TRINET CORPORATE REALTY TRUST INC
10-Q, 1999-05-17
REAL ESTATE INVESTMENT TRUSTS
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<PAGE>   1
 
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                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
 
                            ------------------------
 
                                   FORM 10-Q
                            ------------------------
 
            QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934
 
                 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999
 
                         COMMISSION FILE NUMBER 1-11918
 
                            ------------------------
 
                      TRINET CORPORATE REALTY TRUST, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
<TABLE>
<S>                                                   <C>
                      MARYLAND                                       94-3175659
              (STATE OF INCORPORATION)                  (I.R.S. EMPLOYER IDENTIFICATION NO.)
 
ONE EMBARCADERO CTR., 33RD FLOOR, SAN FRANCISCO, CA                     94111
      (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                       (ZIP CODE)
</TABLE>
 
                                 (415) 391-4300
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
 
                            ------------------------
 
     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), and (2) has been subject to such
filing requirements for the past 90 days. Yes  [X]  No  [ ]
 
     Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date:
 
      24,938,594 shares of Common Stock, $.01 par value as of May 14, 1999
 
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<PAGE>   2
 
                      TRINET CORPORATE REALTY TRUST, INC.
            FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999
 
                                     INDEX
 
<TABLE>
<CAPTION>
                                                                       PAGE
                                                                       ----
<S>      <C>                                                           <C>
                   PART I -- FINANCIAL INFORMATION
 
Item 1.  Financial Statements (Unaudited)
         Consolidated Balance Sheets as of March 31, 1999 and
         December 31, 1998...........................................    3
         Consolidated Statements of Operations for the three months
         ended March 31, 1999 and 1998...............................    4
         Consolidated Statements of Cash Flows for the three months
         ended March 31, 1999 and 1998...............................    5
         Notes to Consolidated Financial Statements..................    6
Item 2.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations...................................   12
 
                    PART II -- OTHER INFORMATION
Item 1.  Legal Proceedings...........................................   19
Item 2.  Changes in Securities.......................................   19
Item 3.  Defaults Upon Senior Securities.............................   19
Item 4.  Submission of Matters to a Vote of Security Holders.........   19
Item 5.  Other Information...........................................   19
Item 6.  Exhibits and Reports on Form 8-K............................   19
Signatures...........................................................   20
</TABLE>
 
                                        2
<PAGE>   3
 
                      TRINET CORPORATE REALTY TRUST, INC.
 
                          CONSOLIDATED BALANCE SHEETS
         (UNAUDITED AND IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
 
                                     ASSETS
 
<TABLE>
<CAPTION>
                                                               MARCH 31,     DECEMBER 31,
                                                                 1999            1998
                                                              -----------    ------------
<S>                                                           <C>            <C>
Real estate.................................................  $1,504,065      $1,500,789
  Less accumulated depreciation.............................     (78,832)        (71,950)
                                                              ----------      ----------
                                                               1,425,233       1,428,839
Cash and cash equivalents...................................      10,692          19,323
Restricted cash.............................................      18,518          17,768
Deferred rent receivable....................................      28,602          27,235
Loan costs, net.............................................      11,842          12,238
Other assets, net...........................................      19,318          21,164
                                                              ----------      ----------
                                                              $1,514,205      $1,526,567
                                                              ==========      ==========
 
                          LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
  Debt......................................................  $  634,629      $  647,720
  Dividends payable.........................................      16,167          16,167
  Other liabilities.........................................      55,947          56,655
                                                              ----------      ----------
          Total liabilities.................................     706,743         720,542
                                                              ----------      ----------
Commitments and contingencies (notes 2, 5)..................          --              --
Minority interest...........................................       2,565           2,565
Stockholders' equity:
  Preferred stock, $.01 par value, 10,000,000 shares
     authorized:
       Series A: 2,000,000 shares issued and outstanding at
        March 31, 1999 and December 31, 1998 (aggregate
        liquidation preference $50,000).....................          20              20
       Series B: 1,300,000 shares issued and outstanding at
        March 31, 1999 and December 31, 1998 (aggregate
        liquidation preference $32,500).....................          13              13
       Series C: 4,000,000 shares issued and outstanding at
        March 31, 1999 and December 31, 1998 (aggregate
        liquidation preference $100,000) ...................          40              40
  Common stock, $.01 par value, 40,000,000 shares
     authorized:
       24,925,094 and 24,872,429 shares issued and
      outstanding at March 31, 1999 and December 31, 1998...         249             249
  Paid-in-capital...........................................     857,875         855,568
  Accumulated deficit.......................................     (53,300)        (52,430)
                                                              ----------      ----------
          Total stockholders' equity........................     804,897         803,460
                                                              ----------      ----------
                                                              $1,514,205      $1,526,567
                                                              ==========      ==========
</TABLE>
 
   The accompanying notes are an integral part of these financial statements.
                                        3
<PAGE>   4
 
                      TRINET CORPORATE REALTY TRUST, INC.
 
                     CONSOLIDATED STATEMENTS OF OPERATIONS
         (UNAUDITED AND IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
 
<TABLE>
<CAPTION>
                                                              THREE MONTHS ENDED
                                                                  MARCH 31,
                                                              ------------------
                                                               1999       1998
                                                              -------    -------
<S>                                                           <C>        <C>
Revenues:
  Rent......................................................  $39,286    $35,266
  Joint venture income......................................      919        448
  Property management fees..................................      659        265
  Interest income...........................................    1,556        120
  Other income..............................................      664        773
                                                              -------    -------
          Total revenues....................................   43,084     36,872
Expenses:
  Property operating costs..................................    1,826      1,260
  General and administrative................................    3,078      2,510
  Interest..................................................   11,162      8,706
  Depreciation and amortization.............................    7,104      6,457
                                                              -------    -------
  Income before minority interest, gain on sale of real
     estate and cumulative effect of a change in accounting
     principle..............................................   19,914     17,939
  Minority interest.........................................      (41)       (12)
  Gain on sale of real estate...............................    1,153      1,115
                                                              -------    -------
  Income before cumulative effect of a change in accounting
     principle..............................................   21,026     19,042
  Cumulative effect of a change in accounting principle.....   (1,810)        --
                                                              -------    -------
     Net income.............................................   19,216     19,042
     Preferred dividend requirement.........................   (3,919)    (3,919)
                                                              -------    -------
     Earnings available to common shares:
       Basic................................................  $15,297    $15,123
                                                              =======    =======
       Diluted..............................................  $15,389    $15,123
                                                              =======    =======
Earnings available per common share, basic:
  Income available before cumulative effect.................  $  0.68    $  0.65
  Earnings available........................................  $  0.61    $  0.65
Earnings available per common share, assuming dilution:
  Income available before cumulative effect.................  $  0.68    $  0.65
  Earnings available........................................  $  0.61    $  0.65
Weighted average number of common shares outstanding:
  Basic.....................................................   24,876     23,131
  Diluted...................................................   25,294     23,411
Dividends declared per common share.........................  $  0.65    $  0.64
</TABLE>
 
   The accompanying notes are an integral part of these financial statements.
                                        4
<PAGE>   5
 
                      TRINET CORPORATE REALTY TRUST, INC.
 
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                          (UNAUDITED AND IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                               THREE MONTHS ENDED
                                                                    MARCH 31,
                                                              ---------------------
                                                                1999        1998
                                                              --------    ---------
<S>                                                           <C>         <C>
Cash flows from operating activities:
  Net income................................................  $ 19,216    $  19,042
  Adjustment to reconcile net income to net cash provided by
     operating activities:
     Minority interest......................................        41           12
     Depreciation and amortization..........................     7,104        6,457
     Amortization of loan costs and discounts...............       485          641
     Straight-line rent adjustments.........................    (1,439)      (2,304)
     Gain on sale of real estate............................    (1,153)      (1,115)
     Joint venture income...................................      (919)        (448)
     Distributions from operating joint ventures............     1,372          431
     Cumulative effect of a change in accounting
      principle.............................................     1,810           --
  Cash provided by (used in) operating assets and
     liabilities:
     Other assets...........................................         4       (2,253)
     Other liabilities......................................       439       11,281
                                                              --------    ---------
       Net cash provided by operating activities............    26,960       31,744
                                                              --------    ---------
Cash flows from investing activities:
  Real estate acquisitions..................................   (15,898)     (87,676)
  Net proceeds from sale of real estate.....................    14,480       12,297
  Net investments in and advances to unconsolidated joint
     ventures...............................................      (644)    (108,076)
  Other capital expenditures and investments................      (633)        (571)
                                                              --------    ---------
       Net cash used in investing activities................    (2,695)    (184,026)
                                                              --------    ---------
Cash flows from financing activities:
  Net borrowings (repayments) on Acquisition Facilities.....   (12,900)     (47,600)
  Mortgage note principal payments..........................      (211)         (94)
  Preferred dividends paid..................................    (3,919)      (3,920)
  Common dividends paid.....................................   (16,167)     (13,346)
  Proceeds from issuance of common stock....................     1,161      119,351
  Proceeds from senior unsecured debt offering..............        --      124,633
  Minority interest distributions...........................       (41)          --
  Increase in restricted cash and investments...............      (750)     (11,118)
  Increase in loan costs....................................       (69)        (947)
                                                              --------    ---------
       Net cash (used in) provided by financing
        activities..........................................   (32,896)     166,959
                                                              --------    ---------
(Decrease)/increase in cash and cash equivalents............    (8,631)      14,677
Cash and cash equivalents, at beginning of period...........    19,323          303
                                                              --------    ---------
Cash and cash equivalents, at end of period.................  $ 10,692    $  14,980
                                                              ========    =========
Supplemental Schedule of Noncash Investing and Financing
  Activities:
  Issuance of common shares in conjunction with real estate
     acquired...............................................  $     --    $   1,864
</TABLE>
 
   The accompanying notes are an integral part of these financial statements.
                                        5
<PAGE>   6
 
                      TRINET CORPORATE REALTY TRUST, INC.
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)
 
1. FINANCIAL STATEMENTS:
 
  Principles of Consolidation and Basis of Presentation:
 
     The accompanying consolidated financial statements include the accounts of
TriNet Corporate Realty Trust, Inc. (the "Company" or "TriNet"), its
wholly-owned subsidiary corporations and partnerships, and its majority-owned
and controlled partnership. The equity interests in the consolidated partnership
not owned and controlled by the Company are reflected as minority interest in
the consolidated financial statements. All significant intercompany balances and
transactions have been eliminated in consolidation
 
     In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments, consisting of normal recurring
adjustments, necessary for a fair presentation of TriNet's consolidated
financial position, results of operations and cash flows for the interim period.
The results of operations for the three months ended March 31,1999, are not
necessarily indicative of the results to be expected for the entire year.
 
  Change in Accounting Principle:
 
     In April 1998, the Accounting Standards Executive Committee issued
Statement of Position 98-5, "Reporting on the Costs of Start-Up Activities"
("SOP 98-5"). SOP 98-5 requires all costs of start-up activities, including
organization costs, to be charged to operations as incurred for fiscal years
beginning after December 15, 1998. The initial application of SOP 98-5 requires
that prior years' unamortized start-up costs be charged to income as a
cumulative effect of a change in accounting principle. Accordingly, the Company
reported a $1.8 million charge to net income during the first quarter as a
cumulative effect of a change in accounting principle.
 
2. REAL ESTATE:
 
     TriNet's investments in real estate, at cost, were as follows (in
thousands):
 
<TABLE>
<CAPTION>
                                                     MARCH 31,     DECEMBER 31,
                                                        1999           1998
                                                     ----------    ------------
<S>                                                  <C>           <C>
Buildings and Improvements.........................  $1,111,546     $1,119,425
Improved land......................................     229,024        230,401
Real estate held for sale..........................          --          3,500
  Less accumulated depreciation....................     (78,832)       (71,950)
                                                     ----------     ----------
                                                      1,261,738      1,281,376
Convertible mortgages..............................      43,623         27,725
Investments in and advances to unconsolidated joint
  ventures.........................................     119,872        119,738
                                                     ----------     ----------
       Net real estate.............................  $1,425,233     $1,428,839
                                                     ==========     ==========
</TABLE>
 
  Investments in and Advances to Unconsolidated Joint Ventures:
 
     At March 31, 1999, TriNet had $119.9 million invested in six unconsolidated
real estate joint ventures: TriNet Sunnyvale Partners, L.P. ("Sunnyvale"),
W9/TriNet Poydras, LLC ("Poydras"), Corporate Technology Associates LLC ("CTC
I"), Sierra Land Ventures ("Sierra"), Corporate Technology Centre Associates II
LLC ("CTC II"), and TriNet Milpitas Associates, LLC ("Milpitas"), for the
purpose of operating, acquiring, and, in certain cases, developing properties.
At March 31, 1999, the ventures comprised 24 operating properties totaling 2.4
million square feet, 19.4 acres of land under development and 51.7 acres of land
held for development. The 24 operating properties owned at March 31, 1999 had a
total purchase price of
 
                                        6
<PAGE>   7
                      TRINET CORPORATE REALTY TRUST, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  (UNAUDITED)
 
$331.8 million. The purchase price of the land, either held or under development
was approximately $66.9 million. Third party debt related to these investments
totalled $250.1 million at March 31, 1999. On an aggregate book basis, the joint
ventures had total assets of $434.2 million, total liabilities of $324.6
million, and net income of $1.7 million. TriNet accounts for these investments
under the equity method, because TriNet's joint venture partners have certain
participating rights which constitute shared control.
 
     TriNet's investments in and advances to unconsolidated joint ventures, its
percentage ownership interests and their respective revenues at March 31, 1999
are presented below (in thousands):
 
<TABLE>
<CAPTION>
                                                              ACCRUED                   JOINT                         THIRD
   UNCONSOLIDATED      OWNERSHIP     EQUITY       NOTES       INTEREST      TOTAL      VENTURE   INTEREST   TOTAL     PARTY
    JOINT VENTURE          %       INVESTMENT   RECEIVABLE   RECEIVABLE   INVESTMENT   INCOME     INCOME    INCOME     DEBT
   --------------      ---------   ----------   ----------   ----------   ----------   -------   --------   ------   --------
<S>                    <C>         <C>          <C>          <C>          <C>          <C>       <C>        <C>      <C>
Operating:
  Sunnyvale..........    44.7%      $ 6,232      $    --       $   --      $  6,232     $271      $   --    $  271   $ 16,862
  Poydras............    50.0%       12,445       14,890          404        27,739       93         404       497     78,610
  CTC II.............    50.0%        1,998       28,732        1,212        31,942     (103)        896       793     16,856
  Milpitas...........    50.0%       27,694           --           --        27,694      651          --       651     82,951
Developments:
  Sierra.............    50.0%        7,229           --           --         7,229        3          --         3      7,540
  CTC I..............    50.0%       19,036           --           --        19,036        4          --         4     47,232
                                    -------      -------       ------      --------     ----      ------    ------   --------
         Total.......               $74,634      $43,622       $1,616      $119,872     $919      $1,300    $2,219   $250,051
                                    =======      =======       ======      ========     ====      ======    ======   ========
</TABLE>
 
     At March 31, 1999, TriNet was the guarantor for 25% of Poydras's $78.6
million third party debt and 50% of CTC I's $47.2 million construction loan.
Additionally, under certain circumstances, the Company had commitments to fund
further development costs for CTC I, up to a maximum of $16.3 million. The
Company has the right, however, to arrange financing secured by the development
project to reduce this funding commitment.
 
     The limited partners of Sunnyvale have the option to convert their
partnership interest into cash; however, the Company may elect to deliver
258,894 shares of the Company's common stock in lieu of cash. Additionally,
commencing in March 2001 and February 2002, subject to acceleration under
certain circumstances, partnership units held by certain partners of Poydras and
Milpitas may be converted into 304,977 and 856,066 shares, respectively, of
TriNet's common stock.
 
                                        7
<PAGE>   8
                      TRINET CORPORATE REALTY TRUST, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  (UNAUDITED)
 
3. DEBT:
 
     Debt consists of the following (in thousands):
 
<TABLE>
<CAPTION>
                                           BALANCE AS OF
                                    ---------------------------      INTEREST RATE
                                     MARCH 31,     DECEMBER 31,     AS OF MARCH 31,      MATURITY
               LOAN                    1999            1998              1999              DATE
               ----                 -----------    ------------    -----------------    ----------
<S>                                 <C>            <C>             <C>                  <C>
Acquisition Facility..............   $176,000        $188,900         LIBOR + 0.750%    05/31/2001
7.30% Notes due 2001..............    100,000         100,000                 7.300%    05/15/2001
1994 Mortgage Loan................     55,013          55,013         LIBOR + 1.000%    12/01/2004
7.95% Notes due 2006..............     50,000          50,000                 7.950%    05/15/2006
7.70% Notes due 2017..............    100,000         100,000                 7.700%    07/15/2017
6.75% Drs. due 2013 (1)...........    125,000         125,000                 6.750%    03/01/2013
Other Mortgage Loans..............     29,515          29,726        6.00% - 11.375%       (2)
                                     --------        --------
                                      635,528         648,639
Less debt discount................       (899)           (919)
                                     --------        --------
                                     $634,629        $647,720
                                     ========        ========
</TABLE>
 
- ---------------
(1) Subject to mandatory tender on 3/1/2003. Initial coupon of 6.75% applies to
    first five year term only.
 
(2) Other Mortgage Loans mature at various dates through 2010.
 
     The 30-day LIBOR rate as of March 31, 1999 was 4.93719%. Effective October
1, 1995, the Company entered into an interest rate swap agreement which,
together with certain existing interest rate cap agreements, effectively fixes
the interest rate on $75.0 million of the Company's LIBOR-based borrowings at
5.58% plus the applicable margin. The actual borrowing cost to the Company with
respect to indebtedness covered by the protection agreements will depend upon
the applicable margin over LIBOR for such indebtedness, which will be determined
by the terms of the relevant debt instruments. At March, 1999, the swap
agreement, together with the Cap agreements had a fair market value totalling
$402,000.
 
     The following table presents loan costs and related accumulated
amortization associated with loans outstanding (in thousands):
 
<TABLE>
<CAPTION>
                                                       MARCH 31,    DECEMBER 31,
                                                         1999           1998
                                                       ---------    ------------
<S>                                                    <C>          <C>
Loan origination costs...............................   $ 8,633       $ 8,564
Protection agreement costs...........................     9,686         9,686
                                                        -------       -------
                                                         18,319        18,250
Accumulated amortization.............................    (6,477)       (6,012)
                                                        -------       -------
Loan origination costs and protection agreement
  costs, net.........................................   $11,842       $12,238
                                                        =======       =======
</TABLE>
 
     The following table sets forth the components of interest expense for the
periods presented (in thousands):
 
<TABLE>
<CAPTION>
                                                            FOR THE THREE MONTHS
                                                               ENDED MARCH 31,
                                                            ---------------------
                                                              1999         1998
                                                            ---------    --------
<S>                                                         <C>          <C>
Interest incurred.........................................   $11,222      $8,065
Capitalized interest......................................      (545)         --
Amortization of loan origination costs, interest rate
  protection agreements, and loan discounts...............       485         641
                                                             -------      ------
                                                             $11,162      $8,706
                                                             =======      ======
</TABLE>
 
                                        8
<PAGE>   9
                      TRINET CORPORATE REALTY TRUST, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  (UNAUDITED)
 
     Cash interest paid for the three months ended March 31, 1999 and 1998 was
$12.5 million and $6.5 million, respectively.
 
4. STOCKHOLDERS' EQUITY:
 
     On March 15, 1999, the Company paid a quarterly dividend of $0.5859 per
Series A perpetual preferred share, $0.5750 per Series B perpetual preferred
share and $0.5000 per Series C perpetual preferred share to preferred
shareholders of record on February 26, 1999.
 
     On February 25, 1999, the Company declared a distribution of $0.65 per
common share, payable April 15, 1999, to common shareholders of record as of
March 31, 1999.
 
5. COMMITMENTS AND CONTINGENCIES:
 
     The Company is subject to option agreements with four existing tenants
which could require the Company to fund tenant improvements on approximately
25,000 square feet and to construct approximately 541,000 square feet of
additional adjacent space on which the Company would receive additional rent
under the terms of the option agreements. The option agreements commence and
expire at various dates through 2012.
 
     At March 31, 1999, TriNet had an obligation to loan TN-CP Venture One
("TN-CP") up to $40.4 million . TN-CP, a Texas joint venture between TriNet and
Sierra Office Venture Three, Ltd. ("SOVT"), was formed to provide a take-out
commitment to SOVT to acquire Sierra III, a build-to-suit office building,
located in Irving, Texas, which will be 100% occupied upon completion in January
2000. TriNet's obligation to make such loan is conditioned upon TN-CP acquiring
Sierra III from SOVT. TN-CP's obligation to purchase Sierra III from SOVT is
conditioned upon satisfaction of certain requirements related to the completion
of the project and the tenant's occupancy of the building. TriNet is the
Managing Partner of TN-CP and has an option to acquire Sierra III from TN-CP, at
its sole election, based upon a pre-determined formula.
 
                                        9
<PAGE>   10
                      TRINET CORPORATE REALTY TRUST, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  (UNAUDITED)
 
6. EARNINGS PER SHARE:
 
     The following table presents the basic and diluted earnings per share
calculations for the periods presented (dollars in thousands, except per share
amounts):
 
<TABLE>
<CAPTION>
                                                               MARCH 31,
                                                           ------------------
                                                            1999       1998
                                                           -------    -------
<S>                                                        <C>        <C>
NUMERATOR
  Basic:
     Income before cumulative effect of a change in
       accounting principle..............................  $21,026    $19,042
     Cumulative effect of a change in accounting
       principle.........................................   (1,810)        --
                                                           -------    -------
     Net income..........................................   19,216     19,042
     Preferred dividend requirement......................   (3,919)    (3,919)
                                                           -------    -------
     Earnings available to common shares.................   15,297     15,123
                                                           -------    -------
  Diluted:
     Earnings available to common shares.................   15,297     15,123
     Equity earnings in joint ventures attributable to
       convertible partnership units.....................       92         --
                                                           -------    -------
     Earnings available to common shares, as adjusted....  $15,389    $15,123
                                                           =======    =======
DENOMINATOR
  Basic:
     Weighted average common shares outstanding..........  $24,876    $23,131
  Diluted:
     Weighted average common shares outstanding..........   24,876     23,131
     Shares issuable from assumed conversion of common
       stock options.....................................       10        280
     Shares issuable in exchange for land................      103
     Partnership units as if converted...................      305         --
                                                           -------    -------
     Weighted average common shares outstanding, as
       adjusted..........................................   25,294     23,411
                                                           =======    =======
EARNINGS AVAILABLE PER COMMON SHARE -- BASIC:
     Income available before cumulative effect of a
       change in accounting principle....................  $  0.68    $  0.65
     Cumulative effect of a change in accounting
       principle.........................................    (0.07)        --
                                                           -------    -------
     Earnings available per common share.................  $  0.61    $  0.65
                                                           =======    =======
EARNINGS AVAILABLE PER COMMON SHARE -- DILUTED:
     Income available before cumulative effect of a
       change in accounting principle....................  $  0.68    $  0.65
     Cumulative effect of a change in accounting
       principle.........................................    (0.07)        --
                                                           -------    -------
     Earnings available per common share, as adjusted....  $  0.61    $  0.65
                                                           =======    =======
</TABLE>
 
     For the quarter ended March 31, 1999 and 1998, there were 1,180,037 and
258,894 weighted average partnership units outstanding, on an as converted
basis, respectively, that were not assumed converted into
 
                                       10
<PAGE>   11
                      TRINET CORPORATE REALTY TRUST, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  (UNAUDITED)
 
common shares since they were antidilutive to earnings per share. These
securities may become dilutive to earnings per share in subsequent periods.
 
7. SUBSEQUENT EVENTS
 
     MJDesigns, Inc., a tenant of TriNet occupying a 510,000 square foot
industrial building in Coppell, Texas, is in default under its lease. On
February 2, 1999, the tenant filed for protection under Chapter 11 of the
federal bankruptcy laws. On April 30, 1999, MJ Designs rejected its lease with
TriNet, but will remain in the building until May 31, 1999. Effective May 1,
1999, MJ Designs is paying TriNet $7,742 per day to continue occupying the
premises. The Company has collected $2.5 million on a standby letter of credit
it held as collateral under the lease and $524,000 of cash previously held in
escrow. The Company applied a majority of the collateral proceeds to $466,000 of
delinquent property taxes paid by TriNet on behalf of the tenant, $633,000 to
rents and late fees due in the first quarter of 1999 and $1.2 million towards
the write-off of straight line rents receivable. The annual rents under this
lease totalled approximately $2.3 million in cash rents plus approximately
$300,000 in straight-line rents, which represented less than 1.6% of the
Company's total revenues at December 31, 1998. Currently, the company is
actively marketing the property for sale or lease.
 
                                       11
<PAGE>   12
 
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
 
     The following discussion should be read in conjunction with the
Consolidated Financial Statements and Notes thereto appearing elsewhere in this
report and also with the Company's Annual Report for 1998 filed on Form 10-K.
Unless otherwise defined in this report, or unless the context otherwise
requires, the capitalized words or phrases referred to in this section have the
meaning ascribed to them in such financial statements and the notes thereto.
 
OVERVIEW
 
     TriNet is a real estate investment trust ("REIT") which owns predominately
strategic corporate office and industrial properties net leased to large, well
know companies. The Company believes that operating a national portfolio of real
estate reduces the risk of exposure to economic downturns in any one market. As
of March 31, 1999, TriNet's portfolio consisted of 145 properties, which
comprised more than 19.4 million rentable square feet in 25 states.
 
     First quarter highlights consist of:
 
  Acquisitions and Dispositions
 
     - During the first quarter of 1999, TriNet structured a $15.9 million
       convertible mortgage on a 109,043 square foot office building in
       Richardson, Texas. TriNet is earning an 11% initial yield on the mortgage
       and has the option to acquire the building after seven months by funding
       an additional $0.5 million.
 
     - TriNet raised approximately $14.7 million in proceeds from the sale of
       two buildings during the first quarter of 1999, including its last
       remaining retail property in the Louisiana Retail Portfolio.
 
  Leasing Activity
 
     TriNet executed eight new leases and/or lease extensions on 705,325 square
feet of office and industrial space during the first three months of 1999,
generating approximately a 10% increase in annual rent on those leases. The
larger leasing transactions included:
 
     - An agreement with AT&T Capital/Newcourt Credit Group ("Newcourt") which
       permits Newcourt to remain in the 420,000 square foot Gatehall Corporate
       Center office property in Parsippany, N.J., for approximately seven
       months following the July 2000 expiration of its current lease. This
       arrangement gives TriNet two full years of lead time to re-tenant the
       property. Newcourt continues to pay rent at its current contractual rate
       during the extension period and has paid TriNet $2.5 million as
       consideration for the right to occupy the property past the lease
       expiration date. The $2.5 million is being amortized over the remaining
       lease term.
 
     - A new, five-year lease on 41,068 square feet of R&D space in suburban
       Boston effective June 15, 1999. Stream International Services
       Corporation, the new tenant, will occupy more than half the space of an
       80,000 square foot building that was vacant when TriNet acquired it as
       part of a portfolio of 14 properties.
 
     - A five-year extension option exercised by Lockheed Martin on a 174,600
       square foot Silicon Valley office property. The extension begins July 1,
       1999, at a rent that will be calculated based on CPI increases over the
       five-year period immediately preceding the beginning of the lease
       extension.
 
     - An early lease renewal by CitiCorp Universal Card on a 46,002 square foot
       office building in Jacksonville, Florida. The rent on the five-year lease
       renewal represents an 18% increase in base rent over the original lease.
 
                                       12
<PAGE>   13
 
RESULTS OF OPERATIONS --
THREE MONTHS ENDED MARCH 31, 1999 VS. THREE MONTHS ENDED MARCH 31, 1998
 
  Earnings Available to Common Shares
 
     Earnings available to common shares increased by $174,000 to $15.3 million
for the three months ended March 31, 1999, from $15.1 million for the same
period in 1998. The increase is net of a $1.8 million charge to earnings for a
cumulative effect of a change in accounting principle in the first quarter of
1999.
 
  Rent Revenues
 
     Rental revenues for the first three months of 1999 increased by $4.0
million or 11.3% to $39.3 million, as compared to $35.3 million for the same
period in 1998. The increase was primarily attributable to 1998 and 1999
acquisitions, which generated an increase in revenues of $6.1 million, offset by
a decrease in revenues of approximately $2.1 million for properties sold in 1998
and 1999.
 
  Joint Venture Income
 
     For the three months ended March 31, 1999, joint venture income increased
by $471,000, from $448,000 in 1998 to $919,000 in 1999. The substantial increase
was primarily attributable to the Milpitas joint venture formed in 1998, which
generated revenues of $651,000 in the first quarter of 1999. Additionally, joint
venture income attributable to the Sunnyvale joint venture increased $52,000 in
the first quarter of 1999 compared to the same period in 1998. These increases
were offset by a decrease in net income of approximately $137,000 from the
Poydras joint venture when compared to the same period in 1998, and a loss of
$103,000 attributable to CTC II in the first quarter of 1999. TriNet earns
interest income and other fees from the Poydras and CTC II joint ventures in
addition to income (losses) from its equity interest (see "Interest Income" and
"Other Income" below).
 
  Management Fees
 
     Management fees increased by $394,000 for the three months ended March 31,
1999 to $659,000 from $265,000 for the same period in 1998. The increase relates
primarily to fees earned on the management of 24 properties acquired during
1998, 15 of which were acquired through joint ventures.
 
  Interest Income
 
     Interest income increased to $1.6 million for the three months ended March
31, 1999 from $120,000 for the same period in 1998. The increase consists of
$1.3 million of interest income earned on loans made to its CTC II and Poydras
joint ventures, $57,000 of interest earned on the Company's investment in G.
Accion, a real estate company in Mexico with which the company has a strategic
alliance, and an increase of $79,000 of interest on cash balances over the 1998
amount.
 
  Other Income
 
     Other income for the three months ended March 31, 1999 consisted of a
$250,000 non-compete fee, amortization of $209,000 of the $2.5 million received
from Newcourt (see "Overview: Leasing Activity"), a $98,000 credit enhancement
fee, and $107,000 of dividend income. Other income of $773,000 for the three
months ended March 31, 1998, consisted primarily of fees from the Company's
advisory services provided in connection with the formation of the Poydras joint
venture.
 
  Property Operating Costs
 
     For the three months ended March 31, 1999, property-operating costs
increased $566,000, or 45%, to $1.8 million from $1.3 million for the same
period of 1998. The increase in property operating costs is due to the costs
associated with the net growth in the Company's real estate portfolio during
1998.
 
                                       13
<PAGE>   14
 
  General and Administrative
 
     For the three months ended March 31, 1999, general and administrative
expenses increased by $568,000, or 23%, to $3.1 million compared to $2.5 for the
same period in 1998. This increase is primarily a result of increased personnel
and related overhead from the Company's net growth during 1998. General and
administrative expenses as a percentage of weighted average joint venture
investments and undepreciated real estate was .20% for the first quarter of 1999
and 1998.
 
  Interest Expense
 
     Interest expense increased by $2.5 million, or 29% to $11.2 million for the
three months ended March 31, 1999, from $8.7 million for the same period in
1998. This increase is due to a greater weighted average debt balance of $636.3
million for the three months ended March 31, 1999, compared to $437.2 million
for the same period of 1998. The increase in the debt balance is primarily
attributable to the issuance of $125.0 million of Dealer remarketable securities
(the "Drs.") in February 1998 and a higher average balance outstanding on the
the Company's $350 million unsecured revolving credit facility (the
"Acquisitions Facility"). Interest expense was reduced by $545,000 of
capitalized interest costs associated with development projects in certain joint
venture partnerships for the three months ended March 31, 1999. The Company's
weighted average interest rate decreased from the first three months of 1998
from 7.36% to 7.05% for the first three months of 1999.
 
  Depreciation and Amortization
 
     Depreciation and amortization increased by 10% for the three months ended
March 31, 1999, when compared to the first three months of 1998, a result of the
Company's larger asset base.
 
  Minority Interest
 
     Minority interest of $41,000 for the first three months of 1999 represents
the limited partners' share of net income from TriNet Property Partners, L.P.
("TriNet Property Partners"), a partnership formed in December 1997. TriNet has
a 96.5% interest in TriNet Property Partners and is the sole general partner.
TriNet Property Partners purchased nine office/R&D properties in December 1997
and five additional office/R&D properties in the first six months of 1998 from a
group of private partnerships.
 
  Gain on Sale of Real Estate
 
     On March 12, 1999, TriNet sold an 82,600 square foot office building
located in Allen, Texas for $11.2 million and recognized a gain of $1.2 million
on the transaction. TriNet also disposed of its last retail property in the
first quarter of 1999 for $3.5 million. The retail property was classified as
held for sale at December 31, 1998, and a provision for asset held for sale of
$5.7 million was recognized in 1998.
 
  Cumulative Effect of a Change in Accounting Principle
 
     In April 1998, the Accounting Standards Executive Committee issued
Statement of Position 98-5, "Reporting on the Costs of Start-Up Activities"
("SOP 98-5"). SOP 98-5 requires all costs of start-up activities, including
organization costs, to be charged to operations as incurred for fiscal years
beginning after December 15, 1998. The initial application of SOP 98-5 requires
that prior years' unamortized start-up costs be charged to income as a
cumulative effect of a change in accounting principle. Accordingly, the Company
reported a $1.8 million charge to net income during the first quarter as a
cumulative effect of a change in accounting principle.
 
LIQUIDITY AND CAPITAL RESOURCES
 
     Net cash provided by operating activities decreased by $4.8 million to
$26.9 million for the three months ended March 31, 1999, compared to $31.7
million the same period in 1998. The decrease was primarily due to timing
differences in the payment of accounts payable and the receipt of $10.0 million
for tenant security
 
                                       14
<PAGE>   15
 
deposits in the first quarter of 1998. Net cash used in investing activities
decreased $181.3 million to $2.7 million for the three months ended March 31,
1999, compared to $184.0 million in the first three months of 1998. The decrease
was the result of a reduction in acquisitions in the first quarter of 1999
compared to the same period in 1998. The Company incurred $633,000 of capital
expenditures in the first quarter of 1999, primarily for improvements relating
to existing properties.
 
     Net cash used by financing activities was $32.9 million for the three
months ended March 31, 1999, which consisted primarily of a net decrease in
borrowings on the Acquisitions Facility of $12.9 million and dividends on common
and preferred stock totalling $20.1 million. For the three months ended March
31, 1998, net cash provided by financing activities was $166.9 million,
primarily the result of proceeds from an $89.0 million common stock offering in
January 1998, a $30.0 million common stock offering in March 1998 and the
issuance of $125.0 million of Drs. in February 1998.
 
     The Company has an agreement with a group of 15 banks led by Morgan
Guaranty Trust Company of New York which provides the Company with a $350
million unsecured revolving credit facility. The Acquisition Facility matures on
May 31, 2001 and has an automatic one-year extension option. The Company can
extend the facility for a second one-year term and increase the facility size up
to $500 million with approval of the bank group. LIBOR-based borrowings under
the facility are based on the Company's credit ratings. The Facility bears
interest at LIBOR plus 0.75% and requires an annual facility fee of $ 0.15%. The
Facility also has a $225 million competitive bid feature, which allows banks in
the syndicate group to bid on certain borrowings at more competitive rates. All
of the available commitment under the facility may be borrowed for general
corporate and working capital needs, as well as for the acquisition of real
estate. The facility requires interest only payments until maturity, at which
time outstanding borrowings are due and payable. At March 31, 1998, the Company
had $174.0 million available under the Acquisition Facility.
 
     Outstanding debt as of March 31, 1999 consisted of mortgage notes totalling
$84.5 million, unsecured long-term notes of $375.0 million and an outstanding
balance on the Acquisitions Facility of $176.0 million. Future maturities of
long-term debt and mortgages from March 31, 1999 through 2003 and thereafter are
presented below (in thousands):
 
<TABLE>
<S>                                                         <C>
Remainder of 1999.........................................  $    659
               2000.......................................     4,683
               2001.......................................   100,854
               2002.......................................    15,135
               2003.......................................       568
Thereafter(1).............................................   337,629
                                                            --------
                                                            $459,528
                                                            ========
</TABLE>
 
- ---------------
(1) On February 24, 1998, the Company sold to the public $125 million of 6.75%
    Drs. notes. Upon certain terms and conditions, the Drs. are subject to a
    mandatory tender on March 1, 2003, to either the Dealer or TriNet. If
    tendered to the Dealer, the Drs. must be remarketed by the dealer.
 
     TriNet considers its liquidity and ability to generate cash from operations
and financings to be adequate and expects them to continue to be adequate to
meet the Company's acquisition, development, operating, debt service and
shareholder distribution requirements.
 
     The Company has on file with the Securities and Exchange Commission two
Form S-3 Registration Statements. One registration statement is a universal
shelf registration statement authorizing the issuance of debt securities, common
stock, preferred stock or depository shares representing preferred stock of the
Company with a remaining availability of $232.3 million. A second registration
statement authorized the issuance of $250.0 million of debt securities and has a
remaining availability of $150.4 million. The exact amount of debt, common
stock, preferred stock, and depository shares representing preferred stock
issued will depend on acquisitions, asset sales, the Company's senior unsecured
debt and preferred stock ratings, and the general interest rate environment.
 
                                       15
<PAGE>   16
 
     In managing the Company's long-term liquidity, consideration is given to
both the weighted average maturity of the Company's fixed-rate debt instruments
and to the ratio of total debt to total market capitalization. As of March 31,
1999 and 1998, the Company's weighted average fixed-rate debt maturity was 7.3
years and 8.6 years, respectively, and the ratio of total debt to total market
capitalization was 42.3% and 31.6%, respectively.
 
IMPACT OF YEAR 2000
 
  Forward Looking Information.
 
     The statements in the following section include Year 2000 readiness
disclosure within the meaning of the Year 2000 Information and Readiness
Disclosure Act. The Company intends such statements to be covered by the safe
harbor provisions for forward-looking statements contained in the Private
Securities Reform Act of 1995, and is including this statement for purposes of
complying with these safe harbor provisions. Forward-looking statements, which
are based on certain assumptions and describe future plans, strategies and
expectations of the Company are generally identifiable by use of the words
"believe," "expect," "intend," "anticipate," "estimate," "project" or similar
expressions. The Company's ability to predict results or the actual effect of
future plans or strategies is inherently uncertain. Although the Company
believes that the expectations reflected in such forward-looking statements are
based on reasonable assumptions, the Company's actual costs, progress and
expenses with respect to its plan to address Year 2000 issues could differ
materially from those set forth in the forward-looking statements. Factors which
could have a material adverse effect on the Company's results and progress
include, but are not limited to, changes in the expenses of or delays in: the
identification and upgrade or replacement by the Company of computer systems
that do not relate to information technology but include embedded technology;
and the Year 2000 compliance of vendors (including vendors of the Company's
computer information systems) or third-party service providers (including the
Company's primary bank and payroll processor). These risks and uncertainties
should be considered in evaluating forward-looking statements and undue reliance
should not be placed on such statements.
 
  Introduction
 
     The term "Year 2000 issue" is a general term used to describe various
problems that may result from the improper processing by computer systems of
dates after 1999. These problems could result in a system failure or
miscalculations causing disruptions of operations.
 
     The Company's efforts to address its Year 2000 issues are focused in the
following three areas: (i) reviewing and taking any necessary steps to attempt
to correct the Company's computer information systems (i.e., software
applications and hardware platforms), (ii) evaluating and making any necessary
modifications to other computer systems that do not relate to information
technology but include embedded technology at its properties, such as security,
heating, ventilation, and air conditioning, elevator, fire and safety systems,
and (iii) communicating with certain significant third-party service providers
to determine whether there will be any interruption in their systems that could
affect the Company.
 
     The Company currently expects to complete its Year 2000 compliance program
before the end of 1999. While the Company anticipates that the program will be
successful in all material respects, the Company intends to closely monitor its
Year 2000 compliance and is developing the contingency plans described under
"Risks Presented by Year 2000 Issues and the Company's Contingency Plan."
 
  The Company's State of Readiness
 
     Information Technology Systems. The Company has completed an inventory of
all information technology systems and has contacted vendors to determine
whether such systems are Year 2000 compliant. Based on manufacturers'
representations, the Company has determined that its primary network operating
system, Novell Netware 5, its newly acquired property management and accounting
software and all of its desktop personal computers are Year 2000 compliant. The
Company's telephone system requires minimal upgrades.
 
                                       16
<PAGE>   17
 
     Embedded Systems. The Company has reviewed all of its properties' operating
leases to determine whether the tenant or the Company has the responsibility to
address Year 2000 issues. For those properties with respect to which the Company
is responsible for Year 2000 compliance, independent consultants have performed
on-site inventories of the embedded systems (e.g. security, heating, ventilation
and air conditioning, fire and elevator systems) and have contacted the various
manufacturers to determine whether the embedded systems are Year 2000 compliant.
Based on the inventory and responses from manufacturers to date, the Company has
identified 21 embedded systems that are not Year 2000 compliant, and may need to
be replaced or repaired. There are an additional 41 systems where further
testing is necessary to determine compliance.
 
     For those 21 systems that have been identified as non-compliant a program
has been initiated to repair, replace and test. With respect to those properties
for which the Company is not responsible for Year 2000 compliance, written
notices have been sent to tenants informing them of their obligations under the
leases. A program is in place to follow up with these tenants to ensure that
they are taking action and meeting their responsibilities under their leases.
 
     Third Party Relationships. With respect to the Company's relationships with
third parties (e.g., transfer agent, financial institutions, utility companies
and landlords), the Company is concurrently requesting compliance certificates
from all third parties that have an impact on the Company's operations, but no
assurance can be given that such certifications will be received by the Company
or that they will prove to be accurate. The Company is contacting those third
parties that have not responded to the initial request to determine their
readiness for Year 2000.
 
  Costs to Address the Company's Year 2000 Issues
 
     As of March 31, 1999, the Company has paid $130,000 and accrued $330,000
for Year 2000 costs since the inception of the program. The Company has a
remaining budget of $187,500 for 1999. The Company expects that a substantial
portion of these costs will be passed back to the tenant through recoveries of
operating expenses and that the remaining costs of addressing the Year 2000
issues will be funded through operating cash flows.
 
     Because the Company's Year 2000 assessment is ongoing and additional funds
may be required as a result of future findings, the Company's current accrual
amounts may increase as a result of unanticipated delays or preparedness issues.
While the Company's efforts to address its Year 2000 issues may involve
additional costs, the Company believes, based on available information, that
these costs will not have a material adverse effect on its business, financial
condition or results of operations.
 
     Although the Company has concluded that many of its tenants are responsible
for certain Year 2000 compliance costs, there is a possibility that certain
tenants will not agree with such conclusions.
 
  Risks Presented by Year 2000 Issues and the Company's Contingency Plan
 
     At this time, the Company has not identified any specific business
functions that are likely to suffer material disruption as a result of Year
2000-related events. Due to the unique and pervasive nature of the Year 2000
issue, it is not possible to anticipate each of the wide variety of Year 2000
events, particularly outside of the Company, that might arise in a worst case
scenario which might have a material adverse impact on the Company's business,
financial condition and results of operations.
 
     A reasonably likely worst case scenario might be the failure of an energy
management system in a building. Such a failure could adversely affect the
environmental conditions of the occupied space, thus creating discomfort and
inconvenience to the tenants until the condition could be manually corrected.
Persistence of this problem for a long period of time could result in an
increase in operating costs for the building until the energy management system
is restored to proper operations.
 
     In the event of an unforeseen failure of any energy management system due
to a Year 2000 issue that cannot be readily cured, the Company's contingency
plan includes the deployment of teams consisting of regional facility managers,
building engineers and customer service personnel, which would manually override
any such energy management system in a timely manner.
                                       17
<PAGE>   18
 
FUNDS FROM OPERATIONS
 
     The definition of Funds From Operations ("FFO") was clarified in the
National Association of Real Estate Investment Trusts, Inc. ("NAREIT") White
Paper, adopted by the NAREIT Board of Governors on March 3, 1995, as net income
(computed in accordance with generally accepted accounting principles ("GAAP")),
excluding gains (or losses) from debt restructuring and sales of property, plus
depreciation and amortization (in each case only on real estate related assets),
less preferred dividends, and after adjustments for unconsolidated partnerships
and joint ventures. Adjustments for unconsolidated partnerships and joint
ventures will be calculated to reflect FFO on the same basis. The Company's FFO
is not comparable to FFO reported by other real estate investment trusts (REITs)
that do not define FFO using the current NAREIT definition or that interpret the
current NAREIT definition differently than the Company. The Company believes
that to facilitate a clear understanding of the historical operating results of
the Company, FFO should be examined in conjunction with income as presented in
the Consolidated Statements of Operations. FFO should not be considered as an
alternative to net income (determined in accordance with GAAP) as an indicator
of the Company's financial performance, or cash flows from operating activity
(determined in accordance with GAAP) as a measure of the Company's liquidity,
nor is it indicative of funds available to fund the Company's cash needs,
including its ability to make distributions.
 
<TABLE>
<CAPTION>
                                                                FOR THE
                                                           THREE MONTHS ENDED
                                                               MARCH 31,
                                                           ------------------
                                                             (IN THOUSANDS)
                                                            1999       1998
                                                           -------    -------
<S>                                                        <C>        <C>
Funds From Operations:
  Income before gain on sale of real estate, and
     cumulative effect of a change in accounting
     principle...........................................  $19,873    $17,927
  Real estate depreciation...............................    6,971      6,418
  Joint venture depreciation.............................      831        204
  Preferred dividend requirement.........................   (3,919)    (3,919)
                                                           -------    -------
          Total Funds From Operations....................  $23,756    $20,630
                                                           =======    =======
</TABLE>
 
FORWARD LOOKING INFORMATION
 
     This quarterly report contains forward-looking statements within the
meaning of the federal securities laws. The Company intends such forward-looking
statements to be covered by the safe harbor provisions for forward-looking
statements contained in the Private Securities Reform Act of 1995, and is
including this statement for purposes of complying with these safe harbor
provisions. Forward-looking statements, which are based on certain assumptions
and describe future plans, strategies and expectations of the Company, are
generally identifiable by use of the words "believe," "expect," "intend,"
"anticipate," "estimate," "project" or similar expressions. The Company's
ability to predict results or the actual effect of future plans or strategies is
inherently uncertain. Factors which could have a material adverse effect on the
operations and future prospects of the Company include, but are not limited to,
changes in: economic conditions generally and the real estate market
specifically, legislative or regulatory provisions affecting the Company
(including changes to laws governing the taxation of REITs), availability of
capital, interest rates, competition, supply of and demand for office and
industrial properties in the Company's current and proposed market areas, and
general accounting principles, policies and guidelines applicable to REITs.
These risks and uncertainties, together with the other risks described from time
to time in the Company's reports and documents filed with the Securities and
Exchange Commission, should be considered in evaluating forward-looking
statements and undue reliance should not be placed on such statements.
 
                                       18
<PAGE>   19
 
                                    PART II
 
                               OTHER INFORMATION
 
ITEM 1. LEGAL PROCEEDINGS
 
     None.
 
ITEM 2. CHANGES IN SECURITIES
 
     None.
 
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
 
     None.
 
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
     None.
 
ITEM 5. OTHER INFORMATION
 
     None.
 
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
 
<TABLE>
<CAPTION>
    EXHIBITS
    --------
    <C>         <S>
      27.1      Financial Data Schedule.
</TABLE>
 
  Reports on Form 8-K
 
<TABLE>
<CAPTION>
                                                                FINANCIAL
                  DATE                    ITEMS REPORTED        STATEMENTS
                  ----                    --------------        ----------
<S>                                       <C>                   <C>
February 3, 1999........................        5                   No
</TABLE>
 
                                       19
<PAGE>   20
 
                                   SIGNATURES
 
     Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
 
                                          TRINET CORPORATE REALTY TRUST, INC.
                                          (Registrant)
 
                                          BY:     /s/ ELISA F. DITOMMASO
 
                                             -----------------------------------
                                                     Elisa F. DiTommaso
                                             Senior Vice President, Finance and
                                             Chief Financial Officer (Principal
                                              Financial and Accounting Officer)
 
DATE: May 17, 1999
 
                                       20
<PAGE>   21
 
                                 EXHIBIT INDEX
 
<TABLE>
<CAPTION>
    EXHIBIT
    NUMBER                                   EXHIBIT
    -------                                  -------
    <C>            <S>
     27.1          Financial Data Schedule
</TABLE>

<TABLE> <S> <C>

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM (A) THE
CONSOLIDATED BALANCE SHEET AT MARCH 31, 1999 AND THE CONSOLIDATED STATEMENT OF
OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31,
1999.
</LEGEND>
<MULTIPLIER> 1,000
       
<S>                             <C>
<PERIOD-TYPE>                   3-MOS
<FISCAL-YEAR-END>                          DEC-31-1999
<PERIOD-START>                             JAN-01-1999
<PERIOD-END>                               MAR-31-1999
<CASH>                                          29,210
<SECURITIES>                                         0
<RECEIVABLES>                                        0
<ALLOWANCES>                                         0
<INVENTORY>                                          0
<CURRENT-ASSETS>                                     0
<PP&E>                                       1,504,065
<DEPRECIATION>                                  78,832
<TOTAL-ASSETS>                               1,514,205
<CURRENT-LIABILITIES>                                0
<BONDS>                                        634,629
                                0
                                         73
<COMMON>                                           249
<OTHER-SE>                                     857,875
<TOTAL-LIABILITY-AND-EQUITY>                 1,514,205
<SALES>                                         40,864
<TOTAL-REVENUES>                                43,084
<CGS>                                                0
<TOTAL-COSTS>                                    1,826
<OTHER-EXPENSES>                                     0
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                              11,162
<INCOME-PRETAX>                                 17,107
<INCOME-TAX>                                         0
<INCOME-CONTINUING>                             17,107
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                      (1,810)
<NET-INCOME>                                    15,297
<EPS-PRIMARY>                                     0.61
<EPS-DILUTED>                                     0.61
        

</TABLE>


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