MERIDIAN INDUSTRIAL TRUST INC, 424B5, 1998-06-26

MERIDIAN INDUSTRIAL TRUST INC
424B5, 1998-06-26
REAL ESTATE INVESTMENT TRUSTS

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<PAGE>
FILED PURSUANT TO RULE 424(b)(5)
REGISTRATION NO. 333-24579

PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED DECEMBER 12, 1997

[LOGO]
2,000,000 SHARES

MERIDIAN INDUSTRIAL TRUST, INC.

8.75% SERIES D CUMULATIVE REDEEMABLE PREFERRED STOCK
(PAR VALUE $.001 PER SHARE)
(LIQUIDATION PREFERENCE $25.00 PER SHARE)
------------------

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.
Dividends on the Company's Series D Cumulative Redeemable Preferred Stock, par
value $.001 per share (the "Series D Preferred Shares"), offered by this
Prospectus Supplement (the "Offering") will be cumulative from the date of
original issue and will be payable quarterly in arrears on the last day of
January, April, July and October of each year (or, if such day is not a business
day, the next business day), commencing on July 31, 1998, at the rate of 8.75%
of the liquidation preference per annum (equal to $2.1875 per share per annum).
See "Description of Series D Preferred Shares--Dividends."

The Series D Preferred Shares are not redeemable prior to June 30, 2003. On
and after such date, the Series D Preferred Shares may be redeemed, in whole or
in part, at the option of the Company, at a redemption price of $25.00 per
share, plus all accrued and unpaid dividends. The Series D Preferred Shares will
not be subject to any sinking fund or mandatory redemption and will not be
convertible into any other securities of the Company. See "Description of Series
D Preferred Shares--Redemption." The Series D Preferred Shares will rank junior
to the Company's Series B Convertible Preferred Stock, par value $.001 per
share, $35.0 million aggregate liquidation preference (the "Series B Preferred
Shares"). The Series B Preferred Shares are redeemable for cash or convertible
into Common Stock of the Company beginning on January 1, 1999, in each case at
the Company's option. See "Description of Stock-- Designated Preferred Stock" in
the accompanying Prospectus. Subject to certain limited exceptions, ownership of
more than 8.5% of the Series D Preferred Shares is restricted in order to
preserve the Company's status as a REIT for federal income tax purposes. See
"Description of Stock--Restrictions on Ownership and Transfer" in the
accompanying Prospectus.

The Company intends to file an application to list the Series D Preferred
Shares on the New York Stock Exchange, although there can be no assurance that
the Series D Preferred Shares will be approved for listing.
--------------------

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.

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

<TABLE>
<CAPTION>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE (1) DISCOUNT (2) COMPANY (1)(3)
------------------ ------------------ ------------------
<S> <C> <C> <C>
Per Share................................................ $25.00 $.7875 $24.2125
Total (4)................................................ $50,000,000 $1,575,000 $48,425,000
</TABLE>

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

(1) Plus accrued dividends, if any, from the date of original issue.

(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933. See
"Underwriting."

(3) Before deducting estimated expenses of $300,000 payable by the Company.

(4) The Company has granted the several Underwriters an option for 30 days to
purchase up to 300,000 additional Series D Preferred Shares at the initial
public offering price per share, less the underwriting discount, solely to
cover over-allotments, if any. If the option is exercised in full, the
Initial Public Offering Price, Underwriting Discount and Proceeds to Company
will be $57,500,000, $1,811,250 and $55,688,750, respectively. See
"Underwriting."
--------------------

The Series D Preferred Shares are offered severally by the Underwriters, as
specified herein, subject to receipt and acceptance by them and subject to their
right to reject any order in whole or in part. It is expected that the Series D
Preferred Shares will be ready for delivery in book-entry form only through the
facilities of the Depository Trust Company in New York, New York on or about
June 30, 1998, against payment therefor in immediately available funds.

GOLDMAN, SACHS & CO. PRUDENTIAL SECURITIES INCORPORATED

ABN AMRO ROTHSCHILD
A DIVISION OF ABN AMRO
INCORPORATED
<PAGE>
A.G. EDWARDS & SONS, INC.

LEGG MASON WOOD WALKER
INCORPORATED

PAINEWEBBER INCORPORATED
--------------------

The date of this Prospectus Supplement is June 25, 1998.
<PAGE>
Map of the United States with graphic representation of the Company's principal
markets: Los Angeles Basin, Dallas, Chicago, Columbus, Memphis, Houston, San
Francisco Bay Area, Atlanta, Phoenix, New Jersey/ Pennsylvania I-95 Corridor,
Orlando, Seattle and Indianapolis.

REGIONAL OFFICES

San Francisco Bay Area--Headquarters
Los Angeles Basin--Western region
Chicago--Midwest region
Dallas--Southeastern region
Boston--Northeastern region

<TABLE>
<S> <C>
* 202 Industrial Properties * 531 Tenants
* 24.7 Million Square Feet * 95% Occupancy
* 22 Markets * Average Property Age of 12 Years
</TABLE>

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

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS THAT
STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE SERIES D PREFERRED
SHARES, INCLUDING OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING TRANSACTIONS IN
SUCH SECURITIES AND THE IMPOSITION OF A PENALTY BID, IN CONNECTION WITH THE
OFFERING. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
<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. UNLESS INDICATED
OTHERWISE, THE INFORMATION CONTAINED IN THIS PROSPECTUS SUPPLEMENT ASSUMES THAT
THE UNDERWRITERS' OVER-ALLOTMENT OPTION IS NOT EXERCISED. 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 12 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

S-3
<PAGE>
portion of the Company's outstanding stock, including Hunt Realty Corporation
("Hunt"), USAA Real 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.

S-4
<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>

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

(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.

Since January 1, 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.

S-5
<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.

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
<PAGE>
THE OFFERING

For a more complete description of the terms of the Series D Preferred
Shares, including definitions of capitalized terms used but not defined in this
summary, see "Description of Series D Preferred Shares" in this Prospectus
Supplement.

<TABLE>
<S> <C>
SECURITIES OFFERED..... 2,000,000 Series D Preferred Shares.

USE OF PROCEEDS........ The net proceeds to the Company from the Offering (approximately
$48.1 million) will be used to repay outstanding borrowings
under the Company's $250 million unsecured line of credit (the
"Unsecured Credit Facility"). See "Use of Proceeds."

RANKING................ With respect to the payment of dividends and amounts upon
liquidation, the Series D Preferred Shares will rank junior to
the 2,272,727 outstanding Series B Preferred Shares, aggregate
liquidation preference $35.0 million, and senior to the Common
Stock. The Series B Preferred Shares are redeemable for cash or
convertible into Common Stock, in each case at the option of the
Company, beginning on January 1, 1999. See "Description of
Series D Preferred Shares--Ranking" and "Description of
Stock--Designated Preferred Stock" in the accompanying
Prospectus.

DIVIDENDS.............. Dividends on the Series D Preferred Shares will be cumulative
from the date of original issue and will be payable quarterly in
arrears on the last day of January, April, July and October of
each year (or, if such day is not a business day, the next
business day), commencing on July 31, 1998, at the rate of 8.75%
of the liquidation preference per annum (equivalent to $2.1875
per share per annum). Dividends on the Series D Preferred Shares
will accrue whether or not the Company has earnings, whether or
not there are funds legally available for the payment of such
dividends and whether or not such dividends are declared. See
"Description of Series D Preferred Shares--Dividends."

LIQUIDATION RIGHTS..... The liquidation preference for each Series D Preferred Share is
$25.00. Upon liquidation, holders will be entitled to be paid
the liquidation preference plus an amount equal to accrued and
unpaid dividends thereon out of the assets available for such
payment. See "Description of Series D Preferred
Shares--Liquidation Rights."

REDEMPTION............. The Series D Preferred Shares are not redeemable prior to June
30, 2003. On and after June 30, 2003, the Series D Preferred
Shares will be redeemable at the option of the Company, in whole
or in part, at a redemption price of $25.00 per share, plus
accrued and unpaid dividends thereon. The redemption price
(other than the portion thereof consisting of accrued and unpaid
dividends) is payable solely out of proceeds from the sale of
other stock of the Company. See "Description of Series D
Preferred Shares--Redemption."

VOTING RIGHTS.......... If dividends on the Series D Preferred Shares are in arrears for
six or more quarterly periods, holders of Series D Preferred
Shares (voting separately as a class with all other series of
preferred stock upon which like voting rights have been
conferred and are exercisable, other than the Series B Preferred
Shares which are entitled to certain additional voting rights as
described under "Description of Stock--Designated Preferred
</TABLE>

S-7
<PAGE>

<TABLE>
<S> <C>
Stock" in the accompanying Prospectus) will be entitled to vote
for the election of two additional directors to serve on the
Board of Directors of the Company until all such dividend
arrearages are eliminated. See "Description of Series D
Preferred Shares--Voting Rights."

CONVERSION............. The Series D Preferred Shares are not convertible into or
exchangeable for any other property or security of the Company.

OWNERSHIP LIMITS....... Ownership of more than 8.5% of the Series D Preferred Shares is
restricted in order to maintain the Company's ability to qualify
as a REIT for federal income tax purposes. See "Description of
Preferred Shares-- Restrictions on Transfer; Ownership Limits"
herein and "Description of Stock--Restrictions on Ownership and
Transfer" in the accompanying Prospectus.

TRADING................ The Company intends to file an application to list the Series D
Preferred Shares on the New York Stock Exchange, although there
can be no assurance that the Series D Preferred Shares will be
approved for listing.
</TABLE>

S-8
<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 YEAR ENDED
DECEMBER 31, 1997 DECEMBER 31, 1996
------------------- -------------------
FOR THE THREE MONTHS ENDED
MARCH 31, 1998 MARCH 31, 1997
--------------- ---------------
(UNAUDITED) (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA AND RATIOS)
<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
Ratio of Funds from Operations before
fixed charges to fixed charges
(3)(6)(7)(8)............................ 3.67x 4.34x 3.59x 3.34x
Ratio of Funds from Operations before
fixed charges to preferred dividends and
fixed charges (3)(6)(8)(9).............. 3.22x 3.14x 2.94x 2.45x
Ratio of earnings to fixed charges
(6)(10)................................. 2.75x 3.26x 2.73x 2.60x
Ratio of earnings to combined fixed
charges and preferred dividends (11).... 2.42x 2.35x 2.24x 1.91x
</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.

(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

S-9
<PAGE>
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.

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

<TABLE>
<CAPTION>
For the Year Ended
--------------------------------------
December 31, 1997 December 31, 1996
------------------ ------------------
For the Three Months Ended
--------------------------------
March 31, 1998 March 31, 1997
--------------- ---------------
(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.

(6) Fixed charges consist of interest costs including amortization of debt
premium and deferred financing fees, whether expensed or capitalized.

(7) The ratio of Funds from Operations before fixed charges to fixed charges is
calculated as Funds from Operations plus fixed charges (excluding
capitalized interest), divided by fixed charges.

(8) The Company believes that in addition to the ratio of earnings to fixed
charges, this ratio provides a useful measure of the Company's ability to
service its debt because of the exclusion of non-cash items such as
depreciation and amortization from the definition of Funds from Operations.
This ratio differs from a GAAP-based ratio of earnings to fixed charges and
should not be considered as an alternative to that ratio.

(9) The ratio of Funds from Operations before fixed charges to preferred
dividends and fixed charges is calculated as Funds from Operations plus
fixed charges (excluding capitalized interest), divided by dividends paid to
preferred stockholders and fixed charges.

(10) The ratio of earnings to fixed charges is computed as income from
operations, before minority interest, gain or loss on divestiture of
properties and extraordinary items, plus fixed charges (excluding
capitalized interest), divided by fixed charges.

(11) The ratio of earnings to combined fixed charges and preferred dividends is
computed as income from operations, before minority interest, gain or loss
on divestiture of properties and extraordinary items, plus fixed charges
(excluding capitalized interest), divided by fixed charges and dividends
paid to preferred stockholders.

S-10
<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.

S-11
<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.

S-12
<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, renewing 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%. 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. At March 31, 1998, the
Company's debt-to-total market capitalization rate was 30.8%.

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 disposition, 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-13
<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-14
<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-15
<PAGE>
USE OF PROCEEDS

The net proceeds to the Company from the sale of the Series D Preferred
Shares offered hereby, after deducting underwriting discounts and commissions
and expenses of the Offering, are expected to be approximately $48.1 million.

The Company intends to use the net proceeds of the Offering to repay
borrowings under its Unsecured Credit Facility. As of May 31, 1998, the Company
had total outstanding borrowings under the Unsecured Credit Facility of $147.3
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. As of March 31, 1998,
outstanding borrowings under the Unsecured Credit Facility totaled $91.8
million. The Unsecured Credit Facility matures on April 3, 2000.

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 Offering, additional
borrowings under the Unsecured Credit Facility and the assumption of certain
mortgage notes since March 31, 1998 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 99,175
------------ ------------
Total Debt........................................................................ 345,864 357,138
------------ ------------
Stockholder's 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 Series B
Preferred Shares with a liquidation preference of $35.0 million issued and
outstanding at March 31, 1998; and 2,000,000 Series D Preferred Shares with a
liquidation preference of $50.0 million issued and outstanding on a pro forma
basis............................................................................. 32 34
Additional Paid-in Capital.......................................................... 574,589 622,712
Distributions in Excess of Income................................................... (5,223) (5,223)
------------ ------------
Total Stockholder's Equity............................................................ 569,398 617,523
------------ ------------
Total Capitalization.................................................................. $ 915,262 $ 974,661
------------ ------------
------------ ------------
</TABLE>

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

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

(2) Includes unamortized debt premium of $83 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 $55.5 million resulting in total
outstanding borrowings of $147.3 million as of May 31, 1998. These
borrowings were used to fund property acquisitions and construction draws on
its development projects.

S-16
<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 YEAR ENDED
----------------------------------------
DECEMBER 31, 1997 DECEMBER 31, 1996
FOR THE THREE MONTHS ENDED ------------------- -------------------
--------------------------------
MARCH 31, 1998 MARCH 31, 1997
--------------- ---------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
(IN THOUSANDS, EXCEPT PER SHARE DATA, RATIOS AND PROPERTY DATA)
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
</TABLE>

S-17
<PAGE>
<TABLE>
<CAPTION>
FOR THE YEAR ENDED
----------------------------------------
DECEMBER 31, 1997 DECEMBER 31, 1996
------------------- -------------------
FOR THE THREE MONTHS ENDED
--------------------------------
MARCH 31, 1998 MARCH 31, 1997
--------------- ---------------
(UNAUDITED) (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA, RATIOS AND PROPERTY DATA)
<S> <C> <C> <C> <C>
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
Ratio of Funds from Operations before fixed
charges to fixed charges (4)(6)(7)(8).... 3.67x 4.34x 3.59x 3.34x
Ratio of Funds from Operations before fixed
charges to preferred dividends and fixed
charges (4)(6)(8)(9)..................... 3.22x 3.14x 2.94x 2.45x
Ratio of earnings to fixed charges
(6)(10).................................. 2.75x 3.26x 2.73x 2.60x
Ratio of Earnings to combined fixed charges
and preferred dividends (11)............. 2.42x 2.35x 2.24x 1.91x
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>

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

(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

S-18
<PAGE>
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.

(6) Fixed charges consist of interest costs including amortization of debt
premium and deferred financing fees, whether expensed or capitalized.

(7) The ratio of Funds from Operations before fixed charges to fixed charges is
calculated as Funds from Operations plus fixed charges (excluding
capitalized interest), divided by fixed charges.

(11) The ratio of earnings to combined fixed charges and preferred dividends is
computed as income from operations, before minority interest, gain or loss
on divestiture of properties and extraordinary items, plus fixed charges
(excluding capitalized interest) divided by fixed charges and dividends paid
to preferred stockholders.

S-19
<PAGE>
BUSINESS AND PROPERTIES

THE PROPERTIES

<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>

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

(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

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

<CAPTION>
RANK STATES
----- ---------
<C> <C>
1 OH, MS
2 FL, NV
3 CA, TN
4 CA, WI
5 CA
6 TX
7 CA
8 CA
9 TN
10 TX
11 CA
12 GA
13 NJ
14 CA
15 CA
</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 released 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
YEAR OF LEASE EXPIRING REPRESENTED BY RENTS UNDER RENTS REPRESENTED
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>

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

(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; President--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--Regional Director

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

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

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

S-25
<PAGE>
DESCRIPTION OF SERIES D PREFERRED SHARES

The following summary sets forth the material terms and provisions of the
Series D Preferred Shares, and is qualified in its entirety by reference to the
provisions of the Articles Supplementary relating to the Series D Preferred
Shares (the "Articles Supplementary") and the Company's Charter, which are
incorporated by reference herein. The following description of the particular
terms of the Series D Preferred Shares supplements, and to the extent
inconsistent therewith, replaces, the description of the general terms of the
Preferred Stock set forth in the accompanying Prospectus, to which description
reference is hereby made.

GENERAL

Subject to limitations prescribed by Maryland law and the Company's Charter,
the Board is authorized to provide for the issuance, from the authorized but
unissued stock of the Company, of up to 25,000,000 shares of Preferred Stock in
such classes or series as the Board may determine and to establish from time to
time the number of shares of preferred stock to be included in any such series
and to fix the designation and any preferences, conversion and other rights,
voting powers, restrictions, limitations as to dividends, qualifications and
terms and conditions of redemption of the shares of each such series.

The Company currently has outstanding 2,272,727 Series B Preferred Shares.
Each Series B Preferred Share is convertible at the option of its holder at any
time into shares of Common Stock at a conversion price of $15.40 per share of
Common Stock (equivalent to an initial conversion rate of one share of Common
Stock per share of Series B Preferred), subject to customary adjustments. The
annual dividend payable on the Series B Preferred Shares is equal to the greater
of $1.32 per share or the then current dividend payable per share of Common
Stock. At any time on or after January 1, 1999, the Company may redeem the
outstanding Series B Preferred Shares at an escalating redemption price
beginning at $16.95 per share. The closing price of the Company's Common Stock
on the New York Stock Exchange on June 24, 1998 was $22.0625 and the annualized
dividend was $1.32 per share. In addition, 150,000 shares of Series C Junior
Participating Preferred Stock, par value $.001 per share (the "Series C
Preferred Shares"), are reserved for issuance pursuant to the terms of the
Company's Stockholder Rights Plan. The Series D Preferred Shares will rank
junior to the Series B Preferred Shares and senior to the Series C Preferred
Shares as to payment of dividends and amounts payable upon liquidation.

When issued, the Series D Preferred Shares will be validly issued, fully
paid and nonassessable. The holders of the Series D Preferred Shares will have
no preemptive rights with respect to any shares of the capital stock of the
Company or any other securities of the Company convertible into or carrying
rights or options to purchase any such shares. The Series D Preferred Shares
will not be subject to any sinking fund or other obligation of the Company to
redeem or retire the Series D Preferred Shares.

The transfer agent, registrar and dividend disbursing agent for the Series D
Preferred Shares will be First Chicago Trust Company of New York.

RANKING

With respect to payment of dividends and amounts upon liquidation,
dissolution or winding up, the Series D Preferred Shares will rank junior to the
Series B Preferred Shares and senior to the Common Stock. The Series B Preferred
Shares are redeemable for cash or convertible into Common Stock, in each case at
the Company's option beginning on January 1, 1999. See "Description of Stock--
Designated Preferred Stock" in the accompanying Prospectus.

While any Series D Preferred Shares are outstanding, the Company may not
authorize, create or increase the authorized amount of any class of security
that ranks senior to the Series D Preferred Shares with respect to the payment
of dividends or amounts payable upon liquidation, dissolution or winding up, or
any class of security convertible into shares of such a class, without the
consent of the

S-26
<PAGE>
holders of at least two-thirds of the outstanding Series D Preferred Shares and
Parity Shares (as defined below), voting as a single class. However, the Company
may create additional classes of other stock, increase the authorized number of
preferred shares or issue series of preferred shares ranking on a parity with
the Series D Preferred Shares with respect, in each case, to the payment of
dividends and amounts upon liquidation, dissolution and winding up (a "Parity
Share") without the consent of any holder of Series D Preferred Shares. See
"--Voting Rights" below.

DIVIDENDS

Holders of the Series D Preferred Shares will be entitled to receive, when
and as declared by the Board, out of funds legally available for the payment of
dividends, cumulative preferential cash dividends at the rate of 8.75% of the
liquidation preference per annum (equivalent to $2.1875 per share per annum).
Such dividends will be cumulative from the date of original issue and payable
quarterly in arrears on the last calendar day (or, if such day is not a business
day, the next business day) of each January, April, July and October (each, a
"Dividend Payment Date"). The first dividend, which will be paid on or about
July 31, 1998, will be for less than a full quarter. Such first dividend and any
dividends payable on the Series D Preferred Shares for any partial dividend
period will be computed on the basis of the actual number of days in such
period. Dividends will be payable to holders of record as they appear in the
records of the Company at the close of business on the applicable record date,
which will be the date designated as such by the Board of Directors of the
Company that is not more than 50 nor less than 10 days prior to such Dividend
Payment Date (each, a "Dividend Record Date"). Accrued and unpaid dividends for
any past dividend periods may be declared and paid at any time and for such
interim periods to holders of record on the applicable Dividend Record Date. Any
dividend payment made on the Series D Preferred Shares will first be credited
against the earliest accrued but unpaid dividend due with respect to the Series
D Preferred Shares that remains payable.

Dividends on Series D Preferred Shares will accrue whether or not the
Company has earnings, whether or not there are funds legally available for the
payment of such dividends and whether or not such dividends are declared. No
interest, or sum of money in lieu of interest, will be payable in respect of any
dividend payment or payments on the Series D Preferred Shares that may be in
arrears. Holders of Series D Preferred Shares will not be entitled to any
dividends, whether payable in cash, property or shares of stock, in excess of
the full cumulative dividends, as described herein, on the Series D Preferred
Shares.

If, for any taxable year, the Company elects to designate as "capital gain
dividends" (as defined in Section 857 of the Internal Revenue Code of 1986, as
amended, or any successor revenue code or section (the "Code")) any portion (the
"Capital Gains Amount") of the dividends (within the meaning of the Code) paid
or made available for the year to holders of all classes of capital stock (the
"Total Dividends"), then the portion of the Capital Gains Amount that will be
allocable to holders of Series D Preferred Shares will be in the same portion
that the Total Dividends paid or made available to the holders of Series D
Preferred Shares for the year bears to the Total Dividends.

No dividends will be declared or paid on any Series D Preferred Shares or
Parity Shares unless full cumulative dividends have been declared and paid, or
declared and set apart for payment on all outstanding Series B Preferred Shares
for all past dividend periods and sufficient funds shall have been paid or
declared and set aside for payment of the dividend payable on the outstanding
Series B Preferred Shares for the then current dividend period. Except as
provided in the next sentence, no dividends will be declared or paid on any
Parity Shares unless full cumulative dividends have been declared and paid or
are contemporaneously declared and funds sufficient for the payment thereof set
aside for such payment on the Series D Preferred Shares for all prior dividend
periods. If accrued dividends on the Series D Preferred Shares for all prior
dividend periods have not been paid in full, then any dividend declared on the
Series D Preferred Shares and on any Parity Shares for any dividend period will
be declared ratably in proportion to accrued and unpaid dividends on the Series
D Preferred Shares and such Parity Shares.

S-27
<PAGE>
The Company will not (i) declare, pay or set apart funds for the payment of
any dividend or other distribution with respect to any Junior Shares (as defined
below) or (ii) redeem, purchase or otherwise acquire for consideration any
Junior Shares through a sinking fund or otherwise (other than a redemption or
purchase or other acquisition of Common Stock made for purposes of any employee
incentive or benefit plan of the Company or any subsidiary), unless (A) all
cumulative dividends with respect to the Series D Preferred Shares and any
Parity Shares at the time such dividends are payable have been paid or declared
and funds have been set apart for payment of such dividends and (B) sufficient
funds have been paid or declared and set apart for the payment of the dividend
for the current dividend period with respect to the Series D Preferred Shares
and any Parity Shares.

As used herein, (i) the term "dividend" does not include dividends or other
distributions payable solely in Fully Junior Shares, or in options, warrants or
rights to subscribe for or purchase any Fully Junior Shares, (ii) the term
"Junior Shares" means the Common Stock and any other class or series of shares
of capital stock of the Company now or hereafter issued and outstanding that
ranks junior to the Series D Preferred Shares as to the payment of dividends or
in the distribution of assets or amounts upon liquidation, dissolution and
winding up and (iii) the term "Fully Junior Shares" means Junior Shares that
rank junior to the Series D Preferred Shares both as to the payment of dividends
and distribution of assets upon liquidation, dissolution and winding up.

LIQUIDATION RIGHTS

Upon any voluntary or involuntary liquidation, dissolution or winding up of
the Company, the holders of Series D Preferred Shares will be entitled to
receive out of assets of the Company legally available for distribution to
stockholders a liquidation preference of $25.00 per Series D Preferred Share,
plus an amount per Series D Preferred Share equal to all dividends (whether or
not earned or declared) accrued and unpaid thereon to the date of final
distribution to such holders, and no more.

Until the holders of the Series B Preferred Shares have been paid their
liquidation preference in full ($35.0 million plus accrued but unpaid
dividends), no payment will be made to any holder of Series D Preferred Shares
or Parity Shares upon the liquidation, dissolution or winding up of the Company.
Until the holders of Series D Preferred Shares and Parity Shares have been paid
their liquidation preference in full, no payment will be made to any holder of
Junior Shares upon the liquidation, dissolution or winding up of the Company. If
upon any liquidation, dissolution or winding up of the Company, the assets of
the Company, or proceeds thereof, distributable among the holders of the Series
D Preferred Shares are insufficient to pay in full the amount payable upon
liquidation with respect to the Series D Preferred Shares and any other Parity
Shares, then such assets, or the proceeds thereof, will be distributed among the
holders of Series D Preferred Shares and any such Parity Shares ratably in
accordance with the respective amounts which would be payable on such Series D
Preferred Shares and any such Parity Shares if all amounts payable thereon were
paid in full. Neither a consolidation or merger of the Company with another
entity, a statutory share exchange by the Company nor a sale, lease or transfer
of all or substantially all of the Company's assets will be considered a
liquidation, dissolution or winding up, voluntary or involuntary, of the
Company.

REDEMPTION

The Series D Preferred Shares are not redeemable by the Company prior to
June 30, 2003. On and after June 30, 2003, the Company, at its option, upon not
less than 30 or more than 90 days' written notice, may redeem the Series D
Preferred Shares, in whole or in part, at any time or from time to time, for
cash at a redemption price of $25.00 per share, plus accumulated, accrued and
unpaid dividends thereon to the date fixed for redemption, without interest. The
redemption price of the Series D Preferred Shares (other than the portion
thereof consisting of accrued and unpaid dividends) is payable solely out of
proceeds from the sale of other stock of the Company, which may include Common
Stock, preferred stock, depositary shares, interests, participations or other
ownership interests in the Company however designated (other than debt
securities converted into or exchangeable for capital stock), and any rights,

S-28
<PAGE>
warrants or options to purchase any thereof. If fewer than all of the
outstanding Series D Preferred Shares are to be redeemed, the number of shares
to be redeemed will be determined by the Company and such shares may be redeemed
pro rata from the holders of record of such shares in proportion to the number
of such shares held by such holders (with adjustments to avoid redemption of
fractional shares), by lot or by any other method determined by the Company in
its sole discretion to be equitable.

Unless full cumulative dividends on all outstanding Series B Preferred
Shares have been declared and paid or declared and set apart for payment for all
past dividend periods and the then current dividend period, no Series D
Preferred Shares or Parity Shares may be redeemed or purchased by the Company.
Unless full cumulative dividends on all Series D Preferred Shares and any Parity
Shares have been or contemporaneously are declared and paid or declared and a
sum sufficient for the payment thereof set apart for payment for all past
dividend periods and the then current dividend period, no Series D Preferred
Shares or Parity Shares may be redeemed or purchased by the Company except
pursuant to a purchase or exchange offer made on the same terms to holders of
all outstanding Series D Preferred Shares or Parity Shares, as the case may be.

Notice of redemption will be mailed at least 30 days but not more than 90
days before the redemption date to each holder of record of Series D Preferred
Shares at the address shown on the stock transfer books of the Company. Each
notice shall state: (i) the redemption date; (ii) the number of Series D
Preferred Shares to be redeemed; (iii) the redemption price per share; (iv) the
place or places where certificates for Series D Preferred Shares are to be
surrendered for payment of the redemption price; and (v) that dividends on the
Series D Preferred Shares will cease to accrue on such redemption date. If fewer
than all Series D Preferred Shares are to be redeemed, the notice mailed to each
such holder thereof shall also specify the number of Series D Preferred Shares
to be redeemed from such holder. If notice of redemption of any Series D
Preferred Shares has been given and if the funds necessary for such redemption
have been set aside by the Company in trust for the benefit of the holders of
Series D Preferred Shares so called for redemption, then from and after the
redemption date, dividends will cease to accrue on the Series D Preferred
Shares, such Series D Preferred Shares shall no longer be deemed outstanding and
all rights of the holders of such shares will terminate, except the right to
receive the redemption price.

The holders of Series D Preferred Shares at the close of business on a
Dividend Record Date will be entitled to receive the dividends payable with
respect to such Series D Preferred Shares on the corresponding Dividend Payment
Date notwithstanding the redemption thereof between such Dividend Record Date
and the corresponding Dividend Payment Date or the Company's default in the
payment of the dividend due. Except as provided above, the Company will make no
payment or allowance for unpaid dividends, whether or not in arrears, on Series
D Preferred Shares which have been called for redemption.

The Series D Preferred Shares have no stated maturity and will not be
subject to any sinking fund or mandatory redemption.

VOTING RIGHTS

Except as indicated below, or except as otherwise from time to time required
by applicable law, the holders of Series D Preferred Shares will have no voting
rights.

If six or more quarterly dividends payable on the Series D Preferred Shares
or any Parity Shares are in arrears, whether or not earned or declared, the
number of directors then constituting the Board of Directors of the Company will
be increased by two, and the holders of Series D Preferred Shares, voting
together as a class with the holders of any other series of Parity Shares, will
have the right to elect two additional directors to serve on the Company's Board
of Directors at any annual meeting of stockholders or a properly called special
meeting of the holders of the voting Parity Shares until all such dividends and
dividends for the current quarterly period on the Series D Preferred Shares and
such other voting Parity Shares have been declared and paid or set aside for
payment. Such voting rights will terminate when all

S-29
<PAGE>
such accrued and unpaid dividends have been declared and paid or set aside for
payment. The term of office of all directors so elected will terminate with the
termination of such voting rights.

The approval of at least two-thirds of the outstanding Series D Preferred
Shares and all other Parity Shares similarly affected, voting as a single class,
is required in order to (i) amend the Company's Charter to affect materially and
adversely the rights, preferences or voting power of the holders of the Series D
Preferred Shares or the Parity Shares; (ii) enter into a share exchange that
affects the Series D Preferred Shares, or consolidate the Company with or merge
the Company with another entity, unless in each such case each Series D
Preferred Share remains outstanding without a material adverse change to its
terms and rights or is converted into or exchanged for preferred stock of the
surviving entity having preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications and terms and
conditions of redemption thereof identical to that of the Series D Preferred
Shares (except for changes that do not materially and adversely affect the
holders of Series D Preferred Shares), or (iii) authorize, reclassify, create or
increase the authorized amount of any shares of any class, or any security
convertible into shares of any class, having rights senior to the Series D
Preferred Shares with respect to the payment of dividends or amounts upon
liquidation, dissolution or winding up of the Company. However, the Company may
create additional classes of Parity Shares and Junior Shares, increase the
authorized number of Parity Shares and Junior Shares and issue additional series
of Parity Shares and Junior Shares without the consent of any holder of Series D
Preferred Shares.

Except as provided above and as required by applicable law, the holders of
Series D Preferred Shares are not entitled to vote on any merger or
consolidation involving the Company, on any share exchange or on a sale of all
or substantially all of the assets of the Company.

CONVERSION

The Series D Preferred Shares are not convertible into or exchangeable for
any other property or securities of the Company at the option of the holder.

RESTRICTIONS ON TRANSFER; OWNERSHIP LIMITS

For the Company to qualify as a REIT under the Code, no more than 50% in
value of its outstanding stock may be owned, directly or indirectly, by five or
fewer "individuals" during the last half of a full taxable year or during a
proportionate part of a shorter taxable year. Under the constructive ownership
provisions of the Code, stock owned by an entity, including a corporation, life
insurance company, mutual fund or pension trust, is treated as owned by the
ultimate individual beneficial owners of the entity. Because the Company intends
to maintain its qualification as a REIT, the Company's Charter contains certain
restrictions on the ownership and transfer of capital stock, including the
Series D Preferred Shares, intended to assist the Company in complying with
these requirements. For a complete description of these restrictions, see
"Description of Stock--Restrictions on Ownership and Transfer" in the
accompanying Prospectus.

Subject to certain exceptions specified in the Company's Charter, no holder
may own, or be deemed to own by virtue of certain attribution provisions of the
Code, more than 8.5% of any class or series of Preferred Stock. The Board has
waived this restriction with respect to the acquisition of Series D Preferred
Shares for a holder who is not an "individual" within the meaning of Section
542(a)(2) of the Code, so long as, through such holder's ownership of such
Series D Preferred Shares, (i) no "individual" would be considered the
beneficial owner of more than 8.5% of the Series D Preferred Shares and (ii) the
Company would not be deemed to own, actually or constructively, more than a 9.8%
interest (as set forth in Section 856(h)(3) of the Code) in any tenant of the
Company. If a holder were to acquire more than 8.5% of the Series D Preferred
Shares and such holder did not meet the criteria set forth in the preceding
sentence, such holder's shares of Series D Preferred Shares would be subject to
the provisions in the Charter relating to a violation of the ownership limits as
described in the accompanying Prospectus under the caption "Description of
Stock--Restrictions on Ownership and Transfer."

S-30
<PAGE>
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS

The following is a summary of certain federal income tax considerations
pertaining to the acquisition, ownership and disposition of Series D Preferred
Shares. This discussion is general in nature and not exhaustive of all possible
tax considerations, nor does the discussion address any state, local or foreign
tax considerations. The discussion is based on current law and does not purport
to deal with all aspects of federal income taxation that may be relevant to a
prospective shareholder in light of its particular circumstance or to certain
types of shareholders (including insurance companies, financial institutions,
broker-dealers, tax exempt investors, foreign corporations and persons who are
not citizens or residents of the United States) subject to special treatment
under the federal income tax laws.

Except for the discussion below under "--Clinton Administration's Proposed
Changes to REIT Asset Tests," 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."

The Company has not sought any ruling from the Internal Revenue Service
("IRS") with respect to the statements made and the conclusions reached in the
following summary, and there can be no assurance that the IRS will agree with
such statements and conclusions. INVESTORS CONSIDERING THE PURCHASE OF SERIES D
PREFERRED SHARES SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE
APPLICATION OF THE UNITED STATES FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR
SITUATIONS AS WELL AS ANY TAX CONSEQUENCES ARISING UNDER THE LAWS OF ANY STATE,
LOCAL OR FOREIGN TAXING JURISDICTION OR UNDER ANY APPLICABLE TAX TREATY.

CLINTON ADMINISTRATION'S PROPOSED CHANGES TO REIT ASSET TESTS

The Clinton Administration's budget proposal announced on February 2, 1998
includes a proposal to amend the REIT asset tests with respect to non-qualified
REIT subsidiaries, such as the Company's corporate Subsidiaries. The proposal
would prohibit a REIT from owning more than 10% of the vote or value of the
outstanding stock of any non-qualified REIT subsidiary. Existing non-qualified
REIT subsidiaries would be grandfathered, and therefore subject only to the 5%
asset test and 10% voting securities test of current law, except that such
grandfathering would terminate if the subsidiary engaged in a new trade or
business or acquired substantial new assets. (For a description of the 5% asset
test and 10% voting securities test, see the accompanying Prospectus under the
heading "Federal Income Tax Considerations--Requirements for
Qualification--Asset Tests.") As a result, if the proposal were to be enacted,
certain of the Subsidiaries would become subject to the new 10%-vote-and-value
limitation if they commenced new trade or business activities or acquired
substantial new assets after the specified effective date. The Company could not
satisfy the new test because it would be considered to own more than 10% of the
value of the stock of such Subsidiaries. Accordingly, the proposal, if enacted,
would materially impede the ability of the Company's corporate Subsidiaries to
engage in other activities without jeopardizing the Company's REIT status.

TAXATION OF HOLDERS OF SERIES D PREFERRED SHARES

DIVIDENDS AND OTHER DISTRIBUTIONS. For a discussion of the taxation of the
Company, the treatment of dividends and other distributions with respect to
shares of the Company, and the backup withholding rules, see the captions
"Federal Income Tax Considerations--Federal Income Taxation of the Company,"
"--Taxation of Domestic Stockholders" "--Taxation of Domestic Tax-Exempt
Stockholders" and "--Taxation of Foreign Stockholders" in the accompanying
Prospectus. In determining the extent to which a distribution on the Series D
Preferred Shares constitutes a dividend for tax purposes, the earnings and
profits of the Company will be allocated, on a pro rata basis, first to
distributions with respect to the Series B and Series D Preferred Shares and
then to the Common Stock. Distributions made by the Company that are properly
designated by the Company as capital gain dividends will be

S-31
<PAGE>
taxable to taxable U.S. Stockholders, who are individuals, estates or trusts, as
gain from the sale or exchange of a capital asset held for more than one year
(to the extent that they do not exceed the Company's actual net capital gain for
the taxable year) without regard to the period for which a U.S. Stockholder has
held its shares. In the event that the Company designates any portion of a
dividend as a "capital gain dividend," a U.S. Stockholder's share of such
capital gain dividend would be an amount which bears the same ratio to the total
amount of dividends paid to such U.S. Stockholder for the year as the aggregate
amount designated as a capital gain dividend bears to the aggregate amount of
all dividends paid on all classes of shares for the year.

On November 10, 1997, the IRS issued IRS Notice 97-64, which provides
generally that the Company may classify portions of its designated capital gain
dividend as (i) a 20% rate gain distribution (which would be taxed as long-term
capital gain in the 20% group), (ii) an unrecaptured Section 1250 gain
distribution (which would be taxed as long-term capital gain in the 25% group),
or (iii) a 28% rate gain distribution (which would be taxed as long-term capital
gain in the 28% group). (If no designation is made, the entire designated
capital gain dividend will be treated as a 28% rate gain distribution. For a
discussion of the 20%, 25% and 28% tax rates applicable to individuals, see
"--1997 Act Changes to Capital Gain Taxation" below.) IRS Notice 97-64 provides
that a REIT must determine the maximum amounts that it may designate as 20% and
25% rate capital gain dividends by performing the computation required by the
Code as if the REIT were an individual whose ordinary income were subject to a
marginal tax rate of at least 28%. The Notice further provides that designations
made by the REIT only will be effective to the extent that they comply with
Revenue Ruling 89-91, which requires that distributions made to different
classes of shares be composed proportionately of dividends of a particular type.

SALE OF SERIES D PREFERRED SHARES. Upon any sale or other disposition of
shares, a U.S. Stockholder will recognize gain or loss for federal income tax
purposes in an amount equal to the difference between (i) the amount of cash and
the fair market value of any property received on such sale or other disposition
and (ii) the holder's adjusted basis in such shares for tax purposes. Such gain
or loss will be capital gain or loss if the shares have been held by the U.S.
Stockholder as a capital asset. In the case of a U.S. Stockholder who is an
individual or an estate or trust, such gain or loss will be long-term capital
gain or loss, subject to a 28% tax rate, if such shares have been held for more
than one year but not more than 18 months, and a long-term capital gain or loss,
subject to a 20% tax rate, if such shares have been held for more than 18
months. In the case of a U.S. Stockholder that is a corporation, such gain or
loss will be long-term capital gain or loss if such shares have been held for
more than one year. In general, any loss recognized by a U.S. Stockholder upon
the sale or other disposition of shares that have been held for six months or
less (after applying certain holding period rules) will be treated as a
long-term capital loss, to the extent of distributions received by such U.S.
Stockholder from the Company that were required to be treated as long-term
capital gains. For a U.S. Stockholder that is an individual, trust or estate,
the long-term capital loss would be apportioned among the applicable long-term
capital gain groups to the extent it appears that distributions received by such
U.S. Stockholders were previously so treated.

1997 ACT CHANGES TO CAPITAL GAIN TAXATION. The Tax Relief Act of 1997 (the
"1997 Act") altered the taxation of capital gain income. Under the 1997 Act,
individuals, trusts and estates that hold certain investments for more than 18
months may be taxed at a maximum long-term capital gain rate of 20% on the sale
or exchange of those investments. Individuals, trusts and estates that hold
certain assets for more than one year but not more than 18 months may be taxed
at a maximum long-term capital gain rate of 28% on the sale or exchange of those
investments. The 1997 Act also provides a maximum rate of 25% for "unrecaptured
section 1250 gain" for individuals, trusts and estates, special rules for
"qualified 5-year gain," and other changes to prior law. The 1997 Act allows the
IRS to prescribe regulations on how the 1997 Act's new capital gain rates will
apply to sales of capital assets by "pass-through entities," which include
REITs, such as the Company, and to sales of interests in "pass-through
entities." For a discussion of new rules under the 1997 Act that apply to the
taxation of distributions by the Company to

S-32
<PAGE>
its stockholders that are designated by the Company as "capital gain dividends,"
see "--Dividends and Other Distributions" above. Stockholders are urged to
consult with their own tax advisors with respect to the new rules contained in
the 1997 Act.

REDEMPTION OF SERIES D PREFERRED SHARES. The treatment accorded to any
redemption by the Company (as distinguished from a sale, exchange or other
disposition) of Series D Preferred Shares can only be determined on the basis of
particular facts as to each Preferred Holder at the time of redemption. In
general, a Preferred Holder will recognize capital gain or loss measured by the
difference between the amount received by the Preferred Holder upon the
redemption and such holder's adjusted tax basis in the Series D Preferred Shares
redeemed (provided the Series D Preferred Shares are held as a capital asset) if
such redemption (i) results in a "complete termination" of the Preferred
Holder's interest in all classes of stock of the Company under Section 302(b)(3)
of the Code, or (ii) is "not essentially equivalent to a dividend" with respect
to the Preferred Holder under Section 302(b)(1) of the Code. In applying these
tests, there must be taken into account not only any Series D Preferred Shares
owned by the Preferred Holder, but also such holder's ownership of Common Stock,
other series of preferred shares and any other options (including stock purchase
rights) to acquire any of the foregoing. The Preferred Holder also must take
into account any such securities (including options) which are considered to be
owned by such Preferred Holder by reason of the constructive ownership rules set
forth in Sections 318 and 302(c) of the Code.

If a particular Preferred Holder owns (actually or constructively) no shares
of Common Stock of the Company or an insubstantial percentage of the outstanding
shares of Common Stock of the Company, based upon current law, it is probable
that the redemption of Series D Preferred Shares from such a Preferred Holder
would be considered "not essentially equivalent to a dividend." However, whether
a distribution is "not essentially equivalent to a dividend" depends on all of
the facts and circumstances, and a Preferred Holder intending to rely on any of
these tests at the time of redemption should consult its own tax adviser to
determine their application to its particular situation.

If the redemption does not meet any of the tests under Section 302 of the
Code, then the redemption proceeds received from the Series D Preferred Shares
will be treated as a distribution on the Series D Preferred Shares as described
under "Federal Income Tax Considerations--Taxation of Domestic Stockholders,"
"--Taxation of Domestic Tax-Exempt Stockholders" and "--Taxation of Foreign
Stockholders" in the accompanying Prospectus. If the redemption is taxed as a
dividend, the Preferred Holder's adjusted tax basis in the Series D Preferred
Shares will be transferred to any other stockholdings of the Preferred Holder in
the Company. If the Preferred Holder owns no other stockholdings in the Company,
under certain circumstances, such basis may be transferred to a related person,
or it may be lost entirely.

SPECIAL CONSIDERATIONS FOR NON-U.S. SHAREHOLDERS

There are several special considerations for prospective purchasers of the
Series D Preferred Shares who would be Non-U.S. Stockholders (persons other than
(i) citizens or residents of the United States, (ii) corporations, partnerships
or other entities created or organized under the laws of the United States or
any political subdivision thereof, and (iii) estates or trusts the income of
which is subject to United States federal income taxation regardless of its
source). See also "Federal Income Tax Considerations--Taxation of Foreign
Stockholders" and "Description of Common Stock--Restrictions on Transfer" in the
accompanying Prospectus.

A Non-U.S. Stockholder will be subject to tax under the Foreign Investment
in Real Property Tax Act ("FIRPTA") on the gain attributable to a disposition of
the Series D Preferred Shares if the Company does not qualify as a "domestically
controlled REIT." The Company will qualify as a "domestically controlled REIT"
with respect to a sale by a Non-U.S. Shareholder only if throughout the
five-year period ending on the date of the sale, less than 50%, by value, of the
Company's outstanding stock is owned by Non-U.S. Shareholders. In the event that
stockholders of the Company who are Non-U.S. Stockholders either

S-33
<PAGE>
currently, or at any time in the future, collectively own 50% or more of the
Company's stock, the Company would fail to qualify as a "domestically controlled
REIT." The Company does not have knowledge that there currently are Non-U.S.
Stockholders that would cause the Company to fail the 50% test, but the vast
majority of the Company's shares of Common Stock are held in "street name" and
thus the Company is unable to advise a prospective Non-U.S. Stockholder that the
Company in fact qualifies as a "domestically controlled REIT."

Even if the Company were not a "domestically controlled REIT," a Non-U.S.
Stockholder of Series D Preferred Shares will not be subject to tax under FIRPTA
provided that (i) the Series D Preferred Shares are "regularly traded" (as
defined by the applicable Treasury Regulations) on an established securities
market, and (ii) such Non-U.S. Stockholder owned 5% or less of the value of the
Company's preferred stock, or any series thereof, throughout the five-year
period ending on the date of sale.

If the gain on the disposition of the Series D Preferred Shares were to be
subject to tax under FIRPTA, a Non-U.S. Stockholder would be subject to the same
tax treatment as domestic shareholders with respect to such gain (subject to
applicable alternative minimum tax and a special alternative minimum tax in the
case of nonresident alien individuals), and the purchaser of the Series D
Preferred Shares would be required to withhold and remit to the IRS 10% of the
consideration paid for the Series D Preferred Shares.

UNCONSOLIDATED SUBSIDIARIES

The Company does not own more than 10% 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 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 fund distributions is
expected to come from MRI through payments of dividends. 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
for distribution by the Company to holders of Series D Preferred Shares will be
reduced accordingly.

S-34
<PAGE>
UNDERWRITING

Subject to the terms and conditions of the Underwriting Agreement and the
Pricing Agreement, the Company has agreed to sell to each of the underwriters
named below (the "Underwriters"), and each of the Underwriters, for whom
Goldman, Sachs & Co., Prudential Securities Incorporated, ABN AMRO Incorporated,
A.G. Edwards & Sons, Inc., Legg Mason Wood Walker, Incorporated and PaineWebber
Incorporated are acting as representatives (the "Representatives"), has
severally agreed to purchase, the respective number of Series D Preferred Shares
set forth opposite its name below:

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS SHARES
- ------------------------------------------------------------------------------- -------------
<S> <C>
Goldman, Sachs & Co............................................................ 247,925
Prudential Securities Incorporated............................................. 247,925
ABN AMRO Incorporated.......................................................... 247,000
A.G. Edwards & Sons, Inc....................................................... 247,000
Legg Mason Wood Walker, Incorporated........................................... 247,000
PaineWebber Incorporated....................................................... 247,000
BT Alex. Brown Incorporated.................................................... 33,300
CIBC Oppenheimer Corp.......................................................... 33,300
Donaldson, Lufkin & Jenrette Securities Corporation............................ 33,300
EVEREN Securities, Inc......................................................... 33,300
McDonald & Company Securities, Inc............................................. 33,300
Wheat First Securities, Inc.................................................... 33,300
Advest, Inc.................................................................... 16,650
J.C. Bradford & Co............................................................. 16,650
Cowen & Company................................................................ 16,650
Crowell, Weedon & Co........................................................... 16,650
Dain Rauscher Wessels.......................................................... 16,650
Fahnestock & Co. Inc........................................................... 16,650
J.J.B. Hilliard, W.L. Lyons, Inc............................................... 16,650
Interstate/Johnson Lane Corporation............................................ 16,650
McGinn, Smith & Co., Inc....................................................... 16,650
Morgan, Keegan & Company, Inc.................................................. 16,650
NationsBanc Montgomery Securities LLC.......................................... 16,650
Fifth Third/The Ohio Company................................................... 16,650
Piper Jaffray Inc.............................................................. 16,650
The Robinson-Humphrey Company, LLC............................................. 16,650
Roney Capital Markets.......................................................... 16,650
Sutro & Co. Incorporated....................................................... 16,650
Trilon International Inc....................................................... 16,650
Tucker Anthony Incorporated.................................................... 16,650
Wedbush Morgan Securities...................................................... 16,650
-------------
Total........................................................................ 2,000,000
-------------
-------------
</TABLE>

Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and pay for all of the Series D Preferred
Shares, if any are taken.

The Underwriters propose to offer the Series D Preferred Shares in part
directly to the public at the initial public offering price set forth on the
cover page of this Prospectus Supplement, and in part to certain securities
dealers at such price less a concession of $.50 per share. The Underwriters may
allow, and such dealers may reallow, a concession not in excess of $.40 per
share to certain brokers and

S-35
<PAGE>
dealers. After the Series D Preferred Shares are released for sale to the
public, the offering price and other selling terms may from time to time be
varied by the Representatives.

The Company has granted the Underwriters an option exercisable for 30 days
after the date of this Prospectus Supplement to purchase up to an aggregate of
300,000 additional Series D Preferred Shares solely to cover over-allotments, if
any. If the Underwriters exercise their over-allotment option, the Underwriters
have severally agreed, subject to certain conditions, to purchase approximately
the same percentage thereof that the number of Series D Preferred Shares to be
purchased by each of them, as shown in the foregoing table, bears to the
2,000,000 Series D Preferred Shares offered by this Prospectus Supplement.

Prior to the Offering, there has been no public market for the Series D
Preferred Shares. An application to list the Series D Preferred Shares on the
New York Stock Exchange will be made, although there can be no assurance that
the Series D Preferred Shares will be approved for listing.

The Company has agreed to indemnify the several Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.

Certain of the Underwriters have provided investment banking and other
services to the Company in the past and from time to time may provide such
services to the Company in the future. Affiliates of Prudential Securities
Incorporated currently own approximately 29.8% of the Company's outstanding
Common Stock.

In connection with the Offering, the Underwriters may purchase and sell the
Series D Preferred Shares in the open market. These transactions may include
over-allotment and stabilizing transactions and purchases to cover syndicate
short positions created in connection with the Offering. Stabilizing
transactions consist of certain bids or purchases for the purpose of preventing
or retarding a decline in the market price of the Series D Preferred Shares; and
syndicate short positions involve the sale by the Underwriters of a greater
number of securities than they are required to purchase from the Company in the
Offering. The Underwriters also may impose a penalty bid, whereby selling
concessions allowed to syndicate members or other broker-dealers in respect of
the securities sold in the Offering for their account may be reclaimed by the
syndicate if such Series D Preferred Shares are repurchased by the syndicate in
stabilizing or covering transactions. These activities may stabilize, maintain
or otherwise affect the market price of the Series D Preferred Shares, which may
be higher than the price that might otherwise prevail in the open market; and
these activities, if commenced, may be discontinued at any time. These
transactions may be effected on the New York Stock Exchange, the
over-the-counter market or otherwise.

LEGAL MATTERS

The validity of the issuance of the Series D Preferred Shares offered
pursuant to this Prospectus Supplement will be passed upon for the Company by
Ballard Spahr Andrews & Ingersoll, Baltimore, Maryland. Certain legal matters
also will be passed upon for the Company by Vinson & Elkins L.L.P., Dallas,
Texas. Certain legal matters will be passed upon for the Underwriters by Hogan &
Hartson L.L.P., Washington, D.C.

EXPERTS

The financial statements and schedules incorporated by reference in this
Prospectus Supplement and elsewhere in the accompanying Prospectus to the extent
and for the periods indicated in their reports have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their reports with
respect thereto, and are included herein in reliance upon the authority of said
firm as experts in giving said reports.

S-36
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

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.

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

TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Prospectus Supplement Summary.................. S-3
The Company.................................... S-11
Use of Proceeds................................ S-16
Capitalization................................. S-16
Selected Financial and Other Information....... S-17
Business and Properties........................ S-20
Management..................................... S-25
Description of Series D Preferred Shares....... S-26
Certain Federal Income Tax Considerations...... S-31
Underwriting................................... S-35
Legal Matters.................................. S-36
Experts........................................ S-36

PROSPECTUS

Available Information.......................... 2
Incorporation by Reference..................... 2
The Company.................................... 4
Use of Proceeds................................ 4
Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends.................... 4
Description of Debt Securities................. 5
Description of Stock........................... 18
Description of Warrants........................ 25
Selling Stockholders........................... 27
Plan of Distribution........................... 28
Certain Provisions of Maryland Law and of the
Charter and Bylaws........................... 30
Federal Income Tax Considerations.............. 35
Experts........................................ 45
Legal Matters.................................. 45
Glossary....................................... 46
</TABLE>

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
2,000,000 SHARES

MERIDIAN INDUSTRIAL

TRUST, INC.

8.75% SERIES D CUMULATIVE

REDEEMABLE

PREFERRED STOCK

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

[LOGO]

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

GOLDMAN, SACHS & CO.
PRUDENTIAL SECURITIES INCORPORATED

ABN AMRO ROTHSCHILD
A DIVISION OF ABN AMRO INCORPORATED

A.G. EDWARDS & SONS, INC.

LEGG MASON WOOD WALKER
INCORPORATED

PAINEWEBBER INCORPORATED

REPRESENTATIVES OF THE UNDERWRITERS