MILLS CORP
8-K, 1997-03-19
REAL ESTATE INVESTMENT TRUSTS
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<PAGE>





                          SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C.  20549

                                       FORM 8-K
                                    CURRENT REPORT
                        Pursuant to Section 13 or 15(d) of the
                           Securities Exchange Act of 1934



Date of Report (Date of earliest event reported):      Commission File Number:
March 12, 1997                                                         1-12994


                                THE MILLS CORPORATION
                Exact name of registrant as specified in its charter)


                     Delaware                       52-1802283
           (State or other jurisdiction           (IRS Employer
               of incorporation)              Identification Number)



               1300 Wilson Boulevard
                    Suite 400
               Arlington, Virginia                      22209
     (Address of principal executive offices)         (Zip Code)


                 Registrant's telephone number, including area code:

                                  (703) 526-5000


            (Former name or former address, if changed since last report)

                                   Not applicable


<PAGE>

                           THE MILLS CORPORATION

Item 5   -    Other Events

Attached as Exhibits to this form are the documents listed below:

    Exhibit    Document


      1.1      Form of Underwriting Agreement among the
               Company, the Operating Partnership and
               Merrill Lynch & Co., Merrill Lynch, Pierce,
               Fenner & Smith Incorporated

      5.1O     Opinion of Hogan & Hartson L.L.P. relating
               to the legality of the shares of Common Stock 

                                        -2-


<PAGE>

                                  SIGNATURE

   Pursuant to the requirements of the Securities Exchange Act of 1934, the 
Registrant has duly caused this report to be signed on its behalf by the 
undersigned hereunto duly authorized.

                                        THE MILLS CORPORATION


Date:  March 18, 1997                        By:  /s/ Thomas E. Frost
                                                  --------------------
                                                  Thomas E. Frost
                                                  Senior Vice President


                                        -3-


<PAGE>
                                    EXHIBIT INDEX


    Exhibit                  Description                             Page



      1.1         Form of Underwriting Agreement among the 
                  Company, the Operating Partnership and
                  Merrill Lynch & Co., Merrill Lynch, Pierce,
                  Fenner & Smith Incorporated


      5.1         Opinion of Hogan & Hartson L.L.P. regarding 
                  the legality of the shares of Common Stock 



<PAGE>
                                                                    EXHIBIT 1.1






                                THE MILLS CORPORATION
                                      FORM OF
                                UNDERWRITING AGREEMENT 
<PAGE>

                                  Table of Contents
                                                                           Page

UNDERWRITING AGREEMENT.......................................................1
  SECTION 1. Representations and Warranties..................................4
     (a) Representations and Warranties by the Company and the Operating
              Partnership....................................................4
              (1) Compliance with Registration Requirements..................4
              (2) Incorporated Documents.....................................5
              (3) Independent Accountants....................................6
              (4) Financial Statements.......................................6
              (5) No Material Adverse Change in Business.....................7
              (6) Good Standing of the Company...............................7
              (7) Good Standing of the Operating Partnership.................7
              (8) Good Standing of the Subsidiaries..........................8
              (9) Good Standing of Property Partnerships.....................9
              (10) Capitalization............................................9
              (11) Authorization of Units....................................9
              (12) Authorization of this Underwriting Agreement and Terms
                     Agreement..............................................10
              (13) Authorization of Common Stock............................10
              (14) Authorization of Preferred Stock.........................10
              (15) Authorization of Common Stock Warrants...................11
              (16) Authorization of Warrant Agreement.......................11
              (17) Authorization of Underlying Securities...................11
              (18) Descriptions of the Underwritten Securities, Underlying
                     Securities and Warrant Agreement.......................12
              (19) Absence of Defaults and Conflicts........................12
              (20) Absence of Labor Dispute.................................13
              (21) Absence of Proceedings...................................13
              (22) Accuracy of Exhibits.....................................14
              (23) REIT Qualification.......................................14
              (24) Absence of Further Requirements..........................14
              (25) Possession of Intellectual Property......................14
              (26) Possession of Licenses and Permits.......................14
              (27) Registration Rights......................................15
              (28) Title to Property........................................15
              (29) Insurance................................................16
              (30) Investment Company Act...................................16
              (31) Environmental Laws.......................................17
              (32) Tax Returns..............................................17
              (33) Beneficial Owners, Directors and Officers of the 
                     Company................................................17
              (34) Compliance with Cuba Act.................................18
              Stabilization/Manipulation....................................18
     (b) Officers' Certificates.............................................18
  SECTION 2. Sale and Delivery to Underwriters; Closing.....................18
     (a) Underwritten Securities............................................18
     (b) Option Underwritten Securities.....................................18
     (c) Payment............................................................19
     (d) Denominations; Registration........................................20
   SECTION 3. Covenants of the Company and the Operating Partnerships.......20


                                       2


<PAGE>
     (a) Compliance with Securities Regulations and Commission
           Requests.........................................................20
     (b) Filing of Amendments...............................................21
     (c) Delivery of Registration Statements................................21
     (d) Delivery of Prospectuses...........................................21
     (e) Continued Compliance with Securities Laws..........................22
     (f) Blue Sky Qualifications............................................22
     (g) Earnings Statement.................................................23
     (h) Reporting Requirements.............................................23
     (i) Listing............................................................23
     (j) Restriction on Sale of Securities..................................23
     (k) REIT Qualification.................................................23
     (l) Reservation of Securities..........................................23
     (m) Use of Proceeds....................................................23
  SECTION 4. Payment of Expenses............................................24
     (a) Expenses...........................................................24
     (b) Termination of Agreement...........................................25
  SECTION 5. Conditions of Underwriters' Obligations........................25
     (a) Effectiveness of Registration Statement............................25
     (b) Opinion of Counsel for Company.....................................25
     (c) Opinion of Counsel for Underwriters................................26
     (d) Officers' Certificate..............................................26
     (e) Accountant's Comfort Letter........................................26
     (f) Bring-down Comfort Letter..........................................27
     (g) Ratings............................................................27
     (h) Approval of Listing................................................27
     (i) No Objection.......................................................27
     (j) Lock-up Agreements.................................................27
     (k) Over-Allotment Option..............................................28
     (l) Additional Documents...............................................28
     (m) Termination of Terms Agreement.....................................29
  SECTION 6. Indemnification................................................29
     (a) Indemnification of Underwriters....................................29
     (b) Indemnification of Company, Directors and Officers.................30
     (c) Actions against Parties; Notification..............................30
     (d) Settlement without Consent if Failure to Reimburse.................31
  SECTION 7. Contribution...................................................32
  SECTION 8. Representations, Warranties and Agreements to Survive
               Delivery.....................................................33
  SECTION 9. Termination....................................................34
     (a) Underwriting Agreement.............................................34
     (b) Terms Agreement....................................................34
     (c) Liabilities........................................................34
  SECTION 10. Default by One or More of the Underwriters....................35
  SECTION 11. Notices.......................................................35
  SECTION 12. Parties.......................................................36
  SECTION 13. GOVERNING LAW AND TIME........................................36
  SECTION 14. Effect of Headings............................................36
  SECTION 15. Counterparts..................................................37


                                      ii
<PAGE>

                                THE MILLS CORPORATION
                               (a Delaware corporation)

                          Common Stock, Preferred Stock and
                          Warrants to Purchase Common Stock

                                UNDERWRITING AGREEMENT

                                                                 March 12, 1997

MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
    Incorporated
c/o Merrill Lynch, Pierce, Fenner & Smith
    Incorporated
North Tower
World Financial Center
New York, New York 10281-1209

Ladies and Gentlemen:

         The Mills Corporation, a Delaware corporation (the "Company") 
proposes to issue and sell up to $250,000,000 aggregate initial public 
offering price (or its equivalent based on the exchange rate at the time of 
sale) of its (i) shares of common stock, par value $.01 per share (the 
"Common Stock"), (ii) warrants to purchase shares of Common Stock (the 
"Common Stock Warrants"), or (iii) shares of preferred stock, par value $.01 
per share (the "Preferred Stock"), or any combination thereof, from time to 
time, in or pursuant to one or more offerings on terms to be determined at 
the time of sale.

         The Preferred Stock will be issued in one or more series and each 
series of Preferred Stock may vary, as applicable, as to the title, specific 
number of shares, rank, stated value, liquidation preference, dividend rate 
or rates (or method of calculation), dividend payment dates, redemption 
provisions, sinking fund requirements, conversion provisions, voting 
provisions (and terms of the related Underlying Securities (as defined 
below)) and any other variable terms as set forth in the applicable 
certificate of designations (each, the "Certificate of Designations") 
relating to such series of Preferred Stock.

<PAGE>


         Each issue of Common Stock Warrants will be issued pursuant to a 
separate warrant agreement (each, a "Warrant Agreement") between the Company 
and the warrant agent identified therein (each, a "Warrant Agent").  The 
Common Stock Warrants may vary, as applicable, as to, among other terms, 
title, type, specific number, exercise dates or periods, exercise price(s) 
and  expiration date(s).

         As used herein, "Securities" shall mean the Common Stock, Common 
Stock Warrants, or Preferred Stock, or any combination thereof, initially 
issuable by the Company and "Underlying Securities" shall mean the Common 
Stock issuable upon exercise of the Common Stock Warrants or upon conversion 
of the Preferred Stock, as applicable.  

         Whenever the Company determines to make an offering of Securities 
through Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith 
Incorporated ("Merrill Lynch") or through an underwriting syndicate managed 
by Merrill Lynch, the Company will enter into an agreement (each, "Terms 
Agreement") providing for the sale of such Securities to, and the purchase 
and offering thereof by, Merrill Lynch and such other underwriters, if any, 
selected by Merrill Lynch (the "Underwriters," which term shall include 
Merrill Lynch, whether acting as sole Underwriter or as a member of an 
underwriting syndicate, as well as any Underwriter substituted pursuant to 
Section 10 hereof).  The Terms Agreement relating to the offering of 
Securities shall specify the number of Securities to be initially issued (the 
"Initial Underwritten Securities"), the name of each Underwriter 
participating in such offering (subject to substitution as provided in 
Section 10 hereof) and the name of any Underwriter other than Merrill Lynch 
acting as co-manager in connection with such offering, the number of Initial 
Underwritten Securities which each such Underwriter severally agrees to 
purchase, whether such offering is on a fixed or variable price basis and, if 
on a fixed price basis, the initial offering price, the price at which the 
Initial Underwritten Securities are to be purchased by the Underwriters, the 
form, time, date and place of delivery and payment of the Initial 
Underwritten Securities and any other material variable terms of the Initial 
Underwritten Securities, as well as the material variable terms of any 
related Underlying Securities.  In addition, if applicable, such Terms 
Agreement shall specify whether the Company has agreed to grant to the 
Underwriters an option to purchase additional Securities to cover 
over-allotments, if any, and the number of Securities subject to such option 
(the "Option Underwritten Securities").  As used herein, the term 
"Underwritten Securities" shall include the Initial Underwritten Securities 
and all or any portion of any Option Underwritten Securities.  The Terms 
Agreement, which shall be substantially in the form of Exhibit A hereto, may 
take the form of an exchange of any standard form of written 
telecommunication between the Company and Merrill Lynch acting for itself, 
and, if applicable, as representative of any other Underwriters.  Each 
offering of Underwritten Securities through Merrill Lynch, acting as sole 
Underwriter or through an underwriting syndicate managed by Merrill Lynch 
will be governed by Underwriting Agreement, as supplemented by the applicable 
Terms Agreement.

                                        2

<PAGE>

         The Company has filed with the Securities and Exchange Commission 
(the "Commission") a registration statement on Form S-3 (No. 333-13363) and 
Pre-Effective Amendment No. 1 thereto, for the registration of the Securities 
and the Underlying Securities under the Securities Act of 1933, as amended 
(the "1933 Act"), and the offering thereof from time to time in accordance 
with Rule 430A or Rule 415 of the rules and regulations of the Commission 
under the 1933 Act (the "1933 Act Regulations"), and the Company has filed 
such post-effective amendments thereto as may be required prior to the 
execution of the applicable Terms Agreement.  Such registration statement (as 
so amended, if applicable) has been declared effective by the Commission.  
Such registration statement (as so amended, if applicable), including the 
information, if any, deemed to be a part thereof pursuant to Rule 430A(b) of 
the 1933 Act Regulations (the "Rule 430A Information") or Rule 434(d) of the 
1933 Act Regulations (the "Rule 434 Information"), is referred to herein as 
the "Registration Statement"; and the final prospectus and the prospectus 
supplement relating to the offering of the Underwritten Securities, in the 
form first furnished to the Underwriters by the Company for use in connection 
with the offering of the Underwritten Securities, are collectively referred 
to herein as the "Prospectus"; provided, however, that all references to the 
"Registration Statement" and the "Prospectus" shall be deemed to include all 
documents incorporated therein by reference pursuant to the Securities 
Exchange Act of 1934, as amended (the "1934 Act"), prior to the execution of 
the applicable Terms Agreement; provided, further, that if the Company files 
a registration statement with the Commission pursuant to Section 462(b) of 
the 1933 Act Regulations (the "Rule 462 Registration Statement"), then, after 
such filing, all references to "Registration Statement" shall be deemed to 
include the Rule 462 Registration Statement; and provided, further, that if 
the Company elects to rely upon Rule 434 of the 1933 Act Regulations, then 
all references to "Prospectus" shall be deemed to include the final or 
preliminary prospectus and the applicable term sheet or abbreviated term 
sheet (the "Term Sheet"), as the case may be, in the form first furnished to 
the Underwriters by the Company in reliance upon Rule 434 of the 1933 Act 
Regulations, and all references in this Underwriting Agreement to the date of 
the Prospectus shall mean the date of the Term Sheet.  A "preliminary 
prospectus" shall be deemed to refer to any prospectus used before the 
registration statement became effective and any prospectus that omitted, as 
applicable, the Rule 430A Information, the Rule 434 Information or other 
information to be included upon pricing in a form of prospectus filed with 
the Commission pursuant to Rule 424(b) of the 1933 Act Regulations, that was 
used after such effectiveness and prior to the execution and delivery of the 
applicable Terms Agreement.  For purposes of this Underwriting Agreement, all 
references to the Registration Statement, Prospectus, Term Sheet or 
preliminary prospectus or to any amendment or supplement to any of the 
foregoing shall be deemed to include the copy filed with the Commission 
pursuant to its Electronic Data Gathering, Analysis and Retrieval system 
("EDGAR").

                                        3

<PAGE>


         All references in this Underwriting Agreement to financial 
statements and schedules and other information which is "contained," 
"included" or "stated" (and all references of like import) in the 
Registration Statement, Prospectus or preliminary prospectus shall be deemed 
to mean and include all such financial statements and schedules and other 
information which is incorporated by reference in the Registration Statement, 
Prospectus or preliminary prospectus, as the case may be; and all references 
in this Underwriting Agreement to amendments or supplements to the 
Registration Statement, Prospectus or preliminary prospectus shall be deemed 
to mean and include the filing of any document under the 1934 Act which is 
incorporated by reference in the Registration Statement, Prospectus or 
preliminary prospectus, as the case may be.

         The term "subsidiary" also includes, without limitation, each entity 
listed on Exhibit B hereto.

         The term "Property Partnership" means any entity which owns any of 
the Properties (as such term is defined in the Prospectus) or any direct or 
indirect interest in any of the Properties.

    SECTION 1.     Representations and Warranties.

    (a)  Representations and Warranties by the Company and the Operating 
Partnership.  The Company and the Operating Partnership jointly and severally 
represent and warrant to Merrill Lynch, as of the date hereof, and to each 
Underwriter named in the applicable Terms Agreement, as of the date thereof, 
as of the Closing Time (as defined below) and, if applicable, as of each Date 
of Delivery (as defined below) (in each case, a "Representation Date"), as 
follows:


        (1) Compliance with Registration Requirements.  The Company meets 
    the requirements for use of Form S-3 under the 1933 Act.  Each of the 
    Registration Statement and any Rule 462(b) Registration Statement has 
    become effective under the 1933 Act and no stop order suspending the 
    effectiveness of the Registration Statement or any Rule 462(b) 
    Registration Statement has been issued under the 1933 Act and no 
    proceedings for that purpose have been instituted or are pending or, to 
    the knowledge of the Company or the Operating Partnership, after due 
    inquiry, are contemplated by the Commission, and any request on the part 
    of the Commission for additional information has been complied with.  No 
    order preventing or suspending the use of the Prospectus has been issued 
    and no proceeding for that purpose has been instituted or, to the 
    knowledge of the Company or the Operating Partnership, after due 
    inquiry, threatened by the Commission or the state securities authority 
    of any jurisdiction.

                                        4

<PAGE>


              At the respective times the Registration Statement, any Rule
    462(b) Registration Statement and any post-effective amendments thereto
    (including the filing of the Company's most recent Annual Report on Form
    10-K with the Commission (the "Annual Report on Form 10-K")) became
    effective and at each Representation Date, the Registration Statement, any
    Rule 462(b) Registration Statement and any amendments and supplements
    thereto complied and will comply in all material respects with the
    requirements of the 1933 Act and the 1933 Act Regulations and did not and
    will not contain an untrue statement of a material fact or omit to state a
    material fact required to be stated therein or necessary to make the
    statements therein not misleading.  At the date of the Prospectus, at the
    Closing Time and at each Date of Delivery, if any, the Prospectus and any
    amendments and supplements thereto did not and will not include an untrue
    statement of a material fact or omit to state a material fact necessary in
    order to make the statements therein, in the light of the circumstances
    under which they were made, not misleading.  If the Company elects to rely
    upon Rule 434 of the 1933 Act Regulations, the Company will comply with the
    requirements of Rule 434.  Notwithstanding the foregoing, the
    representations and warranties in this subsection shall not apply to
    statements in or omissions from the Registration Statement or the
    Prospectus made in reliance upon and in conformity with information
    furnished to the Company in writing by any Underwriter through Merrill
    Lynch expressly for use in the Registration Statement or the Prospectus.

              Each preliminary prospectus and Prospectus filed as part of the
    Registration Statement as originally filed or as part of any amendment
    thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so
    filed in all material respects with the 1933 Act Regulations and, if
    applicable, each preliminary prospectus and the Prospectus delivered to the
    Underwriters for use in connection with the offering of Underwritten
    Securities will, at the time of such delivery, be identical to the
    electronically transmitted copies thereof filed with the Commission
    pursuant to EDGAR, except to the extent permitted by Regulation S-T.

              If a Rule 462(b) Registration Statement is required in connection
    with the offering and sale of the Securities, the Company has complied or
    will comply with the requirements of Rule 111 under the 1933 Act
    Regulations relating to the payment of filing fees therefor.


        (2)  Incorporated Documents.  The documents incorporated or deemed 
    to be incorporated by reference in the Registration Statement and the 
    Prospectus, at the time they were or hereafter are filed with the 
    Commission, complied and will comply in all material respects with the 
    requirements of the 1934 Act and the rules and regulations of the 
    Commission thereunder (the "1934 Act Regulations") and, when read 
    together with the other information in the Prospectus, at the date

                                        5

<PAGE>


    of the Prospectus, at the Closing Time and at each Date of Delivery, if 
    any, did not and will not include an untrue statement of a material fact 
    or omit to state a material fact necessary to make the statements 
    therein, in the light of the circumstances under which they were made, 
    not misleading.

        (3)  Independent Accountants.  The accountants who certified the 
    financial statements and supporting schedules included in, or 
    incorporated by reference into, the Registration Statement and the 
    Prospectus are independent public accountants as required by the 1933 
    Act and the 1933 Act Regulations.

        (4)  Financial Statements.  The financial statements of the 
    Company included, or incorporated by reference, in the Registration 
    Statement and the Prospectus, together with the related schedules and 
    notes, as well as those financial statements, schedules and notes of any 
    other entity included therein, present fairly the financial position of 
    the respective entity or entities or group presented therein at the 
    respective dates indicated and the statement of operations, 
    stockholders' equity and cash flows data of such entity, as the case may 
    be, for the periods specified.  Such financial statements have been 
    prepared in conformity with generally accepted accounting principles 
    ("GAAP") applied on a consistent basis throughout the periods involved.  
    The supporting schedules, if any, included or incorporated by reference 
    in the Registration Statement and the Prospectus present fairly, in 
    accordance with GAAP, the information required to be stated therein.  
    The selected financial data, the summary financial information and other 
    financial information and data included in, or incorporated by reference 
    into, the Prospectus present fairly the information shown therein and 
    have been compiled on a basis consistent with that of the audited 
    financial statements included, or incorporated by reference, in the 
    Registration Statement and the Prospectus.  In addition, any pro forma 
    financial information and the related notes thereto included or 
    incorporated by reference in the Registration Statement and the 
    Prospectus present fairly the information shown therein, have been 
    prepared in accordance with the Commission's rules and the guidelines of 
    the American Institute of Certified Public Accountants ("AICPA") with 
    respect to pro forma information and have been properly compiled on the 
    bases described therein, and the assumptions used in the preparation 
    thereof are, in the opinion of the Company, reasonable and the 
    adjustments used therein are appropriate to give effect to the 
    transactions and circumstances referred to therein.  All historical 
    financial statements and information and all pro forma financial 
    statements and information required by the 1933 Act, the 1933 Act 
    Regulations, the 1934 Act and the 1934 Act Regulations are included, or 
    incorporated by reference, in the Registration Statement and the 
    Prospectus.

        (5)  No Material Adverse Change in Business.  Since the respective 
    dates as of which information is given in the Registration Statement and 
    the Prospectus, except as otherwise stated therein, (A) there has been 
    no material

                                        6

<PAGE>

    adverse change in the condition, financial or otherwise, or in the 
    earnings, business affairs or business prospects of the Company, the 
    Operating Partnership, the subsidiaries and the Property Partnerships 
    considered as one enterprise (a "Material Adverse Effect"), whether or 
    not arising in the ordinary course of business, (B) no casualty loss or 
    condemnation or other adverse event with respect to the Properties or 
    any development site (as referred to in the Prospectus as "Mills Under 
    Development") (the "Development Sites") has occurred which would have a 
    Material Adverse Effect, (C) there have been no transactions entered 
    into by the Company, the Operating Partnership, any subsidiary or any 
    Property Partnership, other than those arising in the ordinary course of 
    business, which would have a Material Adverse Effect, (D) except for 
    regular distributions on the Company's common stock in amounts per share 
    that are consistent with past practice and regular quarterly 
    distributions on units of the Operating Partnership (the "Units") there 
    has been no dividend or distribution of any kind declared, paid or made 
    by the Company on any class of its capital stock or any distribution by 
    the Operating Partnership with respect to its Units and (E) there has 
    been no material change in the capital stock of the Company or the 
    partnership interests of the Operating Partnership, or any material 
    increase in the indebtedness of the Company, the Operating Partnership, 
    its subsidiaries and any Property Partnership considered as one 
    enterprise.

         (6)  Good Standing of the Company.  The Company has been 
    duly organized and is validly existing as a corporation in good standing 
    under the laws of the State of Delaware and has corporate power and 
    authority to own, lease and operate its properties and to conduct its 
    business as described in the Prospectus and to enter into and perform 
    its obligations under, or as contemplated under, this Underwriting 
    Agreement and the applicable Terms Agreement.  The Company is duly 
    qualified or registered as a foreign corporation to transact business 
    and is in good standing in each other jurisdiction in which such 
    qualification or registration is required, whether by reason of the 
    ownership or leasing of property or the conduct of business, except 
    where the failure to so qualify or register or be in good standing would 
    not result in a Material Adverse Effect.

         (7)  Good Standing of the Operating Partnership.  The 
    Operating Partnership is duly formed and validly existing as a limited 
    partnership in good standing under the laws of the State of Delaware, 
    with partnership power and authority to own, lease and operate its 
    properties, to conduct the business in which it is engaged and proposes 
    to engage as described in the Prospectus and to enter into and perform 
    its obligations under this Underwriting Agreement and the applicable 
    Terms Agreement.  The Operating Partnership is duly qualified or 
    registered as a foreign partnership and is in good standing in each 
    jurisdiction in which such qualification or registration is required, 
    whether by reason of the

                                        7

<PAGE>


    ownership or leasing of property or the conduct of business, except 
    where the failure to so qualify or register would not have a Material 
    Adverse Effect.  The Company is the sole general partner of the 
    Operating Partnership and holds such number and/or percentage of Units 
    as disclosed in the Prospectus.  The Agreement of Limited Partnership of 
    the Operating Partnership, dated April 21, 1994, as amended through the 
    Closing Time and at each Date of Delivery (the "Operating Partnership 
    Agreement"), is in full force and effect.

         (8)  Good Standing of the Subsidiaries.  Each subsidiary 
    that is a "significant subsidiary" as such term is defined in Section 
    1-02 of Regulation S-X (each a "Significant Subsidiary," and 
    collectively, the "Significant Subsidiaries") and each subsidiary listed 
    on Exhibit B hereto and has been duly organized and is validly existing 
    as a corporation, limited partnership, limited liability company or 
    other legal entity, as the case may be, in good standing under the laws 
    of the state of its jurisdiction of incorporation or organization, as 
    the case may be, with the requisite power and authority to own, lease 
    and operate its properties, and to conduct the business in which it is 
    engaged or proposes to engage as described in the Prospectus.  Each such 
    entity is duly qualified or registered as a foreign corporation, limited 
    partnership or limited liability company or other entity, as the case 
    may be, to transact business and is in good standing in each 
    jurisdiction in which such qualification or registration is required, 
    whether by reason of the ownership or leasing of property or the conduct 
    of business, except where the failure to so qualify or register would 
    not have a Material Adverse Effect.  Except as otherwise stated in the 
    Registration Statement and the Prospectus, all of the issued and 
    outstanding capital stock or other equity interests of such entity has 
    been duly authorized and validly issued and is fully paid and 
    non-assessable and with respect to partnership entities have been fully 
    paid and are owned directly or indirectly by the Company or the 
    Operating Partnership, in each case free and clear of any security 
    interest, mortgage, pledge, lien, encumbrance, claim or equity 
    (collectively, "Liens").  No shares of capital stock or other equity 
    interests of such entities are reserved for any purpose, and there are 
    no outstanding securities convertible into or exchangeable for any 
    capital stock or other equity interests of such entities and no 
    outstanding options, rights (preemptive or otherwise) or warrants to 
    purchase or to subscribe for shares of such capital stock or other 
    equity interests or any other securities of such entities, except as 
    disclosed in the Prospectus.

         (9)  Good Standing of Property Partnerships.  Each of the 
    Property Partnerships is duly organized and validly existing as a 
    limited or general partnership, limited liability company or other legal 
    entity, as the case may be, in good standing under the laws of its 
    respective jurisdiction of formation; each of the Property Partnerships 
    has the requisite power and authority to own, lease and operate its 
    properties, and to conduct the business in which it is engaged.  Each of 
    the partnership, operating or other organizational agreements, as the 

                                        8

<PAGE>

    case may be, of the Property Partnerships is in full force and effect. 
    Each of the Property Partnerships is duly qualified or registered as a 
    foreign partnership, limited liability company or other legal entity to 
    transact business and is in good standing in each jurisdiction in which 
    such qualification or registration is required, whether by reason of the 
    ownership or leasing of property or the conduct of business, except 
    where the failure to so qualify or register would not have a Material 
    Adverse Effect.

         (10) Capitalization.  If the Prospectus contains a 
    "Capitalization" section, the authorized, issued and outstanding shares 
    of capital stock of the Company is as set forth therein (except for 
    subsequent issuances thereof, if any, contemplated under this 
    Underwriting Agreement, pursuant to employee benefit plans referred to 
    in the Prospectus or pursuant to the exercise of convertible securities 
    or options referred to in the Prospectus or upon the exchange of Units). 
     Such shares of capital stock have been duly authorized and validly 
    issued by the Company and are fully paid and non-assessable and were 
    offered in compliance with all applicable laws (including, without 
    limitation, Federal and State Securities laws), and none of such shares 
    of capital stock were issued in violation of preemptive or other similar 
    rights arising by operation of law, under the charter and by-laws of the 
    Company or under any agreement to which the Company or any of its 
    subsidiaries is a party or otherwise.  Except for shares of Common Stock 
    issuable upon exchange of Units or upon the exercise of options or the 
    grant of restricted shares under the stock option plans of the Company, 
    there are no shares of capital stock of the Company reserved for any 
    purpose and there are no outstanding securities convertible into or 
    exchangeable for any shares of capital stock of the Company and except 
    as granted in this Underwriting Agreement, any Terms Agreement and any 
    Warrant Agreement, there are no outstanding options, rights (preemptive 
    or otherwise) or warrants to purchase or to subscribe for shares of such 
    stock or any other securities of the Company.

         (11) Authorization of Units.  All the issued and outstanding Units 
    have been duly  authorized, validly issued, and fully paid, and sold or 
    exchanged in compliance with all applicable laws (including, without 
    limitation, federal and state securities laws).  There are no Units 
    reserved for any purpose, no outstanding securities convertible into or 
    exchangeable for any Units and no outstanding options, rights 
    (preemptive or otherwise) or warrants to purchase or to subscribe for 
    Units.

         (12) Authorization of this Underwriting Agreement and Terms 
    Agreement.  This Underwriting Agreement has been, and the applicable 
    Terms Agreement as of the date thereof will have been, duly authorized, 
    executed and delivered by the Company and the

                                        9

<PAGE>


    Operating Partnership, to the extent each is a party thereto and 
    assuming due authorization, execution and delivery by Merrill Lynch and 
    any other Underwriter, is enforceable against the Company and the 
    Operating Partnership, to the extent each is a party thereto, in 
    accordance with its terms except as (A) the enforceability thereof may 
    be limited by bankruptcy, insolvency, reorganization, moratorium or 
    similar laws affecting creditors' rights generally or (b) the 
    availability of equitable remedies may be limited by equitable 
    principles of general applicability.

        (13) Authorization of Common Stock.  If the Underwritten Securities 
    being sold pursuant to the applicable Terms Agreement include Common 
    Stock, such Underwritten Securities have been, or as of the date of such 
    Terms Agreement will have been, duly authorized by the Company for 
    issuance and sale pursuant to this Underwriting Agreement and such Terms 
    Agreement.  Such Underwritten Securities, when issued and delivered by 
    the Company pursuant to this Underwriting Agreement and such Terms 
    Agreement against payment of the consideration therefor specified in 
    such Terms Agreement, will be validly issued, fully paid and 
    non-assessable and will not be subject to preemptive or other similar 
    rights arising by operation of law, under the charter and by-laws of the 
    Company or under any agreement to which the Company, the Operating 
    Partnership, any subsidiary or any Property Partnership is a party, or 
    otherwise.  No holder of such Underwritten Securities is or will be 
    subject to personal liability by reason of being such a holder.  The 
    form of stock certificate to be used to evidence the Common Stock will 
    be in due and proper form and will comply with all applicable legal 
    requirements.

        (14) Authorization of Preferred Stock.  If the Underwritten 
    Securities being sold pursuant to the applicable Terms Agreement include 
    Preferred Stock, such Underwritten Securities have been, or as of the 
    date of such Terms Agreement will have been, duly authorized by the 
    Company for issuance and sale pursuant to this Underwriting Agreement 
    and such Terms Agreement.  Such Underwritten Securities, when issued and 
    delivered by the Company pursuant to this Underwriting Agreement and 
    such Terms Agreement against payment of the consideration therefor, 
    specified in such Terms Agreement, will be validly issued, fully paid 
    and non-assessable and will not be subject to preemptive or other 
    similar rights arising by operation of law, under the charter and 
    by-laws of the Company or under any agreement to which the Company, the 
    Operating Partnership, any subsidiary or any Property Partnership is a 
    party, or otherwise.  No holder of Preferred Stock is or will be subject 
    to personal liability by reason of being such a holder.  The applicable 
    Certificate of Designations will be in full force and effect prior to 
    the Closing Time.  The form of stock certificate to be used to evidence 
    the Preferred Stock will be in due and proper form and will comply with 
    all applicable legal requirements.


        (15)  Authorization of Common Stock Warrants.  If the Underwritten 
    Securities being sold pursuant to the applicable Terms Agreement include 
    Common Stock Warrants, such Underwritten Securities have been, or as of 
    the

                                        10

<PAGE>

    date of such Terms Agreement will have been, duly authorized by the 
    Company for issuance and sale pursuant to this Underwriting Agreement 
    and such Terms Agreement.  Such Underwritten Securities, when issued and 
    authenticated in the manner provided for the applicable Warrant 
    Agreement and delivered against payment of the consideration therefor 
    specified in such Terms Agreement, will constitute valid and legally 
    binding obligations of the Company, entitled to the benefits provided by 
    such Warrant Agreement and enforceable against the Company in accordance 
    with their terms, except as except as (A) the enforceability thereof may 
    be limited by bankruptcy, insolvency, reorganization, moratorium or 
    similar laws affecting creditors' rights generally or (b) the 
    availability of equitable remedies may be limited by equitable 
    principles of general applicability.

        (16) Authorization of Warrant Agreement.  If the Underwritten 
    Securities being sold pursuant to the applicable Terms Agreement include 
    Common Stock Warrants, each applicable Warrant Agreement has been, or 
    prior to the issuance of such Underwritten Securities will have been, 
    duly authorized, executed and delivered by the Company and, upon such 
    authorization, execution and delivery, will constitute a valid and 
    legally binding agreement of the Company, enforceable against the 
    Company in accordance with its terms, except as (A) the enforceability 
    thereof may be limited by bankruptcy, insolvency, reorganization, 
    moratorium or similar laws affecting creditors' rights generally or (b) 
    the availability of equitable remedies may be limited by equitable 
    principles of general applicability.

        (17) Authorization of Underlying Securities.  The Underlying 
    Securities related to the Underwritten Securities being sold pursuant to 
    the applicable Terms Agreement have been, or as of the date of such 
    Terms Agreement will have been, duly authorized and reserved for 
    issuance by the Company upon exercise of the Common Stock Warrants or 
    upon conversion of the related Preferred Stock, as applicable.  Such 
    Underlying Securities, when issued upon such exercise or conversion, as 
    applicable, will be validly issued, fully paid and non-assessable and 
    will not be subject to preemptive or other similar rights arising by 
    operation of law, under the charter and by-laws of the Company or under 
    any agreement to which the Company, the Operating Partnership, any 
    subsidiary or any Property Partnership is a party, or otherwise.  No 
    holder of such Common Stock will be subject to personal liability by 
    reason of being such a holder.  

         (18) Descriptions of the Underwritten Securities, Underlying 
    Securities and Warrant Agreement.  The Underwritten Securities being 
    sold pursuant to the applicable Terms Agreement and each applicable 
    Warrant Agreement, as of the date of the Prospectus, and any Underlying 
    Securities, when issued and delivered in accordance with the terms of 
    the related Underwritten Securities, will conform in all material 
    respects to the statements relating thereto contained in the

                                        11

<PAGE>

    Prospectus and will be in substantially the form filed or incorporated 
    by reference, as the case may be, as an exhibit to the Registration 
    Statement.

        (19) Absence of Defaults and Conflicts.  None of the Company, the 
    Operating Partnership, any subsidiary or any Property Partnership is in 
    violation of its charter, by-laws, certificate of limited partnership or 
    partnership agreement or other organizational document, as the case may 
    be, or in default in the performance or observance of any material 
    obligation, agreement, covenant or condition contained in any material 
    contract, indenture, mortgage, deed of trust, loan or credit agreement, 
    note, lease or other agreement or instrument to which any such entity is 
    a party or by which or any of them may be bound, or to which any of its 
    assets or the Properties may be bound or are subject (collectively, 
    "Agreements and Instruments"), except for such defaults that would not 
    result in a Material Adverse Effect.  The execution, delivery and 
    performance of this Underwriting Agreement, the applicable Terms 
    Agreement and each applicable Warrant Agreement and any other agreement 
    or instrument entered into or issued or to be entered into or issued by 
    the Company or the Operating Partnership in connection with the 
    transactions contemplated hereby or thereby or in the Registration 
    Statement and the Prospectus and the consummation of the transactions 
    contemplated herein and in the Registration Statement and the Prospectus 
    (including the issuance and sale of the Underwritten Securities and the 
    use of the proceeds from the sale of the Underwritten Securities as 
    described under the caption "Use of Proceeds") and compliance by the 
    Company and the Operating Partnership with their obligations hereunder 
    and thereunder have been duly authorized by all necessary corporate or 
    partnership action, as the case may be, and do not and will not, whether 
    with or without the giving of notice or passage of time or both, 
    conflict with or constitute a breach of, or default or Repayment Event 
    (as defined below) under, or result in the creation or imposition of any 
    lien, charge or encumbrance upon any assets, properties or operations of 
    the Company, the Operating Partnership, any subsidiary or any Property 
    Partnership pursuant to, any Agreements and Instruments, except for such 
    conflicts, breaches, defaults, events or liens, charges or encumbrances 
    that would not result in a Material Adverse Effect, nor will such action 
    result in any violation of the provisions of the charter, by-laws of the 
    Company or the organizational documents of the Operating Partnership, 
    any subsidiary or any Property Partnership or any applicable law, 
    statute, rule, regulation, judgment, order, writ or decree of any 
    government, government instrumentality or court, domestic or foreign, 
    having jurisdiction over the Company, the Operating Partnership, any 
    subsidiary or any Property Partnership or any of their assets, 
    properties or operations.  As used herein, a "Repayment Event" means any 
    event or condition which gives the holder of any note, debenture or 
    other evidence of indebtedness (or any person acting on such holder's 
    behalf) the right to require the repurchase, redemption or repayment of 
    all or a portion of such indebtedness by the Company, the Operating 
    Partnership, any subsidiary or any Property Partnership.

                                        12

<PAGE>

         (20) Absence of Labor Dispute.  No labor dispute with the employees 
    of the Company, the Operating Partnership, any subsidiary or any 
    Property Partnership exists or, to the knowledge of the Company or the 
    Operating Partnership is imminent. 

         (21) Absence of Proceedings.  There is no action, suit, proceeding, 
    inquiry or investigation before or by any court or governmental agency 
    or body, domestic or foreign, now pending, or, to the knowledge of the 
    Company or the Operating Partnership threatened against or affecting the 
    Company, the Operating Partnership, any subsidiary or any Property 
    Partnership which is required to be disclosed in the Registration 
    Statement and the Prospectus (other than as stated therein), or which 
    might reasonably be expected to result in a Material Adverse Effect, or 
    which might reasonably be expected to materially and adversely affect 
    the assets, properties or operations thereof or the consummation of this 
    Underwriting Agreement, the applicable Terms Agreement or any applicable 
    Warrant Agreement or the transactions contemplated herein or therein.  
    The aggregate of all pending legal or governmental proceedings to which 
    the Company, the Operating Partnership, any subsidiary or any Property 
    Partnership is a party or of which any of their respective assets, 
    properties or operations is the subject which are not described in the 
    Registration Statement and the Prospectus, including ordinary routine 
    litigation incidental to the business, could not reasonably be expected 
    to result in a Material Adverse Effect.

         (22) Accuracy of Exhibits.  There are no contracts or documents 
    which are required to be described in the Registration Statement, the 
    Prospectus or the documents incorporated by reference therein or to be 
    filed as exhibits thereto which have not been so described and/or filed 
    as required and the descriptions thereof or references thereto are 
    correct in all material respects and no material defaults exist in the 
    due performance or observance of any material obligation, agreement, 
    covenant or condition contained in any such contract or document.

         (23) REIT Qualification.  The Company was organized and has 
    operated in conformity with the requirements for qualification and 
    taxation as a real estate investment trust under the Internal Revenue 
    Code of 1986, as amended (the "Code"), and its proposed method of 
    operation will enable it to continue to meet the requirements for 
    taxation as a real estate investment trust under the Code for each of 
    its subsequent taxable years, and no actions have been taken (or not 
    taken which are required to be taken) which would cause such 
    qualification to be lost.

         (24) Absence of Further Requirements.  No filing with, or 
    authorization, approval, consent, license, order registration, 
    qualification or decree of, any court or governmental authority or 
    agency is necessary or required for the performance

                                        13

<PAGE>

    by the Company or the Operating Partnership of its obligations under 
    this Underwriting Agreement or the applicable Terms Agreement or in 
    connection with the transactions contemplated under this Underwriting 
    Agreement, such Terms Agreement or any applicable Warrant Agreement, 
    except such as have been already obtained or as may be required in 
    connection with the National Association of Securities Dealers, Inc. 
    (the "NASD") or under state securities or real estate syndication laws.

         (25) Possession of Intellectual Property.  None of the Company, the 
    Operating Partnership or any subsidiary is required to own or possess 
    any trademarks, service marks, trade names, copyrights or other 
    intellectual property (collectively "proprietary rights") not now 
    lawfully owned or possessed by such entity in order to lawfully conduct 
    the business now operated by such entity or as proposed to be operated 
    by it as described in the Prospectus, and no such entity has received 
    any notice or is otherwise aware of any infringement of or conflict with 
    asserted rights of others with respect to any proprietary rights, other 
    than such conflict or infringement which would not have a Material 
    Adverse Effect.

         (26) Possession of Licenses and Permits.  Each of the Company, the 
    Operating Partnership, the subsidiaries and the Property Partnerships 
    possesses such certificates, permits, licenses, approvals, consents and 
    other authorizations (collectively, "Governmental Licenses") issued by 
    the appropriate federal, state, local or foreign regulatory agencies or 
    bodies necessary to conduct the business now operated by them.  Each of 
    the Company, the Operating Partnership, the subsidiaries and the 
    Property Partnerships are in compliance with the terms and conditions of 
    all such Governmental Licenses, except where the failure so to comply 
    would not, singly or in the aggregate, result in a Material Adverse 
    Effect.  All of the Governmental Licenses are valid and in full force 
    and effect, except where the invalidity of such Governmental Licenses or 
    the failure of such Governmental Licenses to be in full force and effect 
    would not result in a Material Adverse Effect.  None of the Company, the 
    Operating Partnership, any subsidiary or any Property Partnership has 
    received any notice of proceedings relating to the revocation or 
    modification of any such Governmental Licenses which, singly or in the 
    aggregate, if the subject of an unfavorable decision, ruling or finding, 
    would result in a Material Adverse Effect.

         (27) Registration Rights.  Except as disclosed in the Prospectus 
    and for registration rights of holders of Units, and certain holders of 
    Common Stock who acquired such shares from the Company's former Chief 
    Executive Officer, there are no persons with registration or other 
    similar rights to have any securities registered pursuant to the 
    Registration Statement or otherwise registered by the Company under the 
    1933 Act.  

                                        14

<PAGE>

         (28) Title to Property.  The Company, the Operating Partnership, 
    the subsidiaries and the Property Partnerships have good and marketable 
    title to all real property and related improvements and other assets 
    owned by the Company, the Operating Partnership, the subsidiaries and 
    the Property Partnerships, respectively, and good title to all other 
    properties owned by them, in each case, free and clear of all mortgages, 
    pledges, liens, security interests, claims, restrictions or encumbrances 
    of any kind, except (A) as otherwise stated in the Registration 
    Statement and the Prospectus or (B) those which do not, singly or in the 
    aggregate, materially affect the value of such property and do not 
    interfere with the use made and proposed to be made of such property by 
    the Company, the Operating Partnership, any subsidiary or any Property 
    Partnership, as the case may be.  All of the leases and subleases 
    material to the business of the Company, the Operating Partnership, the 
    subsidiaries and the Property Partnerships considered as one enterprise, 
    and under which the Company or any subsidiary holds properties described 
    in the Prospectus, are in full force and effect, and none of the 
    Company, the Operating Partnership, any subsidiary or any Property 
    Partnership has received any notice of any material claim of any sort 
    that has been asserted by anyone adverse to the rights of the Company, 
    the Operating Partnership, any subsidiary or any Property Partnership 
    under any of the leases or subleases mentioned above, or affecting or 
    questioning the rights of the Company, the Operating Partnership, such 
    subsidiary or such Property Partnership of the continued possession of 
    the leased or subleased premises under any such lease or sublease.  All 
    material liens, charges, encumbrances, claims, restrictions on or 
    affecting any of the Properties or Development Sites and the assets of 
    the Company, the Operating Partnership, the subsidiaries or any Property 
    Partnership which are required to be disclosed in the Registration 
    Statement and the Prospectus are disclosed therein.  No tenant under any 
    of the leases, pursuant to which the Company, the Operating Partnership, 
    any subsidiary or any Property Partnership, as lessor, leases its 
    Property, has an option or right of first refusal to purchase the 
    premises demised under such lease, the exercise of which would have a 
    Material Adverse Effect. Except as disclosed in the Registration 
    Statement or Prospectus, each Property complies with all applicable 
    codes, laws, regulations (including without limitation, building and 
    zoning codes, laws and regulations and laws relating to access to such 
    Property), except for such failure to comply that would not, 
    individually or in the aggregate, have a Material Adverse Effect.  
    Neither the Company nor the Operating Partnership has knowledge of any 
    pending or threatened condemnation proceeding, zoning change or other 
    proceeding or action that will, in any material manner, affect the size 
    of, use of, improvements on, development of, construction on or access 
    to, the Properties or the Development Sites, except such proceedings or 
    actions that would not have a Material Adverse Affect.

         (29) Insurance. The Company, the Operating Partnership, the 
    subsidiaries and/or the Property Partnerships, as applicable, have 
    insurance

                                        15

<PAGE>

    policies in effect for the Properties, Development Sites and other 
    assets of the Company, the Operating Partnership, the subsidiaries 
    and/or the Property Partnerships, as applicable, covering risks and in 
    amounts that are commercially reasonable for the assets owned by such 
    entities and that are consistent with the types and amounts of insurance 
    typically maintained by prudent owners of similar types of properties 
    and assets, and none of such entities has reason to believe that it will 
    not be able to renew its existing insurance coverage as and when such 
    coverage expires or to obtain similar coverage from similar insurers as 
    may be necessary to continue its business at a cost that would not 
    result in a Material Adverse Effect.

         (30) Investment Company Act.  None of the Company, the Operating 
    Partnership, any subsidiary or any Property Partnership is, and upon the 
    issuance and sale of the Underwritten Securities as herein contemplated 
    and the application of the net proceeds therefrom as described in the 
    Prospectus will be, an "investment company" within the meaning of the 
    Investment Company Act of 1940, as amended (the "1940 Act").

         (31) Environmental Laws.  Except as otherwise stated in the 
    Registration Statement and the Prospectus and except such violations as 
    would not, singly or in the aggregate, result in a Material Adverse 
    Effect, (A) none of the Company, the Operating Partnership, any 
    subsidiary or any Property Partnership is in violation of any federal, 
    state, local or foreign statute, law, rule, regulation, ordinance, code, 
    policy or rule of common law and any judicial or administrative 
    interpretation thereof including any judicial or administrative order, 
    consent, decree of judgment, relating to pollution or protection of 
    human health, the environment (including, without limitation, ambient 
    air, surface water, groundwater, land surface or subsurface strata) or 
    wildlife, including, without limitation, laws and regulations relating 
    to the release or threatened release of chemicals, pollutants, 
    contaminants, wastes, toxic substances, hazardous substances, petroleum 
    or petroleum products (collectively, "Hazardous Materials") or to the 
    manufacture, processing, distribution, use, treatment, storage, 
    disposal, transport or handling of Hazardous Materials (collectively, 
    "Environmental Laws"), (B) each of the Company, the Operating 
    Partnership, the subsidiaries and the Property Partnerships has all 
    permits, authorizations and approvals required under any applicable 
    Environmental Laws and each is in compliance with their requirements, 
    (C) there are no pending or, to our knowledge, threatened 
    administrative, regulatory or judicial actions, suits, demands, demand 
    letters, claims, liens, notices of noncompliance or violation, 
    investigation or proceedings pursuant to any Environmental Law against 
    the Company, the Operating Partnership, any subsidiary or any Property 
    Partnership and (D) there are no events or circumstances that might 
    reasonably be expected to form the basis of an order for clean-up or 
    remediation, or an action, suit or proceeding by any private party or 
    governmental body or agency, against

                                        16

<PAGE>

    the Company, the Operating Partnership, any subsidiary or any Property 
    Partnership or any of their assets relating to any Hazardous Materials 
    or the violation of any Environmental Laws.

         (32) Tax Returns.  Each of the Company, the Operating Partnership, 
    the subsidiaries and the Property Partnerships has filed all federal, 
    state, local and foreign income tax returns which have been required to 
    be filed (except in any case in which an extension has been granted or 
    the failure to so file would not have a Material Adverse Effect) and has 
    paid all taxes required to be paid and any other assessment, fine or 
    penalty levied against it, to the extent that any of the foregoing is 
    due and payable, except, in all cases, for any such tax, assessment, 
    fine or penalty that is being contested in good faith.

         (33) Beneficial Owners, Directors and Officers of the Company.  No 
    person who (a) in the aggregate beneficially owns 5% or more of the 
    common stock of the Company (a "Beneficial Owner"), (b) is a director of 
    the Company or (c) is an officer of the Company, is a member of the 
    NASD, a controlling stockholder of a member, or an affiliate of a 
    member, or of an underwriter or related person of a member or 
    underwriter with respect to any proposed offering under this 
    Underwriting Agreement and any applicable Terms Agreement.  No 
    beneficial owner of the Company's unregistered securities acquired 
    within the 12 months prior to the filing of the Registration Statement, 
    or any amendments thereto, or to the filing of the Prospectus, or any 
    amendment or supplement thereto, has any direct or indirect affiliation 
    or association with any NASD member.

         (34) Compliance with Cuba Act.  The Company has complied with, and 
    is and will be in compliance with, the provisions of that certain 
    Florida act relating to disclosure of doing business with Cuba, codified 
    as Section 517.075 of the Florida statutes, and the rules and 
    regulations thereunder or is exempt therefrom.

         (35) Stabilization/Manipulation.  Neither the Company, the 
    Operating Partnership nor any of their directors, officers or 
    controlling persons nor Kan Am U.S., Inc., a Delaware corporation and an 
    affiliate of the Company ("Kan AM"), has taken or will take, directly or 
    indirectly, any action resulting in the violation of Regulation M, or 
    designed to cause or result under the 1934 Act or otherwise in, or which 
    has constituted or which reasonably might be expected to constitute, the 
    stabilization or manipulation of the price of any security of the 
    Company or facilitation of the sale or resale of any such securities.

    (b)   Officers' Certificates.  Any certificate signed by any officer of 
the Company or any authorized representative of the Operating Partnership and 
delivered to any Underwriter or to counsel for the Underwriters in connection 
with the offering of the Underwritten Securities shall be deemed a 
representation and warranty by such

                                        17

<PAGE>

entity to each Underwriter as to the matters covered thereby on the date of 
such certificate and, unless subsequently amended or supplemented, at each 
Representation Date subsequent thereto.

    SECTION 2. Sale and Delivery to Underwriters; Closing.

    (a)  Underwritten Securities.  The several commitments of the 
Underwriters to purchase the Underwritten Securities pursuant to the 
applicable Terms Agreement shall be deemed to have been made on the basis of 
the representations and warranties herein contained and shall be subject to 
the terms and conditions herein set forth.

    (b)  Option Underwritten Securities.  In addition, subject to the terms 
and conditions set forth therein, the Company may grant, if so provided in 
the applicable Terms Agreement, an option to the Underwriters named therein, 
severally and not jointly, to purchase up to the number of the Option 
Underwritten Securities set forth therein at a price per Option Underwritten 
Security equal to the price per Initial Underwritten Security, less an amount 
equal to any dividends or distributions declared by the Company and paid or 
payable on the Initial Underwritten Securities but not payable on the Option 
Underwritten Securities.  Such option, if granted, will expire 30 days or 
such lesser number of days as may be specified in the applicable Terms 
Agreement, after the date of such Terms Agreement, and may be exercised in 
whole or in part from time to time only for the purpose of covering 
over-allotments which may be made in connection with the offering and 
distribution of the Initial Underwritten Securities upon notice by Merrill 
Lynch to the Company setting forth the number of Option Underwritten 
Securities as to which the several Underwriters are then exercising the 
option and the time, date and place of payment and delivery for such Option 
Underwritten Securities.  Any such time and date of payment and delivery 
(each, a "Date of Delivery") shall be determined by Merrill Lynch, but shall 
not be later than seven full business days after the exercise of said option, 
nor in any event prior to the Closing Time, unless otherwise agreed upon by 
Merrill Lynch and the Company.  If the option is exercised as to all or any 
portion of the Option Underwritten Securities, each of the Underwriters, 
severally and not jointly, will purchase that proportion of the total number 
of Option Underwritten Securities then being purchased which the number of 
Initial Underwritten Securities each such Underwriter has severally agreed to 
purchase as set forth in such Terms Agreement bears to the total number of 
Initial Underwritten Securities, subject to such adjustments as Merrill Lynch 
in its discretion shall make to eliminate any sales or purchases of a 
fractional number of Option Underwritten Securities.

    (c)  Payment.  Payment of the purchase price for, and delivery of, the 
Initial Underwritten Securities shall be made at the office of Hogan & 
Hartson L.L.P., 555 13th Street, N.W. Washington, D.C., 20004, or at such 
other place as shall be agreed upon by Merrill Lynch and the Company, at 9:00 
A.M. (Eastern time) on the third

                                        18

<PAGE>

(fourth, if the pricing occurs after 4:30 P.M. (Eastern time) on any given 
day) business day after the date of the applicable Terms Agreement (unless 
postponed in accordance with the provisions of Section 10 hereof), or such 
other time not later than ten business days after such date as shall be 
agreed upon by Merrill Lynch and the Company (such time and date of payment 
and delivery being herein called "Closing Time").  In addition, in the event 
that the Underwriters have exercised their option, if any, to purchase any or 
all of the Option Underwritten Securities, payment of the purchase price for, 
and delivery of such Option Underwritten Securities, shall be made at the 
above-mentioned offices of Rogers & Wells, or at such other place as shall be 
agreed upon by Merrill Lynch and the Company, on the relevant Date of 
Delivery as specified in the notice from Merrill Lynch to the Company.

         Payment shall be made to the Company by wire transfer of immediately 
available funds payable to the order of the Company, against delivery to 
Merrill Lynch for the respective accounts of the Underwriters of the 
Underwritten Securities to be purchased by them.  It is understood that each 
Underwriter has authorized Merrill Lynch, for its account, to accept delivery 
of, receipt for, and make payment of the purchase price for, the Underwritten 
Securities which it has severally agreed to purchase.  Merrill Lynch, 
individually and not as a representative of the Underwriters, may (but shall 
not be obligated to) make payment of the purchase price for the Underwritten 
Securities to be purchased by any Underwriter whose check has not been 
received by the Closing Time or the relevant Date of Delivery, as the case 
may be, but such payment shall not relieve such Underwriter from its 
obligations hereunder.

    (d)  Denominations; Registration.  The Underwritten Securities shall be 
in such denominations and registered in such names as Merrill Lynch may 
request in writing at least one full business day prior to the Closing Time 
or the relevant Date of Delivery, as the case may be.  The Underwritten 
Securities will be made available for examination and packaging by Merrill 
Lynch in The City of New York not later than 10:00 A.M. (Eastern time) on the 
business day prior to the Closing Time or the relevant Date of Delivery, as 
the case may be.

    SECTION 3. Covenants of the Company and the Operating Partnerships.

    Each of the Company and the Operating Partnership covenants with Merrill 
Lynch and with each Underwriter participating in the offering of Underwritten 
Securities, as follows:

    (a)  Compliance with Securities Regulations and Commission Requests.  The 
Company, subject to Section 3(b), will comply with the requirements of Rule 
430A of the 1933 Act Regulations and/or Rule 434 of the 1933 Act Regulations, 
if and as applicable, and will notify Merrill Lynch immediately, and confirm 
the notice in writing, of (i) the effectiveness of any post-effective 
amendment to the Registration

                                        19

<PAGE>

Statement or the filing of any supplement or amendment to the Prospectus, 
(ii) the receipt of any comments from the Commission, (iii) any request by 
the Commission for any amendment to the Registration Statement or any 
amendment or supplement to the Prospectus or for additional information, and 
(iv) the issuance by the Commission of any stop order suspending the 
effectiveness of the Registration Statement or of any order preventing or 
suspending the use of any preliminary prospectus, or of the suspension of the 
qualification of the Underwritten Securities for offering or sale in any 
jurisdiction, or of the initiation or threatening of any proceedings for any 
of such purposes.  The Company will promptly effect the filings necessary 
pursuant to Rule 424 and will take such steps as it deems necessary to 
ascertain promptly whether the Prospectus transmitted for filing under Rule 
424 was received for filing by the Commission and, in the event that it was 
not, it will promptly file the Prospectus.  The Company will make every 
reasonable effort to prevent the issuance of any stop order and, if any stop 
order is issued, to obtain the lifting thereof at the earliest possible 
moment.

    (b)  Filing of Amendments.  The Company and the Operating Partnership 
will give Merrill Lynch notice of their intention to file or prepare any 
amendment to the Registration Statement (including any filing under Rule 
462(b) of the 1933 Act Regulations), any Term Sheet or any amendment, 
supplement or revision to either the prospectus included in the Registration 
Statement at the time it became effective or to the Prospectus, whether 
pursuant to the 1933 Act, the 1934 Act or otherwise, will furnish Merrill 
Lynch with copies of any such documents a reasonable amount of time prior to 
such proposed filing or use, as the case may be, and will not file or use any 
such document to which Merrill Lynch or counsel for the Underwriters shall 
reasonably object.

    (c)  Delivery of Registration Statements.  The Company has furnished or 
will deliver to Merrill Lynch and counsel for the Underwriters, without 
charge, signed copies of the Registration Statement as originally filed and 
of each amendment thereto (including exhibits filed therewith or incorporated 
by reference therein and documents incorporated or deemed to be incorporated 
by reference therein) and signed copies of all consents and certificates of 
experts, and will also deliver to Merrill Lynch and counsel for the 
Underwriters, without charge, conformed copies of the Registration Statement 
as originally filed and of each amendment thereto for each of the 
Underwriters.  If applicable, the copies of the Registration Statement and 
each amendment thereto furnished to the Underwriters will be identical to the 
electronically transmitted copies thereof filed with the Commission pursuant 
to EDGAR, except to the extent permitted by Regulation S-T.

    (d)  Delivery of Prospectuses.  The Company will deliver to each 
Underwriter, without charge, as many copies of each preliminary prospectus as 
such Underwriter may reasonably request, and the Company hereby consents to 
the use of such copies for purposes permitted by the 1933 Act.  The Company 
will furnish to each

                                        20

<PAGE>

Underwriter, without charge, during the period when the Prospectus is 
required to be delivered under the 1933 Act or the 1934 Act, such number of 
copies of the Prospectus as such Underwriter may reasonably request.  If 
applicable, the Prospectus and any amendments or supplements thereto 
furnished to the Underwriters will be identical to the electronically 
transmitted copies thereof filed with the Commission pursuant to EDGAR, 
except to the extent permitted by Regulation S-T.

    (e)  Continued Compliance with Securities Laws.  The Company will comply 
with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934 
Act Regulations so as to permit the completion of the distribution of the 
Underwritten Securities as contemplated in this Underwriting Agreement and 
the applicable Terms Agreement and in the Registration Statement and the 
Prospectus. If at any time when the Prospectus is required by the 1933 Act or 
the 1934 Act to be delivered in connection with sales of the Underwritten 
Securities, any event shall occur or condition shall exist as a result of 
which it is necessary, in the reasonable opinion of counsel for the 
Underwriters or for the Company, to amend the Registration Statement in order 
that the Registration Statement will not contain an untrue statement of a 
material fact or omit to state a material fact required to be stated therein 
or necessary to make the statements therein not misleading or to amend or 
supplement the Prospectus in order that the Prospectus will not include an 
untrue statement of a material fact or omit to state a material fact 
necessary in order to make the statements therein not misleading in the light 
of the circumstances existing at the time it is delivered to a purchaser, or 
if it shall be necessary, in the reasonable opinion of such counsel, at any 
such time to amend the Registration Statement or amend or supplement the 
Prospectus in order to comply with the requirements of the 1933 Act or the 
1933 Act Regulations, the Company will promptly prepare and file with the 
Commission, subject to Section 3(b), such amendment or supplement as may be 
necessary to correct such statement or omission or to make the Registration 
Statement or the Prospectus comply with such requirements, and the Company 
will furnish to the Underwriters and counsel for the Underwriters, without 
charge, such number of copies of such amendment or supplement as the 
Underwriters may reasonably request.

    (f)  Blue Sky Qualifications.  The Company will use its best efforts, in 
cooperation with the Underwriters, to qualify the Underwritten Securities and 
any related Underlying Securities for offering and sale under the applicable 
securities laws of such states and other jurisdictions (domestic or foreign) 
as Merrill Lynch may designate and to maintain such qualifications so long as 
may be required for the distribution of the Underwritten Securities or any 
related Underlying Securities in effect for a period of not less than one 
year from the date of the applicable Terms Agreement; provided, however, that 
the Company shall not be obligated to file any general consent to service of 
process or to qualify or register as a foreign corporation or as a dealer in 
securities in any jurisdiction in which it is not so qualified or registered, 
or to subject itself to taxation in respect of doing business in any 

                                        21

<PAGE>


jurisdiction in which it is not otherwise so subject.  In each jurisdiction 
in which the Underwritten Securities or any related Underlying Securities 
have been so qualified or registered, the Company will file such statements 
and reports as may be required by the laws of such jurisdiction to continue 
such qualification in effect for so long as may be required for the 
distribution of the Underwritten Securities or any related Underlying 
Securities.

    (g)  Earnings Statement.  The Company will timely file such reports 
pursuant to the 1934 Act as are necessary in order to make generally 
available to its security holders as soon as practicable an earnings 
statement (in form complying with Rule 158 of the 1933 Act Regulations) for 
the purposes of, and to provide the benefits contemplated by, the last 
paragraph of Section 11(a) of the 1933 Act.

    (h)  Reporting Requirements.  The Company, during the period when the 
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, 
will file all documents required to be filed with the Commission pursuant to 
Section 13, 14 or 15 of the 1934 Act within the time periods required by the 
1934 Act and the 1934 Act Regulations.

    (i)  Listing.  The Company will use its best efforts to effect and 
maintain the listing of the Underwritten Securities and any related 
Underlying Securities, prior to the Closing Time, on any national securities 
exchange or quotation system if and as specified in the applicable Terms 
Agreement.

    (j)  Restriction on Sale of Securities.  Between the date of the 
applicable Terms Agreement and the Closing Time and/or such other date 
specified in such Terms Agreement, the Company, the Operating Partnership and 
any other entity or person named in the applicable Terms Agreement will not, 
without the prior written consent of Merrill Lynch, directly or indirectly, 
issue, sell, offer to sell, contract to sell, grant any option for the sale 
of, or otherwise dispose of, the securities specified in such Terms Agreement 
for a period of 90 days following the date of this Agreement, subject to any 
conditions listed therein.

    (k)  REIT Qualification.  The Company will use its best efforts to 
continue to meet the requirements to qualify as a "real estate investment 
trust" under the Code for each of its taxable years in which sales of the 
Underwritten Securities are to occur.

    (l)  Reservation of Securities.  If the applicable Terms Agreement 
specifies that any related Underlying Securities include Common Stock, the 
Company will reserve and keep available at all times, free of preemptive or 
other similar rights, a sufficient number of shares of Common Stock for the 
purpose of enabling the Company to satisfy any obligations to issue such 
Underlying Securities upon exercise of the

                                        22

<PAGE>

related Common Stock Warrants, as applicable, or upon conversion of the 
Preferred Stock, as applicable.

    (m)  Use of Proceeds.  The Company will use the net proceeds received by 
it from the sale of the Underwritten Securities in the manner specified in 
the Prospectus under "Use of Proceeds."

    (n)  Exchange Act Filings.  During the period from each Closing Time 
until five years after such Closing Time, the Company will deliver to Merrill 
Lynch, (i) promptly upon their becoming available, copies of all current, 
regular and periodic reports of the Company mailed to its stockholders or 
filed with any securities exchange or with the Commission or any governmental 
authority succeeding to any of the Commission's functions, and (ii) such 
other information concerning the Company as Merrill Lynch may reasonably 
request.


    SECTION 4. Payment of Expenses.

    (a)  Expenses.  The Company will pay all expenses incident to the 
performance of its obligations under this Underwriting Agreement each 
applicable Terms Agreement, including (i) the preparation, printing and 
filing of the Registration Statement (including financial statements and 
exhibits) as originally filed and of each amendment thereto, (ii) the 
preparation and delivery to the Underwriters of this Underwriting Agreement, 
any Terms Agreement, any Agreement among Underwriters, any Warrant Agreement 
and such other documents as may be required in connection with the offering, 
purchase, sale and delivery of the Underwritten Securities or any related 
Underlying Securities, (iii) the preparation, issuance and delivery of the 
Underwritten Securities and any related Underlying Securities, any 
certificates for the Underwritten Securities or such Underlying Securities, 
as applicable, to the Underwriters, (iv) the fees and disbursements of the 
Company's counsel, accountants and other advisors or agents (including 
transfer agents and registrars), as well as the reasonable fees and 
disbursements of any Warrant Agent, and their respective counsel, (v) the 
qualification of the Underwritten Securities and any related Underlying 
Securities under state securities and real estate syndication laws in 
accordance with the provisions of Section 3(f) hereof, including filing fees 
and the reasonable fees and disbursements of counsel for the Underwriters in 
connection therewith and in connection with the preparation and delivery of 
the Blue Sky Survey, (vi) the printing and delivery to the Underwriters of 
copies of each preliminary prospectus, any Term Sheet, and the Prospectus and 
any amendments or supplements thereto, (vii) the fees charged by nationally 
recognized statistical rating organizations for the rating of the 
Underwritten Securities and any related Underlying Securities, if applicable, 
(viii) the fees and expenses incurred with respect to the listing of the 
Underwritten Securities and any related Underlying Securities, if applicable 
on a national securities exchange, (i) the filing fees incident to, and the

                                        23

<PAGE>

reasonable fees and disbursements of counsel to the Underwriters in 
connection with, the review, if any, by the NASD of the terms of the sale of 
the Underwritten Securities and any related Underlying Securities, (x) the 
fees and expenses of any Underwriter acting in the capacity of a "qualified 
independent underwriter" (as defined in Section 2710(c)(8) of the Conduct 
Rules of the NASD), if applicable, and (xi) any transfer taxes imposed on the 
sale of the Underwritten Securities to the several Underwriters.

    (b)  Termination of Agreement.  If the applicable Terms Agreement is 
terminated by Merrill Lynch in accordance with the provisions of Section 5 or 
Section 9(b)(i) or Section 10 hereof, the Company shall reimburse the 
Underwriters for all of their out-of-pocket expenses, including the 
reasonable fees and disbursements of counsel for the Underwriters.

    SECTION 5. Conditions of Underwriters' Obligations.

    The obligations of the Underwriters to purchase and pay for the 
Underwritten Securities pursuant to the applicable Terms Agreement are 
subject to the accuracy of the representations and warranties of the Company 
and the Operating Partnership contained in Section 1 hereof or in 
certificates of any officer or authorized representative of the Company or 
the Operating Partnership delivered pursuant to the provisions hereof, to the 
performance by each of the Company and the Operating Partnership of its 
covenants and other obligations hereunder, and to the following further 
conditions:

    (a)  Effectiveness of Registration Statement.  The Registration 
Statement, including any Rule 462(b) Registration Statement, has become 
effective under the 1933 Act and no stop order suspending the effectiveness 
of the Registration Statement shall have been issued under the 1933 Act or 
proceedings therefor initiated or threatened by the Commission and any 
request on the part of the Commission for additional information shall have 
been complied with to the reasonable satisfaction of counsel to the 
Underwriters.  A prospectus containing information relating to the 
description of the Underwritten Securities and any related Underlying 
Securities, the specific method of distribution and similar matters shall 
have been filed with the Commission in accordance with Rule 424(b)(1), (2), 
(3), (4) and/or (5), as applicable (or any required post-effective amendment 
providing such information shall have been filed and declared effective in 
accordance with the requirements of Rule 430A), or, if the Company has 
elected to rely upon Rule 434 of the 1933 Act Regulations, a Term Sheet 
including the Rule 434 Information shall have been filed with the Commission 
in accordance with Rule 424(b)(7).

    (b)  Opinion of Counsel for Company.  At Closing Time, Merrill Lynch 
shall have received the favorable opinion, dated as of Closing Time, of Hogan 
& Hartson L.L.P., counsel for the Company and the Operating Partnership in 
form and substance

                                        24

<PAGE>

reasonably satisfactory to counsel for the Underwriters, together with signed 
or reproduced copies of such letter for each of the other Underwriters, if 
any, to the effect set forth in Exhibit C hereto and to such further effect 
as counsel to the Underwriters may reasonably request.

    (c)  Opinion of Counsel for Underwriters.  At Closing Time, Merrill Lynch 
shall have received the favorable opinion, dated as of Closing Time, of 
Rogers & Wells, counsel for the Underwriters, or such other counsel as may be 
designated by Merrill Lynch together with signed or reproduced copies of such 
letter for each of the other Underwriters, if any, with respect to the 
matters set forth in opinions (A) (first sentence only), (K), (N) (except for 
the last two sentences), (X) (with respect to "Description of Securities" 
only), (U), (V), and the penultimate paragraph of Exhibit C hereto.  In 
giving such opinion, such counsel may rely, as to all matters governed by the 
laws of jurisdictions other than the law of the State of New York, the 
federal law of the United States and the General Corporation Law of the State 
of Delaware, upon the opinions of counsel satisfactory to Merrill Lynch.  
Such counsel may also state that, insofar as such opinion involves factual 
matters, they have relied, to the extent they deem proper, upon certificates 
of officers or authorized representatives of the Company and the Operating 
Partnership and certificates of public officials.

    (d)  Officers' Certificate.  At Closing Time, there shall not have been, 
since the date of the applicable Terms Agreement or since the respective 
dates as of which information is given in the Prospectus, any material 
adverse change in the condition, financial or otherwise, or in the earnings, 
business affairs or business prospects of the Company, the Operating 
Partnership, the subsidiaries and the Property Partnerships considered as one 
enterprise, whether or not arising in the ordinary course of business, and 
Merrill Lynch shall have received a certificate of the President or a Vice 
President of the Company for itself and as general partner of the Operating 
Partnership and of the chief financial officer or chief accounting officer of 
the Company for itself and as general partner of the Operating Partnership, 
dated as of Closing Time, to the effect that (i) there has been no such 
material adverse change, (ii) the representations and warranties in Section 1 
are true and correct, in all material respect, with the same force and effect 
as though expressly made at and as of the Closing Time, (iii) each of the 
Company and the Operating Partnership has complied with all agreements and 
satisfied all conditions on its part to be performed or satisfied at or prior 
to the Closing Time, and (iv) no stop order suspending the effectiveness of 
the Registration Statement or any part thereof has been issued and no 
proceedings for that purpose have been initiated or threatened by the 
Commission.

    (e)  Accountant's Comfort Letter.  At the time of the execution of the 
applicable Terms Agreement, Merrill Lynch shall have received from the 
accountants who certified the financial statements included in or 
incorporated by reference into the Registration Statement or the Prospectus, 
a letter, dated such date, in form and substance reasonably satisfactory to 
Merrill Lynch and counsel to the Underwriters,

                                        25

<PAGE>

together with signed or reproduced copies of such letter for each of the 
other Underwriters, if any, containing statements and information of the type 
ordinarily included in accountants' "comfort letters" as set forth in the 
AICPA's Statement on Auditing Standards 72 to underwriters with respect to 
the financial statements and certain financial information contained in the 
Registration Statement and the Prospectus.

    (f)  Bring-down Comfort Letter.  At Closing Time, Merrill Lynch shall 
have received from the accountants who certified the financial statements 
included in or incorporated by reference into the Registration Statement or 
the Prospectus, a letter, dated as of Closing Time, to the effect that they 
reaffirm the statements made in the letter furnished pursuant to subsection 
(e) of this Section 5, except that the specified date referred to shall be a 
date not more than three business days prior to the Closing Time.

    (g)  Ratings.  At Closing Time and at any relevant Date of Delivery, the 
Underwritten Securities shall have the ratings accorded by any "nationally 
recognized statistical organization," as defined by the Commission for 
purposes of Rule 436(g)(2) of the 1933 Act Regulations, if and as specified 
in the applicable Terms Agreement, and the Company shall have delivered to 
Merrill Lynch a letter, dated as of such date, from each such rating 
organization, or other evidence reasonably satisfactory to Merrill Lynch, 
confirming that the Underwritten Securities have such ratings.  Since the 
time of execution of such Terms Agreement, there shall not have occurred a 
downgrading in the rating assigned to the Underwritten Securities or any of 
the Company's other securities by any such rating organization, and no such 
rating organization shall have publicly announced that it has under 
surveillance or review, with possible negative implications, its rating of 
the Underwritten Securities or any of the Company's other securities.

    (h)  Approval of Listing.  At Closing Time, the Underwritten Securities 
shall be listed or shall have been approved for listing, on the New York 
Stock Exchange (the "NYSE") subject only to official notice of issuance, if 
and as specified in the applicable Terms Agreement.

    (i)  No Objection.  If the Registration Statement or an offering of 
Underwritten Securities has been filed with the NASD for review, the NASD 
shall not have raised any objection with respect to the fairness and 
reasonableness of the underwriting terms and arrangements.

    (j)  Lock-up Agreements.  On the date of the applicable Terms Agreement, 
Merrill Lynch shall have received, in form and substance satisfactory to it, 
each lock-up agreement, if any, specified in such Terms Agreement as being 
required to be delivered by the persons listed therein.

                                        26





<PAGE>
         (k)  Over-Allotment Option.  In the event that the Underwriters are
granted an over-allotment option by the Company in the applicable Terms
Agreement and the Underwriters exercise their option to purchase all or any
portion of the Option Underwritten Securities, the representations and
warranties of the Company and the Operating Partnership contained herein and the
statements in any certificates furnished by the Company or the Operating
Partnership hereunder shall be true and correct as of each Date of Delivery,
and, at the relevant Date of Delivery, Merrill Lynch shall have received:

         (1)  A certificate, dated such Date of Delivery, of the President or a
    Vice President of the Company for itself and as general partner of the
    Operating Partnership and the chief financial officer or chief accounting
    officer of the Company for itself and as general partner of the Operating
    Partnership confirming that the certificate delivered at the Closing Time
    pursuant to Section 5(d) hereof remains true and correct as of such Date of
    Delivery.

         (2)  The favorable opinion of Hogan & Hartson L.L.P., counsel for the
    Company, the Operating Partnership and the subsidiaries, in form and
    substance reasonably satisfactory to counsel for the Underwriters, dated
    such Date of Delivery, relating to the Option Underwritten Securities and
    otherwise to the same effect as the opinion required by Section 5(b)
    hereof.

         (3)  The favorable opinion of Rogers & Wells, counsel for the
    Underwriters, dated such Date of Delivery, relating to the Option
    Underwritten Securities and otherwise to the same effect as the opinion
    required by Section 5(c) hereof.

         (4)  A letter from the accountants who certified the financial
    statements included in or incorporated by reference into the Registration
    Statements of the Prospectus, in form and substance reasonably satisfactory
    to Merrill Lynch and dated such Date of Delivery, substantially in the same
    form and substance as the letter furnished to Merrill Lynch pursuant to
    Section 5(f) hereof, except that the "specified date" on the letter
    furnished pursuant to this paragraph shall be a date not more than three
    business days prior to such Date of Delivery.

    (l)  Additional Documents.  At Closing Time and at each Date of Delivery,
counsel for the Underwriters shall have been furnished with such documents and
opinions (including the opinion of Hogan & Hartson L.L.P., as to the Company's
qualification as a real estate investment trust under the Internal Revenue Code
of 1986, as amended, and as to certain other tax matters, in form and substance
reasonably satisfactory to counsel for the Underwriters, dated the Closing Time)
as they may require for the purpose of enabling them to pass upon the issuance
and sale of the Underwritten Securities as herein contemplated, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the

                                     27

<PAGE>

conditions, herein contained; and all proceedings taken by the Company in 
connection with the issuance and sale of the Underwritten Securities as 
herein contemplated shall be satisfactory in form and substance to Merrill 
Lynch and counsel for the Underwriters.

    (m)  Termination of Terms Agreement. If any condition specified in this
Section 5 shall not have been fulfilled when and as required to be fulfilled,
the applicable Terms Agreement (or, with respect to the Underwriters' exercise
of any applicable over-allotment option for the purchase of Option Underwritten
Securities on a Date of Delivery after the Closing Time, the obligations of the
Underwriters to purchase the Option Underwritten Securities on such Date of
Delivery) may be terminated by Merrill Lynch by notice to the Company at any
time at or prior to the Closing Time (or such Date of Delivery, as applicable),
and such termination shall be without liability of any party to any other party
except as provided in Section 4, and except that Sections 1, 6 and 7 shall
survive any such termination and remain in full force and effect.

    SECTION 6. Indemnification.

    (a)  Indemnification of Underwriters.  The Company and the Operating 
Partnership agree, jointly and severally, to indemnify and hold harmless each 
Underwriter and each person, if any, who controls any Underwriter within the 
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as 
follows:

         (1)  against any and all loss, liability, claim, damage and expense
    whatsoever, as incurred, arising out of any untrue statement or alleged
    untrue statement of a material fact contained in the Registration Statement
    (or any amendment thereto), including the Rule 430A Information and the
    Rule 434 Information deemed to be a part thereof, if applicable, or the
    omission or alleged omission therefrom of a material fact required to be
    stated therein or necessary to make the statements therein not misleading
    or arising out of any untrue statement or alleged untrue statement of a
    material fact included in any preliminary prospectus or the Prospectus (or
    any amendment or supplement thereto), or the omission or alleged omission
    therefrom of a material fact necessary in order to make the statements
    therein, in the light of the circumstances under which they were made, not
    misleading;

         (2)  against any and all loss, liability, claim, damage and expense
    whatsoever, as incurred, to the extent of the aggregate amount paid in
    settlement of any litigation, or any investigation or proceeding by any
    governmental agency or body, commenced or threatened, or of any claim
    whatsoever based upon any such untrue statement or omission, or any such
    alleged untrue statement or omission; provided that (subject to Section
    6(d) below) any such settlement is

                                     28

<PAGE>

    effected with the written consent of the Company and the Operating 
    Partnership; and

         (3)  against any and all expense whatsoever, as incurred (including
    the fees and disbursements of counsel chosen by Merrill Lynch), reasonably
    incurred in investigating, preparing or defending against any litigation,
    or any investigation or proceeding by any governmental agency or body,
    commenced or threatened, or any claim whatsoever based upon any such untrue
    statement or omission, or any such alleged untrue statement or omission, to
    the extent that any such expense is not paid under (1) or (2) above; 

provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company or the
Operating Partnership by any Underwriter through Merrill Lynch expressly for use
in the Registration Statement (or any amendment thereto), including the 430A
Information and the Rule 434 Information deemed to be a part thereof, if
applicable, or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto).  

    (b)  Indemnification of Company, Directors and Officers.  Each Underwriter
severally agrees to indemnify and hold harmless the Company and the Operating
Partnership, each of the Company's directors, each of its officers who signed
the Registration Statement, and each person, if any, who controls the Company or
the Operating Partnership within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a) of this
Section, as incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions, made in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the Rule 434
Information deemed to be a part thereof, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company or the Operating Partnership by such Underwriter through Merrill Lynch
expressly for use in the Registration Statement (or any amendment thereto) or
such preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).

    (c)  Actions against Parties; Notification.  Each indemnified party shall 
give notice as promptly as reasonably practicable to each indemnifying party 
of any action commenced against it in respect of which indemnity may be 
sought hereunder, but failure to so notify an indemnifying party shall not 
relieve such indemnifying party from any liability hereunder to the extent it 
is not materially prejudiced as a result thereof and in any event shall not 
relieve it from any liability which it may have

                                     29

<PAGE>

otherwise than on account of this indemnity agreement.  In the case of 
parties indemnified pursuant to Section 6(a) above, counsel to the 
indemnified parties shall be selected by Merrill Lynch, and, in the case of 
parties indemnified pursuant to Section 6(b) above, counsel to the 
indemnified parties shall be selected by the Company.  An indemnifying party 
may participate at its own expense in the defense of any such action; 
provided, however, that counsel to the indemnifying party shall not (except 
with the consent of the indemnified party) also be counsel to the indemnified 
party.  In no event shall the indemnifying parties be liable for fees and 
expenses of more than one counsel (in addition to any local counsel) separate 
from their own counsel for all indemnified parties in connection with any one 
action or separate but similar or related actions in the same jurisdiction 
arising out of the same general allegations or circumstances.  No 
indemnifying party shall, without the prior written consent of the 
indemnified parties, settle or compromise or consent to the entry of any 
judgment with respect to any litigation, or any investigation or proceeding 
by any governmental agency or body, commenced or threatened, or any claim 
whatsoever in respect of which indemnification or contribution could be 
sought under this Section 6 or Section 7 hereof (whether or not the 
indemnified parties are actual or potential parties thereto), unless such 
settlement, compromise or consent (i) includes an unconditional release of 
each indemnified party from all liability arising out of such litigation, 
investigation, proceeding or claim and (ii) does not include a statement as 
to or an admission of fault, culpability or a failure to act by or on behalf 
of any indemnified party.

    (d)  Settlement without Consent if Failure to Reimburse.  If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel in accordance with the
provisions hereof, such indemnifying party agrees that it shall be liable for
any settlement of the nature contemplated by Section 6(a)(2) effected without
its written consent if (i) such settlement is entered into more than 45 days
after receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.  


                                     30

<PAGE>

    SECTION 7. Contribution.

    If the indemnification provided for in Section 6 hereof is for any reason
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, liabilities, claims, damages or expenses referred to therein,
then each indemnifying party shall contribute to the aggregate amount of such
losses, liabilities, claims, damages and expenses incurred by such indemnified
party, as incurred, (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Operating Partnership, on the
one hand, and the Underwriters, on the other hand, from the offering of the
Underwritten Securities pursuant to the applicable Terms Agreement or (ii) if
the allocation provided by clause (i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Operating Partnership, on the one hand, and of the Underwriters, on the
other hand, in connection with the statements or omissions which resulted in
such losses, liabilities, claims, damages or expenses, as well as any other
relevant equitable considerations.

    The relative benefits received by the Company and the Operating
Partnership, on the one hand, and the Underwriter, on the other hand, in
connection with the offering of the Underwritten Securities pursuant to the
applicable Terms Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of such Underwritten
Securities (before deducting expenses) received by the Company and the total
underwriting discount received by the Underwriters, in each case as set forth on
the cover of the Prospectus, or, if Rule 434 is used, the corresponding location
on the Term Sheet, bear to the aggregate initial public offering price of such
Underwritten Securities as set forth on such cover.

    The relative fault of the Company and the Operating Partnership, on the one
hand, and the Underwriters, on the other hand, shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Operating Partnership or
by the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.

    The Company, the Operating Partnership and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
7.  The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7 shall
be deemed to include

                                     31

<PAGE>

any legal or other expenses reasonably incurred by such indemnified party in 
investigating, preparing or defending against any litigation, or any 
investigation or proceeding by any governmental agency or body, commenced or 
threatened, or any claim whatsoever based upon any such untrue or alleged 
untrue statement or omission or alleged omission.

    Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Underwritten Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission.

    No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.

    For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company or the
Operating Partnership within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as the
Company.  The Underwriters' respective obligations to contribute pursuant to
this Section 7 are several in proportion to the number of Initial Underwritten
Securities set forth opposite their respective names in the applicable Terms
Agreement and not joint.

    SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. 

    All representations, warranties and agreements contained in this
Underwriting Agreement or the applicable Terms Agreement or in certificates of
officers of the Company or authorized representatives of the Operating
Partnership submitted pursuant hereto or thereto shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
any Underwriter or controlling person, or by or on behalf of the Company or the
Operating Partnership, and shall survive delivery of and payment for the
Underwritten Securities.

                                     32

<PAGE>

    SECTION 9. Termination.

    (a)  Underwriting Agreement.  This Underwriting Agreement (excluding the
applicable Terms Agreement) may be terminated for any reason at any time by the
Company or by Merrill Lynch upon the giving of 30 days' prior written notice of
such termination to the other party hereto.

    (b)  Terms Agreement.  Merrill Lynch may terminate the applicable Terms
Agreement, by notice to the Company, at any time at or prior to the Closing Time
or any relevant Date of Delivery, if (i) there has been, since the time of
execution of such Terms Agreement or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company, the Operating Partnership, the subsidiaries
and the Property Partnership considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) there has occurred any
material adverse change in the financial markets in the United States or any
outbreak of hostilities or escalation thereof or other calamity or crisis, or
any change or development involving a prospective change in national or
international political, financial, or economic conditions, in each case the
effect of which is such as to make it, in the judgment of Merrill Lynch,
impracticable to market the Underwritten Securities or to enforce contracts for
the sale of the Underwritten Securities, (iii) trading in any securities of the
Company has been suspended or limited by the Commission or the New York Stock
Exchange, or if trading generally on the New York Stock Exchange or the American
Stock Exchange or in the over-the-counter market has been suspended or limited,
or minimum or maximum prices for trading have been fixed, or maximum ranges for
prices have been required, by either of said exchanges or by such system or by
order of the Commission, the NASD or any other governmental authority, or (iv) a
banking moratorium has been declared by either Federal, New York authorities.  

    (c)  Liabilities.  If this Underwriting Agreement or the applicable Terms
Agreement is terminated pursuant to this Section 9, such termination shall be
without liability of any party to any other party except as provided in Section
4 hereof, and provided further that Sections 1, 6, 7, 8, and 13 hereof shall
survive such termination and remain in full force and effect.

    SECTION 10. Default by One or More of the Underwriters.

    If one or more of the Underwriters shall fail at the applicable Closing
Time or the relevant Date of Delivery, as the case may be, to purchase the
Underwritten Securities which it or they are obligated to purchase under the
applicable Terms Agreement (the "Defaulted Securities"), then Merrill Lynch
shall have the right, within 24 hours thereafter, to make arrangements for one
or more of the non-defaulting Underwriters, or any other underwriters, to
purchase all, but not less than all, of the Defaulted Securities in such amounts
as may be agreed upon and upon the terms herein set forth; if, however, Merrill
Lynch shall not have completed such arrangements within such 24-hour period,
then:

         (a)  if the number of Defaulted Securities does not exceed 10% of the
    number of Underwritten Securities to be purchased on such date pursuant to

                                     33

<PAGE>


    such Terms Agreement, the non-defaulting Underwriters named in such Terms
    Agreement shall be obligated, severally and not jointly, to purchase the
    full amount thereof in the proportions that their respective underwriting
    obligations under such Terms Agreement bear to the underwriting obligations
    of all non-defaulting Underwriters, or

         (b)  if the number of Defaulted Securities exceeds 10% of the number
    of Underwritten Securities to be purchased on such date pursuant to such
    Terms Agreement, such Terms Agreement (or, with respect to the
    Underwriters' exercise of any applicable over-allotment option for the
    purchase of Option Underwritten Securities on a Date of Delivery after the
    Closing Time, the obligations of the Underwriters to purchase, and the
    Company to sell, such Option Underwritten Securities on such Date of
    Delivery) shall terminate without liability on the part of any
    non-defaulting Underwriter.

    No action taken pursuant to this Section 10 shall relieve any defaulting
Underwriter from liability in respect of its default.

    In the event of any such default which does not result in (i) a termination
of the applicable Terms Agreement or (ii) in the case of a Date of Delivery
after the Closing Time, a termination of the obligations of the Underwriters and
the Company with respect to the related Option Underwritten Securities, as the
case may be, either Merrill Lynch or the Company shall have the right to
postpone the Closing Time or the relevant Date of Delivery, as the case may be,
for a period not exceeding seven days in order to effect any required changes in
the Registration Statement or the Prospectus or in any other documents or
arrangements.

    SECTION 11. Notices.

    All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given or transmitted by any standard form of
telecommunication.  Notices to the Underwriters shall be directed to Merrill
Lynch at Merrill Lynch & Co., Merrill Lynch, Pierce Fenner & Smith Incorporated,
World Financial Center, North Tower, New York, New York 10281-1201, Attention of
Michael Profenius, Managing Director; and notices to either the Company or the
Operating Partnership shall be directed to them at 1300 Wilson Blvd., Suite 400,
Arlington, Virginia 22209, Attention of Laurence C. Siegel.

                                     34

<PAGE>

    SECTION 12. Parties.

    This Underwriting Agreement and the applicable Terms Agreement shall each
inure to the benefit of and be binding upon the parties hereto and, upon
execution of such Terms Agreement, any other Underwriters and their respective
successors.  Nothing expressed or mentioned in this Underwriting Agreement or
such Terms Agreement is intended or shall be construed to give any person, firm
or corporation, other than the Underwriters and the Company and the Operating
Partnership and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Underwriting Agreement or such Terms Agreement or any provision
herein or therein contained.  This Underwriting Agreement and such Terms
Agreement and all conditions and provisions hereof and thereof are intended to
be for the sole and exclusive benefit of the parties hereto and thereto and
their respective successors, and said controlling persons and officers and
directors and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation.  No purchaser of Underwritten Securities from
any Underwriter shall be deemed to be a successor by reason merely of such
purchase.

    SECTION 13. GOVERNING LAW AND TIME.

    THIS UNDERWRITING AGREEMENT AND ANY APPLICABLE TERMS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SAID STATE.  SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME.

    SECTION 14. Effect of Headings.

    The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof. 

    SECTION 15. Counterparts.

     This Underwriting Agreement and the applicable Terms Agreements may be
executed in one or more counterparts, and if executed in more than one
counterpart, the executed counterparts shall constitute a single instrument.

                                     35

<PAGE>

    If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
Underwriting Agreement, along with all counterparts, will become a binding
agreement between Merrill Lynch, the Company and the Operating Partnership in
accordance with its terms.

                        Very truly yours,

                        THE MILLS CORPORATION, for itself and, as the general
                        partner, on behalf of The Mills Limited Partnership


                        By:  ___________________________________________
                             Name:
                             Title:




CONFIRMED AND ACCEPTED,
  as of the date first
  above written:

MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
    Incorporated


By: Merrill Lynch, Pierce, Fenner & Smith
    Incorporated

By: ________________________________________
      Name:
      Title:  Authorized Signatory



<PAGE>


                                                                      Exhibit A


                                THE MILLS CORPORATION
                               (a Delaware corporation)

                          Common Stock, Preferred Stock and
                          Warrants to Purchase Common Stock



                                   TERMS AGREEMENT


                                                             __________ __, 1997

To:      The Mills Corporation
         1300 Wilson Blvd., Suite 400
         Arlington, Virginia  22209

Ladies and Gentlemen:

         We understand that The Mills Corporation, a Delaware corporation (the
"Company"), proposes to issue and sell [      shares of its common stock, par
value $0.01 per share (the "Common Stock")] [     shares of its preferred stock,
par value $0.01 per share (the "Preferred Stock")] [     warrants (the "Common
Stock Warrants") to purchase Common Stock] ([such securities also being
hereinafter referred to as] the "Initial Underwritten Securities").  Subject to
the terms and conditions set forth or incorporated by reference herein, the
underwriters named below (the "Underwriters") offer to purchase, severally and
not jointly, the respective number of Initial Underwritten Securities set forth
below opposite their names at the purchase price set forth below, and a
proportionate share of Option Underwritten Securities (as defined in the
Underwriting Agreement referred to below) set forth below, to the extent any are
purchased.


                                          Number of [Initial]
Underwriter                               Underwritten Securities
- -----------                               -----------------------
Merrill Lynch, Pierce, Fenner & Smith
            Incorporated


Total                                  [$] 

                                     37

<PAGE>

         The Underwritten Securities shall have the following terms:

                                    [Common Stock]

Title:
Number of shares:
Number of Option Underwritten Securities:
Initial public offering price per share:  $
Purchase price per share: $
Listing requirements:
Black-out provisions:
Lock-up provisions:
Other terms and conditions:
Closing date and location:

                                  [Preferred Stock]

Title:
Rank:
Ratings:
Number of shares:
Number of Option Underwritten Securities:
Dividend rate (or formula) per share:  $
Dividend payment dates:
Stated value: $
Liquidation preference per share: $
Redemption provisions:
Sinking fund requirements:
Conversion provisions:
Voting Provisions:
Listing requirements:
Black-out provisions:
Initial public offering price per share: $    plus accumulated dividends, if
any, from
Purchase price per share: $____ plus accumulated dividends, if any, from _______
Other terms and conditions:
Closing date and location:

                               [Common Stock Warrants]


Title:
Type:
Number:

                                     38

<PAGE>


Warrant Agent:
Issuable jointly with Common Stock:  [Yes] [No]
Number of Common Stock Warrants issued with each share of Common Stock:
Date(s) from which or period(s) during which Common Stock Warrants are
exercisable:
Date(s) on which Common Stock Warrants] expire:
Exercise price(s):  $
Initial public offering price:  $
Purchase price:  $
Title of Underlying Securities:
Number of shares purchasable upon exercise of one Common Stock Warrant:
Terms of Underlying Securities:
Other terms and conditions:
Closing date and location:

    All of the provisions contained in the document attached as Annex I hereto
entitled "THE MILLS CORPORATION--Common Stock, Preferred Stock and Warrants to
Purchase Common Stock--Underwriting Agreement" are hereby incorporated by
reference in their entirety herein and shall be deemed to be a part of this
Terms Agreement to the same extent as if such provisions had been set forth in
full herein.  Terms defined in such document are used herein as therein defined.

                                     39

<PAGE>

    Please accept this offer no later than      o'clock P.M. (New York City
time) on         by signing a copy of this Terms Agreement in the space set
forth below and returning the signed copy to us.

                             Very truly yours,

                             MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED


                             By:  ________________________________
                                  Name:
                                  Title:  Authorized Signatory

    Acting on behalf of itself and the other named Underwriters.


Accepted:

THE MILLS CORPORATION


By: ___________________________
    Name:
    Title:


                                     40

<PAGE>

                                                                  Exhibit B


                              SIGNIFICANT SUBSIDIARIES

The Mills Limited Partnership

Franklin Mills Entities
    Franklin Mills Residual Limited Partnership ("FMRLP")
    Franklin Mills Associates Limited Partnership ("FMLP")

Ontario Mills Entities
    Ontario Mills Limited Partnership ("OMLP")
    Ontario Mills Residual Limited Partnership ("OMRLP")
    Ontario Mills, L.L.C. ("OMLLC")
    Ontario Mills Residual, L.L.C. ("OMRLLC")

Gurnee Mills Entities
    Gurnee Mills (MLP) Limited Partnership ("GMLP")
    Gurnee Mills L.L.C. ("GMLLC I")
    Gurnee Mills II L.L.C. ("GMLLC")

Potomac Mills Entities
    Potomac Mills Limited Partnership ("PMLP")
    Potomac Mills L.L.C. ("PMLLC")

Sawgrass Mills Entities
    Sawgrass Mills Phase II Limited Partnership ("SMLP II")
    Sawgrass Mills Phase II, L.L.C. (SMLLC II")
    WSM South Florida Corp. ("WSM")
    Sunrise Mills (MLP) Limited Partnership ("SMLP")
    Sunrise Mills L.L.C. ("SMLLC")

Grapevine Mills Entities
    Mills Services of Grapevine, Inc. ("MSGI")
    Grapevine Mills Residual Limited Partnership ("GVMRLP")
    Grapevine Mills Limited Partnership ("GVMLP")
    Grapevine Mills Residual Operating Company, L.L.C. ("GVMRLLC")
    Grapevine Mills Operating Company, L.L.C. ("GVMLLC")

Developing Property Entities 
    Arizona Mills L.L.C. ("AMLLC")
    Meadowlands Mills L.L.C. ("MMLLC") 

<PAGE>

Additional Entities
    Mills Management L.L.C. ("MMLLC")
    Management Associates Limited Partnership ("MALP")
    Mills-Kan Am Columbus/Sawgrass Limited Partnership  ("MKLP")
    Orange City Mills Limited Partnership   ("OCMLP")
    Hunt Club Road Properties Associates Limited Partnership
    Potomac Gurnee Finance Corp.
    Washington Potomac Partners Corp.
    Sawgrass Finance L.L.C.
    The Mills GP, Inc.
    MillsServices Corp.
    Premises Providers, Inc.
    Mainstreet Retail Limited Partnership


Community Center Entities
    Coopers Crossing Associates (MLP) Limited Partnership
    Coopers Crossing L.L.C.
    Fashion Center Associates of Illinois No. 1 (MLP) Limited Partnership
    Fashion Center L.L.C.
    Mount Prospect Plaza (MLP) Limited Partnership
    Mount Prospect Plaza L.L.C.
    Crosswinds Center Associates of St. Petersburg (MLP) L.P.
    Crosswinds L.L.C.
    Echo Hills Center Associates (MLP) Limited Partnership
    West Falls Church L.L.C.
    Montgomery Village Ground (MLP) Limited Partnership
    Montgomery Village Ground L.L.C.
    Montgomery Village Associates (MLP) Limited Partnership
    Montgomery Village Associates L.L.C.
    Germantown Development Associates (MLP) Limited Partnership
    Germantown Development Associates L.L.C.
    Gwinnett Marketfair Associates Limited Partnership
    Gwinnett L.L.C.
    Fashion Place Associates Limited Partnership
    Fashion Place Associates L.L.C.


<PAGE>

                                                           Exhibit C

                         FORM OF OPINION OF COMPANY'S COUNSEL
                             TO BE DELIVERED PURSUANT TO 
                                     SECTION 5(b)

         a)   The Company was incorporated, and is validly existing and in good
standing as of the applicable Closing Time, under the laws of the State of
Delaware.  The Company has the corporate power and authority under the Amended
and Restated Certificate of Incorporation of the Company (the "Certificate of
Incorporation") and the Delaware General Corporation Law (the "DGCL") to own,
lease and operate its current properties and to conduct its business as
described in the Prospectus and to enter into and perform its obligations under
the Underwriting Agreement and applicable Terms Agreement.  The Company is
authorized to transact business as a foreign corporation in the states listed on
Exhibit B to this opinion.

         (B)  The Operating Partnership is a limited partnership formed, and
validly existing and in good standing as of the applicable Closing Time, under
the laws of the State of Delaware.  The Operating Partnership has the
partnership power and authority under the Agreement of Limited Partnership, as
amended, of the Operating Partnership (the "Operating Partnership Agreement")
and the Delaware Uniform Limited Partnership Act (the "Delaware Partnership
Act") to own, lease and operate its current properties and to conduct its
business as described in the Prospectus and to enter into and perform its
obligations under the Underwriting Agreement.  The Operating Partnership is
registered as a foreign limited partnership under the laws of the states listed
on Exhibit B to this opinion.

         (C)  MillsServices was incorporated, and is validly existing and in
good standing as of the applicable Closing Time under the laws of the State of
Delaware.  MillsServices has the corporate power and authority under its
certificate of incorporation and the DGCL to own, lease and operate its current
properties and to conduct its business as described in the Prospectus. 
MillsServices is authorized to transact business as a foreign corporation in the
states listed on Exhibit B to this opinion.

         (D)  MALP is a limited partnership formed, and validly existing and in
good standing as of the applicable Closing Time under the laws of the State of
Delaware.  MALP has the partnership power and authority under its amended and
restated agreement of limited partnership and the Delaware Partnership Act to
own, lease and operate its current properties and to conduct its business as
described in the Prospectus.  MALP is registered as a foreign limited
partnership under the laws of the states listed on Exhibit B to this opinion.

                                      C-1


<PAGE>
         (E)  OMLLC, GMLLC, PMLLC, SMLLC II, SMLLC, GVMLLC, AMLLC and MMLLC
(the "LLC Subsidiaries") (i) were formed and are validly existing and in good
standing as of the applicable Closing Time, under the laws of the State of
Delaware and (ii) are authorized to transact business as a foreign limited
liability company in the states listed on Exhibit B to this opinion.

         (F)  OMLP, SMLP II, GVMLP, MKLP and OCMLP (together with GMLP, FMLP,
SMLP, and PMLP, the "Partnership Significant Subsidiaries") (i) were formed, and
are validly existing and in good standing as of the applicable Closing Time,
under the laws of the State of Delaware and (ii) each of the Partnership
Significant Subsidiaries, except GMLP, FMLP, SMLP, and PMLP, are authorized to
transact business in the states listed in Exhibit B to this opinion.

         (G)  PMLP was formed, and is validly existing and in good standing as
of the applicable Closing Time under the laws of the Commonwealth of Virginia.

         (H)  GMLP was formed, and is validly existing and in good standing as
of the applicable Closing Time under the laws of the State of Illinois.

         (I)  Each of FMLP and SMLP was formed, and is validly existing and in
good standing as of the applicable Closing Time under the laws of the District
of Columbia and is registered as a foreign limited partnership under the laws of
the states listed on Exhibit B to this opinion.

         (J)  The Operating Partnership Agreement has been duly executed and
delivered by the Company as the sole general partner of the Operating
Partnership and on behalf of the Operating Partnership, and constitutes a valid
and binding obligation of the Operating Partnership, enforceable against the
Company in accordance with its terms, except as may be limited by bankruptcy, 
insolvency, reorganization, moratorium or other laws affecting creditors' rights
(including, without limitation, the effect of statutory and other laws regarding
fraudulent conveyances, fraudulent transfers and potential transfers) and as may
be limited by the exercise of judicial discretion and the application of
principles of equity including, without limitation, requirements of good faith,
fair dealing, conscionablity or materiality (regardless of whether such
agreement is considered in a proceeding in equity or in law.)

         (K)  Each of the Underwriting Agreement and the applicable Terms
Agreement has been duly authorized, executed and delivered on behalf of the
Company, and the Underwriting Agreement has been duly authorized, executed and
delivered by the Company as the sole general partner of the Operating
Partnership and on behalf of the Operating Partnership.

                                      C-2

<PAGE>

         (L)  The execution, delivery and performance as of the applicable
Closing Time by the Company and the Operating Partnership of the Underwriting
Agreement, and by the Company of the Terms Agreement, and the consummation by
the Company and the Operating Partnership of the transactions contemplated by
the Underwriting Agreement and the Terms Agreement, and the compliance by the
Company and the Operating Partnership with their obligations thereunder do not
(i) violate the Certificate of Incorporation or the Amended and Restated Bylaws
of the Company (the "Bylaws") or the DGCL, (ii) violate the Operating
Partnership Agreement or the Delaware Partnership Act, (iii) to our knowledge,
violate any federal (other than compliance with any obligation of indemnity or
contribution under Articles 6 and 7 of the Underwriting Agreement, as to which
such counsel need express no opinion) or Delaware law, statutes, rules,
regulations, orders, judgments, writs, or decrees of any federal or Delaware
court or governmental agency or body having jurisdiction over the Company or the
Operating Partnership or their assets or (iv) breach or constitute a default
(with or without the giving of notice or the passage of time) under any
agreement or contract filed as an exhibit to the Registration Statement or the
10-K.  The foregoing opinion shall not be deemed to address any federal
securities law matters specifically covered elsewhere in the opinion letter.

         (M)  The authorized, issued and outstanding capital stock of the
Company, as of [insert date], was as set forth under the caption
"Capitalization" in the Prospectus.  All shares of Common Stock of the Company
shown as issued and outstanding under said caption are duly authorized and,
assuming the receipt of consideration therefor as provided in resolutions of the
Company's Board of Directors authorizing issuance thereof, are validly issued,
fully paid and non-assessable.  To the knowledge of such counsel, the Company
has not issued any outstanding securities convertible into or exchangeable for,
or outstanding options, warrants or other rights to purchase or to subscribe
for, any shares of capital stock or other securities of the Company, except as
described in the Prospectus and other than the possible issuance of options or
restricted stock under the Company's stock option plans.  No holder of
outstanding shares of Common Stock of the Company has any statutory preemptive
right under the DGCL or, to our knowledge, any contractual right to subscribe
for any of the Common Stock.

         (N)  [Include, if the Underwritten Securities being sold pursuant to
the applicable Terms Agreement includes Common Stock and/or Preferred Stock] The
Shares have been duly authorized by the Company for issuance and sale pursuant
to the Underwriting Agreement and the applicable Terms Agreement.  When issued
and delivered by the Company in accordance with the provisions of the
Underwriting Agreement and such Terms Agreement, the Shares will be validly
issued, fully paid and non-assessable and will not be subject to any pre-emptive
right to purchase the Shares under the DGCL.  The form of certificate evidencing
the Common Stock complies with requirements of Section 158 of the DGCL.  [The
applicable certificate of designations is in full force and effect.]

                                      C-3


<PAGE>

         (O)  [Include if the Underwritten Securities being sold pursuant to
the applicable Terms Agreement include Common Stock Warrants--]  The
Underwritten Securities have been duly authorized by the Company for issuance
and sale pursuant to the Underwriting Agreement and the applicable Terms
Agreement.  When issued and authenticated in accordance with the provisions of
the applicable Warrant Agreement, the Underwritten Securities will constitute
valid and legally binding obligations of the Company, entitled to the benefits
provided by such Warrant Agreement and enforceable against the Company in
accordance with their terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights (including,
without limitation, the effect of statutory and other laws regarding fraudulent
conveyances, fraudulent transfers and potential transfers) and as may be limited
by the exercise of judicial discretion and the application of principles of
equity including, without limitation, requirements of good faith, fair dealing,
conscionablity or materiality (regardless of whether such agreement is
considered in a proceeding in equity or in law.)

         (P)  [Include if the Underwritten Securities being sold pursuant to
the applicable Terms Agreement include Common Stock Warrants--]  The [Each]
applicable Warrant Agreement has been duly authorized, executed and delivered by
the Company and (assuming due authorization, execution and delivery thereof by
the applicable Warrant Agent) constitutes a valid and legally binding agreement
of the Company, enforceable against the Company in accordance with its terms,
except as may be limited by bankruptcy, insolvency, reorganization, moratorium
or other laws affecting creditors' rights (including, without limitation, the
effect of statutory and other laws regarding fraudulent conveyances, fraudulent
transfers and potential transfers) and as may be limited by the exercise of
judicial discretion and the application of principles of equity including,
without limitation, requirements of good faith, fair dealing, conscionablity or
materiality (regardless of whether such agreement is considered in a proceeding
in equity or in law.)

         (Q)  [Include if the Underlying Securities related to the Underwritten
Securities being sold pursuant to the applicable Terms Agreement include Common
Stock and/or Preferred Stock--]  The Underlying Securities have been duly
authorized and reserved for issuance by the Company [upon exercise of the Common
Stock Warrants] [upon conversion of the related [Preferred Stock]].  The
Underlying Securities, when issued upon such [exercise] [conversion], will be
validly issued, fully paid and non-assessable and will not be subject to
preemptive or other similar rights of any securityholder of the Company.  No
holder of the Underlying Securities is or will be subject to personal liability
by reason of being such a holder.

         (R)  The Underwritten Securities being sold pursuant to the applicable
Terms Agreement and the [each] applicable [Warrant Agreement] conform, and any
Underlying Securities, when issued and delivered in accordance with the 

                                      C-4


<PAGE>

terms of the related Underwritten Securities, will conform, in all material 
respects to the statements relating thereto contained in the Prospectus and 
are in substantially the form filed or incorporated by reference, as the case 
may be, as an exhibit to the Registration Statement.

         (S)  The issued and outstanding Units as of [insert date] was as
described under the caption "Capitalization" in the Prospectus.  All of such
Units are duly authorized and fully paid and were validly issued under the
applicable provisions of the Delaware Partnership Act.  To our knowledge, the
Operating Partnership has not issued any outstanding securities convertible into
or exchangeable for, or outstanding options, warrants or other rights to
purchase or subscribe for, any Units, except as described in the Registration
Statement and Prospectus.

         (T)  Except as otherwise stated in the Registration Statement and the
Prospectus, all of the issued and outstanding capital stock or other equity
interests, as the case may be, of each of MillsServices and the LLC Subsidiaries
(other than AMLLC, as to which no opinion no opinion need be expressed) has been
duly authorized and is validly issued, fully paid and non-assessable under the
applicable provisions of the DGCL or the Delaware Limited Liability Company Act,
as the case may be, and except as provided in Exhibit A to this opinion, to the
knowledge of such counsel, is or are owned directly or indirectly by the Company
or the Operating Partnership.  Except as otherwise stated in the Registration
Statement and the Prospectus, all of the issued and outstanding partnership
interests of each of the Partnership Significant Subsidiaries has been duly
authorized and fully paid and were validly issued.

         (U)  The Registration Statement has become effective under the 1933
Act, the required filings of the Prospectus pursuant to Rule 424(b) promulgated
pursuant to the 1933 Act have been made in the manner and within the time period
required by Rule 424(b) and, to the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement or suspending or
preventing the use of the Prospectus has been issued and no proceedings for that
purpose have been instituted or are threatened by the Commission.

         (V)  The Registration Statement and the Prospectus (except for the
financial statements and supporting schedules included or incorporated by
referenced therein, as to which no opinion need be expressed) comply as to form
in all material respects with the requirements of the 1933 Act and the
applicable rules and regulations thereunder.

         (W)  The documents incorporated by reference into the Prospectus
(other than the financial statements and supporting schedules included or
incorporated by reference therein, as to which no opinion need be expressed),
when 

                                      C-5


<PAGE>

they became effective or were filed with the Commission, as the case may be, 
complied as to form in all material respects with the requirements of the 
1934 Act and the 1934 Act Regulations.

         (X)  The information in the Prospectus under the captions "Description
of Common Stock," "Description of Preferred Stock," "Description of Common Stock
Warrants," and "Federal Income Tax Considerations," and such other information
in the Prospectus Supplement or in any Annual Report on Form 10-K, or other 1934
Act filings of the Company incorporated by reference into the Registration
Statement as may be agreed upon from time to time by the Company and Merrill
Lynch, to the extent that such information constitutes matters of law, legal
conclusions, or summaries of legal matters or of provisions of the Certificate
of Incorporation or Bylaws, has been reviewed by us, and is correct in all
material respects.  The Common Stock, Preferred Stock and/or Common Stock
Warrants conform in all material respects to the description thereof set forth
in the Prospectus under the caption "Description of Common Stock," "Description
of Preferred Stock" and "Description of Common Stock Warrants."

         (Y)  Except for the registration of the Shares under the 1933 Act and
such consents, approvals, authorizations, registrations or qualifications as may
be required under the 1934 Act and applicable state securities laws (as to which
no opinion need be expressed) in connection with the purchase and distribution
of the Shares by the Underwriters, no approval, authorization, decree, order or
consent of, or registration or filing with, the Commission or any Delaware court
or governmental agency or body is required to be obtained or made by the Company
or the Operating Partnership in connection with the execution, delivery and
performance as of the date hereof by the Company and the Operating Partnership
of the Underwriting Agreement or the Terms Agreement and the consummation of the
transactions contemplated thereby.

         (Z)  The Shares have been authorized for listing by the NYSE.

         (AA) Neither the Company nor the Operating Partnership is an
"investment company" as such term is defined in the Investment Company Act of
1940, as amended.


         The opinion expressed in Paragraph J above shall be understood to mean
only that if there is a default in performance of an obligation, (i) if a
failure to pay or other damage can be shown and (ii) if the defaulting party can
be brought into a court which will hear the case and apply the governing law,
then, subject to the availability of defenses, and to the exceptions set forth
in Paragraph J above, the court will provide a money damage (or perhaps
injunctive or specific performance) remedy.

                                      C-6


<PAGE>

         During the course of the preparation of the Registration Statement,
the Prospectus, such counsel has participated in conferences with officers and
other representatives of the Company, with representatives of the independent
public accountants of the Company and with Merrill Lynch and Merrill Lynch's
representatives.  While such counsel has not undertaken to determine
independently, and does not assume any responsibility for, the accuracy,
completeness, or fairness of the statements in the Registration Statement, or
Prospectus or any documents incorporated therein by reference, such counsel may
state on the basis of these conferences and its activities as counsel to the
Company and the Operating Partnership in connection with the Registration
Statement and the Prospectus that no facts have come to its attention which
cause it to believe that (i) the Registration Statement (including the Form
10-K), at the time it became effective, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, or that the
Prospectus, as of its date or as of the applicable Closing Time thereof,
contained or contains an untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading, (ii)
there is any action, suit, proceeding, inquiry or investigation pending or
threatened against the Company or the Operating Partnership before or by any
court or governmental body, that is required to be disclosed in the Registration
Statement or the Prospectus, other than those disclosed therein, or (iii) there
are any contracts or documents of a character required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement (including the Form 10-K) that are not described or
referred to therein or so filed; provided that in making the foregoing
statements (which shall not constitute an opinion), such counsel is not
expressing any views as to the financial statements and supporting schedules and
other financial data included or incorporated by reference in or omitted from
the Registration Statement or the Prospectus.

    In rendering such opinion, such counsel may rely as to matters of fact (but
not as to legal conclusions), to the extent they deem proper, on certificates of
responsible officers of the Company and public officials.  Such opinion shall
not state that it is to be governed or qualified by, or that it is otherwise
subject to, any treatise, written policy or other document relating to legal
opinions, including, without limitation, the Legal Opinion Accord of the ABA
Section of Business Law (1991).

                                      C-7


<PAGE>


                                                                         Annex I


            [FORM OF ACCOUNTANTS' COMFORT LETTER PURSUANT TO SECTION 5(e)]

We are independent public accountants with respect to the Operating Partnership
within the meaning of the 1933 Act and the applicable published 1933 Act
Regulations.

              (i)  in our opinion, the audited financial statements and the
    related financial statement schedules included or incorporated by reference
    in the Registration Statement and the Prospectus comply as to form in all
    material respects with the applicable accounting requirements of the 1933
    Act and the published rules and regulations thereunder;

              (ii) on the basis of procedures (but not an examination in
    accordance with generally accepted auditing standards) consisting of a
    reading of the unaudited interim [consolidated] financial statements of the
    Operating Partnership for the [three month periods ended __________, 19__,
    and __________, 19__, the three and six month periods ended __________,
    19__, and __________, 19__, and the three and nine month periods ended
    __________, 19__, and __________, 19__, included or incorporated by
    reference in the Registration Statement and the Prospectus (collectively,
    the "10-Q Financials")](1) [, a reading of the unaudited interim
    [consolidated] financial statements of the Operating Partnership for the
    _____-month periods ended __________, 19__, and __________, 19__, included
    in the Registration Statement and the Prospectus (the "_____-month
    financials")](2) [, a reading of the latest available unaudited interim
    [consolidated] financial statements of the Operating Partnership],(3) a
    reading of the minutes of all meetings of the stockholders and directors of
    the Operating Partnership [and its subsidiaries] and the Committees of the
    Operating Partnership's Board of Directors [and any subsidiary committees]
    since [day after end of last audited period], inquiries of certain
    officials of the Operating Partnership [and its subsidiaries] responsible
    for financial and accounting matters, a review of interim financial
    information in accordance with standards established by the American
    Institute of Certified Public Accountants in Statement on Auditing
    Standards

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

(1) Include the appropriate dates of the 10-Q Financials.

(2) Include if non-10-Q interim financial statements are included in the
    Registration Statement and the Prospectus.

(3) Include if the most recent unaudited financial statements are not included 
    in the Registration Statement and the Prospectus.

                                   Annex I-1

<PAGE>

    No. 71, Interim Financial Information ("SAS 71"),(4) with respect to the 
    [description of relevant periods](5) and such other inquiries and 
    procedures as may be specified in such letter, nothing came to our 
    attention that caused us to believe that:

              [(A) the 10-Q Financials incorporated by reference in the
         Registration Statement and the Prospectus do not comply as to form in
         all material respects with the applicable accounting requirements of
         the 1934 Act and the 1934 Act Regulations applicable to unaudited
         financial statements included in Form 10-Q or any material
         modifications should be made to the 10-Q Financials incorporated by
         reference in the Registration Statement and the Prospectus for them to
         be in conformity with generally accepted accounting principles;](6)

              [( ) the _____-month financials included in the Registration
         Statement and the Prospectus do not comply as to form in all material
         respects with the applicable accounting requirements of the 1933 Act
         and the 1933 Act Regulations applicable to unaudited interim financial

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

    (4)  Note that a review in accordance with Statements on Auditing Standards
         ("SAS") No. 71 is required for an accountant to give negative
         assurance on interim financial information.  A review in accordance
         with SAS No. 71 will only be performed at the request of the Company
         and the accountant's report, if any, related to that review will be
         addressed only to the Company.  Many companies have a SAS No. 71
         review performed in connection with the preparation of their 10-Q
         financial statements. See Codification of Statements on Auditing
         Standards, AU Section  722 for a description of the procedures that
         constitute such a review.  The comfort letter itself should recite
         that the review was performed and a copy of the report, if any, should
         be attached to the comfort letter.  Any report issued pursuant to SAS
         No. 71 that is mentioned in the Registration Statement should also be
         included in the Registration Statement as an exhibit.  If a review in
         accordance with SAS No. 71 has not and will not be performed by the
         accountants, they should be prepared to perform certain agreed-upon
         procedures on the interim financial information and to report their
         findings thereon in the comfort letter.  See Codification of
         Statements on Auditing Standards, AU Section  622 for a discussion of
         reports related to the accountant's performance of agreed-upon
         procedures.  Any question as to whether a review in accordance with
         SAS No. 71 will be performed by the accountants should be resolved
         early.

    (5)  The relevant periods include all interim unaudited condensed
         consolidation financial statements included or incorporated by
         reference in the Registration Statement and the Prospectus. 

    (6)  Include if the 10-Q Financials are incorporated by reference in the
         Registration Statement and the Prospectus.

                                   Annex I-2

<PAGE>

         statements included in registration statements or any material
         modifications should be made to the _____-month financials included in
         the Registration Statement and the Prospectus for them to be in
         conformity with generally accepted accounting principles;](7)

              ( )  at [____________, 19__ and at](8) a specified date not more
         than five days(9)prior to the date of the applicable Terms Agreement,
         there was any change in the __________ of the Operating Partnership
         [and its subsidiaries](10) or any decrease in the _________ of the
         Operating Partnership [and its subsidiaries] or any increase in the
         ___________ of the Operating Partnership [and its subsidiaries,] (10)
         in each case as compared with amounts shown in the latest balance 
         sheet included in the Registration Statement and the Prospectus, 
         except in each case for changes, decreases or increases that the 
         Registration Statement and the Prospectus disclose have occurred or 
         may occur; or

                   ( )  [for the period from ___________, 19__ to ___________,
              19__ and](11) for the period from _________, 19__ to a specified
              date not more than five days prior to the date of the applicable
              Terms Agreement,

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

    (7)  Include if unaudited financial statements, not just selected unaudited
         data, are included in the Registration Statement and the Prospectus.

    (8)  Include, and insert the date of most recent balance sheet of the
         Company, if those statements are more recent than the unaudited
         financial statements included in the Registration Statement and the
         Prospectus.

    (9)  According to Example A of SAS No. 72, the specified date should be
         five calendar days prior to the date of the applicable Terms
         Agreement.  However, in unusual circumstances, five business days may
         be used.

    (10) The blanks should be filled in with significant balance sheet items,
         selected by the banker and tailored to the issuer's industry in
         general and operations in particular.  While the ultimate decision of
         which items should be included rests with the banker, comfort is
         routinely requested for certain balance sheet items, including
         long-term debt, stockholders' equity, capital stock and net current
         assets.

    (11) Include, and insert dates to describe the period from the date of the
         most recent financial statements in the Registration Statement and the
         Prospectus to the date of the most recent unaudited financial
         statements of the Company, if those dates are different.  Regardless
         of whether this language is inserted or not, the period including five
         days prior to the date of the applicable Terms Agreement should run
         from the date of the last financial statement included in the
         Registration Statement and the Prospectus, not from the later one that
         is not included in the Registration Statement and the Prospectus.

                                   Annex I-3

<PAGE>

         there was any decrease in __________, ___________ or ___________,(12)
         in each case as compared with the comparable period in the preceding
         year, except in each case for any decreases that the Registration
         Statement and the Prospectus discloses have occurred or may occur;

              (iii) based upon the procedures set forth in clause (ii) above 
         and a reading of the [Selected Financial Data] included in the
         Registration Statement and the Prospectus [and a reading of the
         financial statements from which such data were derived,](13) nothing
         came to our attention that caused us to believe that the [Selected
         Financial Data] included in the Registration Statement and the
         Prospectus do not comply as to form in all material respects with the
         disclosure requirements of Item 301 of Regulation S-K of the 1933 Act
         [, that the amounts included in the [Selected Financial Data] are not
         in agreement with the corresponding amounts in the audited
         [consolidated] financial statements for the respective periods or that
         the financial statements not included in the Registration Statement
         and the Prospectus from which certain of such data were derived are
         not in conformity with generally accepted accounting principles];(14)

              (iv) we have compared the information in the Registration
         Statement and the Prospectus under selected captions with the
         disclosure requirements of Regulation S-K of the 1933 Act and on the
         basis of limited procedures specified herein.  Nothing came to our
         attention that caused us to believe that this information does not
         comply as to form in all material respects

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

    (12) The blanks should be filled in with significant income statements
         items, selected by the banker and tailored to the issuer's industry in
         general and operations in particular.  While the ultimate decision of
         which items should be included rests with the banker, comfort is
         routinely requested for certain income statement items, including net
         sales, total and per share amounts of income before extraordinary
         items and of net income.

    (13) Include only if there are selected financial data that have been
         derived from financial statements not included in the Registration
         Statement and the Prospectus.

    (14) In unusual circumstances, the accountants may report on "Selected
         Financial Data" as described in SAS No. 42, Reporting on Condensed
         Financial Statements and Selected Financial Data, and include in 
         their report in the Registration Statement and the Prospectus the 
         paragraph contemplated by SAS No. 42.9.  This situation may arise 
         only if the Selected Financial Data do not include interim period 
         data and the five-year selected data are derived entirely from 
         financial statements audited by the auditors whose report is included 
         in the Registration Statement and the Prospectus.  If the guidelines 
         set forth in SAS No. 42 are followed and the accountant's report as 
         included in the Registration Statement and the Prospectus includes 
         the additional language prescribed by SAS No. 42.9, the bracketed 
         language may be eliminated.

                                   Annex I-4

<PAGE>

         with the disclosure requirements of Items 302, 402 and 503(d),
         respectively, of Regulation S-K;

              [(v) based upon the procedures set forth in clause (ii) above, a
         reading of the unaudited financial statements of the Operating
         Partnership for [the most recent period] that have not been included
         in the Registration Statement and the Prospectus and a review of such
         financial statements in accordance with SAS 71, nothing came to our
         attention that caused us to believe that the unaudited amounts for
         __________________ for the [most recent period] do not agree with the
         amounts set forth in the unaudited consolidated financial statements
         for those periods or that such unaudited amounts were not determined
         on a basis substantially consistent with that of the corresponding
         amounts in the audited [consolidated] financial statements;](15)

              [(vi)]    we are unable to and do not express any opinion on the
    [Pro Forma Combining Statement of Operations] (the "Pro Forma Statement")
    included in the Registration Statement and the Prospectus or on the pro
    forma adjustments applied to the historical amounts included in the Pro
    Forma Statement; however, for purposes of this letter we have:

                   (A)  read the Pro Forma Statement;

                   (B)  performed [an audit] [a review in accordance with
              SAS 71] of the financial statements to which the pro forma
              adjustments were applied;

                   (C)  made inquiries of certain officials of the Operating
              Partnership who have responsibility for financial and accounting
              matters about the basis for their determination of the pro forma
              adjustments and whether the Pro Forma Statement complies as to
              form in all material respects with the applicable accounting
              requirements of Rule 11-02 of Regulation S-X; and

                   (D)  proved the arithmetic accuracy of the application of
              the pro forma adjustments to the historical amounts in the Pro
              Forma Statement; and


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

    (15) This language should be included when the Registration Statement and
         the Prospectus include earnings or other data for a period after the
         date of the latest financial statements in the Registration Statement
         and the Prospectus, but the unaudited interim financial statements
         from which the earnings or other data is derived is not included in
         the Registration Statement and the Prospectus.  The blank should be
         filled in with a description of the financial statement item(s)
         included. 

                                   Annex I-5

<PAGE>

         on the basis of such procedures and such other inquiries and
         procedures as specified herein, nothing came to our attention that
         caused us to believe that the Pro Forma Statement included in the
         Registration Statement does not comply as to form in all material
         respects with the applicable requirements of Rule 11-02 of Regulation
         S-X or that the pro forma adjustments have not been properly applied
         to the historical amounts in the compilation of those statements;(16)
         and

              [(vii)]   in addition to the procedures referred to in clause
         (ii) above, we have performed other procedures, not constituting an
         audit, with respect to certain amounts, percentages, numerical data
         and financial information appearing in the Registration Statement and
         the Prospectus, which are specified herein, and have compared certain
         of such items with, and have found such items to be in agreement with,
         the accounting and financial records of the Operating Partnership;(17)
         and

              [(viii)   in addition, we [comfort on a financial forecast that
         is included in the Registration Statement and the Prospectus.(18)]

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

    (16) If an audit or a review in accordance with SAS No. 71 has not been
         performed by the accountants with respect to the underlying historical
         financial statements, or if negative assurance on the Company's pro
         forma financial statements is not otherwise available, the accountants
         should be requested to perform certain other procedures with respect
         to such pro forma financial statements.  See Example O of SAS No. 72.

    (17) This language is intended to encompass all other financial/numerical
         information appearing in the Registration Statement and the Prospectus
         for which comfort may be given, including (but not limited to) amounts
         appearing in the Registration Statement and the Prospectus narrative
         and other summary financial data appearing in tabular form (e.g., the
         capitalization table).

    (18) Accountants' services with respect to a financial forecast may be in
         one of three forms:  an examination of the forecast, a compilation of
         the forecast or the application of agreed-upon procedures to the
         forecast.  If the accountant is to perform an examination of the
         forecast included in the Registration Statement and the Prospectus,
         delivery of the related report should be treated separately in Section
         5(f) as follows (remember to change subsequent letters accordingly):

                   (f)  At the time that the applicable Terms Agreement is
              executed by the Company, you shall have received from
              _________________ a report, dated such date, in form and
              substance satisfactory to you, together with signed or reproduced
              copies of such report for each of the other Underwriters, stating
              that, in their opinion, the forecasted financial statements for
              the [relevant period or periods] included in the Registration
              Statement and the Prospectus are presented

                                   Annex I-6

<PAGE>









- ---------------------------------------
              in conformity with guidelines for presentation of a forecast
              established by the AICPA, and that the underlying assumptions
              provide a reasonable basis for management's forecast.

         If the accountant is to perform a compilation of the forecasted
         financial statements included in the Registration Statement and the
         Prospectus, delivery of the related report should be treated
         separately in Section 5(e) as follows:

                   (f)  At the time that the applicable Terms Agreement is
              executed by the Company, you shall have received from
              _________________ a report, dated such date, in form and
              substance satisfactory to you, together with signed or reproduced
              copies of such report of each of the other Underwriters, stating
              that they have compiled the forecasted financial statements for
              the [relevant period or periods] included in the Registration
              Statement and the Prospectus in accordance with the guidelines
              established by the AICPA.

         Finally, if the accountant is to perform agreed-upon procedures on a
         forecast included in the Registration Statement and the Prospectus,
         SAS No. 72 requires that the accountant first prepare a compilation
         report with respect to the forecast and attach that report to the
         comfort letter.  The accountant may then report on specific procedures
         performed and findings obtained.

                                   Annex I-7



<PAGE>

                                                               EXHIBIT 5.1



                                    March 18, 1997





The Board of Directors
The Mills Corporation
1300 Wilson Boulevard
Suite 400
Arlington, Virginia 22209

Ladies and Gentlemen:

    We are acting as counsel to The Mills Corporation, a Delaware corporation 
(the "Company"), in connection with its registration statement on Form S-3, 
including Pre-Effective Amendment No. 1 thereto (SEC File No. 333-13363) (the 
"Registration Statement") previously declared effective by the Securities and 
Exchange Commission relating to the proposed public offering of securities of 
the Company that may be offered and sold by the Company from time to time as 
set forth in the prospectus which forms a part of the Registration Statement 
(the "Prospectus"), and as to be set forth in one or more supplements to the 
Prospectus (each, a "Prospectus Supplement").  This opinion letter is 
rendered in connection with the proposed public offering of 5,175,000 shares 
of common stock, par value $.01 per share (the "Shares"), of the Company, as 
described in a Prospectus Supplement dated March 12, 1997.  This opinion 
letter is furnished to you at your request to enable you to fulfill the 
requirements of Item 601(b)(5) of Regulation S-K, 17 C.F.R. Section  
229.601(b)(5), in connection with the Registration Statement.

   For purposes of this opinion letter, we have examined copies of the 
following documents:

   1. An executed copy of the Registration Statement.


   2. The Amended and Restated Certificate of Incorporation of the 
      Company, as certified by the Secretary of the Company on the date 
      hereof as being complete, accurate and in effect.

<PAGE>

   3. The Amended and Restated Bylaws of the Company, as certified by 
      the Secretary of the Company on the date hereof as being complete, 
      accurate and in effect.

   4. Resolutions of the Board of Directors of the Company adopted at a 
      special meeting held on February 14, 1997, and of the Pricing Committee 
      of the Board of Directors adopted on March 12, 1997, as certified by 
      the Secretary of the Company on the date hereof as being complete, 
      accurate and in effect, relating to the filing of the Registration 
      Statement and related matters.

   5. Executed copies of the Underwriting Agreement dated March 12, 
      1997, among the Company, The Mills Limited Partnership and Merrill 
      Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated (the 
      "Underwriting Agreement") and the Terms Agreement dated March 12, 1997 
      among the Company, Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & 
      Smith Incorporated, Dean Witter Reynolds Inc., Legg Mason Wood Walker, 
      Incorporated and Salomon Brothers Inc (the "Terms Agreement").

   In our examination of the aforesaid documents, we have assumed the 
genuineness of all signatures, the legal capacity of natural persons, the 
accuracy and completeness of all documents submitted to us, the authenticity 
of all original documents and the conformity to authentic original documents 
of all documents submitted to us as copies (including telecopies).  This 
opinion letter is given, and all statements herein are made, in the context 
of the foregoing. 

   This opinion letter is based as to matters of law solely on the General 
Corporation Law of the State of Delaware, as amended (the "DGCL"), and we 
express no opinion herein as to any other laws, statutes, regulations, or 
ordinances.

   Based upon, subject to and limited by the foregoing, we are of the opinion 
that, following issuance of the Shares pursuant to the terms of the 
Underwriting Agreement and receipt by the Company of the consideration for 
the Shares specified in the resolutions of the Board of Directors and the 
Pricing Committee referred to above and as set forth in the Terms Agreement, 
the Shares will be validly issued, fully paid and nonassessable under the 
DGCL.

<PAGE>

   We assume no obligation to advise you of any changes in the foregoing 
subsequent to the delivery of this opinion letter.  This opinion letter has 
been prepared solely in connection with the filing by the Company of a 
Current Report on Form 8-K on the date of this opinion letter, which Form 8-K 
will be incorporated by reference into the Registration Statement.  This 
opinion letter should not be quoted in whole or in part or otherwise be 
referred to, nor filed with or furnished to any governmental agency or other 
person or entity, without the prior written consent of this firm.

   We hereby consent to the filing of this opinion letter as Exhibit 5.1 to 
the Form 8-K and to the reference to this firm under the caption "Legal 
Matters" in the Prospectus.  In giving this consent, we do not thereby admit 
that we are an "expert" within the meaning of the Securities Act of 1933, as 
amended.

                                              Very truly yours,

                                              /s/  Hogan & Hartson L.L.P.


                                              HOGAN & HARTSON L.L.P.



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