<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

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

                                   FORM 10-Q

(MARK ONE)

<TABLE>
<C>        <S>
   /X/     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
           SECURITIES EXCHANGE ACT OF 1934

           FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000
</TABLE>

                                       OR

<TABLE>
<C>        <S>
   / /     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
           SECURITIES EXCHANGE ACT OF 1934

           For the transition period from ------------ to ------------
</TABLE>

                        Commission file number 000-24905

                         BEACON CAPITAL PARTNERS, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S>                                                <C>
                 Maryland                                          04-3403281
------------------------------------------         ------------------------------------------
     (STATE OR OTHER JURISDICTION OF                   (IRS EMPLOYER IDENTIFICATION NO.)
      INCORPORATION OR ORGANIZATION)

     One Federal Street, 26th Floor,
          Boston, Massachusetts                                      02110
------------------------------------------         ------------------------------------------
 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)                           (ZIP CODE)

                                        617-457-0400
---------------------------------------------------------------------------------------------
                    (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
</TABLE>

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

                                    Yes X  No __

    Number of Common Shares outstanding at the latest practicable date,
November 8, 2000: 21,730,888 shares, $.01 par value.

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
                         BEACON CAPITAL PARTNERS, INC.

                                   FORM 10-Q

                                     INDEX

<TABLE>
<CAPTION>
                                                                         PAGE
                                                                       --------
<S>      <C>                                                           <C>
Part I--Financial Information

Item 1.  Consolidated Financial Statements...........................         1

         Consolidated Balance Sheets--September 30, 2000 (Unaudited)
           and December 31, 1999.....................................         1

         Consolidated Statements of Operations--Three and Nine Months
           Ended September 30, 2000 and 1999 (Unaudited).............         2

         Consolidated Statements of Cash Flows--Nine Months Ended
           September 30, 2000 and 1999 (Unaudited)...................         3

         Notes to Consolidated Financial Statements..................         4

Item 2.  Management's Discussion and Analysis of Financial Condition
           and Results of Operations.................................        11

Item 3.  Quantitative and Qualitative Disclosures about Market
           Risk......................................................        23

Part II--Other Information

Item 1.  Legal Proceedings...........................................        24

Item 2.  Changes in Securities and Use of Proceeds...................        24

Item 3.  Defaults Upon Senior Securities.............................        24

Item 4.  Submission of Matters to a Vote of Security Holders.........        24

Item 5.  Other Information...........................................        24

Item 6.  Exhibits and Reports on Form 8-K............................        24

Exhibit Index........................................................        26
</TABLE>
<PAGE>
PART I--FINANCIAL INFORMATION

  ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

                         BEACON CAPITAL PARTNERS, INC.

                          CONSOLIDATED BALANCE SHEETS

              (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                              SEPTEMBER 30,   DECEMBER 31,
                                                                  2000            1999
                                                              -------------   ------------
                                                               (UNAUDITED)      (NOTE 1)
<S>                                                           <C>             <C>
ASSETS
Real Estate:
  Land......................................................    $  35,264       $  52,182
  Buildings, improvements and equipment.....................      221,328         216,967
                                                                ---------       ---------
                                                                  256,592         269,149
  Less accumulated depreciation.............................       10,486           7,025
                                                                ---------       ---------
                                                                  246,106         262,124

Deferred financing and leasing costs, net of accumulated
  amortization of $1,088 and $434, respectively.............        4,012           3,085
Cash and cash equivalents...................................       65,350          76,927
Restricted cash.............................................          969           1,203
Accounts receivable, net....................................        3,969           3,393
Deferred rent receivable....................................        2,002             783
Other assets................................................        4,764           1,905
Investments in partnership, joint ventures and
  corporations..............................................      107,753         163,677
                                                                ---------       ---------
      Total assets..........................................    $ 434,925       $ 513,097
                                                                =========       =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
  Mortgage notes payable....................................    $  30,925       $  31,172
  Note payable--interim financing...........................       97,830         122,500
  Accounts payable and accrued expenses.....................       17,046          15,209
                                                                ---------       ---------
      Total liabilities.....................................      145,801         168,881
                                                                ---------       ---------
Commitments and contingencies...............................           --              --

Minority interest in consolidated partnership...............       38,909          43,639
                                                                ---------       ---------
Stockholders' equity:
  Preferred stock; $.01 par value, 200,000,000 shares
    authorized, none issued or outstanding..................           --              --
  Excess stock; $.01 par value, 250,000,000 shares
    authorized, none issued or outstanding..................           --              --
  Common stock; $.01 par value, 500,000,000 shares
    authorized, 19,202,592 and 20,973,932 shares issued and
    outstanding, respectively...............................          192             210
  Additional paid-in capital................................      376,395         389,520
  Cumulative net income.....................................       73,629          12,019
  Cumulative dividends......................................     (197,435)       (101,172)
  Unrealized loss on marketable equity securities...........       (2,566)             --
                                                                ---------       ---------
      Total stockholders' equity............................      250,215         300,577
                                                                ---------       ---------
      Total liabilities and stockholders' equity............    $ 434,925       $ 513,097
                                                                =========       =========
</TABLE>

                            SEE ACCOMPANYING NOTES.

                                       1
<PAGE>
                         BEACON CAPITAL PARTNERS, INC.

                     CONSOLIDATED STATEMENTS OF OPERATIONS

              (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)

                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                       THREE MONTHS ENDED     NINE MONTHS ENDED
                                                          SEPTEMBER 30,         SEPTEMBER 30,
                                                       -------------------   -------------------
                                                         2000       1999       2000       1999
                                                       --------   --------   --------   --------
<S>                                                    <C>        <C>        <C>        <C>
Revenues:
  Rental income......................................  $  9,109   $  5,864   $ 26,049   $ 15,741
  Reimbursement of operating expenses and real estate
    taxes............................................       313        253      1,003      1,844
  Equity in earnings of partnership and joint
    ventures.........................................     1,157      1,120      5,129      3,521
  Interest and dividend income.......................     1,414        629      4,748      5,413
  Other income.......................................       205        855      7,200      1,258
                                                       --------   --------   --------   --------
      Total revenues.................................    12,198      8,721     44,129     27,777
                                                       --------   --------   --------   --------
Expenses:
  Property operating.................................     2,583      1,551      7,347      4,298
  Real estate taxes..................................     1,352      1,210      3,791      3,509
  General and administrative.........................     2,805      2,281      8,569      7,204
  Affiliate formation expenses.......................        --         --      2,054         --
  Interest expense...................................       514      1,203      2,998      1,670
  Depreciation and amortization......................     2,165      1,800      5,966      4,116
                                                       --------   --------   --------   --------
      Total expenses.................................     9,419      8,045     30,725     20,797
                                                       --------   --------   --------   --------
Income before gains on sales of real estate, minority
  interest and extraordinary items...................     2,779        676     13,404      6,980
Gains on sales of real estate........................     2,979         --     61,516         --
                                                       --------   --------   --------   --------
Income before minority interest and extraordinary
  items..............................................     5,758        676     74,920      6,980
Minority interest in consolidated partnership........      (710)       (78)    (8,736)      (810)
                                                       --------   --------   --------   --------
Income before extraordinary items....................     5,048        598     66,184      6,170
Extraordinary items, net of minority interest........        --         --     (4,574)        --
                                                       --------   --------   --------   --------
      Net income.....................................  $  5,048   $    598   $ 61,610   $  6,170
                                                       ========   ========   ========   ========
Income before extraordinary items per common
  share-basic and diluted............................  $   0.26   $   0.03   $   3.22   $   0.29
Extraordinary items per common share-basic and
  diluted............................................        --         --      (0.22)        --
                                                       --------   --------   --------   --------
Net income per common share-basic and diluted........  $   0.26   $   0.03   $   3.00   $   0.29
                                                       ========   ========   ========   ========
Weighted average number of common shares outstanding
  (in thousands).....................................    19,595     20,974     20,510     20,974
                                                       ========   ========   ========   ========
</TABLE>

                            SEE ACCOMPANYING NOTES.

                                       2
<PAGE>
                         BEACON CAPITAL PARTNERS, INC.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

                             (DOLLARS IN THOUSANDS)

                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                NINE MONTHS ENDED
                                                                  SEPTEMBER 30,
                                                              ---------------------
                                                                2000        1999
                                                              ---------   ---------
<S>                                                           <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income................................................  $ 61,610    $   6,170
  Adjustments to reconcile net income to net cash provided
    by operating activities:
    Depreciation............................................     4,610        3,403
    Amortization............................................     1,356          713
    Extraordinary items, net of minority interest...........     4,574           --
    Gains on sales of real estate...........................   (61,516)          --
    Equity in earnings of partnership and joint ventures....    (5,129)      (3,521)
    Distributions from partnership and joint venture........     7,872        4,100
    Gain on Cypress investment..............................    (6,414)          --
    Minority interest in consolidated partnership...........     8,736          810
  Increase (decrease) in cash arising from changes in
    operating assets and liabilities:
    Restricted cash.........................................       234         (100)
    Accounts receivable.....................................      (576)         821
    Deferred rent receivable................................    (1,219)        (352)
    Other assets............................................    (5,667)      (2,534)
    Accounts payable and accrued expenses...................       837        3,156
                                                              ---------   ---------
      Net cash provided by operating activities.............     9,308       12,666
                                                              ---------   ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Real estate asset acquisitions and improvements...........   (49,234)     (38,846)
  Proceeds from real estate asset sales.....................    89,112           --
  Payment of deferred leasing costs.........................    (1,928)        (938)
  Investments in partnership, joint ventures and
    corporations............................................   (15,959)     (55,244)
  Distributions from partnership and joint venture..........    78,519           --
  Purchase of Wyndham preferred stock, net..................        --     (102,874)
  Funding of mortgage note receivable.......................        --      (45,000)
  Repayment of mortgage note receivable.....................        --       45,000
  Other investment..........................................        --      (34,705)
  Acquisition deposits and deferred costs...................        --       (1,158)
                                                              ---------   ---------
      Net cash provided (used) by investing activities......   100,510     (233,765)
                                                              ---------   ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Repayments on mortgage notes..............................      (247)      (2,780)
  Proceeds from note payable--interim financing.............     7,500      100,000
  Repayment on note payable--interim financing..............   (32,170)          --
  Payment of deferred financing costs.......................      (293)      (2,077)
  Repurchase of common stock................................   (13,143)          --
  Distribution payment to minority interests................    (9,637)      (1,321)
  Dividend payment to stockholders..........................   (73,405)     (10,259)
                                                              ---------   ---------
      Net cash (used) provided by financing activities......  (121,395)      83,563
                                                              ---------   ---------

Net decrease in cash and cash equivalents...................   (11,577)    (137,536)
Cash and cash equivalents, beginning of period..............    76,927      174,647
                                                              ---------   ---------
Cash and cash equivalents, end of period....................  $ 65,350    $  37,111
                                                              =========   =========
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING
  ACTIVITIES:
Distribution of Cypress stock to minority interests.........  $  2,073    $      --
Dividend of Cypress stock to stockholders...................    15,793           --
Distribution of CO Space stock to minority interests........       928           --
Dividend of CO Space stock to stockholders..................     7,065           --
Distribution of Wyndham stock to minority interests.........        --       11,961
Dividend of Wyndham stock to stockholders...................        --       90,913
SUPPLEMENTAL DISCLOSURE:
Cash paid for interest, net of capitalized interest of
  $6,491 and $1,272, respectively...........................  $  2,999    $   1,080
</TABLE>

                            SEE ACCOMPANYING NOTES.

                                       3
<PAGE>
                         BEACON CAPITAL PARTNERS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2000

              (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)
                                  (UNAUDITED)

1. BASIS OF PRESENTATION

    The financial statements of Beacon Capital Partners, Inc. ("BCP") have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for interim periods are not necessarily
indicative of the results that may be expected for the full year.

    The balance sheet at December 31, 1999 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.

    At September 30, 2000, the Company's investments in marketable equity
securities were included in other assets and had a fair value of approximately
$3,640 and an unrealized loss of approximately $2,566. Comprehensive income
after giving effect to the unrealized loss was $2,482 and $59,044 for the three
and nine month periods ended September 30, 2000, respectively. Net income and
comprehensive income were the same for the three and nine month periods ended
September 30, 1999.

    On October 17, 2000, Luddite Associates (a limited partner in the Operating
Partnership) converted its form of ownership in the Company from Operating
Partnership units to common stock.

    For further information, refer to the consolidated financial statements and
footnotes thereto included in BCP's annual report on Form 10-K for the period
ended December 31, 1999.

2. ORGANIZATION

    Beacon Capital Partners, Inc. was incorporated on January 21, 1998 as a
Massachusetts corporation, and was initially capitalized through loans from the
two founders of BCP, Messrs. Leventhal and Fortin. The loans were repaid in
May 1998. BCP qualifies as a real estate investment trust under the Internal
Revenue Code of 1986, as amended. BCP was established to conduct real estate
investment and development activities and currently operates in one segment.

    On March 17, 1998, BCP was reincorporated as a Maryland corporation and on
March 20, 1998, it completed an initial private offering in accordance with
Section 4(2) of the Securities Act of 1933. BCP initially issued 17,360,769
common shares with proceeds, net of expenses, of $323,110. In April 1998,
3,613,163 additional shares were issued through the exercise of the
underwriter's over-allotment, with proceeds, net of expenses, of $66,620.

    In connection with the reincorporation of BCP in Maryland, BCP established
Beacon Capital Partners, L.P. (the "Operating Partnership"). BCP and the
Operating Partnership are collectively referred to as the "Company". The
Operating Partnership is a Delaware limited partnership. BCP is the sole General
Partner of, and, as of September 30, 2000, holds approximately 87% of the
economic interest in the Operating Partnership. BCP holds an approximate 1%
general partnership interest in the Operating Partnership and the balance is
held as a limited partnership interest. The limited partnership interests not
held by BCP are presented as minority interest in the accompanying consolidated
financial statements. The term of the Operating Partnership commenced on
March 16, 1998 and shall continue until January 1, 2056 or until such time as a
Liquidating Event, as defined, has occurred.

                                       4
<PAGE>
                         BEACON CAPITAL PARTNERS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               SEPTEMBER 30, 2000

              (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)
                                  (UNAUDITED)

3. REAL ESTATE

    On April 19, 2000, the Company sold The Draper Building for $72,500. The
Company recognized a gain on the sale of approximately $27,321. In September
2000, the Company commenced the sales of the Fort Point Place residential
condominiums. As of September 30, 2000, 51 of the 120 units have been sold and
the Company recognized a gain on the sales of approximately $133.

4. INVESTMENTS IN PARTNERSHIP, JOINT VENTURES AND CORPORATIONS

    The investments in partnership, joint ventures and corporations represent
the Company's interest in (i) a joint venture with PW Acquisitions IX, LLC,
known as Beacon/PW Kendall LLC ("The Athenaeum Portfolio"), (ii) a joint venture
with Mathilda Partners LLC ("Mathilda Research Centre"), (iii) a joint venture
with Mathilda Partners II LLC ("Mathilda Research Centre II"), (iv) a joint
venture with HA L.L.C. ("Millennium Tower"), (v) an investment in Series B
Convertible Preferred Stock ("Series B Preferred") of Wyndham International,
Inc. ("Wyndham") and (vi) an investment in Beacon Capital Strategic Partners,
L.P. ("BCSP").

    A reconciliation of the underlying net assets to the Company's carrying
value of investments in partnership, joint ventures and corporations is as
follows:

<TABLE>
<CAPTION>
                                  THE      MATHILDA    MATHILDA
                               ATHENAEUM   RESEARCH    RESEARCH    MILLENNIUM
                               PORTFOLIO    CENTRE    CENTRE II      TOWER      WYNDHAM      BCSP       TOTAL
                               ---------   --------   ----------   ----------   --------   --------   ---------
<S>                            <C>         <C>        <C>          <C>          <C>        <C>        <C>
Operating Partnership equity
  interest (including
  accumulated earnings, net
  of distributions).........   $ 14,975    $17,459       $939       $19,000     $    --    $ (5,134)  $  47,239
Investments in preferred
  stock.....................         --         --         --            --      54,652          --      54,652
Other costs.................         39      2,305         19         2,494         918          87       5,862
                               --------    -------       ----       -------     -------    --------   ---------
Carrying value of
  investments in
  partnership, joint
  ventures and corporations
  at September 30, 2000.....   $ 15,014    $19,764       $958       $21,494     $55,570    $ (5,047)  $ 107,753
                               ========    =======       ====       =======     =======    ========   =========
Equity in earnings of
  partnership and joint
  ventures
Nine months ended
  September 30, 2000........   $  1,992    $   336       $ --       $    --     $    --    $  2,801   $   5,129
  September 30, 1999........      3,521         --         --            --          --          --       3,521
Operating Partnership share
  of gains on sales of real
  estate
Nine months ended
  September 30, 2000........   $ 12,604    $    --       $ --       $    --     $    --    $ 21,459   $  34,063
  September 30, 1999........         --         --         --            --          --          --          --
Operating Partnership share
  of extraordinary items
Nine months ended
  September 30, 2000........   $ (5,149)   $    --       $ --       $    --     $    --    $    (25)  $  (5,174)
  September 30, 1999........         --         --         --            --          --          --          --
</TABLE>

                                       5
<PAGE>
                         BEACON CAPITAL PARTNERS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               SEPTEMBER 30, 2000

              (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)
                                  (UNAUDITED)

4. INVESTMENTS IN PARTNERSHIP, JOINT VENTURES AND CORPORATIONS (CONTINUED)
THE ATHENAEUM PORTFOLIO

    Beacon/PW Kendall LLC was formed on April 16, 1998 and is jointly owned by
the Company and PW Acquisitions IX, LLC, an affiliate of PaineWebber. Initially
each member made a $5,000 contribution and the Company provided a loan to the
joint venture of approximately $117,000. The joint venture acquired The
Athenaeum Portfolio, an eleven building 970,000 square foot mixed-use portfolio
located in Cambridge, Massachusetts. In August 1998, the Company and PW
Acquisitions IX, LLC each made equity contributions of approximately $58,500,
which were used to repay the Company's loan receivable.

    On April 14, 2000, The Athenaeum Portfolio was refinanced and the joint
venture distributed refinancing proceeds in the amount of $90,700. The previous
mortgage was treated as extinguished and an extraordinary loss of approximately
$10,298 was incurred for the write-off of related transaction costs and the
unamortized deferred financing costs. The Company's share of the distribution
and extraordinary loss were approximately $45,350 and $5,149, respectively. On
June 7, 2000, the joint venture sold some of the assets in The Athenaeum
Portfolio (215 First Street, 195 First Street and Doc Linskey Way) for $68,000
and recorded a gain on the sale of approximately $25,208. Simultaneously with
the sale, the debt was paid down by $50,940 and the joint venture distributed
$16,000 to the members. The Company's share of the gain on the sale and
distribution were approximately $12,604 and $8,000, respectively.

MATHILDA RESEARCH CENTRE

    On August 9, 1998, the Company entered into a joint venture agreement with
Mathilda Partners LLC, an affiliate of Menlo Equities, a California based
developer, to develop two four-story Class A office/R&D buildings with surface
parking in Sunnyvale, California, known as Mathilda Research Centre. The Company
and Mathilda Partners LLC have agreed to fund 87.5% and 12.5% of the equity
required, respectively. On November 4, 1998, the venture acquired a twelve-acre
site on Mathilda Avenue in Sunnyvale, CA, on which it is developing Mathilda
Research Centre. The first building (approximately 144,000 square feet) was
completed in June 2000 and is currently 100% occupied by Juniper Networks, Inc.
("Juniper Networks"). The estimated cost of the 267,000 square foot development
is approximately $64,000. The joint venture has obtained a $44,000 construction
loan from an institutional lender to finance the development, and the balance of
the development costs will be funded by equity contributions from the venturers.
As of September 30, 2000, the venturers have funded equity contributions of
$20,000, of which the Company's portion was $17,500.

MATHILDA RESEARCH CENTRE II

    On August 9, 2000, the Company entered into a joint venture agreement with
Mathilda Partners II LLC, an affiliate of Menlo Equities, a California based
developer, to develop an additional phase of Mathilda Research Centre in
Sunnyvale, California, also for Juniper Networks. The Company and Mathilda
Partners II LLC have agreed to fund 87.5% and 12.5% of the equity required,
respectively. Current plans anticipate a 158,000 square foot building which is
projected to cost approximately $40,000. The joint venture is currently
negotiating a construction loan of $32,000. The project will require
approximately $8,000 of equity contributions of which the Company's portion will
be approximately $7,000. As of September 30, 2000, the venturers have funded
equity contributions of approximately $1,074, of which the Company's portion was
approximately $939.

                                       6
<PAGE>
                         BEACON CAPITAL PARTNERS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               SEPTEMBER 30, 2000

              (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)
                                  (UNAUDITED)

4. INVESTMENTS IN PARTNERSHIP, JOINT VENTURES AND CORPORATIONS (CONTINUED)
MILLENNIUM TOWER

    On September 1, 1998 the Company entered into a joint venture agreement with
HA L.L.C., an affiliate of Martin Smith Real Estate Services, a Seattle based
real estate company, to develop a 20-story office/retail and residential tower
in downtown Seattle, Washington, known as Millennium Tower. The Company and HA
L.L.C. have agreed to fund 66 2/3% and 33 1/3% of the equity required,
respectively. Land was contributed to the joint venture by HA L.L.C. at an
agreed value of $10,500, and the Company agreed to fund the first $19,000 of
cash requirements for the venture. As of September 30, 2000, the Company has
funded its total commitment of $19,000. The joint venture has obtained a $45,000
construction loan from two institutional lenders to finance the balance of the
development costs. The estimated cost of the project is $72,000, including the
value of the land.

    The Company's residential portion of this investment is held by BCP
Millennium Residential, Inc., a Massachusetts corporation ("BCP Millennium
Residential"). The voting common stock of BCP Millennium Residential is
controlled by Messrs. Leventhal and Fortin. The Operating Partnership owns
approximately 99% of the economic interests in BCP Millennium Residential. For
financial statement presentation purposes, the Company consolidates
BCP Millennium Residential.

WYNDHAM

    On June 30, 1999, the Company purchased 1,050,000 shares of Series B
Preferred of Wyndham at a net price of approximately $102,874. Simultaneously
with this transaction, the Company transferred all of these shares of Series B
Preferred to a voting trust (the "Wyndham Voting Trust") (the trustee of which
is a subsidiary of the Operating Partnership) and declared and paid a dividend
of approximately $4.34 per share of common stock of BCP and a distribution of
approximately $4.34 per operating partnership unit of the Operating Partnership.
The aggregate value of the dividend and distribution was approximately $103,064
and primarily consisted of the Company's interest in shares of the Series B
Preferred, subject to the Wyndham Voting Trust. Stockholders not able to receive
such interests received cash of equivalent value. Subsequent to June 30, 1999,
the Company purchased approximately 120,409 Wyndham Voting Trust interests at an
aggregate price of approximately $11,419.

    On July 1, 1999, the Company purchased 450,000 shares of Series B Preferred
at a net price of approximately $44,055. On October 29, 1999, the Company
transferred 244,340 of these shares of Series B Preferred to Beacon Lodging,
Inc., a Massachusetts corporation ("Beacon Lodging"). The voting common stock of
Beacon Lodging is controlled by Messrs. Leventhal and Fortin. The Operating
Partnership owns 99% of the economic interests in Beacon Lodging. For financial
statement presentation purposes, the Company consolidates Beacon Lodging. On
December 9, 1999, Wyndham completed a rights offering to its current common
shareholders and redeemed approximately 8,399 shares of Series B Preferred held
by the Company at a price of approximately $857.

    Wyndham's annual dividend on the Series B Preferred is 9.75%, paid
quarterly, partially in cash and partially in paid-in-kind shares.

    On November 3, 2000, the Company declared a dividend and distribution of
607,382.0251 interests (which represent 607,382.0251 of Series B Preferred) to
its shareholders and unitholders. This dividend and distribution is valued at
approximately $2.50 per share of common stock of BCP and approximately

                                       7
<PAGE>
                         BEACON CAPITAL PARTNERS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               SEPTEMBER 30, 2000

              (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)
                                  (UNAUDITED)

4. INVESTMENTS IN PARTNERSHIP, JOINT VENTURES AND CORPORATIONS (CONTINUED)
$2.50 per operating partnership unit of the Operating Partnership. The record
date for the dividend and distribution is November 2, 2000. The shares will be
held in the Wyndham Voting Trust subject to the same terms and conditions as the
shares held in the Wyndham Voting Trust that was established in June 1999.

BCSP

    On October 1, 1999, the Company completed the initial closing for BCSP, a
real estate limited partnership, of which BCP Strategic Partners LLC, the
Company's wholly-owned subsidiary, is the General Partner. Subsequent to
October 1, 1999, the Company completed additional closings and as of March 28,
2000 (the BCSP final closing date), equity commitments totaled $287,500, of
which the Company's equity commitment was $57,500. The commitments include
investments from various endowments, foundations, pension funds and other
institutional investors. For a period of up to two years from October 1, 1999,
BCSP will be the Company's exclusive real estate investment vehicle. As of
September 30, 2000, none of the Company's committed investment was funded. In
connection with the formation of BCSP, for the nine months ended September 30,
2000 and the year ended December 31, 1999, the Company incurred affiliate
formation expenses of approximately $2,054 and $3,977, respectively. The
expenses consist of underwriter commissions and fees for legal and professional
services not reimbursed by the partners of BCSP.

    On March 17, 2000, BCSP obtained a $137,500 secured revolving credit
facility. On June 14, 2000, BCSP sold 233 Fremont Street, a property located in
San Francisco, California that is currently undergoing redevelopment. The
property was sold for approximately $145,894, including approximately $15,894
held in escrow pending completion of the property's redevelopment. BCSP will
continue to oversee the redevelopment and the buyer will fund the remaining
redevelopment costs. The redevelopment is scheduled to be completed in the first
quarter of 2001. As of September 30, 2000, BCSP recognized a gain on the sale of
approximately $59,702. Pursuant to the applicable accounting rules, an
additional gain estimated at approximately $19,901 has been deferred and will be
recognized in future periods. On June 28, 2000, BCSP distributed $70,000 of the
sale proceeds. The Company's share of the recognized gain on the sale and
distribution were approximately $21,459 and $25,169, respectively.

5. OTHER INVESTMENTS

CYPRESS COMMUNICATIONS, INC.

    On September 8, 1998 and October 8, 1999, the Company invested an aggregate
of $11,000 to acquire preferred stock in Cypress Communications, Inc.
("Cypress"), representing a 9.5% fully diluted ownership position. Cypress
provides bundled communications services to tenants in multi-tenant commercial
buildings. Prior to January 5, 2000, the investment was held by both the
Operating Partnership and Tenant Communications, Inc., a Massachusetts
corporation ("Tenant Communications"). On January 5, 2000, the Company
distributed all of its preferred stock of Cypress (held by the Operating
Partnership and Tenant Communications), valued at approximately $0.75 per share
of common stock of BCP and operating partnership unit of the Operating
Partnership to a voting trust (the "Cypress Voting Trust") (the trustee of which
is a subsidiary of BCP), and then distributed its interest in the Cypress Voting
Trust to its stockholders and unitholders. The distribution was recorded by the
Company at the estimated fair value of the Cypress preferred stock as of the
date of distribution, which resulted in a gain in the amount of approximately
$6,414. This gain is included in other income in the accompanying Consolidated
Statements

                                       8
<PAGE>
                         BEACON CAPITAL PARTNERS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               SEPTEMBER 30, 2000

              (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)
                                  (UNAUDITED)

5. OTHER INVESTMENTS (CONTINUED)
of Operations. On February 10, 2000, Cypress successfully completed its initial
public offering. At the IPO, each share of preferred stock split into 4.5 shares
of common stock. The Cypress common stock held in the Cypress Voting Trust is
subject to certain terms and conditions, including limitations on
transferability.

CO SPACE, INC.

    On November 12, 1999, the Company invested $8,000 to acquire preferred stock
in CO Space, Inc. ("CO Space") representing an approximate 18% fully diluted
ownership position. CO Space provides co-location space for data storage,
telecommunication carriers, and web-hosting applications. Prior to January 28,
2000, the investment was held by the Operating Partnership. On January 28, 2000,
the Operating Partnership transferred 10% of its shares of CO Space
(representing 100% of its voting interest) to Shared Communications
Spaces, Inc., a Massachusetts corporation ("Shared Communications"). On
March 24, 2000, the Company distributed all of its preferred stock of CO Space
(held by the Operating Partnership and Shared Communications), valued at
approximately $0.34 per share of common stock of BCP and operating partnership
unit of the Operating Partnership to a voting trust (the "CO Space Voting
Trust") (the trustee of which is a subsidiary of BCP), and then distributed its
interest in the CO Space Voting Trust to its stockholders and unitholders. On
June 20, 2000, CO Space was acquired by InterNAP Network Services Corporation
("InterNAP"). InterNAP was founded in 1996 and provides internet connectivity
that is faster and more reliable than conventional internet services. In
conjunction with the acquisition of CO Space by InterNAP, each share of
preferred stock held in the CO Space Voting Trust was converted to one share of
CO Space common stock. The shares of CO Space common stock were exchanged for
shares of InterNAP common stock based upon a formula set forth in the definitive
agreement. Each share of CO Space common stock which was equivalent to a unit in
the CO Space Voting Trust was exchanged for .24488 shares of InterNAP common
stock. The InterNAP common stock held in the CO Space Voting Trust is subject to
certain terms and conditions, including limitations on transferability.

6. MORTGAGE NOTES PAYABLE

    The mortgage notes payable, collateralized by certain properties and
assignments of leases, total $30,925 at September 30, 2000. Mortgage notes
payable with fixed interest rates ranging from 7.75% to 9.25% and maturities
ranging from May 2002 to October 2022 total $18,425. A variable rate mortgage
note payable with a current interest rate of 8.62% at September 30, 2000 matures
in April 2002 and totals $12,500. The net book value of the mortgaged assets is
approximately $62,611 at September 30, 2000.

                                       9
<PAGE>
                         BEACON CAPITAL PARTNERS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               SEPTEMBER 30, 2000

              (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)
                                  (UNAUDITED)

6. MORTGAGE NOTES PAYABLE (CONTINUED)
    Future minimum principal payments due during the next five years and
thereafter are as follows:

<TABLE>
<S>                                                  <C>
2000...............................................  $    96
2001...............................................      404
2002...............................................   14,315
2003...............................................      414
2004...............................................    3,525
Thereafter.........................................   12,171
                                                     -------
Total                                                $30,925
                                                     =======
</TABLE>

7. NOTE PAYABLE--INTERIM FINANCING

    On June 28, 1999, the Company obtained $100,000 of secured interim financing
(the "Interim Financing") from Bankers Trust Company. On December 3, 1999, the
Company executed an amendment to the Interim Financing that increased the loan
amount to $130,000. On April 19, 2000, The Draper Building was sold. The Draper
Building was part of the collateral for the Interim Financing and as a condition
of the property's release, on April 19, 2000, the Interim Financing was paid
down by approximately $32,170. The Interim Financing matured in June 2000 and
pursuant to the terms of the note, the Company exercised its option to extend
the maturity date to June 2001. Outstanding balances under the Interim Financing
bear interest at a rate spread over the base rate or Eurodollar rate, as
applicable. The spread is based upon certain loan to value ratios. At
September 30, 2000, the outstanding balance of the Interim Financing was
approximately $97,830 and the interest rate was 9.875%. The Interim Financing
requires monthly payments of interest only and is secured by mortgages and
assignments of rents on certain properties. The net book value of the
collateralized assets is approximately $130,793 at September 30, 2000. The
Interim Financing agreement requires the Company's ongoing compliance with a
number of financial and other covenants.

                                       10
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
  OF OPERATIONS.

OVERVIEW

    This Form 10-Q contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. The words "believe", "expect", "anticipate", "intend",
"estimate" and other expressions which are predictions of or indicate future
events and trends and which do not relate to historical matters identify
forward-looking statements. Our actual results could differ materially from
those set forth in the forward-looking statements. Certain factors that might
cause such a difference include the following: real estate investment
considerations, such as the effect of economic and other conditions in the
market area on cash flows and values; the need to renew leases or relet space
upon the expiration of current leases, and the ability of a property to generate
revenue sufficient to meet debt service payments and other operating expenses;
risks associated with borrowing, such as the possibility that we will not have
sufficient funds available to make principal payments on outstanding debt and
outstanding debt may be refinanced at higher interest rates or otherwise on
terms less favorable to us; the impact of pending or future litigation;
variations in quarterly operating results; securities held for investment are
subject to fluctuations in valuation based upon the performance of the
underlying business; risks that some of our investments could cause us to fail
to qualify as a REIT; and those risks and uncertainties contained elsewhere in
this report and under the heading "Risk Factors" beginning on page 8 of our
Form 10-K as filed with the Securities and Exchange Commission on March 30,
2000.

    The following discussion and analysis of the financial condition and results
of operations should be read in conjunction with the accompanying consolidated
financial statements and notes thereto. Our consolidated financial statements
include Beacon Capital Partners, Inc. ("BCP") and Beacon Capital Partners, L.P.
(the "Operating Partnership"), our majority-owned partnership.

RESULTS OF OPERATIONS

SUMMARY

    Changes in revenues and expenses from the three and nine months ended
September 30, 1999 to September 30, 2000 are primarily due to the timing of
investment, financing and sale transactions and redevelopment and releasing
programs during 1999 and 2000. The Batterymarch mortgage note receivable was
funded in May 1999 and repaid in July 1999; the secured interim financing (the
"Interim Financing") from Bankers Trust Company closed in June 1999, was
increased in December 1999 and was partially paid down in April 2000; the
investments in preferred stock of Wyndham International, Inc. ("Wyndham") were
made primarily in June and July 1999; Technology Square Building 200 was
released in July 1999; Technology Square Buildings 400 and 500 were taken out of
service in 1999 and underwent substantial redevelopment and releasing in 1999
and early 2000; Fort Point Place was acquired in July 1999; the Fort Point Place
residential condominium conversion commenced in the fall of 1999 and was
substantially completed in the summer of 2000; Beacon Capital Strategic
Partners, L.P. ("BCSP") was established in October 1999; the Fort Point Place
mortgage debt was obtained in October 1999; the Technology Square Building 300
development commenced in January 2000; The Athenaeum Portfolio was refinanced in
April 2000; The Draper Building was sold in April 2000; the sale of assets in
The Athenaeum Portfolio (215 First Street, 195 First Street and Doc Linskey Way)
was in June 2000; BCSP sold 233 Fremont Street in June 2000; 1194 Mathilda
Avenue in Mathilda Research Centre was completed in June 2000; the repurchase of
common stock of BCP and certain voting trust interests in accordance with the
share repurchase program occurred in July 2000; the Technology Square Buildings
600 and 700 development commenced in August 2000; the sales of residential
condominiums of Fort Point Place commenced in September 2000; and investments in
Mathilda Research Centre I and II, Millennium Tower, Cypress
Communications, Inc. ("Cypress") and CO Space, Inc. ("CO Space") occurred over
time from 1998 through 2000.

                                       11
<PAGE>
COMPARISON OF THE THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999.

    Our total revenues increased $3.5 million to $12.2 million for the three
months ended September 30, 2000 as compared to $8.7 million for the three months
ended September 30, 1999. Rental income increased $3.2 million primarily due to
Technology Square releasing and the acquisition of Fort Point Place.
Reimbursement of operating expenses and real estate taxes increased $.1 million
primarily due to Technology Square. Equity in earnings of partnership and joint
ventures increased $.1 million due to income from BCSP and Mathilda Research
Centre offset by earnings reductions from The Athenaeum Portfolio due to the
property refinancing and the sale of some of its assets in 2000. Interest and
dividend income increased $.8 million due to the timing of loan advances,
property sales and investments. Other income decreased $.7 million due to
reimbursements received from 233 Fremont Street in 1999.

    Our total expenses increased $1.4 million to $9.4 million for the three
months ended September 30, 2000 as compared to $8.0 million for the three months
ended September 30, 1999. Property operating expenses increased $1.1 million
primarily due to increased occupancy at Technology Square and the acquisition of
Fort Point Place. Real estate taxes increased $.1 million primarily due to
Technology Square. General and administrative expenses increased $.5 million.
Interest expense decreased $.7 million due to capitalized interest expense in
2000 offset by interest on the Interim Financing and Fort Point Place mortgage.
Depreciation and amortization expense increased $.4 million primarily due to
Technology Square and Fort Point Place depreciation offset by the Interim
Financing amortization of financing fees in 1999.

    Our gains on sales of real estate for the three months ended September 30,
2000 of $3.0 million resulted from our share of the additional recognized gain
from the sale of 233 Fremont Street of $2.9 million and the gain from the sales
of residential condominiums of Fort Point Place of $.1 million. The minority
interest in consolidated partnership of $.7 million represents the portion of
the Operating Partnership that is not owned by BCP.

COMPARISON OF THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999

    Our total revenues increased $16.4 million to $44.1 million for the nine
months ended September 30, 2000 as compared to $27.7 million for the nine months
ended September 30, 1999. Rental income increased $10.4 million primarily due to
Technology Square releasing and Fort Point Place, which was acquired in July
1999. Reimbursement of operating expenses and real estate taxes decreased
$.8 million primarily due to Technology Square releasing which established
tenant expense bases at current levels. Equity in earnings of partnership and
joint ventures increased $1.6 million primarily due to income from BCSP and
Mathilda Research Centre offset by earnings reductions from The Athenaeum
Portfolio due to the property refinancing and the sale of some of its assets in
2000. Interest and dividend income decreased $.7 million due to the Batterymarch
mortgage note receivable interest in 1999 and the timing of loan advances and
investments offset by the property sales and Wyndham dividends in 2000. Other
income increased $5.9 million primarily due to the gain recognized on the
distribution of the Cypress investment offset by reimbursements received from
233 Fremont Street in 1999. See "--Investing Activities".

    Our total expenses increased $9.9 million to $30.7 million for the nine
months ended September 30, 2000 as compared to $20.8 million for the nine months
ended September 30, 1999. Property operating expenses increased $3.0 million
primarily due to increased occupancy at Technology Square and the acquisition of
Fort Point Place. Real estate taxes increased $.3 million primarily due to the
acquisition of Fort Point Place. General and administrative expenses increased
$1.4 million. The $2.1 million of affiliate formation expenses are costs
incurred in the formation of BCSP and consist of underwriter commissions and
fees for legal and professional services not reimbursed by the partners of BCSP.
See "--Investing Activities". Interest expense increased $1.3 million due to
interest on the Interim Financing and Fort Point Place mortgage, offset by
capitalized interest in 2000. Depreciation and amortization expense increased

                                       12
<PAGE>
$1.8 million primarily due to Technology Square and Dallas Office and Industrial
Portfolio depreciation and the Interim Financing and Fort Point Place mortgage
amortization of financing fees.

    Our gains on sales of real estate for the nine months ended September 30,
2000 of $61.5 million resulted from the gain on the sale of The Draper Building
of $27.3 million, our share of the gain from the sale of assets of The Athenaeum
Portfolio (215 First Street, 195 First Street and Doc Linskey Way) of
$12.6 million, our share of the gain from the sale of 233 Fremont Street of
$21.5 million and the gain from the sales of residential condominiums of Fort
Point Place of $.1 million. The minority interest in consolidated partnership
for the nine months ended September 30, 2000 of $8.7 million represents the
portion of the Operating Partnership that is not owned by BCP. The extraordinary
loss for the nine months ended September 30, 2000 of $4.6 million was primarily
due to The Athenaeum Portfolio refinancing which extinguished the previous
mortgage debt and required the write-off of related transaction costs and
unamortized deferred financing costs.

LIQUIDITY AND CAPITAL RESOURCES

    Cash and cash equivalents were $65.3 million at September 30, 2000 as
compared to $76.9 million at December 31, 1999. The decrease of $11.6 million
was primarily the result of (i) the payments of the March and June dividends to
stockholders and distributions to unitholders, (ii) the payment of Technology
Square development costs, (iii) the repayment of the Interim Financing,
(iv) the repurchase of approximately 1.8 million shares of common stock of BCP
and certain voting trust interests in accordance with the share repurchase
program, (v) the payment of Fort Point Place development costs, and
(vi) investments in Millennium Tower and Mathilda Research Centre II, all offset
by (i) proceeds from the sale of The Draper Building, (ii) distributions
received from The Athenaeum Portfolio, (iii) distributions received from BCSP,
(iv) proceeds received from the sales of Fort Point Place residential
condominiums, (v) proceeds received from the Interim Financing, and (vi) cash
flow from operations.

SHORT AND LONG-TERM LIQUIDITY

    We have considered our short-term (up to 12 months) liquidity needs and the
adequacy of expected liquidity sources to meet these needs. We believe that our
principal short-term operating liquidity needs are to fund normal recurring
expenses, debt service requirements and the minimum distribution required to
maintain the Company's REIT qualification under the Internal Revenue Code of
1986, as amended. We believe that these needs will be provided by cash flow from
operating activities and current cash balances. We believe that our 2000
distribution requirement to maintain our REIT qualification has been met from
our January 5, 2000 dividend of preferred shares of Cypress subject to a voting
trust (approximately $0.75 per share of common stock of BCP), our March 9, 2000
cash dividend ($0.50 per share of common stock of BCP), our March 24, 2000
dividend of preferred shares of CO Space subject to a voting trust
(approximately $0.34 per share of common stock of BCP), and our June 28, 2000
cash dividend ($3.00 per share of common stock of BCP). See "--Investing
Activities". We believe our other short-term liquidity needs are the funding of
current real estate investments, developments, redevelopments, BCSP capital
commitments, securities held for investment, our share repurchase program and
the repayment of the Interim Financing. We expect to fund these needs from
current cash balances, mortgages and other debt instruments, and through sales
of certain assets.

    We expect to meet long-term (greater than 12 months) liquidity requirements
for the costs of additional development, real estate and real estate related
investments, scheduled debt maturities, major renovations, expansions and other
non-recurring capital improvements through secured and unsecured indebtedness,
joint ventures, sales of certain assets, and from current cash balances.

                                       13
<PAGE>
INVESTING ACTIVITIES

TECHNOLOGY SQUARE

    On June 24, 1998, we acquired a four-building complex known as Technology
Square and an adjacent building known as The Draper Building. The properties are
located in Cambridge, Massachusetts and consisted of approximately 1,026,000
square feet. The renovation plan we began in 1999 has been completed. We have
also commenced a new development plan to construct approximately 600,000 square
feet of additional office and laboratory space. Construction of Building 300
(approximately 176,000 square feet) has begun and we currently expect it to be
completed in the spring of 2001. Construction of Buildings 600 and 700
(approximately 127,000 and 50,000 square feet, respectively) has also begun and
we currently expect it to be completed in the fall of 2001. On April 19, 2000,
we sold The Draper Building for $72.5 million. We recognized a gain on the sale
of approximately $27.3 million.

MATHILDA RESEARCH CENTRE I AND II

    On August 9, 1998, we entered into a joint venture agreement with Mathilda
Partners LLC, an affiliate of Menlo Equities (a California based developer). The
joint venture is developing Mathilda Research Centre, two four-story Class A
office/R&D buildings with surface parking in Sunnyvale, California. On June 18,
1999, the joint venture executed a lease with Juniper Networks, Inc. ("Juniper
Networks") for one of the two buildings comprising approximately 144,000 of the
development's approximately 267,000 square feet and on February 28, 2000,
Juniper Networks executed its option to lease the second building. The first
building was completed in June 2000 and Juniper Networks is occupying the space.
We expect to complete the second building in the spring of 2001.

    On August 9, 2000, we entered into a joint venture agreement with Mathilda
Partners II LLC, an affiliate of Menlo Equities (a California based developer),
to develop an additional phase of Mathilda Research Centre in Sunnyvale,
California, also for Juniper Networks. The Company and Mathilda Partners II LLC
have agreed to fund 87.5% and 12.5% of the equity required, respectively.
Current plans anticipate a 158,000 square foot building which is projected to
cost approximately $40 million. The joint venture is currently negotiating a
construction loan of $32 million. The project will require approximately $8
million of equity contributions of which our portion will be approximately
$7 million. As of September 30, 2000, the venturers have funded equity
commitments of approximately $1.1 million, of which our share was approximately
$.9 million.

MILLENNIUM TOWER

    On September 1, 1998 we entered into a joint venture agreement with HA
L.L.C., an affiliate of Martin Smith Real Estate Services (a Seattle based real
estate company). The joint venture is developing Millennium Tower, a 20-story,
approximately 261,000 square foot, office/retail and residential tower, in
downtown Seattle, Washington. HA L.L.C. contributed the land at an agreed value
of $10.5 million and we agreed to fund $19 million of the development. As of
September 30, 2000, we had funded our entire commitment of $19 million. The
joint venture has obtained a $45 million construction loan from two
institutional lenders to finance the balance of the development costs. The
estimated cost of the development is approximately $72 million, including the
value of the land. We expect to complete the project in the first quarter of
2001. Our residential portion of this investment is held by BCP Millennium
Residential, Inc., a Massachusetts corporation ("BCP Millennium Residential").
The voting common stock of BCP Millennium Residential is controlled by
Messrs. Leventhal and Fortin. The Operating Partnership owns approximately 99%
of the economic interests in BCP Millennium Residential.

                                       14
<PAGE>
CYPRESS

    On September 30, 1998 and October 8, 1999, we invested an aggregate of
$11 million to acquire preferred stock in Cypress, representing a 9.5% fully
diluted ownership position. Cypress provides bundled communications services to
tenants in multi-tenant commercial buildings. Prior to January 5, 2000, the
preferred stock investment was held by both the Operating Partnership and Tenant
Communications, Inc., a Massachusetts corporation ("Tenant Communications"). On
January 5, 2000, we distributed all of the preferred stock of Cypress (held by
the Operating Partnership and Tenant Communications), valued at approximately
$0.75 per share of common stock of BCP and operating partnership unit of the
Operating Partnership to a voting trust (the "Cypress Voting Trust") (the
trustee of which is a subsidiary of BCP), and then distributed our interest in
the Cypress Voting Trust to our stockholders and unitholders. The distribution
resulted in a gain of approximately $6.4 million. On February 10, 2000, Cypress
successfully completed its initial public offering. Cypress trades on the NASDAQ
National Market under the symbol CYCO. At the IPO, each share of preferred stock
split into 4.5 shares of common stock. The Cypress common stock held in the
Cypress Voting Trust had an original cost basis of approximately $2.60 per share
and was written up to $4.22 per share at the time that the investment was
transferred into the voting trust. The Cypress Voting Trust is subject to
certain terms and conditions, including limitations on transferability.

FORT POINT PLACE

    On July 13, 1999, we purchased Fort Point Place, a four-building, 335,000
square foot office and warehouse property located in the Boston, Massachusetts
South Boston Waterfront District. Two buildings consist of approximately 145,000
square feet of office space. The other two buildings consisted of approximately
190,000 square feet of warehouse space which were delivered to us vacant. The
warehouse buildings were originally held by the Operating Partnership. On
June 2, 2000, the Operating Partnership transferred the warehouse buildings to
Fort Point Place, Inc., a Massachusetts corporation. The voting common stock of
Fort Point Place, Inc. is controlled by Messrs. Leventhal and Fortin. The
Operating Partnership owns approximately 99% of the economic interests in Fort
Point Place, Inc. We have renovated the warehouse space for use as residential
condominiums. In September 2000, we commenced the sales of the residential
condominiums. As of September 30, 2000, 51 of the 120 units have been sold and
we recognized a gain on the sales of approximately $.1 million.

BCSP

    On October 1, 1999, we completed the initial closing for BCSP, a real estate
limited partnership, of which BCP Strategic Partners LLC, our wholly-owned
subsidiary, is the General Partner. Subsequent to October 1, 1999, we completed
additional closings and as of March 28, 2000 (the BCSP final closing date),
equity commitments totaled $287.5 million, of which our equity commitment was
$57.5 million. The commitments include investments from various endowments,
foundations, pension funds and other institutional investors. The fund will
invest in U.S. domestic real estate with a primary focus on office properties.
The strategy will include redevelopment, development and other real estate
opportunities where we can maximize value through our operating skills and
expertise. For a period of up to two years from October 1, 1999, BCSP will be
our exclusive real estate investment vehicle. As of September 30, 2000, none of
our committed investment was funded. In connection with the formation of BCSP,
for the nine months ended September 30, 2000 and for the year ended
December 31, 1999, we incurred affiliate formation expenses of approximately
$2.1 million and $4.0 million, respectively. The expenses consist of underwriter
commissions and fees for legal and professional services not reimbursed by the
partners of BCSP.

    On June 14, 2000, BCSP sold 233 Fremont Street, a property located in San
Francisco, California, that is currently undergoing redevelopment. The property
was sold for approximately $145.9 million, including approximately
$15.9 million held in escrow pending completion of the property's redevelopment.
BCSP will continue to oversee the redevelopment and the buyer will fund the
remaining redevelopment costs.

                                       15
<PAGE>
The redevelopment is scheduled to be completed in the first quarter of 2001. As
of September 30, 2000, BCSP recognized a gain on the sale of approximately
$59.7 million. Pursuant to the applicable accounting rules, an additional gain
estimated at approximately $19.9 million has been deferred and will be
recognized in future periods. On June 28, 2000, BCSP distributed $70.0 million
of the sale proceeds. Our share of the recognized gain on the sale and
distribution were approximately $21.5 million and $25.2 million, respectively.

CO SPACE/INTERNAP

    On November 12, 1999, we invested $8 million to acquire preferred stock in
CO Space, representing an approximate 18% ownership position on a fully diluted
basis. CO Space provides co-location space for data storage, telecommunication
carriers, and web-hosting applications. Prior to January 28, 2000, the
investment was held by the Operating Partnership. On January 28, 2000, the
Operating Partnership transferred 10% of its shares of CO Space (representing
100% of its voting interest) to Shared Communications Spaces, Inc., a
Massachusetts corporation ("Shared Communications"). On March 24, 2000, we
distributed all of the preferred stock of CO Space (held by the Operating
Partnership and Shared Communications), valued at approximately $0.34 per share
of common stock of BCP and operating partnership unit of the Operating
Partnership to a voting trust (the "CO Space Voting Trust") (the trustee of
which is a subsidiary of BCP), and then distributed our interest in the
CO Space Voting Trust to our stockholders and unitholders. Each share of common
stock of BCP and operating partnership unit of the Operating Partnership held on
March 22, 2000 (the record date for the distribution) received approximately
 .224568409 interests in the CO Space Voting Trust. On June 20, 2000, CO Space
was acquired by InterNAP Network Services Corporation ("InterNAP"). InterNAP
trades on the NASDAQ National Market under the symbol INAP. InterNAP was founded
in 1996 and provides internet connectivity that is faster and more reliable than
conventional internet services. In conjunction with the acquisition of CO Space
by InterNAP, each share of preferred stock held in the CO Space Voting Trust was
converted to one share of CO Space common stock. The shares of CO Space common
stock were exchanged for shares of InterNAP common stock based upon a formula
set forth in the definitive agreement. Each share of CO Space common stock which
was equivalent to a unit in the CO Space Voting Trust was exchanged for .24488
shares of InterNAP common stock. The InterNAP common stock held in the CO Space
Voting Trust has a cost basis of approximately $6.13 per InterNAP share and is
subject to certain terms and conditions, including limitations on
transferability.

THE ATHENAEUM PORTFOLIO

    On June 7, 2000, we sold some of the assets in The Athenaeum Portfolio
(215 First Street, 195 First Street and Doc Linskey Way) for $68 million and
recorded a gain on the sale of approximately $25.2 million. We own The Athenaeum
Portfolio with our joint venture partner, PW Acquisitions IX, LLC (an affiliate
of PaineWebber). Simultaneously with the sale, after paydown of debt, the joint
venture distributed $16 million to the members. Our share of the gain on the
sale and distribution were approximately $12.6 million and $8 million,
respectively.

FINANCING ACTIVITIES

    On April 19, 2000, in conjunction with the sale of The Draper Building, the
Interim Financing was paid down by approximately $32.2 million. See "--Investing
Activities". The Interim Financing matured on June 28, 2000 and pursuant to the
terms of the note, we exercised our option to extend the maturity date to
June 28, 2001.

    On April 14, 2000, the mortgage on The Athenaeum Portfolio was refinanced
with an institutional lender. We own The Athenaeum Portfolio with our joint
venture partner, PW Acquisitions IX, LLC (an affiliate of PaineWebber). The
$175 million refinancing was subsequently paid down by $50.9 million on June 7,
2000 in conjunction with the sale of some of the assets in The Athenaeum
Portfolio. The resulting

                                       16
<PAGE>
$124.1 million financing is comprised of a first mortgage loan and a mezzanine
loan, bears interest at an annual rate of 30-day LIBOR plus 243 basis points and
requires monthly payments of principal and interest based on a 30-year
amortization schedule. Each of the loans has a two-year term and may be extended
for two twelve month periods if certain conditions are met. The joint venture
originally entered into an interest rate protection agreement for a notional
amount of $175 million which was subsequently reduced to approximately
$124 million in conjunction with the above mentioned sale. This agreement, which
terminates on May 1, 2002, provides for offsetting payments to the joint venture
in the event that 30-day LIBOR exceeds 8.35% per annum. The loans are closed to
prepayment in the initial twelve months, however certain properties in the
portfolio may be released during that period.

    Prior to July 28, 2000, in accordance with our original share repurchase
program, we repurchased 1,770,000 shares of common stock of BCP and certain
voting trust interests for approximately $25.4 million. The repurchase equates
to approximately 8.4% of the common stock outstanding. On July 28, 2000, the
Board extended the share repurchase program for six months to January 28, 2001,
authorizing management to utilize up to $30 million for the repurchase of the
common stock of BCP during the extension period.

CAPITALIZATION

    As of September 30, 2000, our total consolidated debt was approximately
$128.8 million and our total consolidated debt plus our proportionate share of
total unconsolidated debt was approximately $239.9 million. The following table
sets forth certain information regarding our consolidated and unconsolidated
debt obligations, including obligations relating to specific properties. All of
the debt is nonrecourse to us, with certain exceptions such as liability for
fraud, misapplication of insurance proceeds, environmental matters, certain
guarantees for completion of construction and certain limited guarantees for
repayment of principal and interest.

                                       17
<PAGE>

<TABLE>
<CAPTION>
                               PRINCIPAL
                                 AMOUNT
                                 AS OF            COMPANY'S
                             SEPTEMBER 30,        PORTION OF    INTEREST   MATURITY         PREPAYMENT
DEBT                              2000            PRINCIPAL       RATE       DATE           PROVISIONS
----                         --------------      ------------   --------   --------   ----------------------
                               (DOLLAR AMOUNTS IN MILLIONS)
<S>                          <C>                 <C>            <C>        <C>        <C>
CONSOLIDATED DEBT
FIXED RATE:
DALLAS OFFICE AND
  INDUSTRIAL PORTFOLIO:
Northcreek Place...........      $  4.2             $  4.2        7.80%    12/1/05    Prepayable subject to
                                                                                      conditions (a)
One Glen Lakes.............         5.5                5.5        7.75%     9/1/05    Prepayable subject to
                                                                                      conditions (b)
Greenville Place...........         3.4                3.4        7.80%    12/1/04    Prepayable subject to
                                                                                      conditions (c)
Plaza at Walnut Hill.......         1.4                1.4        9.00%         (d)   Prepayable subject to
                                                                                      conditions (e)
Richardson Business                 1.5                1.5        9.00%         (f)   Prepayable subject to
  Center...................                                                           conditions (g)
Park North Business                 1.0                1.0        8.25%         (h)   Prepayable subject to
  Center...................                                                           conditions (i)
T. I. Business Park........         1.5                1.5        9.25%     5/1/02    Prepayable subject to
                                                                                      conditions (j)
                                 ------             ------       -----

Subtotal / Weighted Average        18.5               18.5        8.12%
  Fixed Rate Debt..........
                                 ------             ------       -----
VARIABLE RATE:
Fort Point Place...........        12.5               12.5        8.62%         (k)   Prepayable subject to
                                                                                      conditions (l)
Interim Financing (m)......        97.8               97.8        9.88%         (n)   Prepayable subject to
                                                                                      conditions (l)
                                 ------             ------       -----
Subtotal / Weighted Average       110.3              110.3        9.73%
  Variable Rate Debt.......
                                 ------             ------       -----
Subtotal / Weighted Average       128.8              128.8        9.50%
  Consolidated Debt........
                                 ------             ------       -----

UNCONSOLIDATED DEBT
VARIABLE RATE:
The Athenaeum Portfolio
  (o)......................       123.7               61.9        9.06%         (p)   Prepayable subject to
                                                                                      conditions (q)
Beacon Capital Strategic
  Partners, L.P. (r).......        59.4               11.9        7.53%         (r)   Prepayable subject to
                                                                                      conditions (l)
Mathilda Research Centre...        28.3               24.8        9.15%    10/25/02   Prepayable subject to
                                                                                      conditions (l)
Millennium Tower...........        18.8               12.5        9.13%         (s)   Prepayable subject to
                                                                                      conditions (l)
                                 ------             ------       -----
Subtotal / Weighted Average       230.2              111.1        8.92%
  Unconsolidated Debt......
                                 ------             ------       -----

Total / Weighted Average...      $359.0             $239.9        9.23%
                                 ======             ======       =====
</TABLE>

                                       18
<PAGE>
------------------------

(a) Prepayable after January 1, 2001 subject to a yield maintenance payment
    based on the rate of United States Treasury Notes having a term closest to
    the date of maturity but in no event less than 1% of the then balance.

(b) Prepayable after October 1, 2000 subject to a yield maintenance payment
    based on the rate of United States Treasury Notes having a term closest to
    the date of maturity but in no event less than 1% of the then balance.

(c) Prepayable after January 1, 2002 subject to a yield maintenance payment
    based on the rate of United States Treasury Notes having a term closest to
    the date of maturity but in no event less than 1% of the then balance.

(d) Plaza at Walnut Hill loan matures on July 1, 2017. The lender has the right
    to accelerate the maturity in the sixth, eleventh or sixteenth loan years,
    on six months' notice. No prepayment penalties apply in that event.

(e) Prepayable after June 12, 2002 subject to payment of 5% of the amount
    prepaid, reducing by 1% per annum to a minimum payment of 1% of the amount
    prepaid.

(f) The Richardson Business Center loan matures on November 1, 2021. The lender
    has the right to accelerate the maturity in the sixth, eleventh, sixteenth
    or twenty-first loan years, on six months' notice. No prepayment penalties
    apply in that event.

(g) Prepayable after October 24, 2001 subject to payment of 5% of the amount
    prepaid, reducing by 1% per annum to a minimum prepayment of 1% of the
    amount prepaid.

(h) The Park North Business Center loan matures on October 1, 2022. The lender
    has the right to accelerate the maturity in the sixth, eleventh, sixteenth
    or twenty-first loan years, on six months' notice. No prepayment penalties
    apply in that event.

(i) Prepayable after September 8, 2002 subject to payment of 5% of the amount
    prepaid, reducing by 1% per annum to a minimum prepayment of 1% of the
    amount prepaid.

(j) Prepayable after March 1, 2000 subject to a yield maintenance payment based
    on the rate of United States Treasury Notes having a term closest to the
    date of maturity but in no event less than 2% of the then balance.

(k) The Fort Point Place loan matures on April 1, 2002. The loan may be extended
    for one year if certain conditions are met.

(l) Prepayable any time in whole or in part subject to payment of applicable
    breakage costs and in some cases fees.

(m) The following properties are collateral for the Interim Financing: 200, 400
    and 500 Technology Square, Bank One LBJ, Brandywine Place, Crosspoint
    Atrium, Forest Abrams Place, Richardson Commerce Centre, Sherman Tech and
    Venture Drive Tech Center.

(n) The loan matured June 28, 2000 and pursuant to the terms of the note, we
    exercised our option to extend the maturity date to June 28, 2001.

(o) We hold a 50% interest in the master limited liability company that controls
    the limited liability companies that hold title to The Athenaeum Portfolio.

(p) The Athenaeum Portfolio is encumbered by a first mortgage loan and a
    mezzanine loan. Both loans mature on May 1, 2002 and contain options to
    extend for two additional twelve month periods if certain conditions are
    met.

(q) The loans are closed to prepayment in the initial twelve months, however
    certain properties in the portfolio may be released during that period. The
    loans are prepayable thereafter in whole or in part upon payment of a 0.5%
    prepayment fee in months thirteen to eighteen and prepayable without a fee
    thereafter.

                                       19
<PAGE>
(r) Includes a subscription line and a construction loan with varying maturity
    dates.

(s) The Millennium Tower loan matures on June 1, 2002. The loan may be extended
    for one year if certain conditions are met.

    The following table, which includes both consolidated and unconsolidated
debt, summarizes the scheduled amortization of principal and maturities of the
loans outstanding.

<TABLE>
<CAPTION>
                                                          SCHEDULED
                                                         AMORTIZATION   MATURITIES     TOTAL
                                                         ------------   ----------   ----------
                                                                 (DOLLARS IN THOUSANDS)
<S>                                                      <C>            <C>          <C>
October 1, 2000--December 31, 2000.....................     $  220       $     --     $    220
2001...................................................        925        109,330      110,255
2002...................................................        573        112,726      113,299
2003...................................................        414             --          414
2004...................................................        422          3,103        3,525
Thereafter.............................................      3,661          8,510       12,171
                                                            ------       --------     --------
    Total..............................................     $6,215       $233,669     $239,884
                                                            ======       ========     ========
</TABLE>

FUNDS FROM OPERATIONS

    We believe that to facilitate a clear understanding of the operating results
of BCP, Funds from Operations ("FFO") should be examined in conjunction with net
income. The definition of FFO was clarified in the National Association of Real
Estate Investment Trusts, Inc. ("NAREIT") White Paper, adopted by the NAREIT
Board of Governors in March 1995 and subsequently clarified in October 1999, as
net income (loss) (computed in accordance with generally accepted accounting
principles), excluding gains (losses) from sales of properties, plus real estate
related depreciation and amortization, and after adjustments for unconsolidated
partnerships and joint ventures. Adjustments for unconsolidated partnerships and
joint ventures will be calculated to reflect FFO on the same basis. FFO should
not be considered as a substitute for net income, as an indication of our
performance, as a substitute for cash flow or as a measure of our liquidity. The
following table presents the calculations of FFO:

<TABLE>
<CAPTION>
                                                                 NINE MONTHS ENDED
                                                                   SEPTEMBER 30,
                                                                 2000         1999
                                                              ----------   ----------
                                                              (UNAUDITED, DOLLARS IN
                                                                    THOUSANDS)
<S>                                                           <C>          <C>
Income before gains on sales of real estate, minority
  interest and extraordinary items..........................
                                                                $13,404      $ 6,980
Add real estate related depreciation and amortization:
  Consolidated entities.....................................      5,058        3,438
  Joint venture entities....................................      1,764        1,549
                                                                -------      -------
Funds from operations before minority interest..............     20,226       11,967
Company share of consolidated partnership...................      88.16%       88.40%
                                                                -------      -------
Company funds from operations...............................    $17,831      $10,579
                                                                =======      =======
Weighted average number of common shares outstanding (in
  thousands)................................................     20,510       20,974
                                                                =======      =======
</TABLE>

For the periods presented above, our FFO results would be the same using both
the March 1995 and October 1999 definitions.

                                       20
<PAGE>
PROPERTY INFORMATION

    The following table sets forth the Total Area, the Percentage Leased, the
Average Base Rent (as defined below) and the Average Net Effective Rent (as
defined below) per square foot for each of our properties we owned or had an
interest in (excluding properties controlled by BCSP) as of September 30, 2000.
Base Rent is gross rent excluding payments by tenants on account of real estate
tax and operating expense escalation charges. Net Effective Rent is Base Rent
adjusted on a straight-line basis for contractual rent step-ups and free rent
periods, plus tenant payments on account of real estate tax and operating
expense escalation charges, less total operating expenses and real estate taxes.

<TABLE>
<CAPTION>
                                                                                     AVERAGE    AVERAGE
                                                                TOTAL        %         BASE     NET EFF
PROPERTY                                                        AREA       LEASED      RENT       RENT
--------                                                      ---------   --------   --------   --------
<S>                                                           <C>         <C>        <C>        <C>
SOUTH BOSTON, MA:
Fort Point Place (1)........................................    145,222     100%      $32.16     $25.72
                                                              ---------     ---       ------     ------
  Subtotal / Weighted Average South Boston, MA..............    145,222     100%       32.16      25.72
                                                              ---------     ---       ------     ------

CAMBRIDGE, MA:
One Kendall Square Cinema (2)...............................     31,641     100%       18.29      13.48
Buildings 100 - 500 (2).....................................    222,372      99%       31.67      22.96
Buildings 600/650/700 (2)...................................    236,661      97%       39.65      27.99
Buildings 1500 & 1700 (2)...................................     39,707      90%       17.41      10.52
Building 1400 (2)...........................................    133,211     100%       33.66      23.28
                                                              ---------     ---       ------     ------
  Subtotal / Weighted Average...............................    663,592      98%       33.46      23.66
                                                              ---------     ---       ------     ------
200 Technology Square (3)...................................    156,270     100%       31.53      23.12
400 Technology Square (3)...................................    203,600      93%       35.93      28.06
500 Technology Square (3)...................................    182,250      94%       35.24      28.75
                                                              ---------     ---       ------     ------
  Subtotal / Weighted Average...............................    542,120      95%       34.37      26.79
                                                              ---------     ---       ------     ------
  Subtotal / Weighted Average Cambridge, MA.................  1,205,712      97%       33.86      25.04
                                                              ---------     ---       ------     ------

SUBURBAN DALLAS, TX:
OFFICE
Bank One LBJ................................................     42,000      75%       14.13       6.61
Brandywine Place............................................     66,237      98%       14.16      10.22
Crosspoint Atrium...........................................    220,212      89%       14.03       9.54
Forest Abrams Place.........................................     68,827      80%       14.32       7.46
6500 Greenville Avenue......................................    114,600      64%       15.11       7.84
Northcreek Place II.........................................    163,303      84%       15.50       8.99
One Glen Lakes..............................................    166,272      90%       17.52      13.58
                                                              ---------     ---       ------     ------
  Subtotal / Weighted Average...............................    841,451      84%       15.20       9.88
                                                              ---------     ---       ------     ------

R&D / INDUSTRIAL
Park North Business Center..................................     36,885     100%        9.11       7.19
Plaza at Walnut Hill........................................     88,280      89%        8.48       5.59
Richardson Business Center..................................     66,300     100%        6.00       6.40
Richardson Commerce Centre..................................     60,517      88%        7.46       5.46
Sherman Tech................................................     16,176     100%        7.63       4.99
T I Business Park...........................................     96,902      72%        8.14       6.66
Venture Drive Tech Center...................................    128,322      67%        4.84       3.54
                                                              ---------     ---       ------     ------
  Subtotal / Weighted Average...............................    493,382      83%        7.13       5.57
                                                              ---------     ---       ------     ------
  Subtotal / Weighted Average Suburban Dallas, TX...........  1,334,833      83%       12.25       8.31
                                                              ---------     ---       ------     ------

SUNNYVALE, CA:
1194 Mathilda Avenue (4)....................................    144,315     100%       30.00      36.50
                                                              ---------     ---       ------     ------
  Subtotal / Weighted Average Sunnyvale, CA.................    144,315     100%       30.00      36.50
                                                              ---------     ---       ------     ------
  Total / Weighted Average Properties.......................  2,830,082      91%      $24.18     $18.47
                                                              =========     ===       ======     ======
</TABLE>

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

(1) Fort Point Place includes two additional buildings that are not included in
    these figures. The two buildings consist of approximately 137,000 square
    feet of recently converted residential condominiums. We are currently in the
    process of selling the condominiums. As of September 30, 2000, 51 of the 120
    condominiums have been sold.

(2) We own The Athenaeum Portfolio with our joint venture partner, PW
    Acquisitions IX, LLC, an affiliate of PaineWebber.

(3) The renovation of Buildings 400 and 500 is complete and we are in the final
    stage of the buildings' releasing programs. Three new buildings totaling
    approximately 353,000 square feet are currently being developed at
    Technology Square.

(4) We own Mathilda Research Centre with our joint venture partner, Mathilda
    Partners LLC, an affiliate of Menlo Equities, a California based developer.
    Mathilda Research Centre is comprised of two buildings, 1194 and 1184
    Mathilda Avenue. Both buildings are leased to Juniper Networks. 1184
    Mathilda Avenue will be added to this table upon its completion in early
    2001.

                                       21
<PAGE>
    The following table sets forth Lease Expirations (in square feet) for the
portfolio of properties we owned or had an interest in (excluding properties
controlled by BCSP) as of September 30, 2000.

<TABLE>
<CAPTION>
                                             SQUARE     % OF SQUARE    ANNUAL    % ANNUAL      # OF
                                             FEET(1)      FEET(2)     RENT(3)    RENT(4)    TENANTS(5)
                                            ---------   -----------   --------   --------   ----------
                                                                  (IN THOUSANDS)
<S>                                         <C>         <C>           <C>        <C>        <C>
10/1/00--12/31/00.........................     66,640        2.4%     $   929       1.4%         41
2001......................................    189,262        6.7%       2,867       4.2%         65
2002......................................    382,074       13.5%       7,695      11.4%         83
2003......................................    462,989       16.4%       9,473      14.0%         90
2004......................................    297,525       10.5%       8,661      12.8%         38
Thereafter................................  1,171,723       41.4%      38,040      56.2%         80
                                            ---------       ----      -------     -----         ---
  Total...................................  2,570,213       90.9%     $67,665     100.0%        397
                                            ---------       ----      -------     -----         ---
</TABLE>

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

(1) Total area in square feet covered by such leases.

(2) Percentage of total square feet of our portfolio.

(3) Annualized expiring base rental income represented by such leases in the
    year of expiration plus the current tenant payments on account of operating
    expense and real estate tax escalation charges.

(4) Calculated as annual rent divided by the total annual rent.

(5) The number of tenants whose leases will expire.

YEAR 2000 READINESS DISCLOSURE

    The Year 2000 compliance issue concerns the inability of computer systems to
accurately calculate, store or use a date after 1999. The inability of a
computer to properly process dates after 1999 could result in system failures or
miscalculations. Such failures in our computers could lead to disruptions in our
activities and operations. If we fail, or our significant tenants or vendors
fail, to make necessary modifications and conversions on a timely basis to
remedy these problems, the Year 2000 issue could have a material adverse effect
on the Company and its results of operations or financial position. We believe
that our competitors face similar risks in regard to Year 2000.

    We designed and implemented a plan to address Year 2000 issues. We have not
experienced any Year 2000 related issues and we did not incur any material costs
to address Year 2000 compliance.

    The inability of the Company, or our tenants or vendors, to continue to be
Year 2000 compliant could lead to declining occupancy rates, higher operating
expenses and other adverse effects which are not quantifiable at this time. The
failure of any of these parties to continue to be Year 2000 compliant could have
a material adverse effect on our results of operations or financial position.

                                       22
<PAGE>
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

    We are exposed to certain financial market risks, the most predominant being
fluctuations in the prime, Eurodollar and LIBOR interest rates. Interest rate
fluctuations are monitored by management as an integral part of our overall risk
management program, which recognizes the unpredictability of financial markets
and seeks to reduce the potentially adverse effect on our results of operations.
The effect of interest rate fluctuations historically has been small relative to
other factors affecting operating results, such as rental rates and occupancy.
The Interim Financing matured June 28, 2000 and pursuant to the terms of the
note, we exercised our option to extend the maturity date to June 28, 2001.

    The following table summarizes our debt obligations outstanding as of
September 30, 2000. This information should be read in conjunction with Notes 6
and 7 to the consolidated financial statements and with the information
contained under Capitalization in Part I--Item 2.

<TABLE>
<CAPTION>
                                                        EXPECTED MATURITY DATE
                       10/1/00-
                       12/31/00     2001       2002       2003       2004     THEREAFTER    TOTAL     FAIR VALUE
                       --------   --------   --------   --------   --------   ----------   --------   ----------
                                                        (DOLLARS IN THOUSANDS)
<S>                    <C>        <C>        <C>        <C>        <C>        <C>          <C>        <C>
Liabilities
DEBT:
---------------------
FIXED RATE...........  $     96   $   404    $ 1,815     $ 414      $3,525      $12,171    $ 18,425    $ 18,425
Weighted Average
  Fixed Interest
  Rate...............      8.1%      8.1%       8.0%      8.0%        8.1%         8.8%        8.3%

VARIABLE RATE........        --   $97,830    $12,500        --          --           --    $110,330    $110,330
Current Variable
  Interest Rate......        --      9.9%       8.6%        --          --           --        9.7%
</TABLE>

                                       23
<PAGE>
                         BEACON CAPITAL PARTNERS, INC.

PART II--OTHER INFORMATION

Item 1.  Legal Proceedings

    Reference is hereby made to Part II, Item 1 of the Form 10-Q filed with the
Commission by BCP on May 12, 2000 (SEC File No. 000-24905).

Item 2.  Changes in Securities and Use of Proceeds

    None.

Item 3.  Defaults upon Senior Securities

    None.

Item 4.  Submission of Matters to a Vote of Security Holders

    None.

Item 5.  Other Information

    None.

Item 6.  Exhibits and Reports on Form 8-K

<TABLE>
        <S>  <C>     <C>
        (a)   3.1    Articles of Incorporation.(1)
              3.2    Certificate of Correction to Articles of Incorporation.(1)
              3.3    Amendment No. 1 to By-laws.
              3.4    Amended and Restated By-laws, as amended by Amendment No. 1
                       to By-laws.
              3.5    Agreement of Limited Partnership of Beacon Capital Partners,
                       L.P.(2)
              3.6    First Amendment to Agreement of Limited Partnership.(2)
             27.     Financial Data Schedule.
</TABLE>

<TABLE>
        <S>  <C>     <C>
        (b)  Current Report on Form 8-K filed July 7, 2000 reporting disclosure
             under Items 5 and 7.
             Current Report on Form 8-K filed August 17, 2000 reporting
             disclosure under Items 5 and 7.
</TABLE>

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

(1) Previously filed as an exhibit to BCP's Registration Statement on Form S-11
    (SEC File No. 333-56937) filed with the Commission on June 16, 1998.

(2) Previously filed as an exhibit to Pre-Effective Amendment No. 1 to BCP's
    Registration Statement on Form S-11 (SEC File No. 333-56937) filed with the
    Commission on August 21, 1998.

                                       24
<PAGE>
                                   SIGNATURES

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

<TABLE>
<S>                                                   <C>
                                                      BEACON CAPITAL PARTNERS, INC.

                                                      /s/ RANDY J. PARKER
                                                      ------------------------------------------------
                                                      Randy J. Parker
                                                      Chief Financial Officer (Authorized Officer and
November 8, 2000                                      Principal Accounting Officer)
</TABLE>

                                       25
<PAGE>
                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
     EXHIBIT NO.        DESCRIPTION
---------------------   -----------
<S>                     <C>                                                           <C>
Exhibit 3.1             Articles of Incorporation (1)

Exhibit 3.2             Certificate of Correction to Articles of Incorporation (1)

Exhibit 3.3             Amendment No. 1 to By-laws

                        Amended and Restated By-laws, as amended by Amendment No. 1
Exhibit 3.4             to By-laws

                        Agreement of Limited Partnership of Beacon Capital Partners,
Exhibit 3.5             L.P. (2)

Exhibit 3.6             First Amendment to Agreement of Limited Partnership (2)

Exhibit 27              Financial Data Schedule
</TABLE>

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

(1) Previously filed as an exhibit to BCP's Registration Statement on Form S-11
    (SEC File No. 333-56937) filed with the Commission on June 16, 1998.

(2) Previously filed as an exhibit to Pre-Effective Amendment No. 1 to BCP's
    Registration Statement on Form S-11 (SEC File No. 333-56937) filed with the
    Commission on August 21, 1998.

                                       26