ARDEN REALTY LIMITED PARTNERSHIP, S-4, 2001-01-08

ARDEN REALTY LIMITED PARTNERSHIP
S-4, 2001-01-08
OPERATORS OF NONRESIDENTIAL BUILDINGS

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 8, 2001

REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------

ARDEN REALTY LIMITED PARTNERSHIP
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS GOVERNING DOCUMENTS)

<TABLE>
<S> <C> <C>
MARYLAND 6512 95-4599813
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OF ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>

11601 WILSHIRE BOULEVARD
FOURTH FLOOR
LOS ANGELES, CALIFORNIA 90025
(310) 966-2600
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
------------------------

RICHARD S. ZIMAN
11601 WILSHIRE BOULEVARD
FOURTH FLOOR
LOS ANGELES, CALIFORNIA 90025
(310) 966-2600
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER INCLUDING AREA CODE, OF
AGENT FOR SERVICE)

COPIES TO:
WILLIAM J. CERNIUS, ESQ.
DAVID L. KUIPER, ESQ.
LATHAM & WATKINS
650 TOWN CENTER DRIVE, 20TH FLOOR
COSTA MESA, CALIFORNIA 92626-1925
(714) 540-1235

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the registration statement becomes effective.

If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]

If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ] __________

If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] __________
CALCULATION OF REGISTRATION FEE

<TABLE>
<S> <C> <C> <C> <C>
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED PER UNIT PRICE REGISTRATION FEE(1)
-----------------------------------------------------------------------------------------------------------------------
8.50% Senior Notes due 2010.... $100,000,000 100% $100,000,000 $25,000
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Calculated pursuant to Rule 457(f) of the rules and regulations under the
Securities Act of 1933, as amended.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.

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<PAGE> 2

SUBJECT TO COMPLETION, DATED JANUARY 8, 2001

PROSPECTUS

ARDEN REALTY
LIMITED PARTNERSHIP

OFFER TO EXCHANGE

$100,000,000 8.50% SENIOR NOTES DUE 2010 FOR ANY AND ALL
UNREGISTERED 8.50% SENIOR NOTES DUE 2010
-------------------------
THE EXCHANGE OFFER WILL EXPIRE AT 12:00 A.M., NEW YORK CITY TIME ON FEBRUARY ,
2001, UNLESS EXTENDED.
--------------------------------------------------------------------------------

TERMS OF THE EXCHANGE OFFER

Arden Realty Limited Partnership hereby offers, upon the terms and subject
to the conditions contained in this prospectus, to exchange its 8.50% senior
notes due 2010, registered under the Securities Act of 1933, for its
unregistered 8.50% senior notes due 2010. The registered notes received in
exchange for the unregistered notes are sometimes referred to in this prospectus
as the exchange notes.

Interest on the notes is payable on November 15 and May 15 of each year,
beginning May 15, 2001. The terms of the exchange notes to be issued are
substantially identical to the terms of the unregistered notes, except for
specific transfer restrictions and registration rights relating to the
unregistered notes.

We will not receive any proceeds from the exchange offer. We will pay the
expenses of the exchange offer.

You should carefully review the procedures for tendering the unregistered
notes beginning on page 49 of this prospectus. If you do not follow these
procedures, we may not exchange your unregistered notes for registered exchange
notes.

You may withdraw tendered unregistered notes at any time before the
expiration of the exchange offer.

The exchange notes will not be listed on any securities exchange. A public
market for the exchange notes may not develop, which could make selling the
exchange notes difficult. If a market for the exchange notes develops, the
exchange notes could trade at prices that are higher or lower than the initial
prices of the unregistered notes.

You should read the section entitled "Risk Factors" beginning on page 13
for a discussion of specific factors that should be considered in evaluating an
investment in the exchange notes.

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

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE
MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES
IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

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

The date of this prospectus is , 2001
<PAGE> 3

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Forward-Looking Statements.................................. ii
Prospectus Summary.......................................... 1
Risk Factors................................................ 13
No Cash Proceeds............................................ 20
Ratio Of Earnings To Fixed Charges.......................... 20
Capitalization.............................................. 20
Selected Financial Data..................................... 21
Management's Discussion And Analysis Of Financial Condition
And Results Of Operations................................. 23
Business.................................................... 38
Properties.................................................. 42
Description Of Other Debt................................... 45
The Exchange Offer.......................................... 47
Description Of Exchange Notes............................... 57
Description Of Specific Provisions Of Our Partnership
Agreement................................................. 73
Management.................................................. 78
Transactions With Related Parties........................... 87
Policies With Respect To Certain Activities................. 89
Federal Income Tax Consequences............................. 92
Plan Of Distribution........................................ 93
Experts..................................................... 94
Legal Matters............................................... 94
Where You Can Find More Information......................... 94
Financial Statements........................................ F-1
</TABLE>

i
<PAGE> 4

FORWARD-LOOKING STATEMENTS

This prospectus includes "forward-looking statements" including, in
particular, the statements about our plans, strategies and prospects under the
headings "Prospectus Summary," "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Business." Although we
believe that our plans, intentions and expectations reflected in or suggested by
these forward-looking statements are reasonable, we can give no assurance that
our plans, intentions or expectations will be achieved. Important factors that
could cause actual results to differ materially from the forward-looking
statements we make in this prospectus include those found in the section
entitled "Risk Factors" and the following:

- the national and Southern California economic climate;

- Southern California real estate conditions;

- the perceptions of prospective tenants of the attractiveness of our
properties;

- our ability to manage and maintain our properties and secure adequate
insurance;

- potential increases in operating costs, including real estate taxes and
utilities;

- applicable laws, including tax laws;

- interest rate levels; and

- the availability of financing.

You can identify these forward-looking statements by words such as
"believe," "may," "could," "will," "estimate," "continue," "anticipate,"
"intend," "seek," "plan," "expect," "should," "would" and similar expressions.

We undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.

All forward-looking statements attributable to us or persons acting on our
behalf are expressly qualified in their entirety by these cautionary statements.

ii
<PAGE> 5

PROSPECTUS SUMMARY

In this prospectus, the terms "Partnership," "us," "we" and "our" refers to
Arden Realty Limited Partnership and our affiliated entities as a consolidated
group and the terms "Arden Realty" and "General Partner" refer to Arden Realty,
Inc. The following summary contains basic information about this offering. It
likely does not contain all the information that is important to you. For a more
complete understanding of this offering, we encourage you to read this entire
prospectus and the documents we refer to in this prospectus.

ARDEN REALTY LIMITED PARTNERSHIP

Arden Realty Limited Partnership is an operating partnership that owns,
manages, leases, develops, renovates and acquires commercial properties located
in Southern California. Arden Realty, Inc., a real estate investment trust, or
REIT, is our sole general partner and, as of September 30, 2000, owned 96.7% of
our common partnership units. Arden Realty conducts substantially all of its
operations through us and our subsidiaries.

We are a full-service real estate organization managed by 11 senior
executive officers who have an average of 15 years of experience in the real
estate industry. We perform all property management, accounting, finance and
acquisition activities and a majority of our leasing transactions with our own
staff of approximately 300 employees.

As of September 30, 2000, we are Southern California's largest office
landlord as measured by total net rentable square feet owned. Since our
formation in 1996, we have acquired 118 properties containing approximately 14.5
million net rentable square feet for a total purchase price of approximately
$1.9 billion. As of September 30, 2000, our portfolio consisted of 143 primarily
office properties containing approximately 18.7 million net rentable square feet
and two properties with approximately 442,000 net rentable square feet under
development. As of September 30, 2000, our properties were approximately 95.9%
leased, excluding one existing property under renovation.

PORTFOLIO MANAGEMENT

We perform all portfolio management activities, including management of all
lease negotiations, tenant build-outs, property renovations, capital
expenditures and on-site property management for our portfolio. We directly
manage these activities from approximately 45 management offices located
throughout our portfolio. The activities of these management offices are
supervised by five regional offices with oversight by our corporate office to
ensure consistency of the application of our operating policies and procedures.
Each regional office is strategically located within the Southern California
submarkets where our properties are located and is co-managed by a regional
property manager and a regional leasing manager who are responsible for
supervising the day-to-day activities of our management offices. Each regional
office is staffed with leasing, property management, building engineering,
construction, accounting and information systems specialists. By maintaining a
regionally focused organizational structure headed by seasoned managers, we are
able to quickly respond to our tenants' needs and market opportunities.

We currently lease approximately 70% of our properties using our in-house
staff. We employ outside brokers who are monitored by our leasing managers for
the remainder of our properties. We believe that our in-house leasing program
allows us to reduce third-party leasing commissions and closely monitor our
asking rents and leasing terms.

All of our management and regional offices are networked with our corporate
office and have access to the Internet and our e-mail, accounting and lease
management systems. Our accounting and lease management systems employ the
latest technology and allow both corporate and field personnel access to tenant
and prospective tenant-related information to enhance responsiveness and
communication of marketing and leasing activity for each property.

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<PAGE> 6

PROPERTIES

Our portfolio consists of 143 primarily office properties, containing
approximately 18.7 million net rentable square feet, that individually range
from approximately 12,000 - 600,000 net rentable square feet. Our portfolio
consists of primarily suburban office properties located in Los Angeles, Orange,
San Diego, Ventura, Riverside, San Bernardino and Kern Counties. We believe that
our properties are located within desirable and established business communities
and are well maintained. Our properties offer an array of amenities, including
on-site management, high speed Internet access and other broadband services,
security, parking, conference facilities, food services and health clubs.

Following is a summary of our property portfolio as of September 30, 2000:

<TABLE>
<CAPTION>
ANNUALIZED
PERCENT OF BASE RENT PER
APPROXIMATE TOTAL NET LEASED NET
NUMBER OF NET RENTABLE RENTABLE PERCENT RENTABLE
LOCATION PROPERTIES SQUARE FEET SQUARE FEET LEASED SQUARE FOOT(1)
-------- ---------- -------------- ----------- ------- --------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Los Angeles County:
West............................... 31 5,275 28% 96.6% $24.41
North.............................. 32 2,877 16 93.1 21.58
South.............................. 16 2,202 12 96.3 19.38
Central............................ 3 609 3 95.1 19.78
Orange County........................ 21 3,317 18 96.8 19.63
San Diego County..................... 21 2,487 13 97.7 19.15
Ventura County....................... 4 562 3 99.5 17.17
Riverside/San Bernardino Counties.... 12 969 5 91.1 17.66
Kern County.......................... 2 216 1 86.3 --
--- ------ --- ---- ------
Subtotal/Weighted Average.......... 142 18,514 99% 95.9% $21.53
Renovation Properties................ 1 220 1% 47.0% $20.30
--- ------ --- ---- ------
Total/Weighted Average.......... 143 18,734 100% 95.3% $21.52
=== ====== === ==== ======
</TABLE>

-------------------------
(1) Calculated as monthly contractual base rent under existing leases as of
September 30, 2000, multiplied by 12 and divided by leased net rentable
square feet; for those leases where rent has not yet commenced or which are
in a free rent period, the first month in which rent is to be received is
used to determine annualized base rent. Excludes 48 properties and 4,722,281
net rentable square feet under triple net and modified gross leases. If
these properties and square footage had been included, our total weighted
average annualized base rent per leased net rentable square foot would be
$19.45.

Subsequent to September 30, 2000, we sold Evergreen Plaza, a 76,000 net
rentable square foot retail property located in Thousand Oaks, California, for
approximately $11.7 million and recorded a gain of approximately $2.2 million.
Proceeds from this sale were used to repay a portion of our unsecured lines of
credit.

DEVELOPMENT AND ACQUISITION ACTIVITIES

As of September 30, 2000, in addition to the properties listed above, we
currently have two properties under development containing approximately 442,000
net rentable square feet. These two properties are located at the Howard Hughes
Center, a 70-acre commercial development located two miles north of Los Angeles
International Airport and immediately adjacent to the San Diego Freeway (I-405)
with on- and off-ramps that directly serve the site. We estimate the total costs
of developing these two properties will be approximately $124.5 million, of
which $49.0 million had been incurred as of September 30, 2000. Estimated total
costs include purchase and closing costs and anticipated construction costs,
tenant improvements, leasing commissions and carrying costs during development.
One of the properties is an approximately 159,000 net rentable square foot
build-to-suit office building being developed

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<PAGE> 7

for Univision Communications, Inc., that is estimated to be completed and 100%
occupied during the third quarter of 2001. The second property, 6080 Center
Drive, is an approximately 283,000 net rentable square foot multi-tenant
building that is currently approximately 78% leased. Construction is expected to
be completed on this building during the second quarter of 2001 and
stabilization is expected during the fourth quarter of 2001.

Subsequent to September 30, 2000, we commenced construction on 6100 Center
Drive, a multi-tenant office building at the Howard Hughes Center. The 6100
Center Drive project is an approximately 280,000 net rentable square foot
building that has a design similar to our 6080 Center Drive project. In
addition, we have preliminary architectural designs completed for two additional
build-to-suit buildings at the Howard Hughes Center, totaling an additional
approximately 350,000 net rentable square feet. We do not intend to commence
construction on any additional build-to-suit buildings at the Howard Hughes
Center until build-to-suit tenant leases are signed and we can achieve yields
commensurate with the project's development risk.

In addition to our development at the Howard Hughes Center, we have
completed preliminary designs and are marketing an approximately 170,000 net
rentable square foot build-to-suit office building at our Long Beach Airport
Business Park. We do not intend to commence construction on this project until a
build-to-suit tenant lease is signed and we can achieve yields commensurate with
the project's development risk.

We did not acquire any properties in 2000.

TENANT INFORMATION

We believe that the location, quality of construction and building
amenities, as well as our high level of tenant service, have enabled us to
attract and retain a diverse tenant base. As of September 30, 2000, we had over
3,000 tenants, with no tenant representing more than 2.2% of the aggregate
annualized base rent of our properties, and only two tenants representing more
than 1.0% of our aggregate annualized base rent. Our properties are leased to
local, national and foreign companies engaged in a variety of businesses
including financial services, insurance, entertainment, health care services,
accounting, law, technology, education and publishing.

Our leases are typically structured for terms of three, five or ten years.
Leases typically contain provisions permitting tenants to renew expiring leases
at prevailing market rates. A majority of our leases are full service gross
leases under which tenants typically pay for all real property taxes and
operating expenses above those for an established base year or expense stop.
Tenants generally pay directly, without regard to a base year or expense stop,
for overtime use of heating and air conditioning and for on-site monthly
employee and visitor parking. We are generally responsible for structural
repairs.

BUSINESS STRATEGIES

Our primary business strategy is to actively manage our portfolio to
achieve gains in occupancy and rental rates, to control operating expenses and
to maximize income from ancillary operations and services. When market
conditions permit, we may also develop or acquire new properties that add value
and fit strategically into our portfolio. We may also sell existing mature or
slow growth properties and deploy the proceeds into investments that we believe
will generate higher yields.

Through our corporate office and regional offices, we implement our
business strategies by:

- using integrated decision making to provide pro-active solutions to the
space needs of users in the markets where we have extensive real estate
and technical expertise;

- emphasizing quality service, tenant satisfaction and retention;

- employing intensive property marketing and leasing programs; and

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<PAGE> 8

- implementing cost control management techniques and systems that
capitalize on economies of scale and concentration arising from the size
and geographic focus of our portfolio.

We believe the implementation of these operating practices has been
instrumental in the increased occupancy and improved operating results of our
existing portfolio.

GROWTH STRATEGIES

Based on our geographic focus in Southern California and our evaluation of
local market conditions, we believe the following key factors provide us with
opportunities to maximize returns:

- the continued strength of the Southern California economy, particularly
in the submarkets where our properties are located; and

- the limited construction of new office properties in the Southern
California region due to substantial building construction limitations
and a minimal amount of developable land in many key submarkets.

INTERNAL GROWTH

We believe that opportunities exist to increase cash flow from our existing
portfolio and that these opportunities will be enhanced as the Southern
California commercial real estate market continues to improve. We achieve
internal growth by:

- maintaining or improving current occupancy throughout our portfolio by
actively managing and aggressively leasing our properties;

- leasing space and renewing leases as they expire at increasing rents;

- controlling operating expenses through active cost control management and
systems;

- realizing economies of scale and concentration due to the size and
geographic focus of our portfolio; and

- sourcing new and innovative revenue streams while providing high quality
services to our tenants.

EXTERNAL GROWTH

We believe in the strength and potential of the Southern California
commercial real estate market, and we intend to continue to focus our resources
in this region. We have assembled a management team that has extensive
experience and knowledge in this market that we believe provides us with a
competitive advantage in identifying and capitalizing on development, renovation
and acquisition opportunities.

Subject to capital availability and market conditions, our approach is to
seek development, renovation and acquisition opportunities in Southern
California submarkets where we have an existing presence and where one or more
of the following conditions exist:

- low vacancy rates;

- opportunities for rising rents due to employment growth and population
movements;

- a minimal amount of developable land; or

- significant barriers to entry because of constraints on new development,
including challenging entitlement processes, strictly enforced height and
density restrictions and governmental requirements resulting in
significant additional construction costs.

FINANCIAL POLICIES

We are committed to financial policies based on controlled growth and the
maintenance of a strong balance sheet and consistent cash flow. We are committed
to conservative leverage and fixed charge

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<PAGE> 9

coverage levels throughout the economic and investment cycle. Leverage will vary
around target levels based on the timing of equity issuances and relative debt
and equity capital market conditions. Our targeted debt and coverage levels are:
(1) total debt to total market capitalization ratio between 30% and 45%, (2)
EBITDA to interest expense of at least 3.0 to 1, and (3) EBITDA to fixed charges
of at least 2.5 to 1. In addition, covenants contained in the indenture will
limit our ability to incur debt in the future. Going forward, we plan to monitor
and access private and public capital markets to continue to issue equity and
equity-related and unsecured debt instruments on attractive terms. We intend to
limit our floating rate debt by using more long-term fixed rate debt.

ABOUT US

We are a Maryland limited partnership. Arden Realty is a Maryland
corporation. Arden Realty's common stock is listed on the New York Stock
Exchange under the symbol "ARI." Our executive offices are located at 11601
Wilshire Boulevard, Fourth Floor, Los Angeles, California 90025. Our telephone
number is (310) 966-2600.

5
<PAGE> 10

THE EXCHANGE OFFER

Following is a summary of the principal terms of our exchange offer. A more
detailed description is contained in this prospectus under the heading "The
Exchange Offer."

THE EXCHANGE OFFER......... We are offering to issue up to $100 million in
principal amount of exchange notes, registered
under the Securities Act, in exchange for a like
principal amount of our unregistered notes. You may
tender your unregistered notes by following the
procedures described under the heading "The
Exchange Offer."

If you do not validly tender your unregistered
notes and accept our exchange offer, you will
continue to hold unregistered notes and will
continue to be subject to the rights and
limitations applicable to those notes, including
existing transfer restrictions. After the exchange
offer, we will have no further obligation to
provide for the registration under the Securities
Act of your unregistered notes, except in limited
circumstances.

Based on an interpretation by the staff of the
Securities and Exchange Commission set forth in
no-action letters issued to third parties, we
believe that the exchange notes issued to you
pursuant to the exchange offer in exchange for your
unregistered notes may be offered for resale,
resold and otherwise transferred by you unless you
are (1) a broker-dealer who purchases such exchange
notes directly from us to resell pursuant to Rule
144A or any other available exemption under the
Securities Act or (2) a person that is our
affiliate (within the meaning of Rule 405 under the
Securities Act), without compliance with the
registration and prospectus delivery provisions of
the Securities Act; provided that you are acquiring
exchange notes in the ordinary course of your
business and are not participating, and have no
arrangement or understanding with any person to
participate, in the distribution of the exchange
notes. Each broker-dealer that receives exchange
notes for its own account in exchange for
unregistered notes, where the unregistered notes
were acquired by the broker-dealer as a result of
market-making activities or other trading
activities, must acknowledge that it will deliver a
prospectus in connection with any resale of its
exchange notes. See "The Exchange Offer -- Resale
of the Exchange Notes."

REGISTRATION RIGHTS
AGREEMENT.................. We sold the unregistered notes pursuant to a
purchase agreement, dated November 15, 2000, by and
between us and Lehman Brothers Inc., who was the
initial purchaser of the unregistered notes.
Pursuant to the purchase agreement, we and the
initial purchaser entered into a registration
rights agreement, dated as of November 20, 2000,
which grants the holders of the unregistered notes
specific exchange and registration rights. The
exchange offer is intended to satisfy those rights.
See "The Exchange Offer -- Termination of Specific
Rights."

EXPIRATION DATE............ The exchange offer will expire at 12:00 a.m., New
York City time, on February , 2001, unless we, in
our sole discretion, extend the exchange offer, in
which case the term expiration date shall mean the
latest date and time to which the exchange offer is
extended. See "The Exchange Offer -- Expiration
Date; Extensions; Amendments."

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<PAGE> 11

CONDITIONS TO THE EXCHANGE
OFFER.................... The exchange offer is subject to specific customary
conditions that may be waived by us. The exchange
offer is not conditioned upon any minimum aggregate
principal amount of unregistered notes being
tendered for exchange. See "The Exchange
Offer -- Conditions."

PROCEDURES FOR TENDERING
THE UNREGISTERED NOTES..... To accept our exchange offer, you must complete,
sign and date the letter of transmittal, or a
facsimile in accordance with its instructions, and
mail or otherwise deliver the letter of
transmittal, or facsimile, together with your
unregistered notes and any other required
documentation to The Bank of New York, as exchange
agent, at the address set forth herein. By
executing the letter of transmittal, you will
represent to and agree with us that, among other
things:

(i) the exchange notes to be acquired by you in
connection with the exchange offer are being
acquired by you in the ordinary course of your
business;

(ii) if you are not a broker-dealer, you are not
currently participating in, do not intend to
participate in, and have no arrangement or
understanding with any person to participate
in, a distribution of the exchange notes;

(iii) if you are a broker-dealer registered under
the Securities Exchange Act or are
participating in the exchange offer for the
purposes of distributing the exchange notes,
you will comply with the registration and
prospectus delivery requirements of the
Securities Act in connection with a secondary
resale transaction of the exchange notes
acquired by that person and cannot rely on
the position of the staff of the Securities
and Exchange Commission set forth in no-
action letters;

(iv) you understand that a secondary resale
transaction described in clause (iii) above
and any resales of exchange notes obtained by
you in exchange for unregistered notes
acquired by you directly from us should be
covered by an effective registration
statement containing the selling
securityholder information required by Item
507 or Item 508, as applicable, of Regulation
S-K of the Securities and Exchange
Commission; and

(v) you are not our "affiliate," as defined in
Rule 405 under the Securities Act.

If you are a broker-dealer that will receive
exchange notes for your own account in exchange for
unregistered notes that were acquired as a result
of market-making activities or other trading
activities, you will be required to acknowledge in
the letter of transmittal that you will deliver a
prospectus in connection with any resale of your
exchange notes; however, by so acknowledging and by
delivering a prospectus, you will not be deemed to
be admitting that you are an "underwriter" within
the meaning of the Securities Act. See "The
Exchange Offer -- Procedures for Tendering."

SPECIAL PROCEDURES FOR
BENEFICIAL OWNERS.......... If your unregistered notes are registered in the
name of a broker, dealer, commercial bank, trust
company or other nominee and you
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<PAGE> 12

wish to tender your unregistered notes, you should
contact the registered holder promptly and instruct
the registered holder to tender your unregistered
notes on your behalf. If you wish to tender on your
own behalf, you must, prior to completing and
executing the letter of transmittal and delivering
your unregistered notes, either make appropriate
arrangements to register ownership of the
unregistered notes in your name or obtain a
properly completed bond power from the registered
holder. The transfer of registered ownership may
take considerable time and may not be able to be
completed prior to the expiration date. See "The
Exchange Offer -- Procedures for Tendering."

GUARANTEED DELIVERY
PROCEDURES................. If you wish to tender your unregistered notes but
your unregistered notes are not immediately
available or you cannot deliver your unregistered
notes, the letter of transmittal or any other
documentation required by the letter of transmittal
to the exchange agent prior to the expiration date,
then you must tender your unregistered notes
according to the guaranteed delivery procedures
listed under "The Exchange Offer -- Guaranteed
Delivery Procedures."

ACCEPTANCE OF THE
UNREGISTERED NOTES AND
DELIVERY OF THE EXCHANGE
NOTES.................... Subject to the satisfaction or waiver of the
conditions to the exchange offer, we will accept
for exchange any and all unregistered notes that
are properly tendered prior (and not withdrawn) to
the expiration date. The exchange notes will be
delivered on the earliest practicable date
following the expiration date. See "The Exchange
Offer -- Terms of the Exchange Offer."

WITHDRAWAL RIGHTS.......... Tenders of unregistered notes may be withdrawn at
any time prior to the expiration date. See "The
Exchange Offer -- Withdrawal of Tenders."

FEDERAL INCOME TAX
CONSEQUENCES............. The exchange of unregistered notes for exchange
notes in the exchange offer will not be a taxable
event for U.S. federal income tax purposes. See
"Federal Income Tax Consequences."

NO CASH PROCEEDS........... We will not receive any proceeds from the issuance
of the exchange notes.

EXCHANGE AGENT............. The Bank of New York is serving as the exchange
agent.

8
<PAGE> 13

THE EXCHANGE NOTES

The form and terms of the respective exchange notes will be identical in
all material respects to the form and terms of the unregistered notes, except
that the exchange notes will not bear legends restricting their transfer and the
holders of the exchange notes will not be entitled to any of the registration
rights of holders of the unregistered notes under the registration rights
agreement, which rights will terminate upon consummation of the exchange offer.
The exchange notes will evidence the same indebtedness as the unregistered notes
which they replace and will be issued under, and be entitled to the benefits of,
the indenture dated as of March 14, 2000, as amended or supplemented. For a more
complete description of the terms of the exchange notes, see "Description of
Exchange Notes."

ISSUER..................... Arden Realty Limited Partnership

EXCHANGE NOTES............. $100 million in principal amount of 8.50% senior
notes due 2010

MATURITY DATE.............. November 15, 2010

INTEREST PAYMENT DATES..... November 15 and May 15 of each year, beginning May
15, 2001

The unregistered notes tendered for exchange will
cease to accrue interest on the day immediately
preceding the date of issuance of the exchange
notes and the exchange notes will bear interest
from their date of issuance. All of this interest
on the exchange and unregistered notes will be paid
on May 15, 2001.

RANKING.................... The exchange notes will be our senior unsecured
obligations and will rank equally with all of our
other existing and future senior unsecured
indebtedness. See "Description of Exchange
Notes -- General."

Assuming we had completed the offering of the
unregistered notes on September 30, 2000, and
applied the proceeds as we have done, the exchange
notes:

- would have ranked equally with $480.8 million of
other unsecured debt; and

- would have been subordinated to $576.7 million of
secured debt.

OPTIONAL REDEMPTION........ We may redeem some or all of the exchange notes at
any time at the redemption prices described under
"Description of Exchange Notes -- Optional
Redemption."

COVENANTS.................. The indenture governing the exchange notes contains
various covenants including covenants with respect
to:

- limitations on the incurrence of debt;

- limitations on encumbering assets; and

- limitations on specified mergers, consolidations
and other similar transactions.

These covenants are subject to a number of
important qualifications and exceptions. See
"Description of Exchange Notes -- Covenants."

ABSENCE OF A PUBLIC MARKET
FOR THE EXCHANGE NOTES..... The exchange notes are new securities. The exchange
notes will not be listed on any securities
exchange. We cannot assure you that any active or
liquid market will develop for the exchange notes.
See "Plan of Distribution."

9
<PAGE> 14

RISK FACTORS............... See "Risk Factors" and the other information in
this prospectus for a discussion of factors you
should carefully consider before deciding to tender
your unregistered notes in the exchange offer.

10
<PAGE> 15

SUMMARY FINANCIAL DATA

You should read the following consolidated financial and operating data for
Arden Realty Limited Partnership and the following combined financial and
operating data for its predecessors together with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and our consolidated
financial statements included elsewhere in this prospectus. The Arden
predecessors are comprised primarily of partnerships and limited liability
companies owned by Mr. Richard S. Ziman, Arden Realty's Chairman and Chief
Executive Officer and Mr. Victor J. Coleman, Arden Realty's President and Chief
Operating Officer, their relatives and affiliates and other third parties. The
properties held by the Arden predecessors were directly or indirectly
contributed to us in the formation transactions completed prior to Arden
Realty's initial public offering of its common stock.
<TABLE>
<CAPTION>
ARDEN REALTY LIMITED PARTNERSHIP
---------------------------------------------------------------------------
FOR THE
PERIOD
FOR THE NINE MONTHS OCTOBER 9,
ENDED SEPTEMBER 30, FOR THE YEARS ENDED DECEMBER 31, 1996 TO
--------------------- ----------------------------------- DECEMBER 31,
2000 1999 1999 1998 1997 1996
--------- --------- --------- ----------- --------- -------------
(UNAUDITED)
(IN THOUSANDS, EXCEPT RATIO DATA)
<S> <C> <C> <C> <C> <C> <C>
OPERATING DATA:
Revenue........................... $ 284,138 $ 250,863 $ 340,675 $ 284,582 $ 135,447 $ 19,572
Property operating expenses....... 81,584 74,698 101,284 86,570 44,332 6,005
General and administrative
expenses........................ 5,184 4,584 6,753 6,264 3,888 753
Depreciation and amortization..... 63,952 51,198 69,837 51,822 20,260 3,108
--------- --------- --------- ----------- --------- ---------
133,418 120,383 162,801 139,926 66,967 9,706
Interest expense.................. 56,967 43,685 60,239 43,403 19,511 1,280
Loss on valuation of derivative... -- -- -- -- 3,111 --
Equity in net loss of noncombined
entities........................ -- -- -- -- -- --
Minority interest................. 115 137 169 729 59 --
--------- --------- --------- ----------- --------- ---------
Income (loss) before extraordinary
items........................... 76,336 76,561 102,393 95,794 44,286 8,426
Extraordinary (loss) gain on early
extinguishment of debt, net of
minority interest............... -- -- -- -- -- (13,105)
--------- --------- --------- ----------- --------- ---------
Net income (loss)................. $ 76,336 $ 76,561 $ 102,393 $ 95,794 $ 44,286 $ (4,679)
========= ========= ========= =========== ========= =========
Net income (loss) allocated to:
Preferred partner............... $ 3,234 $ 276 $ 1,354 -- $ -- $ --
========= ========= ========= =========== ========= =========
General and limited partners.... $ 73,102 $ 76,285 $ 101,039 $ 95,794 $ 44,286 $ (4,679)
========= ========= ========= =========== ========= =========
OTHER DATA:
Cash provided by operating
activities...................... $ 143,160 $ 119,897 $ 178,920 $ 150,410 $ 41,291 $ 8,665
Cash used in investing
activities...................... (178,728) (212,367) (291,999) (1,119,833) (661,805) (164,763)
Cash provided by financing
activities...................... 30,011 91,543 115,557 948,701 618,182 163,730
Funds from operations(1).......... 137,054 127,483 170,876 147,616 64,546 11,534
EBITDA(2)......................... $ 197,370 $ 171,581 $ 232,638 $ 191,748 $ 87,227 $ 12,814
Ratio of EBITDA to interest
expense(2)...................... 3.46 3.93 3.86 4.42 4.47 10.01
Ratio of EBITDA to fixed
charges(2)(3)................... 2.82 3.36 3.27 3.66 4.22 9.58
Ratio of earnings to fixed
charges(3)(4)................... 1.86 2.35 2.28 2.66 3.08 7.26

<CAPTION>
ARDEN PREDECESSORS
-------------------------
FOR THE
PERIOD
JANUARY 1, FOR THE YEAR
1996 TO ENDED
OCTOBER 8, DECEMBER 31,
1996 1995
---------- ------------

(IN THOUSANDS, EXCEPT RATIO DATA)
<S> <C> <C>
OPERATING DATA:
Revenue........................... $ 40,465 $ 11,693
Property operating expenses....... 14,224 3,340
General and administrative
expenses........................ 1,758 1,377
Depreciation and amortization..... 5,264 1,898
--------- ---------
19,219 5,078
Interest expense.................. 24,521 5,537
Loss on valuation of derivative... -- --
Equity in net loss of noncombined
entities........................ 336 116
Minority interest................. (721) 1
--------- ---------
Income (loss) before extraordinary
items........................... (4,917) (576)
Extraordinary (loss) gain on early
extinguishment of debt, net of
minority interest............... 1,877 --
--------- ---------
Net income (loss)................. $ (3,040) $ (576)
========= =========
Net income (loss) allocated to:
Preferred partner...............
General and limited partners....
OTHER DATA:
Cash provided by operating
activities...................... $ 5,221 $ 2,830
Cash used in investing
activities...................... (119,083) (123,358)
Cash provided by financing
activities...................... 122,074 120,707
Funds from operations(1).......... (374) 1,323
EBITDA(2)......................... $ 24,483 $ 6,976
Ratio of EBITDA to interest
expense(2)...................... 1.00 1.26
Ratio of EBITDA to fixed
charges(2)(3)................... 1.00 1.26
Ratio of earnings to fixed
charges(3)(4)................... 0.80 0.89
</TABLE>

11
<PAGE> 16

<TABLE>
<CAPTION>
AT DECEMBER 31,
AT SEPTEMBER 30, --------------------------------------------------------------
2000 1999 1998 1997 1996 1995
---------------- ---------- ---------- ---------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Net investment in real estate................ $2,586,788 $2,479,111 $2,260,433 $1,247,701 $532,728 $160,874
Total assets................................. 2,685,061 2,572,904 2,333,866 1,287,287 551,256 182,379
Total indebtedness........................... 1,155,531 1,029,656 840,377 477,566 155,000 168,451
Other liabilities............................ 54,778 50,555 35,720 23,305 9,768 5,712
Partners' capital............................ 1,471,807 1,489,740 1,454,844 756,008 386,488 8,216
</TABLE>

-------------------------
(1) We consider funds from operations, as defined by the National Association of
Real Estate Investment Trusts, or NAREIT, to be a useful financial measure
of our operating performance. We believe that funds from operations provides
investors with an additional basis to evaluate our ability to service debt
and to fund acquisitions and other capital expenditures. Funds from
operations should not be considered an alternative to net income determined
in accordance with GAAP, as an indicator of our financial performance or as
a substitute for cash flow from operating activities determined in
accordance with GAAP as a measure of our liquidity. Funds from operations
also is not necessarily indicative of funds available to fund our cash
needs, including our ability to service our debt.

The White Paper on funds from operations approved by the Board of Governors
of NAREIT in October 1999 defines funds from operations as net income or
loss computed in accordance with GAAP, excluding extraordinary items, as
defined by GAAP, and gains and losses from sales of depreciable operating
property plus real estate-related depreciation and amortization and after
adjustments for unconsolidated partnerships and joint ventures. We compute
funds from operations in accordance with standards established by the White
Paper which may differ from the standards used by other real estate
companies and, accordingly, our funds from operations may not be comparable
to those companies' funds from operations.

(2) As used in this prospectus, EBITDA means revenue less property operating
expenses and general and administrative expenses. EBITDA does not represent
cash generated from operating activities in accordance with GAAP and should
not be considered as an alternative to operating income or net income as an
indicator of performance or as a substitute for cash flow from operating
activities determined in accordance with GAAP as a measure of our liquidity.
We have included information with respect to EBITDA because we understand
that this information is used by investors as one measure of operating
performance.

(3) Fixed charges consist of interest costs, whether expensed or capitalized,
amortization of deferred financing costs, amortization of discounts or
premiums related to indebtedness and preferred unit distributions.

(4) The ratios of earnings to fixed charges were computed by dividing earnings
by fixed charges. For this purpose, earnings have been calculated by adding
fixed charges, excluding capitalized interest and preferred unit
distributions, to income or loss before extraordinary items.

12
<PAGE> 17

RISK FACTORS

FINANCING RISKS

OUR SIGNIFICANT AMOUNT OF DEBT COULD LIMIT OUR OPERATIONAL FLEXIBILITY OR
OTHERWISE ADVERSELY AFFECT OUR FINANCIAL CONDITION.

We have now and will continue to have a significant amount of debt. If the
offering of the unregistered notes had been completed as of September 30, 2000
and the proceeds applied accordingly, we would have had total debt of $1,156.6
million, consisting of $576.7 million in secured debt and $579.9 million of
unsecured debt.

Our substantial indebtedness could have important consequences to you. For
example, it could:

- require us to dedicate a substantial portion of our cash flow to pay our
debt, thereby reducing the availability of our cash flow to fund working
capital, capital expenditures, acquisition and development activity and
other business purposes;

- make it more difficult for us to satisfy our obligations with respect to
the exchange notes;

- limit our ability to refinance our debt and obtain additional debt
financing; and

- increase our vulnerability to general adverse economic and real estate
industry conditions and limit our flexibility in planning for, or
reacting to, changes in our business and the real estate industry.

WE MAY BE ABLE TO INCUR SUBSTANTIALLY MORE DEBT WHICH WOULD INCREASE THE RISKS
ASSOCIATED WITH OUR SUBSTANTIAL LEVERAGE.

Despite current indebtedness levels, we may still be able to incur
substantially more debt in the future. The terms of the indenture do not fully
prohibit us from doing so. We may borrow up to a maximum of $360 million under
our existing lines of credit. In addition, we have the option to increase our
$275 million unsecured line of credit by $50 million. If new debt is added to
our current debt levels, the related risks that we now face could intensify and
could increase the risk of default on our indebtedness. See "Description of
Other Debt -- Lines of Credit."

SCHEDULED DEBT PAYMENTS AND RISING INTEREST RATES COULD ADVERSELY AFFECT OUR
FINANCIAL CONDITION.

We are subject to risks normally associated with debt financing. Cash flow
could be insufficient to meet required payments of principal and interest. We
may not be able to refinance existing indebtedness, which in virtually all cases
requires substantial principal payments at maturity, and, if we can, the terms
of the refinancing might not be as favorable as the terms of our existing
indebtedness. If principal payments due at maturity cannot be refinanced,
extended or paid with proceeds of other capital transactions, such as new equity
capital, our cash flow will not be sufficient in all years to repay all maturing
debt. In addition, at September 30, 2000, approximately 29% of our debt was
variable rate debt. Assuming the offering of the unregistered notes had been
completed on September 30, 2000, and after application of the proceeds from that
offering, our as adjusted variable rate debt would have been reduced to
approximately 20% of our outstanding debt, and we would have had the ability to
borrow under existing lines of credit an additional $128.3 million of variable
rate debt. If prevailing interest rates or other factors result in higher
interest rates, the increased interest expense would adversely affect our cash
flow and our ability to service our debt, including the exchange notes. As a
protection against rising interest rates, we may enter into agreements such as
interest rate swaps, caps, floors and other interest rate exchange contracts.
These agreements, however, increase our risks as to the other parties to the
agreements not performing or that the agreements could be unenforceable. As of
December 31, 2000, we were not a party to any such agreements.

13
<PAGE> 18

MANY OF OUR PROPERTIES ARE SUBJECT TO MORTGAGE FINANCING WHICH COULD RESULT IN
FORECLOSURE IF WE ARE UNABLE TO PAY OR REFINANCE THE MORTGAGES WHEN DUE.

We currently have outstanding five mortgage financings totaling $557.3
million that are secured by 67 of our properties. The properties in each of
these financings are fully cross-collateralized and cross-defaulted. To the
extent mortgages are cross-collateralized, lenders may seek to foreclose upon
properties that are not the primary collateral for their loans, which may, in
turn, result in acceleration of other debt secured by the properties. Five
additional properties are subject to single property mortgages. See "Description
of Other Debt." If we are unable to meet our obligations under these mortgages,
the properties subject to the mortgages could be foreclosed upon, which would
have a material adverse effect on us and our ability to pay or refinance our
debt obligations, including the exchange notes.

THE EXCHANGE NOTES ARE JUNIOR IN RIGHT OF PAYMENT TO OUR SECURED DEBT AND WE CAN
INCUR ADDITIONAL DEBT THAT IS SENIOR TO THE EXCHANGE NOTES.

The exchange notes are effectively subordinated to claims by holders of
debt secured by our properties and any other debt secured by any of our assets.
The exchange notes are also effectively subordinated to the debt obligations of
our subsidiaries. We may incur additional debt that may be senior to the
exchange notes. The subordination of the exchange notes may adversely affect our
ability to make payments on the exchange notes.

REAL ESTATE INVESTMENT RISKS

AN INABILITY TO RETAIN TENANTS OR RENT SPACE UPON LEASE EXPIRATIONS MAY
ADVERSELY AFFECT OUR ABILITY TO SERVICE OUR DEBT.

Through 2005, 2,991 leases, including month-to-month leases, comprising 81%
of our leased net rentable square footage and 77% of our annualized base rents
at September 30, 2000 will expire. If we are unable to promptly relet or renew
leases for all or a substantial portion of this space, or if the rent upon
renewal or reletting is significantly lower than expected, our cash flow and
ability to pay or refinance our debt obligations could be adversely affected.

OUR OPERATING PERFORMANCE AND PROPERTY VALUES WILL BE AFFECTED BY CHANGES IN THE
ECONOMIC CLIMATE IN SOUTHERN CALIFORNIA.

All of our properties are located in Southern California. Our revenue and
the value of our properties may be affected by a number of factors, including
the Southern California economic climate and real estate market, which may
adversely affect our ability to pay or refinance our debt obligations, including
the exchange notes.

COMPETITION AFFECTS OCCUPANCY LEVELS AND RENTS WHICH COULD ADVERSELY AFFECT OUR
REVENUES.

Many office properties compete with our properties in attracting tenants to
lease space. Some of the competing properties may be newer, better located or
owned by parties better capitalized than we are. The number of competitive
commercial properties in a particular area could have a material adverse effect
on the rents we can charge and our ability to lease space in our existing
properties or at newly acquired or developed properties.

THE FINANCIAL CONDITION AND SOLVENCY OF OUR TENANTS MAY REDUCE OUR CASH FLOW.

Tenants may experience a downturn in their business which may cause them to
miss rental payments when due or to seek the protection of bankruptcy laws,
which could result in rejection and termination of their leases or a delay in
recovering possession of their premises. Although we have not experienced
material losses from tenant bankruptcies, we cannot assure you that tenants will
not file for bankruptcy protection in the future or, if any tenants file, that
they will affirm their leases and continue to make rental payments in a timely
manner.

14
<PAGE> 19

BECAUSE REAL ESTATE INVESTMENTS ARE ILLIQUID, WE MAY NOT BE ABLE TO SELL
PROPERTIES WHEN APPROPRIATE.

Equity real estate investments are relatively illiquid. That illiquidity
will tend to limit our ability to vary our portfolio promptly in response to
changes in economic or other conditions. In addition, the Internal Revenue Code
of 1986, as amended, may under specified circumstances impose a 100% prohibited
transaction tax on the profits derived from Arden Realty's sale of properties
held for fewer than four years, which may affect our ability to sell properties
if necessary to repay debt.

INCREASES IN TAXES AND REGULATORY COMPLIANCE COSTS MAY REDUCE OUR REVENUE.

Except for our triple net leases, tax increases are not passed through to
some of our tenants under our leases. Therefore, any tax increases may adversely
affect our cash flow and our ability to pay or refinance our debt obligations,
including the exchange notes. Our properties are also subject to various
federal, state and local regulatory requirements, such as requirements of the
Americans with Disabilities Act, and state and local fire and life safety
requirements. Failure to comply with these requirements could result in the
imposition of fines by governmental authorities or awards of damages to private
litigants. We believe that our properties are currently in substantial
compliance with these regulatory requirements and that any noncompliance would
not have a material adverse effect on us. We cannot assure you, however, that
these requirements will not be changed or that new requirements will not be
imposed that would require significant unanticipated expenditures by us and
could have an adverse effect on our cash flow and ability to pay or refinance
our debt obligations.

WE MAY ACQUIRE PROPERTIES THROUGH PARTNERSHIPS OR JOINT VENTURES WITH THIRD
PARTIES THAT COULD RESULT IN FINANCIAL DEPENDENCY AND MANAGEMENT CONFLICTS.

Although we currently do not have any such agreements to do so, we may
participate with other entities in property ownership through joint ventures or
partnerships in the future. Partnership or joint venture investments may, under
some circumstances, involve risks not otherwise present, including:

- our partners or co-venturers might become bankrupt;

- our partners or co-venturers might at any time have economic or other
business interests or goals which are inconsistent with our business
interests or goals; and

- our partners or co-venturers may be in a position to take action contrary
to our instructions or requests contrary to our policies or objectives.

We will, however, seek to maintain sufficient control of any partnerships or
joint ventures with which we may become involved to permit our business
objectives to be achieved.

WE MAY NOT BE ABLE TO INTEGRATE OR FINANCE OUR ACQUISITIONS AND RENOVATION
ACTIVITIES AND OUR ACQUISITIONS AND RENOVATIONS MAY NOT PERFORM AS EXPECTED.

As we acquire additional properties, we will be subject to risks associated
with managing new properties, including lease-up and tenant retention. In
addition, our ability to manage our growth effectively will require us to
successfully integrate our new acquisitions into our existing management
structure. We cannot assure you that we will be able to succeed with that
integration or effectively manage additional properties or that newly acquired
properties will perform as expected. Changing market conditions, including
competition from other purchasers of suburban office properties, may diminish
our opportunities for attractive additional acquisitions.

We intend to expand and renovate our properties from time to time.
Expansion and renovation projects generally require expenditures of capital as
well as various government and other approvals, the receipt of which cannot be
assured. While our policies with respect to expansion and renovation activities
are intended to limit some of the risks otherwise associated with these
activities, we will nevertheless incur risks, including expenditures of funds
on, and devotion of our time to, projects that may not be completed.

15
<PAGE> 20

WE MAY NOT BE ABLE TO INTEGRATE OR FINANCE OUR DEVELOPMENT ACTIVITIES.

We also intend to review, from time to time, opportunities for developing
and constructing office buildings and other commercial properties in accordance
with our development and underwriting policies. Risks associated with our
development and construction activities may include:

- abandonment of development opportunities due to a lack of financing or
other reasons;

- construction costs of a property exceeding original estimates, possibly
making the property uneconomical;

- occupancy rates and rents at a newly completed property may not be
sufficient to make the property profitable;

- construction and lease-up may not be completed on schedule, resulting in
increased debt service expense and construction costs; and

- development activities would also be subject to risks relating to the
inability to obtain, or delays in obtaining, all necessary zoning,
land-use, building, occupancy and other required governmental permits and
authorizations.

WE MAY NOT BE ABLE TO EXPAND INTO NEW MARKETS SUCCESSFULLY.

While we have generally limited our business primarily to the Southern
California market, it is possible that we will in the future expand our business
to new geographic markets. We will not initially possess the same level of
familiarity with new markets outside of Southern California, which could
adversely affect our ability to manage, lease, develop or acquire properties in
new localities.

TAX RISKS

OUR PARTNERSHIP AGREEMENT RESTRICTS OUR ABILITY TO ACCUMULATE CASH THAT MIGHT BE
USED IN FUTURE PERIODS TO MAKE DEBT PAYMENTS OR TO FUND FUTURE GROWTH.

In order to qualify as a REIT, Arden Realty must distribute to its
stockholders at least 90% of its REIT taxable income, excluding net capital
gain, and to avoid federal income taxation, its distributions must not be less
than 100% of its REIT taxable income, including capital gains. To avoid excise
tax liability, Arden Realty's distributions to its stockholders for the year
must exceed the sum of 85% of its ordinary income, 95% of its capital gain net
income, and any undistributed taxable income from prior years. Our partnership
agreement generally requires us to distribute substantially all of our available
cash generated from operations each quarter and make reasonable efforts to
distribute to Arden Realty enough cash for it to meet the 90% distribution
requirement and to avoid any federal income or excise tax liability. As a result
of these distribution requirements, we do not expect to accumulate significant
amounts of cash. Accordingly, these distributions could significantly reduce the
cash available to us in subsequent periods to make payments on the exchange
notes and other debt obligations and to fund future growth.

WE INTEND TO QUALIFY AS A PARTNERSHIP, BUT WE CANNOT GUARANTEE THAT WE WILL
QUALIFY.

We intend to qualify as a partnership for federal income tax purposes.
However, if we are a "publicly traded partnership," we will be treated as a
corporation instead of a partnership for federal income tax purposes unless at
least 90% of our income is qualifying income as defined in the Internal Revenue
Code. The income requirements applicable to REITs and the definition of
"qualifying income" for purposes of this 90% test are similar in most respects.
Qualifying income for the 90% test generally includes passive income, such as
specified types of real property rents, dividends and interest. We believe that
we would meet this 90% test, but we cannot guarantee that we would. If we were
to be taxed as a corporation, we would incur substantial tax liabilities, Arden
Realty would fail to qualify as a REIT for federal income tax purposes, and our
and Arden Realty's ability to raise additional capital could be significantly
impaired.

16
<PAGE> 21

WE MAY SUFFER ADVERSE TAX CONSEQUENCES AND BE UNABLE TO ATTRACT CAPITAL IF ARDEN
REALTY FAILS TO QUALIFY AS A REIT.

We believe that since its taxable year ended December 31, 1996, Arden
Realty has been organized and operated, and intends to continue to operate, so
as to qualify for taxation as a REIT under the Internal Revenue Code. Although
we believe that Arden Realty has been and will continue to be organized and has
operated and will continue to operate so as to qualify for taxation as a REIT,
we cannot assure you that it has been or will continue to be organized or
operated in a manner so as to qualify or remain so qualified. Qualification as a
REIT involves the satisfaction of numerous requirements established under highly
technical and complex Internal Revenue Code provisions for which there are only
limited judicial and administrative interpretations, and involves the
determination of various factual matters and circumstances not entirely within
Arden Realty's control. The complexity of these provisions and of the applicable
Treasury Regulations that have been promulgated under the Internal Revenue Code
is greater in the case of a REIT, like Arden Realty, that holds its assets
through an investment in a partnership. No assurance can be given that
legislation, new regulations, administrative interpretations or court decisions
will not significantly change the tax laws with respect to qualification as a
REIT or the federal income tax consequences of qualification. We are, however,
not aware of any pending legislation that would adversely affect Arden Realty's
ability to operate as a REIT. Arden Realty's qualification and taxation as a
REIT depends on its ability to meet, through actual annual operating results,
asset diversification, distribution levels and diversity of stock ownership, the
various qualification tests imposed under the Internal Revenue Code, the results
of which have not been and will not be reviewed by our tax counsel.

If Arden Realty failed to qualify as a REIT in any taxable year, it would
be subject to federal income tax, including any applicable alternative minimum
tax, on its taxable income at regular corporate rates. Moreover, unless entitled
to relief under specific statutory provisions, it also would be disqualified as
a REIT for the four taxable years following the year during which qualification
was lost. If it were disqualified as a REIT, Arden Realty might cause us to
distribute adequate amounts so as to permit it to pay its tax liabilities. In
addition, Arden Realty's ability to raise additional capital for us could be
significantly impaired. This could significantly reduce the cash we would have
available to service debt, including the exchange notes.

Even if Arden Realty qualifies for and maintains its REIT status, it will
be subject to federal, state and local taxes on its income and property. For
example, if Arden Realty has net income from a prohibited transaction,
specifically sales or other taxable dispositions of property held primarily for
sale to customers in the ordinary course of business, that income will be
subject to a 100% tax.

OTHER RISKS

THE RESTRICTIONS ON TRANSFER OF THE UNREGISTERED NOTES WILL CONTINUE IF THEY ARE
NOT TENDERED OR ARE NOT ACCEPTED FOR EXCHANGE.

We will issue the exchange notes in exchange for the unregistered notes
timely received by the exchange agent and accompanied by a properly completed
and duly executed letter of transmittal and all other documentation. Therefore,
if you want to tender your unregistered notes, you must properly complete all
documentation and allow sufficient time to ensure timely delivery. Neither we
nor the exchange agent is under any duty to give notification of defects or
irregularities with respect to your tender of the unregistered notes.

If you do not tender your unregistered notes or they are not accepted by
the exchange agent, your unregistered notes will continue to be subject to the
existing restrictions upon transfer thereof even after the exchange offer and
you will be required, in the absence of an applicable exemption, to comply with
the registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction. See "The Exchange Offer." In addition,
you will no longer be able to obligate us to register the unregistered notes
under the Securities Act except in the limited circumstances provided under our
registration rights agreement.

17
<PAGE> 22

To the extent that unregistered notes are tendered and accepted in the
exchange offer, the trading market for the untendered and the tendered but
unaccepted unregistered notes could be adversely affected due to the limited
principal amount of the unregistered notes that is expected to remain
outstanding following the exchange offer. A small outstanding amount of
unregistered notes could result in less demand to purchase unregistered notes,
and could, therefore, result in lower prices for the unregistered notes.
Moreover, if you do not tender your unregistered notes, you will hold an
investment subject to some restrictions on transfer not applicable to the
exchange notes and, as a result, you may only be able to sell your unregistered
notes at a price that is less than the price available to sellers of the freely
tradable exchange notes.

OUR GENERAL PARTNER MAY CHANGE POLICIES WITHOUT STOCKHOLDER OR PARTNER APPROVAL.

Our investment, financing, borrowing and distribution policies and our
policies with respect to all other activities, including growth, debt,
capitalization and operations, will be determined by our general partner.
Although Arden Realty has no present intention to do so, these policies may be
amended or revised at any time and from time to time at the discretion of Arden
Realty without a vote of its stockholders or approval by the limited partners.
In addition, Arden Realty may change policies with respect to conflicts of
interest provided that the changes are consistent with applicable legal
requirements. A change in these policies could adversely affect our financial
condition and results of operations. See "Policies with Respect to Certain
Activities."

LOSSES IN EXCESS OF OUR INSURANCE COVERAGE OR UNINSURED LOSSES COULD ADVERSELY
AFFECT OUR CASH FLOW.

We carry comprehensive liability, fire, extended coverage and rental loss
insurance policies which currently cover all of our properties with
specifications and insured limits that we believe are adequate and appropriate
under the circumstances. Some losses, however, are generally not insured against
because it is not economically feasible to do so. Should an uninsured loss or a
loss in excess of insured limits occur, we could lose our capital invested in
the property, as well as the anticipated future revenue from the property and,
in the case of debt which is recourse to us, we would remain obligated for any
mortgage debt or other financial obligations related to the property. Any loss
would adversely affect our ability to repay our debt. Moreover, we would
generally be liable for any unsatisfied obligations other than non-recourse
obligations. We cannot assure you that material losses in excess of insurance
proceeds will not occur in the future.

AN EARTHQUAKE COULD ADVERSELY AFFECT OUR BUSINESS.

Southern California is in a high risk geographical area for earthquakes.
Depending upon its magnitude, an earthquake could severely damage our properties
which would adversely affect our business. We maintain earthquake insurance for
our properties and the resulting business interruption. We cannot assure you
that our insurance will be sufficient if there is a major earthquake.

OUR PROPERTIES MAY BE SUBJECT TO ENVIRONMENTAL LIABILITIES.

Under federal, state and local environmental laws, ordinances and
regulations, a current or previous owner or operator of real estate may be
required to investigate and clean up hazardous or toxic substances or petroleum
product releases at the property and may be held liable to a governmental entity
or to third parties for property damage and for investigation and clean-up costs
in connection with the contamination. These laws typically impose clean-up
responsibility and liability without regard to whether the owner knew of or
caused the presence of the contaminants, and the liability under these laws has
been interpreted to be joint and several unless the harm is divisible and there
is a reasonable basis for allocation of responsibility. These costs may be
substantial, and the presence of these substances, or the failure to remediate
the contamination on the property, may adversely affect the owner's ability to
sell or rent the property or to borrow against the property. Persons who arrange
for the disposal or treatment of hazardous or toxic substances at a disposal or
treatment facility also may be liable for the costs of removal or remediation of
a release of hazardous or toxic substances at the disposal or treatment
facility, whether or not the facility is owned or operated by that person. Some
laws create a lien on the contaminated site in
18
<PAGE> 23

favor of the government for damages and costs incurred in connection with the
contamination. Finally, third parties may have claims against the owner of the
site based on damages and costs resulting from environmental contamination
emanating from that site.

Specific federal, state and local laws, regulations and ordinances govern
the removal, encapsulation or disturbance of asbestos-containing materials when
those materials are in poor condition or in the event of construction,
remodeling, renovation or demolition of a building. These laws may impose
liability for release of asbestos-containing material and may provide for third
parties to seek recovery from owners or operators of real properties for
personal injury associated with asbestos-containing materials. In connection
with the ownership and operation of our properties, we may be potentially liable
for those costs. Except for two properties, one of which has undergone abatement
activities, we are not aware of any friable asbestos-containing materials at any
of our properties.

In the past few years, independent environmental consultants have conducted
or updated Phase I environmental assessments and other environmental
investigations as appropriate at our properties. These environmental site
assessments have included, among other things, a visual inspection of the
properties and the surrounding area and a review of relevant state, federal and
historical documents. Soil and groundwater samplings were performed where
warranted and remediation, if necessary, has or is being conducted.

The environmental site assessments of our properties identified several
properties that may be impacted by known or suspected regional contamination.
The environmental site assessments have not, however, revealed any environmental
liability that we believe would have a material adverse effect on our business,
assets or results of operations taken as a whole, nor are we aware of any
material environmental liability. Nevertheless, it is possible that our
environmental site assessments do not reveal all environmental liabilities or
that there are material environmental liabilities of which we are unaware.
Moreover, we cannot assure you that future laws, ordinances or regulations will
not impose any material environmental liability or the current environmental
condition of our properties will not be affected by tenants, by the condition of
land or operations in the vicinity of our properties, such as the presence of
underground storage tanks, or by third parties unrelated to us.

We believe that our properties are in compliance in all material respects
with all federal, state and local laws, ordinances and regulations regarding
hazardous or toxic substances or petroleum products, except as noted above. We
have not been notified by any governmental authority, and are not otherwise
aware, of any material noncompliance, liability or claim relating to hazardous
or toxic substances or petroleum products in connection with any of our present
properties, other than as noted above.

THERE IS NO CURRENT PUBLIC MARKET FOR THE EXCHANGE NOTES.

The exchange notes are a new issue of securities for which there is
currently no trading market. We cannot guarantee:

- the liquidity of any market that may develop for the exchange notes;

- your ability to sell the exchange notes; or

- the price at which you would be able to sell the exchange notes.

Liquidity of any market for the exchange notes and future trading prices of
the exchange notes will depend on many factors, including:

- prevailing interest rates;

- our operating results; and

- the market for similar securities.

The initial purchaser has advised us that it currently intends to make a
market in the exchange notes, but it is not obligated to do so and may cease any
market-making at any time without notice.

19
<PAGE> 24

NO CASH PROCEEDS

We will not receive any proceeds from the issuance of the exchange notes
and we have agreed to pay the expenses of the exchange offer. The unregistered
notes surrendered in exchange for exchange notes will be cancelled.

We used the approximately $98.1 million of net proceeds from the sale of
the unregistered notes to repay a construction loan of approximately $40.4
million on our 6060 Center Drive project and to reduce the outstanding balance
under our unsecured line of credit with a group of banks led by Wells Fargo by
approximately $57.7 million. An affiliate of Lehman Brothers, the initial
purchaser of the unregistered notes, is a lender on this line of credit and
received its proportionate share of this line of credit that was repaid.

RATIO OF EARNINGS TO FIXED CHARGES

<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEARS ENDED DECEMBER 31,
SEPTEMBER 30, ------------------------------------------------------------------
------------- 1996 1996
2000 1999 1999 1998 1997 (OCT. 9 - DEC. 31) (JAN. 1 - OCT. 8) 1995
---- ----- ---- ---- ---- ------------------ ----------------- ----
<S> <C> <C> <C> <C> <C> <C> <C>
1.86 2.35 2.28 2.66 3.08 7.26 0.80 0.89
</TABLE>

Fixed charges consist of interest costs, whether expensed or capitalized,
amortization of deferred financing costs, amortization of discounts or premiums
related to indebtedness and preferred unit distributions. The ratios of earnings
to fixed charges were computed by dividing earnings by fixed charges. For this
purpose, earnings have been calculated by adding fixed charges, excluding
capitalized interest and preferred unit distributions, to income or loss before
extraordinary items.

CAPITALIZATION

The following table presents our historical capitalization as of September
30, 2000, and on an as adjusted basis to reflect the application of the net
proceeds from the offering of the unregistered notes. This table should be read
together with the consolidated financial statements included elsewhere in this
prospectus.

<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, 2000
-------------------------
HISTORICAL AS ADJUSTED
---------- -----------
(IN THOUSANDS)
<S> <C> <C>
Debt:
Mortgage loans(1)......................................... $ 617,031 $ 576,658
Unsecured lines of credit(2).............................. 289,350 231,634
Unsecured senior notes, net of discount................... 249,150 348,314
---------- ----------
Total debt............................................. 1,155,531 1,156,606
---------- ----------
Partners' capital:
Preferred units, 2,000,000 units outstanding.............. 50,000 50,000
Common units, 65,681,144 units outstanding, net of
deferred compensation.................................. 1,421,807 1,421,807
---------- ----------
Total partners' capital................................ 1,471,807 1,471,807
---------- ----------
Total capitalization................................... $2,627,338 $2,628,413
========== ==========
</TABLE>

-------------------------
(1) We used the net proceeds of the unregistered notes offering to repay a
construction loan of approximately $40.4 million. See "No Cash Proceeds."

(2) We used the net proceeds of the unregistered notes offering to reduce the
outstanding balance under our $275 million line of credit by approximately
$57.7 million. See "No Cash Proceeds."

20
<PAGE> 25

SELECTED FINANCIAL DATA

You should read the following consolidated financial and operating data for
Arden Realty Limited Partnership and the following combined financial and
operating data for its predecessors together with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and our consolidated
financial statements included elsewhere in this prospectus. The Arden Realty
Limited Partnership predecessors are comprised primarily of partnerships and
limited liability companies owned by Mr. Richard S. Ziman, Arden Realty's
Chairman and Chief Executive Officer, and Mr. Victor J. Coleman, Arden Realty's
President and Chief Operating Officer, their relatives and affiliates and other
third parties. The properties held by the Arden predecessors were directly or
indirectly contributed to us in the formation transactions completed prior to
Arden Realty's initial public offering of its common stock.
<TABLE>
<CAPTION>
ARDEN REALTY LIMITED PARTNERSHIP
--------------------------------------------------------------------------
FOR THE
PERIOD
FOR THE NINE MONTHS OCTOBER 9,
ENDED SEPTEMBER 30, FOR THE YEARS ENDED DECEMBER 31, 1996 TO
--------------------- ----------------------------------- DECEMBER 31,
2000 1999 1999 1998 1997 1996
--------- --------- --------- ----------- --------- ------------
(UNAUDITED)
(IN THOUSANDS, EXCEPT RATIO DATA)
<S> <C> <C> <C> <C> <C> <C>
OPERATING DATA:
Revenue....................... $ 284,138 $ 250,863 $ 340,675 $ 284,582 $ 135,447 $ 19,572
Property operating expenses... 81,584 74,698 101,284 86,570 44,332 6,005
General and administrative
expenses.................... 5,184 4,584 6,753 6,264 3,888 753
Depreciation and
amortization................ 63,952 51,198 69,837 51,822 20,260 3,108
--------- --------- --------- ----------- --------- ---------
133,418 120,383 162,801 139,926 66,967 9,706
Interest expense.............. 56,967 43,685 60,239 43,403 19,511 1,280
Loss on valuation of
derivative.................. -- -- -- -- 3,111 --
Equity in net loss of
noncombined entities........ -- -- -- -- -- --
Minority interest............. 115 137 169 729 59 --
--------- --------- --------- ----------- --------- ---------
Income (loss) before
extraordinary items......... 76,336 76,561 102,393 95,794 44,286 8,426
Extraordinary (loss) gain on
early extinguishment of
debt, net of minority
interest.................... -- -- -- -- -- (13,105)
--------- --------- --------- ----------- --------- ---------
Net income (loss)............. $ 76,336 $ 76,561 $ 102,393 $ 95,794 $ 44,286 $ (4,679)
========= ========= ========= =========== ========= =========
Net income (loss) allocated
to:
Preferred partner........... $ 3,234 $ 276 $ 1,354 $ -- $ -- $ --
========= ========= ========= =========== ========= =========
General and limited
partners.................. $ 73,102 $ 76,285 $ 101,039 $ 95,794 $ 44,286 $ (4,679)
========= ========= ========= =========== ========= =========
OTHER DATA:
Cash provided by operating
activities.................. $ 143,160 $ 119,897 $ 178,920 $ 150,410 $ 41,291 $ 8,665
Cash used in investing
activities.................. (178,728) (212,367) (291,999) (1,119,833) (661,805) (164,763)
Cash provided by financing
activities.................. 30,011 91,543 115,557 948,701 618,182 163,730
Funds from operations(1)...... 137,054 127,483 170,876 147,616 64,546 11,534
EBITDA(2)..................... $ 197,370 $ 171,581 $ 232,638 $ 191,748 $ 87,227 $ 12,814
Ratio of EBITDA to interest
expense(2).................. 3.46 3.93 3.86 4.42 4.47 10.01
Ratio of EBITDA to fixed
charges(2)(3)............... 2.82 3.36 3.27 3.66 4.22 9.58
Ratio of earnings to fixed
charges(3)(4)............... 1.86 2.35 2.28 2.66 3.08 7.26

<CAPTION>
ARDEN PREDECESSORS
-------------------------
FOR THE
PERIOD
JANUARY 1, FOR THE YEAR
1996 TO ENDED
OCTOBER 8, DECEMBER 31,
1996 1995
---------- ------------

(IN THOUSANDS, EXCEPT RATIO DATA)
<S> <C> <C>
OPERATING DATA:
Revenue....................... $ 40,465 $ 11,693
Property operating expenses... 14,224 3,340
General and administrative
expenses.................... 1,758 1,377
Depreciation and
amortization................ 5,264 1,898
--------- ---------
19,219 5,078
Interest expense.............. 24,521 5,537
Loss on valuation of
derivative.................. -- --
Equity in net loss of
noncombined entities........ 336 116
Minority interest............. (721) 1
--------- ---------
Income (loss) before
extraordinary items......... (4,917) (576)
Extraordinary (loss) gain on
early extinguishment of
debt, net of minority
interest.................... 1,877 --
--------- ---------
Net income (loss)............. $ (3,040) $ (576)
========= =========
Net income (loss) allocated
to:
Preferred partner...........
General and limited
partners..................
OTHER DATA:
Cash provided by operating
activities.................. $ 5,221 $ 2,830
Cash used in investing
activities.................. (119,083) (123,358)
Cash provided by financing
activities.................. 122,074 120,707
Funds from operations(1)...... (374) 1,323
EBITDA(2)..................... $ 24,483 $ 6,976
Ratio of EBITDA to interest
expense(2).................. 1.00 1.26
Ratio of EBITDA to fixed
charges(2)(3)............... 1.00 1.26
Ratio of earnings to fixed
charges(3)(4)............... 0.80 0.89
</TABLE>

21
<PAGE> 26

<TABLE>
<CAPTION>
AT DECEMBER 31,
AT SEPTEMBER 30, ----------------------------------------------------------------
2000 1999 1998 1997 1996 1995
---------------- ---------- ---------- ---------- ---------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Net investment in real estate..... $2,586,788 $2,479,111 $2,260,433 $1,247,701 $ 532,728 $160,874
Total assets...................... 2,685,061 2,572,904 2,333,866 1,287,287 551,256 182,379
Total indebtedness................ 1,155,531 1,029,656 840,377 477,566 155,000 168,451
Other liabilities................. 54,778 50,555 35,720 23,305 9,768 5,712
Partners' capital................. 1,471,807 1,489,740 1,454,844 756,008 386,488 8,216
</TABLE>

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

(1) We consider funds from operations, as defined by NAREIT, to be a useful
financial measure of our operating performance. We believe that funds from
operations provides investors with an additional basis to evaluate our
ability to service debt and to fund acquisitions and other capital
expenditures. Funds from operations should not be considered an alternative
to net income determined in accordance with GAAP, as an indicator of our
financial performance or as a substitute for cash flow from operating
activities determined in accordance with GAAP as a measure of our liquidity.
Funds from operations also is not necessarily indicative of funds available
to fund our cash needs, including our ability to service our debt.

22
<PAGE> 27

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

OVERVIEW

The following discussion should be read together with the "Selected
Financial Data" and our historical consolidated financial statements and related
notes included elsewhere in this prospectus.

We are a full service real estate organization that owns, manages, leases,
develops, renovates and acquires commercial properties located in Southern
California. Arden Realty, a REIT, is our sole general partner and, as of
September 30, 2000, owned 96.7% of our common operating partnership units. Arden
Realty conducts substantially all of its operations through us and our
subsidiaries. We are managed by 11 senior executive officers who have an average
of over 15 years of experience in the real estate industry. We perform all
property management, accounting, finance and acquisition activities and a
majority of our leasing transactions with our own staff of approximately 300
employees.

As of September 30, 2000, we are Southern California's largest publicly
traded office landlord as measured by total net rentable square feet owned. As
of that date, our portfolio consisted of 143 primarily suburban office
properties containing approximately 18.7 million net rentable square feet and
two properties with approximately 442,000 net rentable square feet under
development. As of September 30, 2000, our properties were approximately 95.9%
leased, excluding one existing property under renovation.

Our primary business strategy is to actively manage our portfolio to
achieve gains in occupancy and rental rates, control operating expenses and to
maximize income from ancillary operations and services. When market conditions
permit, we may also develop or acquire new properties that add value and fit
strategically into our portfolio. We may also sell existing mature or slow
growth properties and redeploy the proceeds into investments that we believe
will generate higher yields.

23
<PAGE> 28

RESULTS OF OPERATIONS

Our financial position and operating results are primarily comprised of our
portfolio of commercial properties and income derived from those properties.
Therefore, financial data from period to period will be affected by the timing
of significant property, renovations, developments and acquisitions.

COMPARISON OF THE NINE MONTHS ENDED SEPTEMBER 30, 2000 TO THE NINE MONTHS ENDED
SEPTEMBER 30, 1999
(IN THOUSANDS, EXCEPT NUMBER OF PROPERTIES AND PERCENTAGES):

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
-------------------- DOLLAR PERCENT
2000 1999 CHANGE CHANGE
-------- -------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C>
REVENUE
Revenue from rental operations:
Rental........................................... $241,726 $216,034 $25,692 12%
Tenant reimbursements............................ 12,213 10,890 1,323 12
Parking, net of expenses......................... 13,199 10,583 2,616 25
Other rental operations.......................... 14,427 11,264 3,163 28
-------- -------- ------- --
281,565 248,771 32,794 13
Interest and other income.......................... 2,573 2,092 481 23
-------- -------- ------- --
Total revenue................................. $284,138 $250,863 $33,275 13%
======== ======== ======= ==
EXPENSES
Property operating expenses:
Repairs and maintenance.......................... $ 25,965 $ 24,180 $ 1,785 7%
Utilities........................................ 22,206 21,487 719 3
Real estate taxes................................ 19,449 17,181 2,268 13
Insurance........................................ 3,140 2,962 178 6
Ground rent...................................... 1,016 693 323 47
Administrative................................... 9,808 8,195 1,613 20
-------- -------- ------- --
Total property operating expenses............. 81,584 74,698 6,886 9
General and administrative....................... 5,184 4,584 600 13
Interest......................................... 56,967 43,685 13,282 30
Depreciation and amortization.................... 63,952 51,198 12,754 25
-------- -------- ------- --
Total expenses................................ $207,687 $174,165 $33,522 19%
======== ======== ======= ==
OTHER DATA:
Number of Properties
Acquired during period............................. -- 4
Completed and placed in service during period...... 1 --
Owned at end of period............................. 143 142
Net Rentable Square Feet:
Acquired during period............................. -- 524
Completed and placed in service during period...... 242 --
Owned at end of period............................. 18,734 18,492
</TABLE>

Variances for revenue from rental operations and property operating
expenses are discussed below.

Interest and other income increased by approximately $481,000 or 23% during
the nine months ended September 30, 2000, as compared to the same period in
1999, primarily due to higher interest income earned in 2000 on higher
restricted cash balances required by certain mortgage loans entered into after
January 1, 1999 as well as additional management fees for building associations
we manage.

24
<PAGE> 29

General and administrative expenses as a percentage of total revenues
remained consistent at approximately 1.8% of total revenues for the nine months
ended September 30, 2000, as well as for the same period in 1999.

Interest expense increased approximately $13.3 million or 30% during the
nine months ended September 30, 2000, as compared to the same period in 1999.
Interest incurred increased due to both higher outstanding balances, primarily
to fund four property acquisitions in 1999, tenant improvements, leasing
commission costs and costs for our development and renovation projects, and
higher average interest rates in 2000.

Depreciation and amortization expense increased by approximately $12.8
million or 25% during the nine months ended September 30, 2000, primarily due to
depreciation related to properties acquired in 1999, newly developed and
renovated properties placed in service in 2000, and for capital expenditures,
tenant improvements and leasing commissions for properties placed in service
after September 30, 1999.

VARIANCES FOR REVENUE FROM RENTAL OPERATIONS AND PROPERTY OPERATING EXPENSES

The increase in revenue from rental operations and property operating
expenses for the nine months ended September 30, 2000 as compared to the same
period in 1999 was partially due to the four properties we acquired during 1999,
a development property placed in service in the third quarter of 2000 and the
five properties under renovation for all or a portion of the periods presented.
Operating results for properties under renovation may significantly vary from
period to period depending on the status of the renovation and occupancy levels.

Following is a summary of the increase in revenue from rental operations
and property operating expenses that relates to the ten properties acquired,
placed in service after January 1, 1999 or under renovation for all or a portion
of the period after January 1, 1999 and for the 133 non-renovation properties we
owned for all of the nine month periods ended September 30, 2000 and 1999 (in
thousands, except number of properties).

<TABLE>
<CAPTION>
PROPERTIES
ACQUIRED, PLACED PROPERTIES OWNED FOR
IN SERVICE OR UNDER ALL OF THE NINE MONTHS
RENOVATION AFTER ENDED SEPTEMBER 30,
TOTAL VARIANCE JANUARY 1, 1999 2000 AND 1999(1)
-------------- ------------------- ----------------------
<S> <C> <C> <C>
REVENUE FROM RENTAL OPERATIONS:
Rental............................ $25,692 $12,381 $13,311
Tenant reimbursements............. 1,323 415 908
Parking, net of operations........ 2,616 982 1,634
Other rental operations........... 3,163 2,431 732
------- ------- -------
$32,794 $16,209 $16,585
======= ======= =======
PROPERTY OPERATING EXPENSES:
Repairs and maintenance........... $ 1,785 $ 1,525 $ 260
Utilities......................... 719 1,233 (514)
Real estate taxes................. 2,268 1,005 1,263
Insurance......................... 178 146 32
Ground rent....................... 323 -- 323
Administrative.................... 1,613 378 1,235
------- ------- -------
$ 6,886 $ 4,287 $ 2,599
======= ======= =======
OTHER DATA:
Number of properties.............. 143 10 133
Net rentable square feet.......... 18,734 1,834 16,900
</TABLE>

-------------------------
(1) See the Same Properties analysis below.

25
<PAGE> 30

SAME PROPERTIES

Following is a comparison of property operating data computed under the
GAAP Basis and Cash Basis for the 133 non-renovation properties we owned for the
entire nine month periods ended September 30, 2000 and 1999 (in thousands,
except number of properties and percentages).

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
-------------------- DOLLAR PERCENT
2000 1999 CHANGE CHANGE
-------- -------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C>
GAAP BASIS:
Revenue from rental operations..................... $257,252 $240,667 $16,585 6.9%
Property operating expenses........................ 74,911 72,312 2,599 3.6
-------- -------- ------- ---
Net.............................................. $182,341 $168,355 $13,986 8.3%
======== ======== ======= ===
CASH BASIS(1):
Revenue from rental operations..................... $251,778 $235,751 $16,027 6.8%
Property operating expenses........................ 74,911 72,312 2,599 3.6
-------- -------- ------- ---
Net.............................................. $176,867 $163,439 $13,428 8.2%
======== ======== ======= ===
Number of non-renovation properties................ 133 133
Average occupancy.................................. 94.8% 92.1%
Net rentable square feet........................... 16,900 16,900
</TABLE>

-------------------------
(1) Excludes straight-line rent adjustments.

Revenue from rental operations for these properties, computed on a GAAP
basis, increased by approximately $16.6 million, or 6.9%, during the nine months
ended September 30, 2000, compared to the same period in 1999. Approximately
$13.3 million of this difference was related to rental revenue, of which $12.7
million was related to scheduled rents and $600,000 was related to increases in
straight-line rent. Approximately 60% of the increase in scheduled rents was due
to higher average occupancy in 2000 and the remaining 40% was related to rental
rate increases. The increase in straight-line rent was primarily due to new
leases and extensions signed with higher rental rate escalations than in 1999.
Revenue from rental operations was also higher due to an approximate $900,000
increase in tenant reimbursements, a $1.6 million increase in parking income and
an approximate $700,000 increase in other rental operations. Tenant
reimbursements and parking revenue increased primarily due to the approximate
2.7% increase in occupancy in 2000, while other rental operations increased
primarily due to additional signage, satellite and after-hour utility billings.

Excluding only the straight-line rent adjustment for these properties,
revenue from rental operations for the nine months ended September 30, 2000,
computed on a cash basis, increased by approximately $16.0 million or 6.8%.

Property operating expenses for these properties increased by approximately
$2.6 million, or 3.6%, during the nine months ended September 30, 2000, compared
to the same period in 1999, primarily due to higher real estate tax, contingent
ground rent, and property administrative expenses in 2000. These increases were
partially offset by lower utilities expense in 2000. Real estate taxes increased
by approximately $1.3 million in 2000 due to normal annual increases and final
assessments on certain properties. Ground rent expense increased by $323,000 due
to higher operating income from one of our properties with a participating
ground lease. Due to our continued focus on raising our portfolio-wide
occupancy, property administrative expenses were also approximately $1.2 million
higher in 2000. These increases in property operating expenses in 2000 were
partially offset by a $514,000 decrease in utility expense as a result of
savings achieved from energy enhancing capital improvements completed during
1999.

26
<PAGE> 31

COMPARISON OF THE YEAR ENDED DECEMBER 31, 1999 TO THE YEAR ENDED DECEMBER 31,
1998
(IN THOUSANDS, EXCEPT NUMBER OF PROPERTIES AND PERCENTAGES)

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
-------------------- DOLLAR PERCENT
1999 1998 CHANGE CHANGE
-------- -------- ------- -------
<S> <C> <C> <C> <C>
REVENUE
Revenue from rental operations:
Rental........................................... $292,688 $250,467 $42,221 17%
Tenant reimbursements............................ 13,863 9,505 4,358 46
Parking, net of expense.......................... 14,384 12,223 2,161 18
Other rental operations.......................... 16,918 8,872 8,046 91
-------- -------- ------- ---
Total......................................... 337,853 281,067 56,786 20
Interest and other income........................ 2,822 3,515 (693) (20)
-------- -------- ------- ---
Total revenue................................. $340,675 $284,582 $56,093 20%
======== ======== ======= ===

EXPENSES
Property expenses:
Repairs and maintenance.......................... $ 32,902 $ 27,141 $ 5,761 21%
Utilities........................................ 28,305 26,559 1,746 7
Real estate taxes................................ 23,167 19,433 3,734 19
Insurance........................................ 3,993 4,110 (117) (3)
Ground rent...................................... 891 714 177 25
Administrative................................... 12,026 8,613 3,413 40
-------- -------- ------- ---
Total property expenses....................... 101,284 86,570 14,714 17
General and administrative....................... 6,753 6,264 489 8
Interest......................................... 60,239 43,403 16,836 39
Depreciation and amortization.................... 69,837 51,822 18,015 35
-------- -------- ------- ---
Total expenses................................ $238,113 $188,059 $50,054 27%
======== ======== ======= ===

OTHER DATA:
Number of properties:
Acquired during period........................... 4 66
Owned at end of period........................... 142 138
Net rentable square feet:
Acquired during period........................... 524 7,664
Owned at end of period........................... 18,492 17,968
</TABLE>

The increase in revenue from rental operations and property expenses in
1999 is primarily from properties acquired during 1998 and 1999. The 1998
amounts do not include a full year of operations for the 66 properties we
acquired during 1998 or for the four properties we acquired during 1999.

27
<PAGE> 32

Following is a summary of the 1999 increase in revenue from rental
operations and property expenses that relates to the 70 properties that we
acquired during 1998 and 1999 and for the 72 properties we owned for all of 1998
and 1999 (in thousands, except number of properties).

<TABLE>
<CAPTION>
PROPERTIES PROPERTIES
ACQUIRED DURING OWNED FOR ALL OF
TOTAL VARIANCE 1998 AND 1999 1998 AND 1999(1)
-------------- --------------- ----------------
<S> <C> <C> <C>
REVENUE FROM RENTAL OPERATIONS:
Rental.................................. $42,221 $32,177 $10,044
Tenant reimbursements................... 4,358 3,551 807
Parking, net of expense................. 2,161 1,323 838
Other rental operations................. 8,046 2,400 5,646
------- ------- -------
$56,786 $39,451 $17,335
======= ======= =======

PROPERTY EXPENSES:
Repairs and maintenance................. $ 5,761 $ 3,708 $ 2,053
Utilities............................... 1,746 1,904 (158)
Real estate taxes....................... 3,734 2,033 1,701
Insurance............................... (117) 190 (307)
Ground rent............................. 177 1 176
Administrative.......................... 3,413 1,938 1,475
------- ------- -------
$14,714 $ 9,774 $ 4,940
======= ======= =======

OTHER DATA:
Number of properties.................... 70 72
Net rentable square feet................ 8,188 10,304
</TABLE>

-------------------------
(1) See analysis of Properties Owned for all of 1998 and 1999.

Interest and other income decreased by approximately $700,000 in 1999 as
compared to 1998, primarily due to lower interest income earned on amortizing
mortgage notes receivable acquired in September 1997.

General and administrative expenses were approximately $6.8 million, or
2.0% of total revenue, in 1999 as compared to $6.3 million, or 2.2% of total
revenue, in 1998. General and administrative expenses as a percentage of total
revenue decreased in 1999 compared to 1998 primarily due to benefits achieved
from economies of scale and concentration over a larger property portfolio.

Interest expense increased approximately $16.8 million in 1999 as compared
to 1998. This increase was due to higher outstanding debt balances in 1999,
primarily to fund property acquisitions and tenant improvement build-outs, which
was partially offset by slightly lower effective interest rates in 1999.

Depreciation and amortization expense increased by approximately $18.0
million in 1999, primarily due to the 70 properties we acquired in 1998 and
1999.

28
<PAGE> 33

PROPERTIES OWNED FOR ALL OF 1998 AND 1999
(IN THOUSANDS, EXCEPT NUMBER OF PROPERTIES AND PERCENTAGES)

Following is a comparison of property operating data computed on a GAAP
basis and cash basis for the 72 non-renovation properties we owned for the
entire twelve months ended December 31, 1999 and 1998 (in thousands, except
number of properties and percentages).

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
-------------------- DOLLAR PERCENT
1999 1998 CHANGE CHANGE
-------- -------- ------- -------
<S> <C> <C> <C> <C>
GAAP BASIS:
Revenue from rental operations..................... $210,312 $192,977 $17,335 9%
Property expenses.................................. 65,270 60,330 4,940 8
-------- -------- ------- --
Net.............................................. $145,042 $132,647 $12,395 9%
======== ======== ======= ==

CASH BASIS(1):
Revenue from rental operations..................... $207,357 $189,181 $18,176 10%
Property expenses.................................. 65,270 60,330 4,940 8
-------- -------- ------- --
Net.............................................. $142,087 $128,851 $13,236 10%
======== ======== ======= ==
Number of properties............................... 72 72
Average occupancy.................................. 89.4% 85.4%
Net rentable square feet........................... 10,304 10,304
</TABLE>

-------------------------
(1) Excludes straight-line rent adjustments.

Revenue from rental operations for the 72 properties we owned for all of
1998 and 1999 computed on a GAAP basis increased by approximately $17.3 million
in 1999 compared to 1998. This increase was primarily due to increases in rental
rates and a four percentage point increase in average occupancy in 1999 for this
pool of properties representing approximately 10.3 million net rentable square
feet. This increase in occupancy not only contributed to higher rental revenue
but also resulted in higher tenant expense reimbursements, parking income and
miscellaneous tenant charges. Miscellaneous tenant charges include revenue from
after-hour utility billings, signage, satellite income and lease termination
settlements. Lease termination settlements totaled approximately $9.7 million in
1999 compared to $4.1 million in 1998 for these properties.

Excluding only the straight-line rent adjustments for these properties,
revenue from rental operations, computed on a cash basis, increased by
approximately $18.2 million for the reasons described above.

Property operating expenses for these properties increased by approximately
$4.9 million in 1999 compared to 1998, primarily due to higher repairs,
maintenance and administrative and overhead expenses. These increases were
primarily related to the four percentage point increase in average occupancy in
1999.

29
<PAGE> 34

COMPARISON OF THE YEAR ENDED DECEMBER 31, 1998 TO THE YEAR ENDED DECEMBER 31,
1997
(IN THOUSANDS, EXCEPT NUMBER OF PROPERTIES AND PERCENTAGES)

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
-------------------- DOLLAR PERCENT
1998 1997 CHANGE CHANGE
-------- -------- -------- -------
<S> <C> <C> <C> <C>
REVENUE
Revenue from rental operations:
Rental.......................................... $250,467 $118,085 $132,382 112%
Tenant reimbursements........................... 9,505 5,945 3,560 60
Parking, net of expense......................... 12,223 7,397 4,826 65
Other rental operations......................... 8,872 2,390 6,482 271
-------- -------- -------- ----
Total........................................ 281,067 133,817 147,250 110%
Interest and other income....................... 3,515 1,630 1,885 116
-------- -------- -------- ----
Total revenue................................ $284,582 $135,447 $149,135 110%
======== ======== ======== ====
EXPENSES
Property expenses:
Repairs and maintenance......................... $ 27,141 $ 15,154 $ 11,987 79%
Utilities....................................... 26,559 14,321 12,238 85
Real estate taxes............................... 19,433 8,003 11,430 143
Insurance....................................... 4,110 2,125 1,985 93
Ground rent..................................... 714 314 400 127
Administrative.................................. 8,613 4,415 4,198 95
-------- -------- -------- ----
Total property expenses...................... 86,570 44,332 42,238 95
General and administrative...................... 6,264 3,888 2,376 61
Interest........................................ 43,403 19,511 23,892 122
Loss on valuation of derivative................. -- 3,111 (3,111) (100)
Depreciation and amortization................... 51,822 20,260 31,562 156
-------- -------- -------- ----
Total expenses............................... $188,059 $ 91,102 $ 96,957 106%
======== ======== ======== ====
OTHER DATA:
Number of properties:
Acquired during period.......................... 66 38
Owned at end of period.......................... 138 72
Net rentable square feet:
Acquired during period.......................... 7,664 4,864
Owned at end of period.......................... 17,968 10,304
</TABLE>

The increase in revenue from rental operations and property expenses in
1998 is primarily from properties acquired during 1997 and 1998. The 1997
amounts do not include a full year of operations for the 38 properties we
acquired during 1997 or for the 66 properties we acquired during 1998.

30
<PAGE> 35

Following is a summary of the 1998 increase in revenue from rental
operations and property expenses that relate to the 104 properties that we
acquired during 1997 and 1998 and for the 34 non-renovation properties we owned
for all of 1997 and 1998 (in thousands, except number of properties).

<TABLE>
<CAPTION>
PROPERTIES PROPERTIES
TOTAL ACQUIRED DURING OWNED FOR ALL OF
VARIANCE 1997 AND 1998 1997 AND 1998(1)
-------- --------------- ----------------
<S> <C> <C> <C>
REVENUE FROM RENTAL OPERATIONS:
Rental.................................... $132,382 $131,760 $ 622
Tenant reimbursements..................... 3,560 4,931 (1,371)
Parking, net of expense................... 4,826 4,811 15
Other rental operations................... 6,482 4,683 1,799
-------- -------- -------
$147,250 $146,185 $ 1,065
======== ======== =======
PROPERTY EXPENSES:
Repairs and maintenance................... $ 11,987 $ 13,117 $(1,130)
Utilities................................. 12,238 12,587 (349)
Real estate taxes......................... 11,430 11,061 369
Insurance................................. 1,985 2,126 (141)
Ground rent............................... 400 374 26
Administrative............................ 4,198 4,901 (703)
-------- -------- -------
$ 42,238 $ 44,166 $(1,928)
======== ======== =======
OTHER DATA:
Number of properties...................... 104 34
Net rentable square feet.................. 12,528 5,440
</TABLE>

-------------------------
(1) See analysis of Properties Owned for all of 1997 and 1998.

Interest and other income increased by approximately $1.9 million in 1998
as compared to 1997, primarily due to higher interest income earned on mortgage
notes receivable acquired in September 1997 and on cash deposits required by
some of our mortgage loans.

General and administrative expenses were approximately $6.3 million, or
2.2% of total revenue in 1998 as compared to $3.9 million, or 2.9% of total
revenue in 1997. General and administrative expenses as a percentage of total
revenue decreased in 1998 compared to 1997, primarily due to benefits achieved
from economies of scale and concentration over a larger property portfolio.

Interest expense increased approximately $23.9 million in 1998 as compared
to 1997. This increase was due to higher outstanding debt balances in 1998,
primarily to fund property acquisitions, which was partially offset by slightly
lower effective interest rates in 1998.

In September 1997, we recorded a loss of approximately $3.1 million related
to the retirement of agreements to convert some floating rate debt liabilities
to fixed rate liabilities. The underlying variable rate liabilities were repaid
in full with proceeds from an equity offering in July 1997.

Depreciation and amortization expense increased by approximately $31.6
million in 1998, primarily due to the 104 properties we acquired in 1997 and
1998.

31
<PAGE> 36

PROPERTIES OWNED FOR ALL OF 1997 AND 1998
(IN THOUSANDS, EXCEPT NUMBER OF PROPERTIES AND PERCENTAGES)

Following is a comparison of property operating data computed on a GAAP and
cash basis for the 34 non-renovation properties we owned for the entire twelve
months ended December 31, 1998 and 1997. (in thousands, except number of
properties and percentages).

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
-------------------- DOLLAR PERCENT
1998 1997 CHANGE CHANGE
-------- -------- ------- -------
<S> <C> <C> <C> <C>
GAAP BASIS:
Revenue from rental operations..................... $101,505 $100,440 $ 1,065 1%
Property expenses.................................. 31,421 33,349 (1,928) (6)
-------- -------- ------- --
Net.............................................. $ 70,084 $ 67,091 $ 2,993 4%
======== ======== ======= ==
CASH BASIS(1):
Revenue from rental operations..................... $100,554 $ 98,701 $ 1,853 2%
Property expenses.................................. 31,421 33,349 (1,928) (6)
-------- -------- ------- --
Net.............................................. $ 69,133 $ 65,352 $ 3,781 6%
======== ======== ======= ==
Number of properties............................... 34 34
Average occupancy.................................. 87.5% 85.7%
Net rentable square feet........................... 5,440 5,440
</TABLE>

-------------------------
(1) Excludes straight-line rent adjustments.

Revenue from rental operations for the 34 properties we owned for all of
1997 and 1998 computed on a GAAP basis increased by approximately $1.1 million
in 1998 compared to 1997. This increase was primarily due to increases in rental
rates, a two percentage point increase in average occupancy in 1998 and higher
miscellaneous tenant charges for this pool of properties representing
approximately 5.4 million net rentable square feet. Miscellaneous tenant charges
include revenue from after-hour utility billings, signage, satellite income and
lease termination settlements. Lease termination settlements totaled
approximately $2.0 million in 1998 compared to $316,000 in 1997 for these
properties. These increases were partially offset by lower tenant expense
reimbursements in 1998, primarily due to resetting base years for leases that
were retenanted in 1998 and the reversing effect of straight-line rent
adjustments on specific properties in 1998.

Excluding only the straight-line rent adjustments for these properties,
revenue from rental operations, computed on a cash basis, increased by
approximately $1.9 million for the reasons described above.

Property operating expenses for these properties decreased by approximately
$1.9 million in 1998 compared to 1997, primarily due to lower repairs,
maintenance and administrative and overhead expenses achieved primarily from
economies of scale and concentration over a larger property portfolio.

LIQUIDITY AND CAPITAL RESOURCES

CASH FLOWS

Nine months ended September 30, 2000

Cash provided by operating activities increased by approximately $23.3
million to $143.2 million for the nine months ended September 30, 2000, as
compared to $119.9 million for the same period in 1999, primarily due to
improved operating results, net of depreciation and amortization, from our
property portfolio.

Cash used in investing activities decreased by approximately $33.7 million,
to $178.7 million for the nine months ended September 30, 2000 compared to
$212.4 million for the same period in 1999. This decrease was primarily due to
$89.8 million used in 1999 to acquire four properties which was partially

32
<PAGE> 37

offset by an increase of approximately $56.1 million used in 2000 for capital
expenditures related to our increased development and renovation activity and
higher costs associated with tenant improvement build-outs resulting from
occupancy gains achieved in 2000.

Cash provided by financing activities decreased by approximately $61.5
million to an inflow of $30.0 million for the nine months ended September 30,
2000, as compared to an inflow of $91.5 million for the same period in 1999.
Cash provided by financing activities for the nine months ended September 30,
2000 consisted primarily of net proceeds from our offering of unsecured senior
notes, partially offset by repayments of mortgage loans, paydowns of our
unsecured lines of credit and distributions to our general and limited partners.

Year ended December 31, 1999

Cash provided by operating activities increased by $28.5 million to $178.9
million for the year ended December 31, 1999, as compared to $150.4 million for
the year ended December 31, 1998, primarily due to operating results from the 70
properties acquired in 1998 and 1999.

Cash used in investing activities decreased by $807.8 million to $292.0
million in 1999 compared to $1.1 billion in 1998, primarily due to a reduction
in property acquisitions in 1999.

Cash provided by financing activities decreased by $833.1 million to $115.6
million, as compared to $948.7 million in 1998. This decrease was primarily due
to the timing of equity issuances. During 1998, we had net proceeds of
approximately $708.6 million from equity issuances as compared to $49.0 million
in net proceeds from equity issuances in 1999. Cash provided by financing
activities for the year ended December 31, 1999, consisted primarily of net
proceeds from mortgage loans, unsecured lines of credit, and the issuance of
2,000,000 8 5/8% Series B Cumulative Redeemable Preferred Units, partially
offset by distributions to partners and minority interests.

CAPITAL COMMITMENTS

As of September 30, 2000, we had approximately $16.7 million outstanding in
capital commitments related to tenant improvements, development and renovation
costs and for property-related capital expenditures.

AVAILABLE BORROWINGS, CASH BALANCES AND CAPITAL RESOURCES

We have an unsecured line of credit with a total commitment of $10 million
from City National Bank. This line of credit accrues interest at the City
National Bank Prime Rate less 0.875% and is scheduled to mature on August 1,
2001. As of September 30, 2000, there was no outstanding balance, and $10
million was available for additional borrowing. Proceeds from this line of
credit have been used, among other things, to provide funds for tenant
improvements, capital expenditures and working capital.

On March 17, 2000, we issued $250 million of senior unsecured notes in two
tranches. One tranche was for $200 million at an interest rate of 8.875% due in
March 2005 and the other tranche was for $50 million at an interest rate of
9.150% due in March 2010. These notes are our senior unsecured obligations and
pay interest semi-annually on March 1 and September 1 of each year. Net proceeds
from this offering were used to repay two prepayable term loans to an affiliate
of Lehman Brothers totaling $145.5 million, a $5.0 million mortgage loan and
approximately $96.1 million under our unsecured lines of credit. These senior
unsecured notes were issued in a private placement in reliance upon an exemption
from registration provided by Rule 144A under the Securities Act. We
subsequently filed a registration statement that became effective on May 10,
2000 and all privately placed notes were exchanged for notes registered under
the Securities Act.

facility) depending on our unsecured debt rating. In addition, as long as we
maintain an unsecured debt rating of BBB-/Baa3 or better, the agreement contains
a competitive bid option, whereby the lenders under this line of credit may bid
on the interest rate to be charged for up to $137.5 million of the unsecured
line of credit. Under certain circumstances, we also have the option to convert
the interest rate on this line of credit to the prime rate plus 0.5%. This line
of credit matures in April 2003. As of September 30, 2000, there was
approximately $214.4 million outstanding on this line of credit and
approximately $60.6 million was available for additional borrowings. In November
2000, we used approximately $57.7 million from the proceeds of the sale of the
unregistered notes to reduce the outstanding balance under this line of credit.

In July 2000, we closed on a $75 million unsecured line of credit with
Lehman Brothers. Borrowings on this new line of credit bear interest at a rate
ranging between LIBOR plus 1.05% and LIBOR plus 1.70%, depending on our
unsecured debt rating. We also have the option to convert the interest rate to
the prime rate plus 0.5%. This line of credit matures on July 27, 2002 with an
option to extend the maturity date for one year. Proceeds from this line of
credit have been used to reduce the outstanding balance under our $275 million
line of credit. As of September 30, 2000, there was approximately $75 million
outstanding on this line of credit.

On November 20, 2000, we completed a private placement of $100 million
8.50% senior notes due 2010. We used the net proceeds from this private
placement to reduce the outstanding balance on one of our unsecured lines of
credit from the group of banks led by Wells Fargo and to repay a construction
loan related to our development of the 6060 Center Drive project. See "No Cash
Proceeds."

On April 5, 1999, we closed a $115 million loan with Mass Mutual Life
Insurance Company that is secured by twelve of our properties, has a 10-year
term, bears interest at a fixed rate of 6.94%, requires monthly payments of
principal and interest and is amortized over a 25-year period. Proceeds from
this loan were used to repay $76.4 million of our prepayable term loan with an
affiliate of Lehman Brothers and to repay a portion of our lines of credit.

On April 30, 1999, we closed a $22.5 million loan with an affiliate of
Lehman Brothers that is secured by three of our properties, has a 10-year term,
bears interest at a fixed rate of 7.54%, requires monthly payments of principal
and interest and is amortized over a 30-year period. Proceeds from this loan
were used to repay a portion of our lines of credit.

On July 23, 1999, we entered into a construction loan with a total
commitment of $50 million related to our development of the approximately
241,000 net rentable square foot 6060 Center Drive office building in the Howard
Hughes Center. The construction loan was secured by specific property and
construction improvements, bore interest at LIBOR plus 2.0%, required monthly
payments of interest only and was scheduled to mature December 30, 2000, with
two one-year extension options. As of September 30, 2000, the effective interest
rate of this construction loan was 8.63%, the outstanding principal balance was
$40.4 million and $9.6 million was available for additional borrowing. In
November 2000, we used approximately $40.4 million from the proceeds of the sale
of the unregistered notes to repay this construction loan.

On September 7, 1999, we completed a $50 million private placement of 2
million 8 5/8% Series B Cumulative Redeemable Preferred Units to an
institutional investor. These preferred units are callable by us after five
years and are exchangeable after 10 years by the holder into Arden Realty's
8 5/8% Series B Cumulative Redeemable Preferred Stock on a one-for-one basis.
The preferred units have no stated maturity or mandatory redemption and are
subordinated to all debt. We used the net proceeds from this private placement
to repay a portion of our lines of credit.

34
<PAGE> 39

Following is a summary of scheduled principal payments for our total debt
outstanding as of September 30, 2000 (in thousands):

<TABLE>
<CAPTION>
YEAR AMOUNT
---- ----------
<S> <C>
2000..................................................... $ 41,014
2001..................................................... 2,501
2002..................................................... 77,702
2003..................................................... 219,888
2004..................................................... 182,302
2005..................................................... 207,918
2006..................................................... 15,303
2007..................................................... 8,895
2008..................................................... 230,388
2009..................................................... 112,063
Thereafter............................................... 57,557
----------
Total.................................................. $1,155,531
==========
</TABLE>

Following is certain other information related to our indebtedness as of
September 30, 2000 (in thousands, except percentage data):

UNSECURED AND SECURED DEBT ANALYSIS:

<TABLE>
<CAPTION>
WEIGHTED
AVERAGE
BALANCE PERCENT INTEREST RATE(1)
---------- ------- ----------------
<S> <C> <C> <C>
Unsecured Debt................................ $ 538,500 47% 8.73%
Secured Debt.................................. 617,031 53 7.50
---------- --- ----
Total Debt.................................. $1,155,531 100% 8.07%
========== === ====
</TABLE>

FLOATING AND FIXED RATE DEBT ANALYSIS:

<TABLE>
<CAPTION>
WEIGHTED
AVERAGE
BALANCE PERCENT INTEREST RATE(1)
---------- ------- ----------------
<S> <C> <C> <C>
Floating Rate Debt............................ $ 329,723 29% 8.45%
Fixed Rate Debt............................... 825,808 71 7.93
---------- --- ----
Total Debt.................................. $1,155,531 100% 8.07%
========== === ====
</TABLE>

-------------------------
(1) Includes amortization of prepaid financing costs.

As of September 30, 2000, we had $23.0 million in cash and cash
equivalents, including $13.8 million in restricted cash representing interest
bearing cash deposits required by five of our mortgage loans payable. Also
included in cash and cash equivalents were $7.7 million in cash impound accounts
for real estate taxes and insurance as required by several of our mortgage loans
payable.

As of September 30, 2000, we had $70.6 million available under our lines of
credit.

We may sell mature, slow growth assets throughout the next several years.
Due to future market conditions beyond our control, it is difficult to predict
the actual period and amount of these asset sales. At the time any such sales
proceeds are realized, we expect to redeploy such amounts into investments that
we believe will generate higher yields, which may include development of office
buildings, acquisitions or repurchase of our common stock. In addition, we
expect to use a portion of any proceeds to pay down portions of our debt in
order to maintain our conservative leverage and coverage ratios.

35
<PAGE> 40

We expect to continue meeting our short-term liquidity and capital
requirements generally through net cash provided by operating activities and
proceeds from our lines of credit. We believe that the net cash provided by
operating activities will continue to be sufficient to pay any distributions
necessary to enable Arden Realty to continue qualifying as a REIT. We also
believe the foregoing sources of liquidity will be sufficient to fund our
short-term liquidity needs for the foreseeable future, including recurring non-
revenue enhancing capital expenditures, tenant improvements and leasing
commissions.

We expect to meet our long-term liquidity and capital requirements such as
scheduled principal repayments, development costs, property acquisitions, if
any, and other non-recurring capital expenditures through the refinancing of
existing indebtedness and/or the issuance of long-term debt and equity
securities.

FUNDS FROM OPERATIONS

The following table reflects the calculation of our funds from operations
for the nine months ended September 30, 2000 and 1999, and for the years ended
December 31, 1999, 1998 and 1997 (in thousands):

<TABLE>
<CAPTION>
FOR THE NINE MONTHS FOR THE YEARS
ENDED SEPTEMBER 30, ENDED DECEMBER 31,
-------------------- -------------------------------
2000 1999 1999 1998 1997
-------- -------- -------- -------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Funds from operations(1):
Net income......................... $ 76,336 $ 76,561 $102,393 $ 95,794 $44,286
Depreciation and amortization...... 63,952 51,198 69,837 51,822 20,260
Distributions on preferred units... (3,234) (276) (1,354) -- --
-------- -------- -------- -------- -------
Funds from operations.............. $137,054 $127,483 $170,876 $147,616 $64,546
======== ======== ======== ======== =======
</TABLE>

-------------------------
(1) We consider funds from operations, as defined by NAREIT, to be a useful
financial measure of our operating performance. We believe that funds from
operations provides investors with an additional basis to evaluate our
ability to service debt and to fund acquisitions and other capital
expenditures. Funds from operations should not be considered an alternative
to net income determined in accordance with GAAP, as an indicator of our
financial performance or as a substitute for cash flow from operating
activities determined in accordance with GAAP as a measure of our liquidity.
Funds from operations also is not necessarily indicative of funds available
to fund our cash needs, including our ability to service our debt.

The White Paper on funds from operations approved by the Board of Governors
of NAREIT in October 1999 defines funds from operations as net income or
loss computed in accordance with GAAP, excluding gains or losses from
extraordinary items, as defined by GAAP, and gains and losses from sales of
depreciable operating property plus real estate-related depreciation and
amortization and after adjustments for unconsolidated partnerships and joint
ventures. We compute funds from operations in accordance with standards
established by the White Paper which may differ from the standards used by
other real estate companies and, accordingly, our funds from operations may
not be comparable to those companies' funds from operations.

QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Market risk is the exposure or loss resulting from changes in interest
rates, foreign currency exchange rates, commodity prices and equity prices. The
primary market risk to which we are exposed is interest rate risk, which is
sensitive to many factors, including governmental monetary and tax policies,
domestic and international economic and political considerations and other
factors that are beyond our control.

36
<PAGE> 41

INTEREST RATE RISK

In order to modify and manage the interest characteristics of our
outstanding debt and limit the effects of interest rates on our operations, we
may use a variety of financial instruments, including interest rate swaps, caps,
floors and other interest rate exchange contracts. The use of these types of
instruments to hedge our exposure to changes in interest rates carries
additional risks such as counter-party credit risk and legal enforceability of
hedging contracts. We do not enter into any transactions for speculative or
trading purposes.

Some of our future earnings, cash flows and fair values relating to
financial instruments are dependent upon prevailing market rates of interest,
such as LIBOR. Based on interest rates and outstanding balances as of September
30, 2000, a 1% increase in interest rates on our $329.7 million of floating rate
debt would decrease annual future earnings and cash flows by approximately $3.3
million and would not have an impact on the fair value of the floating rate
debt. A 1% decrease in interest rates on our $329.7 million of floating rate
debt would increase annual future earnings and cash flows by approximately $3.3
million and would not have an impact on the fair value of the floating rate
debt. A 1% increase or decrease in interest rates on our secured notes
receivable would not have a material impact on annual future earnings, cash
flows and the fair value of our secured notes receivable.

These amounts are determined by considering the impact of the hypothetical
interest rates on our borrowing cost. These analyses do not consider the effects
of the reduced level of overall economic activity that could exist in that
environment. Further, in the event of a change of this magnitude, we would
consider taking actions to further mitigate our exposure to the change. Due to
the uncertainty of the specific actions that would be taken and their possible
effects, however, this sensitivity analysis assumes no changes in our capital
structure.

37
<PAGE> 42

BUSINESS

We are an operating partnership that owns, manages, leases, develops,
renovates and acquires commercial properties located in Southern California.
Arden Realty, a REIT, is our sole general partner and, as of September 30, 2000,
owned 96.7% of our common partnership units. Arden Realty conducts substantially
all of its operations through us and our subsidiaries.

BUSINESS STRATEGIES

In addition to our corporate office, we maintain five regional offices and
approximately 45 separate management offices. Each regional office is co-managed
by a regional property manager and a regional leasing manager that oversee and
direct on-site service teams located in the management offices. Each of the
regional offices is staffed with property management, leasing, tenant
improvements, building engineering, accounting and information systems
specialists which enables us to respond quickly to our tenants' needs. By
maintaining a regionally focused organizational structure headed by seasoned
managers, we are able to quickly respond to our tenants' needs and market
opportunities.

In addition, to increase operational efficiency, all of our management and
regional offices are networked with our corporate office and have access to the
Internet and our e-mail, accounting and lease management systems. Our accounting
and lease management systems employ the latest technology and allow both
corporate and field personnel access to tenant and prospective tenant-related
information to enhance responsiveness and communication of marketing and leasing
activity for each property.

Through our corporate infrastructure, we implement our business strategies
by:

- using integrated decision making to provide pro-active solutions to the
space needs of users in the markets where we have extensive real estate
and technical expertise;

- emphasizing quality service, tenant satisfaction and retention;

- employing intensive property marketing and leasing programs; and

- implementing cost control management techniques and systems that
capitalize on economies of scale and concentration arising from the size
and geographic focus of our portfolio.

We believe the implementation of these operating practices has been
instrumental in the increased occupancy and improved operating results of our
existing portfolio.

INTEGRATED DECISION MAKING

Our management, leasing, development, renovation, acquisition and finance
teams coordinate their activities to enhance responsiveness to market
opportunities and to provide pro-active solutions to the space needs of users in
the submarkets where we have extensive real estate and technical expertise. This
integrated approach permits us to analyze the specific requirements of existing
and prospective tenants and the economic terms and costs for each transaction on
a timely and efficient basis. We are therefore able to commit to leasing,
development or acquisition terms quickly, which facilitates an efficient
completion of tenant space build-out, minimal downtime after lease expirations
and the timely completion of development and acquisition transactions.

QUALITY SERVICE AND TENANT SATISFACTION

We strive to provide quality service through our multidisciplinary
operating approach resulting in timely responses to our tenants' needs. Our
seasoned on-site service teams interact and resolve most issues
38
<PAGE> 43

relating to tenant satisfaction and day-to-day operations. For portfolio-wide
operational and administrative functions, our corporate office provides support
to all regional offices and provides immediate response for critical operational
issues. This customer service approach has contributed to an average tenant
retention rate of approximately 75% since our formation.

AGGRESSIVE LEASING

The concentration of many of our properties within particular office
submarkets and our relationships with a broad array of tenants and brokers
enable us to pursue aggressive leasing strategies, to effectively monitor the
office space requirements of existing and prospective tenants and to offer
tenants a variety of space alternatives across our portfolio. In an effort to
realize cost savings and exercise more control over lease negotiations, we
currently lease approximately 70% of our properties using our in-house staff. We
employ outside brokers who are monitored by our leasing managers for the
remainder of our properties. In 1999, we signed approximately 990 leases for
approximately 4 million net rentable square feet, including approximately
716,000 square feet of net absorption. For the nine months ended September 30,
2000, we signed approximately 780 leases for approximately 3.4 million net
rentable square feet, including approximately 471,000 square feet of net
absorption.

COST CONTROL AND OPERATING EFFICIENCIES

The size and geographic focus of our portfolio permits us to enhance
portfolio value by controlling operating costs. We seek to capitalize on the
economies of scale and concentration which result from the geographic focus of
our portfolio, the ownership and management of multiple properties within
particular submarkets and the maintenance of a centralized purchasing and
accounting system for cost control at each of our properties.

GROWTH STRATEGIES

Based on our geographic focus in Southern California and our evaluation of
local market conditions, we believe the following key factors provide us with
opportunities to maximize returns:

- the continued strength of the Southern California economy, particularly
in the submarkets where our properties are located; and

INTERNAL GROWTH

- maintaining or improving current occupancy throughout our portfolio by
actively managing and aggressively leasing our properties;

- leasing space and renewing leases as they expire at increasing rents;

- controlling operating expenses through active cost control management and
systems;

- realizing economies of scale and concentration due to the size and
geographic focus of our portfolio; and

- sourcing new and innovative revenue streams while providing high quality
services to our tenants.

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<PAGE> 44

Maintaining or improving current occupancy

We believe that we have been successful in attracting, expanding and
retaining a diverse tenant base by actively managing our properties with an
emphasis on tenant satisfaction and retention. Our in-house leasing teams,
working with outside leasing brokers, continuously monitor each market to
identify strong prospective tenants who are in need of new or additional space.
We also strive to be responsive to the needs of existing tenants through our
on-site professional management staff and by providing them with alternative
space within our portfolio to accommodate their changing space requirements. Our
success in maintaining and improving occupancy rates is demonstrated, in part,
by the number of existing tenants that have renewed or re-leased their space,
leased additional space to support their expansion needs, or moved to other
space within our portfolio.

Leasing space and renewing leases as they expire at increasing rents

We believe that as the commercial real estate market in Southern California
continues to gain strength, there will be a continued increase in demand for
office space and a decline in vacancy rates, which are expected to result over
time in increasing market rents. We believe we will have significant
opportunities to increase cash flow during periods of increasing market rents by
renewing or re-leasing space as leases expire at higher rents.

Cost control management and systems

We plan to continue lowering our operating expenses through active cost
control management at all of our properties. We focus on cost control in various
areas of our operations. We continuously monitor the operating performance of
our properties and employ energy-enhancing and expense recovery technologies
when appropriate. These system enhancements include:

- lighting retrofits;

- replacement of inefficient heating, ventilation and air conditioning
systems;

- computer-driven energy management systems that monitor and react to the
climatic requirements of individual properties;

- automated security systems that allow us to provide security services to
our tenants at a lower cost;

- enhancement of billing systems, which enable us to more efficiently
recover operating expenses from our tenants; and

- on-going preventive maintenance programs to operate our building systems
efficiently, thereby reducing operating costs.

Capitalizing on economies of scale and concentration

In order to capitalize on economies of scale and concentration arising from
the size and geographic focus of our portfolio, our property managers and
building engineers are often responsible for several properties, which spreads
administrative and maintenance costs over those properties and reduces per
square foot expenses. In addition, we believe that parking operations and
building services and supplies purchased in bulk on a portfolio-wide basis will
facilitate further benefits from these economies of scale and concentration.

Sourcing additional revenue while providing high quality services to tenants

By implementing the next generation of technology in our properties, we
believe we will be able to further increase occupancy, tenant retention and
rental rates in the future. In 1998, we entered into an agreement with a
national technology/access management firm that has successfully marketed our
rooftop space to telecommunications providers as antennae sites resulting in
additional revenue and providing additional voice and data technology options to
our tenants. During 1999, we completed an agreement with

40
<PAGE> 45

a premium broadband Internet access and applications services provider to deploy
its building-centric, fiber optic network in a majority of our portfolio. In
addition to high speed Internet services, this fiber optic network provides our
tenants with a wide range of next generation business applications and
e-commerce tools, including video and audio conferencing, e-mail and unified
messaging.

EXTERNAL GROWTH

- low vacancy rates;

- opportunities for rising rents due to employment growth and population
movements;

- a minimal amount of developable land; or

EMPLOYEES

As of September 30, 2000, we had approximately 300 employees that perform
all of our property management, accounting, finance and acquisition activities
and a majority of our leasing transactions.

LEGAL PROCEEDINGS

We are not presently subject to any material litigation nor, to our
knowledge, is any litigation threatened against us, other than routine
litigation arising in the ordinary course of business, some of which is expected
to be covered by liability insurance and all of which collectively is not
expected to have a material adverse effect on our consolidated financial
statements.

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<PAGE> 46

PROPERTIES

EXISTING PORTFOLIO

Our portfolio consists of 143 primarily office properties, containing
approximately 18.7 million net rentable square feet, that individually range
from approximately 12,000 - 600,000 net rentable square feet. Our portfolio
consists of primarily suburban office properties located in Los Angeles, Orange,
San Diego, Ventura, Riverside, San Bernardino and Kern Counties. We believe that
our properties are located within desirable and established business communities
and are well maintained. Our properties offer an array of amenities, including
on-site management, high speed Internet and other broadband services, security,
parking, conference facilities, food services and health clubs.

<TABLE>
<CAPTION>
APPROXIMATE NET RENTABLE SQUARE FEET
NUMBER OF PROPERTIES (IN THOUSANDS, EXCEPT PERCENTAGES)
---------------------------------------- -----------------------------------------
INDUSTRIAL INDUSTRIAL
LOCATION OFFICE AND RETAIL TOTAL % OF TOTAL OFFICE AND RETAIL TOTAL % OF TOTAL
-------- ------ ---------- ----- ---------- ------ ---------- ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Los Angeles County:
West.................................... 30 1 31 22% 5,238 37 5,275 28%
North................................... 32 -- 32 22 2,877 -- 2,877 16
South................................... 16 -- 16 11 2,202 -- 2,202 12
Central................................. 3 -- 3 2 609 -- 609 3
Orange County............................. 21 -- 21 15 3,317 -- 3,317 18
San Diego County.......................... 21 -- 21 15 2,487 -- 2,487 13
Ventura County............................ 4 -- 4 3 562 -- 562 3
Riverside/San Bernardino Counties......... 8 4 12 8 554 415 969 5
Kern County............................... 2 -- 2 1 216 -- 216 1
--- -- --- --- ------ --- ------ ---
Subtotal.............................. 137 5 142 99% 18,062 452 18,514 99%
Renovation Properties..................... 1 -- 1 1% 220 -- 220 1%
--- -- --- --- ------ --- ------ ---
Total................................. 138 5 143 100% 18,282 452 18,734 100%
=== == === === ====== === ====== ===
</TABLE>

<TABLE>
<CAPTION>
ANNUALIZED BASE RENT PER LEASED
NET RENTABLE SQUARE FOOT(1)
PERCENT OCCUPIED PERCENT LEASED ----------------------------------------
AT SEPTEMBER 30, 2000 AT SEPTEMBER 30, 2000 FULL
--------------------------- --------------------------- SERVICE
INDUSTRIAL INDUSTRIAL INDUSTRIAL GROSS
LOCATION OFFICE AND RETAIL TOTAL OFFICE AND RETAIL TOTAL OFFICE AND RETAIL TOTAL LEASES(2)
-------- ------ ---------- ----- ------ ---------- ----- ------ ---------- ------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Los Angeles County:
West..................... 94.7% 100.0% 94.7% 96.6% 100.0% 96.6% $24.41 $24.60 $24.42 $24.41
North.................... 92.5 -- 92.5 93.1 -- 93.1 20.30 -- 20.30 21.58
South.................... 94.4 -- 94.4 96.3 -- 96.3 17.93 -- 17.93 19.38
Central.................. 94.7 -- 94.7 95.1 -- 95.1 19.78 -- 19.78 19.78
Orange County.............. 96.4 -- 96.4 96.8 -- 96.8 16.69 -- 16.69 19.63
San Diego County........... 97.5 -- 97.5 97.7 -- 97.7 16.28 -- 16.28 19.15
Ventura County............. 99.2 -- 99.2 99.5 -- 99.5 17.17 -- 17.17 17.17
Riverside/San Bernardino
Counties................. 84.0 96.7 89.4 86.8 96.7 91.1 14.99 8.79 12.17 17.66
Kern County................ 86.3 -- 86.3 86.3 -- 86.3 17.21 -- 17.21 --
---- ----- ---- ---- ----- ---- ------ ------ ------ ------
Subtotal/Weighted
Average.............. 94.7% 97.0% 94.8% 95.8% 97.0% 95.9% $19.68 $10.13 $19.44 $21.53
Renovation Properties...... 31.8% -- 31.8% 47.0% -- 47.0% $20.30 -- $20.30 $20.30
---- ----- ---- ---- ----- ---- ------ ------ ------ ------
Total/Weighted
Average.............. 94.0% 97.0% 94.0% 95.2% 97.0% 95.3% $19.68 $10.13 $19.45 $21.52
==== ===== ==== ==== ===== ==== ====== ====== ====== ======
</TABLE>

-------------------------
(1) Based on monthly contractual base rent under existing leases as of September
30, 2000, multiplied by 12 and divided by leased net rentable square feet;
for those leases where rent has not yet commenced or which are in a free
rent period, the first month in which rent is to be received is used to
determine annualized base rent.

(2) Excludes 48 properties and 4,722,281 net rentable square feet under triple
net and modified gross leases.

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<PAGE> 47

DEVELOPMENT PROPERTIES

In addition to the properties listed above, we currently have two
properties under development containing approximately 442,000 net rentable
square feet.

These properties are located in the Howard Hughes Center, a 70-acre
commercial development located two miles north of Los Angeles International
Airport and immediately adjacent to the San Diego Freeway (I-405), with on- and
off-ramps that directly serve the site.

The following table summarizes information about our properties under
development as of September 30, 2000.
<TABLE>
<CAPTION>
PERCENT ESTIMATED
ESTIMATED LEASED AT CONSTRUCTION ESTIMATED
SQUARE COSTS INCURRED TOTAL NOVEMBER 15, COMPLETION STABILIZATION
PROPERTY FEET TO DATE COST(1) 2000 DATE DATE
-------- ------- -------------- -------------- ------------ ------------ -------------
(IN THOUSANDS) (IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Development:
Howard Hughes Center
Univision Building......... 158,473 $15,645 $ 51,700 100% 3rd Qtr 2001 3rd Qtr 2001
6080 Center Drive.......... 283,204 33,388 72,750 78% 2nd Qtr 2001 4th Qtr 2001
Unallocated Acquisition and
Master Plan Costs(1)(2)...... -- 22,766 34,600
------- ------- --------
Total Development
Properties............. 441,677 $71,799 $159,050
======= ======= ========

<CAPTION>
ESTIMATED ESTIMATED
YEAR 1 YEAR 1
STABILIZED ANNUAL
PROPERTY CASH NOI CASH YIELD
-------- -------------- ----------
(IN THOUSANDS)
<S> <C> <C>
Development:
Howard Hughes Center
Univision Building......... $5,199 10.1%
6080 Center Drive.......... $8,288 11.4%
Unallocated Acquisition and
Master Plan Costs(1)(2)......
Total Development
Properties.............
</TABLE>

-------------------------
(1) Estimated total cost includes purchase and closing costs, capital
expenditures, tenant improvements, leasing commissions and carrying costs
during renovation or development, and for the Howard Hughes Center
development properties also includes an allocation of land and Master Plan
costs. Master plan costs include the costs of road and bridge construction
and other Howard Hughes Center infrastructure and master planning costs.

(2) We acquired the undeveloped commercial property portions of the Howard
Hughes Center for $28.5 million. In August 1999, subject to a sales
agreement entered into upon our initial acquisition, we sold approximately
5.4 acres for $7.5 million to a third party who is currently developing a
250,000 square foot retail and entertainment complex. This amount also
excludes approximately $4.3 million allocated to 6060 Center Drive, $5.1
million allocated to 6080 Center Drive, and approximately $1.6 million
allocated to the Univision building.

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<PAGE> 48

ACQUISITIONS

We did not acquire any properties in 2000.

TENANT INFORMATION

LEASE EXPIRATIONS

The following table presents a summary schedule of our lease expirations
through 2005 for leases in place at September 30, 2000. This table assumes that
none of the tenants exercise renewal options or termination rights, if any, at
or prior to the scheduled expirations:

<TABLE>
<CAPTION>
PERCENTAGE OF
SQUARE PERCENTAGE OF ANNUALIZED AGGREGATE ANNUAL BASE
NUMBER OF FOOTAGE OF AGGREGATE BASE RENT OF PORTFOLIO RENT PER
LEASES EXPIRING PORTFOLIO LEASED EXPIRING ANNUALIZED SQUARE FOOT OF
YEAR OF LEASE EXPIRATION EXPIRING LEASES SQUARE FEET LEASES(1) BASE RENT EXPIRING LEASES
------------------------ --------- ---------- ---------------- -------------- ------------- ---------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Month-to-Month......... 175 309,005 1.73% $ 6,148 1.65% $19.90
2000(2)................ 142 498,420 2.79 8,347 2.23 16.75
2001................... 667 2,179,905 12.21 42,162 11.28 19.34
2002................... 642 2,797,475 15.67 52,182 13.96 18.65
2003................... 577 3,075,105 17.23 62,361 16.69 20.28
2004................... 406 2,745,872 15.38 56,744 15.18 20.67
2005................... 382 2,786,850 15.61 61,349 16.42 22.01
</TABLE>

-------------------------
(1) Base rent is determined as of the date of lease expiration, including all
fixed contractual base rent increases; increases tied to indices such as the
Consumer Price Index are not included.

(2) Represents leases expiring from October 1, 2000 through December 31, 2000.

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<PAGE> 49

DESCRIPTION OF OTHER DEBT

The following is a summary of the material terms of our credit lines and
mortgage debt obligations. This description is not complete and is subject to,
and qualified in its entirety by reference to, all provisions of the agreements
evidencing the debt.

LINES OF CREDIT

On May 3, 2000, we extended our unsecured line of credit with a group of
banks led by Wells Fargo. The extended line of credit provides for borrowings up
to $275 million with an option to increase the amount to $325 million and bears
interest at a rate ranging between LIBOR plus 1.15% and LIBOR plus 1.80%
(including an annual facility fee ranging from .20% to .40% based on the
aggregate amount of the facility) depending on our unsecured debt rating. In
addition, as long as we maintain an unsecured debt rating of BBB-/Baa3 or
better, the agreement contains a competitive bid option, whereby the lenders on
this line of credit may bid on the interest rate to be charged for up to $137.5
million of the unsecured line of credit. Under certain circumstances, we also
have the option to convert the interest rate on this line of credit to the prime
rate plus 0.5%. This line of credit matures on April 30, 2003. As of September
30, 2000, there was approximately $214.4 million outstanding on this line of
credit and approximately $60.6 million was available for additional borrowings.
In November 2000, we used approximately $57.7 million from the proceeds of the
sale of the unregistered notes to reduce the outstanding balance under this line
of credit.

We also have an unsecured line of credit with a total commitment of $10
million from City National Bank. This line of credit accrues interest at the
City National Bank Prime Rate less 0.875% and is scheduled to mature on August
1, 2001. As of September 30, 2000, there was no outstanding balance and $10
million was available for additional borrowing.

On July 27, 2000, we closed on a $75 million unsecured line of credit with
Lehman Brothers. Borrowings on this line of credit bear interest at a rate
ranging between LIBOR plus 1.05% and LIBOR plus 1.70%, depending on our
unsecured debt rating. We also have the option to convert the interest rate to
the prime rate plus 0.5%. This line of credit matures on July 27, 2002 with an
option to extend the maturity date for one year. Proceeds from this line of
credit have been used to reduce the outstanding balance under our $275 million
unsecured line of credit. As of September 30, 2000, there was approximately $75
million outstanding on this line of credit.

SENIOR UNSECURED NOTES

On March 17, 2000, we issued $250 million of senior unsecured notes into
two tranches. One tranche was for $200 million at an interest rate of 8.875% due
in March 2005 and the other tranche was for $50 million at an interest rate of
9.150% due in March 2010. These notes are our senior unsecured obligations and
pay interest semi-annually on March 1, and September 1, of each year. Net
proceeds from the offering were used to repay approximately $145.5 million under
two prepayable term loans to an affiliate of Lehman Brothers, a $5.0 million
mortgage loan and approximately $96.1 million under our unsecured lines of
credit. These senior unsecured notes were issued in a private placement in
reliance upon an exemption from registration provided by Rule 144A under the
Securities Act. We subsequently filed a registration statement that became
effective on May 10, 2000 and all privately placed notes were exchanged for
notes registered under the Securities Act.

45
<PAGE> 50

MORTGAGE FINANCINGS

We have a $175 million loan that originated with an affiliate of Lehman
Brothers, as conduit lender. This loan was subsequently sold to other investors,
is secured by eighteen of our properties, matures in June 2004, bears interest
at a fixed rate of 7.52% and requires monthly payments of interest only.

We have a $136.1 million loan that originated with an affiliate of Lehman
Brothers, as conduit lender. This loan was subsequently sold to other investors,
is secured by twenty-two of our properties, matures in April 2008, bears
interest at a fixed rate of 6.74% and requires monthly payments of interest only
for five years and monthly payments of principal and interest thereafter, based
upon amortization over a 25-year period.

We have a $111.2 million loan that originated with an affiliate of Lehman
Brothers, as conduit lender. This loan was subsequently sold to other investors,
is secured by twelve of our properties, matures in April 2008, bears interest at
a fixed rate of 6.61% and requires monthly payments of interest only for five
years and monthly payments of principal and interest thereafter, based upon
amortization over a 25-year period.

We have a $115 million loan with Mass Mutual Life Insurance Company that is
secured by 12 of our properties, has a 10-year term maturing in April 2009,
bears interest at a fixed rate of 6.94% and requires monthly payments of
principal and interest based upon amortization over a 25-year period. As of
September 30, 2000, the outstanding principal balance on this loan was $112.7
million.

We have a $22.5 million loan that originated with an affiliate of Lehman
Brothers, as conduit lender. This loan was subsequently sold to other investors,
is secured by three of our properties, matures in April 2009, bears interest at
a fixed rate of 7.54% and requires monthly payments of principal and interest
based upon amortization over a 30-year period. As of September 30, 2000, the
outstanding principal balance on this loan was $22.3 million.

The above mortgage financings require us to maintain cash deposits
aggregating $13.8 million to comply with specified operational restrictions and
cash management procedures.

In connection with two of our mortgage loans payable to an affiliate of
Lehman Brothers, we entered into a treasury rate lock agreement, or swap
agreement, with a notional amount of $100 million. The swap agreement fixed the
United States 10-year treasury rate at 6.174%. On April 16, 1998, we settled the
swap agreement for $4.5 million and are amortizing the cost of settling the swap
agreement over the term of the two related mortgage loans.

As of September 30, 2000, we had five other mortgage notes payable totaling
$19.2 million. The notes are secured by four properties, mature at various dates
from 2006 through 2027, bear interest at fixed rates ranging from 7.88% to
9.00%, and require monthly payments of principal and interest.

In September 2000, we repaid in full a $14.7 million mortgage loan secured
by our Westwood Center building.

CONSTRUCTION LOAN

Through November 2000 we had a construction loan with a total commitment of
$50 million related to our development of the approximately 241,000 net rentable
square foot 6060 Center Drive office building in the Howard Hughes Center. The
construction loan was secured by specific property and construction
improvements, bore interest at LIBOR plus 2.0%, required monthly payments of
interest only and was scheduled to mature December 30, 2000, with two one-year
extension options. As of September 30, 2000, the effective interest rate of this
construction loan was 8.63%, the outstanding principal balance was $40.4 million
and $9.6 million was available for additional borrowing. In November 2000, we
used approximately $40.4 million from the proceeds of the sale of the
unregistered notes to repay this construction loan.

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<PAGE> 51

THE EXCHANGE OFFER

PURPOSE OF THE EXCHANGE OFFER

We sold the unregistered notes on November 20, 2000 to the initial
purchaser pursuant to a purchase agreement. The initial purchaser subsequently
sold the unregistered notes to qualified institutional buyers, or QIBs, as
defined in Rule 144A under the Securities Act, in reliance on Rule 144A. As a
condition to the sale of the unregistered notes, we and the initial purchaser
entered into a registration rights agreement dated as of November 20, 2000.
Pursuant to the registration rights agreement, we agreed that, unless the
exchange offer is not permitted by applicable law or Securities and Exchange
Commission policy, we would:

(1) file with the Securities and Exchange Commission a registration
statement under the Securities Act with respect to the exchange notes
within 90 days after November 20, 2000;

(2) use our best efforts to cause the registration statement to become
effective under the Securities Act within 180 days after November 20, 2000;
and

(3) use our best efforts to commence the exchange offer and issue, on
or prior to 30 days after the date on which the registration statement was
declared effective by the Securities and Exchange Commission, exchange
notes in exchange for all properly tendered unregistered notes.

A copy of the registration rights agreement has been filed as an exhibit to the
registration statement. The registration statement is intended to satisfy our
obligations under the registration rights agreement and the purchase agreement.

RESALE OF THE EXCHANGE NOTES

Based on interpretations by the staff of the Securities and Exchange
Commission in no-action letters issued to third parties, we believe that the
exchange notes issued under the exchange offer may be offered for resale, resold
or otherwise transferred by each holder of exchange notes, without compliance
with the registration and prospectus delivery provisions of the Securities Act,
so long as this holder:

- is acquiring the exchange notes in the ordinary course of its business;

- is not participating in, and does not intend to participate in, a
distribution of the exchange notes within the meaning of the Securities
Act and has no arrangement or understanding with any person to
participate in a distribution of the exchange notes within the meaning of
the Securities Act;

- is not a broker-dealer who acquires the unregistered notes directly from
us for resale under Rule 144A under the Securities Act or any other
available exemption under the Securities Act; and

- is not a person that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control
with us.

By tendering the unregistered notes in exchange for exchange notes, each
holder will be required to represent to us that each of the above statements
applies to that holder. If a holder of unregistered notes is participating in or
intends to participate in, a distribution of the exchange notes, or has any
arrangement or understanding with any person to participate in a distribution of
the exchange notes to be acquired in this exchange offer, that holder may be
deemed to have received restricted securities and may not rely on the applicable
interpretations of the staff of the Securities and Exchange Commission. Any
holder so deemed will have to comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any secondary
resale transaction.

Each broker-dealer that receives exchange notes for its own account in
exchange for unregistered notes may be deemed to be an underwriter within the
meaning of the Securities Act and must acknowledge that it will deliver a
prospectus meeting the requirements of the Securities Act in connection with any
resale of those exchange notes. The letter of transmittal states that by so
acknowledging and by delivering a prospectus, a broker-dealer will not be deemed
to admit that it is an underwriter within the
47
<PAGE> 52

meaning of the Securities Act. This prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with offers to resell, resales and other transfers of exchange notes received in
exchange for unregistered notes which were acquired by that broker-dealer as a
result of market making or other trading activities. We have agreed that we will
make this prospectus available to any broker-dealer for a period of time not to
exceed 180 days after the completion of the exchange offer for use in connection
with any offer to resell, resale or other transfer. Please refer to the section
in this prospectus entitled "Plan of Distribution."

TERMS OF THE EXCHANGE OFFER

Upon the terms and subject to the conditions set forth in this prospectus
and in the letter of transmittal, we will accept any and all unregistered notes
validly tendered and not withdrawn prior to the expiration date. We will issue
$1,000 principal amount of exchange notes in exchange for each $1,000 principal
amount of unregistered notes surrendered pursuant to the exchange offer.
Unregistered notes may be tendered only in integral multiples of $1,000.

The form and terms of the exchange notes are the same as the form and terms
of the unregistered notes except that:

(1) the issuance of the exchange notes will be registered under the
Securities Act and, therefore, the exchange notes will not bear legends
restricting their transfer; and

(2) holders of the exchange notes will not be entitled to any of the
rights of holders of unregistered notes under the registration rights
agreement, which rights will terminate upon the consummation of the
exchange offer.

The exchange notes will evidence the same indebtedness as the unregistered notes
they replace and will be issued under, and be entitled to the benefits of, the
indenture. Both unregistered and exchange notes will be treated as a single
class of debt securities under the indenture.

As of the date of this prospectus, $100,000,000 in aggregate principal
amount of the unregistered 8.50% senior notes due 2010 is outstanding. Only a
registered holder of the unregistered notes, or such holder's legal
representative or attorney-in-fact, as reflected on the records of the trustee
under the indenture, may participate in the exchange offer. There will be no
fixed record date for determining registered holders of the unregistered notes
entitled to participate in the exchange offer.

Holders of the unregistered notes do not have any appraisal or dissenters'
rights under the indenture in connection with the exchange offer. We intend to
conduct the exchange offer in accordance with the provisions of the registration
rights agreement and the applicable requirements of the Securities Act, the
Securities Exchange Act and the rules and regulations of the Securities and
Exchange Commission thereunder.

We shall be deemed to have accepted validly tendered unregistered notes
when, as and if we have given oral or written notice thereof to the exchange
agent. The exchange agent will act as agent for the tendering holders of
unregistered notes for the purposes of receiving the exchange notes from us.

Holders who tender unregistered notes in the exchange offer will not be
required to pay brokerage commissions or fees or, subject to the instructions in
the letter of transmittal, transfer taxes with respect to the exchange of
unregistered notes pursuant to the exchange offer. We will pay all charges and
expenses, other than applicable taxes described below, in connection with the
exchange offer. See "-- Fees and Expenses."

EXPIRATION DATE; EXTENSIONS; AMENDMENTS

The term "expiration date" shall mean 12:00 a.m., New York City time on
February , 2001, unless we, in our sole discretion, extend the exchange offer,
in which case the term "expiration date" shall mean the latest date and time to
which the exchange offer is extended.

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In order to extend the exchange offer, we will:

(1) notify the exchange agent of any extension by oral or written
notice; and

(2) mail to the registered holders an announcement thereof which shall
include disclosure of the approximate number of unregistered notes
deposited to date;

each prior to 9:00 a.m., New York City time, on the next business day after the
previously scheduled expiration date.

We reserve the right, in our reasonable discretion:

(1) to delay accepting any unregistered notes;

(2) to extend or amend the exchange offer; or

(3) if any conditions set forth below under "-- Conditions" shall not
have been satisfied, to terminate the exchange offer by giving oral or
written notice of such delay, extension or termination to the exchange
agent.

Any delay in acceptance, extension, termination or amendment will be followed as
promptly as practicable by oral or written notice to the registered holders. If
the exchange offer is amended in a manner determined by us to constitute a
material change, we will promptly disclose the amendment by means of a
prospectus supplement or post-effective amendment to the registration statement
that will be distributed to the registered holders, and we will extend the
exchange offer for a period of five to ten business days, depending upon the
significance of the amendment and the manner of disclosure to the registered
holders, if the exchange offer would otherwise expire during that period.

INTEREST ON THE EXCHANGE NOTES

The exchange notes due 2010 will bear interest at a rate equal to 8.50% per
year. Interest on the exchange notes will be payable semi-annually in arrears on
each November 1 and May 15, commencing May 15, 2001. Holders of exchange notes
will receive interest on May 15, 2001 from the date of initial issuance of the
exchange notes, plus an amount equal to the accrued interest on the unregistered
notes from the date of issuance to the day preceding the date of exchange for
exchange notes. Holders of unregistered notes that are accepted for exchange
will be deemed to have waived the right to receive any interest accrued on the
unregistered notes.

PROCEDURES FOR TENDERING

To tender your unregistered notes in the exchange offer, you must complete,
sign and date the letter of transmittal, or a facsimile, have the signatures
thereon guaranteed if required by the letter of transmittal, and mail or
otherwise deliver the letter of transmittal or facsimile, or an agent's message,
together with the certificates representing the unregistered notes being
tendered and any other required documents, to the exchange agent for receipt
prior to the expiration date. Alternatively, you may either:

(1) send a timely confirmation of a book-entry transfer of your
unregistered notes, if this procedure is available, into the exchange
agent's account at The Depository Trust Company, or DTC, pursuant to the
procedure for book-entry transfer described below, prior to the expiration
date; or

(2) comply with the guaranteed delivery procedures described below.

The term "agent's message" means a message, transmitted by DTC to, and
received, by, the exchange agent and forming a part of a book-entry
confirmation, which states that DTC has received an express acknowledgement from
its participant tendering unregistered notes which are the subject of this
book-entry confirmation that this participant has received and agrees to be
bound by the terms of the letter of transmittal, and that we may enforce this
agreement against this participant.

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Unless withdrawn prior to the expiration date, your tender will constitute
an agreement between you and us in accordance with the terms and subject to the
conditions provided in this prospectus and in the letter of transmittal.

THE METHOD OF DELIVERY OF UNREGISTERED NOTES, THE LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT YOUR ELECTION AND RISK.
INSTEAD OF DELIVERY BY MAIL, WE RECOMMEND THAT YOU USE AN OVERNIGHT OR HAND
DELIVERY SERVICE. IF YOU CHOOSE DELIVERY BY MAIL, WE RECOMMEND REGISTERED MAIL,
RETURN RECEIPT REQUESTED, AND PROPERLY INSURED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION
DATE. YOU SHOULD NOT SEND ANY LETTER OF TRANSMITTAL OR UNREGISTERED NOTES TO US.
YOU MAY REQUEST YOUR RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST
COMPANIES OR NOMINEES TO EFFECT THE ABOVE TRANSACTIONS ON YOUR BEHALF.

If you are the beneficial owner of the unregistered notes that are
registered in the name of a broker, dealer, commercial bank, trust company or
other nominee and you wish to tender your unregistered notes, you should contact
the registered holder promptly and instruct the registered holder to tender on
your behalf. If you wish to tender on your own behalf, you must, prior to
completing and executing the letter of transmittal and delivering your
unregistered notes, either make appropriate arrangements to register ownership
of the unregistered notes in your name or obtain a properly completed bond power
from the registered holder. The transfer of registered ownership may take
considerable time.

Signatures on a letter of transmittal or a notice of withdrawal, as the
case may be, must be guaranteed by an eligible institution, as defined below,
unless the unregistered notes are tendered:

- by a registered holder, or by a participant in DTC whose name appears on
a security position listing as the owner, who has not completed the box
titled "Special Issuance Instructions" or "Special Delivery Instructions"
on the letter of transmittal; or

- for the account of an eligible institution.

An eligible institution is:

- a member firm of a registered national securities exchange or of the
National Association of Securities Dealers, Inc.;

- a commercial bank or trust company having an office or correspondent in
the United States; or

- an "eligible guarantor institution" within the meaning of Rule 17Ad-15
under the Securities Exchange Act which is a member of one of the
recognized signature guarantee programs identified in the letter of
transmittal.

If the letter of transmittal is signed by the registered holder(s) of the
unregistered notes tendered, the signature must correspond with the name(s)
written on the face of the unregistered notes without alteration, enlargement or
any change whatsoever. If the letter of transmittal is signed by a participant
in DTC, the signature must correspond with the name as it appears on the
security position listing as the holder of the unregistered notes.

If the letter of transmittal is signed by a person other than the
registered holder of any unregistered notes listed, the unregistered notes must
be endorsed or accompanied by bond powers and a proxy that authorizes that
person to tender the unregistered notes on behalf of the registered holder in
satisfactory form to us as determined in our sole discretion, in each case as
the name of the registered holder or holders appears on the unregistered notes.

If the letter of transmittal or any unregistered notes or bond powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, those persons should so indicate when signing. Unless waived by us,
evidence satisfactory to us of their authority to so act must be submitted with
the letter of transmittal.

A tender will be deemed to have been received as of the date when the
tendering holder's duly signed letter of transmittal accompanied by the
unregistered notes tendered, or a timely confirmation received by

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a book-entry transfer of unregistered notes into the exchange agent's account at
DTC with an agent's message, or a notice of guaranteed delivery from an eligible
institution is received by the exchange agent. Issuances of exchange notes in
exchange for unregistered notes tendered under a notice of guaranteed delivery
by an eligible institution will be made only against delivery of the letter of
transmittal, and any other required documents, and the tendered unregistered
notes, or a timely confirmation received of a book-entry transfer of
unregistered notes into the exchange agent's account at DTC with an agent's
message, to the exchange agent.

All questions as to the validity, form, eligibility, time of receipt,
acceptance and withdrawal of tendered unregistered notes will be determined by
us in our sole discretion. Our determination will be final and binding. We
reserve the absolute right to reject any and all unregistered notes not properly
tendered or any unregistered notes which, if accepted by us would, in the
opinion of our counsel, be unlawful. We also reserve the right to waive any
defects, irregularities or conditions of tender as to particular unregistered
notes. Our interpretation of the terms and conditions of the exchange offer,
including the instructions in the letter of transmittal, will be final and
binding on all parties. Unless waived, any defects or irregularities in
connection with tenders of unregistered notes must be cured within the time we
determine. Although we intend to notify holders of defects or irregularities
with respect to tenders of unregistered notes, neither we, the exchange agent
nor any other person shall incur any liability for failure to give that notice.
Tenders of unregistered notes will not be deemed to have been made until such
defects or irregularities have been cured or waived.

While we have no present plan to do so, we reserve the right in our sole
discretion to:

- purchase or make offers for any unregistered notes that remain
outstanding subsequent to the expiration date or, as described under
"-- Conditions," to terminate the exchange offer; and

- purchase unregistered notes in the open market, to the extent permitted
by applicable law, in privately negotiated transactions or otherwise. The
terms of any purchases or offers could differ from the terms of the
exchange offer.

By tendering, you will be making several representations to us including
that:

(1) the exchange notes to be acquired by you are being acquired by you
in the ordinary course of your business;

(2) you are not participating in, and do not intend to participate in,
a distribution of the exchange notes;

(3) you have no arrangement or understanding with any person to
participate in the distribution of the exchange notes;

(4) you satisfy specific requirements of your state's securities
regulations;

(5) if you are a broker-dealer or are participating in the exchange
offer for the purposes of distributing the exchange notes, you will comply
with the registration and prospectus delivery requirements of the
Securities Act in connection with a secondary resale transaction of the
exchange notes acquired by you and cannot rely on the position of the staff
of the Securities and Exchange Commission set forth in no-action letters
issued to third parties;

(6) if you are a broker-dealer, you understand that a secondary resale
transaction described in clause (5) above and any resales of exchange notes
obtained by you in exchange for unregistered notes acquired by you directly
from us should be covered by an effective registration statement containing
the selling securityholder information required by Item 507 or Item 508, as
applicable, of Regulation S-K under the Securities Act; and

(7) you are not our affiliate as defined in Rule 405 under the
Securities Act.

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will also be required to acknowledge in the letter of transmittal that you will
deliver a prospectus in connection with any resale of those exchange notes;
however, by so acknowledging and by delivering a prospectus, you will not be
deemed to admit that you are an underwriter within the meaning of the Securities
Act.

RETURN OF UNREGISTERED NOTES

If any tendered unregistered notes are not accepted by us or the exchange
agent for any reason, or if unregistered notes are withdrawn or are submitted
for a greater principal amount than you desire to exchange, the unaccepted,
withdrawn or non-exchanged unregistered notes will be returned to you without
expense to you. In the case of unregistered notes tendered by book-entry
transfer into the exchange agent's account at DTC pursuant to the book-entry
transfer procedures described below, those unregistered notes will be credited
to the appropriate account maintained with DTC.

BOOK-ENTRY TRANSFER

The exchange agent will make a request to establish an account with respect
to the unregistered notes at DTC for purposes of the exchange offer within two
business days after the date of this prospectus. Any financial institution that
is a participant in DTC's systems may make book-entry delivery of unregistered
notes by causing DTC to transfer the unregistered notes into the exchange
agent's account in accordance with DTC's procedures for transfer.

However, although delivery of unregistered notes may be effected through
book-entry transfer, an agent's message or the letter of transmittal or
facsimile, with any required signature guarantees and any other required
documents, must, in any case, be transmitted to and received by the exchange
agent at the address set forth below under "-- Exchange Agent" on or prior to
the expiration date or pursuant to the guaranteed delivery procedures described
below. DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE
AGENT.

GUARANTEED DELIVERY PROCEDURES

If you are a registered holder and wish to tender your unregistered notes
and (a) your unregistered notes are not immediately available or (b) you cannot
deliver your unregistered notes, the letter of transmittal or any other required
documents to the exchange agent prior to the expiration date, or (c) the
procedures for book-entry transfer cannot be completed on a timely basis and an
agent's message delivered, you may effect a tender if:

(1) you tender through an eligible institution;

(2) prior to the expiration date, the exchange agent receives from the
eligible institution a properly completed and duly executed notice of
guaranteed delivery substantially in the form provided by us, by facsimile
transmission, mail or hand delivery, containing your name and address, the
certificate numbers of your unregistered notes and the principal amount of
unregistered notes tendered, stating that the tender is being made thereby
and guaranteeing that, within five business days after the expiration date,
the letter of transmittal or a facsimile, together with the certificates
representing the unregistered notes in proper form for transfer or a
book-entry confirmation, as the case may be, and any other documents
required by the letter of transmittal, will be deposited by the eligible
institution with the exchange agent; and

(3) a properly executed letter of transmittal or facsimile thereof, as
well as the certificates representing all tendered unregistered notes in
proper form for transfer and all other documents required by the letter of
transmittal are received by the exchange agent within five business days
after the expiration date.

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WITHDRAWAL OF TENDERS

Except as otherwise provided herein, you may withdraw tenders of
unregistered notes at any time prior to 12:00 a.m. on the expiration date.

To withdraw a tender of unregistered notes in the exchange offer, you must
send a written or facsimile transmission notice of withdrawal to the exchange
agent at its proper address prior to the expiration date. Any notice of
withdrawal must:

(1) specify the name of the person having tendered the unregistered
notes to be withdrawn;

(2) identify the unregistered notes to be withdrawn, including the
certificate number or numbers and principal amount of the unregistered
notes;

(3) be signed by the person having tendered the unregistered notes to
be withdrawn in the same manner as the original signature on the letter of
transmittal by which these unregistered notes were tendered, including any
required signature guarantees, or be accompanied by documents of transfer
sufficient to permit the trustee with respect to the unregistered notes to
register the transfer of these unregistered notes into the name of the
person having made the original tender and withdrawing the tender;

(4) specify the name in which these unregistered notes are to be
registered, if different from that of the person having tendered the
unregistered notes to be withdrawn; and

(5) if applicable because the unregistered notes have been tendered
under the book-entry procedures, specify the name and number of the
participant's account at DTC to be credited, if different than that of the
person having tendered the unregistered notes to be withdrawn.

All questions as to the validity, form and eligibility, including time of
receipt, of withdrawal notices will be determined by us in our sole discretion.
Our determination will be final and binding on all parties. Any unregistered
notes so withdrawn will be deemed not to have been validly tendered for purposes
of the exchange offer and no exchange notes will be issued unless the
unregistered notes so withdrawn are validly retendered. Properly withdrawn
unregistered notes may be retendered by following one of the procedures
described above under "Procedures for Tendering" at any time prior to the
expiration date.

CONDITIONS

Notwithstanding any other term of the exchange offer, we shall not be
required to accept for exchange, or exchange the exchange notes for, any
unregistered notes, and may terminate or amend the exchange offer as provided in
this prospectus before the acceptance of such unregistered notes, if the
exchange offer violates applicable law, rules or regulations or an applicable
interpretation of the staff of the Securities and Exchange Commission.

If we determine in our sole discretion that any of these conditions are not
satisfied, we may:

(1) refuse to accept any unregistered notes and return all tendered
unregistered notes to the tendering holders;

(2) extend the exchange offer and retain all unregistered notes
tendered prior to the expiration of the exchange offer, subject, however,
to the rights of holders to withdraw such unregistered notes; or

(3) waive such unsatisfied conditions with respect to the exchange
offer and accept all properly tendered unregistered notes that have not
been withdrawn.

If our waiver constitutes a material change to the exchange offer, we will
promptly disclose our waiver by means of a prospectus supplement or
post-effective amendment that will be distributed to the registered holders of
the unregistered notes, and we will extend the exchange offer for a period of
five to ten business days, depending upon the significance of the waiver and the
manner of disclosure to the registered holders, if the exchange offer would
otherwise expire during that period.

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TERMINATION OF SPECIFIC RIGHTS

All rights under the registration rights agreement, including registration
rights, of holders of the unregistered notes eligible to participate in the
exchange offer will terminate upon consummation of the exchange offer except
with respect to our continuing obligations to:

(1) indemnify holders and specific parties related to the holders
against specific liabilities, including liabilities under the Securities
Act;

(2) provide, upon the request of any holder of a transfer-restricted
unregistered note, the information required by Rule 144A(d)(4) under the
Securities Act in order to permit resales of the holder's unregistered
notes pursuant to Rule 144A;

(3) provide copies of the latest version of the prospectus to
broker-dealers upon their request for a period of up to one year after the
expiration date; and

(4) use our best efforts, under specific circumstances, to file a
shelf registration statement and keep the registration statement effective
to the extent necessary to ensure that it is available for resales of
transfer-restricted unregistered notes by broker-dealers for a period of up
to two years.

LIQUIDATED DAMAGES

In the event of a registration default, as defined in the registration
rights agreement, we will pay liquidated damages to each holder of transfer
restricted securities, as defined below, with respect to the first 90-day period
immediately following the occurrence of such registration default in an amount
equal to $0.05 per week per $1,000 principal amount of unregistered notes
constituting transfer restricted securities held by such holder. Transfer
restricted securities shall mean each unregistered note until:

(1) the date on which such unregistered note has been exchanged for an
exchange note in the exchange offer;

(2) following the exchange by a broker-dealer in the exchange offer of
such unregistered note for one or more exchange notes, the date on which
the exchange notes are sold to a purchaser who receives a copy of this
prospectus from that broker-dealer on or prior to the date of sale;

(3) the date on which the unregistered note has been effectively
registered under the Securities Act and disposed of in accordance with the
shelf registration statement as defined in the registration rights
agreement; or

(4) the date on which the unregistered note is distributed to the
public pursuant to Rule 144(k) under the Securities Act.

The amount of liquidated damages will increase by an additional $0.05 per week
per $1,000 principal amount of unregistered notes constituting transfer
restricted securities with respect to each subsequent 90-day period until all
registration defaults have been cured, up to a maximum amount of liquidated
damages of $0.25 per week per $1,000 principal amount of unregistered notes
constituting transfer restricted securities. Following the cure of all
registration defaults, the accrual of all liquidated damages will cease. The
filing and effectiveness of the registration statement of which this prospectus
is a part and the consummation of the exchange offer will eliminate all rights
of the holders of unregistered notes eligible to participate in the exchange
offer to receive damages that would have been payable if such actions had not
occurred.

Holders of transfer restricted securities will be required to make specific
representations to us, as described in the registration rights agreement, in
order to participate in the exchange offer and will be required to deliver
information to be used in connection with the shelf registration statement and
to provide comments on the shelf registration statement within the time periods
set forth in the registration rights agreement in order to have their transfer
restricted securities included in the shelf registration agreement and benefit
from the provisions regarding liquidated damages set forth above.

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EXCHANGE AGENT

We have appointed The Bank of New York as exchange agent for the exchange
offer. You should direct all questions and requests for assistance, requests for
additional copies of this prospectus or of the letter of transmittal and
requests for notice of guaranteed delivery to the exchange agent as follows:

<TABLE>
<S> <C>
By Registered or Certified Mail: By Hand Delivery:
The Bank of New York The Bank of New York
101 Barclay Street, Floor 7 East 101 Barclay Street
New York, New York 10286 Corporate Trust Services Window
Attn: Reorganization Section New York, New York 10286
Attn: Reorganization Section
By Overnight Delivery: By Facsimile:
(for eligible institutions only):
The Bank of New York
101 Barclay Street (212) 815-6339
Corporate Trust Services Window
New York, New York 10286 Confirm by Telephone:
Attn: Reorganization Section
(212) 815-3750
</TABLE>

FEES AND EXPENSES

We will bear the expenses of soliciting tenders. The principal solicitation
is being made by mail; however, additional solicitation may be made by
telegraph, telephone or in person by our and our affiliates' officers and
regular employees.

We have not retained any dealer-manager in connection with the exchange
offer and will not make any payments to brokers, dealers or others soliciting
acceptances of the exchange offer. We will pay the exchange agent reasonable and
customary fees for its services and will reimburse it for its reasonable out-
of-pocket expenses in connection with the exchange offer.

We will pay the cash expenses to be incurred in connection with the
exchange offer which we estimate in the aggregate to be approximately $100,000.
Such expenses include registration fees, fees and expenses of the exchange agent
and the trustee, accounting and legal fees and printing costs, among others.

We will pay all transfer taxes, if any, applicable to the exchange of
unregistered notes pursuant to the exchange offer. If, however, transfer taxes
are imposed for any reason other than the exchange of the unregistered notes
pursuant to the exchange offer, then the amount of any such transfer taxes,
whether imposed on the registered holder or any other persons, will be payable
by the tendering holder. If satisfactory evidence of payment of such taxes or
exemption therefrom is not submitted with the letter of transmittal, the amount
of such transfer taxes will be billed directly to such tendering holder.

YOUR FAILURE TO PARTICIPATE IN THE EXCHANGE OFFER WILL HAVE ADVERSE CONSEQUENCES

The unregistered notes that are not exchanged for the exchange notes
pursuant to the exchange offer will remain restricted securities. Accordingly,
such unregistered notes may be resold by you only:

(1) to a person whom you reasonably believes is a QIB in a transaction
meeting the requirements of Rule 144A;

(2) in a transaction meeting the requirements of Rule 144 under the
Securities Act;

(3) outside the United States to a foreign person in a transaction
meeting the requirements of Rule 904 under the Securities Act;

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<PAGE> 60

(4) in accordance with another exemption from the registration
requirements of the Securities Act, and based upon an opinion of counsel if
we so request;

(5) to us; or

(6) pursuant to an effective registration statement and, in each case,
in accordance with any applicable securities laws of any state of the
United States or any other applicable jurisdiction.

In addition, you will no longer be able to obligate us to register the
unregistered notes under the Securities Act except in the limited circumstances
provided under our registration rights agreement. The restrictions on transfer
of your unregistered notes arise because we issued the unregistered notes under
exemptions from, or in transactions outside the registration requirements of the
Securities Act and applicable state securities laws. In addition, if you want to
exchange your unregistered notes in the exchange offer for the purpose of
participating in a distribution of the exchange notes, you may be deemed to have
received registered securities, and, if so, will be required to comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction. To the extent the unregistered notes are
tendered and accepted in the exchange offer, the trading market, if any, for the
unregistered notes would be adversely affected. Please refer to the section in
this prospectus entitled "Risk Factors."

You are urged to consult your financial and tax advisors in making your own
decisions on whether to participate in the exchange offer.

ACCOUNTING TREATMENT

For accounting purposes, we will recognize no gain or loss as a result of
the exchange offer. The expenses of the exchange offer will be amortized over
the term of the exchange notes.

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DESCRIPTION OF EXCHANGE NOTES

GENERAL

The following is a description of the terms of the 8.50% senior notes due
2010 offered in exchange for our unregistered notes of the same maturities and
interest rates. The form and terms of the exchange notes are the same as the
form and terms of the unregistered notes, except that the exchange notes have
been registered under the Securities Act, will not bear legends restricting the
transfer of the notes and will not be entitled to registration rights under our
registration rights agreement. As used in this section, the terms "note,"
"notes" and "2010 notes" refer to the exchange notes.

The notes are a series of debt securities to be issued pursuant to an
indenture dated as of March 14, 2000 (the "Indenture"), between us and The Bank
of New York, as trustee (the "Trustee"). The terms of the notes include those
provisions contained in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939. The notes are subject to all those
terms, and holders of notes are referred to the Indenture and the Trust
Indenture Act for a statement of the terms. The following summary of specified
provisions of the Indenture does not purport to be complete and is subject to
and qualified in its entirety by reference to the Indenture, including the
definitions therein of some of the terms used below. Except as otherwise
indicated, section references are to sections of the Indenture. Capitalized
terms not defined where first used are defined below under the heading
"Definitions."

The notes will be our direct, unsecured recourse obligations and will rank
equally with all our other unsecured and unsubordinated indebtedness from time
to time outstanding, including $231.6 million outstanding, on an as adjusted
basis, as of September 30, 2000 under our unsecured lines of credit and
collectively $250.0 million outstanding under our 8.875% senior notes due 2005
and our 9.150% senior notes due 2010. The notes will be effectively subordinated
to the claims of mortgage lenders holding our secured indebtedness, as to the
specific property securing each lender's mortgage. As of September 30, 2000, on
an as adjusted basis, the aggregate principal amount of secured indebtedness was
approximately $576.7 million. The notes will be recourse to all of our assets,
but will be non-recourse with respect to Arden Realty and the stockholders and
directors of Arden Realty. Subject to specified limitations in the Indenture,
and as described below under "Covenants," the Indenture permits us to incur
additional secured and unsecured indebtedness.

The notes will mature on November 15, 2010 (the "Maturity Date"). The notes
will not be subject to any sinking fund provisions and will not be convertible
into or exchangeable for any of our equity interests. The notes will be issued
only in fully registered book-entry form without coupons, in denominations of
$1,000 and integral multiples of $1,000, except under the limited circumstances
described below under "Form and Registration." The notes are restricted from
resale or other transfer as described under "Notice to Investors."

Except as described below under "Covenants -- Limitations on Incurrence of
Debt" and "-- Merger, Consolidation or Sale," the Indenture does not contain any
provisions that would limit our ability to incur indebtedness or that would
afford holders of the notes protection in the event of:

(1) a highly leveraged or similar transaction involving us or any of
our affiliates;

(2) a change of control; or

(3) a reorganization, restructuring, merger or similar transaction
involving us that may adversely affect the holders of the notes.

Restrictions on the ownership and transfer of the shares of common stock of
Arden Realty designed to preserve its status as a REIT, however, may act to
prevent or hinder a change of control. Arden Realty and its management have no
present intention of engaging in a transaction which would result in Arden
Realty or us being highly leveraged or that would result in a change of control.

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PRINCIPAL AND INTEREST

The notes will bear interest at 8.50% per year from November 20, 2000 or
from the immediately preceding Interest Payment Date to which interest has been
paid, payable semi-annually in arrears on each November 15 and May 15,
commencing May 15, 2001 (each, an "Interest Payment Date"), and on the Maturity
Date, to the persons (the "Holders") in whose names the notes are registered in
the Security Register at the close of business 15 calendar days prior to the
payment date (each, a "Regular Record Date"), regardless of whether that day is
a Business Day. Interest on the notes will be computed on the basis of a 360-day
year of twelve 30-day months.

Any interest not punctually paid or duly provided for on any Interest
Payment Date with respect to a note ("Defaulted Interest") will forthwith cease
to be payable to the Holder on the applicable regular record date and may either
be paid to the person in whose name that note is registered at the close of
business on a special record date (the "Special Record Date") for the payment of
the Defaulted Interest to be fixed by the Trustee, notice whereof shall be given
to the Holder of that note not less than ten days prior to the Special Record
Date, or may be paid at any time in any other lawful manner, all as more
completely described in the Indenture (Section 307).

The principal of each note payable on the Maturity Date will be paid
against presentation and surrender of the note at the corporate trust office of
the Trustee, located initially at The Bank of New York, 101 Barclay Street,
Floor 21 West, New York, New York 10286, Re: Arden Realty Limited Partnership in
the coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts.

If any Interest Payment Date or a Maturity Date falls on a day that is not
a Business Day, the required payment will be made on the next Business Day as if
it were made on the date the payment was due and no interest will accrue on the
amount so payable for the period from and after that Interest Payment Date or
Maturity Date, as the case may be. "Business Day" means any day, other than a
Saturday or Sunday, that is neither a legal holiday nor a day on which banking
institutions in New York City are authorized or required by law, regulation or
executive order to close.

COVENANTS

The Indenture contains various covenants, including the following:

LIMITATIONS ON INCURRENCE OF DEBT

We will not, and will not permit any Subsidiary to, incur any Debt, other
than Intercompany Debt, if, immediately after giving effect to the incurrence of
that Debt and the application of the net proceeds therefrom, the aggregate
principal amount of all of our and our Subsidiaries' outstanding Debt on a
consolidated basis determined in accordance with GAAP is greater than 60% of the
sum of:

(1) our Total Assets as of the end of the fiscal quarter covered in
our most recent quarterly or annual financial statements, as the case may
be, most recently required to be delivered to Holders pursuant to the
Indenture, prior to the incurrence of the additional Debt; and

(2) the increase or decrease in Total Assets from the end of that
quarter, including, without limitation, any increase in Total Assets
resulting from the incurrence of the additional Debt (the increase or
decrease together with our Total Assets is referred to as the "Adjusted
Total Assets") (Section 1004(a)).

In addition to the foregoing limitation on the incurrence of Debt, we will
not, and will not permit any Subsidiary to, incur any Debt, other than
Intercompany Debt, if the ratio of Consolidated Income Available for Debt
Service to Annual Debt Service Charge for the period consisting of the four
consecutive fiscal quarters most recently ended prior to the date on which the
additional Debt is to be

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incurred would have been less than 1.5 to 1.0 on a pro forma basis, after giving
effect to the incurrence of the Debt and to the application of the net proceeds
therefrom, and calculated on the assumption that:

(1) the Debt and any other Debt incurred by us and our Subsidiaries
since the first day of the four-quarter period, which was outstanding at
the end of that period, had been incurred at the beginning of that period
and continued to be outstanding throughout that period, and the application
of the proceeds of that Debt, including to refinance other Debt, had
occurred at the beginning of that period;

(2) the repayment or retirement of any other Debt by us or our
Subsidiaries since the first day of the four-quarter period had been repaid
or retired at the beginning of that period, except that, in determining the
amount of Debt so repaid or retired, the amount of Debt under any revolving
credit facility will be computed based upon the average daily balance of
that Debt during that period;

(3) in the case of Acquired Indebtedness or Debt incurred in
connection with any acquisition since the first day of the four-quarter
period, the related acquisition had occurred as of the first day of the
period with the appropriate adjustments with respect to the acquisition
being included in the pro forma calculation; and

(4) in the case of any increase or decrease in Total Assets, or any
other acquisition or disposition by us or any Subsidiary of any asset or
group of assets since the first day of that four-quarter period, including,
without limitation, by merger, stock purchase or sale, or asset purchase or
sale, that increase, decrease or other acquisition or disposition or any
related repayment of Debt had occurred as of the first day of that period
with the appropriate adjustments to revenues, expenses and Debt levels with
respect to that increase, decrease or other acquisition or disposition
being included in that pro forma calculation (Section 1004(c)).

Further, we will not, and will not permit any Subsidiary to, incur any
Secured Debt if, immediately after giving effect to the incurrence of the
additional Secured Debt, and the application of the net proceeds thereof, the
aggregate principal amount of all of our and our Subsidiaries' outstanding
Secured Debt determined on a consolidated basis in accordance with GAAP is
greater than 40% of Adjusted Total Assets (Section 1004(b)).

For purposes of the foregoing provisions regarding the limitation on the
incurrence of Debt, Debt shall be deemed to be "incurred" by us or a Subsidiary
whenever we or our Subsidiary creates, assumes, guarantees or otherwise becomes
liable in respect of that Debt.

MAINTENANCE OF TOTAL UNENCUMBERED ASSETS

We will at all times maintain Total Unencumbered Assets of not less than
150% of the aggregate outstanding principal amount of all of our and our
Subsidiaries' outstanding Unsecured Debt determined on a consolidated basis in
accordance with GAAP (Section 1004(d)).

MERGER, CONSOLIDATION OR SALE

We may consolidate with, or sell, lease or convey all or substantially all
of our assets to, or merge with or into any other entity, provided that in any
case:

(1) either we will be the continuing entity, or the successor entity
will be an entity organized and existing under the laws of the United
States or a State thereof and the successor entity will expressly assume
the due and punctual payment of the principal of, and premium or Make-Whole
Amount, if any, and any interest on all of the notes, according to their
tenor, and the due and punctual performance and observance of all of the
covenants and conditions of the Indenture to be performed by us by
supplemental indenture, complying with the provisions of the Indenture
relating to supplemental indentures, satisfactory to the Trustee, executed
and delivered to the Trustee by that entity;

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(2) immediately after giving effect to the transaction and treating
any indebtedness which becomes an obligation of ours or any Subsidiary of
ours as a result thereof as having been incurred by us or one of our
Subsidiaries at the time of the transaction, no Event of Default, and no
event which, after notice or the lapse of time, or both, would become an
Event of Default, will have occurred and be continuing; and

(3) an officer's certificate and legal opinion covering these
conditions will be delivered to the Trustee (Sections 801 and 803).

EXISTENCE

Except as described under "Merger, Consolidation or Sale," above, we will
do or cause to be done all things necessary to preserve and keep in full force
and effect our existence, rights, by partnership agreement and statute, and
franchises; provided, however, that we will not be required to preserve any
right or franchise if we determine that the preservation thereof is no longer
desirable in the conduct of our business and that the loss thereof is not
disadvantageous in any material respect to the Holders of the notes (Section
1006).

MAINTENANCE OF PROPERTIES

We will cause all of our material properties used or useful in the conduct
of our business or the business of any Subsidiary to be maintained and kept in
good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in our reasonable
judgment may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
however, that we and our Subsidiaries will not be prevented from selling or
otherwise disposing of our properties for value in the ordinary course of
business (Section 1007).

INSURANCE

We will, and will cause each of our Subsidiaries to, keep in force upon all
of our properties and operations insurance policies carried with responsible
companies in customary amounts and covering customary risks in accordance with
prevailing market conditions and availability (Section 1008).

PAYMENT OF TAXES AND OTHER CLAIMS

We will pay or discharge or cause to be paid or discharged, before the same
become delinquent:

(1) all taxes, assessments and governmental charges levied or imposed
upon us or any Subsidiary or upon our income, profits or property or upon
any Subsidiary's income, profits or property; and

(2) all lawful claims for labor, materials and supplies which, if
unpaid, might by law become a lien upon our property or the property of any
Subsidiary;

provided, however, that we will not be required to pay or discharge or cause to
be paid or discharged any tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings or for which we have set apart and maintain an adequate reserve in
accordance with GAAP (Section 1009).

PROVISION OF FINANCIAL INFORMATION

Whether or not we are subject to Section 13 or 15(d) of the Securities
Exchange Act, we will, to the extent permitted under the Securities Exchange
Act, file with the SEC the annual reports, quarterly reports and other documents
which we would have been required to file with the SEC pursuant to Sections 13
or 15(d) if we were so subject (the "Financial Information"), these documents to
be filed

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with the SEC on or prior to the respective dates (the "Required Filing Dates")
by which we would have been required to file these documents if we were so
subject. We also will in any event

(1) within 15 days of each Required Filing Date:

(x) transmit by mail to all Holders of notes, as their names and
addresses appear in the Security Register, without cost to the Holders,
copies of the Financial Information; and

(y) file with the Trustee copies of the Financial Information; and

(2) if filing these documents by us with the SEC is not permitted
under the Securities Exchange Act, promptly upon written request and
payment of the reasonable cost of duplication and delivery, supply copies
of the documents to any prospective Holder (Section 1010).

DEFINITIONS

As used in the Indenture and the description of the Indenture in this
prospectus:

"Acquired Indebtedness" means Debt of a person (a) existing at the time the
person becomes a Subsidiary or (b) assumed in connection with the acquisition of
assets from the person, in each case, other than Debt incurred in connection
with, or in contemplation of, the person becoming a Subsidiary or that
acquisition. Acquired Indebtedness will be deemed to be incurred on the date of
the related acquisition of assets from any person or the date the acquired
person becomes a Subsidiary.

"Annual Debt Service Charge" as of any date means the amount which is
expensed in any 12-month period for Consolidated Interest Expense of us and our
Subsidiaries.

"Consolidated Income Available for Debt Service" as of any date means our
and our Subsidiaries' Consolidated Net Income plus amounts that have been
deducted in determining Consolidated Net Income during that period for:

(a) Consolidated Interest Expense;

(b) provision for taxes of us and our Subsidiaries based on income;

(d) provisions for losses from sales or joint ventures;

(e) increases in deferred taxes and other non-cash items;

(f) charges resulting from a change in accounting principles; and

(g) charges for early extinguishment of debt;

less amounts which have been added in determining Consolidated Net Income during
that period for:

(1) provisions for gains from sales or joint ventures; and

(2) decreases in deferred taxes and other non-cash items.

"Consolidated Interest Expense" means, for any period, and without
duplication, all interest, including the interest component of rentals on leases
reflected in accordance with GAAP as capitalized leases on our consolidated
balance sheet, letter of credit fees, commitment fees and other like financial
charges, and all amortization of debt discount on all Debt, including, without
limitation, payment-in-kind, zero coupon and other securities, of us and our
Subsidiaries, but excluding legal fees, title insurance charges and other out-
of-pocket fees and expenses incurred in connection with the issuance of Debt,
all determined in accordance with GAAP.

"Consolidated Net Income" for any period means the amount of net income, or
loss, of us and our Subsidiaries for the period determined on a consolidated
basis in accordance with GAAP.

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"Debt" means, without duplication, any indebtedness of us or any
Subsidiary, whether or not contingent, in respect of:

(1) borrowed money evidenced by bonds, notes, debentures or similar
instruments;

(2) indebtedness secured by any mortgage, pledge, lien, charge,
encumbrance or any security interest existing on property owned by us or
any Subsidiary;

(3) reimbursement obligations, contingent or otherwise, in connection
with any letters of credit actually issued or amounts representing the
balance deferred and unpaid of the purchase price of any property except
any balance that constitutes an accrued expense or trade payable; or

(4) any lease of property by us or any Subsidiary as lessee which is
reflected on our consolidated balance sheet as a capitalized lease in
accordance with GAAP;

but in the case of items of indebtedness incurred under (1) through (3) above
only to the extent that any items, other than letters of credit, would appear as
a liability on our consolidated balance sheet in accordance with GAAP; and also
includes, to the extent not otherwise included, any obligation of us or any
Subsidiary to be liable for, or to pay, as obligor, guarantor or otherwise,
other than for purposes of collection in the ordinary course of business,
indebtedness of another person, other than us or any Subsidiary, it being
understood that "Debt" will be deemed to be incurred by us and our Subsidiaries
on a consolidated basis whenever we and our Subsidiaries on a consolidated basis
create, assume, guarantee or otherwise become liable in respect thereof; Debt of
a Subsidiary existing prior to the time it became our Subsidiary will be deemed
to be incurred upon that Subsidiary's becoming our Subsidiary, and Debt of a
person existing prior to a merger or consolidation of that person with us or any
of our Subsidiaries in which that person is our successor or successor of that
Subsidiary will be deemed to be incurred upon the consummation of that merger or
consolidation; provided, however, that the term Debt will not include any
indebtedness that has been the subject of an "in substance" defeasance in
accordance with GAAP.

"Intercompany Debt" means Debt to which the only parties are us, Arden
Realty and any of our and Arden Realty's Subsidiaries, but only so long as that
Debt is held solely by any of us, Arden Realty and any Subsidiary and, provided
that, in the case of Debt owed by us to any Subsidiary, the Debt is subordinated
in right of payment to the holders of the notes.

"Secured Debt" means, without duplication, Debt secured by any mortgage,
trust deed, deed of trust, deed to secure Debt, security agreement, pledge,
conditional sale or other title retention agreement, capitalized lease, or other
like agreement granting or conveying security title to or a security interest in
real property or other tangible assets. Secured Debt will be deemed to be
incurred (a) on the date we or any Subsidiary create, assume, guarantee or
otherwise become liable in respect thereof if it is secured in the manner
described in the preceding sentence on that date or (b) on the date we or any
Subsidiary first secure the Debt in the manner described in the preceding
sentence if such Debt was not so secured on the date it was incurred.

"Security Register" means a register maintained at a place of payment for
the registration and transfer of the notes.

"Subsidiary" means a corporation, real estate investment trust, trust,
partnership, limited liability company or other entity, a majority of the
outstanding voting stock, beneficial interests, partnership interests or
membership interests, as the case may be, of which is owned or controlled,
directly or indirectly, by us or by one or more of our Subsidiaries. For the
purposes of this definition, "voting stock" means stock having the voting power
for the election of directors, general partners, managers or trustees, as the
case may be, whether at all times or only so long as no senior class of stock
has the voting power by reason of any contingency.

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"Total Assets" as of any date means the sum of:

(1) Undepreciated Real Estate Assets; and

(2) all of our other assets and assets of our Subsidiaries on a
consolidated basis determined in accordance with GAAP, but excluding
intangibles and accounts receivable.

"Total Unencumbered Assets" as of any date means the sum of:

(1) those Undepreciated Real Estate Assets not securing any portion of
Secured Debt; and

(2) all our other assets and those of our Subsidiaries on a
consolidated basis not securing any portion of Secured Debt determined in
accordance with GAAP, but excluding accounts receivable and intangibles.

"Undepreciated Real Estate Assets" as of any date means the cost (original
cost plus capital improvements) of our and our Subsidiaries' real estate assets
on that date, before depreciation and amortization, determined on a consolidated
basis in accordance with GAAP.

"Unsecured Debt" means our Debt or Debt of any of our Subsidiaries that is
not Secured Debt.

Compliance with the covenants described in this prospectus and with respect
to the notes generally may not be waived by us, or by the Trustee unless the
Holders of at least a majority in principal amount of all outstanding notes
consent to the waiver; provided, however, that the defeasance and covenant
defeasance provisions of the Indenture described under "Discharge, Defeasance
and Covenant Defeasance" below, will apply to the notes, including with respect
to the covenants described in this prospectus.

OPTIONAL REDEMPTION

The notes may be redeemed at any time at our option, in whole or from time
to time in part, at a redemption price equal to the sum of:

(1) the principal amount of the notes being redeemed plus accrued
interest thereon to the redemption date; and

(2) the Make-Whole Amount, as defined below, if any, with respect to
the notes (the "Redemption Price").

If notice of redemption has been given as provided in the Indenture and
funds for the redemption of any notes called for redemption have been made
available on the redemption date referred to in the notice, the notes will cease
to bear interest on the date fixed for the redemption specified in the notice
and the only right of the Holders of the notes from and after the redemption
date will be to receive payment of the Redemption Price upon surrender of the
notes in accordance with the notice.

Notice of any optional redemption of any notes will be given to Holders at
their addresses, as shown in the security register for the notes, not more than
60 nor less than 30 days prior to the date fixed for redemption. The notice of
redemption will specify, among other items, the Redemption Price and principal
amount of the notes held by the Holder to be redeemed.

If all or less than all of the notes are to be redeemed at our option, we
will notify the Trustee at least 45 days prior to giving notice of redemption,
or a shorter period as may be satisfactory to the Trustee, of the aggregate
principal amount of notes to be redeemed, if less than all of the notes are to
be redeemed, and their redemption date. The Trustee will select, in the manner
it deems fair and appropriate, no less than 60 days prior to the date of
redemption, the notes to be redeemed in whole or in part.

Neither we nor the Trustee will be required to:

(1) issue, register the transfer of or exchange notes during a period
beginning at the opening of business 15 days before any selection of notes
to be redeemed and ending at the close of business on the day of mailing of
the relevant notice of redemption;

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(2) register the transfer of or exchange any note, or portion thereof,
called for redemption, except the unredeemed portion of any note being
redeemed in part; or

(3) issue, register the transfer of or exchange any note that has been
surrendered for repayment at the option of the Holder, except the portion,
if any, of the note not to be so repaid (Section 305).

As used herein:

"Make-Whole Amount" means, in connection with any optional redemption of
any notes, the excess, if any, of:

(1) the aggregate present value as of the date of redemption of each
dollar of principal being redeemed and the amount of interest, exclusive of
interest accrued to the date of redemption, that would have been payable in
respect of each dollar if the redemption had not been made, determined by
discounting, on a semi-annual basis, the principal and interest at the
Reinvestment Rate, determined on the third Business Day preceding the date
notice of the redemption is given, from the respective dates on which the
principal and interest would have been payable if the redemption had not
been made, to the date of redemption; over

(2) the aggregate principal amount of the notes being redeemed.

"Reinvestment Rate" means the yield on Treasury securities at a constant
maturity corresponding to the remaining life (as of the date of redemption, and
rounded to the nearest month) to stated maturity of the principal being redeemed
(the "Treasury Yield"), plus 0.25%. For purposes hereof, the Treasury Yield will
be equal to the arithmetic mean of the yields published in the Statistical
Release under the heading "Week Ending" for "U.S. Government
Securities -- Treasury Constant Maturities" with a maturity equal to the
remaining life; provided, that if no published maturity exactly corresponds to
the remaining life, then the Treasury Yield will be interpolated or extrapolated
on a straight-line basis from the arithmetic means of the yields for the next
shortest and next longest published maturities. For purposes of calculating the
Reinvestment Rate, the most recent Statistical Release published prior to the
date of determination of the Make-Whole Amount will be used. If the format or
content of the Statistical Release changes in a manner that precludes
determination of the Treasury Yield in the above manner, then the Treasury Yield
will be determined in the manner that most closely approximates the above
manner, as we reasonably determine.

"Statistical Release" means the statistical release designated "H.15(519)"
or any successor publication that is published weekly by the Federal Reserve
System and that reports yields on actively traded United States government
securities adjusted to constant maturities, or, if that statistical release is
not published at the time of any determination under the Indenture, then another
reasonably comparable index which we will designate.

DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE

We are permitted under the Indenture to discharge specific obligations to
the Holders of the notes that have not already been delivered to the Trustee for
cancellation by irrevocably depositing with the Trustee, in trust, funds in the
currency in which the notes are payable in an amount sufficient to pay the
entire indebtedness on the notes in respect of principal, and premium or
Make-Whole Amount, if any, and interest to the date of the deposit, if the notes
have become due and payable, or to the stated Maturity Date or redemption date,
as the case may be.

The Indenture also provides that we may elect either:

(a) to defease and be discharged from any and all obligations with
respect to the notes other than the obligations to register the transfer or
exchange of the notes, to replace temporary or mutilated, destroyed, lost
or stolen notes, to maintain an office or agency in respect of the notes
and to hold moneys for payment in trust ("defeasance") (Section 1402); or

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(b) to be released from our obligations with respect to the notes
under specified sections of Article Ten of the Indenture relating to
limitations on the incurrence of Debt, maintenance of Total Unencumbered
Assets, our existence, maintenance of our properties, insurance, payment of
taxes and other claims and provision of financial information, and any
omission to comply with these obligations shall not constitute an Event of
Default with respect to the notes ("covenant defeasance") (Section 1403);

in either case upon the irrevocable deposit by us with the Trustee, in trust, of
an amount, in the currency in which the notes are payable at stated maturity, or
Government Obligations, or both, applicable to the notes which through the
scheduled payment of principal and interest in accordance with their terms will
provide money in an amount sufficient without reinvestment to pay the principal
of, and premium or Make-Whole Amount, if any, and interest on the notes or
analogous payments thereon, on the scheduled due dates therefor.

A trust may only be established if, among other things, we have delivered
to the Trustee an opinion of counsel, as specified in the Indenture, to the
effect that the Holders of the notes will not recognize income, gain or loss for
federal income tax purposes as a result of the defeasance or covenant defeasance
and will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if the defeasance or
covenant defeasance had not occurred, and the opinion of counsel, in the case of
defeasance, will be required to refer to and be based upon a ruling of the
Internal Revenue Service or a change in applicable federal income tax law
occurring after the date of the Indenture (Section 1404).

"Government Obligations" means securities that are:

(1) direct obligations of the United States of America for the payment
of which its full faith and credit is pledged; or

(2) obligations of a Person controlled or supervised by and acting as
an agency or instrumentality of the United States of America, the payment
of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America;

which, in either case, are not callable or redeemable at the option of the
issuer thereof, and will also include a depositary receipt issued by a bank or
trust company as custodian with respect to any Government Obligation or a
specific payment of interest on or principal of any Government Obligation held
by the custodian for the account of the holder of a depositary receipt, provided
that, except as required by law, the custodian is not authorized to make any
deduction from the amount payable to the holder of the depositary receipt from
any amount received by the custodian in respect of the Government Obligation or
the specific payment of interest on or principal of the Government Obligation
evidenced by the depositary receipt.

If we effect covenant defeasance with respect to any notes and these notes
are declared due and payable because of the occurrence of any Event of Default
other than the Event of Default described in clause (3) under "Events of
Default, Notice and Waiver" with respect to specified sections of Article Ten of
the Indenture, which sections would no longer be applicable to the notes as a
result of the covenant defeasance, the amount in the currency in which the notes
are payable, and Government Obligations on deposit with the Trustee, will be
sufficient to pay amounts due on the notes at the time of their stated maturity
but may not be sufficient to pay amounts due on the notes at the time of the
acceleration resulting from the Default. We would remain liable, however, to
make payment of the amounts due at the time of acceleration.

EVENTS OF DEFAULT, NOTICE AND WAIVER

The term "Event of Default," when used in the Indenture, means any one of
the following events, whatever the reason for the Event of Default and whether
or not it is voluntary or involuntary or is

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effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body:

(1) default in the payment of any interest upon the notes when the
interest becomes due and payable, and continuance of the default for a
period of 30 days;

(2) default in the payment of the principal of, or premium or
Make-Whole Amount, if any, on, any note when it becomes due and payable at
its Maturity Date or by declaration of acceleration, notice of redemption
or otherwise;

(3) default in the performance, or breach, of any of our covenants or
warranties in the Indenture with respect to any note, other than a covenant
or warranty a default in whose performance or whose breach is elsewhere in
the relevant section of the Indenture specifically dealt with, and
continuance of the default or breach for a period of 60 days after there
has been given, by registered or certified mail, to us by the Trustee, or
to us and the Trustee by the Holders of at least 25% in principal amount of
the notes, a written notice specifying the default or breach and requiring
it to be remedied and stating that the notice is a "Notice of Default"
under the Indenture;

(4) a default under any bond, debenture, note or other evidence of
indebtedness of ours, or under any mortgage, indenture or other instrument
of ours under which there may be issued or by which there may be secured
any of our or our Subsidiaries' indebtedness, the repayment of which we
have guaranteed or for which we are directly responsible or liable as
obligor or guarantor on a full recourse basis, whether the indebtedness now
exists or is hereafter created, which default constitutes a failure to pay
an aggregate principal amount exceeding $15 million of the indebtedness
when due and payable after the expiration of any applicable grace period
with respect thereto and has resulted in the indebtedness in an aggregate
principal amount exceeding $15 million becoming or being declared due and
payable prior to the date on which it would otherwise have become due and
payable, without the indebtedness having been discharged, or the
acceleration having been rescinded or annulled, within a period of 10 days
after there has been given, by registered or certified mail, to us by the
Trustee, or to us and the Trustee by the Holders of at least 10% in
principal amount of the outstanding notes, a written notice specifying the
default and requiring us to cause the indebtedness to be discharged or
cause the acceleration to be rescinded or annulled and stating that the
notice is a "Notice of Default" under the Indenture; or

(5) specific events of bankruptcy, insolvency or reorganization
(Section 501).

If an Event of Default under the Indenture with respect to the notes at the
time outstanding occurs and is continuing, other than Events of Default arising
in connection with specific events of bankruptcy, insolvency or reorganization,
then in every such case the Trustee or the Holders of not less than 25% of the
principal amount of the outstanding notes may declare the principal amount and
premium or Make-Whole Amount, if any, and accrued interest on all the notes to
be due and payable immediately by written notice thereof to us, and to the
Trustee if given by the Holders. However, at any time after a declaration of
acceleration with respect to the notes has been made, but before a judgment or
decree for payment of the money due has been obtained by the Trustee, the
Holders of not less than a majority in principal amount of the outstanding notes
may, by written notice to us and the Trustee, rescind and annul the declaration
and its consequences if:

(a) we have deposited with the Trustee all required payments of the
principal of, and premium or Make-Whole Amount, if any, and interest on the
notes, plus specified fees, expenses, disbursements and advances of the
Trustee; and

(b) all Events of Default with respect to the notes, other than the
non-payment of principal of, or premium or Make-Whole Amount, if any, or
interest on the notes which has become due solely by the declaration of
acceleration, have been cured or waived as provided in the Indenture
(Section 502).

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The Holders of not less than a majority in principal amount of the notes of
any series may waive any past default with respect to such series and its
consequences, except a default.

(1) in the payment of the principal of, or premium or Make-Whole
Amount, if any, or interest payable on any note of that series; or

(2) in respect of a covenant or provision contained in the Indenture
that cannot be modified or amended without the consent of the Holder of
each note of the affected series (Section 513).

The Trustee will be required to give notice to the Holders of the notes
within 90 days of the occurrence of a default under the Indenture unless the
default has been cured or waived; provided, however, that the Trustee may
withhold notice to the Holders of the notes of any default, except a default in
the payment of the principal of, or premium or Make-Whole Amount, if any, or
interest on the notes, if and so long as specified responsible officers of the
Trustee determine in good faith that the withholding of the notice is in the
interest of the Holders; provided, that in the case of any default or breach of
a covenant or warranty under the Indenture as described in clause (3) of the
first paragraph of this section "Events of Default, Notice and Waiver," no
notice to Holders will be given until at least 60 days after the occurrence
thereof. For purposes of this paragraph, the term "default" means any event
which is, or after notice or lapse of time or both, would become, an Event of
Default under the Indenture with respect to the notes (Section 601).

The Indenture provides that no Holder of notes may institute any
proceedings, judicial or otherwise, with respect to the Indenture, or for the
appointment of a receiver or trustee, or for any remedy thereunder, except in
the case of failure of the Trustee, for 60 days, to act after it has received a
written request to institute proceedings in respect of an Event of Default from
the Holders of not less than 25% in principal amount of the outstanding notes,
as well as an offer of indemnity reasonably satisfactory to it (Section 507).
This provision will not prevent, however, any Holder of notes from instituting
suit for the payment of the principal of, and premium or Make-Whole Amount, if
any, and interest on the notes on the due date thereof (Section 508).

Defaults, except a default in the payment of principal of, or premium or
Make-Whole Amount, if any, or interest on the notes or default with respect to a
covenant or provision which cannot be modified under the terms of the Indenture
without the consent of each Holder affected, may be waived by the Holders of not
less than a majority of principal amount of the then outstanding notes, upon the
conditions provided in the Indenture (Section 513).

Subject to provisions in the Indenture relating to its duties in case of
default, the Trustee is under no obligation to exercise any of its rights or
powers under the Indenture at the request or direction of any Holders of notes
then outstanding under the Indenture, unless the Holders have offered to the
Trustee reasonable security or indemnity (Section 602). The Holders of not less
than a majority in principal amount of the outstanding notes have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred upon the
Trustee. However, the Trustee may refuse to follow any direction which is in
conflict with any law or the Indenture, which may involve the Trustee in
personal liability or which may be unduly prejudicial to the Holders of notes
not joining therein and the Trustee may take any other action it deems proper
not inconsistent with the direction given (Section 512).

Within 120 days after the close of each fiscal year, we will be required to
deliver to the Trustee a certificate, signed by one of several of our specified
officers, stating whether or not the officer has knowledge of any default under
the Indenture and, if so, specifying each default and the nature and status
thereof (Section 1011).

MODIFICATION OF THE INDENTURE

Modifications and amendments of the Indenture may be made only with the
consent of the Holders of not less than a majority in principal amount of each
series affected by the modification or amendment;

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provided, however, that no such modification or amendment may, without the
consent of the Holder of each note affected thereby:

(a) change the stated maturity of the principal of, or premium or
Make-Whole Amount, if any, on, or any installment of interest on, any note;

(b) reduce the principal amount of, or the rate or amount of interest
on, or any premium payable on redemption of the notes, or adversely affect
any right of repayment of the Holder of any notes;

(c) change the place of payment, or the coin or currency, for payment
of principal or premium, if any, or interest on the notes;

(d) impair the right to institute suit for the enforcement of any
payment on or with respect to the notes on or after the stated maturity of
any note;

(e) reduce the above-stated percentage in principal amount of
outstanding notes the consent of whose Holders is necessary to modify or
amend the Indenture, for any waiver with respect to the notes, or to waive
compliance with specified provisions of the Indenture or specified defaults
and consequences thereunder or to reduce the quorum or voting requirements
set forth in the Indenture; or

(f) modify any of the foregoing provisions or any of the provisions
relating to the waiver of specified past defaults or specified covenants,
except to increase the required percentage to effect the action or to
provide that specified other provisions of the Indenture may not be
modified or waived without the consent of the Holder of each note (Section
902).

The Holders of not less than a majority in principal amount of the notes
have the right to waive compliance by us with specific covenants in the
Indenture (Section 1013).

Modifications and amendments of the Indenture may be permitted to be made
by us and the Trustee without the consent of any Holder for any of the following
purposes:

(1) to evidence the succession of another person to us as obligor
under the Indenture;

(2) to add to our covenants for the benefit of the Holders of the
notes or to surrender any right or power conferred upon us in the
Indenture;

(3) to add Events of Default for the benefit of the Holders of the
notes;

(4) to add or change any provisions of the Indenture to facilitate the
issuance of, or to liberalize certain terms of, notes in bearer form, or to
permit or facilitate the issuance of notes in uncertificated form, provided
that the action shall not adversely affect the interests of the Holders of
the notes in any material respect;

(5) to change or eliminate any provisions of the Indenture, provided
that any change or elimination shall become effective only when the
outstanding notes are not entitled to the benefit of that provision;

(6) to secure the notes;

(7) to establish the form or terms of the notes and any related
coupons as permitted by the Indenture;

(8) to evidence and provide for the acceptance of appointment under
the Indenture by a successor Trustee with respect to the notes or
facilitate the administration of the trust under the Indenture by more than
one Trustee;

(9) to cure any ambiguity, defect or inconsistency in the Indenture,
provided that the action is not inconsistent with the provisions of the
Indenture and will not adversely affect the interests of Holders of notes
in any material respect; or

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(10) to supplement any of the provisions of the Indenture to the
extent necessary to permit or facilitate defeasance and discharge of the
notes, provided that the action will not adversely affect the interests of
the Holders of the notes in any material respect (Section 901).

The Indenture contains provisions for convening meetings of the Holders of
the notes (Section 1501). A meeting may be called at any time by the Trustee,
and also will be called, upon request, by us or the Holders of at least 10% in
principal amount of the outstanding notes of any series, in any case upon notice
given as provided in the Indenture. Except for any consent that must be given by
the Holder of each note affected by certain modifications and amendments of the
Indenture, any resolution presented at a meeting or adjourned meeting duly
reconvened at which a quorum is present may be adopted by the affirmative vote
of the Holders of a majority in principal amount of the outstanding notes of
that series; provided, however, that, except as referred to above, any
resolution with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action that may be made, given or taken by the
Holders of a specific percentage, which is less than a majority, in principal
amount of the outstanding notes of a series may be adopted at a meeting or
adjourned meeting duly reconvened and at which a quorum is present by the
affirmative vote of the Holders of the specified percentage in principal amount
of the outstanding notes of that series. Any resolution passed or decision taken
at any meeting of Holders of the notes duly held in accordance with the
Indenture will be binding on all Holders of notes. The quorum at any meeting
called to adopt a resolution, and at any reconvened meeting, will be persons
entitled to vote a majority in principal amount of the outstanding notes of a
series; provided, however, that if any action is to be taken at the meeting with
respect to a consent or waiver that may be given by the Holders of not less than
a specified percentage in principal amount of the outstanding notes of a series,
the persons entitled to vote the specified percentage in principal amount of the
outstanding notes of that series will constitute a quorum (Section 1504).

Notwithstanding the foregoing provisions, the Indenture provides that if
any action is to be taken at a meeting of Holders of notes with respect to any
request, demand, authorization, direction, notice, consent, waiver or other
action that the Indenture expressly provides may be made, given or taken by the
Holders of a specified percentage in principal amount of all outstanding notes
affected thereby, or the Holders of that series and any other series:

(1) there will be no minimum quorum requirement for the meeting; and

(2) the principal amount of the outstanding notes of the series that
votes in favor of the request, demand, authorization, direction, notice,
consent, waiver or other action will be taken into account in determining
whether the request, demand, authorization, direction, notice, consent,
waiver or other action has been made, given or taken under the Indenture.

THE TRUSTEE

The Bank of New York is the Trustee under the Indenture. All payments of
principal of, and interest on, and all registration, transfer, exchange,
authentication, and delivery, including authentication and delivery on original
issuance of the notes, of, the notes will be effected by the Trustee in New
York, New York.

The Indenture contains specific limitations on the right of the Trustee,
should it become a creditor of ours, to obtain payment of claims in specified
cases or to realize on specific property received in respect of any claim as
security or otherwise. The Trustee is permitted to engage in other transactions;
however, if it acquires any conflicting interest it must eliminate the conflict
or resign.

The Holders of not less than a majority in principal amount of the then
outstanding notes shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to

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the Trustee or exercising any trust or power conferred on the Trustee with
respect to the notes, provided that:

(1) the direction is not in conflict with any rule of law or with the
Indenture;

(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with the direction;

(3) the direction would not be unduly prejudicial to the rights of
another Holder not joining therein; and

(4) the direction would not involve the Trustee in personal liability
(Section 512).

If an Event of Default with respect to the notes occurs and is continuing,
the Trustee will exercise with respect to the notes the rights and powers vested
in it by the Indenture, and use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs. Subject to those provisions, the Trustee will be
under no obligation to exercise any of its rights or powers vested in it by the
Indenture at the request of any of the Holders, unless the Holders have offered
to the Trustee security or indemnity reasonably satisfactory to the Trustee
against the costs, expenses and liabilities which might be incurred by it in
compliance with the request or direction (Section 602).

FORM AND REGISTRATION

The notes will be book-entry notes represented by one or more Global Notes.
Each Global Note will be deposited with, or on behalf of, the depositary, which
initially will be DTC, and registered in the name of the depositary or its
nominee, Cede & Co.

The following are summaries of specified rules and operating procedures of
DTC that affect the payment of principal and interest and transfers in the
Global Notes. Unless and until it is exchanged in whole or in part for notes in
definitive form under the limited circumstances described below, the Global
Notes may not be transferred except as a whole:

(1) by DTC to a nominee of DTC;

(2) by a nominee of DTC to DTC or another nominee of DTC; or

(3) by DTC or any nominee to a successor or a nominee of the
successor.

Ownership of beneficial interests in the Global Notes will be limited to
persons that have accounts with DTC for the Global Notes ("participants") or
persons that may hold interests through participants. Upon the issuance of the
Global Notes, DTC will credit, on its book-entry registration and transfer
system, the participants' accounts with the respective principal amounts of the
notes represented by the Global Note beneficially owned by the participants.
Ownership of beneficial interests in the Global Notes will be shown on, and the
transfer of the ownership interests will be effected only through, records
maintained by DTC, with respect to interests of participants, and on the records
of participants, with respect to interests of persons holding through
participants. The laws of some states may require that specified purchasers of
securities take physical delivery of the securities in definitive form. These
laws may limit or impair the ability to own, transfer or pledge beneficial
interests in the Global Notes.

So long as DTC or its nominee is the registered owner of the Global Notes,
DTC or its nominee, as the case may be, will be considered the sole owner or
Holder of the notes represented by the Global Notes for all purposes under the
Indenture. Except as set forth below, owners of beneficial interests in the
Global Notes will not be entitled to have notes represented by the Global Notes
registered in their names, will not receive or be entitled to receive physical
delivery of the notes in certificated form and will not be considered the
registered owners or Holders thereof under the Indenture. Accordingly, each
person owning a beneficial interest in the Global Notes must rely on the
procedures of DTC and, if the person is not a participant, on the procedures of
the participant through which the person owns its interest, to exercise any
rights of a Holder under the Indenture. We understand that under existing
industry practices, if we request
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any action of Holders or if an owner of a beneficial interest in the Global
Notes desires to give or take any action that a Holder is entitled to give or
take under the Indenture, DTC would authorize the participants holding the
relevant beneficial interests to give or take the action, and the participants
would authorize beneficial owners owning through the participants to give or
take the action or would otherwise act upon the instructions of beneficial
owners holding through them.

Principal and interest payments on interests represented by the Global
Notes will be made to DTC or its nominee, as the case may be, as the registered
owner of the Global Notes. None of us, the Trustee or any agent of the Trustee
will have any responsibility or liability for any aspect of the records relating
to or payment made on account of beneficial ownership interests in the Global
Notes or for maintaining, supervising or reviewing any records relating to the
beneficial ownership interests. We expect that DTC, upon receipt of any payment
of principal or interest in respect of the Global Notes, will immediately credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the Global Notes as shown on the records of
DTC. We also expect that payments by participants to owners of beneficial
interests in the Global Notes held through the participants will be governed by
standing customer instructions and customary practice, as is now the case with
securities held for the accounts of customers in bearer form or registered in
"street name," and will be the responsibility of the participants.

If DTC is at any time unwilling or unable to continue as depository for the
notes and we fail to appoint a successor depository registered as a clearing
agency under the Securities Exchange Act within 90 days, we will issue the notes
in definitive form in exchange for the Global Notes. Any notes issued in
definitive form in exchange for the Global Notes will be registered in the name
or names, and will be issued in denominations of $1,000 and integral multiples
thereof, as DTC shall instruct the Trustee. It is expected that the instructions
will be based upon directions received by DTC from participants with respect to
ownership of beneficial interests in the Global Notes.

Certificated notes will be issued in exchange for interests in the Global
Note under the limited circumstances described above.

DTC has advised us of the following information regarding DTC. DTC is a
limited-purpose trust company organized under the Banking Law of the State of
New York, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered pursuant to the provisions of Section 17A of the Securities
Exchange Act. DTC was created to hold securities of its participants and to
facilitate the clearance and settlement of transactions among its participants
in the securities through electronic book-entry changes in accounts of the
participants, thereby eliminating the need for physical movement of securities
certificates. DTC's participants include securities brokers and dealers, banks,
trust companies, clearing corporations and certain other organizations, some of
which, and/or their representatives, own DTC. Access to the DTC book-entry
system is also available to others, such as banks, brokers and dealers and trust
companies that clear through or maintain a custodial relationship with a
participant, either directly or indirectly.

Any beneficial interest in a Global Note that is transferred for a
beneficial interest in another Global Note will, upon transfer, cease to be an
interest in the original Global Note and will become an interest in the other
Global Note and, accordingly, will be subject to all transfer restrictions and
other procedures applicable to beneficial interests in the other Global Note for
as long as it remains a beneficial interest in that Global Note.

The information in this subsection "-- Form and Registration" concerning
the depositary and its book-entry systems has been obtained from sources we
believe to be reliable, but we take no responsibility for its accuracy.

SAME-DAY SETTLEMENT AND PAYMENT

All payments of principal and interest in respect of the notes in the form
of Global Notes will be made by us in immediately available funds.

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Beneficial interests in the global securities will trade in the
depositary's same-day funds statement system until maturity or earlier
redemption, and secondary market trading activity in the global securities will
therefore settle in immediately available funds, subject in all cases to the
rules and operating procedures of the depositary. Transfers between participants
in the depositary will be effected in the ordinary way in accordance with the
depositary's rules and operating procedures and will be settled in same-day
funds.

GOVERNING LAW

The Indenture is governed by, and construed in accordance with, the laws of
the State of New York, and once issued the notes will be as well.

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DESCRIPTION OF SPECIFIC PROVISIONS
OF OUR PARTNERSHIP AGREEMENT

The following summarizes our Second Amended and Restated Agreement of
Limited Partnership, generally referred to as our partnership agreement. This
summary is not complete and is qualified in its entirety by reference to our
partnership agreement.

MANAGEMENT

We are organized as a Maryland limited partnership pursuant to the terms of
our partnership agreement. Arden Realty, as our sole general partner, has full,
exclusive and complete responsibility and discretion in our management and
control, subject to specified limited exceptions. Our limited partners have no
authority to transact business for us or participate in our management
activities or decisions.

UNITS

Each of our partners owns partnership units, generally referred to as OP
Units. We currently have two types of OP Units outstanding: common OP Units and
Series B Preferred Units. At September 30, 2000, there were 65,681,144 common OP
Units outstanding, of which Arden Realty owned 63,506,871 common OP Units, all
of which correspond to the issued and outstanding common stock of Arden Realty.
At September 30, 2000, there were 2,000,000 Series B Preferred Units
outstanding, all of which are owned by Salomon Smith Barney Tax Advantage
Exchange Fund II, LLC. A partner's percentage ownership is determined by
dividing the number of common OP Units held by the partner by the total number
of common OP Units outstanding.

DISTRIBUTIONS; ALLOCATIONS OF INCOME AND LOSS

Our partnership agreement provides for preferred distributions of cash and
preferred allocations of income to the holders of Series B Preferred Units,
including Arden Realty to the extent it acquires any Series B Preferred Units
upon a holder's exchange of these units for Arden Realty stock. As a
consequence, Arden Realty will receive distributions from us that it will use to
pay dividends on any issued shares of Series B Preferred Stock before any other
partner receives a distribution, other than a holder of Series B Preferred
Units, or any parity preferred units, not then held by Arden Realty. In
addition, if necessary, income will be specially allocated to holders of Series
B Preferred Units, and losses will be allocated to the other partners, in
amounts necessary to ensure that, to the extent possible, the balance in the
holder's capital account will at all times be equal to or in excess of the
liquidation preference of their Series B Preferred Units. In general, all
remaining distributions will be made, and all remaining items of our income and
loss will be allocated, to the holders of common OP Units in proportion to the
number of common OP Units held by each unit holder. Some limited partners have
agreed to guarantee some of our debt, either directly or indirectly through an
agreement to make capital contributions to us under limited circumstances. As a
result, and notwithstanding the above discussion of allocations of income and
loss to holders of common OP Units, these limited partners could, under limited
circumstances, be allocated a disproportionate amount of net loss, which net
loss would have otherwise been allocable to Arden Realty.

TRANSFERABILITY OF INTERESTS

Except for a transaction described in the following two paragraphs, Arden
Realty may not voluntarily withdraw from us, or transfer its interest in us,
without the consent of all the holders of the common OP Units.

Arden Realty may not merge or combine with another entity, sell all or
substantially all of its assets or reclassify, recapitalize or change its
outstanding equity interests unless the proposed transaction has been approved
by holders of more than 66% of the common OP Units, including the common OP
Units held by Arden Realty. In connection with that proposed transaction, all
limited partners must receive, or have the option to receive, cash, securities
or other property equal to the product of the number of shares of Arden Realty
common stock into which each common OP Unit is then exchangeable times the
greatest
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amount of cash, securities or other property proposed to be paid to the holder
of each share of common stock of Arden Realty in the proposed transaction. If,
in connection with the proposed transaction, a purchase, tender offer or
exchange offer was accepted by the holders of more than 50% of the outstanding
shares of common stock, each holder of common OP Units will receive, or will
have the option to receive, the greatest amount of cash, securities or other
property which that holder would have received had it exercised its right to
redemption and received shares of common stock of Arden Realty in exchange for
its common OP Units immediately prior to the expiration of the purchase, tender
or exchange offer and had accepted the purchase, tender offer or exchange offer.

Notwithstanding the foregoing paragraph, Arden Realty may merge or combine
its assets with another entity if, immediately after the merger or combination,
substantially all of the assets of the surviving entity, other than common OP
Units held by Arden Realty, are contributed to us as a capital contribution in
exchange for common OP Units with a fair market value, as reasonably determined
by Arden Realty, equal to the agreed value of the assets contributed.

Arden Realty is required to use its commercially reasonable efforts to
structure any proposed transaction to avoid causing the limited partners to
recognize gain for federal income tax purposes. A partner's sole remedy for a
breach by Arden Realty of this obligation is a claim for money damages.

CAPITAL CONTRIBUTIONS

If we require additional funds at any time or from time to time in excess
of the funds available to us from borrowing or contributed capital, and Arden
Realty borrows funds, then Arden Realty will lend those funds to us on
comparable terms and conditions. Arden Realty may contribute the amount of any
required funds not loaned to us as an additional capital contribution to us. If
Arden Realty contributes additional capital to us, Arden Realty's partnership
interest in us will be increased on a proportionate basis based upon the amount
of that additional capital contribution and our value at the time of the
contributions. Conversely, the partnership interests of the limited partners
will be decreased on a proportionate basis in the event of additional capital
contributions by Arden Realty. Arden Realty's rights to make loans or additional
capital contributions to us are generally subject to Mr. Ziman's right to fund
the loan or capital contribution on a pro rata basis so long as Mr. Ziman is
Arden Realty's Chief Executive Officer and holds a limited partnership interest
in us. See "Issuance of Additional Common OP Units, Common Stock or Convertible
Securities."

REDEMPTION/EXCHANGE RIGHTS

Limited partners may require us to redeem part or all of their common OP
Units for an amount of cash equal to the fair market value of an equivalent
number of shares of Arden Realty's common stock at the time of the redemption.
Arden Realty may, however, elect in its sole and absolute discretion to exchange
those common OP Units for shares of Arden Realty's common stock on a one-
for-one basis, subject to adjustment in the event of stock splits, stock
dividends, issuance of specified rights, specified extraordinary distributions
and similar events. Arden Realty presently anticipates that it would elect to
issue its common stock in exchange for common OP Units rather than pay cash for
the common OP Units, subject to the ownership and transfer limitations
established to maintain its status as a REIT. With each redemption or exchange,
Arden Realty's percentage ownership interest in us would increase.

ISSUANCE OF ADDITIONAL COMMON OP UNITS, COMMON STOCK OR CONVERTIBLE SECURITIES

As our general partner, Arden Realty has the ability to cause us to issue
additional common OP Units. In addition, Arden Realty may, from time to time,
issue additional shares of its common stock or convertible securities. In each
such event, Mr. Ziman, the Chairman of the Board and Chief Executive Officer of
Arden Realty, pursuant to our partnership agreement and a certain Miscellaneous
Rights Agreement, between Mr. Ziman, Namiz, Inc., Arden Realty and us, will have
proportional purchase rights which will enable him to maintain his overall
percentage ownership of the combined equity of Arden Realty and us, assuming the
exchange of all common OP Units for common stock. Mr. Ziman's

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proportional purchase rights may be exercised, in his sole discretion, at a
price per share or other trading unit of the common OP Units, common stock or
convertible securities, as the case may be, to be received by Arden Realty or us
in the issuance, less any underwriting discounts and commissions, and otherwise
on the same terms as may be applicable to those issuances. These proportional
purchase rights require that Mr. Ziman be the Chief Executive Officer of Arden
Realty at the time of the exercise and hold a limited a limited partnership
interest in us and do not apply to:

- transactions under Arden Realty's stock incentive plans;

- shares issued pursuant to an exchange of common OP Units for shares of
Arden Realty's common stock; or

- in connection with any issuance of Arden Realty's common stock or common
OP Units incident to an acquisition of properties, assets or a business.

TAX MATTERS PARTNER

Arden Realty is our tax matters partner. It has authority, in its sole and
absolute discretion, to make tax elections under the Internal Revenue Code on
our behalf.

OPERATIONS

Our partnership agreement requires that we operate in a manner that will
enable Arden Realty to satisfy the requirements for being classified as a REIT
and to avoid any federal income tax liability. Our partnership agreement
provides that our net operating cash revenue, as well as the net sales and
refinancing proceeds, will be distributed from time to time, but at least
quarterly, as determined by Arden Realty pro rata in accordance with the
partners' percentage interests. Subject to specific exceptions, we will pay or
reimburse Arden Realty for all costs and expenses relating to the operations of
Arden Realty.

DUTIES AND CONFLICTS

Our partnership agreement provides that all business activities of Arden
Realty, including all activities pertaining to the acquisition and operation of
office properties, must be conducted through us.

TERM

We will continue in full force and effect until December 31, 2096, or until
sooner dissolved:

- upon the bankruptcy, dissolution, withdrawal, termination or incapacity
of Arden Realty as general partner, unless the limited partners other
than Arden Realty elect to continue our existence;

- by election of Arden Realty and the limited partners;

- pursuant to an entry of a decree of judicial dissolution;

- upon the sale or other disposition of all or substantially all of our
assets or redemption of all OP Units; or

- as otherwise provided by law.

INDEMNIFICATION

To the extent permitted by law, our partnership agreement provides for
indemnification and advance of expenses of Arden Realty and its officers and
directors similar to indemnification and advance of expenses provided to
officers and directors of Arden Realty in its charter and bylaws and provides
that Arden Realty shall not be liable to us and our partners if it acted in good
faith. See "Management -- Limitation of Liability and Indemnification."

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SERIES B PREFERRED UNITS

General. Our Series B Preferred Units have rights with respect to ordinary
distributions and distributions on liquidation, winding up or dissolution that
are:

- senior to the common OP Units and to all OP Units that provide that they
rank junior to the Series B Preferred Units;

- junior to all OP Units which rank senior to the Series B Preferred Units;
and

- equal to all OP Units expressly designated to be on parity with the
Series B Preferred Units.

Subject to these seniority rights, holders of the Series B Preferred Units
are entitled to receive cumulative preferential cash distributions in an amount
equal to 8 5/8% per year on an amount equal to $25.00 per Series B Preferred
Unit then outstanding, or $2.16 per year. These distributions are payable on or
before March 31, June 30, September 30 and December 31 of each year.

Exchange Rights. Upon the satisfaction of any of the following conditions,
and with the approval of 51% of the holders of the then outstanding Series B
Preferred Units, the Series B Preferred Units may be exchanged, in whole, but
not in part, on a one-for-one basis, for shares of Arden Realty's 8 5/8% Series
B Cumulative Redeemable Preferred Stock:

- at any time on or after September 7, 2009;

- at any time after September 7, 2002 and prior to September 7, 2009, if
the holders of Series B Preferred Units deliver to Arden Realty a private
letter ruling or an opinion of counsel to the effect that an exchange of
the Series B Preferred Units at that time would not cause the Series B
Preferred Units to be considered "stock and securities" within the
meaning of the Internal Revenue Code for purposes of determining whether
the holder is an "investment company" under the Internal Revenue Code;

- full distributions have not been paid on the Series B Preferred Units for
six or more quarters, whether or not the quarters were consecutive; or

- we or one of our subsidiaries take the position, and any holders of
Series B Preferred Units receive an opinion of counsel that, we are or
after completing a proposed transaction will become a "publicly traded
partnership" within the meaning of the Internal Revenue Code.

In addition, the Series B Preferred Units may be exchanged for shares of
Arden Realty's Series B Preferred Stock if the holder of the Series B Preferred
Units concludes that the Series B Preferred Units represent more than 19.5% of
our total profits or capital interests for a taxable year.

Instead of exchanging the Series B Preferred Units for Series B Preferred
Stock, we may elect to redeem the Series B Preferred Units for cash in an amount
equal to the original capital account balance of the Series B Preferred Units
plus all accrued and unpaid distributions to the date of redemption. A holder of
Series B Preferred Units will not be entitled to exchange the Series B Preferred
Units for Series B Preferred Stock if the exchange would violate the
restrictions on ownership and transfer of Arden Realty's equity interests
established by Arden Realty to maintain Arden Realty's qualification as a REIT.

Redemption. On or after September 7, 2004, we may redeem the Series B
Preferred Units, in whole or in part from time to time, at a redemption price
payable in cash equal to the capital account balance of the holder, provided
that the amount shall not be less than the original capital account balance of
the Series B Preferred Units, plus all accrued and unpaid distributions to the
date of redemption. We may only pay the redemption price out of the proceeds
from sales of Arden Realty's capital stock or our partnership units. We must
redeem all of the Series B Preferred Units at the same time unless we have paid
all accumulated and unpaid distributions on all Series B Preferred Units for all
quarterly distribution periods terminating on or prior to the date of
redemption.

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<PAGE> 81

Limited Approval Rights. For so long as any Series B Preferred Units are
outstanding, without the affirmative vote of the holders of at least two-thirds
of the Series B Preferred Units outstanding at the time, we may not:

- create or increase the amount of, or reclassify, any class or series of
partnership interests, or create or issue any obligations or security
convertible into or evidencing the right to purchase any partnership
interests, ranking equal to the Series B Preferred Units, but only if
they are issued to an affiliate of ours other than Arden Realty to allow
Arden Realty to issue corresponding shares of Series B Preferred Stock to
persons who are not our affiliates; or

- consolidate, merge, transfer or lease all or substantially all of our
assets to any entity, or amend the provisions of our partnership
agreement, in a manner that would materially and adversely affect the
powers, special rights, preferences, privileges or voting power of the
Series B Preferred Units.

Other than as discussed in this prospectus, the holders of Series B
Preferred Units have no voting rights other than with respect to other matters
that would adversely affect them or as otherwise provided by applicable law.

Liquidation Preference. The distribution and income allocation provisions
of our partnership agreement provide each Series B Preferred Unit with a
liquidation preference to each holder of those Units equal to the holder's
capital contributions, plus any accrued but unpaid distributions, in preference
to any other class or series of partnership interest of us, other than preferred
OP Units senior to or on parity with Series B Preferred Units.

Registration Rights. Arden Realty has agreed to file with the SEC a shelf
registration statement registering the resale of the shares of Series B
Preferred Stock issuable to the holders of Series B Preferred Units as soon as
practicable but not later than 60 days after the date the Series B Preferred
Units are exchanged for shares of Series B Preferred Stock. Arden Realty has
also agreed to use its best efforts to cause the registration statement to be
declared effective within 120 days after the date of the exchange.

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<PAGE> 82

MANAGEMENT

As a limited partnership, our business and affairs are managed by our
general partner, Arden Realty. The following table presents the names, ages and
positions of Arden Realty's directors and executive and senior officers.

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Richard S. Ziman............ 58 Chairman of the Board and Chief Executive Officer
Victor J. Coleman........... 39 President, Chief Operating Officer and Director
Andrew J. Sobel............. 41 Executive Vice President
Jeffery A. Berger........... 38 Senior Vice President -- Project Development and Technology
Daniel S. Bothe............. 35 Senior Vice President and Co-Chief Financial Officer
Richard S. Davis............ 42 Senior Vice President, Co-Chief Financial Officer and Treasurer
Randy J. Noblitt............ 44 Senior Vice President -- Property Operations
Robert C. Peddicord......... 39 Senior Vice President -- Leasing
Herbert L. Porter........... 62 Senior Vice President -- Construction and Development
David A. Swartz............. 34 General Counsel and Secretary
Brigitta B. Troy............ 60 Senior Vice President -- Acquisitions and Dispositions
Carl D. Covitz.............. 61 Director
Larry S. Flax............... 58 Director
Peter S. Gold............... 76 Director
Steven C. Good.............. 58 Director
Kenneth B. Roath............ 65 Director
</TABLE>

The following is a biographical summary of the experience of Arden Realty's
executive and senior officers and directors.

RICHARD S. ZIMAN. Mr. Ziman is a founder of Arden Realty and has served as
Arden Realty's Chairman of the Board and Chief Executive Officer and as a
Director since its formation. Mr. Ziman has been involved in the real estate
industry for over 25 years. In 1990, Mr. Ziman formed Arden Realty Group, Inc.,
a California corporation, subsequently known as "Namiz," and served as its
Chairman of the Board and Chief Executive Officer from its inception until the
formation of Arden Realty. In 1979, he co-founded Pacific Financial Group, a
diversified real estate investment and development firm headquartered in Beverly
Hills, of which he was the Managing General Partner. Mr. Ziman received his
Bachelor's Degree and his Juris Doctor Degree from the University of Southern
California and practiced law as a partner of the law firm of Loeb & Loeb from
1971 to 1980, specializing in transactional and financing aspects of real
estate. Mr. Ziman's term as Director will expire at the 2002 annual meeting of
stockholders.

VICTOR J. COLEMAN. Mr. Coleman is a founder of Arden Realty and has served
as President and Chief Operating Officer and as a Director since its formation.
Mr. Coleman was a co-founder of Namiz and was its President and Chief Operating
Officer from 1990 to 1996. From 1987 to 1989, Mr. Coleman was Vice President of
Los Angeles Realty Services, Inc. and earlier in his career from 1985 to 1987,
was Director of Marketing/Investment Advisor of Development Systems
International and an associate at Drexel Burnham Lambert specializing in private
placements with institutional and individual investors. Mr. Coleman received his
Bachelor's Degree from the University of California at Berkeley and received his
Master of Business Administration Degree from Golden Gate University. Mr.
Coleman's term as Director will expire at the 2002 annual meeting of
stockholders.

ANDREW J. SOBEL. Mr. Sobel has served as Arden Realty's Executive Vice
President with oversight of Arden Realty's operational and financial strategies
since August 2000. Prior to that, Mr. Sobel served as Arden Realty's Executive
Vice President and Director of Property Operations from August 1997 until his
resignation from Arden Realty in February 2000. From February 2000 to July 2000,
Mr. Sobel served as the President of 555-1212.com, an Internet information based
company. Mr. Sobel is an attorney, admitted to the State Bar of California in
1985, with 11 years experience in the practice of real estate law.

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<PAGE> 83

Mr. Sobel received his Bachelor's Degree from State University of New York at
Oswego and his Juris Doctor Degree from the University of California, Berkeley
(Boalt Hall).

JEFFREY A. BERGER. Mr. Berger has served as Arden Realty's Senior Vice
President -- Project Development and Technology since October 1997. Prior to
joining Arden Realty, Mr. Berger served as Vice President and Director of Berger
Realty Group, a privately held real estate company in Chicago, Illinois. Berger
Realty Group managed and leased approximately 1,000 apartments, and over two
million net rentable square feet of office, retail, and R&D/industrial
properties. Mr. Berger was responsible for all acquisitions and finance and for
managing a staff of 75 people. Prior to joining Berger Realty Group, Mr. Berger
served as Assistant Vice President of Real Estate Acquisitions for Heitman
Financial. Mr. Berger received his Bachelor of Science Degree in Communication
Studies from Northwestern University.

DANIEL S. BOTHE. Mr. Bothe has served as Arden Realty's Senior Vice
President and Co-Chief Financial Officer since July 2000. From December 1997 to
July 2000, Mr. Bothe served as Arden Realty's Senior Vice President -- Finance,
and Vice President -- Finance from December 1996 to December 1997. From 1993 to
1996, Mr. Bothe was a management consultant with the E&Y Kenneth Leventhal Real
Estate Group of Ernst & Young LLP. From 1988 to 1991, Mr. Bothe served as a
member of the audit staff of KPMG Peat Marwick LLP specializing in real estate.
Mr. Bothe is a Certified Public Accountant in the State of California and a
member of the America Institute of CPAs. Mr. Bothe received his Bachelor of
Science Degree in Accounting from San Diego State University and his Master of
Business Administration Degree from the University of Southern California.

RICHARD S. DAVIS. Mr. Davis has served as Arden Realty's Senior Vice
President, Co-Chief Financial Officer and Treasurer since July 2000. From
December 1997 to July 2000, Mr. Davis served as Arden Realty's Senior Vice
President -- Chief Accounting Officer. From 1996 to 1997, Mr. Davis was with
Catellus Development Corporation where he was responsible for accounting and
finance for the asset management and development divisions. From 1985 to 1996,
Mr. Davis served as a member of the audit staff of both KPMG Peat Marwick LLP
and Price Waterhouse LLP, specializing in real estate. Mr. Davis is a Certified
Public Accountant in the states of California and Missouri and a member of the
American Institute of CPAs. Mr. Davis received his Bachelor of Science Degree in
Accounting from the University of Missouri at Kansas City.

RANDY J. NOBLITT. Mr. Noblitt has served as Arden Realty's Senior Vice
President -- Property Operations since November 1997. From 1995 to 1997, Mr.
Noblitt established a management consulting practice serving the real estate
industry. From 1993 to 1995, Mr. Noblitt served as Senior Vice President of
Tishman West in charge of their Southern California operations. In 1992 and
1993, Mr. Noblitt served as Senior Portfolio Manager and Director of Management
Services for Cushman & Wakefield in Southern California. Mr. Noblitt's career
includes extensive experience in asset management, leasing and development of
all commercial property types. Mr. Noblitt received his Bachelor of Science
Degree in Business Administration from California State University, Northridge.

ROBERT C. PEDDICORD. Mr. Peddicord served as Arden Realty's Vice
President -- Leasing from December 1996 to September 1997, and has served as
Senior Vice President -- Leasing since October 1997. From 1987 to 1996, Mr.
Peddicord was a Managing Director in the West Los Angeles office of Julien J.
Studley, representing landlords and tenants in the leasing of office space. From
1984 to 1986, Mr. Peddicord served as a branch Vice President for Great Western
Financial Corporation. Mr. Peddicord received his Bachelor's Degree in Economics
from the University of California at Los Angeles.

HERBERT L. PORTER. Mr. Porter has served as Arden Realty's Senior Vice
President -- Construction and Development since its formation. Mr. Porter served
as Director of Construction and Capital Improvements for Namiz from 1993 to
1996. From 1973 to 1992, Mr. Porter was a partner/owner in his own real estate
development and property management company specializing in medium to high-rise
commercial office buildings. Mr. Porter's over 25 years in commercial office
development include planning, financing, acquisition, entitlements and
approvals, design, construction, marketing, leasing, tenant

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<PAGE> 84

improvements and outright sale. Mr. Porter received his Bachelor's Degree from
the University of Southern California.

DAVID A. SWARTZ. Mr. Swartz has served as Arden Realty's General Counsel
and Secretary since August 1999, and from May 1998 to August 1999 served as
Associate General Counsel. From September 1991, until his employment with Arden
Realty, Mr. Swartz was a real estate attorney with the law firm of Allen,
Matkins, Leck, Gamble & Mallory, LLP, where he managed and negotiated commercial
real estate transactions, handled litigation for major institutional clients and
served as legal advisor to property owners, building and asset managers, real
estate brokers and tenants. A graduate of The Wharton School of the University
of Pennsylvania with a Bachelor of Science in Economics, Mr. Swartz received his
juris doctorate from UCLA School of Law in 1991.

BRIGITTA B. TROY. Ms. Troy has served as Arden Realty's Senior Vice
President -- Acquisitions and Dispositions since its formation. Ms. Troy served
as Director of Acquisitions for Namiz from 1993 to 1996, and for Pacific
Financial Group from 1982 to 1989. During the period from 1989 to 1993, she was
principal of Esquire Investment Partners, a real estate advisory firm. A
graduate of Radcliffe College, Ms. Troy received her Juris Doctor Degree from
the University of Southern California Law School and a Master of Business
Administration from the UCLA Graduate School of Management. Ms. Troy is also a
member of the State Bar of California.

CARL D. COVITZ. Mr. Covitz has served as a member of Arden Realty's Board
of Directors since its formation as a public company in October 1996. For the
past 19 years, Mr. Covitz has served as the owner and President of Landmark
Capital, Inc., a national real estate development and investment company
involved in the construction, financing, ownership and management of commercial,
residential and warehouse properties. Mr. Covitz has also previously served,
from 1990 to 1993, as Secretary of the Business, Transportation & Housing Agency
of the State of California as well as Under Secretary and Chief Operating
Officer of the U.S. Department of Housing and Urban Development from 1987 to
1989. Mr. Covitz is currently the Chairman of the Board of Directors of Century
Housing Corporation and is the past Chairman of the Board of several
organizations including the Federal Home Loan Bank of San Francisco and the Los
Angeles City Housing Authority. Mr. Covitz received his Bachelor's Degree from
the Wharton School at the University of Pennsylvania and his Master of Business
Administration from the Columbia University Graduate School of Business. Mr.
Covitz's term as Director will expire at the 2003 annual meeting of
stockholders.

LARRY S. FLAX. Mr. Flax has served as a member of Arden Realty's Board of
Directors since December 1996. Mr. Flax is Co-Founder and Co-Chairman of the
Board of California Pizza Kitchen. Prior to becoming a restaurateur in 1985, Mr.
Flax served in Los Angeles as Assistant U.S. Attorney from 1968 to 1972, Chief
of Civil Rights from 1970 to 1971, and Assistant Chief of the Criminal Division
for the United States Department of Justice from 1971 to 1972. Mr. Flax attended
the University of Washington as an undergraduate and received his Juris Doctor
Degree from the University of Southern California Law School in 1967. Mr. Flax's
term as a Director will expire at the 2003 annual meeting of stockholders.

PETER S. GOLD. Mr. Gold has served as a member of Arden Realty's Board of
Directors since July 1999. During a career that spanned more than 30 years at
Price Pfister, Inc., Mr. Gold served as owner, President, Chairman and Chief
Executive Officer. Price Pfister, Inc., is one of the largest faucet
manufacturers in the world. Mr. Gold executed a leveraged buyout of Price
Pfister, Inc. and eventually took that company public in 1987, before selling it
in 1988. Mr. Gold remained in his position as a Chairman and Chief Executive
Officer of Price Pfister, Inc. until his retirement in 1990. Mr. Gold is a
Director Emeritus of Home Depot, Inc. and is currently a chairman and a member
of the board of trustees of two private organizations. Mr. Gold attended the
University of Southern California, received his Juris Doctor Degree from
Southwestern University School of Law and received a Doctor of Humane Letters
from Pitzer College. Mr. Gold's term as Director will expire at the 2001 annual
meeting of stockholders.

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<PAGE> 85

STEVEN C. GOOD. Mr. Good has served as a member of Arden Realty's Board of
Directors since its formation as a public company in October 1996. Mr. Good is
the senior partner in the firm of Good Swartz & Berns, an accountancy firm
founded in 1993, which evolved from the firm of Block, Good and Gagerman, which
he founded in 1976. Prior to 1976, Mr. Good was a partner first at Laventhol &
Horwath, a national accounting firm, and later at Horowitz & Good. Mr. Good is a
founder and past Chairman of CU Bancorp, where he directed the bank's operations
from 1982 through 1989. For the past seven years he has been a member of the
Board of Directors of Opto Sensors, Incorporated. Mr. Good received his Bachelor
of Science in Business Administration from the University of California at Los
Angeles and attended UCLA's Graduate School of Business. Mr. Good's term as
Director will expire at the 2001 annual meeting of stockholders.

KENNETH B. ROATH. Mr. Roath has served as a member of Arden Realty's Board
of Directors since its formation as a public company in October 1996. Mr. Roath
is currently Chairman, President and Chief Executive Officer of Health Care
Property Investors, Inc., a leader in the health care REIT industry. Mr. Roath
is past Chairman of NAREIT and also serves as a member of the Board of Governors
of NAREIT. He is a director of Franchise Finance Corporation of America. Mr.
Roath received his Bachelor's Degree in accounting from San Diego State
University. Mr. Roath's term as a Director will expire at the 2003 annual
meeting of stockholders.

ARDEN REALTY'S BOARD OF DIRECTORS

The business and affairs of Arden Realty are managed under the direction of
its Board of Directors, which currently has seven members, five of whom are not
employees or affiliates of Arden Realty.

Pursuant to Arden Realty's charter, the Board of Directors is divided into
three classes of directors. Directors of each class are chosen for three-year
terms upon the expiration of their current terms and each year one class of
directors is elected by the stockholders. Arden Realty believes that
classification of the Board of Directors will help to assure the continuity and
stability of Arden Realty's business strategies and policies as determined by
the Board of Directors. The stockholders do not have the right to cumulative
voting in the election of directors. Consequently, at each annual meeting of
stockholders, the holders of a plurality of the shares of common stock will be
able to elect all of the successors of the class of directors whose terms expire
at that meeting.

COMMITTEES OF THE BOARD OF DIRECTORS

The Board of Directors of Arden Realty has an Audit Committee, an Executive
Committee, a Compensation Committee and an Acquisition Committee.

Audit Committee. The Audit Committee consists of Mr. Good, its Chairman,
and Messrs. Flax and Covitz. The Audit Committee:

- makes recommendations concerning the engagement of independent public
accountants;

- reviews the independence of our independent public accountants;

- approves other professional services provided by the independent public
accountants;

- reviews the scope and results of the annual audit engagement with our
independent public accountants;

- considers the range of audit and non-audit fees; and

- reviews the adequacy of our internal accounting controls.

Executive Committee. The Executive Committee consists of Mr. Ziman, its
Chairman, and Mr. Coleman. Subject to Arden Realty's conflict of interest
policies, the Executive Committee has authority to dispose of our real property
and the power to authorize, on behalf of the full Board of Directors, the
execution of specified contracts and agreements, including those related to our
debt financings.
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<PAGE> 86

Compensation Committee. The Compensation Committee consists of Mr. Roath,
its Chairman, and Messrs. Good and Gold. The function of the Compensation
Committee is to:

- establish, review, modify and adopt compensation plans and arrangements
for Arden Realty; and

- review, determine and establish the compensation, including bonuses, of
Arden Realty's officers.

Acquisitions Committee. The Acquisitions Committee consists of Mr. Ziman,
its Chairman, and Messrs. Coleman and Covitz. The Acquisition Committee has the
authority to approve the acquisition of real property with purchase prices up to
$20 million. Any acquisitions greater than $20 million require full Board
approval.

COMPENSATION OF DIRECTORS

Each Director received annual compensation of $18,000 in 1999 and will
receive $25,000 beginning in 2000 for his services, plus $1,000 for each Board
of Directors meeting attended and an additional $1,000 for each committee
meeting attended, unless the committee meeting is held on the day of a meeting
of the Board of Directors. Each director who is not an employee is also
reimbursed for reasonable expenses incurred to attend director and committee
meetings. Directors who are also officers are not paid any directors' fees.

In addition, under Arden Realty's stock incentive plan, upon his initial
appointment to the Board of Directors, each director who is not an employee is
automatically granted options to purchase 10,000 shares of common stock at the
then current market price. These options vest during the directors' continued
service at a rate of 2,500 shares per year.

On October 15, 1997, each non-employee director was granted options to
purchase an additional 10,000 common shares at the closing stock price per share
on that date ($32.25). On December 15, 1998, each non-employee director was
granted options to purchase an additional 40,000 common shares at the closing
stock price per share on that date ($22.50). On November 30, 1999, each
non-employee director was granted options to purchase an additional 10,000
common shares at the closing stock price per share on that date ($19.25). These
options vest during the directors' continued service over a three-year period,
with one third of the options vesting on each anniversary of the grant date.

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<PAGE> 87

EXECUTIVE COMPENSATION

The following table presents information with respect to the compensation
Arden Realty paid for services rendered during the fiscal years ended December
31, 1999, 1998 and 1997, to its Chief Executive Officer and to its four other
most highly compensated executive officers, who are referred to in this
prospectus as the named executive officers.

SUMMARY COMPENSATION

<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------------- RESTRICTED
OTHER ANNUAL OPTIONS STOCK
NAME AND TITLE YEAR SALARY BONUS COMPENSATION(1) GRANTED (#) AWARD($)
-------------- ---- -------- -------- --------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Richard S. Ziman.............. 1999 $390,000 $225,000 $47,100 125,600 --
Chairman of the Board,
Chief.................... 1998 330,000 247,500 9,600 422,000 --
Executive Officer and
Director................. 1997 300,000 228,000 9,600 211,000 --
Victor J. Coleman............. 1999 $300,000 $165,000 $36,650 80,000 --
President, Chief Operating 1998 275,000 206,250 7,800 280,000 --
Officer and Director 1997 250,000 162,500 7,800 140,000 --
Diana M. Laing................ 1999 $225,000 $123,750 $ 6,000 60,000 --
Executive Vice President and 1998 214,500 160,875 6,000 200,000 (2)(3)
Chief Financial Officer 1997 195,000 114,500 6,000 60,000 --
Andrew J. Sobel............... 1999 $205,000 $123,750 $ 2,600 60,000 --
Executive Vice President and 1998 187,500 140,625 -- 200,000 (2)(4)
Director of Property
Operations 1997 150,000 87,500 -- 45,000 --
Robert C. Peddicord........... 1999 $196,000 $ 70,000 -- 50,000 --
Senior Vice President -- 1998 112,300 127,600 -- 70,000 --
Leasing 1997 106,250 68,750 -- -- --
</TABLE>

-------------------------
(1) Represents an annual auto allowance and payments of $37,500 and $28,850 in
1999 to Messrs. Ziman and Coleman, respectively, for unused vacation time.

(2) In August 1998, Arden Realty issued 42,553 shares of common stock through
its 1996 Stock Option and Incentive Plan to this executive. These shares are
encumbered by a promissory note in the amount of $1.0 million. The
promissory note is recourse and secured by the shares of common stock
issued, bears interest at 6% per year with all accrued interest and
principal due on August 14, 2004. See Notes 3 and 4 below.

(3) Ms. Diana Laing resigned as Executive Vice President and Chief Financial
Officer effective July 1, 2000. At the time of her resignation, Ms. Laing
surrendered stock options valued at approximately $59,000 as well as 42,553
shares of Arden Realty's common stock underlying a promissory note in the
amount of $1.0 million payable to Arden Realty. The value of the options and
shares surrendered by Ms. Laing equaled the unpaid principal and interest of
her promissory note.

(4) Mr. Sobel resigned as Executive Vice President and Director of Property
Operations effective February 18, 2000. At the time of his resignation, Mr.
Sobel surrendered the common stock underlying his promissory note and
executed a new promissory note in the amount of $223,887, representing the
difference between the value of the common stock surrendered and the unpaid
principal and interest on his original promissory note. The new promissory
note bears interest at 6.56%, with all accrued interest and principal due on
February 18, 2002. In addition, effective with his resignation, Arden Realty
and Mr. Sobel entered into a consulting and non-competition agreement for a
term of two years. Under this agreement, Mr. Sobel will receive compensation
of $6,000 per month which will be applied against the unpaid interest and
principal on the new promissory note. In July 2000, Mr. Sobel returned to
Arden Realty as Executive Vice President, terminating the consulting and
non-competition agreement described above, and is in the process of
finalizing a new employment agreement with Arden Realty addressing, among
other things, the repayment of the promissory note.

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<PAGE> 88

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES

The following table presents information concerning exercised and
unexercised options held by the named executive officers as of December 31,
1999.

<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
SHARES AT DECEMBER 31, 1999 AT DECEMBER 31, 1999(1)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Richard S. Ziman........... -- -- 618,334 406,333 $16,700 $117,200
Victor J. Coleman.......... -- -- 483,333 266,667 15,700 75,000
Diana M. Laing(2).......... -- -- 190,000 180,000 3,100 56,000
Andrew J. Sobel(3)......... -- -- 170,000 175,000 2,500 56,000
Robert C. Peddicord........ -- -- 33,333 96,667 -- 40,700
</TABLE>

-------------------------
(1) Based on the December 31, 1999 closing price of $20.06 per share of Arden
Realty's common stock, as reported by the New York Stock Exchange.

(2) Ms. Laing resigned effective July 1, 2000, surrendered her exercisable stock
options and forfeited her unexercisable options.

(3) Mr. Sobel resigned on February 18, 2000 and returned to Arden Realty as
Executive Vice President in July 2000. Mr. Sobel forfeited 175,000 in
unexercisable options upon his resignation in February 2000.

OPTION GRANTS IN LAST FISCAL YEAR

The following table presents information relating to options granted to
purchase shares of Arden Realty common stock to the named executive officers
during 1999.

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS(1)
----------------------------------------------------- POTENTIAL REALIZABLE
NUMBER OF VALUE AT
SHARES OF PERCENT OF ASSUMED ANNUAL RATES OF
COMMON STOCK TOTAL OPTIONS SHARE PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM(2)
OPTIONS EMPLOYEES IN PRICE PER EXPIRATION -------------------------
NAME GRANTED (#) FISCAL YEAR SHARE DATE 5% 10%
---- ------------ ------------- --------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Richard S. Ziman........... 125,000 17.61% $19.125 12/03/09 $1,503,000 $3,810,000
Victor J. Coleman.......... 80,000 11.27 19.125 12/03/09 962,000 2,438,000
Diana M. Laing(3).......... 60,000 8.45 19.125 12/03/09 722,000 1,829,000
Andrew J. Sobel(4)......... 60,000 8.45 19.125 12/03/09 722,000 1,829,000
Robert C. Peddicord........ 50,000 7.04 19.250 11/30/09 605,000 1,534,000
</TABLE>

-------------------------
(1) The options granted to Messrs. Ziman and Coleman become exercisable in two
equal installments beginning on the first anniversary of the date of grant.
The options granted to Mr. Peddicord become exercisable in three equal
installments beginning on the first anniversary of the date of grant. All
options granted in 1999 have a term of ten years subject to earlier
termination in specified events related to termination of employment. The
option exercise price for all options granted in 1999 is equal to the fair
market value of a share of Arden Realty's common stock on the date of grant.

(2) Assumed annual rates of stock price appreciation for illustrative purposes
only. Actual stock prices will vary from time to time based upon market
factors and our financial performance. We cannot assure you that these
appreciation rates will be achieved.

(3) The options granted to Ms. Laing were forfeited on July 1, 2000, the
effective date of her resignation.

(4) The options granted to Mr. Sobel were forfeited on February 18, 2000, the
effective date of his resignation.

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<PAGE> 89

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

There are no Compensation Committee interlocks and none of Arden Realty's
or our employees participate on the Compensation Committee.

EMPLOYMENT AGREEMENTS

Arden Realty has entered into employment agreements with Messrs. Ziman,
Coleman and Peddicord. Ms. Laing and Mr. Sobel also had employment agreements
with Arden Realty that terminated at each of their request on July 1, 2000 and
February 18, 2000, respectively. Mr. Sobel returned to Arden Realty in July 2000
and is in the process of finalizing a new employment agreement with Arden
Realty. The employment agreements of Messrs. Ziman and Coleman had an original
expiration date of October 1999, and are subject to automatic one-year
extensions following the expiration of those terms. The employment agreements
for Messrs. Ziman and Coleman provide for a base compensation and bonus to be
determined by Arden Realty's Compensation Committee. The annual compensation and
bonuses paid to these executives for 1999 are presented in the Summary
Compensation table above.

In May 1999, Arden Realty entered into an employment agreement with Mr.
Peddicord which had an original expiration date of December 2000 and is subject
to automatic one-year extensions following the original expiration date. Mr.
Peddicord's employment agreement provides for annual base compensation in 1999
of $196,000 and a bonus to be determined by Arden Realty's Compensation
Committee.

The employment agreements of Messrs. Ziman, Coleman and Peddicord entitle
the executives to participate in the 1996 Stock Option and Incentive Plan. Each
executive has been allocated the number of stock options presented in the
Summary Compensation table above. Each executive will also receive other
insurance and pension benefits.

In the event of a termination of any of these executives by Arden Realty
without "cause," a termination by the executive for "good reason," or a
termination pursuant to a "change in control" of Arden Realty, as those terms
are defined in their respective employment agreements, the terminated executive
will be entitled to (1) a single severance payment and (2) continued receipt of
specified benefits including medical insurance, life and disability insurance
for a specified period of time following the date of termination. The single
severance payments for Messrs. Ziman and Coleman are equal to the sum of three
times the respective executive's average annual base compensation for the
preceding 36 months and three times the highest annual bonus received in the
preceding 36 month period. The single severance payment for Mr. Peddicord is
equal to the sum of two times his average annual base compensation for the
preceding 24-month period and an amount equal to two times his most recent
annual bonus. Messrs. Ziman and Coleman will continue to receive the severance
benefits described above for three years commencing on the date of termination
and Mr. Peddicord will continue to receive the severance benefits for up to 18
months commencing on the date of termination. In the event of a termination
without cause, in addition to payment of the single severance payment, for
Messrs. Ziman, Coleman and Peddicord, any unvested stock options will become
fully vested as of the date of termination. In addition, if any of Messrs.
Ziman's, Coleman's or Peddicord's severance payments or benefits are deemed to
be parachute payments under the Internal Revenue Code, Arden Realty has agreed
to make additional payments to the executive to compensate him or her for the
additional tax obligations.

As part of their employment agreements, each of Messrs. Ziman and Coleman
are bound by a non-competition covenant which prohibits them from engaging in
(1) the acquisition, renovation, management or leasing of any office properties
in the Los Angeles, Orange and San Diego counties of Southern California and (2)
any active or passive investment in or reasonably relating to the acquisition,
renovation, management or leasing of office properties in the Los Angeles,
Orange and San Diego counties of Southern California for a period of one year
following the date of that executive's termination, unless the termination was
without cause for Messrs. Ziman and Coleman.

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STOCK INCENTIVE PLAN

Arden Realty has adopted the 1996 Stock Incentive Plan for itself and us,
for the purpose of attracting and retaining executive officers, directors and
employees.

The Stock Incentive Plan is qualified under Rule 16b-3 under the Securities
Exchange Act. The Stock Incentive Plan is administered by the Compensation
Committee and provides for the granting of stock options, stock appreciation
rights or restricted stock with respect to up to 4.2 million shares of common
stock to executive or other key employees. Stock options may be granted in the
form of "incentive stock options," as defined in Section 422 of the Code, or
non-statutory stock options and are exercisable for up to 10 years following the
date of grant. The exercise price of each option will be set by the Compensation
Committee; provided, however, that the price per share must be equal to or
greater than the fair market value of Arden Realty's common stock on the grant
date.

The Stock Incentive Plan also provides for the issuance of stock
appreciation rights which will generally entitle a holder to receive cash or
stock, as determined by the Compensation Committee, at the time of exercise
equal to the difference between the exercise price and the fair market value of
the common stock. In addition, the Stock Incentive Plan permits Arden Realty to
issue shares of restricted stock to executives or other key employees upon terms
and conditions as determined by the Compensation Committee.

401(k) PLAN

The Arden Realty 401(k) Plan and Trust covers our eligible employees and
any designated affiliates.

The 401(k) Plan permits our eligible employees to defer up to 20% of their
annual compensation, subject to certain limitations imposed by the Internal
Revenue Code. The employees' elective deferrals are immediately vested and
non-forfeitable upon contribution to the 401(k) Plan. Employees are generally
eligible to participate in the 401(k) Plan after four months of service. We
currently make matching contributions to the 401(k) Plan equal to 50% of each
participating employee's contribution with a maximum match of 5% of annual
compensation. Employees vest 25% in our matching contributions for each full
year of service, vesting 100% after four full years of service.

The 401(k) Plan qualifies under Section 401 of the Internal Revenue Code so
that contributions by employees or by us to the 401(k) Plan, and income earned
on plan contributions, are not taxable to employees until withdrawn from the
401(k) Plan, and so that our contributions are deductible by us when made.

LIMITATION OF LIABILITY AND INDEMNIFICATION

The Maryland General Corporation Law permits a Maryland corporation to
include in its charter a provision limiting the liability of its directors and
officers to the corporation and its stockholders for money damages expect for
liability resulting from (a) actual receipt of an improper benefit or profit in
money, property or services or (b) active and deliberate dishonesty established
by a final judgment and which is material to the cause of action. Arden Realty's
charter contains a provision which eliminates that kind of liability to the
maximum extent permitted by Maryland law.

The charter authorizes Arden Realty, to the maximum extent permitted by
Maryland law, to obligate itself to indemnify and to pay or reimburse reasonable
expenses in advance of final disposition of a proceeding to:

(a) any present or former director or officer; or

(b) any individual who, while a director of and at the request of
Arden Realty, serves or has served another corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise as a director,
officer, partner or trustee of that corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise from and against
any claim or liability which those persons may incur by reason of their
status as a present or former director or officer of Arden Realty.
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The bylaws obligate Arden Realty, to the maximum extent permitted by
Maryland law, to indemnify and to pay or reimburse reasonable expenses in
advance of final disposition of a proceeding to:

(a) any present or former director or officer who is made a party to
the proceeding by reason of his service in that capacity; or

(b) any individual who, while a director and at the request of Arden
Realty, serves or has served another corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise as a director,
officer, partner or trustee of that corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise, and who is made
a party to the proceeding by reason of his service in that capacity against
any claim or liability to which he may become subject by reason of his
service.

The charter and the bylaws also permit Arden Realty to indemnify and
advance expenses to any person who served a predecessor of Arden Realty in any
of the capacities described above and to any employee or agent of Arden Realty
or a predecessor of Arden Realty.

The Maryland General Corporation Law requires a corporation (unless its
charter provides otherwise, which Arden Realty's does not) to indemnify a
director or officer who has been successful, on the merits or otherwise, in the
defense of any proceeding to which he is made a party by reason of his service
in that capacity. A Maryland corporation is permitted to indemnify its present
and former directors and officers, among others, against judgments, penalties,
fines, settlements and reasonable expenses actually incurred by them in
connection with any proceeding to which they may be made a party by reason of
their service in those or other capacities unless it is established that:

(a) the act or omission of the director or officer was material to the
matter giving rise to the proceeding and (i) was committed in bad faith or
(ii) was the result of active and deliberate dishonesty;

(b) the director or officer actually received an improper personal
benefit in money, property or services; or

(c) in the case of any criminal proceeding, the director or officer
had reasonable cause to believe that the act or omission was unlawful.

A Maryland corporation, however, may not indemnify for an adverse judgment
in a suit by or in the right of the corporation or for a judgment of liability
on the basis that a personal benefit was improperly received, unless, in either
case, a court orders indemnification and then only for expenses. A Maryland
corporation is permitted to advance reasonable expenses to a director or officer
upon receipt by the corporation of (a) a written affirmation by the director or
officer of his good faith belief that he has met the standard of conduct
necessary for indemnification and (b) a written undertaking by him or on his
behalf to repay the amount paid or reimbursed if it shall ultimately be
determined that the standard of conduct was not met.

Our partnership agreement also provides for indemnification and advance of
expenses of Arden Realty and its officers and directors similar to the
indemnification and advance of expenses provided to officers and directors of
Arden Realty in its charter and bylaws, and provides that Arden Realty will not
be liable to us and its partners if it acted in good faith. See "Description of
Specific Provisions of Our Partnership Agreement -- Indemnification."

TRANSACTIONS WITH RELATED PARTIES

On April 28, 1999, Arden Realty acquired Namiz, Inc. in a tax-free,
stock-for-stock merger in which Arden Realty issued 775,196 shares of its common
stock to Namiz's stockholders. Prior to the acquisition, Namiz was wholly owned
by Richard S. Ziman, Arden Realty's Chairman of the Board and Chief Executive
Officer, and Victor J. Coleman, Arden Realty's President and Chief Operating
Officer.

At the time of the acquisition, Namiz's sole assets were our common OP
Units. In the merger, each share of Namiz common stock then issued and
outstanding was converted into 775,196 shares of Arden
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Realty's common stock, with the exchange ratio calculated by dividing 775,196
(the number of common OP Units owned by Namiz) by 1,000 (the number of shares of
Namiz common stock issued and outstanding immediately prior to the merger). As a
result, Namiz's stockholders converted their proportionate interest in the
common OP Units held by Namiz into an economically equivalent number of shares
of Arden Realty's common stock.

On August 14, 1998, Arden Realty issued 42,553 shares of common stock to
each of Ms. Diana M. Laing and Mr. Andrew J. Sobel in exchange for a promissory
note in the amount of $1.0 million from each. These promissory notes were full
recourse and were secured by the shares of common stock issued to each officer,
bore interest at 6% per year with all accrued interest and principal due on
August 14, 2004.

Mr. Sobel resigned as Executive Vice President and Director of Property
Operations effective February 18, 2000. At the time of his resignation, Mr.
Sobel surrendered 42,553 shares of Arden Realty's common stock underlying his
promissory note and executed a new promissory note in the amount of $223,887,
bearing interest at 6.56%, per annum representing the difference between the
value of the common stock surrendered and the unpaid principal and interest on
his original promissory note. In July 2000, Mr. Sobel returned to Arden Realty
as Executive Vice President, terminating the consulting and non-competition
agreement described above, and is in the process of finalizing a new employment
agreement with Arden Realty addressing, among other things, repayment of the
promissory note.

Ms. Laing resigned as Executive Vice President and Chief Financial Officer
effective July 1, 2000. At the time of her resignation, Ms. Laing surrendered
stock options valued at approximately $59,000 as well as 42,553 shares of Arden
Realty's common stock underlying her promissory note. The value of the options
and shares surrendered by Ms. Laing equaled the unpaid principal and interest of
her promissory note.

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POLICIES WITH RESPECT TO CERTAIN ACTIVITIES

The following is a discussion of investment, financial and other policies
governing our operations. These policies have been determined by Arden Realty's
Board of Directors and may be amended or revised from time to time without
approval by the stockholders of Arden Realty or our partners, except that:

(1) Arden Realty cannot change its policy of holding its assets and
conducting its business only through us and our affiliates without the
consent of the holders of OP Units as provided in our partnership agreement
and the consent of a majority in principal amount of the outstanding notes
as provided in the indenture governing the notes;

(2) changes in our policies with respect to conflicts of interest must
be consistent with legal requirements; and

(3) Arden Realty cannot take any action intended to terminate its
qualification as a REIT without the approval of the holders of two-thirds
of its outstanding common stock.

INVESTMENT POLICIES

Investment in Real Estate or Interests in Real Estate. Our investment
objectives are to provide quarterly cash distributions and achieve long-term
appreciation in the value of our property portfolio. For a discussion of the
properties and our acquisition and other strategic objectives, see "Properties"
and "Business -- Growth Strategies."

We expect to pursue our investment objectives primarily through the direct
ownership of our office properties. Subject to capital availability and market
conditions, we intend to seek development, renovation and acquisition
opportunities in Southern California. Future investment or development
activities, however, will not be limited to any geographic area or product type
or to a specified percentage of our assets. While we intend to diversify our
property portfolio in terms of property locations, size and market, we do not
have any limit on the amount or percentage of our assets that may be invested in
any one property or any one geographic area. We intend to engage in future
investment or development activities in a manner which is consistent with the
maintenance of Arden Realty's status as a REIT for federal income tax purposes.
In addition, we may purchase or lease income-producing commercial and other
types of properties for long-term investment, expand and improve the real estate
we presently own or other properties we purchase, or sell our real estate
properties when circumstances warrant.

We may also participate with third parties in property ownership, through
joint ventures or other types of co-ownership. Investments of this kind may
permit us to own interests in larger assets without unduly restricting
diversification and, therefore, add flexibility in structuring our portfolio. We
will not enter into a joint venture or partnership to make an investment that
would not otherwise meet our investment policies.

Equity investments may be subject to existing mortgage financing and other
indebtedness or financing or indebtedness that may be incurred in connection
with acquiring or refinancing these investments. Debt service on financing or
indebtedness will have a priority over any distributions to our partners,
including Arden Realty. Investments are also subject to our policy not to be
treated as an investment company under the Investment Company Act of 1940, as
amended.

Investments in Real Estate Mortgages. While our current portfolio consists
of, and our business objectives emphasize, equity investments in commercial real
estate, we may invest, and in the past have invested, in mortgages and other
types of equity real estate interests consistent with Arden Realty's
qualification as a REIT. We do not presently intend to invest in mortgages or
deeds of trust, but may invest in participating or convertible mortgages if we
conclude that we may benefit from the cash flow or any appreciation in value of
the property. Investments in real estate mortgages run the risk that one or more
borrowers may default under their mortgages and that the collateral securing
those mortgages may not be sufficient to enable us to recoup our full
investment.

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Securities or Interests in Persons Primarily Engaged in Real Estate
Activities and Other Issuers. Subject to the ownership limitations and gross
income tests necessary for Arden Realty's REIT qualification, we also may invest
in securities of REITs other than Arden Realty, other entities engaged in real
estate activities or securities of other issuers, including investments for the
purpose of exercising control over those entities.

FINANCIAL POLICIES

Neither Arden Realty's charter and bylaws nor our partnership agreement
limit the amount or percentage of indebtedness that we may incur. We are
committed to financial policies based on controlled growth and the maintenance
of a strong balance sheet and consistent cash flow. We are committed to
conservative leverage and fixed charge coverage levels throughout the economic
and investment cycle. Our leverage will vary around target levels based on the
timing of equity issuances and relative debt and equity capital market
conditions. Our targeted debt coverage levels are: (1) total debt to total
market capitalization ratio between 30% and 45%; (2) EBITDA to interest expense
of at least 3.0 to 1; and (3) EBITDA to fixed charges of at least 2.5 to 1. In
addition, covenants contained in the Indenture will limit our ability to incur
debt in the future. Going forward, we plan to monitor and access private and
public capital markets to continue to issue equity and equity-related and
unsecured debt instruments on attractive terms. We intend to limit our floating
rate debt by using more long-term fixed rate debt.

We may from time to time modify our debt policy in light of current
economic conditions, relative costs of debt and equity capital, market values of
our properties, general conditions in the market for debt and equity securities,
fluctuations in the market price of Arden Realty's common stock, growth and
acquisition opportunities and other factors. Accordingly, we may increase or
decrease our debt to total market capitalization ratio beyond the limits
described above.

We have established our debt policy relative to the total market
capitalization of Arden Realty computed at the time the debt is incurred, rather
than relative to the book value of those assets, because we believe that the
book value of our assets, which is largely the depreciated value of our property
portfolio, does not accurately reflect our ability to borrow and meet debt
service requirements. Total market capitalization, however, is subject to
greater fluctuation than book value, and does not necessarily reflect the fair
market value of our assets at all times. Moreover, due to fluctuations in the
value of our portfolio of properties over time, and since any measurement of our
total consolidated indebtedness to total market capitalization is made only at
the time debt is incurred, our debt to total market capitalization ratio could
exceed the 45% level.

Although we will consider factors other than total market capitalization in
making decisions regarding the incurrence of debt, such as the purchase price of
properties to be acquired with debt financing, the estimated market value of
properties upon refinancing, and the ability of particular properties and our
ability as a whole to generate sufficient cash flow to cover expected debt
service, that the debt to total market capitalization ratio, and any other
measure of asset value, at the time the debt is incurred or at any other time,
may not be consistent with any particular level of debt service. See "Risk
Factors -- Financing Risks" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and Capital
Resources."

CONFLICT OF INTEREST POLICIES

We have adopted policies designed to eliminate or minimize potential
conflicts of interest. In addition, Arden Realty's Board of Directors is subject
to certain provisions of Maryland law that are designed to eliminate or minimize
potential conflicts of interest. We cannot assure you that these policies always
will be successful in eliminating the influence of those conflicts.

We have adopted a policy that, without the approval of a majority of Arden
Realty's non-employee directors, we will not (1) acquire from or sell to any
director, officer or employee of Arden Realty, or any entity in which a
director, officer or employee of Arden Realty beneficially owns more than a 1%
interest, or acquire from or sell to any affiliate of any of the foregoing, any
of our assets, (2) make any loan to or
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borrow from any of the foregoing persons or (3) engage in any other transaction
with any of the foregoing persons.

Pursuant to Maryland law, each director will be subject to restrictions on
misappropriation of partnership opportunities. In addition, under Maryland law,
a contract or other transaction between us or Arden Realty and a director or
between us or Arden Realty and any other corporation or other entity in which a
director is a director or has a material financial interest is not void or
voidable solely on the grounds of the common directorship or interest, the
presence of the director at the meeting at which the contract or transaction is
authorized, approved or ratified or the counting of the director's vote in favor
of the transaction or contract if (a) the transaction or contract is authorized,
approved or ratified by the board of directors or a committee of the board,
after disclosure of the common directorship or interest, by the affirmative vote
of a majority of disinterested directors, even if the disinterested directors
constitute less than a quorum, or by a majority of the votes cast by
disinterested stockholders, or (b) the transaction or contract is fair and
reasonable to us or Arden Realty.

POLICIES WITH RESPECT TO OTHER ACTIVITIES

As described under "Description of Specific Provisions of Our Partnership
Agreement -- Redemption/ Exchange Rights," Arden Realty expects, but is not
obligated, to issue its common stock to holders of our OP Units upon exercise of
their redemption and exchange rights. We have not engaged in trading,
underwriting or agency distribution or sale of securities of other issuers, nor
have we invested in the securities of other issuers for the purposes of
exercising control, and do not intend to do so. At all times, we intend to make
investments in the manner necessary for Arden Realty to qualify as a REIT,
unless because of circumstances or changes in the Internal Revenue Code or the
Treasury Regulations, the Board of Directors determines that it is no longer in
the best interest of Arden Realty to qualify as a REIT and that determination is
approved by a two-thirds vote of Arden Realty's stockholders as required by its
charter. We have not made any loans to third parties, although we may in the
future make loans to third parties, including, without limitation, to joint
ventures in which we participate. Our policies with respect to those activities
may be reviewed and modified or amended from time to time by Arden Realty's
Board of Directors without approval by its stockholders or the partners.

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FEDERAL INCOME TAX CONSEQUENCES

The following discussion is based on the opinion of Latham & Watkins, our
tax counsel, as to the material federal income tax consequences expected to
result to you if you exchange your unregistered notes for exchange notes in the
exchange offer. This discussion is based on:

- the facts described in the registration statement of which this
prospectus is a part;

- the Internal Revenue Code of 1986, as amended;

- current, temporary and proposed treasury regulations promulgated under
the Internal Revenue Code;

- the legislative history of the Internal Revenue Code;

- current administrative interpretations and practices of the Internal
Revenue Service; and

- court decisions,

all as of the date of this prospectus. In addition, the administrative
interpretations and practices of the Internal Revenue Service include its
practices and policies as expressed in private letter rulings that are not
binding on the Internal Revenue Service, except with respect to the particular
taxpayers who requested and received those rulings. Future legislation, treasury
regulations, administrative interpretations and practices and/or court decisions
may adversely affect the tax considerations contained in this discussion. Any
change could apply retroactively to transactions preceding the date of the
change. The tax considerations contained in this discussion may be challenged by
the Internal Revenue Service, and we have not requested, and do not plan to
request, any rulings from the Internal Revenue Service concerning the tax
treatment of the exchange of unregistered notes for the exchange notes.

Some holders may be subject to special rules not discussed below,
including, without limitation:

- insurance companies;

- financial institutions or broker-dealers;

- tax-exempt organizations;

- stockholders holding securities as part of a conversion transaction, or a
hedge or hedging transaction, or as part of a position in a straddle for
tax purposes;

- foreign corporations or partnerships; and

- persons who are not citizens or residents of the United States.

YOU SHOULD CONSULT YOUR TAX ADVISOR AS TO THE PARTICULAR TAX CONSEQUENCES
OF EXCHANGING YOUR UNREGISTERED NOTES FOR EXCHANGE NOTES, INCLUDING THE
APPLICABILITY AND EFFECT OF ANY STATE, LOCAL OR FOREIGN LAWS.

The exchange of unregistered notes for exchange notes will be treated as a
"non-event" for federal income tax purposes, because the exchange notes will not
be considered to differ materially in kind or extent from the unregistered
notes. Therefore, no material federal income tax consequences will result to you
from exchanging unregistered notes for exchange notes.

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PLAN OF DISTRIBUTION

Each broker-dealer that receives exchange notes for its own account
pursuant to the exchange offer must acknowledge that it will deliver a
prospectus in connection with any resale, offer to resell or other transfers of
its exchange notes. This prospectus, as it may be amended or supplemented from
time to time, may be used by a broker-dealer in connection with the resale of
exchange notes received in exchange for unregistered notes where the
unregistered notes were acquired as a result of market-making activities or
other trading activities. We have agreed that for a period of up to 180 days
after the expiration date, we will make this prospectus, as amended or
supplemented, available to any broker-dealer that requests such document in the
letter of transmittal for use in connection with any resale.

We will not receive any proceeds from any sale of exchange notes by
broker-dealers or any other persons. Exchange notes received by broker-dealers
for their own account pursuant to the exchange offer may be sold from time to
time in one or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the exchange notes or a
combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or negotiated
prices. Any resale may be made directly to purchasers or to or through brokers
or dealers who may receive compensation in the form of commissions or
concessions from any broker-dealer and/or the purchasers of any exchange notes.
Any broker-dealer that resells exchange notes that were received by it for its
own account pursuant to the exchange offer and any broker or dealer that
participates in a distribution of exchange notes may be deemed to be an
"underwriter" within the meaning of the Securities Act and any profit on any
such resale of exchange notes and any commissions or concessions received by any
persons may be deemed to be underwriting compensation under the Securities Act.
The letter of transmittal states that by acknowledging that it will deliver and
by delivering a prospectus, a broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act.

We have agreed to pay all expenses incident to our performance of, or
compliance with, the registration rights agreement and will indemnify the
holders of unregistered notes, including any broker-dealers, and specific
parties related to such holders, against specific liabilities, including
liabilities under the Securities Act.

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EXPERTS

The consolidated financial statements of Arden Realty Limited Partnership
at December 31, 1999 and 1998, and for each of the three years in the period
ended December 31, 1999, appearing in this prospectus and registration statement
have been audited by Ernst & Young LLP, independent auditors, as set forth in
their report thereon appearing elsewhere herein, and are included in reliance
upon such report given on the authority of such firm as experts in accounting
and auditing.

LEGAL MATTERS

The validity of the exchange notes offered in this prospectus and specified
legal matters in connection with this offering will be passed upon for us by
Latham & Watkins, Costa Mesa, California and Ballard Spahr Andrews & Ingersoll,
LLP, Baltimore, Maryland. The description of United States federal income tax
consequences contained in "Federal Income Tax Consequences" is based upon the
opinion of Latham & Watkins.

WHERE YOU CAN FIND MORE INFORMATION

This prospectus is part of a registration statement on Form S-4 we have
filed with the Securities and Exchange Commission under the Securities Act. This
prospectus does not contain all of the information included in the registration
statement. For further information about us and the exchange notes, you should
refer to the registration statement. In this prospectus we summarize material
provisions of contracts and other documents to which we refer you. Since this
prospectus may not contain all of the information that you may find important,
you should review the full text of these documents. We have filed these
documents as exhibits to our registration statement.

We and Arden Realty, respectively, file annual, quarterly and special
reports and other information with the SEC. You may read and copy materials that
we and Arden Realty, respectively, have filed with the SEC at the following SEC
public reference rooms:

<TABLE>
<S> <C> <C>
450 Fifth Street, N.W. 7 World Trade Center 500 West Madison Street
Room 1024 Suite 1300 Suite 1400
Washington, D.C. 20549 New York, New York 10048 Chicago, Illinois 60661
</TABLE>

Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms.

Our SEC filings are also available to the public on the SEC's Web site at
http://www.sec.gov.

We have established a Web site at http://www.ardenrealty.com. The
information on our Web site is not a part of this prospectus.

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ARDEN REALTY LIMITED PARTNERSHIP
REPORT OF INDEPENDENT AUDITORS

The Partners
Arden Realty Limited Partnership

We have audited the accompanying consolidated balance sheets of Arden
Realty Limited Partnership as of December 31, 1999 and 1998 and the related
consolidated statements of income, partners' capital, and cash flows for each of
the three years in the period ended December 31, 1999. Our audits also include
the financial statement Schedule III -- Commercial Properties and Accumulated
Depreciation as of December 31, 1999, 1998 and 1997. These financial statements
and the financial statement schedule are the responsibility of the management of
Arden Realty Limited Partnership. Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States. 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 audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Arden Realty
Limited Partnership at December 31, 1999 and 1998 and the consolidated results
of its operations and its cash flows for each of the three years in the period
ended December 31, 1999 in conformity with accounting principles generally
accepted in the United States. Also, in our opinion, the financial statement
schedule referred to above, when considered in relation to the basic financial
statements taken as a whole, presents fairly in all material respects the
information set forth therein.

/s/ ERNST & YOUNG LLP

Los Angeles, California
January 31, 2000, except for Note 5, as to which
the date is September 14, 2000.

F-1
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ARDEN REALTY LIMITED PARTNERSHIP

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT UNIT DATA)

<TABLE>
<CAPTION>
DECEMBER 31,
SEPTEMBER 30, ------------------------
2000 1999 1998
------------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Commercial properties:
Land...................................................... $ 476,215 $ 467,157 $ 447,339
Buildings and improvements................................ 2,002,572 1,833,052 1,673,149
Tenant improvements and leasing costs..................... 225,299 153,161 78,092
---------- ---------- ----------
2,704,086 2,453,370 2,198,580
Less: accumulated depreciation............................ (221,551) (157,608) (88,863)
---------- ---------- ----------
2,482,535 2,295,762 2,109,717
Properties under development.............................. 104,253 183,349 150,716
---------- ---------- ----------
Net investment in real estate.......................... 2,586,788 2,479,111 2,260,433
Cash and cash equivalents................................... 1,499 7,056 4,578
Restricted cash............................................. 21,533 18,513 12,409
Rent and other receivables, net of allowance of $1,642,
$2,390 and $1,573 at September 30, 2000, December 31, 1999
and 1998, respectively.................................... 11,047 11,785 9,024
Due from general partner.................................... 1,175 2,446 1,947
Mortgage notes receivable, net of discount of $1,708, $2,014
and $2,463 at September 30, 2000, December 31, 1999 and
1998, respectively........................................ 13,786 13,847 14,329
Deferred rent............................................... 29,604 23,932 17,004
Prepaid financing costs, expenses and other assets net of
accumulated amortization of $5,172, $5,742 and $2,874 at
September 30, 2000, December 31, 1999 and 1998,
respectively.............................................. 19,629 16,214 14,142
---------- ---------- ----------
Total assets......................................... $2,685,061 $2,572,904 $2,333,866
========== ========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Mortgage loans payable...................................... $ 617,031 $ 740,806 $ 543,927
Unsecured lines of credit................................... 289,350 288,850 296,450
Unsecured senior notes, net of discount of $850 at September
30, 2000.................................................. 249,150 -- --
Accounts payable and accrued expenses....................... 34,638 34,482 21,787
Security deposits........................................... 20,140 16,073 13,933
---------- ---------- ----------
Total liabilities.................................... 1,210,309 1,080,211 876,097
---------- ---------- ----------
Minority interests.......................................... 2,945 2,953 2,925
Partners' capital:
Preferred partner, 2,000,000 Series B Cumulative Redeemable
Preferred Units outstanding at September 30, 2000 and
December 31, 1999......................................... 50,000 50,000 --
General and limited partners, 65,681,144 common OP Units
outstanding at September 30, 2000 and 65,509,000
outstanding on both December 31, 1999 and 1998............ 1,427,537 1,441,907 1,456,891
Deferred Compensation....................................... (5,730) -- --
Receivable from general partner for common partnership
units..................................................... -- (2,167) (2,047)
---------- ---------- ----------
Total partners' capital.............................. 1,471,807 1,489,740 1,454,844
---------- ---------- ----------
Total liabilities and partners' capital.............. $2,685,061 $2,572,904 $2,333,866
========== ========== ==========
</TABLE>

See accompanying notes to consolidated financial statements.

F-2
<PAGE> 101

ARDEN REALTY LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER UNIT AMOUNTS)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEARS ENDED DECEMBER 31,
-------------------- --------------------------------
2000 1999 1999 1998 1997
-------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenue............................. $281,565 $248,771 $337,853 $281,067 $133,817
Property operating expenses......... 81,584 74,698 101,284 86,570 44,332
-------- -------- -------- -------- --------
199,981 174,073 236,569 194,497 89,485
General and administrative.......... 5,184 4,584 6,753 6,264 3,888
Interest............................ 56,967 43,685 60,239 43,403 19,511
Loss on valuation of derivative..... -- -- 3,111
Depreciation and amortization....... 63,952 51,198 69,837 51,822 20,260
Interest and other income........... (2,573) (2,092) (2,822) (3,515) (1,630)
-------- -------- -------- -------- --------
Income before minority interest..... 76,451 76,698 102,562 96,523 44,345
Minority interest................... (115) (137) (169) (729) (59)
-------- -------- -------- -------- --------
Net income..................... $ 76,336 $ 76,561 $102,393 $ 95,794 $ 44,286
======== ======== ======== ======== ========
Net income allocated to:
Preferred units................... $ 3,234 $ 276 $ 1,354 $ -- $ --
-------- -------- -------- -------- --------
Common units...................... $ 73,102 $ 76,285 $101,039 $ 95,794 $ 44,286
======== ======== ======== ======== ========
Earnings per common operating
partnership unit:
Earnings per common
unit -- basic.................. $ 1.12 $ 1.16 $ 1.54 $ 1.55 $ 1.44
======== ======== ======== ======== ========
Earnings per common
unit -- diluted................ $ 1.11 $ 1.16 $ 1.54 $ 1.55 $ 1.43
======== ======== ======== ======== ========
Weighted average common operating
partnership units outstanding:
Basic............................. 65,521 65,509 65,509 61,846 30,797
======== ======== ======== ======== ========
Diluted........................... 65,703 65,625 65,566 61,999 31,042
======== ======== ======== ======== ========
</TABLE>

See accompanying notes to consolidated financial statements.

F-3
<PAGE> 102

ARDEN REALTY LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL
(IN THOUSANDS)

<TABLE>
<CAPTION>
RECEIVABLE
FROM
PREFERRED LIMITED GENERAL GENERAL DEFERRED
PARTNER PARTNERS PARTNER PARTNER COMPENSATION TOTAL
--------- -------- ---------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1997.................. $ -- $ 81,356 $ 305,132 $ -- $ -- $ 386,488
Conversions............................... -- (3,427) 3,427 -- -- --
Distributions............................. -- (4,573) (39,336) -- -- (43,909)
Contributions............................. -- 25,486 343,657 -- -- 369,143
Net income................................ -- 4,318 39,968 -- -- 44,286
Adjustment to reflect limited partners'
capital at redemption value............. -- 6,741 (6,741) -- -- --
------- -------- ---------- ------- ------- ----------
Balance at December 31, 1997................ -- 109,901 646,107 -- -- 756,008
Conversions............................... -- (3,899) 3,899 -- -- --
Distributions............................. -- (5,137) (92,269) -- -- (97,406)
Contributions............................. -- 8,218 710,582 -- -- 718,800
Receivable and interest from general
partner................................. -- -- -- (2,047) -- (2,047)
Redemption of units....................... -- (16,305) -- -- -- (16,305)
Net income................................ -- 4,933 90,861 -- -- 95,794
Adjustment to reflect limited partners'
capital at redemption value............. -- (25,737) 25,737 -- -- --
------- -------- ---------- ------- ------- ----------
Balance at December 31, 1998................ -- 71,974 1,384,917 (2,047) -- 1,454,844
Conversions............................... -- (19,241) 19,241 -- -- --
Issuance of preferred units............... 50,000 -- -- -- -- 50,000
Issuance costs............................ -- (38) (962) -- -- (1,000)
Distributions............................. (1,354) (4,629) (110,394) -- -- (116,377)
Interest on receivable from general
partner................................. -- -- -- (120) -- (120)
Net income................................ 1,354 3,850 97,189 -- -- 102,393
Adjustment to reflect limited partners'
capital at redemption value............. -- (8,782) 8,782 -- -- --
------- -------- ---------- ------- ------- ----------
Balance at December 31, 1999................ 50,000 43,134 1,398,773 (2,167) -- 1,489,740
Issuance costs (unaudited)................ -- -- -- -- -- --
Distributions (unaudited)................. (3,234) (2,958) (89,086) -- -- (95,278)
Contributions (unaudited)................. -- 550 -- -- -- 550
Receivable and interest from general
partner (unaudited)..................... -- -- -- 2,167 -- 2,167
Redemption of units (unaudited)........... -- -- (1,920) -- -- (1,920)
Stock compensation Expense (unaudited).... -- -- 5,942 (5,942) --
Amortization of stock compensation expense
(unaudited)............................. -- -- -- -- 212 212
Net income (unaudited).................... 3,234 2,405 70,697 -- -- 76,336
Adjustment to reflect limited partners'
capital at redemption value
(unaudited)............................. -- 15,167 (15,167) -- -- --
------- -------- ---------- ------- ------- ----------
Balance at September 30, 2000 (unaudited)... $50,000 $ 58,298 $1,369,239 $ -- $(5,730) $1,471,807
======= ======== ========== ======= ======= ==========
</TABLE>

See accompanying notes to consolidated financial statements.

F-4
<PAGE> 103

ARDEN REALTY LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEARS ENDED DECEMBER 31,
---------------------- -------------------------------------
2000 1999 1999 1998 1997
--------- --------- --------- ----------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income.................................................. $ 76,336 $ 76,561 $ 102,393 $ 95,794 $ 44,286
Adjustments to reconcile net income to net cash provided by
operating activities:
Minority interest......................................... 115 137 169 729 59
Depreciation and amortization............................. 63,952 51,198 69,837 51,822 20,260
Amortization of loan costs and fees....................... 2,687 2,036 2,868 1,941 823
Stock compensation expense................................ 212 -- -- -- --
Changes in operating assets and liabilities:
Rents and other receivables............................. 1,046 (1,539) (2,279) 1,280 (22,340)
Due from general partner................................ (649) (324) (499) 1,336 (3,283)
Deferred rent........................................... (5,672) (5,557) (6,928) (8,193) (2,742)
Prepaid financing costs, expenses and other assets...... (7,515) (8,640) (1,456) (6,567) (9,309)
Accounts payable and accrued expenses................... 8,581 4,598 12,675 5,182 10,280
Security deposits....................................... 4,067 1,427 2,140 7,086 3,257
--------- --------- --------- ----------- ---------
Net cash provided by operating activities............. 143,160 119,897 178,920 150,410 41,291
--------- --------- --------- ----------- ---------
INVESTING ACTIVITIES:
Acquisitions and improvements of commercial properties...... (178,728) (212,367) (291,999) (1,119,833) (644,654)
Cash and cash equivalents of consolidated real estate
partnership............................................... -- -- -- -- 2,849
Escrow deposit.............................................. -- -- -- 20,000 (20,000)
--------- --------- --------- ----------- ---------
Net cash used in investing activities................. (178,728) (212,367) (291,999) (1,099,833) (661,805)
--------- --------- --------- ----------- ---------
FINANCING ACTIVITIES:
Proceeds from mortgage loans................................ 43,336 301,802 310,038 677,520 308,202
Repayment of mortgage loans................................. (167,111) (112,591) (113,259) (370,659) (175,036)
Proceeds from secured line of credit........................ -- -- -- -- 28,700
Repayment of secured line of credit......................... -- -- -- -- (28,700)
Proceeds from unsecured lines of credit..................... 201,500 159,461 209,661 413,350 443,500
Repayments of unsecured lines of credit..................... (201,000) (212,061) (217,261) (357,300) (254,100)
Proceeds from issuances of unsecured senior notes, net of
discount.................................................. 249,150 -- -- -- --
Increase in restricted cash................................. (3,020) (8,087) (6,104) (8,369) (4,040)
Proceeds from issuances of common partnership units, net of
issuance costs............................................ -- -- -- 708,582 343,565
Distributions and redemption paid to common partnership unit
holders................................................... (89,487) (85,874) (115,023) (113,711) (43,909)
Distributions to preferred operating partnership unit
holder.................................................... (3,234) -- (1,354) -- --
Distributions to minority interests......................... (123) (107) (141) (712) --
Proceeds from issuance of preferred operating partnership
units..................................................... -- 50,000 50,000 -- --
Preferred partnership units issuance costs.................. -- (1,000) (1,000) -- --
--------- --------- --------- ----------- ---------
Net cash provided by financing activities............. 30,011 91,543 115,557 948,701 618,182
--------- --------- --------- ----------- ---------
Net increase (decrease) in cash and cash equivalents........ (5,557) (927) 2,478 (722) (2,332)
Cash and cash equivalents at beginning of period............ 7,056 4,578 4,578 5,300 7,632
--------- --------- --------- ----------- ---------
Cash and cash equivalents at end of period.................. $ 1,499 $ 3,651 $ 7,056 $ 4,578 $ 5,300
========= ========= ========= =========== =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for interest, net of amounts
capitalized............................................... $ 55,164 $ 47,842 $ 58,365 $ 48,206 $ 19,191
========= ========= ========= =========== =========
</TABLE>

See accompanying notes to consolidated financial statements.

F-5
<PAGE> 104

ARDEN REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. BUSINESS

DESCRIPTION OF BUSINESS

The terms "Operating Partnership," "Partnership," "us," "we" and "our" as
used in these financial statements refer to Arden Realty Limited Partnership.
The term "Arden Realty" refers to Arden Realty, Inc.

ORGANIZATION AND FORMATION

We are an operating partnership that owns, manages, leases, develops,
renovates and acquires commercial properties located in Southern California.
Arden Realty, a REIT, is our sole general partner and, as of September 30, 2000
(unaudited) and December 31, 1999 owned 96.7% of our common partnership units,
or common OP Units. Arden Realty conducts substantially all of its operations
through us and our subsidiaries. Commencing with its taxable year ended December
31, 1996, Arden Realty has operated and qualified as a REIT for federal income
tax purposes.

Arden Realty conducts substantially all of its operations through us. As of
September 30, 2000 (unaudited) and December 31, 1999 we directly or indirectly
owned a portfolio of 143 and 142 primarily office properties containing
approximately 18.7 million and 18.5 million net rentable square feet,
respectively, and two properties with approximately 442,000 square feet under
development as of September 30, 2000 (unaudited) and three properties with
approximately 700,000 square feet under development as of December 31, 1999.

Arden Realty's interest in us entitles it to share in cash distributions
from, and in our profits and losses in proportion to its percentage ownership.
Certain individuals and entities own our remaining common OP Units, including
Messrs. Ziman and Coleman, our Chairman and Chief Executive Officer and our
President and Chief Operating Officer, respectively, together with other
entities and persons who were issued common OP Units in connection with our
acquisition of specific properties previously owned by those entities and
persons. Holders of common OP Units are entitled to cause us to redeem their
common OP Units for cash. Arden Realty, however, may, instead of paying cash,
elect to exchange those common OP Units for shares of its common stock on a
one-for-one basis, subject to certain limitations. With each redemption or
exchange of common OP Units, Arden Realty's percentage interest in us will
increase.

As our sole general partner, Arden Realty generally has the exclusive power
under our partnership agreement to manage us and conduct our business, subject
to limited exceptions. Arden Realty's board of directors manages our affairs. We
cannot be terminated until the year 2096 without the approval of a majority of
our partners or in connection with the sale of all or substantially all of our
assets, a business combination, a judicial decree or the redemption of all the
OP Units held by our limited partners.

We are a Maryland limited partnership. Arden Realty is a Maryland
corporation. Arden Realty's common stock is listed on the New York Stock
Exchange under the symbol "ARI."

2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The accompanying consolidated financial statements include our accounts and
our subsidiaries. All significant intercompany balances and transactions have
been eliminated in consolidation.

Some prior period amounts have been reclassified to conform with the
current period presentation.

F-6
<PAGE> 105
ARDEN REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

RISKS AND UNCERTAINTIES

The preparation of financial statements, in conformity with generally
accepted accounting principles, requires us to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

Our properties are all located in Southern California. As a result of our
geographic concentration, the operations of these properties could be affected
by the economic conditions in this region.

SEGMENT INFORMATION

We view our operations as principally one segment and the financial
information disclosed herein represents all of the financial information related
to our principal operating segment.

COMMERCIAL PROPERTIES

Our properties are stated at cost. When indicators of impairment exist,
write-downs to estimated fair value would be recognized if a property's
estimated undiscounted future cash flows, before interest charges, are less than
its book value. Based on our assessment, no write-downs to estimated fair value
were necessary as of September 30, 2000 (unaudited), December 31, 1999 and 1998,
respectively.

Repair and maintenance costs are charged to expenses as incurred and
significant replacements and betterments are capitalized.

Depreciation is calculated under the straight-line method using forty-year
lives for buildings, ten-year lives for building improvements and five-year
lives for furniture, fixtures and equipment. Amortization of tenant improvements
is calculated using the straight-line method over the term of the related lease.

CASH EQUIVALENTS

Cash equivalents consist of highly liquid investments with original
maturities of three months or less when acquired.

RESTRICTED CASH

Restricted cash at September 30, 2000 (unaudited), December 31, 1999 and
1998 primarily consists of $13.8 million, $13.7 million and $10 million,
respectively, in cash deposits as required by certain of our mortgage loans
payable and $7.7 million, $4.8 million and $2.4 million, respectively, in
impound accounts for real estate taxes and insurance, as required by certain of
our mortgage loans payable.

PREPAID FINANCING AND LEASING COSTS

Costs associated with leasing properties are capitalized and amortized to
expense on a straight-line basis over the related lease term. Costs associated
with obtaining long-term financing are capitalized and amortized to interest
expense over the term of the related loan.

REVENUE RECOGNITION

Minimum rent, including rental abatements and contractual fixed increases
attributable to operating leases, is recognized on a straight-line basis over
the term of the related lease. Amounts expected to be received in later years
are included in deferred rents. Property operating expense reimbursements due
from

F-7
<PAGE> 106
ARDEN REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

tenants for common area maintenance, real estate taxes and other recoverable
costs are recognized in the period the related expenses are incurred.

INCOME TAXES

Our taxable income is reportable by our partners on their separate income
tax returns. Accordingly, no provision has been made for income taxes in the
accompanying consolidated statements of operations.

FAIR VALUE OF FINANCIAL INSTRUMENTS

Our disclosures of estimated fair value of financial instruments at
September 30, 2000 were determined using available market information and
appropriate valuation methodologies. Considerable judgment is necessary to
interpret market data and develop estimated fair value. The use of different
market assumptions or estimation methodologies may have a material effect on the
estimated fair value amounts.

Our cash equivalents, mortgage notes receivable, accounts payable, the
lines of credit and other financial instruments are carried at amounts that
reasonably approximate their fair value amounts. The unrealized gain on our
mortgage notes payable at September 30, 2000 (unaudited) and December 31, 1999
was approximately $9.2 million and $20.4 million, respectively. Estimated fair
value is based on interest rates currently available for issuance of debt with
similar terms and remaining maturities.

UNAUDITED INTERIM FINANCIAL INFORMATION

The financial information as of September 30, 2000 and for each of the nine
months ended September 30, 2000 and September 30, 1999 is unaudited. In the
opinion of management the unaudited financial statements have been prepared on
the same basis as the audited financial statements and include all adjustments,
consisting of normal recurring adjustments necessary for a fair presentation of
the financial position, results of operations, and cash flows for the interim
periods. The results of operations for each of the nine months ended September
30, 2000 and September 30, 1999 are not necessarily indicative of results that
may be expected for the entire year.

3. COMMERCIAL PROPERTIES

The following table sets forth specific information regarding our
acquisition of office properties for the year ended December 31, 1999.

<TABLE>
<CAPTION>
APPROXIMATE NET TOTAL
RENTABLE MONTH OF ACQUISITION
PROPERTY NAME LOCATION SQUARE FEET ACQUISITION COST(1)
------------- ------------ --------------- ----------- --------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Hillside Corporate Center.......... Westlake 59,876 February $ 9,600
Westlake Gardens II................ Westlake 48,874 April 7,300
Howard Hughes Tower................ Los Angeles 313,833 May 53,000
2001 Wilshire Boulevard............ Santa Monica 101,125 September 19,900
------- -------
Total............................ 523,708 $89,800
======= =======
</TABLE>

-------------------------
(1) Total acquisition cost includes purchase and closing costs.

We have not acquired any properties year-to-date in 2000 (unaudited).

We capitalize interest and taxes related to buildings under construction
and renovation to the extent those assets qualify for capitalization.

F-8
<PAGE> 107
ARDEN REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Total interest incurred and the amount capitalized for the nine months
ended September 30, 2000 and 1999 and for the years ended December 31, 1999,
1998 and 1997 were as follows (in thousands):

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------------ -----------------------------
2000 1999 1999 1998 1997
------- ------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Total interest incurred.................. $66,660 $50,718 $69,826 $52,323 $20,689
Interest capitalized..................... (9,693) (7,033) (9,587) (8,920) (1,178)
------- ------- ------- ------- -------
Interest expensed........................ $56,967 $43,685 $60,239 $43,403 $19,511
======= ======= ======= ======= =======
</TABLE>

Office space in our properties is generally leased to tenants under lease
terms that provide for the tenants to pay for increases in operating expenses in
excess of specified amounts.

Future minimum lease payments to be received under noncancelable operating
leases existing are as follows (in thousands):

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
2000 1999
------------- ------------
(UNAUDITED)
<S> <C> <C>
2000............................................... $ 73,860 $278,668
2001............................................... 325,386 241,222
2002............................................... 292,316 200,375
2003............................................... 243,022 152,055
2004............................................... 187,043 97,517
Thereafter......................................... 493,358 159,542
</TABLE>

The above future minimum lease payments do not include specified payments
for tenant reimbursements of operating expenses.

We lease the land underlying the office buildings or parking structures of
six of our buildings. Ground lease expense, including amounts netted against
parking revenues, was approximately $1.9 million and $1.7 million for the nine
months ended September 30, 2000 (unaudited) and 1999 (unaudited). Ground lease
expense, including amounts netted against parking revenues, was $1.7 million,
$2.0 million and $1.6 million for the years ended December 31, 1999, 1998 and
1997, respectively. Future minimum ground lease payments due under existing
ground leases are as follows (in thousands):

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
2000 1999
------------- ------------
(UNAUDITED)
<S> <C> <C>
2000............................................... $ 428 $ 1,716
2001............................................... 1,717 1,717
2002............................................... 1,754 1,754
2003............................................... 1,754 1,754
2004............................................... 1,785 1,785
Thereafter......................................... 118,307 118,307
</TABLE>

4. MORTGAGE NOTES RECEIVABLE

In September 1997, we purchased two mortgage notes receivable, secured by a
single commercial office property, with an aggregate balance of approximately
$17.6 million, for approximately $14.4 million. These notes bear interest at the
Eleventh District Cost of Funds plus 3.25% per annum, require monthly

F-9
<PAGE> 108
ARDEN REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

payments of principal, interest, and additional net cash flow from the office
property and mature on May 31, 2004. These notes had an effective interest rate
of 8.70% at September 30, 2000 (unaudited) and 7.9% at December 31, 1999.

5. MORTGAGE LOANS PAYABLE, UNSECURED LINES OF CREDIT AND UNSECURED SENIOR NOTES

A summary of our outstanding indebtedness as of September 30, 2000 and
December 31, 1999 and 1998 is as follows:
<TABLE>
<CAPTION>
STATED ANNUAL STATED ANNUAL
DECEMBER 31, INTEREST RATE AT INTEREST RATE AT
SEPTEMBER 30, ------------------------- SEPTEMBER 30, DECEMBER 31, FIXED/FLOATING
TYPE OF DEBT 2000 1999 1998 2000 1999 RATE
------------ ------------- -------------- -------- ---------------- ---------------- --------------
(UNAUDITED) (IN THOUSANDS) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
MORTGAGE LOANS PAYABLE:
Fixed Rate
Mortgage Financing I(1)..... $ 175,000 $ 175,000 $175,000 7.52% 7.52% Fixed
Mortgage Financing III(2)... 136,100 136,100 136,100 6.74 6.74 Fixed
Mortgage Financing IV(2).... 111,200 111,200 111,200 6.61 6.61 Fixed
Mortgage Financing V(3)..... 112,686 114,016 -- 6.94 6.94 Fixed
Mortgage Financing VI(3).... 22,286 22,426 -- 7.54 7.54 Fixed
Activity Business
Center(3)................. 7,915 8,003 8,142 8.85 8.85 Fixed
145 South Fairfax(3)........ 4,029 4,050 4,079 8.93 8.93 Fixed
Marin Corporate Center(3)... 3,088 3,168 3,257 9.00 9.00 Fixed
Conejo Business Center(3)... 3,034 3,114 3,203 8.75 8.75 Fixed
Conejo Business Center(3)... 1,320 1,358 1,401 7.88 7.88 Fixed
Westwood Center............. -- 14,859 15,167 -- 8.09 Fixed
299 North Euclid............ -- 5,000 5,000 -- 7.00 Fixed
---------- ---------- --------
576,658 598,294 462,549
Floating Rate LIBOR+
Construction Loan(6)........ 40,373 22,037 -- 8.63 8.23 2.00%
Lehman Prepayable Term...... LIBOR+
Loan II and III............. -- 120,475 81,378 -- 8.07 2.25%
---------- ---------- --------
617,031 740,806 543,927
UNSECURED LINES OF CREDIT:
Floating Rate LIBOR+
Wells Fargo(1)(7)........... 214,350 280,850 296,450 7.78 7.52 1.15%
LIBOR+
Lehman Brothers(1)(8)....... 75,000 -- -- 7.92 -- 1.30%
Prime Rate-
City National Bank(1)....... -- 8,000 -- -- 7.63 0.875%
---------- ---------- --------
289,350 288,850 296,450
UNSECURED SENIOR NOTES:
Fixed Rate
2005 Notes(9)............... 199,539 -- -- 8.88 -- Fixed
2010 Notes(9)............... 49,611 -- -- 9.15 -- Fixed
---------- ---------- --------
249,150 -- --
---------- ---------- --------
Total Debt................ $1,155,531 $1,029,656 $840,377
========== ========== ========

<CAPTION>
NUMBER OF
PROPERTIES MATURITY
SECURING MONTH/
TYPE OF DEBT LOAN YEAR
------------ ---------- --------

<S> <C> <C>
MORTGAGE LOANS PAYABLE:
Fixed Rate
Mortgage Financing I(1)..... 18 6/04
Mortgage Financing III(2)... 22 4/08
Mortgage Financing IV(2).... 12 4/08
Mortgage Financing V(3)..... 12 4/09
Mortgage Financing VI(3).... 3 4/09
Activity Business
Center(3)................. 1 5/06
145 South Fairfax(3)........ 1 1/27
Marin Corporate Center(3)... 1 7/15
Conejo Business Center(3)... (Note 4) 7/15
Conejo Business Center(3)... (Note 4) 7/15
Westwood Center............. 1 5/03
299 North Euclid............ 1 7/02
Floating Rate
Construction Loan(6)........ (Note 5) 12/00
Lehman Prepayable Term......
Loan II and III............. 9 11/00
UNSECURED LINES OF CREDIT:
Floating Rate
Wells Fargo(1)(7)........... -- 4/03
Lehman Brothers(1)(8)....... -- 7/02
City National Bank(1)....... -- 8/01
UNSECURED SENIOR NOTES:
Fixed Rate
2005 Notes(9)............... -- 3/05
2010 Notes(9)............... -- 3/10
Total Debt................
</TABLE>

-------------------------
(1) Requires monthly payments of interest only, with outstanding principal
balance due upon maturity.

(2) Requires monthly payments of interest only for five years and monthly
payments of principal and interest thereafter.

(3) Requires monthly payments of principal and interest.

(4) Both mortgage loans are secured by the Conejo Business Center property.
F-10
<PAGE> 109
ARDEN REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(5) This loan is secured by certain property and construction improvements
relating to the 6060 Center Drive office building in the Howard Hughes
Center.

(6) All interest and principal due upon maturity. This loan matures in December
2000 with two one-year extension options.

(7) This line of credit also has an annual 25 basis points facility fee on the
entire $275 million commitment amount.

(8) This line of credit has a one-year extension option.

(9) Requires semi-annual interest payments only, with principal balance due upon
maturity.

MORTGAGE LOANS PAYABLE

On April 5, 1999, we closed a $115 million loan with Mass Mutual Life
Insurance Company (the "Mortgage Financing V"). Proceeds from this loan were
used to repay $76.4 million of our Lehman Prepayable Term Loan I and to repay a
portion of our unsecured lines of credit. On April 30, 1999 we closed a $22.5
million loan with an affiliate of Lehman Brothers (the "Mortgage Financing VI").
Proceeds from this loan were used to repay a portion of our unsecured lines of
credit. On May 5, 1999, we refinanced the remaining $35 million outstanding
under the Lehman Prepayable Term Loan I with one secured note payable totaling
$62.5 million (the "Lehman Prepayable Term Loan II") to an affiliate of Lehman
Brothers. The remaining proceeds from this loan were used to repay a portion of
our unsecured lines of credit. As described below, the Lehman Prepayable Term
Loan II was repaid in March 2000 with the proceeds from the issuance of
unsecured senior notes.

On July 23, 1999, we entered into a construction loan with a total
commitment of $50 million (the "Construction Loan") related to our development
of the approximately 241,000 net rentable square foot Center Drive office
building in the Howard Hughes Center. Subject to meeting certain construction
completion and leasing benchmarks, as defined, the interest rate on the
Construction Loan may be reduced to LIBOR plus 1.75%, then to LIBOR plus 1.5%.
As of September 30, 2000 (unaudited), there was $40.4 million outstanding on the
Construction Loan and $9.6 million was available for additional borrowing. As of
December 31, 1999, there was $22.0 million outstanding on the Construction Loan
and $28.0 million was available for additional borrowings.

On July 27, 1999, we closed a $58 million loan with an affiliate of Lehman
Brothers (the "Lehman Prepayable Term Loan III"). Proceeds from this loan were
used to repay a portion of our unsecured lines of credit and to fund certain
capital expenditures. In January 2000, we expanded this loan from $58 million to
$83 million. As described below, this loan was repaid in March 2000 with the
proceeds from the issuance of unsecured senior notes.

In connection with two of our mortgage loans payable to an affiliate of
Lehman Brothers, we entered into a treasury rate lock agreement, or the swap
agreement, with a notional amount of $100 million and locked in the United
States 10-year treasury rate at 6.174%. On April 16, 1998, we settled the swap
agreement for $4.5 million and are amortizing the cost of settling the swap
agreement over the term of the two related mortgage loans payable to an
affiliate of Lehman Brothers.

On September 14, 2000, we repaid in full a $14.7 million mortgage loan
secured by our Westwood Center building.

F-11
<PAGE> 110
ARDEN REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Following is a summary of scheduled principal payments for our mortgage
loans as of December 31, 1999 (in thousands):

<TABLE>
<CAPTION>
AMOUNT
--------
<S> <C>
2000...................................................... $145,299
2001...................................................... 3,004
2002...................................................... 8,236
2003...................................................... 16,838
2004...................................................... 178,292
Thereafter................................................ 389,137
--------
Total................................................... $740,806
========
</TABLE>

UNSECURED LINES OF CREDIT

As of December 31, 1999 and 1998, we had an unsecured line of credit in the
amount of $300 million with a group of banks led by Wells Fargo Bank. This line
of credit's interest rate ranges between LIBOR plus 1.2% and LIBOR plus 1.45%,
depending on our leverage ratio. The effective interest rate at December 31,
1999 was 7.52%. The interest rate may be lowered to between LIBOR plus 0.9% and
LIBOR plus 1.15%, depending on our unsecured debt rating. Under specific
circumstances, we have the option to convert the interest rate to the prime rate
plus 0.5%. The outstanding principal balance of this line of credit was $280.9
million and $296.4 million at December 31, 1999 and 1998, respectively.

On May 3, 2000, we extended our unsecured line of credit with a group of
banks led by Wells Fargo Bank. The extended line of credit provides for
borrowings up to $275 million with an option to increase the amount to $325
million and bears interest at a rate ranging between LIBOR plus 1.15% and LIBOR
plus 1.80% (including an annual facility fee ranging from .20% to .40% based on
the aggregate amount of the facility) depending on our unsecured debt rating. In
addition, as long as we maintain an unsecured debt rating of BBB--/Baa3 or
better, the agreement contains a competitive bid option, whereby the lenders on
this of line may bid on the interest rate to be charged for up to $137.5 million
of the unsecured line of credit. Under certain circumstances, we also have the
option to convert the interest rate on this line of credit to the prime rate
plus 0.5%. This line of credit matures April 2003. As of September 30, 2000
(unaudited), there was approximately $214.4 million outstanding on this line of
credit and approximately $60.6 million was available for additional borrowings.

This line of credit is subject to customary conditions to borrowing;
contains representations, warranties and defaults customary in REIT financings;
and contains financial covenants, including requirements for a minimum tangible
net worth, maximum liabilities to asset values, and minimum interest, unsecured
interest and fixed charge coverage ratios, all calculated as defined in the
Wells Fargo line of credit documentation, and requirements to maintain a pool of
unencumbered properties that meet certain defined characteristics and are
approved by the group of banks led by Wells Fargo Bank. This line of credit also
contains restrictions on, among other things, indebtedness, investments,
distributions, liens and mergers. Proceeds from this line of credit have been
used, among other things, to provide funds for tenant improvements and capital
expenditures and provide for working capital and other purposes.

In July 2000, we closed on a $75 million unsecured line of credit with
Lehman Brothers. Borrowings on this new line of credit bear interest at a rate
ranging between LIBOR plus 1.05% and LIBOR plus 1.70%, depending on our
unsecured debt rating. We also have the option to convert the interest rate to
the prime rate plus 0.5%. This line of credit matures on July 27, 2002 with an
option to extend the maturity date for one year. Proceeds from this line of
credit have been used to reduce the outstanding balance under our $275 million
line of credit. As of September 30, 2000 (unaudited), there was approximately
$75 million outstanding on this line of credit.
F-12
<PAGE> 111
ARDEN REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

As of September 30, 2000 (unaudited) and December 31, 1999, we also have an
unsecured line of credit with a total commitment of $10 million from City
National Bank. This line of credit accrues interest at the City National Bank
Prime Rate less 0.875% and is scheduled to mature on August 1, 2001. As of
September 30, 2000 (unaudited), there was no outstanding balance on this line of
credit and $10 million was available for additional borrowing.

In January 1997, Arden Realty entered into interest rate floor and cap
transactions with a notional amount of $155.0 million to hedge its exposure to
variable interest rates. Arden Realty entered into these agreements to convert
floating rate liabilities to fixed rate liabilities. In July 1997, Arden Realty
repaid all of its outstanding floating rate debt at the time with proceeds from
an equity offering and in October 1997, the swap agreement was retired resulting
in a loss on the derivative of $3.1 million.

UNSECURED SENIOR NOTES

The following is a summary of scheduled principal payments for our total
indebtedness as of September 30, 2000 (in thousands and unaudited):

<TABLE>
<CAPTION>
AMOUNT
----------
<S> <C>
2000..................................................... $ 41,014
2001..................................................... 2,501
2002..................................................... 77,702
2003..................................................... 219,888
2004..................................................... 182,302
2005..................................................... 207,918
2006..................................................... 15,303
2007..................................................... 8,895
2008..................................................... 230,388
2009..................................................... 112,063
Thereafter............................................... 57,557
----------
Total.................................................. $1,155,531
==========
</TABLE>

6. PARTNERS' CAPITAL

A common OP Unit and a share of common stock in Arden Realty have
essentially the same economic characteristics as they share equally in our total
net income or loss and distributions. A common OP Unit may be redeemed for cash
or, at the election of Arden Realty, for shares of common stock of Arden Realty
on a one-for-one basis, subject to adjustment.

On September 7, 1999, we completed a $50 million private placement of 2
million 8 5/8% Series B Cumulative Redeemable Preferred Units to an
institutional investor. The Preferred OP Units are callable by us after five
years and are exchangeable after ten years by the holder into 8 5/8% Series B
Cumulative Redeemable Preferred Stock of Arden Realty, on a one-for-one basis.
The Preferred OP Units have no

F-13
<PAGE> 112
ARDEN REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

stated maturity or mandatory redemption and are subordinate to all debt. We used
the net proceeds from this private placement to repay a portion of our lines of
credit.

During 1998, we issued 300,255 common OP Units, valued at approximately
$8.2 million in connection with certain property acquisitions. During 1998, we
also redeemed 542,382 common OP Units at a cost of approximately $16.3 million
in cash based on the original issuance price of the related common OP Units.

The outstanding common OP Units held by limited partners are initially
recorded at fair value and subsequently adjusted based on fair value at the
balance sheet date as measured by the closing price of Arden Realty's common
stock at that date multiplied by the total number of common OP Units held by
limited partners.

In January 2000, we made a quarterly distribution of $0.445 per common OP
Unit which equates to $1.86 per common OP Unit.

7. COMMITMENTS AND CONTINGENCIES

CAPITAL COMMITMENTS

As of September 30, 2000 (unaudited) and December 31, 1999, we had
approximately $16.7 million and $23.6 million, respectively, in capital
commitments related to tenant improvements, renovation costs and general
property-related capital expenditures.

LITIGATION

We do not believe there is any litigation threatened against us other than
routine litigation arising out of the ordinary course of business, some of which
is expected to be covered by liability insurance and all of which is not
expected to have a material adverse effect on our consolidated financial
statements.

CONCENTRATION OF CREDIT RISK

We maintain our cash and cash equivalents at financial institutions. The
combined account balances at each institution periodically exceed FDIC insurance
coverage, and as a result, there is a concentration of credit risk related to
amounts on deposit in excess of FDIC insurance coverage. Management believes
that the risk is not significant.

We generally do not require collateral or other security from our tenants,
other than security deposits.

8. RELATED PARTY TRANSACTIONS

PROMISSORY NOTES RECEIVABLE FROM GENERAL PARTNER FOR COMMON OP UNITS

In August 1998, we issued 85,106 common OP Units to Arden Realty, related
to the issuance of 42,553 shares of Arden Realty's common stock to each of two
executive officers. In consideration for the issuance of the common stock, the
executive officers executed promissory notes in the amount of $1 million each.
These promissory notes were full recourse and were secured by the shares of
common stock issued to each officer, bore interest at 6% per year with all
accrued interest and principal due on August 14, 2004.

The promissory notes are recourse and secured by the shares of common stock
issued to the executive officers, bear interest at 6% per year with all accrued
interest and principal due on August 14, 2004. Provided that the executive
officers are still employed by Arden Realty, the outstanding principal amount of
the promissory notes will be forgiven as follows; August 14, 2001, $100,000;
August 14, 2002, $166,667; August 14, 2003, $200,000; and August 14, 2004,
$200,000. Additionally, provided that the executive

F-14
<PAGE> 113
ARDEN REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

officers are still employed by us, all accrued and unpaid interest and the
outstanding principal amount of the promissory notes will be forgiven upon a
change in control, as defined in the promissory note, of us or upon the death or
disability of the executive officers. See Note 12.

DUE FROM OUR GENERAL PARTNER

Due from our general partner represents the net balance of intercompany
transactions between us and Arden Realty for amounts reimbursable under the
terms of our partnership agreement.

9. REVENUE FROM RENTAL OPERATIONS AND PROPERTY OPERATING EXPENSES

Revenue from rental operations and property operating expenses for the nine
months ended September 30, 2000 and 1999 and for the years ended December 31,
1999, 1998 and 1997 are summarized as follows (in thousands):

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEARS ENDED DECEMBER 31,
-------------------- --------------------------------
2000 1999 1999 1998 1997
-------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
REVENUE FROM RENTAL OPERATIONS:
Rental.............................. $241,726 $216,034 $292,688 $250,467 $118,085
Tenant reimbursements............... 12,213 10,890 13,863 9,505 5,945
Parking, net of expenses............ 13,199 10,583 14,384 12,223 7,397
Other rental operations............. 14,427 11,264 16,918 8,872 2,390
-------- -------- -------- -------- --------
281,565 248,771 337,853 281,067 133,817
-------- -------- -------- -------- --------
PROPERTY OPERATING EXPENSES:
Repairs and maintenance............. 25,965 24,180 32,902 27,141 15,154
Utilities........................... 22,206 21,487 28,305 26,559 14,321
Real estate taxes................... 19,449 17,181 23,167 19,433 8,003
Insurance........................... 3,140 2,962 3,993 4,110 2,125
Ground rent......................... 1,016 693 891 714 314
Administrative...................... 9,808 8,195 12,026 8,613 4,415
-------- -------- -------- -------- --------
81,584 74,698 101,284 86,570 44,332
-------- -------- -------- -------- --------
$199,981 $174,073 $236,569 $194,497 $ 89,485
======== ======== ======== ======== ========
</TABLE>

10. STOCK OPTION PLAN

Arden Realty has elected to follow Accounting Principles Board Opinion No.
25, "Accounting for Stock Issued to Employees" ("APB 25") and related
interpretations in accounting for our employee and directors stock options
because, as discussed below, the alternative fair value accounting provided for
under FASB Statement No. 123, "Accounting for Stock-Based Compensation"
("Statement 123") requires use of option valuation models that were not
developed for use in valuing employee stock options. Under Statement 123,
because the exercise price of employee and director stock options Arden Realty
granted equals the market price of the underlying stock on the date of grant, no
compensation expense is recognized.

Arden Realty established a stock option plan for the purpose of attracting
and retaining executive officers, directors and other key employees. 6,500,000
and 4,200,000 of Arden Realty's authorized shares of common stock have been
reserved for issuance under that plan as of September 30, 2000 (unaudited) and
December 31, 1999, respectively.

F-15
<PAGE> 114
ARDEN REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

All holders of the above options have a ten-year period to exercise and all
options were granted at exercise prices equal to the market prices at the date
of the grant.

Pro forma information regarding net income and earnings per share is
required by Statement 123, and has been determined as if Arden Realty had
accounted for its employee stock options under the fair value method of that
Statement. The fair value for these options was estimated at the date of grant
using a Black-Scholes option pricing model with the following weighted-average
assumptions for the nine months ended September 30, 2000 (unaudited) and for the
years ended December 31, 1999, 1998 and 1997, respectively: risk-free interest
rate of 6.09%, 6.67%, 5.68%, and 5.81%; dividend yield of 7.00%, 5.79%, 7.25%
and 5.20%; volatility factor of the expected market price of Arden Realty's
common stock of .198, .245, .268, and .194. The weighted average expected life
of the options ranges between eight and 10 years.

The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options which have no vesting restriction
and are fully transferable. In addition, option valuation models require the
input of highly subjective assumptions including the expected stock price
volatility. Because Arden Realty's employee and director stock options have
characteristics significantly different from those of traded options, and
because changes in the subjective input assumptions can materially affect the
fair value estimate, in management's opinion, the existing models do not
necessarily provide a reliable single measure of the fair value of Arden
Realty's employee and director stock options.

For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options' vesting periods. Arden
Realty's pro forma information for the nine months ended September 30, 2000
(unaudited) and for the years ended December 31, 1999, 1998 and 1997 follows (in
thousands, except earnings per share information):

<TABLE>
<CAPTION>
NINE MONTHS ENDED YEARS ENDED DECEMBER 31,
SEPTEMBER 30, -----------------------------
2000 1999 1998 1997
----------------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C>
Pro forma net income................ $73,300 $98,257 $88,711 $38,711
======= ======= ======= =======
Pro forma net income per share...... $ 1.07 $ 1.48 $ 1.51 $ 1.39
======= ======= ======= =======
</TABLE>

A summary of Arden Realty's stock option activity, and related information
for the nine months ended September 30, 2000 and for the years ended December
31, 1999, 1998 and 1997 follows:

<TABLE>
<CAPTION>
2000 1999 1998 1997
------------------- ------------------- ------------------- -------------------
WEIGHTED- WEIGHTED- WEIGHTED- WEIGHTED-
AVERAGE AVERAGE AVERAGE 1997 AVERAGE
OPTIONS EXERCISE OPTIONS EXERCISE OPTIONS EXERCISE OPTIONS EXERCISE
(000S) PRICE (000S) PRICE (000S) PRICE (000S) PRICE
------- --------- ------- --------- ------- --------- ------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Outstanding, beginning of
period................. 3,890 $25.38 3,140 $25.56 1,303 $25.27 930 $20.15
Granted.................. 1,367 25.05 760 19.67 1,847 26.03 556 32.09
Exercised................ -- -- -- -- -- -- (147) 20.00
Forfeited................ (230) 23.28 (10) 25.94 (10) 20.00 (36) 20.00
------ ------ ------ ------ ------ ------ ------ ------
Outstanding at end of the
period................. 5,027 $25.39 3,890 $25.38 3,140 $25.56 1,303 $25.27
====== ====== ====== ====== ====== ====== ====== ======
Weighted-average fair
value of options
granted................ $ 2.88 $ 3.35 $ 3.27 $ 3.72
</TABLE>

F-16
<PAGE> 115
ARDEN REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Exercise prices for options outstanding as of September 30, 2000
(unaudited) and December 31, 1999 ranged from $19.13 to $32.25. The weighted
average remaining contractual life of those options is 8 years.

11. EMPLOYEE RETIREMENT SAVINGS PLAN

Effective June 12, 1997, Arden Realty adopted a retirement savings plan
pursuant to Section 401(k) of the Internal Revenue Code (the "Code") whereby
participants may contribute a portion of their compensation to their respective
retirement accounts in an amount not to exceed the maximum allowed under the
Code. The plan provides for matching contributions by us, which amounted to
approximately $388,000 for the nine months ended September 30, 2000 (unaudited),
$385,000 in 1999, $187,000 in 1998 and $71,000 in 1997. Plan participants are
immediately vested in their contributions and are vested equally over four years
in matching contributions by us.

12. SUBSEQUENT EVENT -- UNAUDITED

Mr. Andrew J. Sobel resigned as Executive Vice President and Director of
Property Operations effective February 18, 2000. At the time of his resignation,
Mr. Sobel surrendered the common stock underlying his promissory note and
executed a new promissory note in the amount of $223,887, representing the
difference between the value of the common stock surrendered and the unpaid
principal and interest on his original promissory note. The new promissory note
bears interest at 6.56%, with all accrued interest and principal due on February
18, 2002. In addition, effective with his termination, Arden Realty and Mr.
Sobel entered into a consulting and non-competition agreement for a term of two
years. Under this agreement, Mr. Sobel will receive compensation of $6,000 per
month which will be applied against the unpaid interest and principal on the new
promissory note. In July 2000, Mr. Sobel returned to Arden Realty as Executive
Vice President, terminating the consulting and non-competition agreement
described above, and is in the process of finalizing a new employment agreement
with Arden Realty addressing, among other things, the promissory note.

Ms. Diana Laing resigned as Executive Vice President and Chief Financial
Officer effective July 1, 2000. At the time of her resignation, Ms. Laing
surrendered stock options valued at approximately $59,000 as well as the 42,553
shares of Arden Realty's common stock underlying her promissory note. The value
of the options and shares surrendered by Ms. Laing equaled the unpaid principal
and interest of her promissory note.

On October 13, 2000, we sold Evergreen Plaza, a 76,000 net rentable square
foot retail property located in Thousand Oaks, California, for approximately
$11.7 million and recorded a gain of approximately $2.2 million. Proceeds from
this sale were used to repay a portion of our unsecured lines of credit.

In each of April, July and October 2000, we made quarterly distributions of
$0.465 per common OP Unit which equates to $1.86 per common OP Unit on an
annualized basis.

F-17
<PAGE> 116
ARDEN REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

13. QUARTERLY RESULTS

Following is a summary of our revenue and expenses for the years ended
December 31, 1999, 1998 and 1997. Revenue and expenses have fluctuated
significantly from quarter to quarter primarily due to property acquisitions
(unaudited).

<TABLE>
<CAPTION>
FOR THE QUARTER ENDED
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
--------------------------------------
MARCH 31, JUNE 30, SEPTEMBER 30,
2000 2000 2000
--------- -------- -------------
<S> <C> <C> <C> <C>
Revenue...................................... $ 89,678 $ 92,856 $ 99,031
Property operating expenses.................. (25,347) (26,721) (29,516)
General and administrative................... (1,669) (1,625) (1,890)
Interest expense............................. (17,852) (18,770) (20,345)
Depreciation and amortization................ (20,147) (21,277) (22,528)
Interest and other income.................... 855 770 948
Minority interests........................... (30) (35) (50)
-------- -------- --------
Net Income................................... $ 25,488 $ 25,198 $ 25,650
======== ======== ========
Net Income per share:
Basic...................................... $ 0.37 $ 0.37 $ 0.37
Diluted.................................... $ 0.37 $ 0.37 $ 0.37
</TABLE>

<TABLE>
<CAPTION>
FOR THE QUARTER ENDED (IN THOUSANDS, EXCEPT SHARE AMOUNTS)
-------------------------------------------------------------
MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31,
1999 1999 1999 1999
---------- ---------- --------------- --------------
<S> <C> <C> <C> <C>
Revenue...................................... $ 79,336 $ 82,712 $ 86,723 $ 89,082
Property operating expenses.................. (23,510) (24,444) (26,744) (26,586)
General and administrative................... (1,291) (1,578) (1,715) (2,169)
Interest expense............................. (13,183) (14,455) (16,047) (16,554)
Depreciation and amortization................ (16,215) (17,173) (17,810) (18,639)
Interest and other income.................... 670 671 751 730
Minority interests........................... (54) (34) (49) (32)
-------- -------- -------- --------
Net Income................................... $ 25,753 $ 25,699 $ 25,109 $ 25,832
======== ======== ======== ========
Net Income per share:
Basic...................................... $ 0.39 $ 0.39 $ 0.38 $ 0.39
Diluted.................................... $ 0.39 $ 0.39 $ 0.38 $ 0.39
</TABLE>

F-18
<PAGE> 117
ARDEN REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

<TABLE>
<CAPTION>
FOR THE QUARTER ENDED (IN THOUSANDS, EXCEPT SHARE AMOUNTS)
-------------------------------------------------------------
MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31,
1998 1998 1998 1998
---------- ---------- --------------- --------------
<S> <C> <C> <C> <C>
Revenue...................................... $ 54,759 $ 70,503 $ 76,738 $ 79,067
Property operating expenses.................. (16,738) (21,543) (24,072) (24,217)
General and administrative................... (1,489) (1,290) (1,467) (2,018)
Interest expense............................. (8,612) (10,539) (11,988) (12,264)
Depreciation and amortization................ (11,296) (12,930) (12,954) (14,642)
Interest and other income.................... 1,458 695 680 682
Minority interests........................... (615) (42) (37) (35)
-------- -------- -------- --------
Net Income................................... $ 17,467 $ 24,854 $ 26,900 $ 26,573
======== ======== ======== ========
Net Income per share:
Basic...................................... $ 0.34 $ 0.38 $ 0.41 $ 0.41
Diluted.................................... $ 0.34 $ 0.38 $ 0.41 $ 0.41
</TABLE>

<TABLE>
<CAPTION>
FOR THE QUARTER ENDED (IN THOUSANDS, EXCEPT SHARE AMOUNTS)
-------------------------------------------------------------
MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31,
1997 1997 1997 1997
----------- --------- --------------- --------------
<S> <C> <C> <C> <C>
Revenue....................................... $24,916 $29,704 $ 36,431 $ 42,766
Property operating expenses................... (7,894) (9,544) (11,737) (15,157)
General and administrative.................... (823) (859) (879) (1,327)
Interest expense.............................. (3,024) (5,883) (4,816) (5,788)
Loss on valuation of derivative............... -- -- (3,111) --
Depreciation and amortization................. (3,562) (4,458) (5,241) (6,999)
Interest and other income..................... 54 59 450 1,067
Minority interests............................ -- (9) (43) (7)
------- ------- -------- --------
Net Income.................................... $ 9,667 $ 9,010 $ 11,054 $ 14,555
======= ======= ======== ========
Net Income per share:
Basic....................................... $ 0.39 $ 0.37 $ 0.31 $ 0.38
Diluted..................................... $ 0.39 $ 0.36 $ 0.31 $ 0.38
</TABLE>

F-19
<PAGE> 118

SCHEDULE III -- COMMERCIAL PROPERTIES AND ACCUMULATED DEPRECIATION
SEPTEMBER 30, 2000
(UNAUDITED AND IN THOUSANDS, EXCEPT SQUARE FOOT DATA)
<TABLE>
<CAPTION>
BASIS
INITIAL COSTS STEP UP COSTS
------------------------ ---------------------- CAPITALIZED
SQUARE BUILDINGS AND BUILDINGS AND SUBSEQUENT TO
FOOTAGE LAND IMPROVEMENTS LAND IMPROVEMENTS ACQUISITION
---------- -------- ------------- ------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Century Park Center............ 243,404 $ 7,190 $ 16,742 $ -- $ -- $ 9,759
Beverly Atrium................. 59,650 4,127 11,513 117 327 2,968
Woodland Hills Financial
Center....................... 224,955 6,566 14,754 365 880 6,902
Anaheim City Centre............ 175,391 515 11,199 94 2,075 4,551
425 West Broadway.............. 71,589 1,500 4,436 305 918 2,635
1950 Sawtelle.................. 103,106 1,988 7,263 -- -- 2,343
Bristol Plaza.................. 84,014 1,820 3,380 257 485 2,871
16000 Ventura.................. 174,841 1,700 17,189 185 1,929 5,047
5000 East Spring............... 163,358 -- 11,658 -- 424 4,012
70 South Lake.................. 100,133 1,360 9,097 -- -- 2,793
Westwood Terrace............... 135,943 2,103 16,850 -- -- 2,860
5601 Lindero Canyon............ 105,830 2,576 6,067 -- -- 2,440
6100 Wilshire.................. 202,704 1,200 19,902 -- -- 5,574
Calabasas Commerce Center...... 126,771 1,262 9,725 -- -- 2,158
Long Beach -- DF&G............. 272,013 -- 14,452 -- -- 411
Skyview Center................. 391,675 6,514 33,701 -- -- 6,164
400 Corporate Pointe........... 164,598 3,383 17,527 74 391 3,080
5832 Bolsa..................... 49,355 690 3,526 15 80 805
9665 Wilshire.................. 158,684 6,697 22,230 139 473 6,532
Imperial Bank Tower............ 540,413 3,722 35,184 64 625 12,058
100 West Broadway.............. 191,727 4,570 15,255 -- -- 2,198
Norwalk........................ 122,175 4,508 5,532 -- -- 3,583
303 Glenoaks Blvd.............. 175,289 6,500 18,132 -- -- 3,280
10351 Santa Monica............. 96,251 3,080 7,906 -- -- 1,544
2730 Wilshire.................. 55,080 3,515 5,944 -- -- 1,460
Grand Avenue Plaza............. 81,448 620 2,832 -- -- 4,260
Burbank Executive Plaza........ 60,395 1,100 4,384 -- -- 2,472
California Federal Building.... 81,243 1,500 5,981 -- -- 1,634
Center Promenade............... 174,837 2,310 9,266 -- -- 2,811
Los Angeles Corporate Center... 389,293 26,781 15,139 -- -- 7,388
5200 West Century.............. 310,910 2,080 9,360 -- -- 20,569
Sumitomo Bank Building......... 110,641 2,560 10,257 -- -- 3,067
10350 Santa Monica............. 42,292 860 3,456 -- -- 762
535 N. Brand Blvd.............. 109,187 1,600 8,427 -- -- 12,440

TOTAL COSTS
------------------------
BUILDINGS AND ACCUMULATED YEAR BUILT/
LAND IMPROVEMENTS TOTAL DEPRECIATION(1) ENCUMBRANCES RENOVATED
-------- ------------- ---------- --------------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Century Park Center............ $ 7,190 $ 26,501 $ 33,691 $ 7,922 $ -- 1972
Beverly Atrium................. 4,244 14,808 19,052 3,415 5,268(2) 1989
Woodland Hills Financial
Center....................... 6,931 22,536 29,467 5,962 14,564(2) 1972/95
Anaheim City Centre............ 609 17,825 18,434 3,920 8,914(2) 1986
425 West Broadway.............. 1,805 7,989 9,794 1,214 4,734(2) 1984
1950 Sawtelle.................. 1,988 9,606 11,594 2,447 6,855(2) 1988/95
Bristol Plaza.................. 2,077 6,736 8,813 1,476 4,082(2) 1982
16000 Ventura.................. 1,885 24,165 26,050 4,547 11,634(2) 1980/96
5000 East Spring............... -- 16,094 16,094 4,119 -- 1989/95
70 South Lake.................. 1,360 11,890 13,250 1,781 6,677(2) 1982/94
Westwood Terrace............... 2,103 19,710 21,813 3,042 -- 1988
5601 Lindero Canyon............ 2,576 8,507 11,083 1,814 6,225(2) 1989
6100 Wilshire.................. 1,200 25,476 26,676 4,375 11,567(2) 1986
Calabasas Commerce Center...... 1,262 11,883 13,145 2,105 8,103(2) 1990
Long Beach -- DF&G............. -- 14,863 14,863 1,827 -- 1987/95
Skyview Center................. 6,514 39,865 46,379 6,334 27,604(2) 1981/87/95
400 Corporate Pointe........... 3,457 20,998 24,455 2,877 15,583(2) 1987
5832 Bolsa..................... 705 4,411 5,116 501 2,675(2) 1985
9665 Wilshire.................. 6,836 29,235 36,071 3,762 -- 1972/92/93
Imperial Bank Tower............ 3,786 47,867 51,653 7,261 -- 1982/96
100 West Broadway.............. 4,570 17,453 22,023 2,375 15,120(2) 1987/96
Norwalk........................ 4,508 9,115 13,623 1,116 7,186(2) 1978
303 Glenoaks Blvd.............. 6,500 21,412 27,912 2,431 13,104(2) 1983/96
10351 Santa Monica............. 3,080 9,450 12,530 1,191 5,541(2) 1984
2730 Wilshire.................. 3,515 7,404 10,919 821 4,875(2) 1985
Grand Avenue Plaza............. 620 7,092 7,712 1,261 5,930(2) 1980
Burbank Executive Plaza........ 1,100 6,856 7,956 982 8,376(2) 1978/83
California Federal Building.... 1,500 7,615 9,115 1,091 -- 1978/83
Center Promenade............... 2,310 12,077 14,387 1,426 -- 1982
Los Angeles Corporate Center... 26,781 22,527 49,308 2,707 21,043(2) 1986
5200 West Century.............. 2,080 29,929 32,009 2,469 -- 1982
Sumitomo Bank Building......... 2,560 13,324 15,884 1,406 -- 1970/90-91
10350 Santa Monica............. 860 4,218 5,078 491 2,280(2) 1979
535 N. Brand Blvd.............. 1,600 20,867 22,467 992 --
</TABLE>

F-20
<PAGE> 119

SCHEDULE III -- COMMERCIAL PROPERTIES AND ACCUMULATED DEPRECIATION (CONTINUED)
SEPTEMBER 30, 2000
(UNAUDITED AND IN THOUSANDS, EXCEPT SQUARE FOOT DATA)
<TABLE>
<CAPTION>
BASIS
INITIAL COSTS STEP UP COSTS
------------------------ ---------------------- CAPITALIZED
SQUARE BUILDINGS AND BUILDINGS AND SUBSEQUENT TO
FOOTAGE LAND IMPROVEMENTS LAND IMPROVEMENTS ACQUISITION
----------- -------- ------------- ------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
10780 Santa Monica............ 92,486 $ 2,625 $ 7,997 $ -- $ -- $ 1,370
California Twin Center........ 155,189 4,680 14,877 -- -- 2,471
Whittier Financial Center..... 135,415 3,575 10,798 -- -- 2,682
6800 Owensmouth............... 80,014 1,725 5,851 -- -- 726
Clarendon Crest............... 43,063 1,300 3,951 -- -- 335
Noble Professional Center..... 51,828 1,657 5,096 -- -- 1,127
South Bay Centre.............. 202,830 4,775 14,365 -- -- 2,850
8383 Wilshire................. 417,463 13,570 45,505 -- -- 9,447
Parkway Center................ 61,333 1,480 5,941 -- -- 517
Centerpointe La Palma......... 597,550 16,011 64,400 -- -- 6,119
299 North Euclid.............. 73,522 1,050 6,110 -- -- 5,498
2800 28th Street.............. 103,506 2,938 9,063 -- -- 2,343
Harbor Corporate Center....... 63,925 870 3,538 -- -- 804
1000 Town Center.............. 107,656 2,800 11,260 -- -- 632
Mariner Court................. 105,436 2,350 9,461 -- -- 1,462
Pacific Gateway II............ 223,731 6,288 19,191 -- -- 5,593
1821 East Dyer................ 115,061 1,808 5,474 -- -- 2,929
Crown Cabot Financial......... 172,900 7,056 21,360 -- -- 5,225
120 South Spalding............ 60,656 2,775 8,544 -- -- 5,649
South Bay Technology Center... 104,815 1,600 4,782 -- -- 1,499
Gateway Center................ 84,081 2,698 8,141 -- -- 755
Renaissance Court............. 61,245 1,580 5,477 -- -- 1,261
Foremost Professional Plaza... 60,534 2,049 6,196 -- -- 687
Northpoint.................... 104,235 1,800 20,272 -- -- 1,293
Thousand Oaks Plaza........... 13,434 444 1,343 -- -- 47
Rancho Plaza.................. 24,057 711 2,213 -- -- 145
Pennsfield Plaza.............. 21,202 800 2,383 -- -- 390
Conejo Business Center........ 69,017 2,489 7,359 -- -- 553
Marin Corporate Center........ 51,360 1,956 5,915 -- -- 464
Evergreen Plaza............... 75,722 2,489 6,911 -- -- 681
145 South Fairfax............. 53,994 1,825 5,551 -- -- 1,091
Bernardo Regency.............. 47,916 1,625 4,937 -- -- 668
City Centre................... 302,519 8,250 24,951 -- -- 1,812
Wilshire Pacific Plaza........ 100,122 3,750 11,317 -- -- 3,545

TOTAL COSTS
------------------------
BUILDINGS AND ACCUMULATED YEAR BUILT/
LAND IMPROVEMENTS TOTAL DEPRECIATION(1) ENCUMBRANCES RENOVATED
-------- ------------- ---------- --------------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
10780 Santa Monica............ $ 2,625 $ 9,367 $ 11,992 $ 1,340 $ -- 1984
California Twin Center........ 4,680 17,348 22,028 2,090 -- 1983
Whittier Financial Center..... 3,575 13,480 17,055 1,704 -- 1967/82
6800 Owensmouth............... 1,725 6,577 8,302 722 -- 1986
Clarendon Crest............... 1,300 4,286 5,586 501 3,246(2) 1990
Noble Professional Center..... 1,657 6,223 7,880 745 3,580(2) 1985/93
South Bay Centre.............. 4,775 17,215 21,990 1,957 13,522(2) 1984
8383 Wilshire................. 13,570 54,952 68,522 6,072 -- 1971/93
Parkway Center................ 1,480 6,458 7,938 685 5,029(2) 1992/95
Centerpointe La Palma......... 16,011 70,519 86,530 7,660 33,832(2) 1986/88/90
299 North Euclid.............. 1,050 11,608 12,658 1,138 -- 1983
2800 28th Street.............. 2,938 11,406 14,344 1,222 -- 1979
Harbor Corporate Center....... 870 4,342 5,212 443 -- 1985
1000 Town Center.............. 2,800 11,892 14,692 1,128 -- 1989
Mariner Court................. 2,350 10,923 13,273 1,214 7,251(2) 1989
Pacific Gateway II............ 6,288 24,784 31,072 2,397 -- 1982/90
1821 East Dyer................ 1,808 8,403 10,211 909 -- 1980/88
Crown Cabot Financial......... 7,056 26,585 33,641 2,787 -- 1989
120 South Spalding............ 2,775 14,193 16,968 1,343 8,647(2) 1984
South Bay Technology Center... 1,600 6,281 7,881 714 -- 1984
Gateway Center................ 2,698 8,896 11,594 860 5,532(2) 1988
Renaissance Court............. 1,580 6,738 8,318 598 -- 1981/92
Foremost Professional Plaza... 2,049 6,883 8,932 714 -- 1992
Northpoint.................... 1,800 21,565 23,365 2,023 -- 1991
Thousand Oaks Plaza........... 444 1,390 1,834 201 -- 1988
Rancho Plaza.................. 711 2,358 3,069 190 -- 1987
Pennsfield Plaza.............. 800 2,773 3,573 237 -- 1989
Conejo Business Center........ 2,489 7,912 10,401 591 4,354 1991
Marin Corporate Center........ 1,956 6,379 8,335 496 3,088 1986
Evergreen Plaza............... 2,489 7,592 10,081 532 -- 1979/96
145 South Fairfax............. 1,825 6,642 8,467 539 4,029 1984
Bernardo Regency.............. 1,625 5,605 7,230 507 -- 1986
City Centre................... 8,250 26,763 35,013 2,332 -- 1982
Wilshire Pacific Plaza........ 3,750 14,862 18,612 1,586 -- 1976/87
</TABLE>

F-21
<PAGE> 120

SCHEDULE III -- COMMERCIAL PROPERTIES AND ACCUMULATED DEPRECIATION (CONTINUED)
SEPTEMBER 30, 2000
(UNAUDITED AND IN THOUSANDS, EXCEPT SQUARE FOOT DATA)
<TABLE>
<CAPTION>
BASIS
INITIAL COSTS STEP UP COSTS
------------------------ ---------------------- CAPITALIZED
SQUARE BUILDINGS AND BUILDINGS AND SUBSEQUENT TO
FOOTAGE LAND IMPROVEMENTS LAND IMPROVEMENTS ACQUISITION
----------- -------- ------------- ------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Glendale Corporate Center..... 108,209 $ 2,750 $ 12,734 $ -- $ -- $ 1,603
World Savings Center.......... 469,115 -- 110,382 -- -- 10,739
Beverly Sunset Medical
Plaza....................... 139,711 7,180 21,666 -- -- 5,908
Sunset Pointe Plaza........... 58,105 2,075 6,362 -- -- 785
Activity Business Center...... 167,045 3,650 11,303 -- -- 761
Westlake Gardens I............ 49,639 1,831 5,550 -- -- 2,577
9100 Wilshire Blvd............ 326,227 16,250 48,950 -- -- 6,302
Westwood Center............... 313,000 3,159 24,920 -- -- 69,266
1919 Santa Monica............. 43,796 2,580 7,772 -- -- 664
600 Corporate Pointe.......... 273,339 8,575 35,325 -- -- 5,127
150 East Colorado............. 61,168 1,988 5,841 -- -- 1,438
5161 Lankershim............... 178,317 5,016 25,568 -- -- 3,476
1501 Hughes Way............... 77,060 1,349 4,058 -- -- 3,129
3901 Via Oro.................. 53,195 692 2,081 -- -- 1,675
Huntington Beach Plaza I &
II.......................... 52,186 1,109 3,317 -- -- 534
Fountain Valley Plaza......... 107,252 2,949 9,377 -- -- 1,891
3300 Irvine Avenue............ 74,224 2,215 6,697 -- -- 1,258
Von Karman Corporate Center... 451,477 11,513 34,783 -- -- 8,212
South Coast Executive Plaza... 60,605 1,570 4,731 -- -- 518
One Venture................... 43,324 1,137 3,492 -- -- 1,266
City Centre................... 139,806 4,792 14,470 -- -- 1,826
Orange Financial Center....... 305,439 10,379 34,415 -- -- 5,827
Lambert Office Plaza.......... 32,807 1,095 3,296 -- -- 562
Carlsbad Corporate Center..... 125,000 3,722 15,061 -- -- 2,619
Balboa Corporate Center....... 69,890 2,759 8,303 -- -- 119
Panorama Corporate Center..... 133,149 6,512 19,593 -- -- 276
Ruffin Corporate Center....... 45,059 1,766 5,315 -- -- 76
Skypark Office Plaza.......... 202,164 5,733 21,608 -- -- 1,967
Governor Office Plaza......... 104,065 3,382 10,177 -- -- 2,069
5120 Shoreham................. 37,759 1,224 4,073 -- -- 417
Sorrento Valley Science....... 181,207 6,841 21,067 -- -- 2,102
Torreyanna Science Park....... 81,204 5,035 15,148 -- -- 309
Waples Tech Center............ 28,119 1,010 3,027 -- -- 711
10251 Vista Sorrento.......... 69,386 1,839 7,202 -- -- 168

TOTAL COSTS
------------------------
BUILDINGS AND ACCUMULATED YEAR BUILT/
LAND IMPROVEMENTS TOTAL DEPRECIATION(1) ENCUMBRANCES RENOVATED
-------- ------------- ---------- --------------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Glendale Corporate Center..... $ 2,750 $ 14,337 $ 17,087 $ 1,224 $ -- 1985
World Savings Center.......... -- 121,121 121,121 9,540 -- 1983
Beverly Sunset Medical
Plaza....................... 7,180 27,574 34,754 2,117 -- 1963/92-95
Sunset Pointe Plaza........... 2,075 7,147 9,222 682 3,452(2) 1988
Activity Business Center...... 3,650 12,064 15,714 843 7,915 1987
Westlake Gardens I............ 1,831 8,127 9,958 950 -- 1998
9100 Wilshire Blvd............ 16,250 55,252 71,502 5,044 -- 1971/90
Westwood Center............... 3,159 94,186 97,345 74 -- 2000
1919 Santa Monica............. 2,580 8,436 11,016 714 3,724(2) 1991
600 Corporate Pointe.......... 8,575 40,452 49,027 3,297 17,692(2) 1989
150 East Colorado............. 1,988 7,279 9,267 586 5,046(2) 1979/97
5161 Lankershim............... 5,016 29,044 34,060 2,705 13,573(2) 1985/97
1501 Hughes Way............... 1,349 7,187 8,536 507 -- 1983/97
3901 Via Oro.................. 692 3,756 4,448 575 -- 1986/97
Huntington Beach Plaza I &
II.......................... 1,109 3,851 4,960 351 1,509(2) 1984/96
Fountain Valley Plaza......... 2,949 11,268 14,217 956 4,833(2) 1982
3300 Irvine Avenue............ 2,215 7,955 10,170 803 3,244(2) 1981/97
Von Karman Corporate Center... 11,513 42,995 54,508 3,687 19,108(2) 1981/84
South Coast Executive Plaza... 1,570 5,249 6,819 340 2,262(2) 1979/97
One Venture................... 1,137 4,758 5,895 513 -- 1990/97
City Centre................... 4,792 16,296 21,088 1,365 7,055(2) 1985/97
Orange Financial Center....... 10,379 40,242 50,621 3,244 18,184(2) 1985/95
Lambert Office Plaza.......... 1,095 3,858 4,953 308 -- 1986/97
Carlsbad Corporate Center..... 3,722 17,680 21,402 1,984 9,327(2) 1996
Balboa Corporate Center....... 2,759 8,422 11,181 625 6,075(2) 1990
Panorama Corporate Center..... 6,512 19,869 26,381 1,475 13,109(2) 1991
Ruffin Corporate Center....... 1,766 5,391 7,157 400 3,626(2) 1990
Skypark Office Plaza.......... 5,733 23,575 29,308 1,680 -- 1986
Governor Office Plaza......... 3,382 12,246 15,628 1,108 5,026(2) 1986
5120 Shoreham................. 1,224 4,490 5,714 577 3,160(2) 1984
Sorrento Valley Science....... 6,841 23,169 30,010 1,840 -- 1984
Torreyanna Science Park....... 5,035 15,457 20,492 1,144 9,500(2) 1980/97
Waples Tech Center............ 1,010 3,738 4,748 293 -- 1990
10251 Vista Sorrento.......... 1,839 7,370 9,209 546 3,882(2) 1981/95
</TABLE>

F-22
<PAGE> 121

SCHEDULE III -- COMMERCIAL PROPERTIES AND ACCUMULATED DEPRECIATION (CONTINUED)
SEPTEMBER 30, 2000
(UNAUDITED AND IN THOUSANDS, EXCEPT SQUARE FOOT DATA)
<TABLE>
<CAPTION>
BASIS
INITIAL COSTS STEP UP COSTS
------------------------ ---------------------- CAPITALIZED
SQUARE BUILDINGS AND BUILDINGS AND SUBSEQUENT TO
FOOTAGE LAND IMPROVEMENTS LAND IMPROVEMENTS ACQUISITION
----------- -------- ------------- ------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Camarillo Business Center..... 154,216 $ 3,522 $ 10,602 $ -- $ -- $ 2,867
Centrelake Plaza.............. 110,763 1,570 9,473 -- -- 2,337
Tower Plaza I................. 72,350 2,080 6,280 -- -- 951
Tower Plaza II................ 19,301 265 802 -- -- 230
Tower Plaza III............... 12,483 172 520 -- -- 152
Chicago Avenue Business
Park........................ 47,482 1,223 3,687 -- -- 303
Havengate Center.............. 80,557 1,913 5,759 -- -- 1,718
HDS Plaza..................... 104,178 2,604 7,838 -- -- 846
5702 Bolsa.................... 27,731 589 1,775 -- -- 63
5672 Bolsa.................... 11,968 254 767 -- -- 170
5632 Bolsa.................... 21,568 458 1,381 -- -- 31
Huntington Commerce Center.... 67,551 992 2,997 -- -- 303
Savi Tech Center.............. 341,446 8,280 24,911 -- -- 2,516
Yorba Linda Business Park..... 167,142 2,629 7,913 -- -- 493
Cymer Technology Center....... 155,612 5,446 16,387 -- -- 1,173
Poway Industrial.............. 112,000 1,876 5,646 -- -- 130
10180 Scripps Ranch........... 43,560 1,165 3,507 -- -- 153
10965-93 Via Frontera......... 77,920 1,792 5,391 -- -- 458
Westridge..................... 48,955 1,807 5,591 -- -- 633
Ontario Airport Commerce
Center...................... 213,127 2,398 7,194 -- -- 803
Highlands I................... 26,856 470 1,418 -- -- 176
Highlands II.................. 41,210 793 2,394 -- -- 166
Hunter Business Park.......... 106,782 1,148 3,439 -- -- 542
Tower Plaza Retail............ 133,481 4,531 13,660 -- -- 1,122
6060 Center Drive............. 242,000 1,989 -- 2,310 -- 51,361
Howard Hughes -- Spectrum..... 36,959 2,500 7,500 -- -- 179
11075 Santa Monica............ 35,696 1,225 3,746 -- -- 1,233
Continental Grand............. 235,926 7,125 40,451 -- -- 3,621
Calabasas Tech Center......... 273,526 11,513 34,591 -- -- 2,895
Oceangate Tower............... 210,907 3,080 20,386 -- -- 1,972
Lyons Plaza................... 61,203 2,078 6,267 -- -- 499
Genesee Executive Plaza....... 155,820 6,750 20,178 -- -- 2,526
Solar Drive Business Park..... 125,132 4,250 12,770 -- -- 828

TOTAL COSTS
------------------------
BUILDINGS AND ACCUMULATED YEAR BUILT/
LAND IMPROVEMENTS TOTAL DEPRECIATION(1) ENCUMBRANCES RENOVATED
-------- ------------- ---------- --------------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Camarillo Business Center..... $ 3,522 $ 13,469 $ 16,991 $ 1,227 $ 8,819(2) 1984/97
Centrelake Plaza.............. 1,570 11,810 13,380 1,070 -- 1989
Tower Plaza I................. 2,080 7,231 9,311 573 -- 1988
Tower Plaza II................ 265 1,032 1,297 102 -- 1983
Tower Plaza III............... 172 672 844 74 -- 1983
Chicago Avenue Business
Park........................ 1,223 3,990 5,213 342 -- 1986
Havengate Center.............. 1,913 7,477 9,390 501 -- 1985
HDS Plaza..................... 2,604 8,684 11,288 751 -- 1987
5702 Bolsa.................... 589 1,838 2,427 141 941(2) 1987/97
5672 Bolsa.................... 254 937 1,191 78 330(2) 1987
5632 Bolsa.................... 458 1,412 1,870 106 845(2) 1987
Huntington Commerce Center.... 992 3,300 4,292 297 1,555(2) 1987
Savi Tech Center.............. 8,280 27,427 35,707 2,069 14,728(2) 1989
Yorba Linda Business Park..... 2,629 8,406 11,035 671 4,170(2) 1988
Cymer Technology Center....... 5,446 17,560 23,006 1,237 10,918(2) 1986
Poway Industrial.............. 1,876 5,776 7,652 431 3,492(2) 1991/96
10180 Scripps Ranch........... 1,165 3,660 4,825 268 1,997(2) 1978/96
10965-93 Via Frontera......... 1,792 5,849 7,641 446 2,875(2) 1982/97
Westridge..................... 1,807 6,224 8,031 504 2,972(2) 1984/96
Ontario Airport Commerce
Center...................... 2,398 7,997 10,395 635 1987/97
Highlands I................... 470 1,594 2,064 151 -- 1988
Highlands II.................. 793 2,560 3,353 189 -- 1990
Hunter Business Park.......... 1,148 3,981 5,129 365 -- 1990
Tower Plaza Retail............ 4,531 14,782 19,313 1,169 -- 1970/97
6060 Center Drive............. 4,299 51,361 55,660 3 40,373 2000
Howard Hughes -- Spectrum..... 2,500 7,679 10,179 494 -- 1993
11075 Santa Monica............ 1,225 4,979 6,204 312 -- 1983
Continental Grand............. 7,125 44,072 51,197 3,386 28,318(2) 1986
Calabasas Tech Center......... 11,513 37,486 48,999 2,758 -- 1990
Oceangate Tower............... 3,080 22,358 25,438 1,875 -- 1971/93/94
Lyons Plaza................... 2,078 6,766 8,844 504 -- 1990
Genesee Executive Plaza....... 6,750 22,704 29,454 1,655 17,319(2) 1984
Solar Drive Business Park..... 4,250 13,598 17,848 900 -- 1982
</TABLE>

F-23
<PAGE> 122

-------------------------
(1) The depreciable life for buildings and improvements ranges from ten to forty
years. Tenant improvements are depreciated over the remaining term of the
lease.

(2) All of these Properties are collateral for Arden Realty's $557.3 million
Mortgage Financings. The encumbrance allocated to an individual property is
based on the related individual release price.

F-24
<PAGE> 123

SCHEDULE III -- COMMERCIAL PROPERTIES AND ACCUMULATED DEPRECIATION (CONTINUED)
SEPTEMBER 30, 2000

The changes in our investment in commercial properties and related
accumulated depreciation for each of the periods presented are as follows (in
thousands):

<TABLE>
<CAPTION>
ARDEN REALTY LIMITED PARTNERSHIP
-------------------------------------------------------
FOR THE NINE
MONTHS ENDED FOR THE YEARS ENDED DECEMBER 31,
SEPTEMBER 30, --------------------------------------
2000 1999 1998 1997
------------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
COMMERCIAL PROPERTIES:
Balance at beginning of period........ $2,453,370 $2,198,580 $1,247,701 $ 550,633
Improvements.......................... 136,633 122,127 93,205 28,385
Deletions............................. -- (591) (44) (335)
Acquisition of properties............. -- 89,800 1,007,347 669,018
Transfers from (to) properties under
development........................ 114,083 43,454 (149,629) --
---------- ---------- ---------- ----------
Balance at end of period.............. $2,704,086 $2,453,370 $2,198,580 $1,247,701
========== ========== ========== ==========
ACCUMULATED DEPRECIATION:
Balance at beginning of period........ $ (157,608) $ (88,863) $ (37,591) $ (17,905)
Depreciation for period............... (63,839) (68,203) (51,758) (20,021)
Deletions............................. -- 591 44 335
Transfers to (from) properties under
development........................ (104) (1,133) 442 --
---------- ---------- ---------- ----------
Balance at end of period.............. $ (221,551) $ (157,608) $ (88,863) $ (37,591)
========== ========== ========== ==========
</TABLE>

F-25
<PAGE> 124

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

ARDEN REALTY

LIMITED PARTNERSHIP

OFFER TO EXCHANGE

$100,000,000

8.50% SENIOR NOTES DUE 2010
FOR ANY AND ALL UNREGISTERED
8.50% SENIOR NOTES DUE 2010

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

PROSPECTUS
, 2001
-------------------------

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE> 125

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20. INDEMNIFICATION OF OFFICERS AND DIRECTORS

The Maryland General Corporation Law permits a Maryland corporation to
include in its charter a provision limiting the liability of its directors and
officers to the corporation and its stockholders for money damages expect for
liability resulting from (a) actual receipt of an improper benefit or profit in
money, property or services or (b) active and deliberate dishonesty established
by a final judgment and material to the cause of action. Arden Realty's charter
contains a provision which eliminates that kind of liability to the maximum
extent permitted by Maryland law.

(a) any present or former director or officer; or

The bylaws obligate Arden Realty, to the maximum extent permitted by
Maryland law, to indemnify and to pay or reimburse reasonable expenses in
advance of final disposition of a proceeding to:

(a) any present or former director or officer who is made a party to
the proceeding by reason of his service in that capacity; or

The Maryland General Corporation Law requires a corporation to indemnify a
director or officer who has been successful, on the merits or otherwise, in the
defense of any proceeding to which he is made a party by reason of his service
in that capacity. A Maryland corporation is permitted to indemnify its present
and former directors and officers, among others, against judgments, penalties,
fines, settlements and reasonable expenses actually incurred by them in
connection with any proceeding to which they may be made a party by reason of
their service in those or other capacities unless it is established that:

(b) the director or officer actually received an improper personal
benefit in money, property or services; or

(c) in the case of any criminal proceeding, the director or officer
had reasonable cause to believe that the act or omission was unlawful.

received, unless, in either case, a court orders indemnification and then only
for expenses. A Maryland corporation is permitted to advance reasonable expenses
to a director or officer upon receipt by the corporation of (a) a written
affirmation by the director or officer of his good faith belief that he has met
the standard of conduct necessary for indemnification and (b) a written
undertaking by him or on his behalf to repay the amount paid or reimbursed if it
shall ultimately be determined that the standard of conduct was not met.

ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) EXHIBITS

II-2
<PAGE> 127

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
10.9* Assignment of Leases and Rents dated June 8, 1998, by and
between Arden Realty Finance III, L.L.C., a Delaware limited
liability company and Lehman Brothers Realty Corporation, a
Delaware corporation, its successors and assigns filed as an
exhibit to Arden Realty's quarterly report on Form 10-Q
filed with the Commission on August 14, 1998.
10.10* Collateral Assignment of Management Agreement and
Subordination Agreement dated as of June 8, 1998 among Arden
Realty Finance III, L.L.C., a Delaware limited liability
company ("Borrower"), Lehman Brothers Realty Corporation, a
Delaware corporation, ("Lender"), and Arden Realty Limited
Partnership, a Maryland limited partnership ("Manager"),
filed as an exhibit to Arden Realty's quarterly report on
Form 10-Q filed with the Commission on August 14, 1998.
10.11* Security Agreement is entered into as of June 8, 1998 by and
between Arden Realty Finance III, L.L.C., a Delaware limited
liability company and Lehman Brothers Realty Corporation, a
Delaware corporation, filed as an exhibit to Arden Realty's
quarterly report on Form 10-Q filed with the Commission on
August 14, 1998.
10.12* Environmental Indemnity Agreement dated June 8, 1998 by
Arden Realty Finance III, L.L.C., a Delaware limited
liability company, in favor of Lehman Brothers Realty
Corporation, a Delaware corporation, filed as an exhibit to
Arden Realty's quarterly report on Form 10-Q filed with the
Commission on August 14, 1998.
10.13* Letter agreement between Lehman Brothers Realty Corporation,
or an affiliate thereof ("Lender"), Arden Realty Finance
III, L.L.C. ("Borrower"), Arden Realty, Inc. (the "REIT")
and Arden Realty Limited Partnership, filed as an exhibit to
Arden Realty's quarterly report on Form 10-Q filed with the
Commission on August 14, 1998.
10.14* Loan Agreement by and between Arden Realty Finance IV, LLC,
a Delaware limited liability company and Lehman Brothers
Realty Corporation, a Delaware corporation, filed as an
exhibit to Arden Realty's quarterly report on Form 10-Q
filed with the Commission on August 14, 1998.
10.15* Mortgage Note, dated June 8, 1998 for $100,600,000 by and
between Arden Realty Finance IV, L.L.C., a Delaware limited
liability company ("Maker"), and Lehman Brothers Realty
Corporation, a Delaware corporation (Exhibit B to Exhibit
10.14 above).
10.16* Tenant Estoppel Certificate (Exhibit C. to Exhibit 10.14
above).
10.17* Subordination, Non-Disturbance and Attornment Agreement
(Exhibit D. to Exhibit 10.14 above).
10.18* Deed of Trust, Assignment of Rents and Leases, Security
Agreement, and Fixture Filing dated as of June 8, 1998 made
by Arden Realty Finance IV, L.L.C. as Grantor, to
Commonwealth Land Title Company as Trustee for the benefit
of Lehman Brothers Realty Corporation as Beneficiary, filed
as an exhibit to Arden Realty's quarterly report on Form
10-Q filed with the Commission on August 14, 1998.
10.19* Assignment of Leases and Rents dated June 8, 1998, by and
between Arden Realty Finance IV, L.L.C., a Delaware limited
liability company ("Assignor"), and Lehman Brothers Realty
Corporation, a Delaware corporation, its successors and
assigns ("Assignee"), filed as an exhibit to Arden Realty's
quarterly report on Form 10-Q filed with the Commission on
August 14, 1998.
10.20* Collateral Assignment of Management Agreement and
Subordination Agreement dated as of June 8, 1998 among Arden
Realty Finance IV, L.L.C., a Delaware limited liability
company ("Borrower"), Lehman Brothers Realty Corporation, a
Delaware corporation, ("Lender"), and Arden Realty Limited
Partnership, filed as an exhibit to Arden Realty's quarterly
report on Form 10-Q filed with the Commission on August 14,
1998.
</TABLE>

II-3
<PAGE> 128

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
10.21* Security Agreement is entered into as of June 8, 1998 by and
between Arden Realty Finance IV, L.L.C., a Delaware limited
liability company ("Debtor"), and Lehman Brothers Realty
Corporation, a Delaware corporation ("Secured Party"), filed
as an exhibit to Arden Realty's quarterly report on Form
10-Q filed with the Commission on August 14, 1998.
10.22* Environmental Indemnity Agreement dated June 8, 1998 by
Arden Realty Finance IV, L.L.C., a Delaware limited
liability company ("Indemnitor"), in favor of Lehman
Brothers Realty Corporation, a Delaware corporation
("Lender"), filed as an exhibit to Arden Realty's quarterly
report on Form 10-Q filed with the Commission on August 14,
1998.
10.23* Letter agreement between Lehman Brothers Realty Corporation,
or an affiliate thereof ("Lender"), Arden Realty Finance IV,
L.L.C. ("Borrower"), Arden Realty, Inc. (the "REIT") and
Arden Realty Limited Partnership, filed as an exhibit to
Arden Realty's quarterly report on Form 10-Q filed with the
Commission on August 14, 1998.
10.24* Amended and Restated Employment Agreement dated August 4,
1998, between Arden Realty and Mr. Richard S. Ziman, filed
as an exhibit to Arden Realty's quarterly report on Form
10-Q/A filed with the Commission on December 15, 1998.
10.25* Amended and Restated Employment Agreement dated August 4,
1998, between Arden Realty and Mr. Victor J. Coleman, filed
as an exhibit to Arden Realty's quarterly report on Form
10-Q/A filed with the Commission on December 15, 1998.
10.26* Amended and Restated Employment Agreement dated August 4,
1998, between Arden Realty and Mr. Herbert Porter, filed as
an exhibit to Arden Realty's quarterly report on Form 10-Q/A
filed with the Commission on December 15, 1998.
10.27* Amended and Restated Employment Agreement dated January 1,
1999, between Arden Realty and Mr. Robert Peddicord, filed
as a exhibit to Arden Realty's quarterly report on Form 10-Q
filed with the Commission on August 8, 2000.
10.28* Miscellaneous Rights Agreement among Arden Realty, Arden
Realty Limited Partnership, NAMIZ, Inc. and Mr. Ziman, filed
as an exhibit to Arden Realty's registration statement on
Form S-11 (No. 333-8163).
10.29* Credit Facility documentation consisting of Second Amended
and Restated Revolving Credit Agreement by and among Arden
Realty Limited Partnership and a group of banks led by Wells
Fargo Bank as filed as an exhibit to Arden Realty's
quarterly report on Form 10-Q filed with the Commission on
May 12, 2000.
10.30* Mortgage Financing documentation consisting of Loan
Agreement by and between Arden Realty's special purpose
financing subsidiary and Lehman Brothers Realty Corporation
(the Loan Agreement includes the Mortgage Note, Deed of
Trust, and form of Tenant Estoppel Certificate and Agreement
as exhibits) as filed as an exhibit to Arden Realty's
registration statement of Form S-11 (No. 333-30059).
10.31* Promissory Note, dated as of March 30, 1999, between
Massachusetts Mutual Life Insurance Company and Arden Realty
Finance V, L.L.C. filed as an exhibit to Arden Realty's
current report Form 8-K filed with the Commission on April
20, 1999.
10.32* Deed of Trust and Security Agreement, dated as of March 30,
1999, with Arden Realty Finance V, L.L.C. as the Trustor and
Massachusetts Mutual Life Insurance Company as the
Beneficiary filed as an exhibit to Arden Realty's current
report on Form 8-K filed with the Commission on April 20,
1999.
10.33* Assignment of Leases and Rents, dated as of March 30, 1999,
between Massachusetts Mutual Life Insurance Company and
Arden Realty Finance V, L.L.C. filed as an exhibit to Arden
Realty's current report on Form 8-K filed with the
Commission on April 20, 1999.
10.34* Subordination of Management Agreement, dated as of March 30,
1999, between Massachusetts Mutual Life Insurance Company
and Arden Realty Finance V. L.L.C. filed as an exhibit to
Arden Realty's current report on Form 8-K filed with the
Commission on April 20, 1999.
</TABLE>

II-4
<PAGE> 129

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
10.35* Environmental Indemnification and Hold Harmless Agreement,
dated as of March 30, 1999, between Massachusetts Mutual
Life Insurance Company and Arden Realty Finance V, L.L.C.
filed as an exhibit to Arden Realty's current report on Form
8-K filed with the Commission on April 20, 1999.
10.35* Form of Arden Realty Limited Partnership's unsecured 8.875%
senior note due 2005, dated March 17, 2000 filed as an
exhibit to Arden Realty Limited Partnership's registration
statement on Form S-4 (No. 333-35406).
10.36* Form of Arden Realty Limited Partnership's unsecured 9.150%
senior note due 2010, dated March 17, 2000 filed as an
exhibit to Arden Realty Limited Partnership's registration
statement on Form S-4 (No. 333-35406).
10.37* Senior Unsecured Credit Agreement between Arden Realty
Limited Partnership and Lehman Brothers Inc. dated July 27,
2000 filed as an exhibit to Arden Realty's quarterly report
on Form 10-Q filed with the Commission on November 12, 2000.
10.38* Registration Rights Agreement between Arden Realty Limited
Partnership and the initial purchasers set forth therein
dated as of March 17, 2000, filed as an exhibit to Arden
Realty Limited Partnership's registration statement on Form
S-4 (No. 333-35406).
10.39* Purchase Agreement between Arden Realty Limited Partnership
and the initial purchasers set forth therein dated as of
March 14, 2000, filed as an exhibit to Arden Realty Limited
Partnership's registration statement on Form S-4 (No.
333-35406).
10.40 Registration Rights Agreement between Arden Realty Limited
Partnership and Lehman Brothers Inc. dated as of November
20, 2000.
10.41 Purchase Agreement between Arden Realty Limited Partnership
and Lehman Brothers Inc. dated as of November 15, 2000.
12.1 Statement regarding computation of ratios
21.1 Subsidiaries of Arden Realty Limited Partnership
23.1 Consent of Ernst & Young LLP
23.2 Consent of Ballard Spahr Andrews & Ingersoll, LLP (included
in Exhibit 5.1)
23.3 Consent of Latham & Watkins (included in Exhibit 5.2 and 8)
24.1 Power of Attorney (included on signature page to the
registration statement)
25.1 Statement of Eligibility of Trustee on Form T-1
27.1 Financial Data Schedule
99.1 Form of Letter of Transmittal
99.2 Form of Notice of Guaranteed Delivery
99.3 Form of Letter to Brokers
99.4 Form of Instructions to Brokers
99.5 Form of Letter to Clients
</TABLE>

-------------------------
(*) Incorporated by reference.

(b) FINANCIAL STATEMENT SCHEDULES

Schedules not listed above are omitted because of the absence of the
conditions under which they are required or because the information required by
such omitted schedules is set forth in the financial statements or the notes
thereto.

II-5
<PAGE> 130

ITEM 22. UNDERTAKINGS.

The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement;

(a) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;

(b) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the estimated
maximum offering range may be reflected in the form of a prospectus
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and

(c) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offering
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.

The undersigned registrant hereby undertakes to file an application for the
purpose of determining the eligibility of the trustee to act under subsection
(a) of Section 310 of the Trust Indenture Act ("Act") in accordance with the
rules and regulations prescribed by the Commission under Section 305(b)(2) of
the Act.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions referred to in Item 20 of this
Registration Statement, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, enforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer, or controlling person of the registrant in the successful defense of
any action, suit, or proceeding) is asserted by such director, officer, or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question as to whether such indemnification by it is against public policy
as expressed in the act, and will be governed by the final adjudication of such
issue.

II-6
<PAGE> 131

SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Los Angeles, State of
California on January 3, 2001.

ARDEN REALTY LIMITED PARTNERSHIP
By: Arden Realty, Inc.
Its: General Partner

By: /s/ RICHARD S. ZIMAN
------------------------------------
Richard S. Ziman
Chairman of the Board and
Chief Executive Officer

POWER OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints
Daniel S. Bothe and Richard S. Davis, and each of them, as his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and for his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments
and any registration statement pursuant to Rule 462(b)) to this registration
statement on Form S-4 and to file the same with all exhibits thereto and any
other documents in connection therewith, with the Securities and Exchange
Commission under the Securities Act granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing necessary or desirable to be done in and about the premises,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, or their substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities indicated
and on January 3, 2001.

<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ RICHARD S. ZIMAN Chairman of the Board, Chief Executive Officer
----------------------------------------------------- and Director
Richard S. Ziman

/s/ VICTOR J. COLEMAN President, Chief Operating Officer and
----------------------------------------------------- Director
Victor J. Coleman

/s/ ANDREW J. SOBEL Executive Vice President
-----------------------------------------------------
Andrew J. Sobel

/s/ DANIEL S. BOTHE Senior Vice President and Co-Chief Financial
----------------------------------------------------- Officer
Daniel S. Bothe

/s/ RICHARD S. DAVIS Senior Vice President, Co-Chief Financial
----------------------------------------------------- Officer and Treasurer
Richard S. Davis

/s/ DAVID A. SWARTZ Secretary and General Counsel
-----------------------------------------------------
David A. Swartz
</TABLE>

II-7
<PAGE> 132

<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ CARL D. COVITZ Director
-----------------------------------------------------
Carl D. Covitz

/s/ LARRY S. FLAX Director
-----------------------------------------------------
Larry S. Flax

/s/ PETER S. GOLD Director
-----------------------------------------------------
Peter S. Gold

/s/ STEVEN C. GOOD Director
-----------------------------------------------------
Steven C. Good

/s/ KENNETH B. ROATH Director
-----------------------------------------------------
Kenneth B. Roath
</TABLE>

II-8
<PAGE> 133

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
3.1* Second Amended and Restated Agreement of Limited Partnership
of Arden Realty Limited Partnership, dated September 7,
1999, filed as an exhibit to Arden Realty's quarterly report
on Form 10-Q filed with the Commission on November 15, 1999.
4.1* Indenture between Arden Realty Limited Partnership and The
Bank of New York, as trustee, dated March 14, 2000 as filed
as an exhibit to Arden Realty Limited Partnership's
registration statement on Form S-4 (No. 333-35406).
4.2 Form of 2010 exchange note
5.1 Opinion of Ballard Spahr Andrews & Ingersoll, LLP regarding
the validity of the exchange notes
5.2 Opinion of Latham & Watkins regarding the validity of the
exchange notes
8.1 Opinion of Latham & Watkins regarding tax matters
10.1* 1996 Stock Option and Incentive Plan of Arden Realty, Inc.
and Arden Realty Limited Partnership as filed as an exhibit
to Arden Realty's registration statement on Form S-11 (No.
333-8163).
10.2* Amendment Number 1 to the 1996 Stock Option and Incentive
Plan of Arden Realty, Inc. and Arden Realty Limited
Partnership as filed as an exhibit to Arden Realty's
Schedule 14A filed with the Commission on June 23, 1998.
10.3* Form of Officers and Directors Indemnification Agreement as
filed as an exhibit to Arden Realty's registration statement
on Form S-11 (No. 333-8163).
10.4* Loan Agreement dated June 8, 1998 by and between Arden
Realty Finance III, LLC, a Delaware limited liability
company and Lehman Brothers Realty Corporation, a Delaware
corporation filed as an exhibit to Arden Realty's quarterly
report of Form 10-Q filed with the Commission on August 14,
1998.
10.5* Mortgage Note, dated June 8, 1998 for $136,100,000 by and
between Arden Realty Finance III, L.L.C., a Delaware limited
liability company, and Lehman Brothers Realty Corporation, a
Delaware corporation. (Exhibit B. to Exhibit 10.4 above).
10.6* Tenant Estoppel Certificate (Exhibit C. to Exhibit 10.4
above).
10.7* Subordination, Non-Disturbance and Attornment Agreement
(Exhibit D. to Exhibit 10.4 above).
10.8* Deed of Trust, Assignment of Rents and Leases, Security
Agreement, and Fixture Filing dated as of June 8, 1998 made
by Arden Realty Finance III, L.L.C. as Grantor, to
Commonwealth Land Title Company as Trustee for the benefit
of Lehman Brothers Realty Corporation as Beneficiary, filed
as an exhibit to Arden Realty's quarterly report on Form
10-Q filed with the Commission on August 14, 1998.
10.9* Assignment of Leases and Rents dated June 8, 1998, by and
between Arden Realty Finance III, L.L.C., a Delaware limited
liability company and Lehman Brothers Realty Corporation, a
Delaware corporation, its successors and assigns filed as an
exhibit to Arden Realty's quarterly report on Form 10-Q
filed with the Commission on August 14, 1998.
10.10* Collateral Assignment of Management Agreement and
Subordination Agreement dated as of June 8, 1998 among Arden
Realty Finance III, L.L.C., a Delaware limited liability
company ("Borrower"), Lehman Brothers Realty Corporation, a
Delaware corporation, ("Lender"), and Arden Realty Limited
Partnership, a Maryland limited partnership ("Manager"),
filed as an exhibit to Arden Realty's quarterly report on
Form 10-Q filed with the Commission on August 14, 1998.
10.11* Security Agreement is entered into as of June 8, 1998 by and
between Arden Realty Finance III, L.L.C., a Delaware limited
liability company and Lehman Brothers Realty Corporation, a
Delaware corporation, filed as an exhibit to Arden Realty's
quarterly report on Form 10-Q filed with the Commission on
August 14, 1998.
</TABLE>
<PAGE> 134

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
10.12* Environmental Indemnity Agreement dated June 8, 1998 by
Arden Realty Finance III, L.L.C., a Delaware limited
liability company, in favor of Lehman Brothers Realty
Corporation, a Delaware corporation, filed as an exhibit to
Arden Realty's quarterly report on Form 10-Q filed with the
Commission on August 14, 1998.
10.13* Letter agreement between Lehman Brothers Realty Corporation,
or an affiliate thereof ("Lender"), Arden Realty Finance
III, L.L.C. ("Borrower"), Arden Realty, Inc. (the "REIT")
and Arden Realty Limited Partnership, filed as an exhibit to
Arden Realty's quarterly report on Form 10-Q filed with the
Commission on August 14, 1998.
10.14* Loan Agreement by and between Arden Realty Finance IV, LLC,
a Delaware limited liability company and Lehman Brothers
Realty Corporation, a Delaware corporation, filed as an
exhibit to Arden Realty's quarterly report on Form 10-Q
filed with the Commission on August 14, 1998.
10.15* Mortgage Note, dated June 8, 1998 for $100,600,000 by and
between Arden Realty Finance IV, L.L.C., a Delaware limited
liability company ("Maker"), and Lehman Brothers Realty
Corporation, a Delaware corporation (Exhibit B to Exhibit
10.14 above).
10.16* Tenant Estoppel Certificate (Exhibit C. to Exhibit 10.14
above).
10.17* Subordination, Non-Disturbance and Attornment Agreement
(Exhibit D. to Exhibit 10.14 above).
10.18* Deed of Trust, Assignment of Rents and Leases, Security
Agreement, and Fixture Filing dated as of June 8, 1998 made
by Arden Realty Finance IV, L.L.C. as Grantor, to
Commonwealth Land Title Company as Trustee for the benefit
of Lehman Brothers Realty Corporation as Beneficiary, filed
as an exhibit to Arden Realty's quarterly report on Form
10-Q filed with the Commission on August 14, 1998.
10.19* Assignment of Leases and Rents dated June 8, 1998, by and
between Arden Realty Finance IV, L.L.C., a Delaware limited
liability company ("Assignor"), and Lehman Brothers Realty
Corporation, a Delaware corporation, its successors and
assigns ("Assignee"), filed as an exhibit to Arden Realty's
quarterly report on Form 10-Q filed with the Commission on
August 14, 1998.
10.20* Collateral Assignment of Management Agreement and
Subordination Agreement dated as of June 8, 1998 among Arden
Realty Finance IV, L.L.C., a Delaware limited liability
company ("Borrower"), Lehman Brothers Realty Corporation, a
Delaware corporation, ("Lender"), and Arden Realty Limited
Partnership, filed as an exhibit to Arden Realty's quarterly
report on Form 10-Q filed with the Commission on August 14,
1998.
10.21* Security Agreement is entered into as of June 8, 1998 by and
between Arden Realty Finance IV, L.L.C., a Delaware limited
liability company ("Debtor"), and Lehman Brothers Realty
Corporation, a Delaware corporation ("Secured Party"), filed
as an exhibit to Arden Realty's quarterly report on Form
10-Q filed with the Commission on August 14, 1998.
10.22* Environmental Indemnity Agreement dated June 8, 1998 by
Arden Realty Finance IV, L.L.C., a Delaware limited
liability company ("Indemnitor"), in favor of Lehman
Brothers Realty Corporation, a Delaware corporation
("Lender"), filed as an exhibit to Arden Realty's quarterly
report on Form 10-Q filed with the Commission on August 14,
1998.
10.23* Letter agreement between Lehman Brothers Realty Corporation,
or an affiliate thereof ("Lender"), Arden Realty Finance IV,
L.L.C. ("Borrower"), Arden Realty, Inc. (the "REIT") and
Arden Realty Limited Partnership, filed as an exhibit to
Arden Realty's quarterly report on Form 10-Q filed with the
Commission on August 14, 1998.
10.24* Amended and Restated Employment Agreement dated August 4,
1998, between Arden Realty and Mr. Richard S. Ziman, filed
as an exhibit to Arden Realty's quarterly report on Form
10-Q/ A filed with the Commission on December 15, 1998.
10.25* Amended and Restated Employment Agreement dated August 4,
1998, between Arden Realty and Mr. Victor J. Coleman, filed
as an exhibit to Arden Realty's quarterly report on Form
10-Q/ A filed with the Commission on December 15, 1998.
</TABLE>
<PAGE> 135

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
10.26* Amended and Restated Employment Agreement dated August 4,
1998, between Arden Realty and Mr. Herbert Porter, filed as
an exhibit to Arden Realty's quarterly report on Form 10-Q/A
filed with the Commission on December 15, 1998.
10.27* Amended and Restated Employment Agreement dated January 1,
1999, between Arden Realty and Mr. Robert Peddicord, filed
as a exhibit to Arden Realty's quarterly report on Form 10-Q
filed with the Commission on August 8, 2000.
10.28* Miscellaneous Rights Agreement among Arden Realty, Arden
Realty Limited Partnership, NAMIZ, Inc. and Mr. Ziman, filed
as an exhibit to Arden Realty's registration statement on
Form S-11 (No. 333-8163).
10.29* Credit Facility documentation consisting of Second Amended
and Restated Revolving Credit Agreement by and among Arden
Realty Limited Partnership and a group of banks led by Wells
Fargo Bank as filed as an exhibit to Arden Realty's
quarterly report on Form 10-Q filed with the Commission on
May 12, 2000.
10.30* Mortgage Financing documentation consisting of Loan
Agreement by and between Arden Realty's special purpose
financing subsidiary and Lehman Brothers Realty Corporation
(the Loan Agreement includes the Mortgage Note, Deed of
Trust, and form of Tenant Estoppel Certificate and Agreement
as exhibits) as filed as an exhibit to Arden Realty's
registration statement of Form S-11 (No. 333-30059).
10.31* Promissory Note, dated as of March 30, 1999, between
Massachusetts Mutual Life Insurance Company and Arden Realty
Finance V, L.L.C. filed as an exhibit to Arden Realty's
current report Form 8-K filed with the Commission on April
20, 1999.
10.32* Deed of Trust and Security Agreement, dated as of March 30,
1999, with Arden Realty Finance V, L.L.C. as the Trustor and
Massachusetts Mutual Life Insurance Company as the
Beneficiary filed as an exhibit to Arden Realty's current
report on Form 8-K filed with the Commission on April 20,
1999.
10.33* Assignment of Leases and Rents, dated as of March 30, 1999,
between Massachusetts Mutual Life Insurance Company and
Arden Realty Finance V, L.L.C. filed as an exhibit to Arden
Realty's current report on Form 8-K filed with the
Commission on April 20, 1999.
10.34* Subordination of Management Agreement, dated as of March 30,
1999, between Massachusetts Mutual Life Insurance Company
and Arden Realty Finance V. L.L.C. filed as an exhibit to
Arden Realty's current report on Form 8-K filed with the
Commission on April 20, 1999.
10.35* Environmental Indemnification and Hold Harmless Agreement,
dated as of March 30, 1999, between Massachusetts Mutual
Life Insurance Company and Arden Realty Finance V, L.L.C.
filed as an exhibit to Arden Realty's current report on Form
8-K filed with the Commission on April 20, 1999.
10.35* Form of Arden Realty Limited Partnership's unsecured 8.875%
senior note due 2005, dated March 17, 2000 filed as an
exhibit to Arden Realty Limited Partnership's registration
statement on Form S-4 (No. 333-35406).
10.36* Form of Arden Realty Limited Partnership's unsecured 9.150%
senior note due 2010, dated March 17, 2000 filed as an
exhibit to Arden Realty Limited Partnership's registration
statement on Form S-4 (No. 333-35406).
10.37* Senior Unsecured Credit Agreement between Arden Realty
Limited Partnership and Lehman Brothers Inc. dated July 27,
2000 filed as an exhibit to Arden Realty's quarterly report
on Form 10-Q filed with the Commission on November 12, 2000.
10.38* Registration Rights Agreement between Arden Realty Limited
Partnership and the initial purchasers set forth therein
dated as of March 17, 2000, filed as an exhibit to Arden
Realty Limited Partnership's registration statement on Form
S-4 (No. 333-35406).
10.39* Purchase Agreement between Arden Realty Limited Partnership
and the initial purchasers set forth therein dated as of
March 14, 2000, filed as an exhibit to Arden Realty Limited
Partnership's registration statement on Form S-4 (No.
333-35406).
</TABLE>
<PAGE> 136

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
10.40 Registration Rights Agreement between Arden Realty Limited
Partnership and Lehman Brothers dated as of November 20,
2000.
10.41 Purchase Agreement between Arden Realty Limited Partnership
and Lehman Brothers dated as of November 15, 2000.
12.1 Statement regarding computation of ratios
21.1 Subsidiaries of Arden Realty Limited Partnership
23.1 Consent of Ernst & Young LLP
23.2 Consent of Ballard Spahr Andrews & Ingersoll, LLP (included
in Exhibit 5.1)
23.3 Consent of Latham & Watkins (included in Exhibit 5.2 and 8)
24.1 Power of Attorney (included on signature page to the
registration statement)
25.1 Statement of Eligibility of Trustee on Form T-1
27.1 Financial Data Schedule
99.1 Form of Letter of Transmittal
99.2 Form of Notice of Guaranteed Delivery
99.3 Form of Letter to Brokers
99.4 Form of Instructions to Brokers
99.5 Form of Letter to Clients
</TABLE>

-------------------------
(*) Incorporated by reference.