. He has been Chairman of the Board and President of Clark
Enterprises, Inc., a Bethesda, Maryland-based company involved in real estate,
communications, and commercial and residential construction, since 1972. Mr.
Clark is a member of the University of Maryland Foundation, and serves on the
Board of Trustees of The Johns Hopkins University. He is also a member of the
PGA Tour Investments Policy Board and a director of Lockheed Martin Corporation
and Potomac Electric Power Company. Mr. Clark is a graduate of the University of
Maryland. Mr. Clark is a member of the Investment Committee, the Executive
Compensation Committee, the Executive Committee and the Nominating Committee of
the Board of Directors.

Anthony R. Manno, Jr., 44, has been a director of the Company since May
1996. Mr. Manno's term as a director of the Company expires at the 1997 Annual
Meeting of Stockholders. Mr. Manno is a Managing Director of Security Capital
Investment Research Incorporated, an affiliate of USRealty. Prior to joining
Security Capital Investment Research Incorporated in 1993, Mr. Manno was a
managing director of LaSalle Partners Limited where he served in various
capacities from 1980 to 1993, including client manager for LaSalle Partners
Limited's joint venture partner, Dai-ichi Mutual Life Insurance Company; manager
of LaSalle Partners Limited's property finance group; and a member of LaSalle
Partners Limited's investment committee. Prior thereto, Mr. Manno was a
commercial real estate loan officer of The First National Bank of Chicago. Mr.
Manno is a Certified Public Accountant. Mr. Manno received his Masters in
Business Administration, with a concentration in Finance, from the University of
Chicago School of Business and his M.A. and B.A. in Economics from Northwestern
University.

Caroline S. McBride, 43, has been a director of the Company since July 1996.
Mrs. McBride's term as a director of the Company expires at the 1997 Annual
Meeting of Stockholders. Mrs. McBride is a Managing Director of Security Capital
Investment Research Incorporated. From January 1993 to June 1996, Mrs. McBride
was the director of private market investments for the IBM Retirement Fund and
from January 1992 to January 1995, she was the director of real estate
investments for such fund. Prior to joining the IBM Retirement Fund in 1992,
Mrs. McBride was director of finance, investments and asset management for IBM's
corporate real estate division. Mrs. McBride is on the Boards of Directors of
the Pension Real Estate Association (PREA) and the Real Estate Research
Institute. Mrs. McBride received her Masters in Business Administration from New
York University and a Bachelor of Arts degree from Middlebury College. Mrs.
McBride is a member of the Investment Committee and the Audit Committee of the
Board of Directors.

J. Marshall Peck, 45, has been a director of the Company since June 1996.
Mr. Peck was appointed to the Board in connection with the USRealty Transaction.
Mr. Peck is a Managing Director of Security Capital Investment Research
Incorporated. Prior to joining Security Capital Investment Research Incorporated
in May 1996, Mr. Peck was a Managing Director of LaSalle Partners Limited since
January 1989, where he served in various capacities over his 14-year tenure,
with responsibility for operating groups within both the investment and services
businesses and was a member of its management committee. Prior thereto, Mr. Peck
held various marketing and management positions in the Data Processing Division
of IBM. Mr. Peck is past Chairman of the Pension Real Estate Association and
serves on the National Real Estate Advisory Board of the Nature Conservancy. Mr.
Peck is on the Boards of

<PAGE>

Directors of Regency Realty Corporation and Storage USA, Inc. Mr. Peck received
his B.A. degree from University of North Carolina at Chapel Hill. Mr. Peck is a
member of the Executive Committee and the Executive Compensation Committee of
the Board of Directors.

George R. Puskar, 53, has been a director of the Company since its
commencement of operations. Mr. Puskar's term expires at the 1999 Annual Meeting
of Stockholders. He has served as the Chairman and Chief Executive Officer of
Equitable Real Estate Investment Management, Inc. ("Equitable Real Estate")
since 1989 and a vice president of The Equitable Life Assurance Society of the
United States ("ELAS"). Mr. Puskar joined ELAS in 1966 in its local field office
in Pittsburgh. Mr. Puskar became the President of Equitable Real Estate, a
diversified real estate organization which is a subsidiary of ELAS, in 1984. Mr.
Puskar serves as a director of Equitable Real Estate Capital Markets, Inc. and
is a board member of the International Council of Shopping Centers, Clark
Atlanta University, The Atlanta Chamber of Commerce, the Vice Chairman and a
board member of the National Realty Committee, and a member of the Advisory
Board of the Wharton School's Real Estate Center in Philadelphia. Mr. Puskar is
a member of the Executive Committee and the Nominating Committee of the Board of
Directors.

William D. Sanders, 55, has been a director of the Company since May 1996.
Mr. Sanders is the Founder and Chairman of Security Capital Group, an affiliate
of USRealty. Mr. Sanders retired on January 1, 1990, as chief executive officer
of LaSalle Partners Limited, which he founded in 1968. Mr. Sanders is on the
Boards of Directors of R. R. Donnelley & Sons Company, USRealty, Storage USA,
Inc. and Regency Realty Corporation. Mr. Sanders is a former trustee and member
of the executive committee of the University of Chicago and a former trustee
fellow of Cornell University. Mr. Sanders received his Bachelor of Science from
Cornell University. Mr. Sanders is a member of the Nominating Committee of the
Board of Directors.

Wesley S. Williams, Jr., 54, has been a director of the Company since
February 1993. Mr. Williams' term as a director of the Company expires at the
1998 Annual Meeting of Stockholders. Mr. Williams has been a partner of the law
firm of Covington & Burling since 1975. He was adjunct professor of real estate
finance law at the Georgetown University Law Center from 1971 to 1973 and is a
contributing author to several texts on banking law and on real estate finance
and investment. Mr. Williams is also on the Editorial Advisory Board of the
District of Columbia Real Estate Reporter. Mr. Williams serves on the Boards of
Directors of Blackstar Communications, Inc. and its Florida, Michigan and Oregon
subsidiaries; Blackstar LLC and its Nebraska and South Dakota subsidiaries; and
the Federal Reserve Bank of Richmond. Mr. Williams is Chairman of the Boards of
Directors of Broadcast Capital, Inc. and Broadcast Capital Fund, Inc. and is
Vice Chairman of The Lockhart Companies, Incorporated. Mr. Williams also is a
member of the Executive Committee of the Board of Trustees of Penn Mutual Life
Insurance Company. Mr. Williams received a B.A. and J.D. from Harvard
University, an M.A. from the Fletcher School of Law and Diplomacy and an L.L.M.
from Columbia University. Mr. Williams is a member of the Executive Compensation
Committee of the Board of Directors.

Executive Officers and Certain Key Employees of the Company

In addition, as of March 15, 1997, the Company's executive officers and key
employees were as follows:

Brian K. Fields, 37, has been the Company's Chief Financial Officer since
May 1995. Prior to that time, Mr. Fields served as the Company's Vice President,
Treasurer and Controller since February 1993. Mr. Fields served as Treasurer and
Controller of OCCO from 1990 to February 1993. Prior to that time, Mr. Fields
was a Senior Manager with KPMG Peat Marwick LLP in Washington, D.C. Mr. Fields
was employed by KPMG Peat Marwick LLP for eight years. Since 1993, Mr. Fields
has also been a director and Treasurer of Carr Services, Inc. and since 1996 he
has served as a director and officer of several other subsidiaries of the
Company. He holds a Bachelor of Science degree in Accounting from Virginia Tech
and is a Certified Public Accountant. Mr. Fields is a member of management's
Operating Committee and Investment Committee.

Philip L. Hawkins, 41, has been the Company's Managing Director of Asset
Management since February 1996. Prior to that time, Mr. Hawkins was employed by
LaSalle Partners Limited since 1982. Mr. Hawkins served as the Executive Vice
President,

<PAGE>

Eastern Division, Asset Management Group since 1995; the Senior Vice President,
Northeast Region, Asset Management Group from 1990 to 1994 and in other asset
management positions prior to that time. Mr. Hawkins was also a director of
LaSalle Partners. He holds a Masters in Business Administration from the
University of Chicago Graduate School of Business and a Bachelor of Arts degree
from Hamilton College. Mr. Hawkins is a member of management's Operating
Committee and Investment Committee.

Robert E. Peterson, 45, has been the Company's Regional Managing Director,
Southeast Region, since November 1996. Mr. Peterson has over 23 years of real
estate experience. Mr. Peterson's most recent experience includes 18 years as
President of Peterson Properties, which he co-founded in 1978. Prior to forming
Peterson Properties, Mr. Peterson was Vice President of Arthur Rubloff &
Company, where he spent five years specializing in office and industrial leasing
and investment property brokerage. Mr. Peterson is a former member of the
Society of Industrial and Office Realtors and serves on the Developer Advisory
council for the Georgia Chapter of the National Association of Industrial and
Office Parks. He graduated from University of North Carolina at Chapel Hill,
with a B.S. in Business Administration. Mr. Peterson is a member of management's
Operating Committee and Investment Committee.

Robert G. Stuckey, 35, has been the Company's Managing Director of
Acquisitions and Development since February 1996. Prior to that time, Mr.
Stuckey was employed by Security Capital Industrial Trust, an affiliate of
Security Capital Group, since January 1993, as a Senior Vice President managing
the operations of the development group since November 1994, and as a Vice
President supervising acquisition due diligence from May 1993 to November 1994.
Prior to that time, Mr. Stuckey had seven years of experience with Trammell Crow
Company. His most recent position there was as Chief Financial Officer for
Trammel Crow Company NE, Inc. Mr. Stuckey holds a Masters in Business
Administration from Harvard Business School and a Bachelor of Science in Finance
from University of Nebraska. Mr. Stuckey is a member of management's Operating
Committee and Investment Committee.

Paul R. Adkins, 38, has been the Company's Vice President, Market Officer
for Washington, D.C. since August 1996. Mr. Adkins has been with the Company for
over 14 years, including serving as Vice President of Acquisitions from May 1994
to August 1996. Mr. Adkins was instrumental in the Company's initial efforts to
acquire suburban office properties in its suburban Atlanta and Austin, Texas
target markets. Prior to that, Mr. Adkins served in a variety of other
capacities with the Company, with over 12 years in commercial real estate
leasing. Mr. Adkins was named "Top Producer" for the Washington metropolitan
area in 1990 and 1991 by the Washington, D.C. Association of Realtors. Mr.
Adkins is a member of the District of Columbia's Building Industry Association
and Northern Virginia's National Association of Industrial and Office Parks. Mr.
Adkins holds a Bachelor of Arts degree from Bucknell University.

Andrea F. Bradley, 36, has been the Company's Vice President, General
Counsel and Corporate Secretary since August 1993. Mrs. Bradley was an attorney
with the law firm of Shaw, Pittman, Potts and Trowbridge from 1991 to August
1993 and an attorney with the law firm of Paul, Hastings, Janofsky & Walker from
1985 to 1991, where she practiced primarily corporate finance and securities
law. Mrs. Bradley holds a Juris Doctor from University of California at Los
Angeles and an A.B. degree in American Studies from Stanford University.

Steven N. Bralower, 46, has been Senior Vice President of Carr Realty, L.P.,
a subsidiary of the Company, since May 1996 and prior thereto was Senior Vice
President of Carr Services, Inc. from 1993 to May 1996. Mr. Bralower was Senior
Vice President of OCCO from 1985 to February 1993 and was responsible for
overseeing and directing one-half of OCCO's leasing activities in its portfolio
of commercial office and retail space. Mr. Bralower first joined OCCO in 1978 as
a commercial leasing agent. Mr. Bralower has been a member of the Georgetown
University Law Center faculty. Mr. Bralower holds a Bachelor of Arts degree from
Kenyon College.

Robert L. Brumm, 45, has been Vice President, Human Resources and
Administration of the Company, since May 1996. From 1993 to 1996, Mr. Brumm held
the same position with Carr Services, Inc. and from March 1990 to 1993 held the
same

<PAGE>

position with OCCO. He is responsible for managing the Human Resources,
Risk Management, Training, and Office Management functions. He has over 20 years
of experience including 8 years with Mark Controls Corporation and 5 years with
the real estate division of Philip Morris, Inc. Mr. Brumm received his Bachelors
degree from California State University at Long Beach.

Clete Casper, 37, has been the Company's Vice President, Market Officer for
suburban Seattle since July 1996. Mr. Casper has over 10 years' experience in
the real estate and marketing field. Mr. Casper's most recent experience
includes 1 year as a Senior Associate with CB Commercial Real Estate Group Inc.,
Seattle, Washington. Prior to that, Mr. Casper was with Sabey Corporation in
Seattle, Washington serving in the following capacities: 4 years as Development
Manager and 5 years as a Marketing Associate. Mr. Casper is a graduate of
Washington State University.

Joel DeSpain, 45, has been the Company's Vice President, Market Officer for
Austin, Texas since August 1996. Mr. DeSpain has over 18 years' experience in
the real estate and marketing field. Mr. DeSpain's most recent experience
includes 2 years as a Vice President of Littlefield Real Estate Company in
Austin, Texas. Prior to that, Mr. DeSpain spent 2 years with Faison-Stone in
Austin, Texas as Vice President, 5 years with Grubb & Ellis in Austin, Texas as
President, 2 years with Paragon Properties in Austin, Texas as Executive Vice
President, and 7 years with The Home Company Realtors in Houston, Texas as
Marketing Director. Mr. DeSpain holds a Doctor of Jurisprudence from South Texas
College of Law and a BBA in Marketing from University of Houston.

John J. Donovan, Jr., 53, has been Senior Vice President of Carr Services,
Inc. since February 1993. Prior to that, Mr. Donovan was Senior Vice President
of OCCO from 1988 to February 1993 and was responsible for overseeing and
directing one-half of OCCO's leasing activities in its portfolio of commercial
office and retail space. Mr. Donovan joined OCCO as a commercial leasing agent
in 1976. He is a member of the Advisory Board for Jubilee Enterprise of Greater
Washington (an affiliate of Jubilee Housing and The Enterprise Foundation). Mr.
Donovan holds a Bachelor of Arts degree from Georgetown University.

Karen B. Dorigan, 32, has been the Company's Vice President -- Land Due
Diligence since January 1996 and is responsible for supervising land and
development due diligence. Prior to that time and for more than 9 years, Mrs.
Dorigan served in a variety of capacities in OCCO's development business,
including from February 1993 to January 1996 serving as a Vice President. She is
a past member of Northern Virginia's Building Industry Association's Arlington
Chapter Council. Mrs. Dorigan holds a Bachelor of Science degree in Economics
from the University of Pennsylvania, Wharton School.

J. Thad Ellis, 36, has been the Company's Vice President, Market Officer for
suburban Atlanta since November 1996. Mr. Ellis has over 12 years' experience in
the real estate field. Mr. Ellis' most recent experience includes 10 years with
Peterson Properties where his primary responsibility was to oversee and
coordinate the leasing and property management for the management services
portfolio. Prior to that, Mr. Ellis spent two years with another Atlanta
development company. Mr. Ellis is a graduate of Washington & Lee University and
is involved with the National Association of Industrial and Office Parks and
Atlanta's Chamber of Commerce and is also on the Advisory Board of Black's
Guide.

Richard W. Greninger, 45, has been Senior Vice President of Carr Services,
Inc. since March 1995. Prior to that time he had been Vice President of Carr
Services, Inc. since February 1993. Mr. Greninger was with OCCO as Vice
President of Property Management Services from January 1992 to February 1993.
Prior to that time, Mr. Greninger was with CB Commercial Real Estate Group Inc.,
a commercial real estate firm, where he was Senior Vice President and Regional
Manager of the Mid-Atlantic Property Management Division responsible for the
management of 7.5 million square feet of commercial space. During 1994, Mr.
Greninger served as President of the Greater Washington Apartment and Office
Building Association. Mr. Greninger has served as a director of both the
Institute of Real Estate Management and the Building Owners and Managers
Association. Mr. Greninger holds a Masters in Business Administration from the
University of Cincinnati and a Bachelor of Science degree from Ohio State
University.

<PAGE>

John S. Herr, 41, has been the Company's Vice President, Market Officer for
Northern California since September 1996. Mr. Herr has over 12 years' experience
in the real estate and marketing field. Mr. Herr's most recent experience
includes 21U2 years as the President and Chief Executive Officer of Simeon
Commercial Properties in San Francisco, California. Prior to that, Mr. Herr
spent 8 years with Trammel Crow serving in the following capacities: 2 years as
Principal and Executive Vice President in San Francisco; 3 years as Partner in
Richmond, Virginia; and 4 years as Marketing Representative in Washington, D.C.
Mr. Herr holds a Masters in Business Administration from Stanford University and
a Bachelors degree from the U.S. Naval Academy.

Austin W. Lehr, 35, has been the Company's Vice President, Market Officer
for Southeast Denver since July 1996. Mr. Lehr has over 10 years' experience in
the real estate and marketing field. Mr. Lehr's most recent experience includes
4 years as a Vice President with Southwest Value Partners and Affiliates in
Phoenix, Arizona. Prior to that, Mr. Lehr spent 4 years with Draper and Kramer,
lncorporated in Washington, D.C. as the Director of Development and Marketing,
and 2 years as a Vice President at Guaranty Federal Savings and Loan in Dallas,
Texas. Mr. Lehr holds a Masters of Management degree from Northwestern
University and a Bachelor of Arts degree from Williams College.

Dwight L. Merriman, 36, has been the Company's Vice President, Market
Officer for Southern California since August 1996. Mr. Merriman has over 12
years' experience in the real estate and marketing field. Mr. Merriman's most
recent experience includes 1 year as Vice President with Security Capital
Industrial Trust in Irvine, California. Prior to that, Mr. Merriman spent 11
years with Overton, Moore in Los Angeles in the following capacities: 5 years as
the Director of Marketing - Asset Management (Partner), 4 years as Director of
Marketing - Development (Partner) and 2 years as a Marketing Associate. Mr.
Merriman holds a Masters in Business Administration from University of
California at Los Angeles and a Bachelors degree from University of Southern
California.

B. Thomas Miller, Jr., 35, has been the Company's Vice President -
Acquisitions and Marketing since September 1996. Mr. Miller has over 10 years of
experience in the real estate and marketing field. Mr. Miller's most recent
experience includes 3 years as Vice President of Security Capital Investment
Research Incorporated. Prior to that time, Mr. Miller spent 3 years as a Senior
Manager with Arthur Andersen S.C. Real Estate Services Group and 2 years as an
Associate in Management Advisory Services at Kenneth Leventhal & Company. Mr.
Miller holds a Bachelor of Arts degree in Finance from University of Texas at
Austin.

Gerald J. O'Malley, 53, has been the Company's Vice President, Market
Officer for suburban Chicago since July 1996. Mr. O'MalIey has over 29 years'
experience in the real estate and marketing field. Mr. O'Malley's most recent
experience includes 10 years as founder and President of G.J. O'MaIIey &
Company, a real estate office leasing company. Prior to that, Mr. O'Malley spent
6 years as a leasing agent for LaSalle Partners in Chicago, Illinois, 4 years as
a leasing and sales agent for the firm of Bennett and Kahnweiler, in Chicago,
Illinois, and 8 years with Whiston Group as a property and leasing manager. Mr.
O'Malley holds a Bachelors degree from Loyola University.

James D. Peterson, 49, has been the Company's Vice President, Market Officer
for South Florida since November 1996. Mr. Peterson has over 25 years'
experience in the real estate field. Mr. Peterson's most recent experience
includes 3 years (from 1993 to October 1996) as Vice President of Peterson
Properties with responsibility for property operations in South Florida. From
1978 to 1981, Mr. Peterson was President of Peterson Properties, which he
co-founded. Mr. Peterson also spent 4 years with the Investment Life Insurance
Company of America as Chairman and Chief Executive Officer, 7 years as Chairman
of Cavanaugh Development Company, a general contractor and developer of office
and industrial parks in San Diego, California, which he co-founded, and 7 years
with Wachovia Bank and Trust Company. Mr. Peterson is involved with the National
Association of Industrial and Office Parks and is a member of Boca Raton's
Chamber of Commerce. Mr. Peterson holds a Masters in Business Administration
from University of Texas - Austin and a Bachelor of Science degree in Economics
from University of North Carolina at Chapel Hill.

<PAGE>

Matthew L. Richardson, 37, has been a Senior Vice President of Carr
Development & Construction, Inc., a subsidiary of the Company, since April 1996,
with responsibility for all build-to- suit marketing and for assisting the
Market Officer Group in qualifying, structuring and negotiating development
opportunities. Prior to that time and for more than 8 years, Mr. Richardson
served in a variety of capacities in OCCO's development business, including from
September 1991 to April 1996 serving as its President. He is on the Board of
Directors of the District of Columbia's Building Industry Association. Mr.
Richardson holds a Masters of Business Administration and a Bachelor of Urban
Planning degree from University of Virginia.

Debra A. Volpicelli, 32, has been the Company's Treasurer and Controller
since May 1995. Prior to that time, Mrs. Volpicelli was the Company's Tax
Manager since February 1993. Mrs. Volpicelli was Tax Manager for OCCO from 1990
to February 1993. Prior to that time, Mrs. Volpicelli was in the tax department
of Arthur Andersen & Co., SC. Mrs. Volpicelli holds a Bachelor of Science degree
in Business Administration from Georgetown University and is a Certified Public
Accountant.

Joseph D. Wallace, 33, has been the Company's Vice President - Building Due
Diligence since January 1996 and is responsible for supervising building
acquisition due diligence. Prior to that time, Mr. Wallace was the Company's
Vice President of Asset Management since February 1993. Mr. Wallace was Vice
President of Carr Partners, Inc. from 1990 to February 1993. Prior to that, Mr.
Wallace was co-Director of Asset Management for OCCO responsible for the
investment oversight of OCCO's portfolio of commercial properties in the
Washington, D.C. metropolitan area. Mr. Wallace holds a Bachelor of Science
degree in Commerce from University of Virginia.

James S. Williams, 40, has been a Senior Vice President of Carr Development
& Construction, Inc. with responsibility for oversight of all project
management, design and construction operations since October 1996. Mr. Williams
rejoined the Company after 2 years as Vice President of Operations of Obadwick
International. Mr. Williams' initial tenure with the Company was from 1983 to
1994, during which time he served in a variety of capacities in OCCO's
development business. Prior to that, Mr. Williams was employed by Holland &
Lyons where he worked in project management of commercial and residential real
estate development. Mr. Williams is a guest lecturer at George Washington
University. Mr. Williams holds a Bachelor of Science degree in Business
Administration from West Virginia University.

EXECUTIVE COMPENSATION

The following table sets forth certain information concerning the
annual and long-term compensation for the Chief Executive Officer and the four
most highly compensated executive officers of the Company (the "Named Executive
Officers"):

<TABLE>
<CAPTION>
Summary Compensation Table
Long-Term
Compensation
Annual Compensation Awards
------------------------------------------------------ --------------------
` Other Annual Unit Options All Other
Year Salary ($) Bonus ($) Compensation Granted (#) (2) Compensation
---- ---------- --------- ------------ --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Oliver T. Carr, Jr.
Chairman and 1996 $225,000 -- -- -- $8,728(6)
Chief Executive Officer 1995 $152,885(3) $67,500 -- -- $8,695(6)
1994 $125,000 -- -- 81,500 $4,806(6)

Thomas A. Carr
President and Chief 1996 $225,000 $225,000 -- -- $8,728(7)
Operating Officer 1995 $225,000 $67,500 -- -- $8,782(7)
1994 $225,000 -- -- 81,500 $9,306(7)

Brian K. Fields --
Chief Financial 1996 $185,000 $185,000 -- -- $8,728(8)
Officer 1995 $150,000 $60,000 -- -- $8,782(8)
1994 $150,000 -- -- 40,767 $9,306(8)

Philip L. Hawkins
Managing Director - 1996 $181,731(1) $210,000 $91,868(4) 20,000 $921(9)
Asset Management

Robert G. Stuckey
Managing Director - 1996 $116,731(1) $185,000 $47,055(5) 20,000 $921(10)
Acquisitions and
Development
</TABLE>

(1) Mr. Hawkins and Mr. Stuckey began their employment with the Company in
1996. The amounts set forth as "Salary" for 1996 represent actual
salary paid to such officers from their respective hire dates to
December 31, 1996. The salaries of Messrs. Philip L. Hawkins and Robert
G. Stuckey for 1996 on an annualized basis were $210,000 and $185,000,
respectively.
(2) Represents options to purchase Class A Units of limited partner
interest in Carr Realty, L.P. ("Class A Units") granted during the
period ended December 31, 1996, 1995, and 1994 respectively. Class A
Units are redeemable by the holder thereof for cash or Common Stock of
the Company, at the option of the Company.
(3) Mr. Oliver Carr's employment contract was amended by the Board of
Directors as of May 22, 1995, to increase his salary to $250,000 on an
annualized basis effective as of October 1995. Mr. Oliver Carr's
employment contract was also amended by the Board of Directors as of
May 22, 1995 to permit Mr. Oliver Carr to receive additional
compensation in such amounts and at such times as the Board of
Directors determines.
(4) Salary for 1996 for Mr. Hawkins includes $91,868 for payment by the
Company of certain employment related expenses.
(5) Salary for 1996 for Mr. Stuckey includes $47,055 for payment by the
Company of certain employment related expenses.
(6) All Other Compensation for 1996, 1995 and 1994 consists solely of
employer contributions to the Carr Realty Retirement Plan in the amount
of $7,500, $8,250 and $3,750, respectively, and life,

<PAGE>

AD&D and long-term disability insurance premiums in the amount of
$1,2128, $445 and $1,056, respectively, paid for the benefit of Mr.
Oliver Carr.
(7) All Other Compensation for 1996, 1995 and 1994 consists solely of
employer contributions to the Carr Realty Retirement Plan in the amount
of $7,500, $8,250 and $8,250, respectively, and life, AD&D and
long-term disability insurance premiums in the amount of $1,228, $532
and $1,056, respectively, paid for the benefit of Mr. Thomas Carr.
(8) All Other Compensation for 1996, 1995 and 1994 consists solely of
employer contributions to the Carr Realty Retirement Plan and Trust in
the amount of $7,500, $8,250 and $8,250, respectively, and life,
AD&D and long-term disability insurance premiums in the amount of
$1,228, $532 and $1,056, respectively, paid for the benefit of
Mr. Fields.
(9) All Other Compensation for 1996 consists solely of life, AD&D and
long-term disability insurance premiums in the amount of $921 paid for
the benefit of Mr. Hawkins.
(10) All Other Compensation for 1996 consists solely of life, AD&D and
long-term disability insurance premiums in the amount of $921 paid for
the benefit of Mr. Stuckey.

Option Plans

The Company has established two option plans for employees: the 1993
Carr Realty Option Plan which provides for the grant of options to purchase
Class A Units in Carr Realty, L.P.; and the 1997 CarrAmerica Realty Corporation
Stock Option and Incentive Plan described in Item 2 above.

1993 Carr Realty Option Plan. A total of 1,266,900 Class A Units have
been reserved for issuance under the 1993 Carr Realty Option Plan. Options
granted under the 1993 Carr Realty Option Plan generally vest 20% on each of the
first five anniversaries of the respective grant dates. On February 12, 1996,
options to acquire 20,000 Class A Units were granted to Philip L. Hawkins, the
Company's Managing Director of Asset Management. On February 26, 1996, options
to acquire 20,000 Class A Units were granted to Robert G. Stuckey, the Company's
Managing Director of Acquisitions and Development. Upon exercise of an option to
acquire Class A Units, an optionee will be deemed to receive ordinary income in
an amount equal to the difference between the exercise price and the fair market
value of the underlying Class A Unit on the date of the exercise and Carr
Realty, L.P. will be entitled to a deduction for the amount recognized as
ordinary income by the optionee. As of March 15, 1997, 941,348 options to
acquire Class A Units are outstanding under the 1993 Carr Realty Option Plan.

1997 CarrAmerica Realty Corporation Stock Option and Incentive Plan.
The material terms and conditions of the Stock Option Plan are described in Item
2 above. As of March 15, 1997, a total of 861,500 Stock Options had been granted
under the Stock Option Plan to a total of 43 executive officers and certain key
and other employees of the Company, subject to stockholder approval.

<PAGE>

<TABLE>
<CAPTION>
Option Grants in Last Fiscal Year
Potential Realizable
Value at Assumed Annual Alternative
Rates of Stock Price to (f) and
Appreciation for Option (g): Grant
Individual Grants Term Date Value
- - ------------------------------------------------------------------------------- -------------------------- ---------------
(a) (b) (c) (d) (e) (f) (g) (f)
Number of Percent of
Securities Total Options Exercise Grant
Underlying Granted to or Base Date
Options Employees in Price Expiration Present
Name/1 Granted (#)/2 Fiscal Year ($/Sh) Date 5% ($) 10% ($) Value $
- - ---- ------------ ----------- ------ ---- ------ ------- -------
<S> <C> <C> <C> <C> <C> <C>
Robert G. Stuckey 20,000 31% $24.75 2/26/06 $305,014 $772,965
Philip L. Hawkins 20,000 31% $24.25 2/12/06 $311,303 $788,903

</TABLE>
1/ No options were granted in 1996 to any other executive officers.
2/ Options to acquire Class A Units pursuant to 1993 Carr Realty Option Plan.

<TABLE>
<CAPTION>
Aggregated Option Exercises in Last Fiscal Year
and FY-end Option Values

Number of Unexercised Securities Value of Unexercised
Shares Underlying In-the-Money
Acquired Value Options at FY-End(1) Options at FY-End(2)
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- - ---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Oliver T. Carr, Jr. -- -- 79,700 40,300 $535,038 $263,650
Thomas A. Carr -- -- 79,700 40,300 535,038 263,650
Brian K. Fields -- -- 39,847 20,153 267,485 399,329
Philip L. Hawkins -- -- -- 20,000 -- 100,000
Robert G. Stuckey -- -- -- 20,000 -- 90,000
</TABLE>
- - ----------------------
(1) The number of unexercised options at fiscal year end is based on
the number of shares of Common Stock for which each underlying Class A
Unit of Carr Realty, L.P. would have been redeemable on that date.
(2) Based on the last reported sale price of the Common Stock on the NYSE
on December 31, 1996 of $29.25.

<PAGE>

New Plan Benefits

The table below indicates Stock Options granted to the Company's Chief
Executive Officer and the Named Executive Officers and the Company's executive
officers as a group as of March 15, 1997 under the Stock Option Plan, subject to
stockholder approval. No Stock Options under the Stock Option Plan may be
granted to Non-Employee Directors. In each case, the Stock Options were granted
effective as of February 6, 1997, vesting 20% on each of the first five
anniversaries of the date of grant at an exercise price of $29.25 per share.
These Stock Options will terminate on the tenth anniversary of the date of
grant. Upon approval of the Stock Option Plan by the stockholders at the
Meeting, these grants will be effective as of the date such grants were made.
The material features of the Stock Option Plan are described in Item 2 above.

Number of Options Granted
Name and Position Pursuant to Stock Option Plan
- - ----------------- -----------------------------

Oliver T. Carr, Jr., Chairman and CEO 50,000

Thomas A. Carr, President and COO 60,000

Brian K. Fields, Chief Financial Officer 35,000

Philip L. Hawkins, Managing Director -
Asset Management 50,000

Robert G. Stuckey, Managing Director -
Acquisitions and Development 50,000

Executive Officer Group, including the
five executive officers named above
(6 persons) 295,000

Employment Contracts

None of the executive officers of the Company have an employment
contract, except for Robert E. Peterson, the Company's Managing Director,
Southeast Region. As of November 1, 1996, in connection with the acquisition of
the Peterson Properties portfolio in suburban Atlanta, the Company entered into
an employment contract with Robert E. Peterson which provides for the employment
of Mr. Peterson for two years at an annual base compensation of $190,000 and
additional cash compensation of a target bonus of $90,000 per year. Mr.
Peterson's employment contract provides for certain severance payments in the
event of disability or termination by the Company without cause or by Mr.
Peterson with cause. Mr. Peterson also entered into a Noncompetition and
Nonsolicitation Agreement with the Company restricting him from competing with
the Company during and for two years after termination or expiration of his
employment with the Company.

<PAGE>

Notwithstanding anything to the contrary set forth in any of the
Company's filings under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, that might incorporate SEC filings,
in whole or in part, the following Performance Graph and the Report on Executive
Compensation shall not be incorporated by reference into any such filings:

PERFORMANCE GRAPH

[GRAPHIC OMITTED]

* $100 invested on 2/09/93 in stock or on 1/31/93 in Index including
reinvestment of dividends.
Fiscal year ending December 31.

The points on the graph represent the following numbers:

Year CarrAmerica S&P 500 NAREIT Equity
---- ----------- ------- -------------
1996 178 187 181
1995 138 152 134
1994 93 111 116
1993 109 109 112

REPORT ON EXECUTIVE COMPENSATION

The Executive Compensation Committee of the Board of Directors (the
"Committee") is comprised entirely of non-employee directors and is responsible
for recommending to the Board of Directors compensation policies applicable to
the Company's executive officers. This report addresses the Company's
compensation policies for 1996 as they affected the Chief Executive Officer, the
Named Executive Officers and the other executive officers of the Company.

Compensation Philosophy

The Committee's executive compensation policies are designed to provide
competitive compensation opportunities, to reward executives consistent with the
Company's performance, to recognize individual performance and responsibility,
to assist the Company in attracting and retaining qualified executives and, most
importantly, to underscore the importance of total stockholder return. The
Committee is committed to a compensation philosophy which rewards employees
primarily on the Company's success in attaining corporate financial objectives
and, secondarily, on the employee's success in attaining departmental and
individual financial and qualitative performance objectives. This philosophy is
based on the premise that achievement of the Company's goals results from the
coordinated efforts of all individuals working toward common objectives. The
Company strives to achieve those objectives through teamwork that is focused on
meeting the expectations of customers and stockholders.

The components of the Company's executive compensation program for 1996
were (i) an annual component consisting of base salaries and cash bonuses, and
(ii) long-term incentives. Central to the Company's executive compensation
program is the definition of detailed performance goals and financial targets.
Executive compensation is determined and administered by the Committee on the
basis of total compensation rather than as separate free-standing components. In
determining executive compensation, the Committee considers compensation
packages for executives of comparable position and responsibility in the
industry.

Annual Component

Base salaries for all Named Executive Officers, including the Chief
Executive Officer, are reviewed by the Committee on an annual basis. In
determining appropriate base salaries, the Committee considers external
competitiveness in the context of the Company's financial condition and capital
resources, the roles and responsibilities of the individual, the contributions
of the individual to the Company's business, an analysis of job requirements and
the individual's prior experience and accomplishments.

To provide additional incentive to achieve outstanding performance, the
Committee also makes cash bonus awards based on corporate and individual
performance. The compensation plan adopted by the Committee in 1996 establishes
target cash bonuses based on achievement of financial and operational goals for
the Company and, where appropriate, those activities of the Company managed by
the executive officer. The Committee has the discretion to increase the annual
bonus in any given year to take into account what it deems to be extraordinary
events.

Long-Term Incentives

The Committee believes that the financial interests of executive
officers should be aligned closely with those of stockholders through equity
ownership. The Company's long-term incentive compensation plan currently
consists of the 1993 Carr Realty Option Plan under which executive officers and
other key employees of the Company have been granted options to acquire Class A
Units in Carr Realty, L.P. ("Unit

<PAGE>

Options"). Class A Units of Carr Realty, L.P. are redeemable for Common Stock of
the Company or, at the Company's election, cash equal to the value of an equal
number of shares of Common Stock and, therefore, have a value equal to that of
the Company's Common Stock. To encourage the Company's employees to seek
long-term appreciation in the value of the Company's Common Stock, Unit Options
vest over a specified period of time, and then only if the employee remains with
the Company. Accordingly, an employee generally must remain with the Company for
a period of 5 years to enjoy the full economic benefit of a Unit Option. The
Company awarded 20,000 Unit Options each to two of the Named Executive Officers
at the time they joined the Company in 1996.

In recognition of the changes in the Company's organizational structure
during 1996, the Committee and the Board of Directors have adopted the 1997
CarrAmerica Realty Corporation Stock Option and Incentive Plan (the "Stock
Option Plan") which provides for the grant of options to purchase shares of
Common Stock of the Company to executive officers and a broad-based group of the
Company's employees. The Committee expects that future grants of long-term
incentives to the Company's executives will be made pursuant to the Stock Option
Plan. The Stock Option Plan is being presented to the Company's stockholders for
approval at the Meeting and, accordingly, is described in detail in Item 2
above. The Committee urges stockholders to approve the Stock Option Plan.

Chief Executive Officer Compensation

The salary and long-term incentive awards of Mr. Oliver T. Carr, Jr.
are determined substantially in conformity with the policies described above for
all other executive officers of the Company. The base salary of Mr. Oliver T.
Carr, Jr. for 1996 was based on the terms of his employment agreement with the
Company, as amended. Mr. Carr was not granted any Unit Options during 1996. Mr.
Carr did not receive an annual cash bonus for 1996.

David Bonderman
A. James Clark
J. Marshall Peck
Wesley S. Williams, Jr.

EXECUTIVE COMPENSATION COMMITTEE
INTERLOCKS AND INSIDER PARTICIPATION

None of the members of the Executive Compensation Committee is an
employee of the Company.

A. James Clark. As described below, A. James Clark, who is a member of
the Executive Compensation Committee, owns interests in certain entities that,
during 1996, were parties to certain transactions involving the Company.

Carr Real Estate Services, Inc. provides management and leasing
services to properties owned by partnerships in which A. James Clark and/or
Clark Enterprises, Inc. have interests. Carr Services, Inc. received revenue of
$.5 million for 1996 from partnerships in which A. James Clark and/or Clark
Enterprises, Inc. have interests.

Wholly-owned subsidiaries of Clark Enterprises, Inc. have provided
construction services to the Company. In connection with these services, the
subsidiaries received payments from the Company of $1.3 million for 1996,
excluding payments described in the next paragraph. These amounts included
amounts paid by these subsidiaries for materials and to sub-contractors.

<PAGE>

On September 26, 1994, the Company and Cousins Properties Incorporated
entered into a joint venture ("CC-JM II Associates") to develop and own a new
office building to be located in McLean, Virginia. Mr. Clark was a limited
partner in the partnership which sold the land to CC-JM II Associates for a
purchase price of $2.1 million. A wholly-owned subsidiary of Clark Enterprises,
Inc. provided construction services to the joint venture pursuant to an $18
million contract and, for the year ended December 31, 1996 received payments
from the Company, including change orders, of $1.8 million.

J. Marshall Peck. As described below, J. Marshall Peck, who is a member
of the Executive Compensation Committee, is a Managing Director of Security
Capital Investment Research Incorporated, which, as described below, during
1996, was a party to certain transactions involving the Company.

During 1996, payments of $1.1 million were made to Security Capital
Investment Research Incorporated, an affiliate of US Realty, for services
rendered in connection with the acquisition of operating and development
properties.

The Company paid Security Capital Markets Group, Inc., an affiliate of
US Realty, a placement fee of $.4 million in 1996 for services rendered in
connection with the sale of 1,740,000 shares of Series A Cumulative Convertible
Redeemable Preferred Stock issued in October 1996.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

OCCO and Oliver T. Carr, Jr.

CarrPark, Inc., a subsidiary of OCCO, a stockholder of the Company
whose chairman, president and trustee of the majority stockholder is Oliver T.
Carr. Jr., manages certain of the parking garages in the Company's properties
for fees ranging from 24 to 62 percent of gross receipts from garage operations.
CarrPark, Inc. is responsible for payment of all garage operating expenses. Fees
paid by the Company to CarrPark, Inc. for 1996 totaled $1.9 million.

The Company leases office space from a partnership affiliated with
OCCO. Rent expense amounted to $1.1 million in 1996 under the lease. Future
minimum payments under the lease are $.9 million in 1997 and $.4 million in
1998.

Carr Development and Construction was a division of OCCO until April
30, 1996 when the Company acquired it for $1.75 million. Carr Development and
Construction was the development manager of 1717 Pennsylvania Avenue during 1995
and a portion of 1996. OCCO earned fees of $.2 million in 1996.

Carr Real Estate Services, Inc. provides management and leasing
services to properties owned by partnerships in which OCCO and/or Oliver T.
Carr, Jr. (as well as A. James Clark and ELAS in some circumstances) have
interests. Management fees are generally equal to 2% to 3% of collected revenue
from the managed property, and leasing fees are generally equal to 1.5% to 2% of
the rent payable over the life of the lease. Carr Real Estate Services, Inc.
received revenue from these affiliated partnerships of $6.9 million for 1996.

Oliver T. Carr, Jr., as beneficial owner of the majority of shares of
OCCO, also has an indirect material interest in the transactions involving OCCO
described above.

Clark Enterprises, Inc. and A. James Clark

A wholly-owned subsidiary of Clark Enterprises, Inc., a Unitholder of
Carr Realty, L.P., has provided construction management services to the Company.
In connection with these services, the Company paid $1.3 million in 1996.
Additionally, a wholly-owned subsidiary of Clark Enterprises, Inc. received a
total of $19.6 million during the years of 1996, 1995 and 1994 under a
construction contract for the Booz-Allen & Hamilton Building (in which the
Company is a 50% joint venturer).

The Equitable Life Assurance Society of the United States

The Equitable Life Assurance Society of the United States ("ELAS"), an
affiliate of an entity of which one of the Company's directors serves as an
officer and director, leases approximately 10,000 square feet of office space
from the Company. Rent of $.3 million was received by the Company in 1996.

Carr Real Estate Services, Inc. provides management and leasing
services to properties owned by partnerships in which ELAS has interests. In
addition to revenue received from partnerships in which OCCO also has an
interest (as described above), Carr Real Estate Services, Inc. received revenue
of $.6 million for 1996 from partnerships in which ELAS has an interest.

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Security Capital Affiliates

The Company paid Security Capital Markets Group, an affiliate of US
Realty, a placement fee of $.4 million in 1996 for services rendered in
connection with the sale of 1,740,000 shares of Series A Preferred Stock issued
in October 1996.