MERIDIAN INDUSTRIAL TRUST INC, 424B5, 1998-07-17

MERIDIAN INDUSTRIAL TRUST INC
424B5, 1998-07-17
REAL ESTATE INVESTMENT TRUSTS

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<PAGE>
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED JULY 17, 1998

850,000 SHARES
[LOGO]
MERIDIAN INDUSTRIAL TRUST, INC.

COMMON STOCK
($.001 PAR VALUE)

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

Meridian Industrial Trust, Inc., a Maryland corporation, is a
self-administered and self-managed real estate operating company engaged
primarily in the business of owning, acquiring, developing, managing and leasing
income-producing warehouse/distribution and light industrial properties. The
850,000 shares of Common Stock, par value $.001 per share (the "Common Stock"),
offered hereby are being sold by the Company directly to State Farm Mutual
Automobile Insurance Company ("State Farm"), without the use of a broker,
dealer, underwriter or agent and without the payment of any underwriter
discounts, commissions or reallowances. The purchase price of $23.50 per share
of Common Stock was negotiated between the Company and State Farm effective
simultaneously upon delivery to State Farm of this Prospectus Supplement. The
last reported sale price of the Common Stock on the New York Stock Exchange on
July 16, 1998, was $23.50 per share.

The net proceeds of the offering of approximately $19.925 million will be
used by the Company to reduce outstanding borrowings under its $250 million
unsecured line of credit. One or more certificates representing the shares of
Common Stock offered hereby will be delivered to State Farm against payment
therefor in immediately available funds promptly following the date of this
Prospectus Supplement. The shares of Common Stock offered hereby have been
approved for listing on the New York Stock Exchange, subject to notice of
issuance.

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

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

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

The date of this Prospectus Supplement is July 17, 1998.
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(This page has been left blank intentionally.)

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<PAGE>
PROSPECTUS SUPPLEMENT SUMMARY

THE FOLLOWING IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED INFORMATION
AND FINANCIAL INFORMATION AND STATEMENTS, AND THE NOTES THERETO, APPEARING
ELSEWHERE IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS AND
INCORPORATED HEREIN OR THEREIN BY REFERENCE. THIS PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PROSPECTUS, INCLUDING DOCUMENTS INCORPORATED HEREIN AND THEREIN BY
REFERENCE, CONTAIN FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A
OF THE SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND SECTION 21E OF THE
SECURITIES EXCHANGE ACT OF 1934 (THE "EXCHANGE ACT"). FORWARD-LOOKING STATEMENTS
ARE INHERENTLY SUBJECT TO RISKS AND UNCERTAINTIES, MANY OF WHICH CANNOT BE
PREDICTED WITH ACCURACY AND SOME OF WHICH MIGHT NOT EVEN BE ANTICIPATED. FUTURE
EVENTS AND ACTUAL RESULTS, FINANCIAL AND OTHERWISE, MAY DIFFER MATERIALLY FROM
THE EVENTS AND RESULTS DISCUSSED IN THE FORWARD-LOOKING STATEMENTS. FACTORS THAT
MIGHT CAUSE SUCH A DIFFERENCE INCLUDE, BUT ARE NOT LIMITED TO, THE GENERAL
ECONOMIC CLIMATE, COMPETITION AND THE SUPPLY OF AND DEMAND FOR INDUSTRIAL
PROPERTIES IN THE COMPANY'S MARKETS, INTEREST RATE LEVELS, THE AVAILABILITY OF
FINANCING, POTENTIAL ENVIRONMENTAL LIABILITY AND OTHER RISKS ASSOCIATED WITH THE
OWNERSHIP, DEVELOPMENT AND ACQUISITION OF PROPERTIES, INCLUDING RISKS THAT
TENANTS WILL NOT TAKE OR REMAIN IN OCCUPANCY OR PAY RENT, OR THAT CONSTRUCTION
OR OPERATING COSTS MAY BE GREATER THAN ANTICIPATED, AND THOSE APPEARING
ELSEWHERE IN THIS PROSPECTUS SUPPLEMENT AND APPEARING IN THE COMPANY'S ANNUAL
REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1997, AS AMENDED, WHICH IS
INCORPORATED BY REFERENCE IN THE ACCOMPANYING PROSPECTUS. AS USED HEREIN, THE
TERM (I) "COMPANY" INCLUDES MERIDIAN INDUSTRIAL TRUST, INC., A MARYLAND
CORPORATION, AND ITS CONSOLIDATED SUBSIDIARIES, UNLESS THE CONTEXT INDICATES
OTHERWISE. CERTAIN ADDITIONAL TERMS CONTAINED HEREIN ARE DEFINED IN THE GLOSSARY
OF THE ACCOMPANYING PROSPECTUS.

THE COMPANY

The Company is a self-administered and self-managed real estate operating
company engaged primarily in the business of owning, acquiring, developing,
managing and leasing income-producing warehouse/distribution and light
industrial properties. The Company's strategy is to be a demand-driven,
competitively priced, nationwide provider of warehouse/distribution space. At
March 31, 1998, the Company owned and operated 202 warehouse/distribution and
light industrial properties encompassing approximately 24.7 million square feet
of leasable space that were 95% leased to a total of 531 tenants. The average
age of the Company's properties at March 31, 1998 was 10 years. In addition, the
Company had 3.8 million square feet of warehouse/distribution properties under
development at March 31, 1998. Based on the total square feet of leasable space
owned by the Company and management's knowledge of the industrial real estate
market, the Company believes it is one of the largest public owners and managers
of modern industrial space for lease in the United States.

The properties are located in significant industrial centers and
distribution hubs throughout the United States (Los Angeles Basin, Dallas,
Chicago, Columbus, Memphis, Houston, San Francisco Bay Area, Atlanta, Detroit,
Las Vegas, Phoenix, New Jersey/Pennsylvania I-95 Corridor, Nashville, Orlando,
Seattle, Miami and Indianapolis). The Company intends to increase its presence
in these markets and in other regional markets and to continue its strategy of
being a demand-driven, competitively priced, nationwide provider of industrial
space.

The Company's senior executives have an average of approximately 18 years
experience in the commercial real estate business and an average tenure of nine
and a half years with the Company and its predecessors. These senior executives'
comprehensive in-house expertise includes management of public and private
companies, operating public real estate investment trusts, acquisitions,
dispositions, development, property management, leasing, marketing, finance,
accounting and law. The executive officers include Allen J. Anderson, Chairman
and Chief Executive Officer, Milton K. Reeder, President and Chief Financial
Officer, and Dennis D. Higgs, Executive Vice President and Chief Investment
Officer. The Company also has attracted institutional investors that, as of
March 31, 1998, owned a substantial portion of the Company's outstanding stock,
including Hunt Realty Corporation ("Hunt"), USAA Real

S-3
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Estate Company ("USAA"), Ameritech Pension Trust ("Ameritech"), The State
Teachers Retirement Board of Ohio ("OTR"), and The Prudential Insurance Company
of America and certain related entities ("Prudential").

The Company's fundamental business objective is to maximize total return to
its stockholders by increasing cash flow per share and increasing the long-term
value of the properties. The Company intends to achieve this objective by
continuing to implement the operating strategies summarized below.

The Company's business strategy is responsive to the accelerated pace of
change in the location and use of distribution space. Management believes this
change is the result of global competition and technological advances which
drive companies to increase efficiencies and reduce costs. Logistics, the
science of procuring, storing and distributing goods, has redefined many of the
criteria for designing distribution space and has led to the development of the
modern warehouse. The Company defines the modern warehouse building as one that
typically has clear heights to stack goods of 24 feet or greater, deeper truck
turning radii (in excess of 130 feet), high capacity sprinkler systems and cross
docking capabilities as well as other important features that are designed to
increase the velocity of goods distribution. In addition, the rapid decline in
the cost of computer driven technology has provided many companies with improved
methods for tracking, storing and retrieving goods. As a result, there is a
growing trend among distribution space users to consolidate inventory into
large, modern warehouses located in major markets along the "path of goods
movement" (I.E., major cities at the intersection of highways, airports, rail
lines and shipping ports). Major cities along the path of goods movement are the
markets that the Company has targeted for acquisition and development
opportunities.

The Company believes that demand for modern warehouses will increase as a
result of such factors as population growth, increased industrial production,
global competition, increased capital spending and increased consumer demand.
The resulting increase in demand for this type of distribution space has not
been met by a corresponding increase in supply. Therefore, distribution space
users often seek build-to-suit transactions in which building design can be
matched with specific logistical requirements and modern distribution
technologies.

The Company's executive offices are located at 455 Market Street, 17th
Floor, San Francisco, California 94105, and its telephone number is (415)
281-3900.

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<PAGE>
THE PROPERTIES

The following table sets forth, as of March 31, 1998, certain information
regarding the Company's 202 properties. The table does not include properties
under development, acquisitions completed since March 31, 1998 or pending
acquisitions.

<TABLE>
<CAPTION>
NUMBER OF OCCUPANCY RENTABLE % OF TOTAL ANNUALIZED % OF TOTAL
MARKET PROPERTIES RATE SQUARE FEET SQUARE FEET BASE RENT (1) BASE RENT
- --------------------------- --------------- --------------- ------------- --------------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C>
LA Basin, CA............... 52 98% 5,699,785 23.0% $ 23,943,134 25.8%
Dallas, TX................. 42 92% 4,682,348 19.0% 14,073,497 15.2%
Chicago, IL................ 22 90% 2,655,142 10.7% 9,266,429 9.9%
Columbus, OH............... 6 100% 1,968,283 8.0% 5,761,142 6.2%
Memphis, TN................ 9 100% 1,762,223 7.0% 5,452,286 5.9%
Houston, TX................ 10 94% 1,134,445 4.6% 3,475,740 3.7%
SF Bay Area, CA............ 6 99% 1,124,276 4.6% 5,581,147 6.0%
Atlanta, GA................ 7 97% 1,064,591 4.3% 5,621,278 6.0%
Detroit, MI................ 13 87% 654,338 2.7% 2,832,615 3.0%
Las Vegas, NV.............. 3 88% 612,735 2.5% 2,890,662 3.1%
Phoenix, AZ................ 5 100% 587,105 2.4% 2,259,047 2.4%
New Jersey/I-95............ 10 100% 579,267 2.3% 2,327,243 2.5%
Nashville, TN.............. 3 100% 437,552 1.8% 1,402,522 1.5%
Orlando, FL................ 1 100% 242,160 1.0% 1,075,992 1.2%
Seattle, WA................ 1 69% 237,281 1.0% 980,562 1.1%
Miami, FL.................. 3 79% 219,379 0.9% 1,030,801 1.1%
Indianapolis, IN........... 1 100% 219,104 0.9% 724,428 0.8%
Other...................... 8 99% 799,142 3.3% 4,460,582 4.6%
--- --- ------------- ----- -------------- -----
Total.................... 202 95% 24,679,156 100.0% $ 93,159,107 100.0%
--- --- ------------- ----- -------------- -----
--- --- ------------- ----- -------------- -----
</TABLE>

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(1) Represents annualized monthly base rent of the leases in effect at March 31,
1998.

RECENT DEVELOPMENTS

ACQUISITIONS AND DIVESTITURES

From January 1, 1998 to May 31, 1998, the Company, either directly or
through unconsolidated subsidiaries, has acquired 21 properties for aggregate
consideration of approximately $95.8 million (13 of which were acquired since
March 31, 1998 for aggregate consideration of approximately $51.8 million).
These properties are located in California, Florida, Ohio, Nevada, Tennessee and
Texas. The properties acquired comprise approximately 2.3 million rentable
square feet. In addition, six cold storage facilities located in California,
Florida and Texas comprising approximately 632,000 square feet were acquired for
total consideration of approximately $49.2 million by Meridian Refrigerated,
Inc., an unconsolidated subsidiary in which the Company owns non-voting
participating preferred stock. In addition, the Company acquired approximately
103.0 acres of land scheduled for future development. Total investment cost
incurred for the acquisition of this land as of May 31, 1998 was $15.2 million.

From January 1, 1998 to May 31, 1998, the Company has also disposed of its
interest in five properties representing approximately 753,000 rentable square
feet, through property swaps or sales for cash, for total consideration of $20.1
million.

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<PAGE>
PROPERTIES UNDER DEVELOPMENT

At May 31, 1998, the Company had 14 warehouse/distribution properties under
development which will comprise approximately 5.2 million square feet upon
completion. The aggregate cost for the design and construction of these
development projects is estimated to be $199.0 million.

CAPITAL TRANSACTIONS

Effective on June 29, 1998, OTR converted 649,351 shares of Series B
Preferred Stock into 649,351 shares of Common Stock. As of June 30, 1998,
1,623,376 shares of Series B Preferred Stock remained outstanding.

On June 30, 1998, the Company completed a public offering of 2,000,000
shares of 8.75% Series D Cumulative Redeemable Preferred Stock, par value $.001
per share (the "Series D Preferred Stock"). The Series D Preferred Stock has an
aggregate liquidation preference of $50.0 million, plus accrued and unpaid
dividends. Dividends on the Series D Preferred Stock are cumulative from the
date of issuance and are payable in arrears at the rate of 8.75% of the
liquidation preference per annum (equivalent to $2.1875 per share per annum).

FIRST QUARTER 1998 AND YEAR-END 1997 RESULTS

The Company's total revenues for the three months ended March 31, 1998
increased to $27.0 million from total revenues of $11.9 million for the same
period in 1997. Net income allocable to the Company's common stockholders was
$9.5 million, or $0.31 per share, for the three months ended March 31, 1998,
compared to $4.1 million, or $0.30 per share for the same period in 1997. All of
the share amounts included above and mentioned below, unless otherwise stated,
refer to basic earnings per share.

The Company's total revenues for the year ended December 31, 1997 increased
to $66.2 million from $35.0 million for the same period in 1996. Net income
allocable to the Company's common stockholders was $19.9 million, or $1.12 per
share, for the year ended December 31, 1997, compared to $11.7 million, or $1.37
per share for the same period in 1996. The Company's historical results of
operations for the year ended December 31, 1996 reflect the operating activities
from February 23, 1996 to December 31, 1996. Prior to February 23, 1996, the
Company had no operations other than interest on its investments and general and
administrative expenses.

S-6
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THE OFFERING

For a more complete description of the features of the Company's stock, see
"Description of Stock" in the accompanying Prospectus.

<TABLE>
<S> <C>
COMMON STOCK OFFERED HEREBY......... 850,000 shares

COMMON STOCK TO BE OUTSTANDING AFTER
THE OFFERING...................... 31,649,933 shares(1)

DISTRIBUTION POLICY................. Currently $0.33 per share, payable quarterly.

USE OF PROCEEDS..................... The net proceeds to the Company from this offering
will be used to reduce outstanding borrowings under
the Company's $250 million unsecured line of credit
(the "Unsecured Credit Facility"). See "Use of
Proceeds."
</TABLE>

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

(1) Excludes 1,076,260 shares of Common Stock issuable upon exercise of
outstanding warrants and options to purchase shares of Common Stock that
were exercisable as of June 30, 1998. Includes 649,351 shares of Common
Stock that were issued to OTR upon the conversion of 649,351 shares of
Series B Preferred Stock into Common Stock effective June 29, 1998.

S-7
<PAGE>
SUMMARY FINANCIAL INFORMATION

The following table sets forth summary financial information for the Company
on a consolidated basis for the three months ended March 31, 1998 and 1997, and
the years ended December 31, 1997 and 1996. The information for the years ended
December 31, 1997 and 1996 was derived from the audited financial statements of
the Company for such periods.

<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED FOR THE YEAR ENDED
MARCH 31, 1998 MARCH 31, 1997 DECEMBER 31, 1997 DECEMBER 31, 1996
-------------- -------------- ----------------- -----------------
(UNAUDITED) (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
OPERATING DATA:
Total revenues.................................... $27,043 $11,852 $66,150 $35,041
Net income........................................ 10,223 4,785 22,688 14,063
Net income allocable to Common.................... 9,473 4,080 19,870 11,651
Net income per share data:
Basic........................................... $ 0.31 $ 0.30 $ 1.12 $ 1.37
Diluted (1)(2).................................. $ 0.31 $ 0.29 $ 1.09 $ 1.33
Weighted average Common Stock outstanding:
Basic........................................... 30,178 13,596 17,791 8,476
Diluted (2)..................................... 30,819 14,046 18,264 10,546
Funds from Operations (3)(4)...................... $15,193 $ 6,343 $35,067 $16,076
EBIDA (4)(5)...................................... 19,819 7,985 46,174 22,178
</TABLE>

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

(1) Computed by dividing Net income allocable to Common by Weighted average
Common Stock outstanding (Diluted). For the year ended December 31, 1996,
the Net income per share data was computed by dividing Net income by
Weighted average Common Stock outstanding (Diluted).

(2) Represents the Weighted average Common Stock outstanding plus the dilutive
effect of stock options and other potentially dilutive securities. For the
year ended December 31, 1996, the Series B Preferred Stock was deemed to be
dilutive and was thus included in the computation. Subsequent to March 31,
1998, 649,351 shares of Series B Preferred Stock were converted into 649,351
shares of Common Stock. As of June 30, 1998, 1,623,376 shares of Series B
Preferred Stock remained outstanding.

(3) In addition to cash flows and net income, management considers Funds from
Operations to be one additional measure of the performance of an equity REIT
because, together with net income and cash flows, Funds from Operations
provides investors with an additional basis to evaluate the ability of the
Company to incur and service debt and to fund acquisitions and other capital
expenditures. However, Funds from Operations does not measure whether cash
flow is sufficient to fund all of the Company's cash needs including
principal amortization, capital improvements and distributions to
stockholders. Funds from Operations also does not represent cash generated
from operating, investing or financing activities as determined in
accordance with generally accepted accounting principles ("GAAP"). Funds
from Operations should not be considered as an alternative to net income as
an indicator of the Company's operating performance or as an alternative to
cash flow as a measure of liquidity. Funds from Operations is defined by the
National Association of Real Estate Investment Trusts ("NAREIT") as net
income or loss (computed in accordance with GAAP), excluding gains or losses
from debt restructurings and divestitures of properties, plus depreciation
and amortization of real estate assets, and after adjustments for
unconsolidated partnerships and joint ventures. The Company calculates Funds
from Operations as defined by NAREIT and as interpreted in NAREIT's White
Paper (i.e., the Company does not add back amortization of deferred
financing costs and depreciation of non-rental real estate assets to net
income). In addition, other real estate companies may calculate Funds from
Operations differently than the Company.

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<PAGE>
(4) The Company realized cash flows from operating, investing and financing
activities as follows:

<TABLE>
<CAPTION>
For the Three Months Ended For the Year Ended
------------------------------- -------------------------------------
March 31, 1998 March 31, 1997 December 31, 1997 December 31, 1996
-------------- -------------- ----------------- -----------------
(Unaudited) (Unaudited)
(in thousands)
<S> <C> <C> <C> <C>
Cash flows provided by (used in):
Operating activities.............................. $ 11,277 $ 3,832 $ 37,286 $ 15,132
Investing activities.............................. (77,284) (10,856) (177,402) (80,819)
Financing activities.............................. 61,491 7,308 145,029 68,154
</TABLE>

(5) EBIDA means net income before gain (loss) on divestiture of properties,
extraordinary items, interest expense, depreciation and amortization and the
amortization of deferred financing costs. The Company believes that in
addition to cash flows and net income, EBIDA is a useful financial
performance measurement for assessing operating performance because,
together with net income and cash flows, EBIDA provides investors with an
additional basis to evaluate the ability of the Company to incur and service
debt and to fund acquisitions and other capital expenditures. Excluded from
EBIDA are financing costs such as interest, as well as depreciation and
amortization, each of which can significantly affect the Company's results
of operations and liquidity and should be considered in evaluating the
Company's operating performance. Further, EBIDA does not represent net
income or cash flows from operating, financing and investing activities as
defined by GAAP and does not necessarily indicate that cash flows will be
sufficient to fund cash needs. It should not be considered as an alternative
to net income as an indicator of the Company's operating performance or to
cash flows as a measure of liquidity.

S-9
<PAGE>
THE COMPANY

The Company's fundamental business objective is to maximize total return to
its stockholders by increasing cash flow per share and increasing the long-term
value of its properties. The Company intends to achieve this objective by
continuing to implement the operating strategies summarized below.

The Company's business strategy is responsive to the accelerated pace of
change in the location and use of distribution space. Management believes this
change is the result of global competition and technological advances which
drive companies to increase efficiencies and reduce costs. Logistics, the
science of procuring, storing and distributing goods, has redefined several of
the criteria for designing distribution space and has led to the development of
the modern warehouse. The Company defines the modern warehouse building as one
that typically has clear heights to stack goods of 24 feet or greater, deeper
truck turning radii (in excess of 130 feet), high capacity sprinkler systems and
cross docking capabilities as well as other important features that are designed
to increase the velocity of goods distribution. In addition, the rapid decline
in the cost of computer driven technology has provided many companies with
improved methods for tracking, storing and retrieving goods. As a result, there
is a growing trend among distribution space users to consolidate inventory into
large, modern warehouses located in major markets along the "path of goods
movement" (I.E., major cities at the intersection of highways, airports, rail
lines and shipping ports). Major cities along the path of goods movement are the
markets that the Company has targeted for acquisition and development
opportunities.

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<PAGE>
build-to-suit transactions in which building design can be matched with specific
logistical requirements and modern distribution technologies.

GROWTH

The Company's growth strategy is to acquire and develop industrial
properties while maximizing cash flow from its properties. The Company seeks to
make acquisitions and develop new properties to meet the needs of customers. The
Company seeks to maximize cash flow from its properties by retaining existing
tenants, releasing space at higher rates and increasing occupancy levels. As
part of this strategy, the Company will seek to build market share, to achieve
name recognition and to continue to improve its operating efficiency.
Specifically, the Company will evaluate and engage in the following activities:

ACQUISITIONS. The Company continually investigates opportunities to acquire
individual and portfolios of properties. In addition, the Company intends to
pursue acquisitions of multi-building portfolios currently owned by regional
developers seeking increased liquidity, including acquisitions through
tax-advantaged structures sometimes referred to as "down REITs." Many U.S.
companies are, for various financial and logistical reasons, seeking to sell
their distribution facilities. Also, many institutional investors own industrial
portfolios which they may seek to liquidate.

DEVELOPMENT. The Company also seeks to develop new warehouse/distribution
properties on a selective basis. The Company expects that future development
projects will be undertaken to (i) meet expansion needs of existing tenants,
(ii) meet requirements of new tenants on a build-to-suit basis, and (iii)
selectively provide inventory for lease in certain markets.

INTERNAL GROWTH. The Company seeks to capitalize on opportunities to
maximize growth in cash flow from its properties by (i) retaining existing
tenants, (ii) increasing occupancy, and (iii) releasing space at higher rates.
The occupancy rate of the portfolio at March 31, 1998 was 95%. The Company's
ability to retain existing tenants and its commitment to increasing occupancy
levels may improve property revenues by minimizing vacancy periods attributable
to leasing downtime and reducing leasing costs such as tenant improvements and
leasing commissions. Further, the Company seeks to achieve internal growth
through controlling operating expenses and renovating properties to a higher and
better use where appropriate.

PORTFOLIO MANAGEMENT

The Company's portfolio management strategy is to actively manage the
portfolio by utilizing market research to help determine which markets and
submarkets are most favorable for new acquisitions. This research is designed to
facilitate the understanding of market cycles for demand and supply. Market
cycles vary from region to region, making individual markets more or less
attractive for new acquisitions at any given time on a comparative basis. The
Company intends to emphasize new acquisitions in those markets which are, at the
time, believed to offer better risk adjusted investment returns. Based on the
same research and understanding of comparative market cycles, the Company will
sell assets that no longer meet its business objectives or when a market is
believed to be overvalued.

REDEPLOYMENT OF ASSETS. As part of its portfolio management strategy, the
Company seeks to reposition its existing portfolio by selling properties which
no longer meet its investment criteria. The Company plans to focus on the
development and management of warehouse/distribution and light industrial
properties and, accordingly, the Company intends to market and sell the two
retail properties remaining in its portfolio as market conditions warrant.

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<PAGE>
MARKETING AND LEASING

The Company's marketing and leasing strategy is to anticipate customer needs
in a manner that promotes tenant retention and maximizes the opportunity to
increase net rental revenues. The Company plans to increase its market share in
the markets in which it currently owns properties. Management believes that by
obtaining and expanding critical mass in these markets, the Company can achieve
above-average rents and occupancy levels. This opportunity arises out of an
ability to anticipate the changing needs of existing tenants who seek either to
expand or relocate their operations to other buildings owned by the Company. The
Company believes that this flexibility generally leads to greater tenant
satisfaction, higher average rents and lower cost of operations. In addition,
significant local market presence may create increased access to potential new
tenants.

The Company pursues an active leasing strategy by aggressively marketing
available space, seeking to renew existing leases at higher rents per square
foot and seeking leases that provide for the pass-through of property-related
expenses to the tenant. One component of the Company's leasing strategy is to
increase the percentage of "triple-net" leases (based on leased area) which
provide that the tenant reimburses the Company for property taxes, insurance and
maintenance costs.

The Company will continue to expand existing local marketing programs that
focus on the business and brokerage communities. Also, the Company will market
its industrial space directly to "Fortune 1000" users in multiple markets to
meet their warehouse and distribution space needs nationwide.

FINANCING

The Company's financing strategy is to minimize its cost of capital by
maintaining conservative debt levels, maintaining an investment grade credit
rating and maintaining ready access to public and private debt and equity
capital. The Company believes that the size of its portfolio and the geographic
diversity of its buildings and tenants will allow it access to the debt and
equity markets that are not generally available to smaller, less diversified
property owners. Where intermediate or long-term debt financing is employed, the
Company will generally seek to obtain fixed interest rates or enter into
agreements intended to cap the effective interest rate on floating rate debt.

The Company intends to operate with a ratio of debt-to-total market
capitalization that generally will not exceed 50%. At March 31, 1998, the
Company's debt-to-total market capitalization ratio was 30.8%. Market
capitalization is defined as the sum of total indebtedness plus the market value
of the Company's outstanding Common Stock, after giving effect to the conversion
of the Company's 2,272,727 outstanding shares of Series B Preferred Stock as of
March 31, 1998.

ORGANIZATION

The Company's organizational strategy is to maintain professional staff
which focuses on important value-added decisions. The Company implements its
growth, portfolio management, marketing and leasing, financing and
organizational strategies, together with other critical operating functions,
from its headquarters in San Francisco and its four regional offices located in
Boston, Chicago, Dallas and Los Angeles. The Boston office opened in February
1998. The Company is staffed by experienced real estate professionals and
executives who also have substantial private and public capital markets
expertise. The Company's management and real estate professionals perform the
following functions: asset management, investment analysis, acquisition due
diligence, asset acquisition and divestiture, marketing, capital markets, legal
and accounting. The Company maintains operational, financial and reporting
control in all aspects of its business. However, the Company relies on
outsourcing of certain functions where it is most cost-effective to do so and
when management believes that it can effectively oversee and monitor the quality
of services performed by outside vendors. In pursuing build-to-suit

S-12
<PAGE>
opportunities that meet its investment objectives, the Company relies on
qualified third parties to provide design and construction services.

The Company currently employs a system of independent agents or "regional
operators" to provide tenants with certain routine services on a day-to-day
basis. These services include maintenance, rent collections, oversight of
physical improvements and certain other services that may be performed by
third-party providers in a reliable and cost-effective manner.

The Company's officers and asset management staff are directly responsible
for all leasing activities, including (i) initiating renewal/expansion
negotiations with existing tenants, (ii) soliciting the brokerage community for
new lease proposals, and (iii) negotiating and signing all leases. In addition,
the Company's asset managers maintain regular contact with tenants to assure
customer service and monitor the effectiveness of individual regional operators
on day-to-day property-specific duties. The Company believes this system has
helped to maintain high tenant retention in its properties while increasing
rental rates on lease renewals.

THE INDUSTRIAL REAL ESTATE SECTOR

The Company believes that the industrial real estate sector provides an
opportunity for attractive returns on investment and that demand for industrial
space will increase as a result of such factors as population growth, increased
industrial production, increased capital spending and increased consumer demand.
In the Company's opinion, these economic factors should lead to continued strong
demand for industrial space. Although the amount of construction of industrial
space in 1996 and 1997 increased from the depressed levels of the early 1990s,
management believes that the overall decrease in the supply of industrial space
during the previous six years, coupled with increased demand for modern space
and the downward trend of vacancy rates, will result in increases in rental
rates and appreciation in the value of properties in the industrial real estate
sector.

TARGET MARKETS

GENERAL. The Company believes that as retailing and manufacturing
businesses continue to focus on higher inventory turnover rates and just-in-time
delivery of goods, transportation of products will continue to be the most
important link in the distribution chain. Faster movement of inventory is
increasing the importance of storing finished goods near the final consumer for
quick response to meet consumer demand. Further, greater reliance on
just-in-time inventory control by manufacturers requires that goods used in the
manufacturing process be stored relatively close to manufacturing centers to
ensure continuous replenishment of those goods when needed.

As the distribution chain continues to become shorter and regional economies
expand or contract, the demand for storage space will fluctuate (i.e. the demand
in specific source and destination markets will increase or decrease). However,
space located along the path of goods movement will remain in demand even as
source and destination points change over time. The Company owns warehouse/
distribution and light industrial properties in target markets that management
believes are located strategically along the path of goods movement across the
United States.

The Company's current target markets are Atlanta, Chicago, Columbus, Dallas,
Detroit, Houston, Indianapolis, Los Angeles Basin, Memphis, New
Jersey/Pennsylvania I-95 Corridor, Orlando, Phoenix, San Francisco Bay Area and
Seattle.

The Company expects that it will make further investments in target markets
in which it currently owns properties and may identify other target markets as
attractive investment opportunities become available. The Company believes that
opportunities exist in its target markets to acquire or develop additional
industrial properties at attractive returns.

S-13
<PAGE>
The Company's target markets have been selected on the basis of their
ability to play a continuing and expanding role in the country's nationwide
distribution process. The Company's properties are generally located near major
transportation facilities, including highway and freeway interchanges, airports,
shipping ports and railyards. Management believes that its portfolio of
properties is geographically well-located within competitive submarkets and is
well-received by prospective tenants and the brokerage communities in the target
markets. The current portfolio is characterized by a tenant base that is a mix
of local, regional and national companies. These companies are involved in a
variety of industries, including retailing and wholesaling, telecommunications,
aerospace, publishing, entertainment, advertising, pharmaceuticals and financial
services. Within these industries, the Company's tenants are involved in all
stages of the manufacturing, assembly and distribution processes of a diverse
set of commercial and retail products and services. The Company intends to
continue to improve this tenant base in each target market by increasing the
general credit quality of tenants and placing an emphasis on tenants that have
increasing distribution and storage space requirements.

As part of its business plan, the Company intends to evaluate additional
markets in which it may acquire and develop properties and may eliminate certain
existing target markets as conditions warrant.

NATIONAL FOCUS. The Company believes that its national focus on ownership
and management of industrial properties in selected markets has many strategic
advantages over owning and managing properties exclusively in one region of the
country. These advantages include the following:

- Enabling the Company to maintain and improve its geographic
diversification.

- Permitting the Company to lease space to a tenant in more than one market.

- Exposing the Company to direct build-to-suit transactions with major
national tenants in multiple markets.

- Providing the Company with the ability to respond to acquisition
opportunities in multiple markets throughout the country.

- Providing the Company with the opportunity to enhance or create critical
mass in the largest and most diverse industrial markets.

- Affording the Company growth opportunities in markets of institutional
investment quality, thus protecting property values and providing for a
reduced cost of capital.

- Allowing the Company to establish a Meridian Industrial Trust trade name
recognized by industrial space users throughout the country.

S-14
<PAGE>
USE OF PROCEEDS

The net proceeds to the Company from the sale of the shares of Common Stock
offered hereby are expected to be approximately $19.925 million, after deducting
estimated expenses of $50,000 payable by the Company.

The Company intends to use the net proceeds of the Offering to reduce
borrowings under its Unsecured Credit Facility. As of June 30, 1998, the Company
had total outstanding borrowings under the Unsecured Credit Facility of $145.8
million, which amounts have been incurred to fund development and acquisition
activities.

The borrowings under the Unsecured Credit Facility bear interest at floating
rates based on LIBOR or the prime rate, and the weighted average rate on such
borrowings as of March 31, 1998, was 6.99% per annum. The Unsecured Credit
Facility matures on April 3, 2000.

PRICE RANGE OF COMMON STOCK AND DISTRIBUTION POLICY

The Company's Common Stock has been listed on the NYSE since February 26,
1996, under the symbol "MDN." On July 16, 1998, the last reported sales price
per share of Common Stock on the NYSE was $23.50. There were approximately
15,800 holders of record of the Company's Common Stock at July 16, 1998. The
following table sets forth the high and low last reported closing sales prices
per share of the Common Stock on the NYSE since it has been listed.
<TABLE>
<CAPTION>
HIGH LOW
-------- --------
<S> <C> <C>
YEAR ENDED DECEMBER 31, 1996:
February 26, 1996 through March 31, 1996.................. $ 16.625 $ 15.125
Second Quarter............................................ $ 18.375 $ 15.875
Third Quarter............................................. $ 18.125 $ 17.125
Fourth Quarter............................................ $ 21.750 $ 17.125

HIGH LOW
-------- --------
<S> <C> <C>
YEAR ENDED DECEMBER 31, 1997:
First Quarter............................................. $ 24.125 $ 20.875
Second Quarter............................................ $ 23.625 $ 20.500
Third Quarter............................................. $ 25.625 $ 22.188
Fourth Quarter............................................ $ 26.188 $ 21.875
<CAPTION>

HIGH LOW
-------- --------
<S> <C> <C>
YEAR ENDING DECEMBER 31, 1998:
First Quarter............................................. $ 26.625 $ 23.875
Second Quarter............................................ $ 24.000 $ 21.313
Third Quarter (through July 16)........................... $ 24.000 $ 22.938
</TABLE>

The Company declared and paid quarterly per share distributions equivalent
to $0.29 to holders of record of the Common Stock for the quarterly dividend
periods from February 23, 1996 (the date operations commenced) through December
31, 1997, and $0.33 per quarter thereafter. The Company currently expects to
continue to declare and pay regular quarterly distributions of $0.33 per share
to holders of its Common Stock, which on an annualized basis are equivalent to
an annual distribution of $1.32 per share. In addition, the terms of the
outstanding shares of Series B Preferred Stock provide for cumulative dividends
at an initial per share rate of at least $0.31 per quarter or $1.24 per year for
the first eight dividend periods after issuance. The Company declared and paid
quarterly per share distributions to the holders of record of the Series B
Preferred Stock equivalent to $0.31 for the quarterly dividend periods from
February 23, 1996 (the date of completion of the Preferred Stock Private
Placement)

S-15
<PAGE>
through December 31, 1997, and $0.33 per quarter thereafter. Future
distributions by the Company to holders of its Common Stock will be at the
discretion of the Board, and there can be no assurance that any such
distributions will be made by the Company.

Distributions by the Company to the extent of its current and accumulated
earnings and profits generally will be taxable to stockholders as ordinary
dividend income for federal income tax purposes. Distributions in excess of
current and accumulated earnings and profits will be treated as a non-taxable
reduction of the stockholder's basis in its shares of Common Stock to the extent
thereof, and thereafter as taxable gain. Distributions that are treated as a
reduction in the stockholder's basis in its shares of Common Stock will have the
effect of deferring taxation until the sale of the stockholder's shares.

On June 30, 1998, the Company completed a public offering of 2,000,000
shares of Series D Preferred Stock. The Series D Preferred Stock has an
aggregate liquidation preference of $50.0 million, plus accrued and unpaid
dividends. Dividends on the Series D Preferred Stock are cumulative from the
date of issuance and are payable quarterly in arrears at the rate of 8.75% of
the liquidation preference per annum (equivalent to $2.1875 per share per
annum).

S-16
<PAGE>
CAPITALIZATION

The following table sets forth the capitalization of the Company as of March
31, 1998, on a pro forma basis to give effect to the issuance of 2,000,000
shares of Series D Preferred Stock, additional borrowings under the Unsecured
Credit Facility, the assumption of certain mortgage notes since March 31, 1998,
the conversion of 649,351 shares of the Company's Series B Preferred Stock into
649,351 shares of Common Stock, and this offering and the application of the net
proceeds therefrom as described in "Use of Proceeds."

<TABLE>
<CAPTION>
AS OF MARCH 31, 1998
-------------------------
ACTUAL PRO FORMA
----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
(IN THOUSANDS)
Debt:
Unsecured Notes, net (1)............................ $160,108 $ 160,108
Mortgage Loans, net (2)............................. 93,956 97,855
Unsecured Credit Facility (3)....................... 91,800 125,875
----------- -----------
Total Debt...................................... 345,864 383,838
----------- -----------
Stockholders' Equity:
Authorized shares--175,000,000 shares of Common
Stock and 25,000,000 shares of Preferred Stock
authorized, each with a par value of $.001;
30,166,984 shares of Common Stock issued and
outstanding at March 31, 1998; 2,272,727 shares
of Series B Preferred Stock with a liquidation
preference of $35.0 million issued and
outstanding at March 31, 1998. On a pro forma
basis, 31,649,933 shares of Common Stock;
1,623,376 shares of Series B Preferred Stock
with a liquidation preference of $25.0 million;
and 2,000,000 shares of Series D Preferred Stock
with a liquidation preference of $50.0 million
issued and outstanding (4)...................... 32 35
Additional Paid-in Capital........................ 574,589 642,636
Distributions in Excess of Income................. (5,223) (5,223)
----------- -----------
Total Stockholders' Equity.......................... 569,398 637,448
----------- -----------
Total Capitalization................................ $915,262 $1,021,286
----------- -----------
----------- -----------
</TABLE>

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

(1) Includes unamortized debt premium of $108,000 as of March 31, 1998.

(2) Includes unamortized debt premium of $83,000 as of March 31, 1998. The
Company acquired four properties in Texas in May 1998 and assumed mortgage
notes payable totaling $3.9 million.

(3) Subsequent to March 31, 1998, the Company made additional borrowings under
the Unsecured Credit Facility of $102.1 million resulting in total
outstanding borrowings of $193.9 million. These borrowings were used to fund
property acquisitions and construction draws on its development projects. On
June 30, 1998, the Company completed a public offering of 2,000,000 shares
of Series D Preferred Stock resulting in net cash proceeds of $48.1 million,
after deducting underwriting discounts and commissions and expenses
associated with the offering. The net cash proceeds were used to repay
borrowings under its Unsecured Credit Facility.

(4) Excludes 1,076,260 shares of Common Stock issuable upon exercise of
outstanding warrants and options to purchase shares of Common Stock that
were exercisable as of June 30, 1998.

S-17
<PAGE>
SELECTED FINANCIAL AND OTHER INFORMATION

The following table summarizes certain selected financial and operating
information for the Company as of and for the three months ended March 31, 1998
and 1997, and the years ended December 31, 1997 and 1996. This table should be
read in conjunction with all the financial statements and notes thereto
incorporated by reference in this Prospectus Supplement and the accompanying
Prospectus. The information for the years ended December 31, 1997 and 1996 was
derived from the audited financial statements of the Company for such periods.

<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED FOR THE YEAR ENDED
------------------------------- -------------------------------------
MARCH 31, 1998 MARCH 31, 1997 DECEMBER 31, 1997 DECEMBER 31, 1996
-------------- -------------- ----------------- -----------------
(UNAUDITED) (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA AND PROPERTY DATA)
<S> <C> <C> <C> <C>
OPERATING DATA:
Rentals from real estate investments.............. $ 26,260 $ 11,695 $ 63,491 $ 34,465
Total revenues.................................... 27,043 11,852 66,150 35,041
Property taxes and operating expense.............. 5,308 2,715 13,734 8,590
Depreciation and amortization expense............. 5,003 2,004 11,194 4,952
Interest expense.................................. 4,592 1,624 11,022 6,065
General and administrative expense................ 1,889 1,152 6,212 4,273
Interest and other income......................... 101 157 2,014 576
Income from unconsolidated joint venture and
subsidiaries.................................... 682 -- 645 --
Net income........................................ 10,223 4,785 22,688 14,063
Net income allocable to Common.................... 9,473 4,080 19,870 11,651
Net income per share data:
Basic........................................... $ 0.31 $ 0.30 $ 1.12 $ 1.37
Diluted (1)(2).................................. $ 0.31 $ 0.29 $ 1.09 $ 1.33
Weighted average Common Stock outstanding:
Basic........................................... 30,178 13,596 17,791 8,476
Diluted (2)..................................... 30,819 14,046 18,264 10,546
BALANCE SHEET DATA (3):
Investment in real estate assets before
depreciation.................................... $ 923,955 $ 338,917 $ 844,739 $ 326,349
Total investments in real estate assets, net...... 904,551 332,686 830,007 321,984
Total assets...................................... 961,174 345,084 863,512 333,063
Unsecured notes, net.............................. 160,108 -- 160,109 --
Mortgage loans, net............................... 93,956 66,094 76,597 66,094
Unsecured credit facility......................... 91,800 23,500 20,500 11,500
Stockholders' equity.............................. 569,398 243,627 570,139 243,513
OTHER DATA:
Cash flows provided by (used in):
Operating activities............................ $ 11,277 $ 3,832 $ 37,286 $ 15,132
Investing activities............................ (77,284) (10,856) (177,402) (80,819)
Financing activities............................ 61,491 7,308 145,029 68,154
Funds from Operations (4)......................... 15,193 6,343 35,067 16,076
EBIDA (5)......................................... 19,819 7,985 46,174 22,178
Total rentable square feet of operating properties
(3)............................................. 24,679,156 10,766,476 24,086,139 10,823,571
Number of operating properties (3)................ 202 79 195 80
</TABLE>

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

S-18
<PAGE>
(2) Represents the Weighted average Common Stock outstanding plus the dilutive
effect of stock options and other potentially dilutive securities. For the
year ended December 31, 1996, the Series B Preferred Stock was deemed to be
dilutive and was thus included in the computation. Subsequent to March 31,
1998, 649,351 shares of Series B Preferred Stock were converted into 649,351
shares of Common Stock. As of June 30, 1998, 1,623,376 shares of Series B
Preferred Stock remained outstanding.

(3) As of the end of the period.

(4) In addition to cash flows and net income, management considers Funds from
Operations to be one additional measure of the performance of an equity REIT
because, together with net income and cash flows, Funds from Operations
provides investors with an additional basis to evaluate the ability of the
Company to incur and service debt and to fund acquisitions and other capital
expenditures. However, Funds from Operations does not measure whether cash
flow is sufficient to fund all of the Company's cash needs including
principal amortization, capital improvements and distributions to
stockholders. Funds from Operations also does not represent cash generated
from operating, investing or financing activities as determined in
accordance with GAAP. Funds from Operations should not be considered as an
alternative to net income as an indicator of the Company's operating
performance or as an alternative to cash flow as a measure of liquidity.
Funds from Operations is defined by NAREIT as net income or loss (computed
in accordance with GAAP), excluding gains or losses from debt restructurings
and divestitures of properties, plus depreciation and amortization of real
estate assets, and after adjustments for unconsolidated partnerships and
joint ventures. The Company calculates Funds from Operations as defined by
NAREIT and as interpreted in NAREIT's White Paper (i.e., the Company does
not add back amortization of deferred financing costs and depreciation of
non-rental real estate assets to net income). In addition, other real estate
companies may calculate Funds from Operations differently than the Company.

S-19
<PAGE>
BUSINESS AND PROPERTIES

THE PROPERTIES

<TABLE>
<CAPTION>
ANNUALIZED
NUMBER OF OCCUPANCY RENTABLE % OF TOTAL BASE RENT % OF TOTAL
MARKET PROPERTIES RATE SQUARE FEET SQUARE FEET (1) BASE RENT
- ---------------------------------------- --------- --------- ----------- ----------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
LA Basin, CA............................ 52 98% 5,699,785 23.0% $ 23,943,134 25.8%
Dallas, TX.............................. 42 92% 4,682,348 19.0% 14,073,497 15.2%
Chicago, IL............................. 22 90% 2,655,142 10.7% 9,266,429 9.9%
Columbus, OH............................ 6 100% 1,968,283 8.0% 5,761,142 6.2%
Memphis, TN............................. 9 100% 1,762,223 7.0% 5,452,286 5.9%
Houston, TX............................. 10 94% 1,134,445 4.6% 3,475,740 3.7%
SF Bay Area, CA......................... 6 99% 1,124,276 4.6% 5,581,147 6.0%
Atlanta, GA............................. 7 97% 1,064,591 4.3% 5,621,278 6.0%
Detroit, MI............................. 13 87% 654,338 2.7% 2,832,615 3.0%
Las Vegas, NV........................... 3 88% 612,735 2.5% 2,890,662 3.1%
Phoenix, AZ............................. 5 100% 587,105 2.4% 2,259,047 2.4%
New Jersey/I-95......................... 10 100% 579,267 2.3% 2,327,243 2.5%
Nashville, TN........................... 3 100% 437,552 1.8% 1,402,522 1.5%
Orlando, FL............................. 1 100% 242,160 1.0% 1,075,992 1.2%
Seattle, WA............................. 1 69% 237,281 1.0% 980,562 1.1%
Miami, FL............................... 3 79% 219,379 0.9% 1,030,801 1.1%
Indianapolis, IN........................ 1 100% 219,104 0.9% 724,428 0.8%
Other................................... 8 99% 799,142 3.3% 4,460,582 4.6%
--- --- ----------- ----- ------------ -----
Total................................. 202 95% 24,679,156 100.0% $ 93,159,107 100.0%
--- --- ----------- ----- ------------ -----
--- --- ----------- ----- ------------ -----
</TABLE>

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

(1) Represents annualized monthly base rent of the leases in effect at March 31,
1998.

PROPERTY OCCUPANCY

The average occupancy rate of the Company's operating properties for the
three months ended March 31, 1998 and for the years ended December 31, 1997 and
1996 was 96%, 97% and 96%, respectively.

RECENT ACQUISITIONS

From January 1, 1998 to May 31, 1998, the Company, either directly or
through unconsolidated subsidiaries, has acquired 21 properties for aggregate
consideration of approximately $95.8 million (13 of which were acquired since
March 31, 1998 for aggregate consideration of approximately $51.8 million). The
properties acquired comprise approximately 2.3 million rentable square feet. In
addition, six cold storage facilities located in California, Florida and Texas
comprising approximately 632,000 square feet were acquired for total
consideration of approximately $49.2 million by Meridian Refrigerated, Inc., an
unconsolidated subsidiary in which the Company owns non-voting participating
preferred stock. In addition, the Company acquired approximately 103.0 acres of
land scheduled for future development. Total investment cost incurred for the
acquisition of this land as of May 31, 1998 was $15.2 million.

S-20
<PAGE>
ACQUISITIONS COMPLETED BETWEEN JANUARY 1, 1998 AND MAY 31, 1998
(BY MARKET)

<TABLE>
<CAPTION>
NUMBER OF RENTABLE OCCUPANCY INVESTMENT
MARKET PROPERTIES SQUARE FEET RATE (1) COST (2)
- ---------------------------------------- --------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Columbus, OH............................ 1 84,250 100% $ 2,797,855
Dallas, TX.............................. 5 420,695 90% 21,425,975
LA Basin, CA............................ 6 547,762 96% 25,673,579
Las Vegas, NV........................... 3 612,735 88% 32,805,258
Memphis, TN............................. 5 467,130 87% 8,326,572
Orlando, FL............................. 1 120,000 100% 4,791,368
--
----------- --- -----------
Total................................. 21 2,252,572 92% $95,820,607
--
--
----------- --- -----------
----------- --- -----------
</TABLE>

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

(1) As of the date of acquisition.

(2) Investment cost includes all costs incurred to date for the property
acquisition.

RECENT DIVESTITURES

From January 1, 1998 to May 31, 1998, the Company has disposed of its
interest in five properties representing approximately 753,000 rentable square
feet, through property swaps or sales for cash, for total consideration of $20.1
million.

DIVESTITURES COMPLETED BETWEEN JANUARY 1, 1998 AND MAY 31, 1998
(BY MARKET)

<TABLE>
<CAPTION>
NUMBER OF RENTABLE
MARKET PROPERTIES SQUARE FEET SALES PRICE
- ------------------------------------------ ---------- ----------- -----------
<S> <C> <C> <C>
Memphis, TN............................... 1 181,064 $ 1,880,000
Nashville, TN............................. 3 437,552 7,976,572
San Carlos, CA............................ 1 134,352 10,200,000
-
----------- -----------
Total................................... 5 752,968 $20,056,572
-
-
----------- -----------
----------- -----------
</TABLE>

PROPERTIES UNDER DEVELOPMENT

S-21
<PAGE>
The following table sets forth certain information about properties under
development as of May 31, 1998:

<TABLE>
<CAPTION>
ESTIMATED ESTIMATED ESTIMATED
RENTABLE DATE OF DATE OF DEVELOPMENT
PROPERTY NAME MARKET SQUARE FEET COMPLETION STABILIZATION (1) COST
- ---------------------------------------- --------------- ----------- ---------- ----------------- ------------
<S> <C> <C> <C> <C> <C>
2235 Cedar Road......................... Atlanta, GA 249,600 9/98 5/99 $ 6,871,508
Lever Atlanta........................... Atlanta, GA 600,000 11/98 11/98 22,040,000
Carrowinds Boulevard.................... Charlotte, NC 558,900 7/98 9/98 21,600,000
2225 Spiegel Drive (2).................. Columbus, OH 163,270 11/98 11/98 12,640,000
2235 Spiegel Drive (2).................. Columbus, OH 510,408 6/98 6/98 17,864,280
Enterprise Building C................... Dallas, TX 178,013 5/98 6/98 7,052,092
Enterprise Building B................... Dallas, TX 124,798 6/98 7/98 4,134,000
Frankford Trade Center.................. Dallas, TX 709,920 6/98 6/99 20,560,209
Meridian Distribution Center............ LA Basin, CA 606,753 5/98 4/99 19,626,000
Lebanon Pike Circle..................... Nashville, TN 178,630 5/98 9/98 7,281,528
4000 Miller Circle (2).................. New Jersey/I-95 265,000 8/98 8/98 20,529,000
2600 Broadhead Road (2)................. New Jersey/I-95 528,670 8/98 8/98 18,503,450
2100 Consulate Drive.................... Orlando, FL 75,000 1/98 11/98 3,915,580
Gateway One............................. SF Bay Area, CA 500,000 5/98 6/98 16,400,294
----------- ------------
Total................................. 5,248,962 $199,017,941
----------- ------------
----------- ------------
</TABLE>

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

(1) Represents the Company's estimate of the date the property will reach
stabilization. Properties are considered stabilized for financial reporting
purposes upon the earlier of substantial lease-up or one year from shell
completion. However, there can be no assurance that these properties will
reach stabilization by the date shown.

(2) Executed purchase and sale agreement for acquisition of build-to-suit
development.

CLIENT RELATIONSHIPS

The Company's 15 largest tenants (measured by annualized base rent as of
March 31, 1998) occupied a total of approximately 6.5 million square feet and
represented 24.5% of annualized base rent from all leases in place where tenants
were paying rent as of March 31, 1998. As shown in the table below, no single
tenant accounted for more than 5.3% of the Company's total annualized base rent
as of March 31, 1998. Information presented in the table below excludes
properties under development and pending acquisitions at March 31, 1998.

S-22
<PAGE>
FIFTEEN LARGEST TENANTS MEASURED BY ANNUALIZED BASE RENT
AS OF MARCH 31, 1998

<TABLE>
<CAPTION>
NUMBER % OF TOTAL
OF SQUARE FEET % OF TOTAL ANNUALIZED ANNUALIZED
RANK TENANT (1) LEASES LEASED PORTFOLIO BASE RENT (2) BASE RENT STATES
- ---- -------------------------------------------------- ------ ----------- ---------- ------------- ---------- ------
<C> <S> <C> <C> <C> <C> <C> <C>
1 Sears Roebuck & Co. (3)........................... 3 1,814,592 7.4% $ 4,966,448 5.3% OH, MS
2 Freeman Decorating Co............................. 2 501,806 2.0% 2,216,710 2.4% FL, NV
3 General Tire, Inc................................. 2 632,790 2.6% 2,120,916 2.3% CA, TN
4 S.C. Johnson & Son, Inc........................... 2 502,500 2.0% 1,660,765 1.8% CA, WI
5 Kirk Paper Corp.(4)............................... 1 315,705 1.3% 1,412,712 1.5% CA
6 Allegiance Healthcare Corp........................ 1 361,690 1.5% 1,294,127 1.4% TX
7 Kraft Foods, Inc. (5)............................. 1 351,788 1.4% 1,278,262 1.4% CA
8 Technicolor Videocassette, Inc.................... 1 310,736 1.3% 1,132,585 1.2% CA
9 Cumberland Swan, Inc. (6)......................... 2 341,552 1.4% 1,127,122 1.2% TN
10 L. D. Brinkman & Co., Inc......................... 1 367,744 1.5% 1,055,676 1.1% TX
11 Moog Automotive, Inc.............................. 1 209,682 0.8% 966,215 1.0% CA
12 International Business Machines................... 1 150,000 0.6% 937,500 1.0% GA
13 AmeriSource Health Corp........................... 1 181,370 0.7% 936,747 1.0% NJ
14 Mattel Toys....................................... 1 275,169 1.1% 924,576 1.0% CA
15 Core-Mark International, Inc...................... 1 201,380 0.8% 852,000 0.9% CA
--
----------- ----- ------------- -----
Total............................................. 21.. 6,518,504 26.4% $22,882,361 24.5%
--
--
----------- ----- ------------- -----
----------- ----- ------------- -----
</TABLE>

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

(1) Upon completion of the Lever Atlanta and Gateway One build-to-suit
development projects, Unilever United States, Inc. will be the Company's
third largest tenant, leasing 1.1 million square feet for annual base rent
of $3.2 million.

(2) Represents annualized base rent from leases in effect as of March 31, 1998.

(3) Two of these leases are signed by Sears Logistics Services, Inc. and
guaranteed by Sears Roebuck and Co.

(4) The Company's interest in this property and six related
warehouse/distribution buildings consists of a $21.5 million participating
mortgage loan secured by such buildings. The participating mortgage loan is
classified as an investment in an unconsolidated joint venture in the
Company's financial statements.

(5) Upon completion of 2235 Spiegel Drive, 2225 Spiegel Drive, 2600 Broadhead
Road and 4000 Miller Circle build-to-suit development projects, Kraft Foods,
Inc. will be the Company's largest tenant, leasing 1.8 million square feet
for annual base rent of $9.8 million.

(6) The properties leased by this tenant were sold by the Company after March
31, 1998.

LEASING TRENDS

The leases for the Company's properties have terms ranging from one to
fifteen years, with terms for multi-tenant properties generally between three
and five years and for build-to-suit properties, typically between seven and ten
years. In most cases, the tenants for both existing and build-to-suit properties
are responsible for most day-to-day operating expenses such as real estate
taxes, insurance, utilities, maintenance of common areas and non-structural
repairs.

S-23
<PAGE>
The Company's industrial properties tenant retention rates on a square
footage basis for the year ended December 31, 1997 and for the three months
ended March 31, 1998 were 69% and 60%, respectively. Average base rents for
lease renewals and re-leased space increased by 4.5% during the year ended
December 31, 1997 and by 9.0% for the three months ended March 31, 1998. The
Company expects to obtain additional rental increases from existing leases in
1998 which have scheduled rental adjustments (both fixed and inflation indexed).
The leases with scheduled rent adjustments in 1998 comprise approximately 25% of
the annual base rent of the Company's industrial leases.

LEASE EXPIRATIONS

The following table sets forth scheduled lease expirations under which
tenants were paying rent to the Company as of March 31, 1998, assuming no
exercise of renewal options or termination rights, if any.

LEASE EXPIRATIONS AS OF MARCH 31, 1998 (1)

<TABLE>
<CAPTION>
RENTABLE SQUARE
FEET % OF TOTAL % OF TOTAL
SUBJECT TO SQUARE FEET ANNUAL BASE ANNUAL BASE
EXPIRING REPRESENTED BY RENTS UNDER RENTS REPRESENTED
YEAR OF LEASE EXPIRATION LEASES EXPIRING LEASES EXPIRING LEASES BY EXPIRING LEASES
- ------------------------------------------------------- --------------- --------------- --------------- ------------------
<S> <C> <C> <C> <C>
1998................................................... 3,018,981 13% $11,770,001 13%
1999................................................... 3,134,049 14% 13,776,668 15%
2000................................................... 3,155,051 14% 11,890,955 13%
2001................................................... 3,043,235 13% 12,623,944 14%
2002................................................... 2,397,176 10% 9,523,726 11%
2003................................................... 836,698 4% 3,581,258 4%
2004................................................... 492,744 2% 2,051,121 2%
2005................................................... 2,001,005 9% 6,317,307 7%
2006................................................... 2,042,867 9% 7,343,856 8%
2007................................................... 1,187,134 5% 4,581,587 5%
Thereafter............................................. 1,868,505 7% 6,876,586 8%
--------------- --- --------------- ---
Total................................................ 23,177,445 100% $90,337,009 100%
--------------- --- --------------- ---
--------------- --- --------------- ---
</TABLE>

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(1) Excludes two retail properties in Atlanta consisting of 384,875 square feet,
which were 93% occupied at March 31, 1998. Month-to-month tenancies are
included as 1998 expirations.

RE-LEASING COSTS

The Company's capitalized tenant improvement and leasing commission
expenditures incurred in the renewal or re-leasing of previously occupied space
in its properties for the three months ended March 31, 1998 and the years ended
December 31, 1997 and 1996 were $1.5 million, $1.5 million and $2.3 million,
respectively. Total capitalized tenant improvements and leasing commissions per
square foot for the three months ended March 31, 1998 and the years ended
December 31, 1997 and 1996 were $1.46, $0.60 and $1.27, respectively.

S-24
<PAGE>
MANAGEMENT

DIRECTORS AND OFFICERS

The Company's current directors and officers and their respective positions
are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION
- ---------------------------------------- --- -----------------------------------------------------
<S> <C> <C>
Allen J. Anderson....................... 45 Chairman of the Board, Chief Executive Officer, and
Director

C.E. Cornutt............................ 48 Director; President--Argent Property Company

T. Patrick Duncan....................... 49 Director; Senior Vice President--USAA Real Estate
Company

Peter O. Hanson......................... 64 Director; Chairman--James E. Hanson, Inc.

John S. Moody........................... 48 Director; Chairman and Chief Executive Officer--
Cornerstone Properties, Inc.

Kenneth N. Stensby...................... 58 Director; Retired Chief Executive Officer--United
Properties, Minneapolis, Minnesota

Lee W. Wilson........................... 59 Director; President--L.W. Wilson & Co., Inc.

Milton K. Reeder........................ 41 President and Chief Financial Officer

Dennis D. Higgs......................... 42 Executive Vice President and Chief Investment Officer

Gregory D. Skirving..................... 51 Senior Vice President--National Marketing

Robert A. Dobbin........................ 51 Secretary and General Counsel

Brian R. Barringer...................... 31 Vice President

Brian K. Flaherty....................... 41 Vice President--Asset Management

Peter B. Harmon......................... 37 Vice President--Regional Director

Steven C. Jensen........................ 40 Vice President--Information Systems

Timothy B. Keith........................ 32 Vice President--Regional Director

Jaime Suarez............................ 40 Vice President--Finance and Assistant Secretary

Celeste K. Woo.......................... 42 Vice President--Asset Management

Richard L. Valladao..................... 34 Controller
</TABLE>

S-25
<PAGE>
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS

Except for the discussion set forth below, this Prospectus Supplement does
not address the taxation of the Company, nor does it address the impact on the
Company of the Company's election to be taxed as a REIT. Such matters are
addressed in the accompanying Prospectus under "Federal Income Tax
Considerations--Federal Income Taxation of the Company."

RECENT TAX LEGISLATION

Congress recently passed the Internal Revenue Service Restructuring and
Reform Act of 1998 (the "1998 Act"), and President Clinton has publicly
indicated he will sign the 1998 Act. Under the 1988 Act, effective January 1,
1998, property held for more than one year (rather than 18 months) will be
eligible for the 20% long-term capital gain tax rate (25% in the case of
unrecaptured Section 1250 gain attributable to depreciable real estate). See
"Federal Income Tax Considerations--Taxation of Taxable Domestic Stockholders"
in the accompanying Prospectus. The 1998 Act does not include any of the REIT
legislative proposals discussed in "Federal Income Tax Considerations--Possible
Tax Law Changes" in the accompanying Prospectus that could affect the Company;
however, such proposals could still be enacted as part of future legislative
changes to the tax law applicable to REITs.

UNCONSOLIDATED SUBSIDIARIES

The Company does not own any of the voting securities of Meridian
Refrigerated, Inc., an unconsolidated subsidiary engaged in the cold storage
business ("MRI"), but it does own 100% of the nonvoting preferred stock of MRI.
The Company has represented, however, (i) that it does not and will not own more
than 10% of the voting securities of any entity that would be treated as a
corporation for federal income tax purposes (other than stock of REITs, which
are not taken into account for purposes of this limitation), and (ii) that it
does not own securities of any non-governmental issuer that have a fair market
value that will exceed 5% of the fair market value of the Company's total
assets. There can be no assurance, however, that the IRS might not contend
either that the value of the securities of MRI held by the Company exceeds the
5% value limitation or that nonvoting stock of MRI should be considered "voting
stock" for this purpose.

A portion of the cash to be used by the Company to pay dividends on the
Common Stock is expected to come from MRI through payments of dividends and
interest on loans made by the Company to MRI. MRI pays federal and state income
tax at the full applicable corporate rates. To the extent that MRI is required
to pay federal, state or local taxes, the cash otherwise available to pay
dividends on the Common Stock will be reduced accordingly.

LEGAL MATTERS

The validity of the issuance of the shares of Common Stock offered pursuant
to this Prospectus Supplement have been passed upon for the Company by Ballard
Spahr Andrews & Ingersoll, LLP, Baltimore, Maryland. Certain legal matters also
have been passed upon for the Company by Vinson & Elkins L.L.P., Dallas, Texas.

S-26
<PAGE>
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS
SUPPLEMENT OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR
THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO ITS DATE.

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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Supplement Summary............................................. S-3
The Company............................................................... S-10
Use of Proceeds........................................................... S-15
Capitalization............................................................ S-17
Selected Financial and Other Information.................................. S-18
Business and Properties................................................... S-20
Management................................................................ S-25
Certain Federal Income Tax Considerations................................. S-26
Legal Matters............................................................. S-26

PROSPECTUS

Available Information..................................................... 2
Incorporation by Reference................................................ 2
The Company............................................................... 3
Use of Proceeds........................................................... 3
Ratio of Earnings to Combined Fixed Charges and Preferred Stock
Dividends............................................................... 3
Description of Debt Securities............................................ 4
Description of Stock...................................................... 18
Description of Warrants................................................... 29
Selling Stockholders...................................................... 32
Plan of Distribution...................................................... 33
Certain Provisions of Maryland Law and of the Charter and Bylaws.......... 35
Federal Income Tax Considerations......................................... 40
Experts................................................................... 50
Legal Matters............................................................. 50
Glossary.................................................................. 51
</TABLE>

850,000 SHARES

MERIDIAN INDUSTRIAL

TRUST, INC.

COMMON STOCK
($.001 PAR VALUE)

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[LOGO]

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JULY 17, 1998

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