CHICAGO DOCK & CANAL TRUST, ARS, 1996-08-27

CHICAGO DOCK & CANAL TRUST
ARS, 1996-08-27
REAL ESTATE INVESTMENT TRUSTS

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[Photograph of Cityfront Place Mid-Rise appears through cutout]

CITYFRONT

THE CHICAGO DOCK AND CANAL TRUST 1996 ANNUAL REPORT

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[Photograph of Sheraton Chicago Hotel & Towers]

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Aerial photograph of Cityfront Center
and surrounding area with an insert
photograph of Cityfront Place Mid-Rise.

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The Chicago Dock and Canal Trust is a self-administered real estate investment
trust (REIT) known for its holdings in Cityfront Center, an established mixed-
use development located on prime downtown land on the Chicago lakefront.
Cityfront Center is the Trust's primary real estate investment, and includes 22
acres of partially developed land. - The Trust has been operating as a REIT
since 1962, and is successor to The Chicago Dock and Canal Company, which was
founded in 1857 by Chicago's first mayor, William Ogden. - The Trust is traded
on NASDAQ under the symbol DOCKS, and operates on an April 30 fiscal year-end.

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FINANCIAL HIGHLIGHTS

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In thousands April 30 1996 1995 1994 1993
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Revenues $ 22,287 $ 22,389 $ 20,714 $ 20,554
Operating Income (Loss) 1,870 (1,019) 309 (1,412)
Net Income (Loss) 1,555 (814) 100 (2,254)
Cash Flows Provided By (Used In)
Operations 4,001 2,115 2,468 (26)
Funds From Operations 5,403 2,859 4,454 2,328
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[BAR GRAPH]

EARNINGS PER SHARE FUNDS FROM OPERATIONS PER SHARE
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1996 $ 0.27 1996 $ 0.93
1995 $ (0.02)* 1995 $ 0.67*
1994 $ 0.02 1994 $ 0.77
1993 $ (0.39) 1993 $ 0.40
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* adjusted to exclude unusual items * adjusted to exclude EPA-related costs

[PIE CHART]

FISCAL 1996 REVENUES
(in millions)

Residential. . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6.3

Ground Leases. . . . . . . . . . . . . . . . . . . . . . . . . . $ 11.4

Interim Uses . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2.3

Offices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.6

Parking Facility and Parcel 7. . . . . . . . . . . . . . . . . . $ 0.7

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DEAR SHAREHOLDER: Fiscal 1996 was truly a watershed year for The Chicago Dock
and Canal Trust -- a year in which we began to reap the benefits of our
conservative long-term investment philosophy. In doing so, we realized
substantial improvements in both operating results and underlying share value.
We also entered a new cycle of enhancing value through development of our vacant
land.

By increasing operating income, net income and earnings per share, we have
established a strong foundation for future growth. In addition, we increased
quarterly dividends twice in calendar 1996. The first increase -- from $.01 per
share to $.04 per share -- was paid on March 1 and the second -- from $.04 per
share to $.06 per share -- is payable September 1.

Book income in fiscal 1996 was $1.6 million, an increase of $2.4 million over
reported earnings in FY95 and an increase of $1.7 million over FY95 earnings as
adjusted to exclude the one-time impact of three unusual transactions: the
recognition of costs related to EPA concerns, the sale of property to the
Chicago Music and Dance Theater and the disposition of our property in Lansing,
Michigan.

Similarly, funds from operations (FFO) increased significantly, up $1.5
million in fiscal 1996 to $5.4 million from FY95's adjusted FFO of $3.9 million.

The improvement in fiscal 1996 earnings and FFO is directly related to the
continued redevelopment of the Cityfront Center area. We generated sufficient
revenue from interim uses of certain parcels to fully cover the carrying costs
on all the Trust's undeveloped land.

Of particular importance in fiscal 1996 was the reopening of Navy Pier; its
$200-million-plus renovation already has attracted some 4 million visitors to
our neighborhood. The Trust captured

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the benefits of this activity, primarily by creating a new lease for the
surface parking lots on the north side of our Cityfront Center holdings.

This new lease, though only in place for four months of fiscal 1996, helped
increase our fiscal 1996 parking revenues by $1.2 million over FY95. We look
forward to the additional boost in parking revenues we will realize from FY97's
full year of operation under the new lease.

We also achieved improved operating earnings at our Cityfront Place Mid-Rise,
where occupancy averaged 95 percent throughout the year. The Cityfront Center
neighborhood is in demand and our Mid-Rise is commanding rents at the top of the
market.

The East Water Place townhomes also began generating income for the Trust
this year. In fact, the developer has accelerated the takedown of leased lots,
with the intention of leasing all 56 by the end of FY97. The developer reports
having contracts with substantial deposits on 35 units to date, and the first
closings are planned for this Fall. In addition to collecting our base rent, we
look forward to receiving our "kicker" payments of at least $5,000 per unit as
the developer sells the final 48 units over the next few years.

With these projects in place, we continue to pursue exciting opportunities
for development of several other parcels. One scenario calls for an
entertainment complex to be built on our "super block" bounded by Columbus
Drive, Grand Avenue, McClurg Court and Illinois Street. Another possibility
is the result of the successful renovation of Navy Pier. That facility
clearly needs more parking and the Trust owns several undeveloped parcels
near the Navy Pier entrance that are prime sites for a parking structure.
Discussions continue on both possibilities with developers and potential
users.

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The Trust also looked inward during the past fiscal year, undertaking a
full strategic assessment of the Trust's holdings and evaluating the best
course of action for delivering shareholders' full value in the appropriate
manner. This frank appraisal of our position led us to hire Lehman Brothers
as an advisor, and subsequently to authorize them to seek preliminary
indications of interest in a potential business combination involving the
Trust. This process is well underway and we expect to be able to share
additional information with you by the time of the annual meeting.

The market price of our shares has increased substantially in recent years,
from a low in FY93 of $7.75 per share to as much as $15.00 per share in fiscal
1996. This strengthening is consistent with our improved earnings, our improved
prospects and a significant improvement in the real estate development
environment in downtown Chicago, as well as with the renewed interest in our
stock generated by our strategic assessment process.

The annual meeting of the Trust will be held this year at the Sheraton
Chicago Hotel & Towers in Cityfront Center on October 15, 1996 at 10:00 AM. I
encourage you to attend the meeting in person and to visit Cityfront Center
either in connection with the meeting or sometime prior to the meeting to see
for yourself how energetic our neighborhood has become.

Sincerely,

/s/ Charles R. Gardner
- ------------------------------
Charles R. Gardner
President
August 15, 1996

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[MAP OF CITYFRONT CENTER]

ASSETS WORKING OPPORTUNITIES
FOR YOU FOR ADDED VALUE

1 Cityfront Place Mid-Rise A Parcels 9 and 13

2 Cityfront Place High-Rise B Parcel 21

3 Sheraton Chicago Hotel & Towers C Parcel 24

4 Ogden Plaza Parking Facility D Parcels 18 and 19

5 Surface Parking E Parcel 16

6 Kraft Building F Parcel 14

7 East Water Place Townhomes G Parcel 7

Waterplace Park (Indianapolis, IN) H Parcel 8

Lincoln Garden (Tampa, FL)

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ASSETS WORKING FOR YOU The Trust's Chicago property lies on the north bank of
the Chicago River along Lake Michigan, east of Columbus Drive and west of Lake
Shore Drive. An Indian trail in the early 1800s, the area became a shipping
center at the end of that century and evolved into industrial use in the
1900s. By 1960, the area was ready for redevelopment into commercial and
residential uses. - In recent years, Cityfront Center developments have
included the High-Rise and Mid-Rise apartment buildings, a convention hotel and
a parking facility; in addition, townhomes currently are under construction. The
Trust also owns an office complex in Indiana and another in Florida. - The
Trust's investment philosophy is designed to achieve three primary objectives:
long-term appreciation in asset value, maximum cash flow, and expeditious
development with minimum risk. To accomplish these objectives, the Trust has
entered into unsubordinated ground leases, formed a joint venture and exchanged
other assets to acquire completed buildings. - The Trust continues to seek
future development opportunities in similar arrangements and prefers
transactions that defer taxable gains, either through exchanges, installment
sales or long-term ground leases.

THE TRUST'S INVESTMENT PHILOSOPHY IS DESIGNED TO ACHIEVE THREE PRIMARY
OBJECTIVES:

- - LONG-TERM APPRECIATION IN ASSET VALUE
- - MAXIMUM CASH FLOW
- - EXPEDITIOUS DEVELOPMENT WITH MINIMUM RISK

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ASSETS WORKING FOR YOU

1 CITYFRONT PLACE MID-RISE
- - Two 12-story apartment buildings 424 rental units, health club, 338 parking
spaces
- - Total rentable area: 346,065 sq. ft., includes 13,303 sq. ft. of commercial
space
- - Opened 1991; acquired 1991
- - Trust Debt: None

FISCAL 1996 PERFORMANCE

- - Average Occupancy: Residential 95%, Commercial 100%
- - Average Annual Rent Increase: 6%
- - Total Revenue: $6,267,000
- - Operating Income: $3,249,000

A key operating asset of the Trust, the Mid-Rise offers many amenities in an
ideal location. With occupancy high and few additional units coming to market
in the neighborhood, there is significant upward pressure on rental rates.

Further, the Mid-Rise was constructed to condominium specifications and could
be sold for condominium conversion. Neighboring buildings recently have been
converted successfully, demonstrating the potential value of this strategy.
Although the Trust currently has no plans for such a sale, we will continue
to monitor this potential to add to shareholder value.

The complex is currently pledged as security for a $20-million credit
facility, which currently is fully available.

2 CITYFRONT PLACE HIGH-RISE
- - 39-story apartment tower 480 rental units, health club, 288 parking spaces
- - Total rentable area: 368,442 sq. ft., includes 7,700 sq. ft. of commercial
space
- - Opened 1991; joint venture formed in 1989
- - Joint Venture Debt: $36,373,000

FISCAL 1996 PERFORMANCE

- - Average Occupancy: Residential 94%, Commercial 47%
- - Average Annual Rent Increase: 4%
- - Joint Venture Total Revenue: $6,942,000
- - Joint Venture Operating Income: $3,759,000

While the Trust has a one-third ownership of this property, it is subject to
the preferred return of its partner, Northwestern Mutual Life Insurance
Company. NML receives a priority over distributions of cash flows available
after debt service, and current cash flows are insufficient to cover that
priority. NML also receives a priority over proceeds from a sale or
refinancing.

Accordingly, the Trust received no cash flow from the property in calendar
1995, and will not until operations improve. However, with occupancy high and
few additional units coming to market in the neighborhood, there is
significant upward pressure on rental rates.

Further, as with the Mid-Rise, the High-Rise was constructed to condominium
specifications and could be sold for conversion.

3 SHERATON CHICAGO HOTEL & TOWERS

- - 1,200-room convention hotel
- - Opened 1992
- - Unsubordinated ground lease
- - Trust Debt: $22,347,000

FISCAL 1996 PERFORMANCE

- - Total Revenue: $10,246,000
- - Operating Income: $4,944,000

The Trust owns the land under the hotel. This asset is unique in that the
ground lease is not subordinated to leasehold financing. In effect, this
means that if rent is not paid, the Trust can terminate the lease and take
title to the entire property, subject only to the mortgage on the Trust's
land.

The annual minimum base rent is $2.1 million in calendar 1996. Base rent
grows annually by the increase in the Consumer Price Index, from a minimum of
5% to a maximum of 10%. The Trust may also collect additional rent, based on
a percentage formula tied to the hotel's gross revenues, to the extent that
the percentage rent exceeds base rent. These provisions offer the Trust
opportunities to realize significant increases in rent over the term of the
lease.

The lessee has the option to purchase the Trust's land starting in the year
2003 at a minimum purchase price of $52.5 million. The purchase price formula
also reflects all increases in base rent (tied to CPI) and percentage rent.
Thus, both rents and purchase price rise with the success of
the hotel.

The mortgage on the Trust's land provided funds for infrastructure
improvements and construction of the Ogden Plaza Parking Facility. It can be
prepaid after December 31, 1997, according to a formula reflecting interest
rates at the time of prepayment. In an interest-rate environment like
today's, the total payoff amount would be approximately $24.4 million.

4 OGDEN PLAZA PARKING FACILITY

- - 400-stall 2-level parking facility connected to 100 stalls on Parcel 7
- - Serves the Sheraton Chicago Hotel & Towers, Navy Pier and surrounding area
- - Opened 1992; leased to General Parking Management
- - Trust Debt: None

FISCAL 1996 PERFORMANCE

- - Total Revenue: $716,000
- - Operating Income: $416,000

The facility comprises a 300-stall parking structure beneath Ogden

NOTE: OPERATING INCOME EXCLUDES GENERAL AND ADMINISTRATIVE, DEPRECIATION AND
AMORTIZATION, AND INTEREST EXPENSES.

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Plaza Park and Park Drive and 100 stalls located under Columbus Drive; it is
connected to 100 stalls in an adjoining surface lot on Parcel 7. The Trust
owns Parcel 7 and the land under Park Drive, holds a long-term lease on the
area under Ogden Plaza from the Chicago Park District, and licenses the area
under Columbus Drive from the city.

In 1995, the Trust improved Parcel 7 by creating a 100-stall surface lot and
connecting it to the Ogden Plaza structure. General Parking Management
operates the parking facility and pays most operating expenses. The Trust
pays real estate taxes. In fiscal 1996, rent increased by $204,000 over the
prior year, due to the additional 100 stalls and to greater parking demand by
visitors to Navy Pier and the Sheraton.

The parking facility is adjacent to the Chicago Music and Dance Theater site,
where, the Theater reports, construction will commence soon. Upon its
completion, the theater will have direct access to the parking facility, and
the Trust anticipates that theater patrons will contribute to a further
increase in parking revenues.

5 SURFACE PARKING ON PARCELS 9, 13, 21 AND 24

- - 725 stalls in four surface lots on the south side of Grand Avenue
- - Serves Navy Pier and surrounding area
- - Leased to System Parking, Inc.
- - Trust Debt: None

FISCAL 1996 PERFORMANCE

- - Total Revenue: $2,318,000
- - Operating Income: $1,178,000

A new lease, effective January 1, 1996, provides for rent based on a varying
percentage of gross revenues, with a minimum of $3.6 million -- a reflection
of the increased demand for parking that followed the renovation of Navy
Pier. This figure will be adjusted to compensate for lost stalls on Parcels 9
and 13 during EPA-related work. The Trust is responsible for real estate
taxes, but the lessee pays all operating expenses.

6 KRAFT BUILDING

- - 9-story office building
- - Opened 1936
- - Unsubordinated ground lease
- - Trust Debt: $5,721,000

FISCAL 1996 PERFORMANCE

- - Total Revenue: $1,111,000
- - Operating Income: $640,000

The property currently is subleased to the City of Chicago. Kraft pays a
triple-net base rent that, in turn, covers the annual debt service of
$640,000 under the self-amortizing mortgage on the Trust's land. The mortgage
will be fully paid off at the end of the lease term in 2016. Its proceeds
were used in the late 1980s to build Cityfront Center infrastructure.

7 EAST WATER PLACE TOWNHOMES

- - 56-townhome development; 28 units now under construction
- - Initial Occupancy: Fall 1996
- - Unsubordinated ground lease
- - Trust Debt: None

FISCAL 1996 PERFORMANCE

- - Total Revenue: $42,000*
- - Operating Income: $16,000*

*represents four months' activity on eight units

This is an unsubordinated 99-year ground lease to the developer and,
ultimately, to the individual townhome owners. If all 56 lots are rented by
the end of FY97, which is the goal, net rents in FY98 will exceed $400,000.
Further, for each of the last 48 units, the $5,000 per-unit "kicker" rent
payment is a minimum, and may be substantially more. Actual kicker payments
are based on each unit's per-square-foot sales price.

The developer is required to complete the Promenade along Ogden Slip adjacent
to the site, and the developer/townhome owners are responsible for all real
estate taxes and other expenses. Further, the Trust has the option to require
the developer to purchase the land for $6 million; the Trust has until
December 31, 1998 to exercise this option.

WATERPLACE PARK

- - 2-story, 4-building office complex in Indianapolis, Indiana
- - Total rentable area: 106,808 sq. ft.
- - Opened 1980; acquired 1986
- - Trust Debt: None

FISCAL 1996 PERFORMANCE

- - Average Occupancy: 68%
- - Total Revenue: $834,000
- - Operating Income: $330,000

In September, 1996, occupancy at Waterplace Park is expected
to reach 99 percent, thanks to aggressive management and leasing efforts.
This is a solid recovery from March, 1995, when the complex's largest tenant
departed and reduced occupancy to 60 percent.

LINCOLN GARDEN

- - Single-story 10-building office complex in Tampa, Florida
- - Total rentable area: 72,922 sq. ft.
- - Opened: 1981; acquired 1986
- - Trust Debt: None

FISCAL 1996 PERFORMANCE

- - Average Occupancy: 89%
- - Total Revenue: $753,000
- - Operating Income: $350,000

Occupancy has improved recently, rising to 96 percent in August, 1996, after
two years at the 89- to 90-percent level.

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OPPORTUNITIES FOR ADDED VALUE The Trust currently holds 10 parcels that are
vacant or being used on an interim basis as surface parking lots. Each of these
sites is a prime parcel in the Cityfront Center neighborhood, near or adjacent
to the city's lakefront and Navy Pier. - Five of the parcels currently are in
interim use as parking lots, and generate sufficient income to cover real estate
taxes and other holding costs -- $1,265,000 in fiscal 1996 -- for all vacant
parcels. The remaining parcels are vacant. - Clearly, these holdings represent
extraordinary potential for the Trust's shareholders.

FIVE PARCELS CURRENTLY GENERATE SUFFICIENT INCOME TO COVER COSTS FOR ALL VACANT
PARCELS.

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A PARCELS 9 AND 13

- - 123,000 sq. ft.
- - Current Use: Leased to System Parking
- - Zoning: Commercial/Residential
- - Potential Use: Entertainment Complex

These parcels were the subject of two major development proposals by the
Trust -- as the site of Northwestern Memorial Hospital's expansion and the
Blue Cross/Blue Shield of Illinois headquarters.

More recently, however, the parcels have been considered as a site for a
300,000-sq.-ft. entertainment complex with such features as a multi-screen
theater, high-profile retail space and parking.

Zoning also permits a total of 500 dwelling units to be developed on these
parcels and Parcel 21.

B PARCEL 21

- - 35,000 sq. ft.
- - Current Use: Leased to System Parking
- - Zoning: Commercial/Residential
- - Potential Use: Residential High-Rise or Office Tower

Located directly west of the Kraft Building, this site historically has been
contemplated as a high-rise residence or an office tower. The zoning permits
a total of up to 500 dwelling units to be developed on this parcel and
Parcels 9 and 13.

C PARCEL 24

- - 40,000 sq. ft.
- - Current Use: Leased to System Parking
- - Zoning: Residential/Hotel
- - Potential Use: Navy Pier Parking Facility

Historically, a residential high-rise has been contemplated for this site,
although zoning does allow a total of 1,000 hotel rooms to be developed on
Parcels 18, 19 and 24.

However, Parcel 24 is adjacent to the entrance to Navy Pier, between the
Kraft Building and Lake Shore Drive on the south side of Grand Avenue.
This makes it an ideal site for a multi-level parking facility to serve
Navy Pier visitors.

Similarly, the center portion of Parcels 18 and 19 also has been considered
as a site for a multi-level parking structure to serve visitors to Navy Pier.

D PARCELS 18 AND 19

- - 78,000 sq. ft.
- - Current Use: Vacant
- - Zoning: Residential/Hotel
- - Potential Use: Residential High-Rise

Historically, these parcels have been considered sites for residential high-
rises. Further, zoning allows up to 1,000 hotel rooms to be developed within
Parcels 18, 19 and 24.

The Trust currently is considering a multi-level parking structure for Navy
Pier on the center portion of these combined parcels. Such a project would
still allow the construction of high-rises on the southern portion of Parcel
18 and the northern portion of Parcel 19. Infrastructure improvements would
be required to prepare this site for development.

E PARCEL 16

- - 18,000 sq. ft
- - Current Use: Vacant
- - Zoning: Residential
- - Potential Use: Senior Housing Facility/Residential High-Rise

Although this is the smallest of the Trust's undeveloped parcels, flexibility
exists to increase its size by transferring square-footage from adjacent
Parcel 14.

Even in its current configuration, the parcel is large enough to hold a
residential high-rise, as has been historically contemplated. Infrastructure
improvements would be required to prepare this site for development. Parcel
16 was proposed as an alternate site for a senior housing facility.

F PARCEL 14

- - 41,000 sq. ft.
- - Current Use: Vacant
- - Zoning: Residential
- - Potential Use: Senior Housing Facility/Residential High-Rise

Located directly east of the Cityfront Place High-Rise, this site recently
was proposed for use as a senior housing facility. This proposal has expired,
however, due to lack of financing.

Historically, this parcel has been considered a site for a residential high-
rise. Infrastructure improvements would be required to prepare this site for
development.

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OPPORTUNITIES FOR ADDED VALUE

G PARCEL 7

- - 32,000 sq. ft.
- - Current Use: Surface parking
- - Zoning: Commercial/Residential
- - Potential Use: Hotel Expansion

Although an office tower has historically been contemplated for this site,
its proximity to the Sheraton makes this parcel an ideal location for
expanding the existing hotel. As an interim use, it currently is connected to
the Ogden Plaza Parking Facility, providing an additional 100 stalls.

H PARCEL 8

- - 29,000 sq. ft.
- - Current Use: Vacant
- - Zoning: Commercial/Residential
- - Potential Use: Office Tower

This parcel has historically been considered a site for an office tower.
Located directly north of the Music and Dance Theater site and east of
Ogden Plaza, it remains an ideal site for such a use. On an interim basis,
this parcel could be used as a parking lot should another of the Trust's
current surface lots be developed.

At the end of fiscal 1996, the Trust's undeveloped Cityfront Center parcels
represented these opportunities:

SITE AREA TOTAL DEVELOPABLE
ZONING IN ACRES BUILDING AREA
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COMMERCIAL 4.2 5.5 MILLION SQUARE FEET
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RESIDENTIAL 6.5 3.9 MILLION SQUARE FEET
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DESCRIPTION PAGE

PART I
Item 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Item 2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Item 3. Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . 13
Item 4. Submission of Matters to a Vote of Security Holders. . . . . . 13
Executive Officers of the Trust. . . . . . . . . . . . . . . . 14
PART II
Item 5. Market for the Trust's Common Shares and Related Security
Holder Matters . . . . . . . . . . . . . . . . . . . . . . . 15
Item 6. Selected Financial Data. . . . . . . . . . . . . . . . . . . . 16
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations. . . . . . . . . . . . . . . . . . 18
Item 8. Financial Statements and Supplementary Data. . . . . . . . . . 27
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure . . . . . . . . . . . 50
PART III
Item 10. Trustees and Executive Officers of the Trust . . . . . . . . . 50
Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . 50
Item 12. Security Ownership of Certain Beneficial Owners and
Management . . . . . . . . . . . . . . . . . . . . . . . . . 50
Item 13. Certain Relationships and Related Transactions . . . . . . . . 50

PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . 50

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

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

For the Fiscal Year Ended April 30, 1996
Commission File Number 0-13804

THE CHICAGO DOCK AND CANAL TRUST
(Exact Name of Registrant as Specified in its Charter)

ILLINOIS 36-2476640
(State or Other Jurisdiction (IRS Employer
of Incorporation) Identification No.)

455 EAST ILLINOIS STREET, SUITE 565
CHICAGO, ILLINOIS 60611
(Address of Principal Executive Offices) (Zip Code)

(312) 467-1870
(Registrant's Telephone Number, Including Area Code)

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

None

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

Title of Each Class
--------------------

Common Shares of Beneficial Interest-no par value

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) with the Commission, and (2) has
been subject to the filing requirements for at least the past 90 days.

Yes x No
---------- ---------

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]

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

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MARKET VALUE

Based on the last sale price on May 28, 1996 of $14.00 per share, as
reported on NASDAQ, the aggregate market value of the outstanding Shares of
Beneficial Interest held by non-affiliates of the Registrant as of May 28, 1996
was $79,159,654.

OUTSTANDING SHARES

The number of Common Shares of Beneficial Interest, no par value,
outstanding as of May 28, 1996 was 5,783,800.

DOCUMENTS INCORPORATED BY REFERENCE

Portion of Form 10-K
Description of Document Where Incorporated
- ----------------------- ------------------

Portions of the Registrant's definitive Proxy Part III Items 10, 11,
Statement, to be filed pursuant to Regulation 14A, 12 and 13.
issued in connection with its Annual Meeting of
Shareholders to be held on October 15, 1996.

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THE CHICAGO DOCK AND CANAL TRUST
FORM 10-K, ANNUAL REPORT
FOR FISCAL YEAR ENDED APRIL 30, 1996

PART I

ITEM 1. BUSINESS

The Chicago Dock and Canal Trust ("Trust") is an equity oriented real
estate investment trust which owns partially developed land located in downtown
Chicago, Illinois and income producing real property in Chicago and elsewhere.
The Trust was organized in 1962, succeeding to the business of its corporate
predecessor. The Trust has elected to continue its operation as a real estate
investment trust ("REIT") under the Internal Revenue Code of 1986, as amended
("Code"). The Trust is self administered. Its principal executive offices are
located at 455 East Illinois Street, Suite 565, Chicago, Illinois, 60611. The
telephone number is (312) 467-1870.

On February 28, 1996 the Trust retained Lehman Brothers Inc., as its
financial advisor to assist in studying strategic alternatives designed to
enhance shareholder value. As part of this study, the Board, on April 11, 1996,
authorized Lehman Brothers to seek preliminary indications of interest for a
potential business combination involving the Trust. There can be no assurance
that any transaction will occur as a result of this study.

As of April 30, 1996, the Trust's principal real estate investments
consisted of: (i) fee title or other interests in approximately 22 acres of
partially developed land in Cityfront Center in downtown Chicago (including
certain developed sites discussed below); (ii) Waterplace Park, an office
complex in Indianapolis, Indiana; and (iii) Lincoln Garden, an office complex in
Tampa, Florida.

The Trust's property in Chicago is located on the north bank of the Chicago
River, east of Michigan Avenue and west of Lake Michigan. This land was
originally owned by the corporate predecessor of the Trust, which was formed in
1857. During the latter part of the 19th century, the land was developed for
industrial use, benefiting from its prime location as a transportation hub with
water and rail access. In the early 1960's, the Trust adopted a program to
redevelop its property for residential and commercial use commencing in 1965
with the long-term ground lease of a site for Lake Point Tower, a 70 story
apartment building; this site was exchanged in 1983 for other developed real
estate, an installment note and cash. In 1983 the Trust contributed its
remaining land to Chicago Dock-Equitable Venture ("CDEV"), a joint venture with
The Equitable Life Assurance Society of the United States ("Equitable"). In
1985, the Chicago City Council approved a Planned Development Ordinance for the
property owned by CDEV and the project was named Cityfront Center. In November
1985, the Venturers agreed to dissolve CDEV because of their inability to agree
on basic business strategies relating to the development of CDEV's property. As
part of the dissolution, the Trust received the portion of the Cityfront Center
property lying east of Columbus Drive.

The neighborhood surrounding the Trust's property has experienced much
recent development activity, including the new University of Chicago Graduate
School of Business facility, the expansion of Northwestern Memorial Hospital,
and the redevelopment of Navy Pier. Located east of Lake Shore Drive, Navy Pier
was redeveloped at a reported cost of $200 million and first reopened in May
1995. The 3,000 foot long Pier has attracted over 4 million visitors since its
reopening. These visitors have led to a substantial increase in revenue
generated by surface parking lots on the Trust's land held for development.

Currently, the first 28 units of the East Water Place townhome project are
under construction on a portion of the Trust's land in Cityfront Center. The
Trust is leasing the land for these townhomes. Ultimately, the project is
expected to contain 56 units. The first units are scheduled for occupancy in
the fourth quarter of calendar 1996.

<PAGE>

The following projects have been completed, are under construction, or are
scheduled for construction on the Trust's portion of Cityfront Center:

NORTH PIER

In fiscal 1987, the Trust disposed of a portion of the property it received
in the dissolution of CDEV to enable the redevelopment of North Pier, an
existing warehouse building in Cityfront Center. The disposition was structured
as an exchange of property and resulted in the acquisition of Waterplace Park.
The redevelopment was completed in June 1989 and contains 250,000 square feet of
office space and 200,000 square feet of retail space. During fiscal 1993, the
Trust relocated its administrative offices to North Pier.

In April 1989, the Trust sold the site adjacent to North Pier on the east
to Brick Venture for an installment note, the final installment of which was
collected in June 1992. A 61 story residential building containing 505 units
was completed on the site in early calendar 1991.

SHERATON CHICAGO HOTEL & TOWERS

In October 1988, the Trust entered into a 50 year ground lease (with lessee
options to extend the term 49 more years) for 2.3 acres of land with Tishman
Realty Corporation of Cook County ("Tishman Realty") for the development of a
1,200 room convention hotel. The ground lease also contains a lessee option to
purchase the property first exercisable in the year 2003. The Trust was
obligated to provide certain infrastructure improvements in the area of the
hotel prior to its completion. Construction of the required infrastructure
began in July 1990 and was completed in March 1992. The hotel also opened in
March 1992.

CITYFRONT PLACE MID-RISE

On December 17, 1991, the Trust acquired the Cityfront Place Mid-Rise
apartment complex ("Mid-Rise"). The acquisition of the Mid-Rise was part of a
transaction in which the Trust exchanged its 62% undivided interest in the
Equitable Building in Chicago for the Mid-Rise. The Mid-Rise, which is part of
the three building complex known as Cityfront Place, consists of two 12-story
buildings containing a total of 424 rental units and parking for 338 cars. The
Mid-Rise first opened in May 1991 and was acquired by the Trust for $52.5
million.

CITYFRONT PLACE HIGH-RISE

In August 1989, the Trust contributed a 0.6 acre site (the "High-Rise"
site), to a wholly owned subsidiary, CDCT Residence Corporation (the "Residence
Corp."). The Residence Corp. then contributed the High-Rise site as its capital
contribution to a partnership, LCD Partnership ("LCD"), with Daniel E. Levin
("Levin"). The Residence Corp. is a two-thirds partner in LCD and Levin is a
one-third partner. LCD then entered into a joint venture, New Street Joint
Venture ("NSJV"), with Northwestern Mutual Life Insurance Company ("Northwestern
Mutual") to develop the site with a 39 story building containing 480 rental
units, a health club and parking for 288 cars. Northwestern Mutual and LCD are
50/50 partners in NSJV (resulting in the Trust effectively owning one-third of
NSJV) subject to Northwestern Mutual's priority over LCD in certain
distributions of cash flow and proceeds from sale or refinancing. The building
opened in July 1991. The High-Rise and Mid-Rise are jointly managed and leased.

OGDEN PLAZA PARKING FACILITY

In conjunction with the infrastructure associated with the Sheraton Chicago
Hotel & Towers, the Trust constructed a 300 stall parking facility under and
adjacent to Ogden Plaza. The facility contains an additional 100 stalls in an
area under Columbus Drive, adjacent to Ogden Plaza, which is occupied

<PAGE>

pursuant to a license from the City of Chicago. The Ogden Plaza parking
facility, which opened in March 1992, serves the parking needs for the hotel and
the current surrounding office and residential buildings. It will also serve
the future planned developments adjacent to the east and north of the facility,
including the performing arts theater discussed below. During fiscal 1996, the
Trust improved a parcel, P-7, adjacent to Ogden Plaza on the east with a surface
parking lot containing an additional 100 stalls, which are operated in
conjunction with the Ogden Plaza facility.

CHICAGO MUSIC AND DANCE THEATER, INC.

During the third quarter of fiscal 1995, the Trust sold a parcel of land to
the Chicago Music and Dance Theater, Inc. (the "Theater") for the construction
of a 1,500 seat performing arts theater in Cityfront Center. The site is
approximately 41,000 square feet and is located in the view corridor on the
east-west axis with Ogden Slip. Under the zoning applicable to the site, there
is a height limitation of 150 feet. The Theater is currently raising funds and
seeking debt financing for the construction of the project. The Trust retained
repurchase rights for the site if the Theater has not made a substantial
commencement of construction prior to September 1, 1996 or a substantial
completion of construction prior to September 1, 1999, in each case subject to
force majeure delays.

EAST WATER PLACE TOWNHOMES

During fiscal 1996 the Trust entered into a ground lease with Ogden
Partners North, Inc. for the development of townhomes on a 2.5 acre site. This
site is subject to a height limitation of 150 feet. This master lease
contemplates the lease of the entire townhome site in phases to the developer,
who will build and sell townhomes on the site and make partial assignments of
the master lease to the individual townhome purchasers. The developer lessee's
interest under the master lease has been assigned by Ogden Partners North, Inc.
to East Water Place, L.P., a limited partnership organized and controlled by it.
The lease for land for the first eight units commenced January 1, 1996. On May
17, 1996, East Water Place, L.P. leased land for an additional 12 units and
obligated itself to lease land for the remaining 36 units over the next three
years; on June 12, 1996 it leased land for an additional 8 units. East Water
Place Townhomes is expected to ultimately contain 56 units. The monthly rent
payable by all townhome purchasers will average $600 per unit escalating
annually over the 99 year lease term by the increase in the Consumer Price
Index. In addition to the base monthly rental, upon the initial sale of each
townhome by the developer lessee (other than the 8 units in the first phase),
the Trust is entitled to an additional rent payment, determined on the basis of
the per square foot sale price of the unit, but not less than $5,000 per unit.
The developer lessee under the master lease and the townhome lessees under the
individual townhome leases are also responsible for the payment of real estate
taxes and all other expenses.

UNDEVELOPED LAND

In addition to the developments described above, the zoning applicable to
the Trust's portion of Cityfront Center pertains to the following areas owned or
controlled by the Trust and permits the following uses and building areas:

Site Area Total Developable Building Area
(in acres) (in million sq. ft.)
------------------------------ -------------------------------
Increase/ Increase/
4/30/95 (Decrease) 4/30/96 4/30/95 (Decrease) 4/30/96
------- ---------- ------- ------- ---------- -------

Commercial 4.2 - 4.2 5.5 - 5.5
Residential 9.0 (2.5) 6.5 4.1 (0.2) 3.9

The decrease in site area and developable building area in the preceding
table represents the land and building areas leased or committed to be leased by
East Water Place, L.P. for the development of 56

<PAGE>

townhomes. The site area and developable building area include parcel P-7 which
was improved with a surface parking lot during fiscal 1996.

The Trust has some flexibility in the uses allowed under its zoning. It
can substitute up to 500,000 square feet of residential building area for
commercial building area or substitute up to 3,650,000 square feet of commercial
building area for residential building area.

In addition to the preceding, the Trust owns a 2.1 acre site in Cityfront
Center which is currently occupied by the Kraft Building. It is under lease
until April 2016, at which time the improvements thereon will revert to the
Trust. Due to the length of the lease, this site was not included in the
Planned Development Ordinance.

INFRASTRUCTURE IMPROVEMENTS

The Trust plans to construct infrastructure at Cityfront Center in three
phases, two of which are now complete. In fiscal 1988, Phase I infrastructure
was completed. The major elements of Phase I consisted of filling a portion of
Ogden Slip, constructing a portion of the River Esplanade, upgrading Illinois
Street and a portion of East North Water Street and constructing three new
roads: (1) McClurg Court between Grand Avenue and the Chicago River, (2) New
Street, a street west of McClurg Court between Illinois and East North Water
Streets and (3) River Drive, a street adjacent to the River Esplanade, west of
McClurg Court.

In conjunction with the development of the Sheraton Chicago Hotel & Towers,
the Trust completed the construction of Phase II in fiscal 1992. Phase II
consisted of constructing Ogden Plaza, elevated roadways adjacent to Columbus
Drive and surrounding the plaza and a parking facility under and adjacent to the
plaza. The portion of the River Esplanade adjacent to the hotel was also
completed at that time by the developers of the hotel.

The primary Phase III infrastructure elements are the construction of the
River Esplanade and River Drive east of McClurg Court, Du Sable Park (a 3 acre
park east of Lake Shore Drive), the slip promenade on the south bank of the
Ogden Slip and the upgrading of the remainder of East North Water Street. The
current cost of Phase III is estimated to be approximately $8.5 million, which
includes the Trust's obligation to contribute $600,000 for improvements to be
made in Du Sable Park expected to be completed during calendar 1996. The
remainder of Phase III will be constructed as needed to support additional
development in the area but not later than the completion of 2,500 units of
residential development on the east portion of Cityfront Center of which
approximately 1,400 units have been completed to date. The estimated cost of
the remaining infrastructure is based on a number of assumptions, including, but
not limited to the following: (i) East Water Place, L.P. completes all
improvements on parcels P-15 and P-17 related to the slip promenade on the south
bank of the Ogden Slip; (ii) the Chicago Music and Dance Theater, Inc. completes
a pedestrian concourse through parcel P-7A; (iii) the estimate is based on
design development drawings; actual site conditions may materially increase the
amount; and (iv) the cost estimate includes hard construction costs only and is
stated in terms of current costs.

INVESTMENT PORTFOLIO DIVERSIFICATION

As of April 30, 1996, the Trust owned property located in Chicago,
Illinois, Tampa, Florida and Indianapolis, Indiana.

The Tampa property was acquired on July 31, 1986 as part of the exchange of
the Trust's interests in the Palmolive Building located in Chicago, Illinois.
The Indianapolis property was acquired on September 30, 1986 in exchange for a
portion of North Pier in Chicago, Illinois.

<PAGE>

REAL ESTATE INVESTMENTS

The following table summarizes the financial statement net carrying value
of the Trust's real estate investments by type as of April 30, 1996:

Financial Statement
Net Carrying Value
-----------------------------
Number of
Type of Investment Investments Amount Percent
------------------ ----------- ------ -------
<S> <C> <C> <C>
Residential (Outright ownership and partnership interest). . . . 2 $ 44,472,196 55.7%
Land and land improvements held for development. . . . . . . . . 1 14,955,676 18.7%
Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 12,327,858 15.5%
Ground lease (Hotel, Office Building and Townhomes). . . . . . . 3 5,618,285 7.0%
Parking facility . . . . . . . . . . . . . . . . . . . . . . . . 1 2,471,736 3.1%
- ------------ ------
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 $ 79,845,751 100.0%
- ------------ ------
- ------------ ------

</TABLE>

INVESTMENT STRATEGY

The Trust emphasizes long-term asset appreciation related to its
undeveloped properties and the maximization of cash flow and asset value of its
interests in currently developed properties. It seeks to develop its property
expeditiously while limiting the amount of risk it assumes in that development.
It also seeks to participate in potential increases in cash flows and residual
values in its development projects. To accomplish these objectives, the Trust
has entered into unsubordinated ground leases, formed a joint venture and
exchanged other assets to acquire a completed residential building in Cityfront
Center. It continues to seek future development opportunities for its property
in Cityfront Center in similar arrangements, but will also consider other
transaction structures which it believes will maximize the value of its assets.

In order to maximize the value of the undeveloped property it owns in
Chicago, substantial land improvements are required (See Item 7: Management's
Discussion and Analysis of Financial Condition and Results of Operations). The
Trust views these expenditures as consistent with its investment philosophy of
maximizing future asset value.

The Trust is not currently seeking to make mortgage loan investments, its
present intention being to invest principally in real estate equities. However,
the Trust in the future may also invest in mortgages. The Trust has entered
into and may consider entering into additional partnerships, joint ventures or
similar arrangements with other parties for the development of individual
parcels in Cityfront Center.

While the Trust may not, under federal tax law applicable to REIT's, hold
property for sale in the ordinary course of business, its policy is to evaluate
periodically its portfolio of properties which might be considered for sale,
lease or exchange, for example, the sale transaction with the Chicago Music and
Dance Theater, Inc. (See Item 7: Management's Discussion and Analysis of
Financial Condition and Results of Operations). The Trust's preference is to
structure transactions to defer the current recognition of taxable gain, either
through exchanges, installment sales or long-term ground leases.

The Trust also evaluates the acquisition of properties for its portfolio.
Currently, it has limited its focus to properties in the vicinity of its
Cityfront Center property in Chicago.

COMPETITION

With respect to its property in Chicago, the Trust is faced with
competition from existing buildings and other undeveloped sites. The office
segment of the Chicago real estate market remains overbuilt, making it unlikely
that any significant office project will be started on the Trust property during
the next several

<PAGE>

years. Development of the Trust's Chicago property will require substantial
financing (See Item 7: Management's Discussion and Analysis of Financial
Condition and Results of Operations). The real estate development and
investment business in Chicago is highly competitive and many of the Trust's
competitors have substantially greater financial resources. As a REIT, the
Trust is also subject to certain limitations on its ability to sell and develop
properties which are not applicable to non-REIT competitors.

As an owner of developed commercial and residential real estate properties,
the Trust competes with other owners of similar properties. The Trust competes
with other residential buildings in the area, including the Cityfront Place
High-Rise, in which the Trust is also a partner, and North Pier Apartment Tower,
both of which are located in Cityfront Center. With respect to its ground lease
on the Sheraton Chicago Hotel & Towers site, the minimum rent is payable without
regard to the occupancy of the hotel. Beginning July 1, 1995, the Trust became
eligible to receive percentage rent based on the hotel's gross revenues if and
to the extent such percentage rent exceeds base rent.

EMPLOYEES

The Trust is self administered and had eight full time employees as of May
28, 1996.

FEDERAL INCOME TAXATION

The Trust has elected to be treated as a REIT under sections 856 through
860 of the Code. While the Trust expects to continue to operate and invest in a
manner which will maintain its qualification as a REIT, it continually evaluates
the benefits of qualifying as a REIT and the operating and investment
restrictions imposed by the Code. The Trust elected to be taxed as a REIT in
1962 and believes that in all intervening years it has qualified as a REIT.
During this period, Arthur Andersen LLP, independent public accountants,
annually audited the Trust's financial statements and in conjunction with Wilson
& McIlvaine, general counsel to the Trust, concluded that the Trust has met the
REIT qualification tests.

TRUSTEES

At April 30, 1996 there were eight Trustees of the Trust, one of whom was
also an employee of the Trust. The non-employee Trustees are paid annual fees
(currently in the form of stock options), meeting fees and committee fees and
are reimbursed for travel and related expenses. The non-employee Trustees also
participate in two Trustee Stock Option Plans.

ENVIRONMENTAL MATTERS

A number of jurisdictions, including Illinois, have laws and regulations
related to environmental controls in the development or transfer of real estate.
These laws and regulations may reduce the number of investment opportunities
available to the Trust, impose remediation costs associated with any adverse
conditions discovered or increase the cost of development opportunities which
the Trust elects to pursue.

In June 1993, the U.S. Environmental Protection Agency (the "EPA")
conducted preliminary surface tests on a 2.8 acre site currently used as a
surface parking lot (the "Tested Site"). The Tested Site was examined because
thorium, a radioactive element, may have been used on the Tested Site earlier in
the century by a former tenant, in a building which was demolished in the mid
1930's after the expiry of the tenant's lease.

In January 1994, the Trust entered into a consent order with the EPA
regarding preliminary testing to be performed on the Tested Site. Initial on-
site tests were conducted pursuant to that order in May 1994 and laboratory
analysis was completed on these samples in June 1994. The results of the tests
indicate one concentrated area which appears to be contaminated by thorium, and
other scattered areas on the Tested Site with significantly lower levels of
contamination. The most contaminated area is within the

<PAGE>

footprint of the former building previously occupied by the former tenant. The
Trust submitted the results of the testing to the EPA in September 1994.

The Trust's consultants have prepared cost estimates to remediate the
contaminated areas on the Tested Site which range from $1 million to $7 million,
with $3.5 million representing the estimated cost of the most likely required
remediation, which involves excavation and disposal of the areas contaminated by
thorium. That range of costs is estimated based on the results of surface
measurements, the analysis of samples gathered from nine borings taken on the
site and the review of the Unilateral Administrative Order. While the tests
conducted to date were made pursuant to the consent order with the EPA,
additional conditions may exist on the site which would be discovered only upon
excavation.

The Trust entered into an agreement on August 11, 1995 (which was expanded
and superseded by an agreement dated January 18, 1996) with Kerr-McGee Chemical
Corporation ("KMCC"), the successor to a former tenant of the Tested Site,
regarding the financial responsibilities of the parties for the remediation of
the Tested Site (the "Reimbursement Agreement"). Under the terms of the
Reimbursement Agreement, KMCC is responsible for the remediation of the Tested
Site with respect to thorium contamination and any thorium/mixed waste
contamination, and the Trust has the obligation to reimburse KMCC for 25% of the
cost of this remediation, not to exceed a maximum reimbursement obligation of
the Trust of $750,000. Legal counsel has advised the Trust that it may have
claims for coverage for some or all of its share of the remediation costs under
its current or prior insurance policies.

On June 6, 1996, the EPA issued a Unilateral Administrative Order which
requires the remediation of the Tested Site and the disposal of the contaminated
material at an approved off-site facility. The Order also requires the
submission of a work plan to the EPA including the expected timetable for the
remediation. The Trust anticipates remediation will be completed during fiscal
1997, at which time two parcels, currently used as surface parking lots, will be
taken out of service for approximately two to three months according to the
anticipated work plan.

In connection with the option to lease three parcels in Cityfront Center
which the Trust granted to Northwestern Memorial Hospital (the "Hospital") in
June 1992 and which terminated in November 1992, the Hospital hired an
independent consultant to conduct certain tests on the parcels subject to
option. The results of those tests were consistent with the findings reported
based on the Trust's preliminary environmental reconnaissance conducted in 1989,
but also noted the presence of petroleum products spread over an approximate
24,000 square foot area, a portion of which is located under the Tested Site.
Based on chemical testing results, the soil is not considered to be hazardous
waste. There is no current requirement to remediate the site for this
condition. To the extent that some of this area is required to be remediated
due to contamination by thorium, the cost of such remediation is covered by the
Reimbursement Agreement with KMCC.

In connection with the development of the convention hotel by Tishman
Realty, excavation on that parcel revealed an underground fuel storage tank
installed by an earlier lessee of the parcel. The tank and contaminated soil
were removed and disposed of as required by law, with Tishman Realty bearing the
majority of such expense.

In light of the earlier industrial uses of portions of the Trust's property
in Chicago, other kinds of adverse environmental conditions may exist on the
property, although the Trust is not currently aware of any such material
conditions. The Trust commissioned a preliminary environmental reconnaissance
of the property in 1989 by an independent consultant. The consultant's report,
while noting the presence of certain materials in trace amounts, concluded that
there were no known unusual conditions at the property, given its prior
manufacturing and warehousing uses. However, this reconnaissance did not test
for radioactive materials. The Trust is not aware of any conditions, other than
the Tested Site as discussed above, which would require current remediation or
which would materially increase the cost of future development of its property
in Chicago.

<PAGE>

ITEM 2. PROPERTIES

The following tables and accompanying discussion set forth information
concerning each property in which the Trust owns an equity interest or has a
lessor's leasehold interest as of April 30, 1996. See also Schedule III in Item
8 for additional information.

Rentable Building
Year Year Area Number of Occupancy Principal
Completed Acquired (Square Feet) Tenants at 4/30/96 Tenants
--------- -------- ------------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
OFFICE COMPLEXES-
Lincoln Garden
Tampa, Florida 1981 1986 72,922 34 91% Engineering Science
Managed Care
Nationwide Insurance

Waterplace Park
Indianapolis, Indiana 1980 1986 106,808 29 86% CIC Enterprises
Center for Neuro Rehab
General Services Admin.

</TABLE>

Total Rentable Unit Mix Residential
--------------------------------------------
Year Year Area (1) 2-Bedroom Parking Occupancy
Completed Acquired (Square Feet) Studios Convertibles 1-Bedroom + Duplexes Stalls at 4/30/96
--------- -------- ------------- ------- ------------ --------- ---------- ------ ----------

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
APARTMENTS-
Cityfront Place Mid-Rise
Chicago, Illinois 1991 1991 346,065 80 40 210 94 338 96%

Cityfront Place
High-Rise (2)
Chicago, Illinois 1991 1989 368,442 120 120 180 60 288 96%

</TABLE>

Year Year Site Area
Completed Acquired (Acres) Other
--------- -------- ------- -----------------------------------
<S> <C> <C> <C> <C>
PARKING FACILITY-
Ogden Plaza
Chicago, Illinois 1992 1992 1.8 400 stalls (3)

GROUND LEASES-
Sheraton Chicago Hotel & Towers
Chicago, Illinois 1992 1985(4) 2.3 1,200 rooms

Kraft Building
Chicago, Illinois 1936 1985(4) 2.1 409,000 square feet

East Water Place Townhomes
Chicago, Illinois N/A (5) 1985(4) 2.5 56 townhomes

LAND AND LAND IMPROVEMENTS
HELD FOR DEVELOPMENT-
Chicago, Illinois N/A 1985(4) 10.7 Current uses include Surface Parking and Vacant
Land

</TABLE>

NOTES:

(1) The Mid-Rise includes 13,303 square feet of commercial space, all of which
was occupied at April 30, 1996. The High-Rise includes 7,700 square feet
of commercial space, of which 4,183 square feet was occupied at April 30,
1996.
(2) The Trust owns an effective 1/3 interest in this building, subject to
priority distributions to one of the Venture partners.
(3) Of these stalls, 100 stalls are in an area under Columbus Drive, adjacent
to Ogden Plaza, which is occupied pursuant to a license from the City of
Chicago. Excludes 100 stalls added during fiscal 1996 to parcel P-7
adjacent to the facility.
(4) Received in the dissolution of CDEV in 1985. The Trust initially
contributed this property, a substantial portion of which was owned by the
Trust since 1857, to CDEV in 1983 (See Item 1).
(5) This development is under construction and includes the ground lease for
the 8 units which commenced January 1, 1996, 12 units which commenced May
17, 1996, 8 units which commenced June 12, 1996 and the obligation to lease
the remaining land for 28 units.

<PAGE>

LINCOLN GARDEN

At Lincoln Garden, the Trust's office complex in Tampa, Florida, rent and
vacancy levels remain stable. Occupancy averaged 89% during fiscal 1996 and was
91% at April 30, 1996. For the remainder of calendar 1996, leases are due to
expire on 16% of the total leasable area.

WATERPLACE PARK

Occupancy at Waterplace Park averaged 68% during the fiscal year. This
occupancy reflects the expiration of the lease for Tri-County Mental Health
("Tri-County") in March 1995. Tri-County, which had occupied approximately 28%
of Waterplace Park, was the largest tenant at the property. However, by April
30, 1996 occupancy had increased to 86%. For the remainder of calendar 1996,
leases for 6% of the total leasable area are due to expire.

CITYFRONT PLACE

During fiscal 1996, occupancy averaged 95% and 94% for the Mid-Rise and
High-Rise buildings, respectively. Average rental rates per square foot at
April 30, 1996 were 6% higher in the Mid-Rise and 4% higher in the High-Rise
compared to rates in effect at April 30, 1995.

OGDEN PLAZA PARKING FACILITY

At the Ogden Plaza parking facility, net revenues for fiscal 1996 were
$716,000, a significant increase over the prior fiscal year amount of $512,000.
This increase reflects greater demand for parking created by the recent
renovation of the nearby Navy Pier and the addition of another 100 stalls on a
surface lot adjacent to the facility in September 1995.

SHERATON CHICAGO HOTEL & TOWERS

The Trust's ground lease related to the Sheraton Chicago Hotel & Towers
provides that minimum base rent is due to the Trust regardless of the operations
of the hotel. However, the Trust became eligible to receive percentage rent
beginning July 1, 1995 if gross revenues from the operations of the hotel
multiplied by applicable percentages exceed base rent (See Note 4 to the
financial statements). During fiscal 1996 the Trust recognized as revenue
$96,000 of percentage rent. Calendar 1995 gross revenues from operations of the
hotel equaled $65 million. In comparison, during calendar 1994 the hotel
recognized gross revenues from operations of $58 million. Average occupancy
during calendar 1995 was approximately 72%, compared to the average occupancy
during calendar 1994 of 68%.

KRAFT BUILDING

The Trust leases 2.1 acres of land to Kraft, Inc. (which is sub-leased to
the City of Chicago) pursuant to a lease which expires in April 2016. The rent
is fixed at $640,000 per year for the term of the lease. The lessee is
responsible for the payment of all operating expenses and real estate taxes.
The land is improved with a 409,000 square foot office building which was
initially constructed in the 1930's and is largely obsolete.

EAST WATER PLACE TOWNHOMES

East Water Place Townhomes is a development which is expected to ultimately
contain 56 townhomes on 2.5 acres of land leased by the Trust. The lease of
land sufficient for the first 8 townhomes commenced January 1, 1996, for the
next 12 townhomes on May 17, 1996 and for the next 8 townhomes on June 12, 1996.
This master lease obligates the developer, East Water Place, L.P., to lease the

<PAGE>

remaining land in phases over the next three years. The developer will build
and sell townhomes on the site and make partial assignments of the master lease
to the individual townhome purchasers.

The leases provide for monthly rental to the Trust which averages $600 per
townhome, escalating annually by the increase in the Consumer Price Index over
the 99 year term. In addition to the base monthly rental, upon the initial sale
of each townhome by the developer lessee (other than the 8 units in the first
phase), the Trust is entitled to an additional rent payment, determined on the
basis of the per square foot sale price of the unit, but not less than $5,000
per unit. The lessees are responsible for the payment of all real estate taxes
and all other expenses.

LAND AND LAND IMPROVEMENTS

Land and land improvements held for development includes surface parking
lots and other parcels which are currently vacant. During the third quarter of
fiscal 1996, the Trust leased four surface parking lots containing 725 stalls to
System Parking, Inc. The lots had previously been leased to North Pier Chicago
on a fixed rental basis. The new lease started January 1, 1996 and provides
that the Trust will receive varying percentages of the gross revenue generated
by the lots. For calendar year 1996, minimum rent will equal $3,600,000
(subject to potential adjustment during the remediation of the Tested Site) (See
Item 1). System Parking will be responsible for paying the operating expenses
of the lots, but the Trust has the obligation to pay the real estate taxes. The
recent renovation of the nearby Navy Pier has increased demand for parking in
the area and the Trust expects an increase in net cash flow under the terms of
the new lease compared to the prior lease.

One of the surface parking lots includes the Tested Site (See Item 1). In
the fourth quarter of fiscal 1995, the Trust recorded environmental remediation
expense of $1,035,000 based upon the resolution of accounting and other issues
related to environmental remediation costs of property held for development.
This amount included the Trust's share of testing and legal costs related to the
Tested Site through April 30, 1995, plus $750,000, which is the maximum
reimbursement obligation of the Trust pursuant to the Reimbursement Agreement
entered into with KMCC (See Item 1).

ITEM 3. LEGAL PROCEEDINGS

In January 1994, the Trust entered into a consent order with the EPA
regarding the Tested Site. On June 6, 1996, the EPA issued a Unilateral
Administrative Order which requires the remediation of the Tested Site. Tests
indicated that the Tested Site is contaminated by thorium, which was used by a
prior tenant on the site. On August 11, 1995, the Trust entered into an
agreement (which was expanded and superseded by an agreement dated January 18,
1996) with KMCC regarding the financial responsibilities of the parties for the
remediation of the Tested Site (See Item 1).

The Trust's legal counsel has advised the Trust that it may have claims for
coverage for some or all of its share of the remediation costs under its current
or prior insurance policies.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of the Trust's security holders during
the last quarter of its fiscal year ended April 30, 1996.

<PAGE>

EXECUTIVE OFFICERS OF THE TRUST

PRINCIPAL OCCUPATIONS AND
AFFILIATIONS DURING THE
NAME AGE PAST FIVE YEARS
---- --- ---------------
Charles R. Gardner 51 President and Chief Executive Officer of the Trust
since January 1982.
David R. Tinkham 41 Vice President-Finance, of the Trust since June 1985.
Treasurer of the Trust since September 1993, and
Assistant Secretary since December 1993.

There is no family relationship among any of the officers listed above nor
any arrangements or understandings between any such officer and any other person
pursuant to which he was elected an officer. Each officer may be removed by the
Trustees at any time subject to severance payments as stipulated in his
employment contract.

All required filings by officers and Trustees were timely.

<PAGE>

PART II

ITEM 5. MARKET FOR THE TRUST'S COMMON SHARES AND RELATED SECURITY HOLDER MATTERS

MARKET INFORMATION AND DIVIDENDS DECLARED

The Trust's Common Shares of Beneficial Interest (the "shares") are traded
in the over-the-counter market and the prices are quoted on the National Market
System of the National Association of Securities Dealers' Automated Quotations
System ("NASDAQ"). The symbol is "DOCKS".

The following table sets forth the high and low closing sale prices of the
shares, as reported by NASDAQ, and dividends declared per share:

FISCAL 1997
-----------
QUARTER HIGH LOW DIVIDENDS DECLARED
------- ---- --- ------------------
First, through May 28, 1996 . . . $14.625 $13.25 (Note 1)

FISCAL 1996
-----------
QUARTER HIGH LOW DIVIDENDS DECLARED
------- ---- --- ------------------
Fourth . . . . . . . . . . . . . $15.00 $10.375 $.07 (Note 2)
Third. . . . . . . . . . . . . . 11.00 9.50 .01
Second . . . . . . . . . . . . . 14.50 10.50 .01
First. . . . . . . . . . . . . . 12.50 11.375 .01

FISCAL 1995
-----------
QUARTER HIGH LOW DIVIDENDS DECLARED
------- ---- --- ------------------
Fourth . . . . . . . . . . . . . $11.50 $10.25 $.01
Third. . . . . . . . . . . . . . 12.00 10.00 .01
Second . . . . . . . . . . . . . 11.50 9.50 .01
First. . . . . . . . . . . . . . 10.25 9.00 .01

(1) The Board of Trustees will consider a dividend at a meeting to be held
during the first quarter of fiscal 1997.

(2) This amount consists of a $.03 per share dividend declared February
13, 1996, payable March 1, 1996, which was in addition to the $.01 per
share dividend declared during the third quarter of fiscal 1996,
payable March 1, 1996, and a $.04 per share quarterly dividend
declared April 11, 1996, payable June 1, 1996.

APPROXIMATE NUMBER OF EQUITY SECURITY HOLDERS

APPROXIMATE NUMBER OF RECORD
TITLE OF CLASS HOLDERS AS OF MAY 28, 1996
-------------- --------------------------
Common Shares of
Beneficial Interest 520

<PAGE>

ITEM 6. SELECTED FINANCIAL DATA

The following table sets forth selected financial data for the Trust and
should be read in conjunction with the financial statements and notes thereto
included in Part II, Item 8.

FISCAL YEAR ENDED APRIL 30,
--------------------------------------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
REVENUES . . . . . . . . . . . . . . . . $ 22,287 $ 22,389 $ 20,714 $ 20,554 $ 19,224
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
OPERATING INCOME (LOSS). . . . . . . . $ 1,870 $ (1,019) $ 309 $ (1,412) $ 1,484
INVESTMENT AND OTHER INCOME. . . . . . 334 342 321 376 706
EQUITY IN NET LOSS OF LCD PARTNERSHIP (349) (475) (530) (1,218) (830)
RESTRUCTURING EXPENSES . . . . . . . . (300) - - - -
NET GAIN (LOSS) FROM DISPOSITION OF
REAL ESTATE . . . . . . . . . . . . - (1,729) - - 43,849
-------- -------- -------- -------- --------
NET INCOME (LOSS) BEFORE
EXTRAORDINARY ITEM. . . . . . . . . 1,555 (2,881) 100 (2,254) 45,209
EXTRAORDINARY ITEM:
GAIN FROM EXTINGUISHMENT OF DEBT . . . - 2,067 - - -
-------- -------- -------- -------- --------
NET INCOME (LOSS). . . . . . . . . . . $ 1,555 $ (814) $ 100 $ (2,254) $ 45,209
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------

REAL ESTATE, net . . . . . . . . . . . $ 79,846 $ 82,314 $103,029 $106,329 $110,157
TOTAL ASSETS . . . . . . . . . . . . . 126,008 123,276 140,156 139,573 138,320
MORTGAGE NOTES PAYABLE . . . . . . . . 28,068 27,369 44,121 42,493 41,080
SHAREHOLDERS' EQUITY . . . . . . . . . 83,874 82,897 83,942 84,073 87,773
PER SHARE:
EARNINGS (LOSS) . . . . . . . . . . $ .27 $ (.14) $ .02 $ (.39) $ 7.82
DIVIDENDS DECLARED . . . . . . . . .10 .04 .04 .25 .31
BOOK VALUE . . . . . . . . . . . . 14.50 14.33 14.51 14.54 15.18
OTHER SUPPLEMENTARY DATA:
CASH FLOWS PROVIDED BY (USED IN):
OPERATING ACTIVITIES. . . . . . . . $ 4,001 $ 2,115 $ 2,468 $ (26) $ 1,145
INVESTING ACTIVITIES. . . . . . . . (3,092) 2,225 (2,148) 1,953 (3,290)
FINANCING ACTIVITIES. . . . . . . . (496) (4,483) (409) (2,033) 1,946
FUNDS FROM OPERATIONS (See Note 1) . . 5,403 2,859 4,454 2,328 4,225

</TABLE>

NOTE 1
The Board of Governors of the National Association of Real Estate
Investment Trusts in 1991 adopted a definition of "Funds From Operations" as
follows:

Funds from Operations means net income (computed in accordance with
generally accepted accounting principles), excluding gains (or losses) from
debt restructuring and sales of property, plus depreciation and
amortization, and after adjustments for unconsolidated partnerships and
joint ventures. Adjustments for unconsolidated partnerships and joint
ventures will be calculated to reflect funds from operations on the same
basis.

The intent of the Board of Governors in the creation of Funds from
Operations was to disregard unusual events in the calculation of Funds from
Operations. Accordingly, the Trust has excluded restructuring expenses from its
calculation of Funds from Operations.

In March 1995, the Board of Governors clarified this definition with
respect to the treatment of certain items, although the clarification did not
affect the Trust's reporting of such funds. The above definition of Funds from
Operations includes certain material non-cash items which are reported in income
and expense of the Trust. Specifically, accrued environmental remediation, the
effect of averaging rental revenue from the hotel ground lease, and the
difference between current interest payable and contractual interest on the note
secured by the rents from and the land under the hotel, are included in Funds
from Operations. Please refer to the Consolidated Statements of Cash Flows in
the financial statements for the computation of cash flows from operating,
investing and financing activities.

<PAGE>

SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

FOR THE QUARTER ENDED
----------------------------------------------------
JULY 31, OCTOBER 31, JANUARY 31, APRIL 30,
1995 1995 1996 1996
---- ---- ---- ----
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

<S> <C> <C> <C> <C>
REVENUES-
Revenue from rental property . . . . . . . $3,508 $3,931 $4,009 $4,631
Real estate taxes payable by lessees . . 1,841 1,483 1,460 1,424
------ ------ ------ ------
Total revenues. . . . . . . . . . . . 5,349 5,414 5,469 6,055
------ ------ ------ ------
EXPENSES-
Real estate taxes. . . . . . . . . . . . 729 743 733 910
Real estate taxes payable by lessees . . 1,841 1,483 1,460 1,424
Property operating expenses. . . . . . . 706 859 779 762
General and administrative . . . . . . . 462 550 472 601
Depreciation and amortization. . . . . . 750 756 759 755
Interest expense . . . . . . . . . . . . 715 720 723 725
------ ------ ------ ------
Total expenses. . . . . . . . . . . . 5,203 5,111 4,926 5,177
------ ------ ------ ------
Operating income . . . . . . . . . . 146 303 543 878
INVESTMENT AND OTHER INCOME. . . . . . . . 86 86 74 88
EQUITY IN NET LOSS OF LCD PARTNERSHIP. . . (103) (94) (59) (93)
RESTRUCTURING EXPENSES . . . . . . . . . . - - (103) (197)
------ ------ ------ ------
Net income . . . . . . . . . . . . . $ 129 $ 295 $ 455 $ 676
------ ------ ------ ------
------ ------ ------ ------
EARNINGS PER SHARE . . . . . . . . . . . . $ 0.02 $ 0.05 $ 0.08 $ 0.12
------ ------ ------ ------
------ ------ ------ ------

</TABLE>

FOR THE QUARTER ENDED
----------------------------------------------------
JULY 31, OCTOBER 31, JANUARY 31, APRIL 30,
1994 1994 1995 1995
---- ---- ---- ----
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

<S> <C> <C> <C> <C>
REVENUES-
Revenue from rental property . . . . . . . $3,956 $4,045 $3,894 $3,630
Real estate taxes payable by lessees . . 1,886 1,660 1,659 1,659
------ ------ ------ ------
Total revenues. . . . . . . . . . . . 5,842 5,705 5,553 5,289
------ ------ ------ ------
EXPENSES-
Real estate taxes. . . . . . . . . . . . 788 805 761 743
Real estate taxes payable by lessees . . 1,886 1,660 1,659 1,659
Property operating expenses. . . . . . . 846 967 703 791
Environmental remediation expense. . . . - - - 1,035
General and administrative . . . . . . . 409 441 520 487
Depreciation and amortization. . . . . . 926 951 863 757
Interest expense . . . . . . . . . . . . 913 1,060 1,015 763
------ ------ ------ ------
Total expenses. . . . . . . . . . . . 5,768 5,884 5,521 6,235
------ ------ ------ ------
Operating income (loss) . . . . . . . 74 (179) 32 (946)
INVESTMENT AND OTHER INCOME. . . . . . . . 76 88 101 77
EQUITY IN NET LOSS OF LCD PARTNERSHIP. . . (141) (112) (119) (103)
NET LOSS FROM DISPOSITION OF REAL ESTATE . - - (1,729) -
------ ------ ------ ------
Net income (loss) before extraordinary
item . . . . . . . . . . . . . . . . . 9 (203) (1,715) (972)
EXTRAORDINARY ITEM-
Gain from extinguishment of debt . . . . - - 2,067 -
------ ------ ------ ------
Net income (loss) . . . . . . . . . . $ 9 $ (203) $ 352 $ (972)
------ ------ ------ ------
------ ------ ------ ------
EARNINGS (LOSS) PER SHARE. . . . . . . . . $ 0.00 $(0.03) $ 0.06 $(0.17)
------ ------ ------ ------
------ ------ ------ ------

</TABLE>

NOTE: Certain reclassifications have been made to prior quarter statements to
make them comparable with the current classifications used.

<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

FINANCIAL CONDITION

During the third quarter of fiscal 1996, the Trust leased four surface
parking lots containing 725 stalls to System Parking, Inc. The lots had
previously been leased to North Pier Chicago on a fixed rental basis. The new
lease started January 1, 1996 and provides that the Trust will receive varying
percentages of the gross revenue generated by the lots. System Parking is
responsible for paying the operating expenses of the lots, but the Trust has the
obligation to pay the real estate taxes. The recent renovation of the nearby
Navy Pier has increased demand for parking in the area and the Trust expects an
increase in net cash flow under the terms of the new lease compared to the prior
lease. For calendar year 1996, the new lease provides for minimum rent of
$3,600,000 (subject to potential adjustment during the remediation of the Tested
Site) (See Item 1). Real estate taxes for the most recent known period,
calendar year 1994, totaled $975,000 on the four surface parking lots. Under
the terms of the prior arrangement, for calendar 1995 the Trust reported net
income of $528,000 after payment of real estate taxes.

The lease with Ogden Partners North, Inc. for the first 8 townhome lots
commenced January 1, 1996. On May 17, 1996, East Water Place, L.P., successor
as developer lessee to Ogden Partners, leased an additional 12 lots and in doing
so obligated itself to lease the remaining 36 lots over the next three years
pursuant to the master lease. On June 12, 1996 it leased an additional 8 lots.
East Water Place, L.P. is currently marketing the townhomes on the leased land,
will build and sell the townhomes, and make partial assignments of the master
lease to the individual townhome purchasers. The monthly rent payable by all
townhome purchasers will average $600 per unit escalating annually over the 99
year lease term by the increase in the Consumer Price Index. In addition to the
base monthly rental, upon the initial sale of each townhome by the developer
lessee (other than the 8 units in the first phase), the Trust is entitled to an
additional rent payment, determined on the basis of the per square foot sale
price of the unit, but not less than $5,000 per unit. The lessees will be
responsible for the payment of real estate taxes and other expenses. Real
estate taxes for the most recent known period, calendar year 1994, equaled
$204,000 for the combined area covering the 8 lots leased January 1, 1996, the
12 lots leased May 17, 1996 and the 8 lots leased June 12, 1996. The full
townhome development allows for a total of 56 units.

As previously reported in August 1995, the Trust signed a conditional
letter of intent with Senior Lifestyle Corporation ("SLS") for the development
of a 225 unit senior housing facility on land which the Trust would lease to
SLS. However, SLS informed the Trust that they were unable to arrange the
necessary financing for the project under the terms of the letter of intent
which expired on March 31, 1996. The Trust and SLS are continuing to discuss
alternative transaction structures which could attract the required financing.

During fiscal 1996, average occupancy of the Mid-Rise and High-Rise
Buildings of Cityfront Place was 95% and 94%, respectively. Occupancy at both
buildings equaled 96% as of April 30, 1996. At the Trust's property in Tampa,
occupancy increased to 91% at April 30, 1996 compared with 87% a year earlier.
Average occupancy for the Tampa property during fiscal 1996 equaled 89%.
Occupancy at the Trust's property in Indianapolis averaged 68% during fiscal
1996. This occupancy reflects the expiration of the lease for Tri-County Mental
Health ("Tri-County") in March 1995. Tri-County, which had occupied
approximately 28% of Waterplace Park, was the largest tenant at the property.
By April 30, 1996 occupancy at Waterplace Park had increased to 86% compared to
60% a year earlier.

<PAGE>

During fiscal 1995, the Trust completed the testing specified in the
consent order which it entered into in 1994 with the United States Environmental
Protection Agency (the "EPA"). The results of this testing confirmed that a
portion of the Tested Site (See Item 1) has concentrations of thorium in excess
of normal amounts. The highest concentrations are within the footprint of a
building which was demolished in the mid 1930's and which had been occupied by a
former tenant of the Trust. The tests also confirmed that, in its current
state, the site does not pose a hazard to human health. The Trust submitted the
results of the testing to the EPA in September 1994.

The Trust's consultants have prepared cost estimates to remediate the
contaminated area on the Tested Site which range from $1 million to $7 million,
with $3.5 million representing the estimated cost of the most likely required
remediation, which involves excavation and disposal of the areas contaminated by
thorium. That range of costs is estimated based on the results of surface
measurements, the analysis of samples gathered from nine borings taken on the
site and the review of the Unilateral Administrative Order. While the tests
conducted to date were made pursuant to the consent order with the EPA,
additional conditions may exist on the site which would be discovered only upon
excavation.

The Trust entered into an agreement on August 11, 1995 (which was expanded
and superseded by an agreement dated January 18, 1996) with Kerr-McGee Chemical
Corporation ("KMCC") regarding the financial responsibilities of the parties for
the remediation of the Tested Site (the "Reimbursement Agreement"). Under the
terms of the Reimbursement Agreement, KMCC is responsible for the remediation of
the Tested Site with respect to thorium contamination and any thorium/mixed
waste contamination, and the Trust has the obligation to reimburse KMCC for 25%
of the cost of this remediation, not to exceed a maximum reimbursement
obligation of the Trust of $750,000. The Trust may recover some or all of its
share of the remediation costs from its insurance carriers.

The operating results for Ogden Plaza parking facility showed significant
improvement during fiscal 1996. During the year, the Trust recorded $716,000 of
net revenue from the operation of the facility, as compared to $512,000 in the
prior fiscal year. This increase reflects greater demand for parking created by
the recent renovation of the nearby Navy Pier and the addition of another 100
stalls on a surface lot adjacent to the facility in September 1995.

Certain tenants are required to pay real estate taxes on land they lease
from the Trust. These real estate taxes payable by lessees are reflected as
both revenue and expense, and therefore, do not affect net income. Real estate
taxes payable by lessees are also reflected as both a receivable and payable in
the Trust's consolidated balance sheets.

The office segment of the Chicago real estate market remains overbuilt. It
is unlikely that there will be any significant office project started on the
Trust property for at least the next several years. While occupancy in the
residential segment of the market has remained relatively strong, current rent
levels do not justify new construction of high density apartment towers.
However, demand has developed for uses of the land not contemplated in the
original plan for Cityfront Center. One example of this demand is a senior
housing facility similar to the development discussed earlier involving Senior
Lifestyle Corporation. The Trust has six residential sites currently available
for development, two of which require no additional infrastructure improvements.
The Trust continues to pursue development opportunities in the form of ground
leases, joint ventures or outright ownership.

<PAGE>

On February 13, 1996 the Board of Trustees of the Trust declared an
increase to the Trust's quarterly dividend to $.04 per share from $.01 per share
effective for the dividend paid March 1, 1996. On April 11, 1996 the Board of
Trustees of the Trust declared a quarterly dividend of $.04 per share paid June
1, 1996. This dividend increase reflects an overall improvement in the cash
flow and the operating results of the Trust.

RESULTS OF OPERATIONS

FISCAL 1996 VERSUS FISCAL 1995

REVENUES:

Revenue from rental property increased in fiscal 1996 compared to fiscal
1995 primarily due to revenue generated by the Trust's surface parking lots. As
a result of a new lease with System Parking, Inc. for four surface parking lots
and as a result of the early termination of a prior lease with North Pier
Chicago for the parcel P-9 surface parking lot, fiscal 1996 revenues increased
by $1,607,000 over fiscal 1995 revenues. Revenue from the Mid-Rise also
increased during fiscal 1996 by $427,000 due to a combination of higher rates
and higher occupancy compared to fiscal 1995. These increases were partially
offset by the disposition of One Michigan Avenue in December 1994. The Trust
recorded no revenue from One Michigan Avenue in fiscal 1996 compared to
$1,477,000 recorded in fiscal 1995.

Due to the termination of the lease with respect to parcel P-9 effective
July 31, 1995 and due to the terms of the new lease with System Parking, Inc.,
effective January 1, 1996 for four surface parking lots, the Trust became liable
for real estate taxes on these parcels. As a result, real estate taxes payable
by lessees decreased by $605,000 compared to the same period in the prior year.
Real estate taxes payable by lessees are also reflected as an expense, and
therefore, do not affect net income.

Equity in Net Loss of LCD Partnership reflects the Trust's effective one-
third share of the operations of New Street Joint Venture, the entity which owns
the Cityfront Place High-Rise. The fiscal 1996 loss reflects the building's
operations from January 1, 1995 through December 31, 1995, New Street Joint
Venture's fiscal year. The reduction in the loss compared to fiscal 1995
primarily results from increased rental rates. The fiscal 1996 loss had no
impact on Trust cash flows since New Street Joint Venture had positive cash flow
and because of the cash flow priority of LCD's partner in New Street Joint
Venture.

EXPENSES:

The disposition of One Michigan Avenue in December 1994, is the most
significant factor in the reductions in property operating expenses,
depreciation and amortization expense and interest expense in fiscal 1996
compared to fiscal 1995.

The increase in real estate taxes results primarily from the Trust assuming
the responsibility for the taxes under the terms of the new lease with System
Parking, Inc. Under the terms of the prior lease, the lessee had the
responsibility for the payment of taxes and these were reported as real estate
taxes payable by lessees. This increase was partially offset by the disposition
of One Michigan Avenue in December 1994.

General and administrative expense increased for fiscal 1996 primarily as a
result of higher legal expense, higher trustee expense due to an increase in the
number of meetings, an increase in bonuses, higher pension expense, and an
increase in the cost of printing and distributing shareholder reports.

Restructuring expenses consist of the combination of hiring FPL Associates
to assist the Trust in its long range planning process, retaining Lehman
Brothers Inc. to assist the Trust in studying strategic alternatives designed to
enhance shareholder value, and other related expenses.

<PAGE>

FISCAL 1995 VERSUS FISCAL 1994

REVENUES:

Revenue from rental property decreased in fiscal 1995 compared to fiscal
1994 primarily due to the disposition of One Michigan Avenue in December 1994.
Furthermore, revenues at One Michigan Avenue declined in fiscal 1995 prior to
the disposition, due to the decrease in occupancy and rental rate under the
terms of IBM's new lease at the property. The combination of these two factors
resulted in a decrease in revenue from One Michigan Avenue during fiscal 1995 of
$1,054,000.

The increase in real estate taxes payable by lessees during fiscal 1995
reflects an increase in the estimated tax assessment on the Sheraton Chicago
Hotel & Towers. Real estate taxes payable by lessees are also reflected as an
expense, and therefore, do not affect net income.

Equity in Net Loss of LCD Partnership reflects the Trust's effective one-
third share of the operations of New Street Joint Venture, the entity which owns
the Cityfront Place High-Rise. The fiscal 1995 loss reflects the building's
operations from January 1, 1994 through December 31, 1994, New Street Joint
Venture's fiscal year. The 1995 loss had no impact on Trust cash flows since
New Street Joint Venture had positive cash flow and because of the cash flow
priority of LCD's partner in New Street Joint Venture.

EXPENSES:

Real estate taxes increased in fiscal 1995 compared to fiscal 1994 due to
refunds of prior year real estate taxes received in fiscal 1994. Refunds of
prior year real estate taxes received during fiscal 1995 were significantly
less. The fiscal 1995 increase was partially offset by the disposition of One
Michigan Avenue in December 1994 and by the sale in December 1994 of a parcel of
land located in Cityfront Center to the Chicago Music and Dance Theater, Inc.

The decreases in property operating expenses and in depreciation and
amortization expense during fiscal 1995 reflect the disposition of One Michigan
Avenue in December 1994. The Trust stopped recording these expenses on December
16, 1994, the date of the sale by foreclosure of One Michigan Avenue.
Accordingly, for fiscal 1995, the Trust recorded only seven and a half months of
these expenses compared to twelve months for fiscal 1994.

In the fourth quarter of fiscal 1995, the Trust recorded environmental
remediation expense of $1,035,000 based upon the resolution of accounting and
other issues related to environmental remediation costs of property held for
development and the execution of the Reimbursement Agreement with KMCC (See Item
1). No such expense was recorded during fiscal 1994. This amount includes the
Trust's share of testing and legal costs related to the Tested Site through
April 30, 1995, plus $750,000, which is the maximum reimbursement obligation of
the Trust pursuant to the terms of the Reimbursement Agreement. This amount
excludes the amount of the potential claims for some or all of the Trust's share
of the remediation costs under the Trust's current or prior insurance policies.

Interest expense for fiscal 1995 decreased compared to fiscal 1994
primarily due to the disposition of One Michigan Avenue in December 1994.
Although the Trust suspended regular debt service on the One Michigan Avenue
note subsequent to the September 1, 1993 payment, the Trust continued to accrue
interest on the loan through the date of the disposition of the property. See
Note 5 to the financial statements for a more complete discussion of the One
Michigan Avenue note. The decrease in interest expense was partially offset by
an increase in interest expense on the note secured by the rents from and the
land under the Sheraton Chicago Hotel & Towers due to the increased principal
balance of this note resulting from the additional accrual of interest under the
terms of the note.

<PAGE>

NET LOSS FROM DISPOSITION OF REAL ESTATE AND
GAIN FROM EXTINGUISHMENT OF DEBT:

The Trust recognized a gain of $1,603,000 from the sale of a parcel of land
to the Chicago Music and Dance Theater, Inc. during the third quarter of fiscal
1995. Total consideration from the sale equaled $2,638,000 which consisted of
cash received of $1,250,000 plus the value of a construction obligation of
$1,388,000 assumed by the Theater which will benefit the surrounding parcels
still owned by the Trust. This construction obligation is a pedestrian
concourse through the theater site which was required under the Planned
Development Ordinance affecting the Trust's land at Cityfront Center.

During the third quarter of fiscal 1995, the Trust also recognized a net
loss of $1,265,000 as a result of the sale by foreclosure of One Michigan
Avenue. The net loss consisted of a loss from disposition of real estate of
$3,332,000 and an extraordinary gain from the extinguishment of debt of
$2,067,000. The loss from disposition of real estate represents the difference
between the carrying value of the property and the estimated fair market value
of the property on the date of foreclosure. The extraordinary gain represents
the difference between the principal amount of the note plus accrued interest
and the estimated fair market value of the property on the date of the
foreclosure.

LIQUIDITY AND CAPITAL RESOURCES

FISCAL 1996 VERSUS FISCAL 1995

CASH FLOWS:

Operating:

The increase in cash flows from operating activities in fiscal 1996
compared to fiscal 1995 was due primarily to an increase in cash flows from
parking operations and from the Mid-Rise.

The effect of averaging hotel rental revenue represents the difference
between base rent recognized and cash base rent received during the year on the
hotel ground lease. In both fiscal year 1996 and 1995 the Trust recorded base
rent of $4,848,000. However, in fiscal 1996 the Trust received cash base rent
of $1,625,000, while receiving $150,000 in fiscal 1995.

The difference between current interest payable and contractual interest
represents the difference between interest expense on the note secured by the
rents from and the land under the hotel, and the interest paid on this note.
This difference was $1,132,000 less in fiscal 1996 due primarily to the increase
in the cash interest paid on the loan. The monthly cash interest paid equals
the prior month's minimum cash base rent from the hotel ground lease through
December 31, 1998.

Investing:

Cash flows from investing activities decreased in fiscal 1996 compared to
fiscal 1995 due to several factors. First, during fiscal 1996 the Trust
acquired a net $2,248,000 of short-term investments; during fiscal 1995, the
Trust sold United States Treasury Notes with a par value of $1,250,000 to
facilitate the paydown of the $4,000,000 balance on its line of credit with
First Bank, N.A. Second, the Trust received $1,250,000 in fiscal 1995 from the
sale of land to the Chicago Music and Dance Theater, Inc. Finally, the
$1,000,000 One Michigan Avenue loan escrow funded during fiscal 1994 was
returned to the Trust during fiscal 1995.

Additions to investments in real estate during fiscal 1996 consisted
primarily of tenant improvements at the office properties in Indianapolis and
Tampa of $284,000, improvements to parcel P-7 for a surface

<PAGE>

parking lot of $132,000 and building improvements at the Mid-Rise, Waterplace
Park and Lincoln Garden of $126,000. In contrast, fiscal 1995 additions to
investments in real estate consisted primarily of tenant improvements at the
office properties of $694,000 and building improvements of $245,000.

Financing:

Cash flows used in financing activities decreased in fiscal 1996 compared
to fiscal 1995 due to the paydown of the Trust's $4,000,000 advance on its line
of credit with First Bank, N.A., during fiscal 1995. Earlier in fiscal 1995 the
Trust repaid the $4,000,000 Cityfront Place Mid-Rise note issued February 25,
1992, using the proceeds from a $4,000,000 draw on its available $20,000,000
line of credit with First Bank, N.A.

FUNDS FROM OPERATIONS:

Funds from Operations increased during fiscal 1996 compared to fiscal 1995
by $2,544,000 primarily due to the increase in net income from parking and from
the Mid-Rise. Fiscal 1996 Funds from Operations also increased because the
Trust recorded environmental remediation expense of $1,035,000 during fiscal
1995. This amount included the Trust's share of testing and legal costs related
to the Tested Site through April 30, 1995, plus $750,000, which is the maximum
reimbursement obligation of the Trust pursuant to the terms of the Reimbursement
Agreement with KMCC. No such expense was recorded during fiscal 1996. For
fiscal 1996 the calculation of Funds from Operations excludes restructuring
expenses of $300,000. Funds from Operations includes certain material non-cash
items which are reported in income and expense of the Trust. Please refer to
the Consolidated Statements of Cash Flows in the financial statements for the
computation of cash flows from operating, investing and financing activities.

FISCAL 1995 VERSUS FISCAL 1994

CASH FLOWS:

Operating:

Cash flows from operating activities decreased in fiscal 1995 compared to
fiscal 1994 by $353,000. This decrease was primarily due to a decrease during
fiscal 1995 of $359,000 in refunds of prior year real estate taxes. The amount
of refunds received during fiscal 1994 was unusually high. During fiscal 1994
the Trust received $473,000 in refunds compared to just $114,000 received during
fiscal 1995.

Cash flows from operating activities from the Mid-Rise increased during
fiscal 1995 due to lower real estate tax payments. Fiscal 1994 payments were
unusually high due to the change in the assessment of the Mid-Rise site from
partially developed. This increase in fiscal 1995 cash flows was partially
offset by higher real estate tax payments on the Trust's other Cityfront Center
land. Cash flows from operating activities for the Trust's other operating
properties as a group were substantially unchanged from fiscal 1994 to fiscal
1995.

No change occurred from fiscal 1994 to fiscal 1995 in the effect of
averaging hotel rental revenue. This item represents the difference between
revenue recognized and cash rent received during the year on the hotel ground
lease. In both fiscal years the Trust recorded revenue of $4,848,000 while
receiving cash of $150,000.

The difference between current interest payable and contractual interest
represents the difference between interest expense on the note secured by the
rents from and the land under the hotel, and the interest paid on this note.
This difference was $160,000 greater in fiscal 1995 due to the increase in the
outstanding principal balance of the loan. The monthly cash interest paid
equals the prior month's minimum cash rent from the hotel ground lease through
December 31, 1998.

<PAGE>

Investing:

Cash flows from investing activities increased in fiscal 1995 compared to
fiscal 1994 due to several factors. First, cash received from the sale of land
to the Chicago Music and Dance Theater, Inc. equaled $1,250,000 during fiscal
1995. Second, the $1,000,000 One Michigan Avenue loan escrow funded during
fiscal 1994 was returned to the Trust during fiscal 1995. Finally, the Trust
sold United States Treasury Notes with a par value of $1,250,000 to facilitate
the paydown of the $4,000,000 advance on its line of credit with First Bank,
N.A.

Additions to investments in real estate during fiscal 1995 consisted
primarily of tenant improvements of $694,000 and building improvements of
$245,000. In contrast, fiscal 1994 additions to investments in real estate
consisted primarily of tenant improvements of $254,000, costs related to
environmental matters of $203,000 and building improvements of $90,000.

Financing:

Cash flows used in financing activities increased in fiscal 1995 compared
to fiscal 1994 due to the paydown of the Trust's $4,000,000 advance on its line
of credit with First Bank, N.A., during fiscal 1995. Earlier in fiscal 1995 the
Trust prepaid the $4,000,000 Cityfront Place Mid-Rise note issued February 25,
1992, using the proceeds from a $4,000,000 advance on its available $20,000,000
line of credit with First Bank, N.A.

FUNDS FROM OPERATIONS:

Funds from Operations decreased during fiscal 1995 compared to fiscal 1994
by $1,595,000 primarily due to three factors. First, the Trust recorded
environmental remediation expense of $1,035,000 during fiscal 1995. This amount
included the Trust's share of testing and legal costs related to the Tested Site
through April 30, 1995, plus $750,000, which is the maximum reimbursement
obligation of the Trust pursuant to the terms of the Reimbursement Agreement
with KMCC. No such expense was recorded during fiscal 1994. Second, refunds of
prior year real estate taxes decreased during fiscal 1995 by $359,000. Third,
interest expense increased by $160,000 during fiscal 1995 on the note secured by
the rents from and the land under the Sheraton Chicago Hotel & Towers due to the
increasing balance of this note resulting from the additional accrual of
interest under the terms of the note. Funds from Operations includes certain
material non-cash items which are reported in income and expense of the Trust.
Please refer to the Consolidated Statements of Cash Flows in the financial
statements for the computation of cash flows from operating, investing and
financing activities.

GENERAL DISCUSSION

The Trust has historically used non-recourse debt secured by individual
properties as the primary source of additional capital, when needed, to fund
acquisitions or development. It has also acquired income producing properties
in tax-deferred exchanges in which little or no debt was required. The Trust
currently has four income producing properties with no debt outstanding -
Waterplace Park, Lincoln Garden, the Cityfront Place Mid-Rise and the Ogden
Plaza parking facility.

During the third quarter of fiscal 1995, the Trust entered into a three
year $20,000,000 revolving credit agreement with First Bank, N.A. secured by the
Mid-Rise apartment building. At April 30, 1996, the full amount of the facility
is available. The Trust agreed to make monthly payments into an escrow account
to fund the semi-annual real estate tax payments due on the Cityfront Place Mid-
Rise. At April 30, 1996 the balance in this account equaled $203,000.

At April 30, 1996, total interest bearing debt of the Trust equaled
$28,068,000, all of which was fixed rate debt.

<PAGE>

While the Trust may not, under federal tax law applicable to REIT's, hold
property for sale in the ordinary course of business, its policy is to evaluate
periodically its portfolio of properties which might be considered for sale,
lease or exchange. The most recent sale occurred during the third quarter of
fiscal 1995 when the Trust sold a parcel containing approximately 41,000 square
feet to the Chicago Music and Dance Theater, Inc. The Trust received total
consideration of $2,638,000 from this sale, of which $1,250,000 was in cash and
$1,388,000 represented the assumption by the Theater of an obligation under the
Planned Development Ordinance affecting the Trust's land at Cityfront Center, to
construct a pedestrian concourse adjacent to the theater site. Prior to this,
the Trust sold the land under the Brick Venture apartment building adjacent to
North Pier at Cityfront Center in fiscal 1989. The Trust received installment
payments of $1.5 million in fiscal 1992 and $2.95 million in fiscal 1993 related
to that sale.

In January 1994, the Trust entered into a consent order with the EPA
regarding preliminary testing to be performed on a 2.8 acre site in Cityfront
Center currently used as a parking lot (the "Tested Site"). The Trust's
consultants have prepared cost estimates to remediate the contaminated areas on
the Tested Site which range from $1 million to $7 million, with $3.5 million
representing the estimated cost of the most likely required remediation, which
involves excavation and disposal of the areas contaminated by thorium.

The Trust entered into an agreement on August 11, 1995 (which was expanded
and superseded by an agreement dated January 18, 1996) with KMCC regarding the
financial responsibilities of the parties for the remediation of the Tested Site
(the "Reimbursement Agreement"). Under the terms of the Reimbursement
Agreement, KMCC is responsible for the remediation of the Tested Site with
respect to thorium contamination and any thorium/mixed waste contamination, and
the Trust has the obligation to reimburse KMCC for 25% of the cost of this
remediation, not to exceed a maximum reimbursement obligation of the Trust of
$750,000.

The Trust will consider using its current cash, investments available for
sale or its current credit facility, to fund its obligations under the
Reimbursement Agreement with KMCC. The Trust may have claims for coverage for
some or all of its share of the remediation costs under its current or prior
insurance policies.

In order to fully develop the land owned by the Trust in Chicago,
additional infrastructure expenditures will be required. These improvements are
necessary to fully redevelop the property in accordance with the Planned
Development Ordinance approved by the Chicago City Council on November 6, 1985.

The Trust completed Phase I infrastructure in fiscal 1988 using the
proceeds from borrowings secured by the Kraft Building and One Michigan Avenue.
Total Phase I expenditures amounted to approximately $10 million. The Trust
completed Phase II infrastructure in fiscal 1992 using the proceeds from a
borrowing secured by the rents from and land under the Sheraton Chicago Hotel &
Towers ground lease.

Phase III infrastructure consists primarily of the River Esplanade and
River Drive east of McClurg Court, Du Sable Park (a 3 acre park east of Lake
Shore Drive), the slip promenade on the south bank of the Ogden Slip and the
upgrading of the remainder of East North Water Street. The total current cost
to the Trust for the improvements is estimated to be approximately $8.5 million,
which includes the Trust's obligation to contribute $600,000 for improvements to
be made in Du Sable Park expected to be completed during calendar 1996. The
remainder of Phase III will be constructed as needed to support additional
development in the area. However, certain improvements are required to be
completed no later than the completion of 2,500 units of residential development
on the east portion of Cityfront Center. The estimated

<PAGE>

cost of the remaining infrastructure is based on a number of assumptions,
including, but not limited to the following: (i) East Water Place, L.P.
completes all improvements on the parcels which are currently under development
for the East Water Place Townhomes related to the slip promenade on the south
bank of the Ogden Slip; (ii) the Chicago Music and Dance Theater, Inc. completes
the pedestrian concourse through its parcel; (iii) the estimate is based on
design development drawings; actual site conditions may materially increase the
amount; and (iv) the cost estimate includes hard construction costs only and is
stated in terms of current costs. It is the intention of the Trust to finance
future infrastructure with cash on hand, its current credit facility, general
corporate indebtedness, borrowings secured by its income producing properties
and ground leases, asset sales or some combination of these sources.

The recent renovation of the nearby Navy Pier has increased demand for
parking in the surrounding area. As a result, the Trust expects an increase in
net cash flow under the terms of its new lease for four surface parking lots
with System Parking, Inc. compared to the cash flow it received from its prior
lease with North Pier Chicago. In addition, the Trust expects an increase in
net cash flow from the operations of the Ogden Plaza parking facility.

Starting January 1, 1996, the base rent payable to the Trust from its lease
with Cityfront Hotel Associates Limited Partnership for the Sheraton Chicago
Hotel & Towers increased to an annual rate of $2.1 million. While all of the
base rent will be paid as additional debt service on the loan which financed the
infrastructure improvements associated with the hotel, it is the starting point
for future increases in minimum base rent and minimum rent will exceed the debt
service beginning in 1999. Also starting July 1, 1995, the percentage rent
provisions of the ground lease became effective. During fiscal 1996 the Trust
received $226,000 in percentage rent, of which $96,000 was recognized as revenue
with the remaining $130,000 representing a prepayment of future percentage rent.

The New Street Joint Venture Agreement obligates LCD and Northwestern
Mutual to contribute, if necessary, their prorata shares of funds related to the
operation of the High-Rise building. As of April 30, 1996, LCD had funded
$335,000 as its share of additional capital contributions, all of which was
contributed prior to fiscal 1994. LCD currently holds approximately $875,000 in
short term investments. The Trust's two-thirds share of these short term
investments is not reflected on the Trust's balance sheet and is in addition to
the Trust's cash and investments. The New Street Joint Venture agreement
provides for Northwestern Mutual to receive a priority return of operating cash
flow and the proceeds from sale or refinancing of the High-Rise. Cash flow must
increase significantly from its current level for LCD to receive any cash
distributions from New Street Joint Venture after the payment of Northwestern's
preferential return. The cash held by LCD is not subject to any such
priorities.

On December 16, 1994 the Trust agreed to permit the sale by foreclosure of
One Michigan Avenue, an office building in Lansing, Michigan to its lender,
Pacific Mutual Life Insurance Company, in full satisfaction of the note secured
by One Michigan Avenue. The One Michigan Avenue note, issued in August 1987,
modified in March 1994 and further modified in August 1994 had an interest rate
of 10% and carrying value at December 15, 1994 of $14,590,000. The disposition
of the property will not have a significant impact on the future cash flow of
the Trust. Cash flow from the property was not significant in fiscal 1995.

Management considers that the Trust's liquidity at April 30, 1996 is
adequate to meet its operating needs and commitments.

<PAGE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Shareholders and Trustees of
The Chicago Dock and Canal Trust:

We have audited the accompanying consolidated balance sheets of The Chicago
Dock and Canal Trust and Subsidiaries as of April 30, 1996 and 1995, and the
related consolidated statements of income, cash flows, and shareholders' equity
for each of the three years in the period ended April 30, 1996. These financial
statements are the responsibility of the Trust's management. Our responsibility
is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our 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 The Chicago
Dock and Canal Trust and Subsidiaries as of April 30, 1996 and 1995, and the
results of their operations and their cash flows for each of the three years in
the period ended April 30, 1996, in conformity with generally accepted
accounting principles.

ARTHUR ANDERSEN LLP

Chicago, Illinois,
June 19, 1996

<PAGE>

THE CHICAGO DOCK AND CANAL TRUST AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF APRIL 30, 1996 AND 1995
(IN THOUSANDS)

A S S E T S
1996 1995
---- ----
INVESTMENT IN REAL ESTATE, at cost:
Developed properties (Note 4). . . . . . . . . $ 70,246 $ 70,487
Land and land improvements held for
development (Note 4) . . . . . . . . . . . . 16,961 16,901
Land subject to ground leases (Note 4) . . . . 6,743 6,564
Less-Accumulated depreciation and
amortization . . . . . . . . . . . . . . . . (14,104) (11,638)
-------- --------
Net investment in real estate . . . . . . 79,846 82,314
-------- --------
OTHER ASSETS:
Cash and cash equivalents. . . . . . . . . . . 757 344
-------- --------
Investments available for sale, at cost
(approximate market value of $6,000 and $3,721
in 1996 and 1995, respectively). . . . . . . . 5,973 3,725
-------- --------
Short-term investments-restricted, at cost
(and at approximate market value) (Note 13). . 203 130
-------- --------
Security deposit cash. . . . . . . . . . . . . 808 1,330
-------- --------
Receivables-
Tenants (including $29,355 and $25,887 of
accrued but unbilled rents in 1996 and 1995,
respectively) (Note 4) . . . . . . . . . . . 29,647 26,193
Real estate taxes payable by lessees . . . . 5,931 5,828
Land improvements (Note 4) . . . . . . . . . 1,388 1,388
Interest . . . . . . . . . . . . . . . . . . 45 91
Other. . . . . . . . . . . . . . . . . . . . 225 506
-------- --------
Total receivables. . . . . . . . . . . . . 37,236 34,006
-------- --------
Other assets, net. . . . . . . . . . . . . . . 1,185 1,427
-------- --------
$126,008 $123,276
-------- --------
-------- --------

L I A B I L I T I E S A N D S H A R E H O L D E R S ' E Q U I T Y

LIABILITIES:
Accounts payable and accrued expenses:
Real estate taxes. . . . . . . . . . . . . . $ 4,946 $ 4,882
Real estate taxes payable by lessees . . . . 5,931 5,828
Accrued environmental remediation costs
(Note 14). . . . . . . . . . . . . . . . . 750 750
Other. . . . . . . . . . . . . . . . . . . . 2,208 1,492
Cash dividends payable . . . . . . . . . . . . 231 58
Mortgage notes payable (Note 5). . . . . . . . 28,068 27,369
-------- --------
Total liabilities. . . . . . . . . . . . . 42,134 40,379
-------- --------
SHAREHOLDERS' EQUITY (Note 6):
Common shares of beneficial interest:
No par value, 20,000,000 authorized, 5,944,200
issued . . . . . . . . . . . . . . . . . . . 3,101 3,101
-------- --------
Preferred shares of beneficial interest:
No par value, 1,000,000 authorized, none
issued . . . . . . . . . . . . . . . . . . . - -
-------- --------
Undistributed income before net gain from sale
of real estate properties. . . . . . . . . . 9,020 7,870
Undistributed net gain from sale of real
estate properties. . . . . . . . . . . . . . 72,372 72,545
-------- --------
Total undistributed net income . . . . . . . 81,392 80,415
-------- --------
Less-
Treasury shares of beneficial interest, at
cost-160,400 at April 30, 1996 and 1995. . (619) (619)
-------- --------
Total shareholders' equity . . . . . . . . . 83,874 82,897
-------- --------
$126,008 $123,276
-------- --------
-------- --------

The accompanying notes to consolidated financial statements are an integral
part of these balance sheets.

<PAGE>
THE CHICAGO DOCK AND CANAL TRUST AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

FOR THE YEARS ENDED APRIL 30, 1996, 1995 AND 1994

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

1996 1995 1994
---- ---- ----
REVENUES:
Revenue from rental property. . . . . $ 16,079 $ 15,525 $ 16,546
Real estate taxes payable by lessees. 6,208 6,864 4,168
-------- -------- --------
Total revenues. . . . . . . . . . . 22,287 22,389 20,714
-------- -------- --------

EXPENSES:
Real estate taxes . . . . . . . . . . 3,115 3,097 3,003
Real estate taxes payable by lessees. 6,208 6,864 4,168
Property operating expenses . . . . . 3,106 3,307 3,444
Environmental remediation
expense (Note 14) . . . . . . . . . - 1,035 -
General and administrative. . . . . . 2,085 1,857 1,865
Depreciation and amortization . . . . 3,020 3,497 3,781
Interest expense. . . . . . . . . . . 2,883 3,751 4,144
-------- -------- --------
Total expenses . . . . . . . . . 20,417 23,408 20,405
-------- -------- --------
Operating income (loss) . . . . . 1,870 (1,019) 309
INVESTMENT AND OTHER INCOME. . . . . . . 334 342 321
EQUITY IN NET LOSS OF LCD PARTNERSHIP
(Note 3) . . . . . . . . . . . . . . (349) (475) (530)
RESTRUCTURING EXPENSES (Note 15) . . . . (300) - -
NET LOSS FROM DISPOSITION OF REAL ESTATE
(Note 4). . . . . . . . . . . . . . . - (1,729) -
-------- -------- --------
Net income (loss) before
extraordinary item. . . . . . . . . 1,555 (2,881) 100
EXTRAORDINARY ITEM:
Gain from extinguishment of
debt (Note 4) . . . . . . . . . . . - 2,067 -
-------- -------- --------
Net income (loss) . . . . . . . . . . $ 1,555 $ (814) $ 100
-------- -------- --------
-------- -------- --------
EARNINGS (LOSS) PER SHARE BEFORE
EXTRAORDINARY ITEM . . . . . . . . . . $ 0.27 $ (0.50) $ 0.02
-------- -------- --------
-------- -------- --------
EARNINGS (LOSS) PER SHARE. . . . . . . . $ 0.27 $ (0.14) $ 0.02
-------- -------- --------
-------- -------- --------

The accompanying notes to consolidated financial statements are an integral
part of these statements.

<PAGE>

THE CHICAGO DOCK AND CANAL TRUST AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED APRIL 30, 1996, 1995 AND 1994
(IN THOUSANDS)

1996 1995 1994
---- ---- ----

Cash flows from operating activities:
Net income (loss) . . . . . . . . . . $ 1,555 $ (814) $ 100
Add (deduct)-Adjustments to
reconcile net income to net cash
flows from operating activities:
Net loss from disposition of real
estate. . . . . . . . . . . . . . - 1,729 -
Gain from extinguishment of debt. . - (2,067) -
Depreciation and amortization . . . 3,020 3,497 3,781
Environmental remediation costs . . - 953 -
Effect of averaging hotel
rental revenue. . . . . . . . . . (3,223) (4,698) (4,698)
Equity in net loss of LCD
Partnership . . . . . . . . . . . 349 475 530
Changes in receivables. . . . . . . 515 (871) 1,815
Changes in accounts payable
and accrued expenses. . . . . . . 933 1,834 (898)
Difference between current
interest payable and contractual
interest. . . . . . . . . . . . . 790 1,922 1,762
Amortization of loan fees . . . . . 82 155 90
Other . . . . . . . . . . . . . . . (20) - (14)
-------- -------- --------
Cash flows provided by (used in)
operating activities . . . . . . . . . 4,001 2,115 2,468
-------- -------- --------
Cash flows from investing activities:
Proceeds from sales and maturities
of investments available for
sale. . . . . . . . . . . . . . . 500 1,755 500
Purchases of investments available
for sale. . . . . . . . . . . . . - (1,963) (1,006)
Net (acquisition) disposition of
short-term investments. . . . . . (2,748) 1,506 273
Net (acquisition) disposition of
short-term investments
-restricted . . . . . . . . . . . (73) 870 (1,000)
Additions to investments in
real estate . . . . . . . . . . . (649) (1,099) (620)
Music and Dance Theater land sale . . - 1,250 -
Lease commissions and other . . . . . (122) (94) (295)
-------- -------- --------
Cash flows provided by (used in)
investing activities . . . . . . . . . (3,092) 2,225 (2,148)
-------- -------- --------
Cash flows from financing activities:
Cash dividends declared . . . . . . . (578) (231) (231)
Change in dividends payable . . . . . 173 - -
Proceeds from bank line of credit . . - 4,000 -
Payment of mortgage loan fees . . . . - (168) (44)
Principal payments on loans . . . . . (91) (8,084) (134)
-------- -------- --------
Cash flows provided by (used in)
financing activities . . . . . . . . . (496) (4,483) (409)
-------- -------- --------
Increase (decrease) in cash and
cash equivalents . . . . . . . . . . . 413 (143) (89)
Cash and cash equivalents, beginning
of period. . . . . . . . . . . . . . . 344 487 576
-------- -------- --------
Cash and cash equivalents, end of
period . . . . . . . . . . . . . . . . $ 757 $ 344 $ 487
-------- -------- --------
-------- -------- --------

The accompanying notes to consolidated financial statements are an integral
part of these statements.

<PAGE>

THE CHICAGO DOCK AND CANAL TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED APRIL 30, 1996, 1995 AND 1994
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

UNDISTRIBUTED
INCOME UNDISTRIBUTED
BEFORE NET NET
COMMON GAIN FROM GAIN FROM TREASURY
SHARES OF SALE OF SALE OF SHARES OF
BENEFICIAL REAL ESTATE REAL ESTATE BENEFICIAL
INTEREST PROPERTIES PROPERTIES INTEREST TOTAL
-------- ---------- ---------- -------- -----
<S> <C> <C> <C> <C> <C>
BALANCE, April 30, 1993. . . . . . . . . . . . . $3,101 $ 9,153 $72,438 $ (619) $84,073
Net income for the year . . . . . . . . . . . - 100 - - 100
Cash dividends declared, $.04 per
share . . . . . . . . . . . . . . . . . . - (231) - - (231)
------- ------- ------- ------- -------
BALANCE, April 30, 1994. . . . . . . . . . . . . 3,101 9,022 72,438 (619) 83,942
Net income (loss) for the year. . . . . . . . - (1,152) 338 - (814)
Cash dividends declared, $.04 per
share . . . . . . . . . . . . . . . . . . - - (231) - (231)
------- ------- ------- ------- -------
BALANCE, April 30, 1995. . . . . . . . . . . . . 3,101 7,870 72,545 (619) 82,897
Net income for the year . . . . . . . . . . . - 1,555 - - 1,555
Cash dividends declared, $.10 per
share . . . . . . . . . . . . . . . . . . - (405) (173) - (578)
------- ------- ------- ------- -------
BALANCE, April 30, 1996. . . . . . . . . . . . . $ 3,101 $ 9,020 $72,372 $ (619) $83,874
------- ------- ------- ------- -------
------- ------- ------- ------- -------

</TABLE>

The accompanying notes to consolidated financial statements are an integral
part of these statements.

<PAGE>

THE CHICAGO DOCK AND CANAL TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 1996, 1995 AND 1994

(1) BUSINESS OF THE TRUST:

The Trust is an equity oriented real estate investment trust which owns
partially developed land (including certain developed sites) located in downtown
Chicago, Illinois and income producing real property in Chicago and elsewhere.
The Trust was organized in 1962, succeeding to the business of its corporate
predecessor. The Trust has elected to continue its operation as a real estate
investment trust under the Internal Revenue Code of 1986, as amended. The Trust
is self administered.

As of April 30, 1996, the Trust's principal real estate investments
consisted of: (i) fee title or other interests in approximately 22 acres of
partially developed land in Cityfront Center in downtown Chicago (including
certain developed sites); (ii) Waterplace Park, an office complex in
Indianapolis, Indiana; and (iii) Lincoln Garden, an office complex in Tampa,
Florida.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

(a) PRINCIPLES OF CONSOLIDATION-

The consolidated financial statements include the accounts of the Trust and
its wholly owned subsidiaries. All material intercompany accounts are
eliminated in consolidation.

(b) INCOME TAXES-

The Trust has elected to be taxed as a real estate investment trust and
intends to make distributions to its shareholders so as to be relieved of
substantially all federal income taxes relating to ordinary income under
provisions of current tax regulations (See Note 7).

The computation of earnings per share is based on 5,783,800 shares
outstanding for 1996, 1995 and 1994.

(d) ESTIMATES AND ASSUMPTIONS-

The preparation of financial statements in conformity with generally
accepted accounting principles requires management 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 revenues and expenses during the reporting period.
Actual results could differ from those estimates.

(e) INVESTMENTS IN REAL ESTATE-

Real estate investments are stated at the cost incurred to acquire the
properties. In addition, costs to develop the properties, including interest,
taxes, development, legal and architectural fees are added to the cost of land
or buildings, as appropriate. No interest or taxes were capitalized in fiscal
1996, 1995 or 1994.

<PAGE>

THE CHICAGO DOCK AND CANAL TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
APRIL 30, 1996, 1995 AND 1994

Costs incurred for improving tenant spaces in the Trust's office buildings
in conjunction with new leases and renewals are capitalized. Costs incurred in
connection with leasing apartments in the Trust's residential building such as
painting and carpeting are charged to expense when incurred.

(f) ENVIRONMENTAL REMEDIATION COSTS-

In general, the Trust charges environmental remediation costs to expense.
However, the Trust capitalizes these costs, if recoverable and if one of the
following criteria is met:

1. The costs extend the life, increase the capacity, or improve the
safety or efficiency of property owned by the company. However, the
condition of the property after the costs are incurred must be
improved as compared with the condition of the property when
originally constructed or acquired, if later.

2. The costs mitigate or prevent environmental contamination that has yet
to occur.

3. The costs are incurred in preparing for sale property currently held
for sale.

The Trust accrues for losses related to environmental remediation, if it is
probable that a liability has been incurred and if the amount of the loss can be
reasonably estimated. If the amount of the liability falls within a range and
no amount within that range can be determined to be the better estimate, the
Trust recognizes the minimum amount of the range. The Trust does not discount
environmental liabilities unless the amount of the liability and the timing of
cash payments are fixed or reliably determinable. The Trust does not offset
claims for potential recoveries against environmental remediation costs.

(g) DEPRECIATION AND AMORTIZATION-

Developed properties and infrastructure improvements are depreciated over
their estimated useful lives, using the straight-line method of depreciation.
Depreciation of leasehold improvements is computed using the straight-line
method over the terms of the related leases and commences when the improvements
are placed in service. Amortization of leasing commissions is computed using
the straight-line method over the terms of the related leases.

(h) REAL ESTATE TAXES-

In Chicago and certain other jurisdictions in which the Trust owns
property, real estate taxes are assessed on a calendar-year basis, one year in
arrears. At April 30, 1996 the Trust has accrued $10,877,000 as its estimate of
unpaid 1995 and 1996 real estate taxes including $5,931,000 payable by lessees
pursuant to ground leases. The Trust does not believe that the difference
between the actual real estate taxes and the current estimates will be material
to the financial statements.

(i) RENTAL INCOME RECOGNITION-

Aggregate rentals from tenant leases are recognized as revenue ratably over
the lives of the leases when collection of all amounts is reasonably assured.
Rental payments received prior to their recognition as income are classified as
deferred rental income and are included in other accrued expenses. Rental
revenues recognized prior to their billing are classified as unbilled rents and
are included in tenant receivables.

<PAGE>

THE CHICAGO DOCK AND CANAL TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
APRIL 30, 1996, 1995 AND 1994

(j) CONSOLIDATED STATEMENTS OF CASH FLOWS-

In fiscal 1996, 1995 and 1994, the Trust, in non-cash transactions, retired
fully depreciated leasehold improvements of $252,000, $170,000 and $843,000,
respectively. In fiscal 1995, the Trust, in a non-cash transaction, eliminated
net investment in real estate of $17,332,000, accrued interest payable of
$1,477,000 and mortgage note payable of $14,590,000 related to the One Michigan
Avenue foreclosure. In fiscal 1995, the Trust received total consideration of
$2,638,000 from the sale to the Chicago Music and Dance Theater, Inc. Total
consideration included a non-cash transaction of $1,388,000 which represents the
assumption by the Theater of an obligation under the Planned Development
Ordinance affecting the Trust's land at Cityfront Center to construct a
pedestrian concourse adjacent to the theater site. The Trust paid $2,011,000,
$977,000 and $1,646,000 in interest on borrowings in fiscal 1996, 1995 and 1994,
respectively.

(k) CASH AND CASH EQUIVALENTS-

For purposes of the Consolidated Balance Sheets and Consolidated Statements
of Cash Flows, Cash and Cash Equivalents consist of amounts held in demand
deposit and money market accounts.

(l) INVESTMENTS-

The Trust has designated all unrestricted investment securities as
available for sale. As of April 30, 1996 the cost of these securities
approximated market value.

(m) RECLASSIFICATIONS-

Certain reclassifications have been made to prior year statements to make
them comparable with the classifications used in fiscal 1996.

(3) SUBSIDIARIES AND JOINT VENTURE:

CDCT PLAZA CORPORATION

CDCT Plaza Corporation (the "Plaza Corp.") was formed by the Trust as a
wholly owned subsidiary. The Plaza Corp. owns or controls the 400 stall parking
facility under and adjacent to Ogden Plaza. The Plaza Corp. owns the area under
Park Drive, adjacent to Ogden Plaza, has a lessee's interest pursuant to a long
term lease from the Chicago Park District in the area under Ogden Plaza, and has
a licensee's interest in the area under Columbus Drive, adjacent to Ogden Plaza,
pursuant to a license with the City of Chicago. The license expires February
2002, subject to the City of Chicago's right to cancel the license for the
payment of a fee to the Plaza Corp. The area subject to the license contains
100 parking stalls and is separate from the main portion of the parking facility
which contains 300 stalls. An independent contractor operates the 400 stall
parking facility, with the Plaza Corp. receiving a varying percentage of gross
revenues. The Trust consolidates the operations of the Plaza Corp. in these
financial statements.

OMA LANSING CORPORATION

OMA Lansing Corporation (the "Lansing Corp.") was formed by the Trust
during fiscal 1994 as a wholly owned subsidiary. Lansing Corp. owned One
Michigan Avenue, a 148,000 sq. ft. office building located in Lansing, Michigan,
until December 16, 1994 when the Trust agreed to permit the sale by foreclosure

<PAGE>

THE CHICAGO DOCK AND CANAL TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
APRIL 30, 1996, 1995 AND 1994

of the building to its lender, Pacific Mutual Life Insurance Company. The Trust
consolidates the operations of the Lansing Corp. in these financial statements.

CDCT RESIDENCE CORPORATION

CDCT Residence Corporation (the "Residence Corp.") is a wholly owned
subsidiary which was capitalized with land located at the southeast corner of
East North Water and New Streets, (the "High-Rise" site) in Cityfront Center.
The Trust consolidates the operations of the Residence Corp. in these financial
statements.

In August 1989, the Residence Corp. entered into a partnership, LCD
Partnership ("LCD"), with Daniel E. Levin ("Levin"). The Residence Corp.
contributed the High-Rise site which was valued at $6,602,000 and which had an
historic cost of $1,689,000. Levin contributed cash, building plans for the
High-Rise building and a note for $903,000 which matured and was paid in
September 1991. Levin's contribution was valued at $3,301,000. The Residence
Corp. is a two-thirds partner in LCD and Levin is a one-third partner. Major
decisions of LCD, however, require unanimous approval. Accordingly, the
Residence Corp. accounts for its investment in LCD under the equity method.

In August 1989, LCD entered into a joint venture, New Street Joint Venture
("NSJV"), with Northwestern Mutual Life Insurance Company ("Northwestern
Mutual"). LCD contributed the High-Rise site, the plans and other assets
related to the development of the building (excluding the $903,000 note from
Levin). LCD's capital account was credited with $9,000,000. Northwestern Mutual
contributed an equal amount of cash. Northwestern Mutual and LCD are 50/50
partners in NSJV, subject, however, to Northwestern Mutual's priority over LCD
in certain distributions of cash flow and proceeds from sale or refinancing.
LCD accounts for its investment in NSJV under the equity method. The NSJV
agreement provides for Northwestern Mutual to receive a priority return of
operating cash flow and the proceeds from sale or refinancing of the High-Rise.
Cash flow must increase significantly from its current level for LCD to receive
any cash distributions from NSJV after the payment of Northwestern's
preferential return.

Northwestern Mutual also loaned NSJV $36,700,000 on a non-recourse basis.
In addition, the NSJV Agreement calls for LCD and Northwestern Mutual to
contribute, if necessary, their prorata shares of shortfalls in operating and
capital requirements. The High-Rise building opened in July 1991 and contains
480 units.

As of December 31, 1995, total assets and liabilities of NSJV were
$46,460,000 and $38,666,000, respectively. For the year ended December 31,
1995, NSJV recorded gross revenues of $6,942,000 and total expenses of
$8,173,000, which resulted in a net loss of $1,231,000. Included in total
expenses is depreciation and amortization expense, which for the year equaled
$1,730,000. LCD has a fiscal year which ends on April 30 and NSJV uses the
calendar year. Accordingly, LCD records its proportionate share of NSJV's
operating results four months in arrears.

<PAGE>

THE CHICAGO DOCK AND CANAL TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
APRIL 30, 1996, 1995 AND 1994

(4) INVESTMENTS IN REAL ESTATE:

DEVELOPED PROPERTIES-

At April 30, 1996 and 1995, the Trust's investment in developed properties,
including improvements owned by the Trust on leasehold interests, its
partnership interest in LCD (which is accounted for under the equity method),
but excluding properties of which the Trust is the ground lessor consisted of
the following:

1996 1995
---- ----
(IN 000's) (IN 000's)

Apartment buildings . . . . . $51,311 $51,648
Office buildings . . . . . . 16,132 16,036
Parking facility. . . . . . . 2,803 2,803
------- -------
70,246 70,487
Accumulated depreciation
and amortization. . . . . . (10,974) (9,046)
------- -------
Net developed properties . $59,272 $61,441
------- -------
------- -------

CITYFRONT PLACE MID-RISE-On December 17, 1991, the Trust acquired the Mid-
Rise apartment complex and related leasehold. The acquisition of the Mid-Rise
was part of a transaction in which the Trust exchanged its 62% undivided
interest in the Equitable Building in Chicago for the Mid-Rise. The Mid-Rise is
a residential complex located in Cityfront Center in downtown Chicago. It
consists of two 12-story buildings containing a total of 424 rental units. The
Mid-Rise was acquired at a total cost of $52.5 million. The price was
determined pursuant to a Sale Option Agreement dated August 31, 1989, between
the Trust and Levin.

The Equitable Life Assurance Society of the United States ("Equitable")
acquired the Trust's 62% interest in the Equitable Building pursuant to an
option granted to Equitable as part of the dissolution of the Chicago Dock-
Equitable Venture. In December 1990, Equitable exercised its option under the
Option Agreement to acquire the Trust's interest in the Equitable Building and
acquired the Trust's interest on December 17, 1991. The price for such interest
was $50 million.

ONE MICHIGAN AVENUE-On December 16, 1994 the Trust permitted the sale by
foreclosure of One Michigan Avenue, an office building in Lansing, Michigan to
its lender, Pacific Mutual Life Insurance Company, in full satisfaction of the
note secured by One Michigan Avenue. The Trust conducted extensive negotiations
with the lender including modifications to the note in March 1994 and again in
August 1994 (the "August modification"), in an effort to restructure the loan.
However, the Trust concluded that the property's reasonably estimated future
value was insufficient to warrant the additional capital investment required to
satisfy the terms of the August modification agreement to the loan. The loan
was non-recourse with respect to the Trust. Accordingly, the Trust's financial
exposure was limited to the loss of the building. The Trust recognized a net
loss of $1,265,000 on the transaction; of this, $3,332,000 was recorded as a
loss from disposition of real estate representing the difference between the
carrying value of the property and the fair market value of the property on the
date of the foreclosure. An extraordinary gain from the extinguishment of
indebtedness of $2,067,000 was also recorded during the third quarter of fiscal
1995, representing the difference between the principal amount of the note plus
accrued interest and the fair market value of the property on the date of the
foreclosure.

<PAGE>

THE CHICAGO DOCK AND CANAL TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
APRIL 30, 1996, 1995 AND 1994

LAND AND LAND IMPROVEMENTS HELD FOR DEVELOPMENT -

SURFACE PARKING-During the third quarter of fiscal 1996, the Trust leased
four surface parking lots containing 725 stalls to System Parking, Inc. The
lots had previously been leased to North Pier Chicago on a fixed rental basis.
The new lease started January 1, 1996 and provides that the Trust will receive
varying percentages of the gross revenue generated by the lots. System Parking
is responsible for paying the operating expenses of the lots, but the Trust has
the obligation to pay the real estate taxes. The recent renovation of the
nearby Navy Pier has increased demand for parking in the area and the Trust
expects an increase in net cash flow under the terms of the new lease compared
to the prior lease. For calendar year 1996, the new lease provides for minimum
rent of $3,600,000 (subject to potential adjustment during the remediation of
the Tested Site) (See Note 14). Real estate taxes for the most recent known
period, calendar year 1994, totaled $975,000 on the four surface parking lots.
Under the terms of the prior arrangement, for calendar 1995 the Trust reported
net income of $528,000 after real estate tax expense.

MUSIC AND DANCE THEATER SITE-On December 30, 1994, the Chicago Music and
Dance Theater, Inc. (the "Theater") acquired from the Trust a parcel of land
containing approximately 41,000 square feet, located in Cityfront Center which
is planned to be the site of a new 1,500 seat performing arts theater. The
Trust received $1,250,000 in cash shortly after the closing. The contract also
obligates the Theater to construct a pedestrian concourse through the theater
site. This concourse is an obligation under the Planned Development Ordinance
affecting the Trust's land at Cityfront Center and will benefit not only the
theater site but also the future buildings planned for the sites owned by the
Trust adjacent to the theater. The estimated cost of this work is $1,500,000.
The Theater is required to commence construction by September 1, 1996, and
complete construction by September 1, 1999, in each case subject to force
majeure delays. The Theater is currently raising funds and seeking debt
financing for the construction of the project. The Trust retained repurchase
rights for the site if the Theater has not made a substantial commencement of
construction by September 1, 1996 or a substantial completion of construction by
September 1, 1999, in each case subject to force majeure delays.

In computing the gain on the sale of $1,603,000, which was recorded during
the third quarter of fiscal 1995, total consideration included the cash received
plus the value of the construction obligation assumed by the Theater which will
benefit the surrounding parcels still owned by the Trust.

The Trust, together with other businesses near the theater site, agreed to
provide the Theater with an annual operating subsidy for up to twenty years.
The Trust agreed to provide up to $50,000 in the first year of the theater's
operation. This amount increases annually in years 2 through 10 by the increase
in the Consumer Price Index, but no more than 5% over the prior year amount.
During years 11 through 14, the amount is the same as the year 10 amount. The
amount declines during the 15th through 20th years. The amount of the subsidy
may be reduced based on the number of annual public performances at the theater.
The Trust agreed to provide the subsidy in light of the anticipated increase in
parking revenues at its Ogden Plaza parking facility from the theater patrons.
In management's opinion this increase in parking revenues will equal or exceed
the subsidy on an annual basis. The parking facility is adjacent to the theater
site and will be connected to the theater at grade level providing direct access
to the parking facility from the theater.

LAND SUBJECT TO GROUND LEASES -

SHERATON CHICAGO HOTEL & TOWERS-During fiscal 1989, the Trust entered into
a 50 year ground lease (with lessee options to extend the term 49 more years)
with Tishman Realty Corporation of Cook County

<PAGE>

THE CHICAGO DOCK AND CANAL TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
APRIL 30, 1996, 1995 AND 1994

("Tishman Realty") for approximately 2.3 acres of land in Cityfront Center in
Chicago. Tishman Realty subsequently assigned this lease to Cityfront Hotel
Associates Limited Partnership ("Cityfront Hotel Associates"), the current
lessee. The site is currently improved with a 1,200 room convention hotel
called the Sheraton Chicago Hotel & Towers which opened in March 1992. The
lease provides for minimum annual rental payments which were fixed at $150,000
through calendar 1994, and for payments which totaled $75,000 for the six month
period January 1, 1995 through June 30, 1995. The payments increased to $900,000
for the six month period July 1, 1995 through December 31, 1995, and will equal
$2,100,000 for calendar 1996. After 1996, the base rent increases annually by
the increase in the Consumer Price Index, but not less than 5% nor more than 10%
per year. In addition to the base rent, percentage rent became payable
beginning July 1, 1995. Percentage rent equals the amount by which base rent is
exceeded by the product obtained by multiplying gross revenues from operations
by the following applicable percentages:

DATE APPLICABLE PERCENTAGES

ROOM FOOD BEVERAGE OTHER
REVENUES REVENUES REVENUES REVENUES
-------- -------- -------- --------
July 1, 1995 - March 31, 1999 . . 3.50% 2.00% 3.00% 3.00%
April 1, 1999 - March 31, 2001. . 3.75% 2.50% 3.25% 3.50%
April 1, 2001 - March 31, 2003. . 4.00% 3.00% 3.50% 4.00%
April 1, 2003 - March 31, 2007. . 4.50% 4.50% 4.50% 4.50%
April 1, 2007 and after . . . . . 5.00% 5.00% 5.00% 5.00%

The lessee also acquired an option to purchase the land. The earliest date
on which the land could be acquired pursuant to the option is July 30, 2003.
The purchase option provides that the land price will be the greater of (i) $40
million at January 1, 1999 escalating thereafter by the increase in the Consumer
Price Index, but not less than 5% nor more than 10% per year or (ii) the highest
annual ground rent payable during the thirty-six month period preceding the
closing date divided by the following Applicable Capitalization Rates:

APPLICABLE
CAPITALIZATION
OPTION EXERCISE DATE RATE
-------------------- ----

April 1, 2003 - March 31, 2004 . . . . . . 7.5%
April 1, 2004 - March 31, 2007 . . . . . . 7.2%
April 1, 2007 - March 31, 2008 . . . . . . 7.3%
April 1, 2008 and after. . . . . . . . . . 7.5%

In addition, in the event the option is exercised during the twelfth
operating year beginning April 1, 2003, a supplemental amount of $2.5 million
will be added to the purchase price. If the option were exercised at its
earliest date, April 1, 2003, the minimum purchase price which the Trust would
receive is approximately $52 million.

The Trust recognizes as rental revenue the average minimum base rent
payable over the initial 50 year term of the lease. This rent increases from
$150,000 in 1989 to approximately $16 million in 2038. The average rent
calculation also considers the minimum purchase price pursuant to the terms of
the above described purchase option. Under the Trust's method of revenue
recognition, the total carrying value of the land and the related accrued rent
receivable will never exceed the minimum option purchase price.

<PAGE>

THE CHICAGO DOCK AND CANAL TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
APRIL 30, 1996, 1995 AND 1994

The annual base rental income recognized on the lease is approximately
$4,848,000. The cash base rent received during fiscal 1996 equaled $1,625,000.
The Trust also received percentage rent during fiscal 1996 of $226,000, of which
$96,000 was recognized as revenue. The remaining $130,000 is a prepayment of
future percentage rent.

The lease obligated the Trust to construct certain Phase II infrastructure
prior to the opening of the hotel. These development obligations consisted
primarily of Ogden Plaza and the elevated roadways adjacent to Columbus Drive
and surrounding the plaza. In addition to the infrastructure obligation under
the terms of the lease, the Trust also constructed the parking facility under
Ogden Plaza (See Note 3). Phase II infrastructure was substantially completed
in March 1992. This infrastructure was financed with the proceeds from a loan
which has debt service payments which, for the first eight years, correspond to
the base rent payable on the ground lease (See Note 5).

OPTION-

OPEN AREAS-In December 1988, the Trust dedicated to the Chicago Park
District a portion of the Ogden Slip Turning Basin and the three major open
areas called for in the Planned Development Ordinance for Cityfront Center: (1)
Approximately 1.3 acres of River Esplanade extending east along the north bank
of the Chicago River from Columbus Drive to Lake Shore Drive; (2) Ogden Plaza,
approximately 1.2 acres of land adjacent to Columbus Drive; and (3) Du Sable
Park, which consists of approximately 3 acres of land east of Lake Shore Drive.
The dedication restricts all of these areas for use as public parks. However,
the Trust has the right and is exercising this right to lease the area under
Ogden Plaza for parking. The Trust is responsible for the construction of the
infrastructure as described in the Planned Development Ordinance. The Trust is
obligated to contribute $600,000 for improvements to be made in Du Sable Park.
These improvements are expected to be completed during calendar 1996. The Trust
retained an option to lease a portion of Du Sable Park to construct and operate
a public facility such as a restaurant.

(5) MORTGAGE NOTES PAYABLE:

At April 30, 1996, mortgage notes payable consisted of two notes secured by
first mortgages on the rents from and the land under the Kraft Building, and the
rents from and the land under the Sheraton Chicago Hotel & Towers. Both notes
are non-recourse with respect to the Trust.

The principal balance of the Kraft Building note issued in May 1987, was
$5,721,000 at April 30, 1996. It is due in April 2016, bears interest at an
annual rate of 9.5%, payable monthly, and is self-amortizing over its term. The
carrying value of collateral pledged on this note at April 30, 1996 equaled
$15,000.

At April 30, 1996, the principal balance of the note secured by the rents
from and the land under the Sheraton Chicago Hotel & Towers was $22,347,000.
The note is due January 1, 2005. The initial principal amount of the loan was
$14,367,000 and the interest rate is 10.25%. Amounts are payable monthly, but
through December 31, 1998, the debt service currently payable coincides with the
ground rent due under the Sheraton lease. The difference between current
interest payable and the contractual interest is added to principal. Starting
in 1999, debt service will be computed on a 30 year amortization based on the
then current principal balance. The carrying value of collateral pledged on
this note at April 30, 1996 was $34,519,000 and consisted of land, the
depreciated basis in land improvements and accrued but unbilled rent.

On December 16, 1994, the Trust permitted the sale by foreclosure of One
Michigan Avenue, an office

<PAGE>

THE CHICAGO DOCK AND CANAL TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
APRIL 30, 1996, 1995 AND 1994

building in Lansing, Michigan to its lender, Pacific Mutual Life Insurance
Company, in full satisfaction of the note secured by One Michigan Avenue. The
One Michigan Avenue note, issued in August 1987, modified in March 1994 (the
"March modification") and further modified in August 1994 (the "August
modification") had an interest rate of 10% and a carrying value at December 15,
1994 of $14,590,000.

Due to the significant reduction in cash flow from One Michigan Avenue
after the IBM (the building's largest tenant) lease renewal took effect, the
Trust suspended regular debt service subsequent to the September 1, 1993
payment. Under the terms of the March modification agreement, the lender
received the cash flow from the property from September 1, 1993 to August 31,
1994, in place of regular debt service. Under the terms of the August
modification agreement, cash flow from the property also replaced regular debt
service to the lender from September 1, 1994 to December 15, 1994.

The Trust continued to accrue interest on the loan at the contractual rate
through the effective date of the March modification agreement. Subsequent to
the date of the March modification agreement and up until the date of the August
modification agreement, the Trust accrued interest at a rate which applied a
constant effective interest rate to the carrying amount of the note for each
period from the March modification date to the maturity of the note taking into
account the accrued interest to be forgiven under the March modification
agreement. This constant effective interest rate was approximately 5.5%. After
the August modification agreement was signed and through the date of the
foreclosure sale on December 16, 1994, the Trust accrued interest on the loan at
the original contractual rate of 10%. At December 15, 1994, accrued interest on
this note equaled $1,477,000.

This loan was non-recourse with respect to the Trust. Accordingly, the
Trust's financial exposure was limited to the loss of the property. The Trust
recognized a net loss of $1,265,000 during the third quarter of fiscal 1995 as a
result of the sale by foreclosure.

Principal repayments are due on the two outstanding notes as follows during
the next five years:

FISCAL
YEAR AMOUNT
---- ------
1997 . . . . . $ 101,000
1998 . . . . . 111,000
1999 . . . . . 168,000
2000 . . . . . 256,000
2001 . . . . . 282,000

REVOLVING CREDIT FACILITY-

On December 23, 1994, the Trust entered into a revolving credit agreement
with First Bank, N.A. The agreement has a three year term and provides for a
maximum commitment by the lender of $20,000,000. The agreement is secured by
the Cityfront Place Mid-Rise. Initially the Trust borrowed $4,000,000 of the
available credit and used the proceeds to retire the $4,000,000 Cityfront Place
Mid-Rise note issued February 25, 1992. During the fourth quarter of fiscal
1995, the Trust repaid the $4,000,000 initially advanced under the credit
facility using available cash and cash equivalents and investments available for
sale. Since that time the Trust has not borrowed any of the available credit.
Accordingly, at April 30, 1996, the full amount of the facility is available.
Interest only, based on LIBOR plus 135 basis points, is due monthly on the
amount advanced under the revolving credit agreement. The carrying value of
collateral pledged on this revolving credit agreement at April 30, 1996 equaled
$46,177,000.

<PAGE>

THE CHICAGO DOCK AND CANAL TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
APRIL 30, 1996, 1995 AND 1994

(6) SHAREHOLDERS' EQUITY:

On July 20, 1988, the Board of Trustees of the Trust declared a dividend of
one Right for each common share of the Trust entitling the holder to purchase
from the Trust one common share at a price of $75.00 per share, subject to
adjustment. The Rights are not exercisable until a date (the "Distribution
Date") ten days after a person (or group of affiliated persons) acquires 25% or
more of the common shares and thereby becomes an "Acquiring Person" or announces
its intention to make a tender offer which would result in the beneficial
ownership by a person of greater than 30% of the Trust's common shares. If the
Distribution Date has occurred and a person becomes an Acquiring Person, each
holder of a Right, other than the Rights held by the Acquiring Person, will,
thereafter, have the right to receive upon exercise that number of common shares
having a market value of two times the exercise price of the Right. The Rights
may be redeemed in whole at a price of one cent per Right by the Board of
Trustees at any time until ten days following the public announcement that a
person has become an Acquiring Person, and any exercise of the Rights is subject
to such redemption right.

Included in undistributed income before net gain from the sale of real
estate properties is approximately $2,385,000, representing total retained
earnings at January 22, 1962, the date on which The Chicago Dock and Canal
Company converted to a REIT.

The classification of cash dividends declared in fiscal 1996 reflects the
final status for Federal income tax purposes for such dividends as capital gain
or ordinary income.

(7) INCOME TAXES:

In order to retain its status as a qualified real estate investment trust,
the Trust is required to distribute at least 95% of taxable ordinary income
computed in accordance with Federal income tax laws and regulations. The amount
of taxable income differs from reported net income due to differences in the
treatment of certain items for tax and financial reporting purposes. Dividends
paid may be applied to different fiscal years for tax and financial reporting
purposes.

The following analysis reconciles reported net income for fiscal 1996 to
estimated taxable loss for that period:
PER
TOTAL SHARE
----- -----
(IN 000'S)

Net income per statement of income . . . . . . . $ 1,555 $ .27
Adjustments required to determine taxable income-
Accrued rent on hotel ground lease . . . . . . (3,223) (.56)
Book depreciation in excess of tax . . . . . . 1,046 .18
Prepaid rent . . . . . . . . . . . . . . . . . 568 .10
Other, net . . . . . . . . . . . . . . . . . . 415 .07
-------- -----
Taxable income before net operating loss
deduction and deduction for dividends paid . . 361 .06
Net operating loss deduction . . . . . . . . . (1,002) (.17)
Deduction for dividends paid . . . . . . . . . (231) (.04)
-------- -----
Taxable loss . . . . . . . . . . . . . . . . . . $ (872) $(.15)
-------- -----
-------- -----

<PAGE>

THE CHICAGO DOCK AND CANAL TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
APRIL 30, 1996, 1995 AND 1994

Dividends for financial reporting purposes for fiscal 1996 of $.10 per
share reflect the application of dividends among years as follows:
PER
TOTAL SHARE
----- -----
(IN 000'S)
Total dividends applicable to fiscal 1996 for tax
purposes . . . . . . . . . . . . . . . . . . . . . . . $ 231 $ .04
Dividends paid September 1, 1995 and December 1, 1995,
included in fiscal 1996 for financial reporting
purposes but in fiscal 1995 for tax purposes. . . . 116 .02
Dividend paid June 1, 1996, included in fiscal 1996 for
financial reporting purposes but in fiscal 1997 for
tax purposes. . . . . . . . . . . . . . . . . . . . 231 .04
----- -----
Total dividends applicable to fiscal 1996 for financial
reporting purposes. . . . . . . . . . . . . . . . . $ 578 $ .10
----- -----
----- -----

The tax status of dividends for Federal income tax purposes (including the
final status for fiscal 1995 and 1994) for each of the last three fiscal years
was:

FISCAL YEAR
-------------------------
1996 1995 1994
---- ---- ----
Ordinary income. . . . $.08 $ - $ .03
Capital gain . . . . . .02 .04 .01
---- ---- -----
Total . . . . $.10 $.04 $ .04
---- ---- -----
---- ---- -----

(8) PENSION PLANS:

The Trust adopted two defined benefit pension plans in fiscal 1987 which
have been subsequently amended: (1) The Chicago Dock and Canal Trust Retirement
Plan which covers all employees of the Trust; and (2) The Chicago Dock and Canal
Trust Supplemental Executive Retirement Plan which covers the executive officers
of the Trust. The total pension expense for fiscal 1996, 1995 and 1994 was
$113,128, $87,480 and $91,634, respectively, of which $0, $0 and $19,842, was
funded in fiscal 1996, 1995 and 1994, respectively. A comparison of accumulated
plan benefits and plan net assets for the plans, at April 30, 1996, is presented
below:

SUPPLEMENTAL
EXECUTIVE
RETIREMENT RETIREMENT
PLAN PLAN
---- ----
Actuarial present value of accumulated
plan benefits:
Vested. . . . . . . . . . . . . . . . . . . $189,751 $101,580
Non-vested. . . . . . . . . . . . . . . . . 17,786 14,814
-------- --------
$207,537 $116,394
-------- --------
-------- --------

Net assets available for benefits . . . . . . . . $249,940 $188,631
-------- --------
-------- --------

The assumed rate of return used in determining the actuarial present value
of accumulated plan benefits was 8% for 1996, 1995 and 1994.

<PAGE>

THE CHICAGO DOCK AND CANAL TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
APRIL 30, 1996, 1995 AND 1994

(9) RELATED-PARTY TRANSACTIONS:

The Trust incurred legal fees of approximately $317,000, $209,000 and
$309,000, with the law firm of Wilson & McIlvaine for services rendered in
fiscal 1996, 1995 and 1994, respectively. Michael F. Csar, who has served as
Secretary or Assistant Secretary of the Trust since 1992, is a partner in Wilson
& McIlvaine.

The Trust incurred management fees of approximately $118,000, $109,000 and
$108,000, with the Habitat Company, for property management services for the
Mid-Rise, in fiscal 1996, 1995 and 1994, respectively, pursuant to a long term
management agreement with the Habitat Company. The Habitat Company is
substantially owned by Daniel E. Levin, a partner in LCD Partnership ("LCD"),
along with the Trust's wholly owned subsidiary, CDCT Residence Corporation. LCD
entered into a joint venture, NSJV, with Northwestern Mutual Life Insurance
Company. NSJV, which owns the High-Rise, retained the Habitat Company to
provide property management services for the High-Rise. NSJV incurred
management fees for the High-Rise of approximately $173,000, $166,000 and
$157,000 for the years ended December 31, 1995, 1994 and 1993, respectively.
The Habitat Company has retained LCD to provide consulting services regarding
operation of the High-Rise. The Habitat Company paid LCD fees of approximately
$43,000, $41,000 and $39,000 for the years ended December 31, 1995, 1994 and
1993, respectively.

(10) FUTURE MINIMUM RENTALS:

The following is a schedule of minimum lease payments receivable under
operating leases signed as of April 30, 1996 that have initial or noncancelable
lease terms in excess of one year, reported on a cash basis:

Fiscal Year-
1997 . . . . . $ 4,779,000
1998 . . . . . 4,370,000
1999 . . . . . 4,025,000
2000 . . . . . 3,772,000
2001 . . . . . 3,797,000
Thereafter . . 316,495,000
------------
$337,238,000
------------
------------

In addition to the above listed amounts, certain tenants are required to
pay a portion of executory costs, including real estate taxes, insurance,
maintenance and other operating expenses. Real estate taxes payable by all
tenants under "net" leases, which are reflected as both revenue and expense,
were $6,208,000, $6,864,000 and $4,168,000, in fiscal 1996, 1995 and 1994,
respectively.

Revenues recognized during fiscal 1996 from Cityfront Hotel Associates for
average minimum base rent, percentage rent and real estate taxes payable were
$4,848,000, $96,000 and $5,302,000, respectively, for a total of $10,246,000 or
46% of total revenues of $22,287,000. In management's opinion the collection of
this lease obligation is reasonably assured, given that the Trust's interest in
the land is not subordinated to any of the debt or equity invested in the
improvements. Accordingly, the Trust will either collect the rent due under the
lease, or in the case of a default and termination of the lease, succeed to
ownership of the improvements not subject to any of the debt. Gross revenues
from operations of the hotel equaled $65 million during calendar 1995 and $58
million during calendar 1994. Average occupancy during calendar 1995 equaled
72% and during calendar 1994 equaled 68%.

<PAGE>

THE CHICAGO DOCK AND CANAL TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
APRIL 30, 1996, 1995 AND 1994

The following tenants comprise a significant amount of the total minimum
rentals disclosed above (See Note 4):
AMOUNT PERCENT
------ -------

Cityfront Hotel Associates (Sheraton Chicago
Hotel & Towers) . . . . . . . . . . . . . . . $313,848,000 93.1%
Kraft . . . . . . . . . . . . . . . . . . . . . 12,800,000 3.8%
------------ -----
$326,648,000 96.9%
------------ -----
------------ -----

(11) EMPLOYEE STOCK OPTIONS:

At April 30, 1996, there are outstanding, under both incentive and
non-qualified plans, options to purchase 554,740 Shares of Beneficial Interest
which were granted to certain key employees. The exercise prices of the options
range from $9.00 to $24.75 per share, which represent the fair market values at
the dates of grant. Generally, the non-qualified options have a term of 20
years and become exercisable at the rate of 10% per year starting one year from
the date of grant. Incentive stock options have a term of 10 years and become
exercisable at the rate of 20% per year starting one year from the date of
grant.

On April 14, 1993, the Trust amended the employment agreements for Messrs.
Gardner and Tinkham allowing up to 20% of stipulated cash compensation to be
paid in stock options in lieu of cash at the discretion of the Trust. On
February 13, 1996, for fiscal 1997, options to purchase 22,724 and 12,120 shares
were granted to Messrs. Gardner and Tinkham, respectively, in lieu of cash
pursuant to the terms of The Chicago Dock and Canal Trust 1993 Employees' Stock
Option Plan. Twenty-five percent of these options first become exercisable
quarterly in the applicable fiscal year, starting August 1, and the options have
a term of 20 years. During fiscal 1996, 20% of stipulated cash compensation for
Messrs. Gardner and Tinkham was replaced with options to purchase 20,316 and
8,804 shares, respectively. During fiscal 1995, 20% of stipulated cash
compensation for Messrs. Gardner and Tinkham was replaced with options to
purchase 22,588 and 9,788 shares, respectively. During fiscal 1994, 20% of
stipulated cash compensation for Messrs. Gardner and Tinkham was replaced with
options to purchase 24,000 and 10,400 shares, respectively.

At April 30, 1996, no options had been exercised; options granted and
outstanding pursuant to all plans covering 282,667 shares had vested and were
exercisable.

(12) TRUSTEE STOCK OPTIONS:

At April 30, 1996, there are outstanding options to purchase 26,500 Shares
of Beneficial Interest which were granted to non-employee Trustees pursuant to
The Chicago Dock and Canal Trust 1988 Trustees' Stock Option Plan. The exercise
prices of the options range from $9.25 to $25.00 per share, which represent the
fair market values at the dates of grant. The options generally become
exercisable one year after their grant except in the case of death or qualified
retirement of a Trustee, in which case they become exercisable immediately.

On February 13, 1996, the Trustees unanimously voted to replace the annual
cash retainer for fiscal 1997 with the grant of Trustee stock options pursuant
to The Chicago Dock and Canal Trust 1993 Trustees' Stock Option Plan. Each
Trustee received a grant to purchase 3,784 shares at $10.56 per share, the
market price on the date of grant. During fiscal 1996, 1995 and 1994, stock
options also

<PAGE>

THE CHICAGO DOCK AND CANAL TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
APRIL 30, 1996, 1995 AND 1994

replaced the annual cash retainer for the Trustees at exercise prices equal to
the market price on the dates of grant. Each Trustee received a grant to
purchase 3,676 shares at $10.875 per share during fiscal 1996, 3,764 shares at
$10.625 per share during fiscal year 1995 and 4,000 shares at $10.00 per share
during fiscal year 1994. Twenty-five percent of these options first become
exercisable quarterly, in the applicable fiscal year, starting May 1, and the
options have a term of 20 years.

At April 30, 1996, no options had been exercised; options granted and
outstanding pursuant to both plans equaled 139,788, of which 109,300 shares were
exercisable.

(13) SHORT-TERM INVESTMENTS-RESTRICTED:

As a requirement of the revolving credit agreement entered into by the
Trust on December 23, 1994 with First Bank, N.A., the Trust agreed to make
monthly payments into an escrow account. This account funds the semi-annual
real estate tax payments due on the Cityfront Place Mid-Rise. At April 30,
1996, and April 30, 1995, the balance in this account equaled $203,000 and
$130,000, respectively.

(14) ENVIRONMENTAL REMEDIATION COSTS:

In January 1994, the Trust entered into a consent order with the EPA
regarding preliminary testing to be performed on the Tested Site. Initial on-
site tests were conducted pursuant to that order in May 1994 and laboratory
analysis was completed on the samples in June 1994. The results of the tests
indicate one concentrated area which appears to be contaminated by thorium, and
other scattered areas on the Tested Site with significantly lower levels of
contamination. The most contaminated area is within the footprint of the
building previously occupied by the former tenant. The Trust submitted the
results of the testing to the EPA in September 1994.

<PAGE>

THE CHICAGO DOCK AND CANAL TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
APRIL 30, 1996, 1995 AND 1994

In the fourth quarter of fiscal 1995, the Trust recorded environmental
remediation expense of $1,035,000 based upon the resolution of accounting and
other issues related to environmental remediation costs of property held for
development and the execution of the Reimbursement Agreement with KMCC. This
amount included the Trust's share of testing and legal costs related to the
Tested Site through April 30, 1995, plus $750,000, which is the maximum
reimbursement obligation of the Trust pursuant to the terms of the Reimbursement
Agreement. This amount excluded the amount of the potential claims for some or
all of the Trust's share of the remediation costs under the Trust's current or
prior insurance policies.

(15) SOLICITATION OF INDICATIONS OF INTEREST FOR BUSINESS COMBINATION:

(16) RECENTLY ISSUED ACCOUNTING STANDARDS:

In 1995, the Financial Accounting Standards Board issued FASB No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of," which establishes accounting standards for the impairment of
long-lived assets, certain identifiable intangibles, and goodwill related to
those assets to be held and used and for long-lived assets and certain
identifiable intangibles to be disposed of.

Additionally, in 1995, the Financial Accounting Standards Board issued FASB
No. 123, "Accounting for Stock-Based Compensation," for which management
currently intends to elect to continue the use of the intrinsic value method and
make the disclosures required by FASB No. 123 in the notes to consolidated
financial statements.

Implementation of these statements is effective for fiscal years beginning
after December 1995. Accordingly, the Trust will implement these statements for
fiscal year 1997. Implementation of these statements is not expected to be
material to the Trust's results of operations or the statement of financial
position.

<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON SUPPLEMENTAL SCHEDULE

To the Shareholders and Trustees of
The Chicago Dock and Canal Trust:

We have audited in accordance with generally accepted auditing standards,
the consolidated financial statements of THE CHICAGO DOCK AND CANAL TRUST AND
SUBSIDIARIES included in this Form 10-K, and have issued our report thereon
dated June 19, 1996. Our audit was made for the purpose of forming an opinion
on those statements taken as a whole. Supplemental Schedule III is the
responsibility of the Trust's management and is presented for purposes of
complying with the Securities and Exchange Commission's rules and is not part of
the basic financial statements. This schedule has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, fairly states in all material respects the financial data
required to be set forth therein in relation to the basic financial statements
taken as a whole.

ARTHUR ANDERSEN LLP

Chicago, Illinois,
June 19, 1996

<PAGE>

SCHEDULE III

THE CHICAGO DOCK AND CANAL TRUST AND SUBSIDIARIES
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF APRIL 30, 1996

COST SUBSEQUENT
INITIAL COST TO ACQUISITION GROSS AMOUNT AT APRIL 30, 1996
---------------------- ------------------- ----------------------------------------
LAND AND BUILDINGS LAND AND BUILDINGS
LAND AND LAND AND
IMPROVE- IMPROVE- IMPROVE- CARRYING IMPROVE- IMPROVE-
DESCRIPTION ENCUMBRANCES MENTS MENTS MENTS COSTS MENTS MENTS TOTAL
----------- ----------- ----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Office Complexes-
Lincoln Garden
2901 West Busch Blvd.
Tampa, Florida - $1,600,000 $5,200,041 $ 581,294 - $1,600,000 $5,781,335 $7,381,335

Waterplace Park
8925-9011 N. Meridian St.
Indianapolis, Indiana - 1,400,000 6,300,000 1,050,817 - 1,400,000 7,350,817 8,750,817

Apartment Complex-
Cityfront Place Mid-Rise
440-480 N. McClurg Court
Chicago, Illinois - 214,428 52,593,152 207,905 - 214,428 52,801,057 53,015,485

Parking Facility-
Ogden Plaza
300 East N. Water St.
Chicago, Illinois - - 2,762,698 40,471 - - 2,803,169 2,803,169

Ground leases-
Sheraton Chicago Hotel
& Towers
301 East N. Water St.
Chicago, Illinois 22,347,116 643,284 - 5,562,854 343,100 6,549,238 - 6,549,238

Kraft Building
500 N. Peshtigo Court
Chicago, Illinois 5,720,621 12,140 - 2,675 - 14,815 - 14,815

East Water Place Townhomes
Chicago, Illinois (1) - 15,952 - 141,036 22,311 179,299 - 179,299

Investment in LCD Partner-
ship (66 2/3% partner-
ship interest) LCD
Partnership has 50%
partnership
interest in New Street
Joint Venture which owns:
Apartment Building -
Cityfront Place
High-Rise 400 North
McClurg Court
Chicago, Illinois (2) - 1,689,161 - - (3,394,238) (1,705,077) - (1,705,077)

Land and land improvements
held for development: ap- -
proximately 13 acres in
Chicago, Illinois,
boundaries being the
Chicago River on the
South, Grand Avenue on
the North, Lake Shore
Drive and the Ogden Slip
Turning Basin on the East
and Columbus Drive on the
West - 3,024,136 - 12,006,068 1,931,023 16,961,227 - 16,961,227
----------- ---------- ----------- ----------- ----------- ----------- ------------ ----------
Total (3) $28,067,737 $8,599,101 $66,855,891 $19,593,120 $(1,097,804)$25,213,930 $68,736,378 $93,950,308
----------- ---------- ----------- ----------- ----------- ----------- ------------ ----------
----------- ---------- ----------- ----------- ----------- ----------- ------------ ----------

DATE
ACCU- OF
MULATED CON-
DEPRE- STRUC- DATE
DESCRIPTION CIATION TION ACQUIRED
----------- ------- ---- --------

Office Complexes-
Lincoln Garden
2901 West Busch Blvd.
Tampa, Florida $1,685,075 1981 7/31/86

Waterplace Park
8925-9011 N. Meridian St.
Indianapolis, Indiana 2,119,219 1980 9/30/86

Apartment Complex-
Cityfront Place Mid-Rise
440-480 N. McClurg Court
Chicago, Illinois 6,838,212 1991 12/17/91

Parking Facility-
Ogden Plaza
300 East N. Water St.
Chicago, Illinois 331,433 1992 3/01/92

Ground leases-
Sheraton Chicago Hotel
& Towers
301 East N. Water St.
Chicago, Illinois 1,091,802 - 12/31/85

Kraft Building
500 N. Peshtigo Court
Chicago, Illinois - - 12/31/85

East Water Place Townhomes
Chicago, Illinois (1) 33,265 - 12/31/85

Investment in LCD Partner-
ship (66 2/3% partner-
ship interest) LCD
Partnership has 50%
partnership
interest in New Street
Joint Venture which owns:
Apartment Building -
Cityfront Place
High-Rise
400 North
McClurg Court
Chicago, Illinois (2)) - - 8/31/89

Land and land improvements
held for development: ap-
proximately 13 acres in
Chicago, Illinois,
boundaries being the
Chicago River on the
South, Grand Avenue on
the North, Lake Shore
Drive and the Ogden Slip
Turning Basin on the East
and Columbus Drive on the
West 2,005,551 - 12/31/85
-----------
Total (3) $14,104,557
-----------
-----------

</TABLE>

NOTES:
(1) Reflects the lease for land for 8 units only. The land for the
remaining 48 units was not leased or committed until May 17, 1996, and is
included in land and land improvements held for development.
(2) Initial cost represents the carrying value of assets contributed to LCD
Partnership as of August 31, 1989, the date of formation of LCD. Costs
subsequent to acquisition include net distributions from LCD to the Trust
of $45,798 and the Trust's Equity in Net Loss of LCD Partnership of
$3,348,440 most of which represents the development loss from New Street
Joint Venture during the period from opening of the High-Rise, July 1, 1991
to December 31, 1995.
(3) Aggregate cost for Federal income tax purposes is approximately
$50,000,000. Accumulated depreciation for Federal income tax purposes is
approximately $11,000,000.

<PAGE>

SCHEDULE III
CONTINUED

LAND
AND LAND BUILDINGS AND
IMPROVEMENTS IMPROVEMENTS TOTAL
------------ ------------- -----
<S> <C> <C> <C>
Real estate-
Balance at April 30, 1993. . . . . . . . . . . . . $28,152,318 $89,186,129 $117,338,447
Additions during the year. . . . . . . . . . . 259,900 343,488 603,388
Deductions of property transferred (1) . . . . . (530,238) (842,789) (1,373,027)
----------- ----------- ------------
Balance at April 30, 1994. . . . . . . . . . . . . 27,881,980 88,686,828 116,568,808
Additions during the year. . . . . . . . . . . 158,458 940,074 1,098,532
Deductions of property transferred (1) . . . . . (2,716,901) (20,998,303) (23,715,204)
----------- ----------- ------------
Balance at April 30, 1995. . . . . . . . . . . . . 25,323,537 68,628,599 93,952,136
Additions during the year. . . . . . . . . . . 239,272 409,944 649,216
Deductions of property transferred (1) . . . . . (348,879) (302,165) (651,044)
----------- ----------- ------------
Balance at April 30, 1996. . . . . . . . . . . . . $25,213,930 $68,736,378 $ 93,950,308
----------- ----------- ------------
----------- ----------- ------------

Accumulated depreciation-
Balance at April 30, 1993. . . . . . . . . . . . . $11,009,383
Add-Depreciation charged to expense
during period (2). . . . . . . . . . . . . . 3,373,373
Deduct-assets transferred/retired. . . . . . . (842,789)
-----------
Balance at April 30, 1994 . . . . . . . . . . . . 13,539,967
Add-Depreciation charged to expense
during period (2). . . . . . . . . . . . . . 3,181,826
Deduct-assets transferred/retired. . . . . . . (5,084,020)
-----------
Balance at April 30, 1995. . . . . . . . . . . . . 11,637,773
Add-Depreciation charged to expense
during period (2). . . . . . . . . . . . . . 2,724,838
Deduct-assets transferred/retired. . . . . . . (258,054)
-----------
Balance at April 30, 1996. . . . . . . . . . . . . $14,104,557
-----------
-----------

</TABLE>

Note (1) Includes the Trust's Equity in Net Loss of LCD Partnership of $348,879,
$475,571 and $530,238 during fiscal 1996, 1995 and 1994, respectively. Also
includes property retirements.

Note (2) Developed properties and infrastructure improvements are depreciated
over 35 years or their remaining estimated useful lives, using the straight-line
method of depreciation. Depreciation of leasehold improvements is computed
using the straight-line method over the terms of the related leases and
commences when the improvements are placed in service.

<PAGE>

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None

PART III

ITEM 10. TRUSTEES AND EXECUTIVE OFFICERS OF THE TRUST

Incorporated herein by reference from the Trust's definitive Proxy
Statement for the Annual Meeting of Shareholders to be held on October 15, 1996.
Information concerning the Executive Officers is included in Part I on page 14.

ITEM 11. EXECUTIVE COMPENSATION

Incorporated herein by reference from the Trust's definitive Proxy
Statement for the Annual Meeting of Shareholders to be held on October 15, 1996.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Incorporated herein by reference from the Trust's definitive Proxy
Statement for the Annual Meeting of Shareholders to be held on October 15, 1996.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Incorporated herein by reference from the Trust's definitive Proxy
Statement for the Annual Meeting of Shareholders to be held on October 15, 1996.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a) 1. FINANCIAL STATEMENTS
The financial statements listed in the accompanying index to financial
statements on page 51 are filed as part of this annual report.

2. FINANCIAL STATEMENT SCHEDULES
The financial statement schedule listed in the accompanying index to
financial statements on page 51 is filed as part of this annual
report.

3. EXHIBITS
The exhibits listed in the accompanying index to exhibits on pages 52-
54 are filed as part of this annual report.

(b) REPORTS ON FORM 8-K

A Form 8-K was filed February 28, 1996 by the Trust announcing that it
had retained Lehman Brothers Inc. as financial advisor to assist the
Trust in studying strategic alternatives designed to enhance
shareholder value.

A Form 8-K was filed April 12, 1996 by the Trust announcing that the
Trust's Board of Trustees had authorized Lehman Brothers Inc. to seek
preliminary indications of interest for a potential business
combination involving the Trust.

<PAGE>

THE CHICAGO DOCK AND CANAL TRUST AND SUBSIDIARIES

INDEX TO FINANCIAL STATEMENTS
AND FINANCIAL STATEMENTS SCHEDULES
(ITEM 14(a))

PAGE
----

Report of independent public accountants . . . . . . . . . . . . . . . . 27
Consolidated balance sheets as of April 30, 1996 and 1995. . . . . . . . 28
Consolidated statements of income for each of the three
years in the period ended April 30, 1996 . . . . . . . . . . . . . . . 29
Consolidated statements of cash flows for each of the
three years in the period ended April 30, 1996 . . . . . . . . . . . . 30
Consolidated statements of shareholders' equity for
each of the three years in the period ended April 30, 1996 . . . . . . 31
Notes to consolidated financial statements . . . . . . . . . . . . . . . 32
Schedule as of April 30, 1996:
III-Real estate and accumulated depreciation. . . . . . . . . . . . 48

All other schedules are omitted since the required information is not
present or is not present in amounts sufficient to require submission of the
schedule, or because the information required is included in the financial
statements and notes thereto.

51
<PAGE>

THE CHICAGO DOCK AND CANAL TRUST AND SUBSIDIARIES

INDEX TO EXHIBITS
(ITEM 14(a))

DESCRIPTION

3 Articles of Incorporation.

3.1 Declaration of Trust (as amended September 16, 1986) incorporated herein
by reference to Exhibit 3.1 to Form 10-K dated July 29, 1987 and further
amended September 19, 1989 incorporated herein by reference to
Appendices A through C of the Trust's definitive proxy statement dated
August 7,1989 and further amended September 22, 1993 incorporated herein
by reference to Appendix A of the Trust's definitive proxy statement
dated August 9, 1993 (Commission File No. 0-13804).

3.2 Bylaws of The Chicago Dock and Canal Trust adopted February 13, 1996 are
incorporated herein by reference to Exhibit 3.2 to Form 10-Q dated March
14, 1996 (Commission File No. 0-13804).

4 Instruments Defining the Rights of Security Holders and Holders of Long-
Term Debt.

4.1 Promissory Note, dated May 29,1987 between The Chicago Dock and Canal
Trust and Pacific Mutual Life Insurance Company and related mortgage and
assignment documents will be filed in accordance with Item
601(b)(4)(iii) of Regulation S-K if so requested by the Commission.

4.2 Rights Agreement dated as of July 20,1988 between The Chicago Dock and
Canal Trust and Harris Trust and Savings Bank is incorporated herein by
reference to Form 8-K, dated July 8,1988 (Commission File No. 0-13804).

4.3 Promissory Note dated December 27, 1990 between The Chicago Dock and
Canal Trust and National Home Life Assurance Company and related
guaranty, mortgage and assignment documents are incorporated herein by
reference to Exhibit 4.5 to Form 10-K dated July 29, 1991 (Commission
File No. 0-13804).

4.4 Revolving Credit Agreement dated December 23, 1994 between The Chicago
Dock and Canal Trust and First Bank N.A. and related promissory note,
mortgage and assignment documents are incorporated herein by reference
to Exhibit 4.4 to Form 10-K dated August 14, 1995 (Commission File No.
0-13804).

<PAGE>

10 Material Contracts.

10.1* The Chicago Dock and Canal Trust 1982 Employees' Stock Option Plan, as
amended and restated effective April 10, 1991, is incorporated herein by
reference to Appendix B of the Trust's 1991 definitive proxy statement
dated August 9, 1991 (Commission File No. 0-13804).

10.2* The Chicago Dock and Canal Trust 1986 Employees' Stock Option Plan, as
amended and restated effective April 10, 1991, is incorporated herein by
reference to Appendix C of the Trust's 1991 definitive proxy statement
dated August 9, 1991 (Commission File No. 0-13804).

10.3* The Chicago Dock and Canal Trust 1988 Employees' Stock Option Plan, as
amended and restated effective April 10, 1991, is incorporated herein by
reference to Appendix D of the Trust's 1991 definitive proxy statement
dated August 9, 1991 (Commission File No. 0-13804).

10.4 The Chicago Dock and Canal Trust 1988 Trustees' Stock Option Plan, as
amended September 22, 1993, is incorporated herein by reference to
Appendix D of the Trust's definitive proxy statement dated August 9,
1993 (Commission File No. 0-13804).

10.5* The Chicago Dock and Canal Trust 1991 Employees' Stock Option Plan is
incorporated herein by reference to Appendix A of the Trust's 1991
definitive proxy statement dated August 9, 1991 (Commission File No. 0-
13804).

10.6* Supplemental Executive Retirement Plan dated January 1, 1986 is
incorporated herein by reference to Exhibit 10.6 to Form 10-K dated July
29, 1987 (Commission File No. 0-13804).

10.7* Employment Agreement between the Trust and Charles R. Gardner dated
April 14, 1993, is incorporated herein by reference to Exhibit 10.7 to
Form 10-K filed July 29, 1993 (Commission File No. 0-13804).

10.8* Employment Agreement between the Trust and David R. Tinkham dated April
14, 1993, is incorporated herein by reference to Exhibit 10.8 to Form
10-K filed July 29, 1993 (Commission File No. 0-13804).

10.9* Amendments effective May 1, 1993 to the Supplemental Executive
Retirement Plan dated January 1, 1986, are incorporated herein by
reference to Exhibit 10.9 to Form 10-K filed July 29, 1993 (Commission
File No. 0-13804).

10.10 The Chicago Dock and Canal Trust 1993 Trustees' Stock Option Plan is
incorporated herein by reference to Appendix C of the Trust's 1993
definitive proxy statement dated August 9, 1993 (Commission File No. 0-
13804).

10.11* The Chicago Dock and Canal Trust 1993 Employees' Stock Option Plan is
incorporated herein by reference to Appendix B of the Trust's 1993
definitive proxy statement dated August 9, 1993 (Commission File No. 0-
13804).

10.12 Letter agreement among the Trust, Private Capital Management, Inc. and
Mr. Bruce Sherman is incorporated herein by reference to Exhibit 1 to
Form 8-K dated April 27, 1994 (Commission File No. 0-13804).

10.13* Amendment to Employment Agreement between the Trust and Charles R.
Gardner dated July 19, 1995 is incorporated herein by reference to
Exhibit 10.13 to Form 10-K dated August 14, 1995 (Commission File No. 0-
13804).

<PAGE>

10.14* Amendment to Employment Agreement between the Trust and David R. Tinkham
dated July 19, 1995 is incorporated herein by reference to Exhibit 10.14
to Form 10-K dated August 14, 1995 (Commission File No. 0-13804).

10.15 Agreement between the Trust and Kerr-McGee Chemical Corporation dated
January 18, 1996 is filed herewith.

10.16* Amendment to Employment Agreement between the Trust and David R. Tinkham
dated April 10, 1996 is filed herewith.

27 Financial Data Schedule for the fiscal year ended April 30, 1996 is
filed herewith.

* Represents a management contract or compensatory plan or arrangement referred
to in Item 14(a)(3) in Form 10-K.

<PAGE>

SIGNATURE

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed in
its behalf by the undersigned, thereunto duly authorized.

THE CHICAGO DOCK AND CANAL TRUST

By /s/ CHARLES R. GARDNER
-----------------------------------------
Charles R. Gardner, President and Trustee
(Principal Executive Officer)

Date July 9, 1996
-----------------------------------------

By /s/ DAVID R. TINKHAM
-----------------------------------------
David R. Tinkham, Vice President
(Principal Financial Officer)

Date July 9, 1996
-----------------------------------------

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons in behalf of the
Registrant and in the capacities and on the dates indicated:

/s/ EDWARD McCORMICK BLAIR, JR. Date July 9, 1996
- --------------------------------------------------
Edward McCormick Blair, Jr., Trustee

/s/ PETER J.P. BRICKFIELD Date July 9, 1996
- --------------------------------------------------
Peter J.P. Brickfield, Trustee

/s/ JOHN S. GATES, JR. Date July 9, 1996
- --------------------------------------------------
John S. Gates, Jr., Trustee

/s/ OGDEN McCLURG HUNNEWELL Date July 9, 1996
- --------------------------------------------------
Ogden McClurg Hunnewell, Trustee

/s/ CHARLES N. SEIDLITZ Date July 9, 1996
- --------------------------------------------------
Charles N. Seidlitz, Trustee

/s/ NANCY W. TROWBRIDGE Date July 9, 1996
- --------------------------------------------------
Nancy W. Trowbridge, Trustee

/s/ ROBERT E. WOOD II Date July 9, 1996
- --------------------------------------------------
Robert E. Wood II, Trustee

<PAGE>

INVESTOR INFORMATION

BOARD OF TRUSTEES

Edward McCormick Blair, Jr.
Partner
William Blair & Company, L.L.C.
Chicago, Illinois

Peter J.P. Brickfield
Brickfield, Burchette & Ritts, P.C.
Washington, D.C.

Charles R. Gardner
President
The Chicago Dock and Canal Trust
Chicago, Illinois

John S. Gates, Jr.
President and Chief
Executive Officer
CenterPoint Properties
Chicago, Illinois

Ogden McClurg Hunnewell
President
Nordic Properties, Inc.
Burlington, Massachusetts

C.N. Seidlitz
President
Bristol Associates, Inc.
Washington, D.C.

Nancy W. Trowbridge
Law Office of
Nancy W. Trowbridge
New York, New York

Robert E. Wood II
Senior Executive Vice President
Dean Witter Discover & Co.
Riverwoods, Illinois

HONORARY TRUSTEES

Kenneth S. Axelson
Former Executive Vice President and Director
J.C. Penney Company, Inc.
Rockland, Maine

William B. Ogden III
Former Senior Vice President
and Trust Officer
Merchants National Bank & Trust Company of Syracuse
Naples, Florida

Nathan W. Pearson
Financial Advisor
Paul Mellon Family Interests
Pittsburgh, Pennsylvania

OFFICERS

Charles R. Gardner
President

David R. Tinkham
Vice President, Finance, Treasurer and Assistant Secretary

Peter B. Holland
Assistant Treasurer and Controller

Michael F. Csar
Secretary

GENERAL COUNSEL

Wilson & McIlvaine
Chicago, Illinois

AUDITORS

Arthur Andersen LLP
Chicago, Illinois

TRANSFER AGENT REGISTRAR AND
DISTRIBUTION DISBURSING AGENT

Harris Trust and Savings Bank
Chicago, Illinois

The Chicago Dock and Canal Trust
455 East Illinois Street
Suite 565
Chicago, Illinois 60611
312-467-1870

ANNUAL SHAREHOLDER MEETING

The annual meeting of the Trust will be held this year at the Sheraton Chicago
Hotel & Towers in Chicago on October 15, 1996 at 10:00 AM.

FORM 10-K

A copy of the Trust's 1996 Form 10-K as filed with the Securities and Exchange
Commission has been incorporated in this report. Exhibits will be provided upon
the payment of a reasonable fee to be determined by the Trust.

Printed on recycled paper stock

<PAGE>

The Chicago Dock and Canal Trust
455 East Illinois Street
Suite 565
Chicago, Illinois 60611

[THE CHICAGO DOCK AND CANAL TRUST]