<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-K

(Mark One)

|X|   Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
      Act of 1934 For the fiscal year ended December 31, 1999

                                       OR

|_|   Transition report pursuant to Section 13 or 15(d) of the Securities
      Exchange Act of 1934 For the transition period from __________ to
      _____________

                         Commission File Number: 1-13829
                                                 -------

                             CABOT INDUSTRIAL TRUST
             (Exact name of registrant as specified in its charter)

         Maryland                                        04-3397866
-------------------------------             ------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

            Two Center Plaza, Suite 200, Boston, Massachusetts 02108
            --------------------------------------------------------
               (Address of principal executive offices) (Zip code)

Registrant's telephone number, including area code: (617) 723-0900

Securities registered pursuant to Section 12(b) of the Act:

Title of each class                    Name of each exchange on which registered
-------------------                    -----------------------------------------

Common Shares of Beneficial            New York Stock Exchange
  Interest, par value $.01
(including related Preferred Share
  Purchase Rights)

      Securities registered pursuant to Section 12(g) of the Act: None

      Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X  No
                                             ---   ---
      Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.

      The aggregate market value of the common shares of beneficial interest
held by non-affiliates of the registrant was approximately $750,652,000 based on
the closing price ($18.50) for such shares on the New York Stock Exchange on
February 29, 2000.

      As of February 29, 2000, 40,619,420 shares of the registrant's common
shares of beneficial interest were outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

      Part III hereof incorporates by reference information contained in the
registrant's proxy statement for its 2000 Annual Meeting of Shareholders.
<PAGE>

                                TABLE OF CONTENTS

           Description                                                      Page

PART I

Item 1.    Business........................................................... 1
Item 2.    Properties.........................................................12
Item 3.    Legal Proceedings..................................................22
Item 4.    Submission of Matters to a Vote of Security Holders................22
Item 4A.   Executive Officers of Registrant...................................22


PART II

Item 5.    Market for Registrant's Common Equity and Related Stockholder
           Matters............................................................26
Item 6.    Selected Financial Data............................................28
Item 7.    Management's Discussion and Analysis of Financial Condition
           and Results of Operations..........................................29
Item 7A.   Quantitative and Qualitative Disclosures About Market Risk.........33
Item 8.    Financial Statements and Supplementary Data........................35
Item 9.    Changes in and Disagreements with Accountants on Accounting
           and Financial Disclosure...........................................77


PART III

Item 10.   Directors and Executive Officers of the Registrant.................77
Item 11.   Executive Compensation  ...........................................77
Item 12.   Principal and Management Shareholders..............................77
Item 13.   Certain Relationships and Related Transactions.....................77


PART IV

Item 14.   Exhibits, Financial Statement Schedules, and Reports on Form 8-K...79

SIGNATURES....................................................................78
<PAGE>

                                     PART I

Item 1. Business

Cabot Trust

Cabot Industrial Trust ("Cabot Trust") was organized on October 10, 1997 as a
Maryland real estate investment trust to continue and expand the national
industrial real estate business of Cabot Partners Limited Partnership ("Cabot
Partners"). Cabot Trust is organized in what is commonly referred to as an
umbrella partnership, or "UPREIT" structure, meaning that its properties are
held and its business is conducted primarily through a limited partnership,
Cabot Industrial Properties, L.P. ("Cabot L.P."), of which Cabot Trust is the
sole general partner. At December 31, 1999, Cabot Trust held a 93% partnership
interest in Cabot L.P. The balance of the partnership interests in Cabot L.P. at
that date was primarily held by investors who had contributed properties or
assets to Cabot L.P. in connection with the commencement of the business of
Cabot Trust and Cabot L.P. in their current form, or in subsequent transactions.
See "Formation Transactions; Organizational Structure".

Cabot Trust is an internally managed, fully integrated real estate company
which, through Cabot L.P., acquires or develops, leases, manages and holds for
investment industrial real estate properties in principal markets throughout the
United States. At December 31, 1999, Cabot L.P. owned a geographically
diversified portfolio of 320 industrial properties having an aggregate of
approximately 38 million rentable square feet, approximately 97% of which space
was leased to 638 tenants. The properties are located in 22 states in each of
the five principal regions (West, Midwest, Northeast, Southeast and Southwest)
of the United States. As of December 31, 1999, no single tenant accounted for
more than 2.6% of Cabot L.P.'s total annualized base rent. Between December 31,
1999 and February 29, 2000, Cabot L.P. acquired 14 industrial properties
containing approximately 1,366,000 square feet and contracted to purchase seven
additional industrial properties containing approximately 770,000 square feet.

Cabot Trust's goal is to be the preeminent national real estate company focused
on serving a variety of industrial space users. As of December 31, 1999, Cabot
Trust has a significant market presence across the United States, with
properties in a total of 22 markets (19 of which Cabot Trust has identified as
principal targeted markets), including 11 markets in which Cabot owns properties
with more than one million rentable square feet. Its tenant base ranges from
large national distributors using bulk warehouse and other types of industrial
space in multiple locations to small companies located in single workspace
properties. Cabot Trust believes that its geographic diversification and
substantial presence in multiple markets is a strategic advantage that allows it
to serve industrial space users with multiple site and industrial property type
requirements, to compete more effectively in its individual markets, and to
respond quickly to acquisition opportunities as they arise.

Cabot Trust offers a broad spectrum of industrial property types to meet the
diverse needs of its tenants. Its properties are of three general types: bulk
distribution properties, multitenant distribution properties and workspace
properties (light industrial, R&D and similar facilities).

In addition to acquiring existing industrial properties, Cabot Trust is engaged
in the development and construction of new properties. Its development
activities are conducted through relationships with local builders selected by
Cabot Trust. As of December 31, 1999, Cabot Trust had approved 17 development
projects with total projected development costs of approximately $172.0 million.
The


                                       1
<PAGE>

projects are located in 12 of Cabot Trust's existing submarkets and involve
construction of each of Cabot Trust's principal property types. Sixty-five
percent of the square footage in development projects which have reached shell
completion, with estimated total project costs of $66.8 million, have been
leased.

Cabot Trust is taxed as a real estate investment trust ("REIT") under the
Internal Revenue Code of 1986 (the "Code"), as amended. As a REIT, Cabot Trust
will not generally be subject to federal income tax to the extent that it
distributes its taxable income to its shareholders.

Cabot Trust's principal executive offices are located at Two Center Plaza, Suite
200, Boston, Massachusetts 02108, and its telephone number is (617) 723-0900.
Cabot Trust has regional offices in the Atlanta, Baltimore, Chicago, Cincinnati,
Dallas, Los Angeles, Orlando and Phoenix markets.

Formation Transactions; Organizational Structure

In February 1998, Cabot Trust completed an initial public offering of 8,625,000
common shares of beneficial interest ("Common Shares") and a private placement
of 1,000,000 Common Shares, in each case at an offering price of $20.00 per
Common Share (collectively, the "Offerings"). The Offerings resulted in net
proceeds to Cabot Trust of approximately $176.3 million. Concurrently with the
completion of the Offerings, Cabot Trust also completed a series of business
combinations (the "Formation Transactions") involving Cabot Partners and a
number of property-owning entities, including both entities organized by Cabot
Partners and its institutional advisory clients, and institutional investors
that had no prior relationship with Cabot Partners (collectively, the
"Contributing Investors"). The Formation Transactions resulted, among other
things, in the transfer of ownership of 122 industrial properties to Cabot L.P.

Cabot Trust's interest in Cabot L.P. entitles it to share in cash distributions
from, and in the profits and losses of, Cabot L.P. in proportion to Cabot
Trust's percentage ownership (apart from tax allocations of profits and losses
to take into account pre-contribution property appreciation). Limited
partnership interests in Cabot L.P. ("Units") are convertible into Common Shares
of Cabot Trust on a one-for-one basis subject to Cabot Trust's right to redeem
such interests for cash in lieu of issuing Common Shares.

As the general partner of Cabot L.P., Cabot Trust has the exclusive power under
the agreement of limited partnership to manage and conduct the business of Cabot
L.P. Cabot Trust holds one Unit in Cabot L.P. for each Common Share that it has
issued. The net proceeds of the issuance of Common Shares of Cabot Trust are
required to be contributed to Cabot L.P. in exchange for a corresponding number
of Units of partnership interest.

Beginning on February 4, 1999, the original Unitholders in Cabot L.P., who were
Contributing Investors in the Formation Transactions, had the right to convert
their Units to Common Shares. During 1999, all of such Unitholders that are
tax-exempt entities converted their Units to Common Shares (approximately 22
million shares), which reduced the minority common equity ownership in Cabot
L.P. to approximately 7%.


                                       2
<PAGE>

Business Strategies

Cabot Trust's fundamental business objective is to maximize the total return to
its shareholders through growth in its cash available for distribution per
Common Share and in the value of its portfolio of industrial properties and
operations. Cabot Trust believes that it is well positioned to take advantage of
the opportunities presented by today's changing industrial real estate markets
through the business strategies and operations described below.

Leveraging Substantial National Market Presence

Cabot Trust believes that maintaining and expanding its market presence in its
19 principal targeted markets across the country is an important factor in
achieving future growth and its targeted returns on investment.

Cabot Trust believes that its substantial presence in its principal markets
provides significant strategic advantages. Foremost among these advantages is
that, through a national tenant marketing program, Cabot Trust is well
positioned to market its industrial space to national companies and third-party
logistics companies who have space requirements in multiple markets. The
national tenant marketing program emphasizes the advantages of dealing with a
single source for a company's industrial space needs in addition to the quality
and attractive locations of Cabot Trust's properties. These advantages include
greater efficiency of lease negotiations and day-to-day property management, as
well as better understanding of the tenants' current needs and prospective space
requirements. Cabot Trust serves 55 tenants in multiple properties. These
tenants accounted for approximately 28% of Cabot Trust's annualized net rents as
of December 31, 1999.

Cabot Trust believes that having a substantial inventory of properties and
significant leasing activities within each local market increases its visibility
to prospective tenants and enables it to establish strong relationships with
leasing brokers and other local market participants. These brokers and market
participants serve as sources of information and potential tenant referrals. In
addition, larger inventories increase Cabot Trust's opportunities to relocate
tenants to one or more of its other properties as their needs change. Increased
size of operations in a market also enables Cabot Trust to bear the costs of the
management personnel and facilities needed to build long-term tenant
relationships in that market.

Serving a Variety of Tenants By Offering a Broad Spectrum of Industrial Property
Types

Cabot Trust believes that its strategy of offering a variety of industrial
property types provides complementary benefits in meeting Cabot Trust's growth
objectives. Offering a broad spectrum of industrial property types and Cabot
Trust's size and professional management capability enable Cabot Trust to
provide better service, on a more cost-efficient basis, to national customers
who need various types of workspace properties, in addition to distribution
space, for their local operations. At the same time, offering a variety of
industrial property types suitable for smaller companies enables Cabot Trust to
capture a larger share of the growth in its chosen industrial property markets.
Cabot Trust's strategy of offering diverse industrial property types also
enables Cabot Trust to pursue opportunities as they arise within its tenant base
by responding to shifts in demand at different stages of the economic cycle.

Growth Strategies

Cabot Trust intends to achieve its growth objectives through a combination of
property acquisitions, development and internal growth.


                                       3
<PAGE>

Acquisitions

Cabot Trust seeks to capitalize on its competitive advantages primarily by
acquiring additional modern, high-quality properties in attractive submarkets
within the industrial markets that it currently serves. During 1999, Cabot Trust
acquired 113 properties, consisting of 10 million rentable square feet in 14
targeted markets, totaling $448.3 million in 42 separate transactions. Through
February 29, 2000, Cabot Trust acquired 14 additional properties in the Atlanta,
Harrisburg and Phoenix markets, consisting of approximately 1,366,000 rentable
square feet. In addition, Cabot Trust entered into contracts to acquire
properties consisting of approximately 770,000 rentable square feet in the
Atlanta, Charlotte, Dallas, San Diego and San Francisco markets. In the near
term, Cabot Trust expects to moderate the pace of its acquisition program,
compared to prior years.

      Investment Criteria

Cabot Trust follows a disciplined, value-oriented strategy in its property
acquisitions. Cabot Trust seeks to acquire modern, cost-efficient buildings
located in key national and regional distribution centers. Cabot Trust's
investment considerations include (i) capitalization rates, (ii) economic
fundamentals in the market, (iii) replacement costs, (iv) rent levels and
trends, (v) construction quality and property condition, (vi) historical
occupancy rates, (vii) access to transportation, (viii) proximity to housing,
(ix) operating costs, (x) location in modern industrial parks and (xi) local
crime rates.

      Emphasis on Market Research

Cabot Trust's property acquisitions are based on extensive research in each
targeted market regarding (i) economic and demographic trends, (ii) the supply
of and demand for industrial space in targeted submarkets, (iii) existing and
potential tenant space requirements, (iv) rent levels and trends and (v) the
physical characteristics of buildings within the market. Cabot Trust's research
includes extensive in-market activity by its employees, including physical site
inspections and continuing contacts with leasing brokers and other local market
participants in the local markets.

      Diversification of Industrial Property Types

As of December 31, 1999, 69% of Cabot Trust's properties, based on annualized
net rents, have been bulk distribution and multitenant distribution facilities
because of the opportunities for superior returns such properties have provided.
While Cabot Trust expects that both types of properties will continue to be part
of its future acquisition program, Cabot Trust believes that workspace
properties (light industrial, R&D and similar facilities) are also attractive in
selected markets where they are in limited supply and strong demand exists.
Cabot Trust continues to increase its acquisitions of workspace properties,
which represented approximately 31% of its properties at December 31, 1999 based
on annualized net rents. During 1999, Cabot Trust's acquisitions as defined by
cost were 22% bulk distribution, 40% multitenant distribution and 38% workspace
properties.

      Relationships with Institutional Real Estate Investors

Prior to the formation of Cabot Trust, management operated Cabot Partners, which
was focused on serving public and private pension funds and other institutional
real estate investors in connection with investments in and management of
industrial real estate. This has provided Cabot Trust's management with an
extensive knowledge of and, Cabot Trust believes, a favorable reputation with
such investors. Cabot Trust believes that it will benefit from its relationships
with these investors through further acquisitions as they increasingly seek to
securitize their direct real estate investments.

      Capital Resources and UPREIT Structure

As of December 31, 1999, Cabot Trust had a debt-to-total market capitalization
ratio of approximately 35%. Cabot Trust has used its relatively unleveraged
capital structure and substantial equity base in its acquisition and development
activities. Cabot Trust believes that its ability to borrow using its $325


                                       4
<PAGE>

million revolving credit acquisition facility has enhanced its credibility with
potential property sellers. Cabot Trust's UPREIT structure, which enables it to
acquire industrial properties on a non-cash basis by exchanging Units in Cabot
L.P. for properties in a tax-deferred manner, also provides an alternative,
depending on market conditions, to a taxable cash sale for tax-paying property
owners.

Development

Cabot Trust's senior management has extensive real estate development
experience, including experience derived from the industrial park development
activities of Cabot, Cabot and Forbes, a nationwide real estate development,
investment, construction and management firm that pioneered the development of
large-scale, planned industrial parks. Cabot Trust believes that in select
targeted markets there are attractive opportunities for new development with
potentially greater returns than those available from the purchase of existing
stabilized properties, and Cabot Trust pursues a development program where such
opportunities exist. Cabot Trust is also engaging its existing tenants in
discussions about future space needs and, based on such discussions, believes
that financially attractive build-to-suit opportunities from its tenant base may
be available over time. In order to limit overhead expenses, Cabot Trust
executes its development activities by engaging local or regional builders with
whom it has established strong relationships. Currently, Cabot Trust is working
with nine local builders. Cabot Trust intends to expand its in-house development
staff as Cabot Trust's development activities increase.

Internal Growth

Cabot Trust's primary internal growth strategy is to increase the cash flow
generated by its properties, and from properties that it proposes to acquire by
renewing or replacing expiring leases with new leases at higher rental rates and
through rent increase provisions in its leases. In addition, Cabot Trust works
actively to (i) maintain its historically high occupancy levels by retaining
existing tenants, thereby minimizing "down time" and re-leasing costs, (ii)
improve the occupancy levels of newly acquired properties that have lower
occupancy levels than Cabot Trust targets for its existing properties, (iii)
capitalize on economies of scale arising from the size of its portfolio of
properties and (iv) control costs. Cabot Trust also seeks internal growth by
converting its properties to more intensive, higher-margin uses, if and to the
extent that suitable opportunities to do so arise. Leases covering approximately
13.7% and 16.4% of the total rentable space of Cabot Trust's properties will
expire in 2000 and 2001, respectively.

Leases

Cabot Trust's properties typically are leased on a triple net basis, meaning
that the tenants pay their proportionate share of real estate taxes and
operating costs. However, some of the properties are leased at higher gross
rents with Cabot Trust being responsible for paying a stated amount of real
estate taxes and operating costs and tenants being responsible for any and all
increases in such taxes and costs above that stated amount. Excluding lease
renewal options, lease terms typically range from three to five years or, for
leases that are renewed, a shorter period of generally two to three years.
Approximately 48% (based on annualized net rent) of these leases contain
provisions for automatic increases of a specified amount or percentage at a
certain point or points during the term of the lease.


                                       5
<PAGE>

Policies

The following is a description of policies that have been adopted by the Cabot
Trust Board of Trustees for the conduct of the business of Cabot Trust and Cabot
L.P. These policies may be amended or revised from time to time without
shareholder approval, except that shareholder approval would be required for
Cabot Trust to change its policy of holding its assets and conducting its
business only through Cabot L.P. and its subsidiaries and other affiliates,
including Cabot Advisors, Inc. ("Cabot Advisors") and joint ventures in which
Cabot L.P. or a subsidiary may be a partner. In addition, changes in policies
with respect to conflicts of interest must be consistent with legal
requirements.

Investment Policies

Cabot Trust conducts all of its investment activities through Cabot L.P. and its
subsidiaries and other affiliates, including Cabot Advisors, and may in the
future conduct activities through joint ventures in which Cabot L.P. or a
subsidiary may be a partner. Cabot Trust's investment policy is to purchase
income-producing industrial properties primarily for long-term capital
appreciation and rental growth, and to expand and improve its properties or to
sell them, in whole or in part, when the circumstances warrant.

Cabot Trust's property investments may be subject to existing mortgage and other
indebtedness or to indebtedness that may be incurred in connection with
acquiring or refinancing such investments. Debt service with respect to such
indebtedness will have a priority over any distributions with respect to the
Common Shares. Investments are also subject to Cabot Trust's policy not to be
treated as an investment company under the Investment Company Act of 1940.

Cabot Trust currently invests primarily in existing improved properties, but
also invests in development projects. It does not limit its investment or
development activities to any geographic area or product type or to a specified
percentage of assets. While Cabot Trust intends to maintain diversity in its
investments in terms of property location, size and market, Cabot Trust does not
have any limit on the amount or percentage of its assets that may be invested in
any one property or any one geographic area. Cabot Trust intends to conduct its
investment and development activities in a manner that is consistent with the
maintenance of its status as a REIT for federal income tax purposes.

Cabot Trust's current portfolio consists of, and its business objectives
emphasize, equity investments in industrial real estate. Cabot Trust may also
make or invest in loans secured by mortgages or deeds of trust that are
consistent with Cabot Trust's continued qualification as a REIT for federal
income tax purposes, although it has no current plans to do so. These may
include participating or convertible mortgage loans if Cabot Trust concludes
that it may benefit from the cash flow or any appreciation in value of the
property secured by such mortgages. Investments in real estate mortgage loans
entail the risk that one or more borrowers may default under such loans and that
the collateral securing such loans may not be sufficient to enable Cabot Trust
to recoup its full investment.

Subject to the limitations on ownership of certain types of assets and the gross
income tests imposed by the Code, Cabot Trust also may invest in the securities
of other REITs, other entities engaged in real estate activities or other
issuers, including investments made for the purpose of exercising control over
such entities. Cabot Trust may enter into joint ventures or partnerships for the
purpose of obtaining an equity interest in a particular property in accordance
with its investment policies. Such investments may permit Cabot Trust to own
interests in larger assets without unduly restricting diversification and,
therefore, add flexibility in structuring its portfolio. Cabot Trust does not
intend to enter into joint ventures or partnerships to make investments that
would not meet its own investment policies.


                                       6
<PAGE>

Financing Policies

As a general policy, Cabot Trust intends to limit its total consolidated
indebtedness incurred so that at the time any debt is incurred, Cabot Trust's
debt-to-total market capitalization ratio does not exceed 40%. Cabot Trust's
Declaration of Trust and Bylaws do not, however, limit the amount or percentage
of indebtedness that it may incur. Moreover, due to fluctuations in the value of
Cabot Trust's portfolio of properties over time, and since any determination of
its debt-to-total market capitalization ratio is made only at the time debt is
incurred, the debt-to-total market capitalization ratio could exceed the 40%
level. In addition, Cabot Trust may modify its debt policy from time to time in
light of changes in economic conditions, relative costs of debt and equity
capital, the market values of its properties, general conditions in the market
for debt and equity securities, fluctuations in the market price of its Common
Shares, growth and acquisition opportunities and other factors. If its debt
policy were changed, Cabot Trust could become more highly leveraged, resulting
in an increased risk of default on its obligations and a related increase in
debt service requirements that could adversely affect the financial condition
and results of operations of Cabot Trust and its ability to make distributions
to shareholders.

Cabot Trust has not established any limit on the number or amount of mortgages
that it may place on any single property or on its portfolio as a whole.

To the extent that its Board of Trustees decides to obtain additional capital,
Cabot Trust may raise such capital through offerings of its Common or Preferred
Shares or of Cabot L.P.'s partnership units, including preferred units, debt
financings or retention of cash available for distribution (subject to
provisions in the Code concerning the taxability of undistributed REIT income),
or a combination of these methods. As long as Cabot L.P. is in existence, the
net proceeds of the sale of Common Shares or Preferred Shares by Cabot Trust
will be transferred to Cabot L.P. in exchange for that number of Units or
Preferred Units that equals the number of Common Shares or Preferred Shares sold
by Cabot Trust.

Cabot Trust presently anticipates that any borrowings would be made through
Cabot L.P., although Cabot Trust may incur indebtedness directly and loan the
proceeds to Cabot L.P. Borrowings may be unsecured or may be secured by any or
all of the assets of Cabot Trust (to the extent not prohibited by existing debt
arrangements), or any existing or new property-owning partnership and may have
full or limited recourse to all or any portion of the assets of Cabot Trust, or
any existing or new property-owning partnership. Indebtedness incurred may be in
the form of bank borrowings, purchase money obligations to sellers of
properties, publicly or privately placed debt instruments or financing from
institutional investors or other lenders. The proceeds from borrowings may be
used for working capital, to refinance existing indebtedness or to finance
acquisitions, expansions or the development of new properties, and for the
payment of distributions.

Neither Cabot Trust nor Cabot L.P. has any present policy or intention to
repurchase or otherwise acquire any shares or other securities issued by either
of them.

Conflict of Interest Policies

Cabot Trust has adopted policies that are intended to minimize potential
conflicts of interest. However, there can be no assurance that these policies
will be successful in eliminating the influence of such conflicts and, if they
are not successful, decisions could be made that do not fully reflect the
interests of all shareholders.


                                       7
<PAGE>

Policies with Respect to Other Activities

Cabot Trust may, but does not presently intend to, make investments that are
different from those described herein. Cabot Trust has authority to offer its
Common Shares, other shares of beneficial interest or other securities for cash
or in exchange for property and to repurchase or otherwise reacquire its shares
or any other securities and may engage in such activities in the future. Cabot
Trust has no outstanding loans to other entities or persons, including its
officers and Trustees, except Cabot Advisors. Cabot Trust has not engaged in
trading, underwriting or agency distribution or sales of securities of other
issuers and does not currently intend to do so. Cabot Trust has also not
invested in the securities of companies other than Cabot L.P. for the purpose of
exercising control over such companies and does not currently intend to do so.
Cabot Trust makes and intends to continue to make investments in such a way that
it will not be treated as an investment company under the Investment Company Act
of 1940. Its policies with respect to such activities may be reviewed and
modified or amended from time to time by the Board of Trustees without
shareholders' approval.

Cabot Trust intends to make investments in a manner consistent with the
requirements of the Code for Cabot Trust to qualify as a REIT unless, because of
changing circumstances or changes in the Code or applicable Treasury
regulations, the Board of Trustees determines that it is no longer in the best
interests of Cabot Trust to qualify as a REIT.

Working Capital Reserves

Cabot Trust intends to maintain working capital reserves in amounts that the
Board of Trustees determines to be adequate to meet normal contingencies in
connection with the operation of Cabot Trust's business and investments.

Declaration of Trust and Bylaw Provisions

Cabot Trust's Declaration of Trust requires, with limited exceptions, that a
majority of Cabot Trust's Board of Trustees be comprised of individuals who are
not officers or employees of Cabot Trust ("Independent Trustees"). This
requirement may not be amended, altered, changed or repealed without the
affirmative vote of a majority of all of the outstanding shares of Cabot Trust
entitled to vote on the matter. The Declaration of Trust also includes a
provision generally permitting Cabot Trust to enter into any agreement or
transaction with any person, including any Trustee, officer, employee or agent
of Cabot Trust.

Cabot Trust's Bylaws provide that Section 2-419 of the Maryland General
Corporation Law, relating to transactions by interested directors, will be
available for and apply to contracts and other transactions between Cabot Trust
and any of its Trustees or between Cabot Trust and any other trust, corporation
or other entity of or in which any of Cabot Trust's Trustees is a trustee or
director or has a material financial interest. Under Section 2-419, a contract
or other transaction between a corporation and any of its directors and any
other corporation, firm or other entity in which any of its directors is a
director or has a material financial interest is not void or voidable solely
because of (a) the common directorship or interest, (b) the presence of the
director at the meeting of the board or a committee of the board that
authorizes, approves or ratifies the contract or transaction, (c) the counting
of the vote of the director for the authorization, approval or ratification of
the contract or transaction if either (i) after disclosure of the interest, the
transaction is authorized, approved or ratified by the affirmative vote of a
majority of the disinterested directors, or by the affirmative vote of a
majority of the votes cast by shareholders entitled to vote other than the votes
of shares owned of record or beneficially by the


                                       8
<PAGE>

interested director or such corporation, firm or other entity, or (ii) the
transaction is fair and reasonable to the corporation.

Cabot L.P. Partnership Agreement

The Cabot L. P. Partnership Agreement gives Cabot Trust, in its capacity as
general partner, full and exclusive discretion in managing and controlling the
business of Cabot L.P. and in making all decisions affecting the business and
assets of Cabot L.P., with limited exceptions. In the Partnership Agreement, the
limited partners have acknowledged and agreed that Cabot Trust is acting on
behalf of both Cabot L.P. and Cabot Trust's shareholders generally and that, in
its capacity as general partner of Cabot L.P., Cabot Trust is under no
obligation to consider separate interests of the Cabot L.P. limited partners in
deciding whether to cause Cabot L.P. to take or to decline to take, any actions
which Cabot Trust, in its capacity as general partner, has undertaken in good
faith on behalf of Cabot L.P. In addition, Cabot Trust in its capacity as
general partner is not responsible for any misconduct or negligence on the part
of its agents, provided that such agents were appointed in good faith. The Cabot
L.P. Partnership Agreement also provides that neither Cabot Trust nor any of its
affiliates (including its officers and Trustees) may sell, transfer or convey
any property to, or purchase any property from, Cabot L.P., except on terms that
are fair and reasonable and no less favorable than would be obtained from an
unaffiliated party.

Security Holder Reports

Cabot Trust makes annual reports to its shareholders regarding the business of
Cabot Trust and Cabot L.P. that include audited consolidated financial
statements. Cabot L.P. does not currently provide separate annual or other
reports to security holders of Cabot L.P. and does not expect to do so, except
to the extent it may specifically undertake to do so in connection with future
issuances of debt or other securities.

Competition

Numerous industrial properties compete with Cabot Trust's properties in
attracting tenants to lease space and additional properties can be expected to
be built in the markets in which the properties are located. The number and
quality of competitive industrial properties in a particular area has a material
effect on Cabot Trust's ability to lease space at the properties or at newly
acquired properties and on the rents charged. Some of these competing properties
may be newer or better located than Cabot Trust's properties.

In addition, the industrial real estate acquisition market has become highly
competitive. There are a significant number of buyers of industrial property,
including other publicly traded industrial REITs, many of which have significant
financial resources. Accordingly, it is possible that Cabot Trust may not be
able to meet its targeted level of property acquisitions and developments due to
such competition or other factors that may have an adverse effect on Cabot
Trust's expected growth in Funds from Operations ("FFO").


                                       9
<PAGE>

Insurance

Cabot Trust carries commercial general liability insurance, standard "all-risk"
property insurance, flood, earthquake and rental loss insurance with respect to
its properties with policy terms and conditions customarily carried for similar
properties. However, the insurance is subject to normal limitations on the
amounts of coverage and certain types of losses (such as from wars or from
earthquakes for properties located in California) may be either uninsurable or
not economically insurable. Should an uninsured loss or a loss in excess of the
amount of the insurance coverage occur, Cabot Trust could lose the capital
invested in a property, as well as the anticipated future revenue from that
property, and Cabot Trust would continue to be obligated on any mortgage
indebtedness or other obligations related to the property.

In light of the California earthquake risk, California building codes have since
the early 1970's established minimum construction standards for all new
buildings and also contain guidelines for seismic upgrading of existing
buildings that are intended to reduce the possibility and severity of loss from
earthquakes. The construction standards and upgrading, however, do not eliminate
the possibility of earthquake loss. Cabot Trust's current policy is to obtain
earthquake insurance if available at acceptable cost. As of December 31, 1999,
all of its 74 properties located in California are covered by earthquake
insurance in amounts believed by management to be reasonable. At December 31,
1999, seismic upgrading had been completed on 19 of the California properties
and seismic upgrading is expected to be completed on nine additional California
properties by December 31, 2000. Cabot Trust currently maintains blanket
earthquake insurance coverage for all properties located outside California in
amounts Cabot Trust believes to be reasonable.

Environmental Matters

Under various federal, state and local environmental laws, ordinances and
regulations, a current or previous owner or operator of real property may be
liable for the costs of removal or remediation of hazardous or toxic substances
on, under or in such property. Such laws often impose liability whether or not
the owner or operator knew of, or was responsible for, the presence of such
hazardous or toxic substances.

In addition, the presence of hazardous or toxic substances, or the failure to
remediate such property properly, may adversely affect the owner's ability to
borrow using such real property as collateral. Persons who arrange for the
disposal or treatment of hazardous or toxic substances may also be liable for
the costs of removal or remediation of hazardous substances at the disposal or
treatment facility, whether or not such facility is or ever was owned or
operated by such person.

Certain environmental laws and common law principles could be used to impose
liability for release of and exposure to hazardous substances and third parties
may seek recovery from owners or operators of real properties for personal
injury or property damage associated with exposure to released hazardous
substances. As the owner of real properties, Cabot Trust may be potentially
liable for any such costs.

Phase I environmental site assessment reports ("Phase I ESAs") were obtained by
our original Contributing Investors in connection with their initial
acquisitions of the properties, or were obtained by Cabot Trust in connection
with the transactions resulting in Cabot Trust's formation as a publicly traded
company. In accordance with Cabot Trust's acquisition policies, Cabot Trust has
also obtained Phase I ESAs for all of the properties acquired since the
completion of the Formation Transactions.


                                       10
<PAGE>
The purpose of Phase I ESAs is to identify potential sources of contamination
for which Cabot Trust may be responsible and to assess the status of
environmental regulatory compliance. The earliest of the Phase I ESAs for Cabot
Trust's properties were obtained in 1988 and Phase I ESAs on approximately 14%
of the properties owned as of December 31, 1999 were obtained prior to 1995.
Commonly accepted standards and practices for Phase I ESAs have evolved to
encompass higher standards and more extensive procedures over the period of 1988
to the present.

The Phase I ESAs obtained for Cabot Trust's properties have not revealed any
environmental liability that Cabot Trust believes would have a material adverse
effect on its business, assets or results of operations, nor is Cabot Trust
aware of any such material environmental liability. It is possible, even if
prepared in accordance with professional standards, that Phase I ESAs relating
to the subject properties do not reveal all environmental liabilities. Moreover,
future laws, ordinances or regulations may impose material environmental
liability or the properties' current environmental condition may be affected by
tenants, by the condition of land or operations in the vicinity of the
properties (such as the presence of underground storage tanks) or by third
parties unrelated to Cabot Trust.

Cabot Advisors

Cabot Advisors provides investment advisory and asset management services to the
former clients of Cabot Partners that elected not to contribute some or all of
their industrial properties to Cabot Trust. In addition, Cabot Advisors provides
property management services to Cabot L.P. and to the properties of some clients
that are not associated with Cabot Trust. Cabot Trust intends to explore
opportunities for co-investment, however, Cabot Advisors will not provide
services relating to any industrial real estate acquisition or development
activities that would conflict with Cabot Trust's own acquisition and
development activities. Cabot Trust believes that its investment in Cabot
Advisors will help it achieve economies of scale with its property management
systems, increase market penetration and provide access to further acquisition
opportunities.

To permit Cabot Trust to share in the income of Cabot Advisors while maintaining
its status as a REIT under the law as currently in effect, Cabot L.P. owns all
of Cabot Advisors' non-voting preferred stock (representing 95% of its economic
interest in Cabot Advisors) and Ferdinand Colloredo-Mansfeld, Cabot Trust's
Chief Executive Officer, owns all of Cabot Advisors' voting common stock
(representing 5% of its economic interest therein). Although Cabot Trust
receives substantially all of the economic benefit of Cabot Advisors' business
through dividends from Cabot L.P., Cabot Trust is not able to vote on the
election of Cabot Advisors' directors or officers and, as a result, does not
have the ability to control Cabot Advisors' operations or require its board of
directors to declare and pay cash dividends.

In late 1999, the REIT Modernizaton Act (RMA) was signed into law, to take
effect on January 1, 2001. The RMA will permit Cabot Trust and any corporation
in which it invests to elect to treat such corporation as a taxable REIT
subsidiary, which will be subject to corporate taxation on its earnings, but
which will be permitted to engage in certain activities that REITS and their
controlled subsidiaries cannot currently perform without jeopardizing REIT
status. Cabot Trust is currently assessing the impact of the RMA on its
operations and the operations of Cabot Advisors.

Employees

At December 31, 1999, Cabot L.P. and Cabot Advisors employed 95 persons, none of
who are represented by any collective bargaining organization. Cabot Trust
believes it has good relations with its employees.


                                       11
<PAGE>

Item 2. Properties

For descriptive purposes, Cabot Trust's properties may generally be grouped into
three property types: bulk distribution properties, multitenant distribution
properties and workspace properties.

Bulk distribution properties are oriented primarily to large national and
regional distribution tenants. These properties generally have at least 100,000
square feet of rentable space, building depths of at least 240 feet, clear
heights of 24 feet or more, truck courts in excess of 100 feet in depth to
accommodate larger modern trucks, a ratio of loading docks to rentable space of
one or more per 10,000 square feet and a location with good access to interstate
highways.

Multitenant distribution properties are oriented primarily to smaller regional
and local distribution tenants, and are generally designed to be subdivided to
suit tenants whose space requirements generally range from 10,000 square feet to
100,000 square feet. These properties generally have clear heights of 20 feet or
more, building depths of less than 240 feet (unless configured with loading
docks on two sides) and a location with good access to regional and interstate
highways. Both types of distribution property are used predominantly for the
storage and distribution of goods.

Workspace properties are designed to serve a variety of industrial tenants with
workspace-related requirements, including light manufacturing and assembly,
research, testing, re-packaging and sorting, back office and sales office
functions. Workspace tenants include smaller companies whose space requirements
generally range from 3,000 square feet to 70,000 square feet. Workspace
properties generally have clear heights of 14 to 24 feet, attractive building
exteriors, office finish of up to 30% or more, parking ratios of one to four
spaces per 1,000 rentable square feet and locations with good access to
executive residential areas and local highways, labor supply and dining and
shopping amenities.

The table set forth below summarizes information regarding Cabot Trust's
properties and markets as of December 31, 1999. All of the properties listed are
owned, directly or through title holding entities, by Cabot L.P.

                         Properties by Region and Market
                             As of December 31, 1999

<TABLE>
<CAPTION>
                                                                                Rentable Sq. Ft.        Annualized Net Rent(1)
                                                                                ----------------        ----------------------
                                                                    Number
                                                             Year       of                                                       Per
                                                           Built/  Proper-               Percent                    Percent   Leased
Property Type and Location                              Renovated     ties       Number   Leased         Amount    of Total  Sq. Ft.
--------------------------                              ---------     ----       ------   ------         ------    --------  -------
<S>                                                          <C>       <C>    <C>           <C>    <C>                 <C>    <C>
BULK DISTRIBUTION PROPERTIES:

WEST REGION

Los Angeles Market
 Vintage Avenue, Ontario, CA                                 1988        1      284,559     100%   $    973,200        0.6%   $ 3.42
 Dahlia Street, Fontana, CA                                  1989        1      278,560     100%        973,632        0.7%     3.50
 South Vintage Avenue, Building 1, Ontario, CA               1986        1      272,448     100%        834,548        0.5%     3.06
 Deforest Circle, Mira Loma, CA                              1992        1      250,584     100%        872,032        0.6%     3.48
 South Vintage Avenue, Building 2, Ontario, CA               1986        1      248,064     100%        796,644        0.5%     3.21
 East Easy Street, Simi Valley, CA                           1990        1      235,080     100%      1,297,641        0.9%     5.52
 Santa Anita Avenue, Rancho Cucamonga, CA                    1988        1      212,300     100%        792,864        0.5%     3.73
 San Fernando Road, Sun Valley, CA                           1980        1      181,670     100%      1,015,537        0.7%     5.61
 Rowland Street, City of Industry, CA                        1998        1      181,635     100%        824,374        0.5%     4.54
 South Rockefeller Avenue, Ontario, CA                       1986        1      164,140     100%        551,510        0.4%     3.36
 East Jurupa Street, Ontario, CA                             1986        1      142,404     100%        461,388        0.3%     3.24
                                                                       ---   ----------    ----    ------------    -------    ------

                               Market Subtotal                          11    2,451,444     100%   $  9,393,370        6.2%   $ 3.83
</TABLE>


                                       12
<PAGE>

<TABLE>
<CAPTION>
                                                                                Rentable Sq. Ft.        Annualized Net Rent(1)
                                                                                ----------------        ----------------------
                                                                    Number
                                                             Year       of                                                       Per
                                                           Built/  Proper-               Percent                    Percent   Leased
Property Type and Location                              Renovated     ties       Number   Leased         Amount    of Total  Sq. Ft.
--------------------------                              ---------     ----       ------   ------         ------    --------  -------
<S>                                                          <C>       <C>    <C>           <C>    <C>                <C>     <C>
Phoenix Market
 North 104th Avenue, Tolleson, AZ                            1995        1      279,279     100%   $    805,634        0.5%   $ 2.88
 North 103rd Street, Phoenix, AZ                             1999        1      279,186     100%        942,524        0.6%     3.38
 West Van Buren, Tolleson, AZ                                1997        1      278,142     100%        868,470        0.6%     3.12
 South 84th Avenue, Tolleson, AZ                             1989        1      236,007     100%        802,488        0.5%     3.40
 South 41st Avenue, Building 2, Phoenix, AZ                  1985        1      223,740     100%        696,009        0.5%     3.11
 South 63rd Avenue, Phoenix, AZ                              1990        1      168,165     100%        395,514        0.3%     2.35
 North 47th Avenue, Phoenix, AZ                              1986        1      163,200     100%        473,451        0.3%     2.90
 South 49th Avenue, Phoenix, AZ                              1989        1      114,871     100%        358,397        0.2%     3.12
 South 55th Avenue, Phoenix, AZ                              1986        1      100,000     100%        243,000        0.2%     2.43
                                                                       ---   ----------    ----    ------------    -------    ------

                               Market Subtotal                           9    1,842,590     100%   $  5,585,487        3.7%   $ 3.03

San Diego Market
 Dornoch Court, San Diego, CA                                1988        1      220,000     100%   $  1,077,292        0.7%   $ 4.90
 Newton Drive, Carlsbad, CA                                  1999        1      179,721     100%      1,189,716        0.8%     6.62
                                                                       ---   ----------    ----    ------------    -------    ------

                               Market Subtotal                           2      399,721     100%   $  2,267,008        1.5%   $ 5.67
                                                                       ---   ----------    ----    ------------    -------    ------

                          WEST REGION SUBTOTAL                          22    4,693,755     100%   $ 17,245,865       11.4%   $ 3.67

SOUTHWEST REGION
Dallas Market
 DFW Trade Center, Building 1, Grapevine, TX                 1996        1      540,000     100%   $  1,705,803        1.1%   $ 3.16
 Patriot Drive, Building 2, Coppell, TX                      1997        1      503,074      76%      1,296,812        0.9%     3.40
 DFW Trade Center, Building 2, Grapevine, TX                 1997        1      440,000     100%      1,278,000        0.8%     2.90
 Luna Road, Carrollton, TX                                   1996        1      205,400     100%        679,992        0.5%     3.31
 Patriot Drive, Building 1, Coppell, TX                      1997        1      142,748     100%        470,289        0.3%     3.29
 Airline Drive, Building 2, Coppell, TX                      1990        1      140,800     100%        492,804        0.3%     3.50
                                                                       ---   ----------    ----    ------------    -------    ------

              SOUTHWEST REGION/MARKET SUBTOTAL                           6    1,972,022      94%   $  5,923,700        3.9%   $ 3.20

MIDWEST REGION

Chicago Market
 West 73rd Street, Building 2, Bedford Park, IL              1986        1      380,269       0%   $         --        0.0%   $   --
 Crossroads Parkway, Bolingbrook, IL                         1995        1      299,520     100%      1,080,800        0.7%     3.61
 Mark Street, Wood Dale, IL                                  1985        1      234,000     100%        833,040        0.5%     3.56
 West 73rd Street, Building 1, Bedford Park, IL              1982        1      233,282     100%        735,279        0.5%     3.15
 West 73rd Street, Building 3, Bedford Park, IL              1979        1      232,000     100%        735,862        0.5%     3.17
 Arthur Avenue, Elk Grove, IL                                1978        1      230,768     100%        699,228        0.5%     3.03
 Harvester Drive, Chicago, IL                                1974        1      212,922       0%             --        0.0%       --
 Remington Street, Bolingbrook, IL                           1996        1      212,333     100%        796,926        0.5%     3.75
 Ambassador Road, Naperville  IL                             1996        1      203,500     100%        737,633        0.5%     3.62
 South Frontenac, Naperville, IL                             1975        1      200,117     100%        623,080        0.4%     3.11
 North Raddant Road, Batavia, IL                             1991        1      170,462     100%        711,954        0.5%     4.18
                                                                       ---   ----------    ----    ------------    -------    ------

                               Market Subtotal                          11    2,609,173      77%   $  6,953,802        4.6%   $ 3.45

Cincinnati/Northern Kentucky Market
 Holton Drive, Independence, KY                              1996        1      352,000     100%   $    991,951        0.7%   $ 2.82
 Kingsley Drive, Building 2, Cincinnati, OH                  1981        1      249,402     100%        726,085        0.5%     2.91
 International Road, Building 2, Cincinnati, OH              1990        1      204,800     100%        721,520        0.5%     3.52
 International Road, Building 1, Cincinnati, OH              1990        1      192,000     100%        547,200        0.4%     2.85
 International Way, Hebron, KY                               1990        1      192,000     100%        528,000        0.3%     2.75
 Kingsley Drive, Building 1, Cincinnati, OH                  1981        1      154,004     100%        484,275        0.3%     3.14
                                                                       ---   ----------    ----    ------------    -------    ------

                               Market Subtotal                           6    1,344,206     100%   $  3,999,031        2.7%   $ 2.98

Columbus Market
 Westbelt Drive, Building 2, Columbus, OH                    1980        1      229,200     100%   $    594,807        0.4%   $ 2.60
 Equity Drive, Building 1, Columbus, OH                      1980        1      227,480     100%        516,595        0.3%     2.27
                                                                       ---   ----------    ----    ------------    -------    ------
</TABLE>


                                       13
<PAGE>

<TABLE>
<CAPTION>
                                                                                Rentable Sq. Ft.        Annualized Net Rent(1)
                                                                                ----------------        ----------------------
                                                                    Number
                                                             Year       of                                                       Per
                                                           Built/  Proper-               Percent                    Percent   Leased
Property Type and Location                              Renovated     ties       Number   Leased         Amount    of Total  Sq. Ft.
--------------------------                              ---------     ----       ------   ------         ------    --------  -------
<S>                                                     <C>            <C>   <C>            <C>    <C>                <C>     <C>
                               Market Subtotal                           2      456,680     100%   $  1,111,402        0.7%   $ 2.43
Other Market
 North State Road #9, Howe, IN                               1988        1      346,515     100%   $    748,472        0.5%   $ 2.16
                                                                       ---   ----------    ----    ------------    -------    ------

                       MIDWEST REGION SUBTOTAL                          20    4,756,574      88%   $ 12,812,707        8.5%   $ 3.08

SOUTHEAST REGION

Atlanta Market
 Highway 316, Dacula, GA                                     1989        1      326,019     100%   $  1,085,223        0.7%   $ 3.33
 Westgate Parkway, Fulton County, GA                         1988        1      231,835     100%        695,505        0.5%     3.00
                                                                       ---   ----------    ----    ------------    -------    ------

                               Market Subtotal                           2      557,854     100%   $  1,780,728        1.2%   $ 3.19

Charlotte Market
 Marine Drive, Rock Hill, SC                                 1997        1      471,744     100%   $  1,369,236        0.9%   $ 2.90
 Westinghouse Blvd., Building 3, Charlotte, NC               1994        1      183,551     100%        593,924        0.4%     3.24
 Reames Road, Charlotte, NC                                  1994        1      105,600     100%        334,153        0.2%     3.16
                                                                       ---   ----------    ----    ------------    -------    ------

                               Market Subtotal                           3      760,895     100%   $  2,297,313        1.5%   $ 3.02

Memphis Market
 Pilot Drive, Memphis, TN                                    1987        1      336,080     100%   $    812,130        0.5%   $ 2.42
                                                                       ---   ----------    ----    ------------    -------    ------

Orlando Market
 Landstreet Road, Building 1, Orlando, FL                    1997        1      355,732     100%   $  1,639,782        1.1%   $ 4.61
                                                                       ---   ----------    ----    ------------    -------    ------

                     SOUTHEAST REGION SUBTOTAL                           7    2,010,561     100%   $  6,529,953        4.3%   $ 3.25

NORTHEAST REGION

Baltimore/Washington Market
 Oceano Avenue, Jessup, MD                                   1987        1      243,895     100%   $    834,121        0.6%   $ 3.42
 Tar Bay Drive, Jessup, MD                                   1990        1      210,000     100%        800,527        0.5%     3.81
                                                                       ---   ----------    ----    ------------    -------    ------

                               Market Subtotal                           2      453,895     100%   $  1,634,648        1.1%   $ 3.60

Harrisburg Market
 Cumberland Parkway, Mechanicsburg, PA                       1992        1      340,000     100%   $  1,144,967        0.8%   $ 3.37
 Brackbill Boulevard, Building 1, Mechanicsburg, PA          1984        1      259,200     100%        913,069        0.6%     3.52
 Brackbill Boulevard, Building 2, Mechanicsburg, PA          1994        1      235,200     100%        828,432        0.5%     3.52
                                                                       ---   ----------    ----    ------------    -------    ------

                               Market Subtotal                           3      834,400     100%   $  2,886,468        1.9%   $ 3.46

New York/New Jersey Market
 Herrod Boulevard, South Brunswick, NJ                       1989        1      400,000     100%   $  1,719,547        1.1%   $ 4.30
 South Middlesex Avenue, Building 1, Cranbury, NJ            1989        1      204,369     100%        735,728        0.5%     3.60
 Birch Creek Road, Bridgeport, NJ                       1991/1997        1      203,229     100%        792,463        0.5%     3.90
 Pepes Farm Road, Milford, CT                                1980        1      200,000     100%        930,000        0.6%     4.65
 Pierce Street, Franklin Township, NJ                        1984        1      182,764     100%        776,748        0.5%     4.25
                                                                       ---   ----------    ----    ------------    -------    ------

                               Market Subtotal                           5    1,190,362     100%   $  4,954,486        3.2%   $ 4.16
                                                                       ---   ----------    ----    ------------    -------    ------

                     NORTHEAST REGION SUBTOTAL                          10    2,478,657     100%   $  9,475,602        6.2%   $ 3.82
                                                                       ---   ----------    ----    ------------    -------    ------

BULK DISTRIBUTION PROPERTIES TOTAL                                      65   15,911,569      95%   $ 51,987,827       34.3%   $ 3.42
</TABLE>


                                       14
<PAGE>

<TABLE>
<CAPTION>
                                                                                Rentable Sq. Ft.        Annualized Net Rent(1)
                                                                                ----------------        ----------------------
                                                                    Number
                                                             Year       of                                                       Per
                                                           Built/  Proper-               Percent                    Percent   Leased
Property Type and Location                              Renovated     ties       Number   Leased         Amount    of Total  Sq. Ft.
--------------------------                              ---------     ----       ------   ------         ------    --------  -------
<S>                                                     <C>            <C>    <C>           <C>    <C>                 <C>    <C>
MULTITENANT DISTRIBUTION PROPERTIES:
WEST REGION
Los Angeles Market
 East Dyer Road, Santa Ana, CA                          1954/1965        1      372,096     100%   $  1,480,660        1.0%   $ 3.98
 Alondra Blvd., La Mirada, CA                           1969/1975        1      237,089     100%        910,421        0.6%     3.84
 West Rincon Street, Corona, CA                              1986        1      162,900     100%        740,400        0.5%     4.55
 Industry Circle, La Mirada, CA                              1966        1      112,946     100%        474,373        0.3%     4.20
 12th Street, Chino, CA                                      1990        1      104,600     100%        402,000        0.3%     3.84
 N. San Fernando Road, Building 1, Los Angeles, CA           1965        1      102,800     100%        627,118        0.4%     6.10
 E. Vista Bella Way, Rancho Dominguez, CA                    1973        1      100,000     100%        444,000        0.3%     4.44
 W. Manville Street, Rancho Dominguez, CA                    1980        1      100,000     100%        438,000        0.3%     4.38
 East Santa Anna Street, Building 1, Ontario, CA             1990        1       98,782     100%        355,615        0.2%     3.60
 Jersey Court, Rancho Cucamonga, CA                          1989        1       88,134     100%        291,000        0.2%     3.30
 Tyburn Street, Los Angeles, CA                              1965        1       85,142     100%        559,572        0.4%     6.57
 N. San Fernando Road, Building 2, Los Angeles, CA           1965        1       80,500     100%        590,274        0.4%     7.33
 Parco Street, Ontario, CA                                   1999        1       72,000     100%        302,400        0.2%     4.20
 East Santa Anna Street, Building 2, Ontario, CA             1990        1       62,398     100%        224,632        0.1%     3.60
 N. San Fernando Road, Building 3, Los Angeles, CA           1965        1       58,860     100%        444,981        0.3%     7.56
                                                                       ---   ----------    ----    ------------    -------    ------

                               Market Subtotal                          15    1,838,247     100%   $  8,285,446        5.5%   $ 4.51

Phoenix Market
 South 40th Avenue, Building 3, Phoenix, AZ                  1987        1      201,600     100%   $    635,040        0.4%   $ 3.15
 South 41st Avenue, Building 1, Phoenix, AZ                  1989        1      161,230     100%        440,157        0.3%     2.73
 South 39th Avenue, Phoenix, AZ                              1989        1      159,450     100%        658,368        0.4%     4.13
 44th Avenue, Phoenix, AZ                                    1997        1      144,592      78%        405,333        0.3%     3.61
 South 53rd Avenue, Phoenix, AZ                              1987        1      127,680     100%        360,057        0.2%     2.82
 South 40th Avenue, Building 2, Phoenix, AZ                  1989        1      127,042     100%        384,872        0.3%     3.03
 South 40th Avenue, Building 1, Phoenix, AZ                  1990        1      126,360     100%        348,525        0.2%     2.76
 South 9th Street, Phoenix, AZ                               1983        1       89,423     100%        464,729        0.3%     5.20
                                                                       ---   ----------    ----    ------------    -------    ------

                               Market Subtotal                           8    1,137,377      97%   $  3,697,081        2.4%   $ 3.35

San Francisco Market
 McLaughlin Avenue, San Jose, CA                             1975        1      134,483     100%   $    713,640        0.5%   $ 5.31
 Reed Avenue, Building 2, West Sacramento, CA                1988        1      105,600     100%        461,460        0.3%     4.37
 Reed Avenue, Building 1, West Sacramento, CA                1988        1      103,110     100%        466,765        0.3%     4.53
                                                                       ---   ----------    ----    ------------    -------    ------

                               Market Subtotal                           3      343,193     100%   $  1,641,865        1.1%   $ 4.78

Seattle Market
 Kent West Corporate Park, II, Kent, WA                      1989        1      250,820     100%   $    966,492        0.6%   $ 3.85
                                                                       ---   ----------    ----    ------------    -------    ------

                          WEST REGION SUBTOTAL                          27    3,569,637      99%   $ 14,590,884        9.6%   $ 4.12

SOUTHWEST REGION

Dallas Market
 North Lake Drive, Coppell, TX                               1982        1      230,400     100%   $    690,343        0.4%   $ 3.00
 East Plano Parkway, Plano, TX                               1998        1      210,560     100%        989,640        0.6%     4.70
 Hillguard Road, Building 3, Dallas, TX                      1980        1      122,798     100%        423,990        0.3%     3.45
 10th Street, Building 2, Plano, TX                          1997        1      107,260     100%        423,086        0.3%     3.94
 10th Street, Building 1, Plano, TX                          1997        1       99,679     100%        439,824        0.3%     4.41
 Diplomat Drive, Building 2, Farmers Branch, TX              1984        1       82,756     100%        325,697        0.2%     3.94
 113th Street, Arlington, TX                                 1979        1       79,735     100%        291,032        0.2%     3.65
 Airline Drive, Building 1, Coppell, TX                      1991        1       75,000     100%        262,500        0.2%     3.50
 Hillguard Road, Building 2, Dallas, TX                      1980        1       71,565     100%        228,671        0.2%     3.20
 Hillguard Road, Building 1, Dallas, TX                      1980        1       53,647     100%        180,666        0.1%     3.37
                                                                       ---   ----------    ----    ------------    -------    ------

                 SOUTHWEST REGION/MARKET TOTAL                          10    1,133,400     100%   $  4,255,449        2.8%   $ 3.75
</TABLE>


                                       15
<PAGE>

<TABLE>
<CAPTION>
                                                                                Rentable Sq. Ft.        Annualized Net Rent(1)
                                                                                ----------------        ----------------------
                                                                    Number
                                                             Year       of                                                       Per
                                                           Built/  Proper-               Percent                    Percent   Leased
Property Type and Location                              Renovated     ties       Number   Leased         Amount    of Total  Sq. Ft.
--------------------------                              ---------     ----       ------   ------         ------    --------  -------
<S>                                                     <C>            <C>    <C>           <C>    <C>                 <C>    <C>
MIDWEST REGION

Chicago Market
 Medinah Road, Building 1, Chicago, IL                       1986        1      319,459     100%   $  1,741,840        1.1%   $ 5.45
 Medinah Road, Building 2, Chicago, IL                       1986        1      160,799     100%        876,751        0.6%     5.45
 Greenleaf Avenue, Elk Grove Village, IL                1968/1995        1      150,000     100%        652,308        0.4%     4.35
 High Grove Lane, Naperville, IL                             1994        1       95,000     100%        392,549        0.3%     4.13
 South 78th Avenue, Hickory Hills, IL                        1981        1       83,170     100%        394,210        0.3%     4.74
 Swenson Avenue, St. Charles, IL                             1988        1       81,110     100%        307,538        0.2%     3.79
 Western Avenue, Lisle, IL                              1979/1985        1       67,996     100%        383,143        0.2%     5.63
                                                                       ---   ----------    ----    ------------    -------    ------

                               Market Subtotal                           7      957,534     100%   $  4,748,339        3.1%   $ 4.96

Cincinnati/Northern Kentucky Market
 Lake Forest Drive, Building 1, Blue Ash, OH                 1978        1      239,891     100%   $    660,789        0.4%   $ 2.75
 Lake Forest Drive, Building 2, Blue Ash, OH                 1979        1      176,956     100%        486,866        0.3%     2.75
 Kenwood Road, Building 2, Blue Ash, OH                      1963        1      144,843     100%        325,897        0.2%     2.25
 Kenwood Road, Building 1, Blue Ash, OH                      1965        1      121,284     100%        277,740        0.2%     2.29
 Kenwood Road, Building 3, Blue Ash, OH                      1964        1      103,415     100%        232,684        0.2%     2.25
 Kenwood Road, Building 4, Blue Ash, OH                      1969        1      102,100     100%        256,271        0.2%     2.51
 Kenwood Road, Building 7, Blue Ash, OH                      1973        1      100,320      62%        187,500        0.1%     3.00
 Kenwood Road, Building 5, Blue Ash, OH                      1970        1      100,000     100%        315,000        0.2%     3.15
 Kenwood Road, Building 6, Blue Ash, OH                      1971        1       98,093     100%        296,107        0.2%     3.02
                                                                       ---   ----------    ----    ------------    -------    ------

                               Market Subtotal                           9    1,186,902      97%   $  3,038,854        2.0%   $ 2.64

Columbus Market
 Port Road, Building 1, Franklin County, OH                  1995        1      205,109     100%   $    677,903        0.4%   $ 3.31
 Westbelt Drive, Building 1, Columbus, OH                    1980        1      202,000     100%      1,070,600        0.7%     5.30
 Twin Creek Drive, Columbus, OH                              1989        1      176,000      59%        310,848        0.2%     3.01
 Port Road, Building 2, Franklin County, OH                  1995        1      156,000     100%        425,899        0.3%     2.73
 International Street, Columbus, OH                          1988        1      152,800     100%        435,479        0.3%     2.85
 Dividend Drive, Columbus, OH                                1980        1      144,850     100%        443,241        0.3%     3.06
                                                                       ---   ----------    ----    ------------    -------    ------

                               Market Subtotal                           6    1,036,759      93%   $  3,363,970        2.2%   $ 3.49

Minneapolis Market
 Lexington Avenue, Eagan, MN                            1979/1984        1      184,429      62%   $    385,890        0.2%   $ 3.38
 Trenton Lane, Plymouth, MN                                  1994        1      122,032     100%        617,930        0.4%     5.06
 Woodale Drive, Building 1, Mounds View, MN                  1992        1       78,016      74%        278,797        0.2%     4.80
                                                                       ---   ----------    ----    ------------    -------    ------

                               Market Subtotal                           3      384,477      77%   $  1,282,617        0.8%   $ 4.36

Other Market
 Sysco Court, Grand Rapids, MI                               1985        1       62,700     100%   $    372,957        0.3%   $ 5.95
                                                                       ---   ----------    ----    ------------    -------    ------

                       MIDWEST REGION SUBTOTAL                          26    3,628,372      94%   $ 12,806,737        8.4%   $ 3.74

SOUTHEAST REGION

Atlanta Market
 Westpark, Building 1, Atlanta, GA                           1981        1      216,074     100%   $    539,189        0.3%   $ 2.50
 Atlanta Industrial Drive, Atlanta, GA                       1986        1      161,965     100%        422,922        0.3%     2.61
 Westpark Drive, Building 2, Atlanta, GA                     1981        1      130,722     100%        281,699        0.2%     2.15
 Williams Drive, Building 1, Marietta, GA                    1987        1       84,124     100%        329,992        0.2%     3.92
 Williams Drive, Building 2, Marietta, GA                    1987        1       70,164     100%        248,412        0.2%     3.54
 Williams Drive, Building 3, Marietta, GA                    1987        1       54,032      65%        144,054        0.1%     4.10
                                                                       ---   ----------    ----    ------------    -------    ------

                               Market Subtotal                           6      717,081      97%   $  1,966,268        1.3%   $ 2.82

Charlotte Market
 Westinghouse Blvd., Building 4, Charlotte, NC               1988        1      159,085     100%   $    548,844        0.4%   $ 3.45
</TABLE>


                                       16
<PAGE>

<TABLE>
<CAPTION>
                                                                                Rentable Sq. Ft.        Annualized Net Rent(1)
                                                                                ----------------        ----------------------
                                                                    Number
                                                             Year       of                                                       Per
                                                           Built/  Proper-               Percent                    Percent   Leased
Property Type and Location                              Renovated     ties       Number   Leased         Amount    of Total  Sq. Ft.
--------------------------                              ---------     ----       ------   ------         ------    --------  -------
<S>                                                     <C>            <C>    <C>           <C>    <C>                <C>     <C>
 Westinghouse Blvd., Building 1, Charlotte, NC               1994        1      121,900     100%        406,272        0.3%     3.33
 Cordage Street, Charlotte, NC                               1981        1      112,000     100%        348,598        0.2%     3.11
 Westinghouse Blvd., Building 2, Charlotte, NC               1992        1      104,000     100%        340,930        0.2%     3.28
                                                                       ---   ----------    ----    ------------    -------    ------

                               Market Subtotal                           4      496,985     100%   $  1,644,644        1.1%   $ 3.31

Orlando Market
 Orlando Central Park, Building 3, Orlando, FL               1991        1      356,583      90%   $  1,419,806        1.0%   $ 4.42
 Orlando Central Park, Building 1, Orlando, FL               1988        1      267,432     100%        901,986        0.6%     3.37
 Orlando Central Park, Building 2, Orlando, FL               1983        1      156,660     100%        493,476        0.3%     3.15
 Orlando Central Park, Building 5, Orlando, FL               1985        1      139,800     100%        494,187        0.3%     3.53
 Orlando Central Park, Building 4, Orlando, FL               1984        1      133,424     100%        475,533        0.3%     3.56
 Orlando Central Park, Building 6, Orlando, FL               1986        1      119,000     100%        497,635        0.4%     4.18
 Exchange Drive, Orlando, FL                                 1979        1      115,728      87%        310,897        0.2%     3.09
 Kingspointe Parkway, Orlando, FL                            1991        1      101,903     100%        337,926        0.2%     3.32
                                                                       ---   ----------    ----    ------------    -------    ------

                               Market Subtotal                           8    1,390,530      96%   $  4,931,446        3.3%   $ 3.68

South Florida Market
 N.W. 70th Avenue, Miami, FL                                 1977        1      215,019     100%   $  1,100,292        0.7%   $ 5.12
                                                                       ---   ----------    ----    ------------    -------    ------

                     SOUTHEAST REGION SUBTOTAL                          19    2,819,615      98%   $  9,642,650        6.4%   $ 3.51

NORTHEAST REGION

Baltimore/Washington Market
 Stayton Drive, Jessup, MD                                   1985        1      125,800     100%   $    514,688        0.4%   $ 4.09
 Bollman Place, Savage, MD                                   1985        1      104,409     100%        498,485        0.3%     4.77
 Port Capital Drive, Jessup, MD                              1974        1       94,381     100%        460,962        0.3%     4.88
 Greenwood Place, Savage, MD                                 1985        1       77,424     100%        309,067        0.2%     3.99
                                                                       ---   ----------    ----    ------------    -------    ------

                               Market Subtotal                           4      402,014     100%   $  1,783,202        1.2%   $ 4.44

Boston Market
 Sunnyslope Avenue, Tewksbury, MA                            1987        1      153,641     100%   $    718,446        0.4%   $ 4.68
 Kenwood Circle, Franklin, MA                                1987        1      153,369     100%        571,298        0.4%     3.72
 South Street, Hopkinton, MA                                1987        1       70,600     100%        291,325        0.2%     4.13
 Progress Road, Building 2, Billerica, MA                    1988        1       69,500     100%        329,975        0.2%     4.75
 Progress Road, Building 1, Billerica, MA                    1988        1       57,600     100%        298,800        0.2%     5.19
                                                                       ---   ----------    ----    ------------    -------    ------

                               Market Subtotal                           5      504,710     100%   $  2,209,844        1.4%   $ 4.38

Harrisburg Market
 Ritter Road, Mechanicsburg, PA                              1986        1       37,800     100%   $    248,970        0.2%   $ 6.59
                                                                       ---   ----------    ----    ------------    -------    ------

New York/New Jersey Market
 Port Jersey Boulevard, Building 1, Port Jersey, NJ     1974/1982        1      425,121     100%   $  1,780,062        1.2%   $ 4.19
 Industrial Drive, Building 1, Port Jersey, NJ               1976        1      263,717     100%      1,015,310        0.7%     3.85
 Colony Road, Building 1, Jersey City, NJ                    1976        1      262,453     100%        918,438        0.6%     3.50
 Port Jersey Boulevard, Building 2, Port Jersey, NJ     1974/1982        1      204,564     100%        754,841        0.5%     3.69
 South Middlesex Avenue, Building 2, Cranbury, NJ            1982        1      203,404     100%        864,467        0.6%     4.25
 Industrial Drive, Building 2, Port Jersey, NJ               1976        1      154,000     100%        615,996        0.4%     4.00
 Colony Road, Building 2, Jersey City, NJ                    1974        1      124,933     100%        499,731        0.3%     4.00
 Industrial Drive, Building 3, Port Jersey, NJ               1972        1       45,274     100%        181,095        0.1%     4.00
                                                                       ---   ----------    ----    ------------    -------    ------

                               Market Subtotal                           8    1,683,466     100%   $  6,629,940        4.4%   $ 3.94
                                                                       ---   ----------    ----    ------------    -------    ------

                     NORTHEAST REGION SUBTOTAL                          18    2,627,990     100%   $ 10,871,956        7.2%   $ 4.14
                                                                       ---   ----------    ----    ------------    -------    ------

MULTITENANT DISTRIBUTION
PROPERTIES TOTAL                                                       100   13,779,014      98%   $ 52,167,676       34.4%   $ 3.87
</TABLE>


                                       17
<PAGE>

<TABLE>
<CAPTION>
                                                                                Rentable Sq. Ft.        Annualized Net Rent(1)
                                                                                ----------------        ----------------------
                                                                    Number
                                                             Year       of                                                       Per
                                                           Built/  Proper-               Percent                    Percent   Leased
Property Type and Location                              Renovated     ties       Number   Leased         Amount    of Total  Sq. Ft.
--------------------------                              ---------     ----       ------   ------         ------    --------  -------
<S>                                                          <C>       <C>      <C>         <C>    <C>                 <C>    <C>
WORKSPACE PROPERTIES:
WEST REGION
Los Angeles Market
 Kovacs Lane, Huntington Beach, CA                           1988        1      125,000     100%   $    951,060        0.6%   $ 7.61
 Lassen Street, Chatsworth, CA                               1968        1      124,518     100%        732,165        0.5%     5.88
 East Howell Avenue, Building 1, Anaheim, CA                 1968        1       81,475     100%        347,385        0.2%     4.26
 N. San Fernando Road, Building 4, Los Angeles, CA           1992        1       66,410     100%        620,008        0.4%     9.34
 Commonwealth Avenue, Fullerton, CA                          1965        1       64,292     100%        250,047        0.2%     3.89
 Artesia Avenue, Building 2, Fullerton, CA                   1991        1       60,502     100%        283,149        0.2%     4.68
 Artesia Avenue, Building 1, Fullerton, CA                   1991        1       55,498     100%        227,671        0.2%     4.10
 N. San Fernando Road, Building 5, Los Angeles, CA           1992        1       41,894     100%        359,753        0.2%     8.59
 Union Place, Building 2, Simi Valley, CA                    1987        1       36,538     100%        330,847        0.2%     9.05
 Shoemaker Avenue, Building 1, Santa Fe Springs, CA          1989        1       36,485     100%        199,189        0.1%     5.46
 Shoemaker Avenue, Building 3, Santa Fe Springs, CA          1989        1       27,550     100%        133,762        0.1%     4.86
 E. 166th Street, Cerritos, CA                               1978        1       27,072       0%             --        0.0%       --
 Royal Avenue, Simi Valley, CA                               1988        1       26,120     100%        157,380        0.1%     6.03
 East Howell Avenue, Building 2, Anaheim, CA                 1991        1       25,962     100%        109,040        0.1%     4.20
 Union Place, Building 1, Simi Valley, CA                    1985        1       22,710     100%        148,476        0.1%     6.54
 Shoemaker Avenue, Building 2, Santa Fe Springs, CA          1989        1       17,800     100%         89,890        0.1%     5.05
 N. San Fernando Road, Building 6, Los Angeles, CA           1993        1       17,000     100%        233,750        0.2%    13.75
 Shoemaker Avenue, Building 4, Santa Fe Springs, CA          1989        1       10,784     100%         55,538        0.1%     5.15
 Anza Drive, Building 1, Valencia, CA                        1990        1       10,296     100%         65,121        0.0%     6.32
 Anza Drive, Building 3, Valencia, CA                        1990        1        8,663     100%         63,648        0.0%     7.35
 Anza Drive, Building 2, Valencia, CA                        1990        1        7,944     100%         58,187        0.0%     7.32
                                                                       ---   ----------    ----    ------------    -------    ------

                               Market Subtotal                          21      894,513      97%   $  5,416,066        3.6%   $ 6.24

Phoenix Market
 East Watkins Street, Phoenix, AZ                            1998        1      101,932     100%   $    953,228        0.6%   $ 9.35
 South 16th Street, Phoenix, AZ                              1998        1       85,259     100%        763,024        0.5%     8.95
 East Encanto Drive, Tempe, AZ                               1990        1       81,817     100%        352,336        0.2%     4.31
 South Priest Drive, Tempe, AZ                               1998        1       54,900     100%        394,200        0.3%     7.18
 West Alameda Drive, Building 1, Tempe, AZ                   1984        1       30,606     100%        147,470        0.1%     4.82
 West Alameda Drive, Building 2, Tempe, AZ                   1984        1       30,606     100%        153,029        0.1%     5.00
 West Alameda Drive, Building 3, Tempe, AZ                   1984        1       30,606     100%        138,976        0.1%     4.54
 West Alameda Drive, Building 4, Tempe, AZ                   1984        1       30,606     100%        153,640        0.1%     5.02
                                                                       ---   ----------    ----    ------------    -------    ------

                               Market Subtotal                           8      446,332     100%   $  3,055,903        2.0%   $ 6.85

San Diego Market
 Avenida Encinas, Building 2, Carlsbad, CA                   1993        1      126,008     100%   $    752,689        0.5%   $ 5.97
 Avenida Encinas, Building 1, Carlsbad, CA                   1972        1       80,000     100%        663,200        0.4%     8.29
 Airway Road, Building. 2, Otay Mesa, CA                     1996        1       78,296     100%        465,479        0.3%     5.95
 Goldentop Road, San Diego, CA                               1997        1       66,448     100%        622,736        0.4%     9.37
 Oak Ridge Way, Vista, CA                                    1999        1       53,239     100%        403,428        0.3%     7.58
 Airway Road, Building 1, Otay Mesa, CA                      1996        1       44,840      80%        239,049        0.2%     6.71
 Kellogg Avenue, Carlsbad, CA                                1991        1       39,900     100%        301,644        0.2%     7.56
                                                                       ---   ----------    ----    ------------    -------    ------

                               Market Subtotal                           7      488,731      98%   $  3,448,225        2.3%   $ 7.19
</TABLE>


                                       18
<PAGE>

<TABLE>
<CAPTION>
                                                                                Rentable Sq. Ft.        Annualized Net Rent(1)
                                                                                ----------------        ----------------------
                                                                    Number
                                                             Year       of                                                       Per
                                                           Built/  Proper-               Percent                    Percent   Leased
Property Type and Location                              Renovated     ties       Number   Leased         Amount    of Total  Sq. Ft.
--------------------------                              ---------     ----       ------   ------         ------    --------  -------
<S>                                                          <C>       <C>    <C>           <C>    <C>                 <C>    <C>
San Francisco Market
 Brisbane Industrial Park, Building 10, Brisbane, CA         1961        1      116,400     100%   $     89,773        0.1%   $ 0.77
 Huntwood Avenue, Hayward, CA                                1982        1       62,031     100%        477,445        0.3%     7.70
 Brisbane Industrial Park, Building 13, Brisbane, CA         1962        1       58,000     100%        368,880        0.3%     6.36
 Brisbane Industrial Park, Building 9, Brisbane, CA          1966        1       43,500     100%        325,685        0.2%     7.49
 Brisbane Industrial Park, Building 4, Brisbane, CA          1968        1       40,680     100%        256,194        0.2%     6.30
 Brisbane Industrial Park, Building 1, Brisbane, CA          1961        1       39,800     100%        225,800        0.1%     5.67
 Brisbane Industrial Park, Building 5, Brisbane, CA          1966        1       37,040     100%        216,227        0.2%     5.84
 Brisbane Industrial Park, Building 11, Brisbane, CA         1968        1       35,744     100%        220,897        0.1%     6.18
 Brisbane Industrial Park, Building 7, Brisbane, CA          1967        1       32,211     100%        208,728        0.1%     6.48
 Brisbane Industrial Park, Building 6, Brisbane, CA          1963        1       31,745     100%        211,982        0.1%     6.68
 Brisbane Industrial Park, Building 12, Brisbane, CA         1968        1       24,786     100%        142,903        0.1%     5.77
 Brisbane Industrial Park, Building 3, Brisbane, CA          1969        1       23,586     100%        173,862        0.1%     7.37
 Brisbane Industrial Park, Building 2, Brisbane, CA          1960        1       21,186     100%        148,501        0.1%     7.01
 Brisbane Industrial Park, Building 14, Brisbane, CA         1969        1       19,100     100%        102,204        0.1%     5.35
 Brisbane Industrial Park, Building 8, Brisbane, CA          1961        1       18,600     100%        140,616        0.1%     7.56
                                                                       ---   ----------    ----    ------------    -------    ------

                               Market Subtotal                          15      604,409     100%   $  3,309,697        2.2%   $ 5.48

Seattle Market
 Kent West Corporate Park I, Building 4, Kent, WA            1989        1       57,990     100%   $    225,216        0.1%   $ 3.88
 Kent West Corporate Park I, Building 1, Kent, WA            1989        1       41,700     100%        501,984        0.3%    12.04
 Kent West Corporate Park I, Building 3, Kent, WA            1989        1       36,250     100%        144,768        0.1%     3.99
 Kent West Corporate Park I, Building 2, Kent, WA            1989        1       16,000     100%        114,348        0.1%     7.15
                                                                       ---   ----------    ----    ------------    -------    ------

                               Market Subtotal                           4      151,940     100%   $    986,316        0.6%   $ 6.49
                                                                       ---   ----------    ----    ------------    -------    ------

                          WEST REGION SUBTOTAL                          55    2,585,925      99%   $ 16,216,207       10.7%   $ 6.36

SOUTHWEST REGION

Dallas Market
 DFW Trade Center, Building 3, Grapevine, TX                 1997        1      202,361     100%   $  1,723,670        1.2%   $ 8.52
 Shiloh Road, Plano, TX                                      1998        1       76,320      75%        299,604        0.2%     5.23
 Avenue F, Plano, TX                                         1984        1       73,086      87%        516,089        0.3%     8.10
 Bradley Lane, Carrollton, TX                                1984        1       56,531     100%        215,892        0.1%     3.82
 Diplomat Drive, Building 1, Farmers Branch, TX              1997        1       53,375     100%        325,044        0.2%     6.09
                                                                       ---   ----------    ----    ------------    -------    ------

              SOUTHWEST REGION/MARKET SUBTOTAL                           5      461,673      94%   $  3,080,299        2.0%   $ 7.11

MIDWEST REGION

Chicago Market
 Beeline Drive/Meyer Road, Bensenville, IL                   1968        1       96,550     100%   $    446,867        0.3%   $ 4.63
 Business Center, Building 2, Mount Prospect, IL             1989        1       79,900     100%        754,927        0.5%     9.45
 Tower Lane, Bensenville, IL                                 1977        1       76,737     100%        459,097        0.3%     5.98
 Territorial Drive, Building 2, Bolingbrook, IL              1998        1       58,283     100%        304,818        0.2%     5.25
 Feehanville Drive, Mount Prospect, IL                       1987        1       57,150     100%        454,342        0.3%     7.95
 Kingsland Drive, Batavia, IL                                1990        1       54,522     100%        314,468        0.2%     5.77
 Territorial Drive, Building 1, Bolingbrook, IL              1998        1       51,874     100%        279,739        0.2%     5.39
 Remington Boulevard, Bolingbrook, IL                        1996        1       45,220     100%        226,100        0.1%     5.00
 Business Center, Building 1, Mount Prospect, IL             1985        1       43,250     100%        367,191        0.2%     8.49
 Northpoint Court, Bolingbrook, IL                           1998        1       32,100     100%        160,884        0.1%     5.01
 Penny Lane, Building 1, Schaumburg, IL                      1988        1       27,742     100%        124,434        0.1%     4.49
 Penny Lane, Building 2, Schaumburg, IL                      1988        1       20,722     100%         94,053        0.1%     4.54
                                                                       ---   ----------    ----    ------------    -------    ------

                               Market Subtotal                          12      644,050     100%   $  3,986,920        2.6%   $ 6.19
</TABLE>


                                       19
<PAGE>

<TABLE>
<CAPTION>
                                                                                Rentable Sq. Ft.        Annualized Net Rent(1)
                                                                                ----------------        ----------------------
                                                                    Number
                                                             Year       of                                                       Per
                                                           Built/  Proper-               Percent                    Percent   Leased
Property Type and Location                              Renovated     ties       Number   Leased         Amount    of Total  Sq. Ft.
--------------------------                              ---------     ----       ------   ------         ------    --------  -------
<S>                                                          <C>       <C>    <C>           <C>    <C>                 <C>    <C>
Cincinnati/Northern Kentucky Market
 Kentucky Drive, Florence, KY                                1991        1      128,077     100%   $    367,515        0.2%   $ 2.87
 Empire Drive, Building 3, Florence, KY                      1991        1      101,250     100%        318,999        0.2%     3.15
 Airport Exchange Drive, Erlanger, KY                        1997        1       67,749     100%        464,433        0.3%     6.86
 Creek Road, Blue Ash, OH                                    1983        1       66,210      94%        467,963        0.3%     7.56
 Foundation Drive, Building 2, Elsmere, KY                   1983        1       62,560     100%        319,910        0.2%     5.11
 Empire Drive, Building 2, Florence, KY                      1990        1       47,842     100%        198,272        0.1%     4.14
 Empire Drive, Building 1, Florence, KY                      1990        1       47,840     100%        164,453        0.1%     3.44
 Jamike Drive, Building 4, Erlanger, KY                      1988        1       42,606      85%        127,251        0.1%     3.52
 Turfway Road, Building 3, Erlanger, KY                      1996        1       41,839     100%        150,300        0.1%     3.59
 Turfway Road, Building 2, Erlanger, KY                      1990        1       39,396     100%        185,480        0.1%     4.71
 Jamike Drive, Building 3, Erlanger, KY                      1986        1       38,900     100%        182,299        0.1%     4.69
 Spiral Drive, Building 2, Florence, KY                      1989        1       34,999     100%        296,101        0.2%     8.46
 Commerce Boulevard, Loveland, OH                            1989        1       34,600     100%        171,000        0.1%     4.94
 Foundation Drive, Building 1, Elsmere, KY                   1983        1       33,000     100%        110,220        0.1%     3.34
 Jamike Drive, Building 7, Erlanger, KY                      1985        1       31,540      78%         86,434        0.1%     3.54
 Turfway Road, Building 1, Erlanger, KY                      1990        1       30,711     100%        154,281        0.1%     5.02
 Jamike Drive, Building 2, Erlanger, KY                      1986        1       26,949     100%        125,076        0.1%     4.64
 Jamike Drive, Building 6, Erlanger, KY                      1985        1       26,560     100%        101,003        0.1%     3.80
 Spiral Drive, Building 1, Florence, KY                      1988        1       26,556     100%        240,144        0.2%     9.04
 Jamike Drive, Building 5, Erlanger, KY                      1985        1       24,640     100%        118,418        0.1%     4.81
 Foundation Drive, Building 6, Elsmere, KY                   1984        1       17,500     100%         57,203        0.0%     3.27
 Jamike Drive, Building 1, Erlanger, KY                      1986        1       15,000     100%         62,499        0.0%     4.17
 Foundation Drive, Building 4, Elsmere, KY                   1983        1       12,000     100%         48,199        0.0%     4.02
 Foundation Drive, Building 5, Elsmere, KY                   1983        1       12,000     100%         48,101        0.0%     4.01
 Foundation Drive, Building 7, Elsmere, KY                   1984        1       12,000     100%         36,160        0.0%     3.01
 Foundation Drive, Building 8, Elsmere, KY                   1984        1       10,000     100%         66,000        0.1%     6.60
 Foundation Drive, Building 3, Elsmere, KY                   1990        1        7,000     100%         90,000        0.1%    12.86
 Power Line Drive, Elsmere, KY                               1994        1        6,000     100%         38,588        0.0%     6.43
                                                                       ---   ----------    ----    ------------    -------    ------

                               Market Subtotal                          28    1,045,324      98%   $  4,796,302        3.1%   $ 4.67

Columbus Market
 Equity Drive, Building 2, Columbus, OH                      1980        1      116,160     100%   $    708,654        0.5%   $ 6.10
 Alum Creek Road, Columbus, OH                               1988        1       34,600     100%        175,076        0.1%     5.06
                                                                       ---   ----------    ----    ------------    -------    ------

                               Market Subtotal                           2      150,760     100%   $    883,730        0.6%   $ 5.86

Minneapolis Market
 Woodale Drive, Building 3, Mounds View, MN                  1990        1      144,019     100%   $    844,751        0.6%   $ 5.87
 West 82nd Street, Bloomington, MN                           1967        1      101,465     100%        481,130        0.3%     4.74
 Woodale Drive, Building 2, Mounds View, MN                  1989        1       55,742     100%        480,948        0.3%     8.63
 Cahill Road, Edina, MN                                      1979        1       45,800     100%        251,157        0.2%     5.48
 Woodale Drive, Building 4, Mounds View, MN                  1992        1       42,551     100%        208,107        0.1%     4.89
 Monticello Lane, Maple Grove, MN                            1986        1       40,437     100%        157,704        0.1%     3.90
                                                                       ---   ----------    ----    ------------    -------    ------

                               Market Subtotal                           6      430,014     100%   $  2,423,797        1.6%   $ 5.64

Other Market
 Rudolph Way, Greendale, IN                                  1990        1       50,000     100%   $    121,776        0.1%   $ 2.44
                                                                       ---   ----------    ----    ------------    -------    ------

                       MIDWEST REGION SUBTOTAL                          49    2,320,148      99%   $ 12,212,525        8.0%   $ 5.30

SOUTHEAST REGION

Atlanta Market
 Highlands Parkway, Smyrna, GA                               1997        1      150,000     100%   $    994,500        0.7%   $ 6.63
 Cobb International Place, Building 2, Kennesaw, GA          1996        1       68,000     100%        276,171        0.2%     4.06
</TABLE>


                                       20
<PAGE>

<TABLE>
<CAPTION>
                                                                                Rentable Sq. Ft.        Annualized Net Rent(1)
                                                                                ----------------        ----------------------
                                                                    Number
                                                             Year       of                                                       Per
                                                           Built/  Proper-               Percent                    Percent   Leased
Property Type and Location                              Renovated     ties       Number   Leased         Amount    of Total  Sq. Ft.
--------------------------                              ---------     ----       ------   ------         ------    --------  -------
<S>                                                     <C>            <C>    <C>           <C>    <C>                 <C>    <C>
 Town Park Drive, Building 1, Kennesaw, GA                   1995        1       65,830     100%        327,966        0.2%     4.98
 Cobb International Place, Building 1, Kennesaw, GA          1996        1       60,000      80%        206,790        0.1%     4.31
 Town Park Drive, Building 2, Kennesaw, GA                   1995        1       55,554     100%        258,490        0.2%     4.65
 South Royal Drive, Building 1, Tucker, GA                   1987        1       53,402      87%        224,436        0.1%     4.83
 South Royal Drive, Building 2, Tucker, GA                   1987        1       43,720     100%        183,035        0.1%     4.19
 South Royal Drive, Building 3, Tucker, GA                   1989        1       37,041     100%        154,707        0.1%     4.18
                                                                       ---   ----------    ----    ------------    -------    ------

                               Market Subtotal                           8      533,547      96%   $  2,626,095        1.7%   $ 5.10

Charlotte Market
 Old Charlotte Highway, Monroe, NC                      1957/1972        1      135,000     100%   $    394,400        0.3%   $ 2.92
 Airport Road, Monroe, NC                               1957/1972        1      118,930     100%        591,600        0.4%     4.97
 Commerce Blvd., Charlotte, NC                               1988        1       80,640      75%        214,963        0.1%     3.55
 Woodpark Blvd., Bldg. 3, Charlotte, NC                      1987        1       65,850     100%        186,356        0.1%     2.83
 Woodpark Blvd., Bldg. 1, Charlotte, NC                      1985        1       56,000     100%        177,368        0.1%     3.17
 Woodpark Blvd., Bldg. 2, Charlotte, NC                      1986        1       48,600     100%        160,185        0.1%     3.30
 N. I-85 Service Road, Charlotte, NC                         1988        1       44,150     100%        227,550        0.2%     5.15
                                                                       ---   ----------    ----    ------------    -------    ------

                               Market Subtotal                           7      549,170      96%   $  1,952,422        1.3%   $ 3.69

Orlando Market
 Boggy Creek Road, Building 2, Orlando, FL                   1996        1       55,456     100%   $    321,388        0.2%   $ 5.80
 Landstreet Road, Building 2, Orlando, FL                    1997        1       55,456     100%        320,871        0.2%     5.79
 Boggy Creek Road, Building 3, Orlando, FL                   1998        1       55,456     100%        298,841        0.2%     5.39
 Boggy Creek Road, Building 1, Orlando, FL                   1992        1       52,500      99%        269,116        0.2%     5.17
 Boggy Creek Road, Building 4, Orlando, FL                   1999        1       50,108     100%        250,539        0.2%     5.00
 Landstreet Road, Building 3, Orlando, FL                    1996        1       50,018     100%        247,589        0.1%     4.95
                                                                       ---   ----------    ----    ------------    -------    ------

                               Market Subtotal                           6      318,994     100%   $  1,708,344        1.1%   $ 5.36

Other Market
 Industrial Drive South, Gluckstadt, MS                      1988        1      160,000     100%   $    873,490        0.6%   $ 5.46
                                                                       ---   ----------    ----    ------------    -------    ------

                     SOUTHEAST REGION SUBTOTAL                          22    1,561,711      97%   $  7,160,351        4.7%   $ 4.70

NORTHEAST REGION

Baltimore/Washington Market
 Guilford Road, Annapolis Junction, MD                       1989        1       96,686     100%   $    592,392        0.4%   $ 6.13
 Nokes Boulevard, Building 1, Sterling, VA                   1998        1       88,489     100%        726,495        0.5%     8.21
 Nokes Boulevard, Building 2, Sterling, VA                   1999        1       78,671     100%        567,432        0.4%     7.21
 Beaumeade Circle, Ashburn, VA                               1990        1       78,274      89%        468,929        0.3%     6.77
 Oakville Industrial Park, Building 3, Alexandria, VA        1947        1       76,089     100%        551,399        0.4%     7.25
 The Crysen Center, Building 2, Jessup, MD                   1985        1       76,043      92%        354,335        0.2%     5.07
 The Crysen Center, Building 1, Jessup, MD                   1985        1       75,820      87%        348,196        0.2%     5.30
 Bristol Court, Building 1, Jessup, MD                       1988        1       73,071      91%        353,526        0.2%     5.32
 Oakville Industrial Park, Building 1, Alexandria, VA        1949        1       67,225     100%        380,613        0.2%     5.66
 Fontana Lane, Building 2, Baltimore, MD                     1988        1       61,320      83%        391,389        0.3%     7.71
 Bristol Court, Building 2, Jessup, MD                       1986        1       60,000     100%        267,646        0.2%     4.46
 Oakville Industrial Park, Building 5, Alexandria, VA        1955        1       56,134      98%        240,766        0.2%     4.36
 Oakville Industrial Park, Building 6, Alexandria, VA        1946        1       50,876     100%        527,691        0.3%    10.37
 Guilford Road, Building 2, Ashburn, VA                      1988        1       50,355     100%        342,046        0.2%     6.79
 West Nursery Road, Building 1, Linthicum, MD                1989        1       49,100     100%        343,700        0.2%     7.00
 Guilford Road, Building 1, Ashburn, VA                      1987        1       48,635     100%        280,498        0.2%     5.77
 Fontana Lane, Building 1, Baltimore, MD                     1988        1       47,434     100%        253,967        0.2%     5.35
 West Nursery Road, Building 2, Linthicum, MD                1989        1       39,041     100%        380,720        0.3%     9.75
 Oakville Industrial Park, Building 2, Alexandria, VA        1940        1       23,683     100%        122,567        0.1%     5.18
 Oakville Industrial Park, Building 4, Alexandria, VA        1952        1        2,800     100%         21,127        0.0%     7.55
                                                                       ---   ----------    ----    ------------    -------    ------

                               Market Subtotal                          20    1,199,746      96%   $  7,515,434        5.0%   $ 6.50

Boston Market
 Technology Drive, Auburn, MA                                1973        1       54,400     100%   $    191,199        0.1%   $ 3.51
 John Hancock Road, Taunton, MA                              1986        1       34,224     100%        206,147        0.1%     6.02
                                                                       ---   ----------    ----    ------------    -------    ------

                               Market Subtotal                           2       88,624     100%   $    397,346        0.2%   $ 4.48
</TABLE>


                                       21
<PAGE>

<TABLE>
<CAPTION>
                                                                                Rentable Sq. Ft.        Annualized Net Rent(1)
                                                                                ----------------        ----------------------
                                                                    Number
                                                             Year       of                                                       Per
                                                           Built/  Proper-               Percent                    Percent   Leased
Property Type and Location                              Renovated     ties       Number   Leased         Amount    of Total  Sq. Ft.
--------------------------                              ---------     ----       ------   ------         ------    --------  -------
<S>                                                     <C>            <C>   <C>            <C>    <C>               <C>      <C>
New York/New Jersey Market
 Memorial Drive, Franklin Township, NJ                       1988        1      148,598      94%   $    624,617        0.4%   $ 4.48
 New England Avenue, Piscataway, NJ                     1975/1995        1      101,553     100%        405,196        0.3%     3.99
                                                                       ---   ----------    ----    ------------    -------    ------

                               Market Subtotal                           2      250,151      96%   $  1,029,813        0.7%   $ 4.27
                                                                       ---   ----------    ----    ------------    -------    ------

                     NORTHEAST REGION SUBTOTAL                          24    1,538,521      97%   $  8,942,593        5.9%   $ 6.02
                                                                       ---   ----------    ----    ------------    -------    ------

WORKSPACE PROPERTIES TOTAL                                             155    8,467,978      98%   $ 47,611,975       31.3%   $ 5.74
                                                                       ---   ----------    ----    ------------    -------    ------

GRAND TOTAL                                                            320   38,158,561      97%   $151,767,478      100.0%   $ 4.11
                                                                       ===   ==========    ====    ============    =======    ======
</TABLE>

(1)   "Annualized Net Rent" means annualized monthly net rent from leases in
      effect as of December 31, 1999. "Net Rent" means contractual rent,
      excluding any reimbursements for real estate taxes or operating expenses.

Item 3. Legal Proceedings

Cabot Trust is not a party to any material litigation nor, to Cabot Trust's
knowledge, is any litigation threatened against Cabot Trust, other than routine
actions arising in the ordinary course of business, substantially all of which
are expected to be covered by liability insurance and which, in the aggregate,
are not expected to have a material adverse effect on the business, results of
operations or financial condition of Cabot Trust.

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

There were no matters submitted to a vote of Cabot Trust's shareholders during
the fourth quarter of 1999.

Item 4A. Executive Officers of the Registrant

The executive officers of the Registrant and their respective positions,
business experience and ages at February 29, 2000, are set forth below. The
executive officers serve at the discretion of the Board of Trustees.

<TABLE>
<CAPTION>
Name                                         Age      Position
-------------------------------------------- -------- -------------------------------------------
<S>                                           <C>     <C>
Ferdinand Colloredo-Mansfeld(1)               60      Chairman of the Board and Chief Executive
                                                      Officer, Trustee
Robert E. Patterson                           54      President, Trustee
Franz Colloredo-Mansfeld(1)                   37      Senior Vice President and Chief Financial
                                                      Officer
Andrew D. Ebbott                              44      Senior Vice President - Director of
                                                      Acquisitions
</TABLE>

                                       22
<PAGE>

<TABLE>
<CAPTION>
Name                                         Age      Position
-------------------------------------------- -------- -------------------------------------------
<S>                                           <C>     <C>
Howard B. Hodgson, Jr.                        44      Senior Vice President - Director of Real
                                                      Estate Operations
Neil E. Waisnor                               45      Senior Vice President - Finance,
                                                      Treasurer and Secretary
Eugene F. Reilly                              38      Senior Vice President - Director of
                                                      Development
</TABLE>

(1) Messrs. Ferdinand and Franz Colloredo-Mansfeld are father and son.

                                  Business Experience
                                  -------------------

Ferdinand Colloredo-Mansfeld .... Ferdinand Colloredo-Mansfeld has served as our
                                  Chairman of the Board of Trustees and Chief
                                  Executive Officer since our formation in
                                  October 1997. Mr. Colloredo-Mansfeld also
                                  serves as the Chairman and Chief Executive
                                  Officer of Cabot Advisors. Mr.
                                  Colloredo-Mansfeld served as Chairman, Chief
                                  Executive Officer and Chief Investment Officer
                                  of Cabot Partners Limited Partnership from
                                  1990 to 1997, having previously served in the
                                  same positions with Cabot, Cabot & Forbes
                                  Realty Advisors, Inc., an affiliate of Cabot,
                                  Cabot & Forbes, since its formation in 1986.
                                  Mr. Colloredo-Mansfeld began his real estate
                                  career in 1970 when he joined Cabot, Cabot &
                                  Forbes, a national real estate development,
                                  management and construction firm, becoming its
                                  Chief Financial Officer in 1973, Chief
                                  Operating Officer in 1974 and Chief Executive
                                  Officer in 1976, a position he held until his
                                  retirement from that company in 1989. As Chief
                                  Executive Officer, Mr. Colloredo-Mansfeld
                                  oversaw the development and management of
                                  approximately $4 billion of commercial
                                  properties in twenty states, including 35
                                  master-planned suburban business and
                                  industrial parks. Mr. Colloredo-Mansfeld is a
                                  graduate of Harvard College and Harvard
                                  Business School. He is a limited partner in
                                  Brown Brothers Harriman & Co. and is a
                                  Director of Raytheon Company and former
                                  Director of Shawmut National Corp. and Data
                                  General Corp. He is a Trustee (former Chairman
                                  of the Board of Trustees) of the Massachusetts
                                  General Hospital and a member of the Board of
                                  Directors, Boston Private Industry Council.
                                  Mr. Colloredo-Mansfeld is the father of Franz
                                  Colloredo-Mansfeld, our Chief Financial
                                  Officer.


                                       23
<PAGE>

Robert E. Patterson ............. Mr. Patterson has served as our President and
                                  a Trustee since our formation in October 1997.
                                  Mr. Patterson served as Executive Vice
                                  President, Director of Acquisitions and a
                                  member of the Investment Committee of Cabot,
                                  Cabot & Forbes Realty Advisors, Inc. and,
                                  subsequently, Cabot Partners Limited
                                  Partnership from 1987 to 1997. Mr. Patterson
                                  began his real estate career in 1972 as a
                                  lawyer with the firm of Gaston, Snow & Ely
                                  Bartlett. In 1978, he became the first
                                  Executive Director of the Massachusetts
                                  Industrial Finance Agency and remained in that
                                  position until 1983 when he joined the Beal
                                  Companies, a Boston-based real estate
                                  development, management and investment firm as
                                  Senior Vice President. He joined Cabot, Cabot
                                  & Forbes Realty Advisors, Inc. in 1987 to head
                                  its acquisitions group and was a founding
                                  partner of Cabot Partners Limited Partnership
                                  upon its formation as an independent entity in
                                  1990. Mr. Patterson is a graduate of Harvard
                                  College and Harvard Law School. He is a
                                  Trustee of The Putnam Group of Mutual Funds, a
                                  Trustee of the Sea Education Association,
                                  Chairman of the Board of Trustees of the
                                  Joslin Diabetes Center, and a Director of the
                                  Brandywine Trust Company. He is a member of
                                  numerous industry associations, including the
                                  National Association of Real Estate Investment
                                  Trusts and the Urban Land Institute.

Franz Colloredo-Mansfeld ........ Franz Colloredo-Mansfeld has been our Chief
                                  Financial Officer since October 1997 and
                                  served as a Senior Vice President of Cabot
                                  Partners Limited Partnership since 1996. He
                                  was a Senior Engagement Manager of McKinsey &
                                  Company, Inc. from 1992 through 1996. He
                                  previously worked for the Deutsche Bank real
                                  estate investment group in 1992 and was a
                                  Robert Bosch Fellow at the German Central Bank
                                  (Bundesbank) in Frankfurt, Germany in 1991. He
                                  was also an investment banker with Merrill
                                  Lynch & Co. from 1986 through 1989, where he
                                  specialized in mergers and acquisitions. Mr.
                                  Colloredo-Mansfeld is a graduate of Harvard
                                  College and Harvard Business School. He is a
                                  director or trustee of numerous corporate,
                                  professional, and charitable organizations.
                                  Mr. Colloredo-Mansfeld is the son of Ferdinand
                                  Colloredo-Mansfeld, our Chief Executive
                                  Officer.

Andrew D. Ebbott ................ Mr. Ebbott has served as our Senior Vice
                                  President, Director of Acquisitions since
                                  October 1997. Mr. Ebbott joined Cabot, Cabot &
                                  Forbes Realty Advisors, Inc. in 1988 as
                                  Director of Research and a member of its
                                  acquisition department, becoming a Vice
                                  President in 1991 and a Senior Vice President
                                  in 1995 of Cabot Partners Limited
                                  Partnership. Mr. Ebbott is a graduate of
                                  Dartmouth College and the University of
                                  Chicago Business School. He has over 14 years
                                  experience in real estate finance, investment
                                  and research and is a member of the American
                                  Institute of Certified Public Accountants and
                                  the National Association of Real Estate
                                  Investment Trusts.


                                       24
<PAGE>

Howard B. Hodgson, Jr. .......... Mr. Hodgson has been our Senior Vice
                                  President, Director of Real Estate Operations
                                  since October 1997 and has served as a Senior
                                  Vice President, Director of Asset Management
                                  and Member of the Investment Committee of
                                  Cabot Partners Limited Partnership from 1992
                                  to October 1997. Mr. Hodgson began his real
                                  estate career in 1979 with the Boston-based
                                  real estate firm of R.M. Bradley & Co., Inc.,
                                  becoming the head of its institutional
                                  property management group prior to joining
                                  Cabot, Cabot & Forbes Asset Management Company
                                  in 1991 as a Senior Vice President and head of
                                  its property management group. Mr. Hodgson is
                                  a graduate of Northeastern University. He is a
                                  Trustee and member of the Executive Committee
                                  of the Cambridge Savings Bank and is a Trustee
                                  of Cambridge Financial Group, Inc. He is a
                                  member of the Building Owners and Managers
                                  Association and is a corporate Trustee of the
                                  Trustees of Reservations.

Neil E. Waisnor ................. Mr. Waisnor has served as our Senior Vice
                                  President-Finance, Treasurer and Secretary
                                  since October 1997. Mr. Waisnor was a founding
                                  partner of Cabot Partners Limited Partnership,
                                  joining as Vice President and Treasurer in
                                  1990 and becoming a Senior Vice President and
                                  Chief Financial Officer in 1995. Prior to
                                  joining Cabot Partners Limited Partnership, he
                                  was Vice President and Controller of Cabot,
                                  Cabot & Forbes, where he served in a variety
                                  of financial capacities since 1985. He worked
                                  for Arthur Andersen & Co. from 1977 until
                                  1985, where he was a senior audit manager
                                  serving real estate and high technology
                                  companies. Mr. Waisnor is a graduate of the
                                  University of Massachusetts at Amherst and is
                                  a member of the American Institute of
                                  Certified Public Accountants and the
                                  Massachusetts Society of Certified Public
                                  Accountants.

Eugene F. Reilly ................ Mr. Reilly has been our Senior Vice
                                  President-Director of Development since
                                  October 1997. Mr. Reilly served as Director of
                                  Leasing and Marketing of Cabot Partners
                                  Limited Partnership from 1992 to October 1997,
                                  becoming Senior Vice President in 1996. Mr.
                                  Reilly began his real estate career with the
                                  Boston commercial real estate brokerage firm
                                  of Leggat McCall and Werner in 1983 and
                                  subsequently became a leasing broker with
                                  Julien J. Studley, Inc. In 1985, he joined
                                  National Development Corporation where he
                                  became a Senior Vice President prior to
                                  joining Cabot Partners Limited Partnership as
                                  a Vice President in 1992. Mr. Reilly is a
                                  graduate of Harvard College. He is a member of
                                  the National Association of Industrial and
                                  Office Parks.

                                       25
<PAGE>

                                     PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters

Cabot Trust's Common Shares began trading on the New York Stock Exchange
("NYSE") on January 30, 1998, under the symbol "CTR". The following table sets
forth the high and low sales prices per share as reported on the New York Stock
Exchange Composite Tape and the distributions paid on the Common Shares with
respect to the periods indicated.

<TABLE>
<CAPTION>
1998:                                                  High              Low          Distributions(1)
-----                                                  ----              ---          ----------------
<S>                                                   <C>              <C>                  <C>
    First Quarter (from January 30, 1998)             $23.81           $20.88               $.202
    Second Quarter                                     25.13            19.81                .325
    Third Quarter                                      22.19            17.56                .325
    Fourth Quarter                                     22.00            16.88                .325

<CAPTION>
1999:                                                  High              Low          Distributions(1)
-----                                                  ----              ---          ----------------
<S>                                                   <C>              <C>                  <C>
    First Quarter                                     $20.44           $18.13               $.340
    Second Quarter                                     22.00            18.25                .340
    Third Quarter                                      23.00            18.00                .340
    Fourth Quarter                                     20.50            17.38                .340

<CAPTION>
2000:                                                  High              Low          Distributions(1)
-----                                                  ----              ---          ----------------
<S>                                                   <C>              <C>                  <C>
    First Quarter (through February 29, 2000)         $20.63           $18.06               $  --
</TABLE>

(1) Cabot Trust paid a distribution with respect to these quarters in the
quarter immediately following the quarter in which the cash flow was generated
and the distribution was deemed.

On February 29, 2000, Cabot Trust had 40,619,420 Common Shares outstanding held
of record by 29 shareholders and beneficially by approximately 1,600
shareholders.

The operating cash flow realized by Cabot Trust and the amount available for
distributions to shareholders is affected by a number of factors, including the
property revenues of Cabot L.P., the operating expenses of Cabot L.P., the
distributions it receives from Cabot L.P., the distributions to Preferred
Unitholders of Cabot L.P., the interest expense on borrowings and capital
expenditures. Future distributions by Cabot Trust will be at the discretion of
the Board of Trustees and will depend on the actual FFO of Cabot Trust, its
financial condition and capital requirements, the annual income distribution
requirements under the REIT provisions of the Code and such other factors as the
Board of Trustees deems relevant. In 1998 and 1999, 100% of Cabot Trust's
distributions to shareholders were taxable as ordinary income. For tax purposes,
$0.19 of the $0.34 distribution made in January 2000 with respect to fourth
quarter 1999 was deemed a distribution taxable in 1999 and $0.15 was deemed
taxable in 2000.


                                       26
<PAGE>

Recent Sales of Unregistered Securities

Cumulative Redeemable Perpetual Preferred Equity

During 1999, Cabot L.P. completed private sales of the following Cumulative
Redeemable Perpetual Preferred Units:

<TABLE>
<CAPTION>
        Sale Date                    Series              Unit Price        Liquidation Value         Net Proceeds
--------------------------     --------------------     -------------    ----------------------    -----------------
<S>                              <C>                         <C>              <C>                     <C>
April 29, 1999                   8.625% Series B             $50              $ 65,000,000            $ 63,175,000
September 3, 1999                8.625% Series C              25                65,000,000              63,175,000
September 27, 1999               8.375% Series D              50                10,000,000               9,715,000
December 9, 1999                 8.375% Series E              50                10,000,000               9,715,000
December 22, 1999                8.500% Series F              25                45,000,000              44,025,000
                                                                         ----------------------    -----------------
                                                                              $195,000,000            $189,805,000
                                                                         ======================    =================
</TABLE>

Net proceeds from the offerings were used to repay borrowings under Cabot
Trust's Acquisition Facility. The Preferred Units, which may be called by Cabot
Trust at par on or after the fifth anniversary of issuance in each case, have no
stated maturity or mandatory redemption and are not convertible into any other
securities of Cabot L.P. The Preferred Units are exchangeable after ten years
from issuance, or earlier upon the occurrence of certain events, for perpetual
preferred shares of Cabot Trust. All Preferred Units were sold to institutional
investment funds in reliance upon the exemption from registration in Section
4(2) of the Securities Act.

Units in Cabot L.P.

On April 7, 1998, Cabot L.P. issued 101,149 Units in Cabot L.P., at a
then-current value of $2.3 million, in exchange for industrial properties. The
Units were issued solely to "accredited investors" within the meaning of Rule
501 of Regulation D, and the Units were issued in reliance upon the exemption
from registration set forth in Regulation D.

On March 11, 1999, and December 15, 1999, Cabot L.P. issued 143,087 and 34,361
Units in Cabot L.P., respectively, at then-current values totaling $3.4 million,
in exchange for industrial properties. The Units were issued solely to
"accredited investors" and in reliance upon the exemption set forth in
Regulation D.

Private Placement of 1,000,000 Common Shares of Beneficial Interest of Cabot
Trust.

On February 4, 1998, Cabot Trust completed a private placement of 1,000,000
Common Shares to a group of investors represented by Morgan Stanley Asset
Management, Inc. ("Morgan Stanley"). Morgan Stanley acted as advisor to six
institutional investors in connection with the private placement. The
aggregate and sales offering price of such shares was $20,000,000. The
Company relied on Regulation D to effectuate the private placement. All of
the investors who purchased common stock in the private placement were
qualified institutional buyers within the meaning of Rule 144A, except for
one institutional "accredited investor" within the meaning of Rule 501 of
Regulation D.


                                       27
<PAGE>

Item 6. Selected Financial Data

Cabot Trust commenced operations in its current form on February 4, 1998, the
completion date of the Formation Transactions and the Offerings described
elsewhere herein. Set forth below are selected historical financial and other
data for the real estate advisory business of Cabot Partners, and for Cabot
Trust. The selected financial data presented below as of December 31, 1997 and
1996 and for the two years in the period ended December 31, 1997 have been
derived from the Cabot Partners financial statements that have been audited by
Arthur Andersen LLP, the independent public accountants, as indicated in their
reports included in this report on Form 10-K. This information should be read in
conjunction with such financial statements and the notes thereto. The selected
financial data presented below as of and for the year ended December 31, 1995
for Cabot Partners is derived from Cabot Partners financial statements and the
notes thereto not included in this report on Form 10-K which have been audited
by Arthur Andersen LLP.

The selected financial data presented below as of and for the years ended
December 31, 1999 and 1998, have been derived from the financial statements of
Cabot Trust that have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their report included in this report on Form 10-K.
This information should be read in conjunction with the financial statements and
notes thereto included elsewhere within this filing.

<TABLE>
<CAPTION>
                                                      Cabot Trust                       Cabot Partners
                                               ---------------------------   --------------------------------------
                                                   As of and for the                   As of and for the
                                                Years Ended December 31,           Years Ended December 31,
                                               ---------------------------   --------------------------------------

In thousands, except per share/unit data            1999        1998(1)            1997        1996       1995
--------------------------------------------     -----------  ------------      ----------  ---------- ----------
<S>                                              <C>          <C>               <C>         <C>        <C>
Operating Data
Revenues                                         $  157,471   $   102,425       $   9,080   $   7,908  $   6,516
General and administrative expenses                   8,902         6,815           7,045       5,888      5,069
Depreciation and amortization expense                31,169        20,913             977         419        453
Net income (2)                                       49,048        21,766           1,058       1,594      1,057
Net income per share                                   1.32          1.17               -           -          -
Distributions per share/unit                           1.36         1.177               -           -          -

Balance Sheet Data
Total assets                                     $1,593,484   $ 1,110,570       $   5,339   $   6,075  $   5,628
Total liabilities                                   584,768       293,272             760         485        563
Minority interest                                   246,974       468,311               -           -          -
Total shareholders' equity/partners'
  capital                                           761,742       348,987           4,579       5,590      5,065

Other Data
Cash flows provided by (used in):
  Operating activities                           $  101,293   $    78,726       $   1,062   $   1,283  $   1,351
  Investing activities                             (454,195)     (398,795)           (193)        113         (6)
  Financing activities                              372,608       322,369          (2,069)     (1,069)         -
Assets under management (unaudited)(3)                  N/A           N/A         861,000     979,000    778,000
</TABLE>

(1)   Represents activity for the period from the commencement of operations on
      February 4, 1998 through December 31, 1998.
(2)   Net of minority interest.
(3)   Based on the estimated fair market value of the managed assets as of the
      dates indicated.



                                       28
<PAGE>

Item 7. Management's Discussion and Analysis of Financial Condition and Results
        of Operations

The statements regarding Cabot Trust contained in this discussion and elsewhere
in this report that are not historical facts are 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. These forward-looking statements are
based on current expectations, estimates and projections about the industry and
markets in which Cabot Trust operates, management's beliefs and assumptions made
by management. Words such as "expects", "anticipates", "intends", "plans",
"believes", "seeks", "estimates" and variations of such words and similar
expressions are intended to identify such forward-looking statements. Such
forward-looking statements are not guarantees of future performance and involve
risks and uncertainties. Therefore, actual outcomes and results may differ
materially from what is expressed or suggested by such forward-looking
statements and readers of this document should not rely on them. Cabot Trust's
operating results depend primarily on income from industrial properties, which
may be affected by various factors, including changes in national and local
economic conditions, competitive market conditions, uncertainties and costs
related to and the imposition of conditions on receipt of governmental approvals
and costs of material and labor, all of which may cause actual results to differ
materially from what is expressed herein. Capital and credit market conditions
that affect Cabot Trust's cost of capital also influence operating results.

INTRODUCTION

Cabot Trust

Cabot Trust owns and operates a diversified portfolio of bulk distribution,
multitenant distribution and "workspace" (light industrial, R&D and similar
facilities) properties throughout the United States.
Cabot Trust was formed on October 10, 1997, but did not begin operations as a
fully integrated real estate company until the completion of the Formation
Transactions and Offerings on February 4, 1998, the closing date of Cabot
Trust's initial public offering. Cabot Trust had no operations prior to February
4, 1998. At December 31, 1999, Cabot Trust owned 320 industrial properties, 119
of which properties were acquired in connection with the Formation Transactions
described in Notes 1 and 3 to the consolidated financial statements herein, 84
of which properties were acquired during 1998 and 113 of which properties were
acquired during the year ended December 31, 1999. In addition, four properties
from the development program were placed into service in 1999 and 1998. In the
near term, Cabot Trust expects to moderate the pace of its acquisition program,
compared to prior years, and Cabot Trust expects development projects will
provide an increasing component of growth due to the higher potential returns on
capital.

Cabot Partners

Cabot Partners was the real estate advisory and management entity that was the
sponsor and organizer of Cabot Trust. Its revenues consisted primarily of asset
management and acquisition fees earned under advisory contracts with large
institutional investors.

                                       29
<PAGE>

RESULTS OF OPERATIONS

Cabot Trust

Since Cabot Trust was formed in October 1997 and did not begin operations until
February 4, 1998, the results for the year ended December 31, 1998 represent
activity for 331 days (approximately 11 months) only, and no comparison of
results to prior periods is available.

Year Ended December 31, 1999 Compared with Year Ended December 31, 1998
Net income attributable to common shareholders for the year ended December 31,
1999, totaled $49.0 million or $1.32 per share, compared to $21.8 million or
$1.17 per share for the year ended December 31, 1998. The increase is the result
of having a full year of operations in 1999 compared to 331 days in 1998 and
increased earnings from additional investments in real estate. The increase in
net income allocable to common shareholders is also due to the conversion of
Units to Common Shares discussed in Note 1 to the financial statements, which
resulted in a decrease in the allocation of income to minority interest but has
no effect on net income per share.

Rental revenues were $157.5 million, including tenant reimbursements of $21.6
million, for the year ended December 31, 1999, compared to $102.4 million,
including tenant reimbursements of $13.4 million, for the year ended December
31, 1998. Total rental revenue of $82.7 million and $72.9 million was generated
in 1999 and 1998, respectively, by the 119 properties owned as of February 4,
1998 as a result of the Formation Transactions and still owned at December 31,
1999 (the "Baseline Properties") and total rental revenue of $73.9 million and
$27.2 million in 1999 and 1998, respectively, was generated by the 201
properties acquired or developed after February 4, 1998. The remainder of total
rental revenue relates to properties sold.

Cabot Trust's operating margin (the ratio of total rental revenues minus
property operating and property tax expenses to total rental revenues) decreased
slightly to approximately 81% for the year ended December 31, 1999 compared with
82% for the year ended December 31, 1998. The decrease is primarily due to a
change in the composition of leases, primarily as a result of acquisition of
multitenant and workspace properties, to more leases where Cabot L.P. pays
property and operating expenses and is reimbursed by the tenants compared to
leases where the tenant pays these expenses directly.

Depreciation and amortization related to real estate investments totaled $31.1
million and $20.9 million for the years ended December 31, 1999 and 1998,
respectively. The increase reflects the acquisition of approximately $448
million of real estate assets in 1999, as well as a full year of expense related
to 1998 acquisitions, and 365 days of operations in 1999 compared to 331 days in
1998.

General and administrative expense increased by $2.1 million, to $8.9 million
for the year ended December 31, 1999. The increase is primarily due to a full
year of operations in 1999 and it also reflects an increase in personnel to
manage the acquisition, development, asset management and financing activity,
from the increase in the number of Cabot Trust's properties during the two-year
period. As a percentage of rental revenues, general and administrative expense
decreased to 5.7% in 1999 from 6.7% in 1998.

Interest expense of $25.4 million for the year ended December 31, 1999
represents interest incurred on an additional $115.7 million of secured debt
incurred during 1999, $200.0 million of unsecured debt issued in May 1999, and
additional borrowings under Cabot Trust's Acquisition Facility, net of $3.2


                                       30
<PAGE>

million of interest capitalized to development projects. Interest expense of
$7.0 million for 1998, net of $959,000 of interest capitalized to development
projects, was incurred for only 331 days on average indebtedness of $116.2
million for 1998.

During 1998 Cabot Trust entered into an interest rate hedge transaction
(referred to as the "Treasury Lock") involving the future sale of $100 million
of Treasury securities based on an interest rate of approximately 5.54% for such
securities in anticipation of a future debt issuance of at least $100 million
with a maturity of 10 years. At the March 31, 1999 contractual settlement date
for this transaction, Cabot Trust paid $2.5 million to its counter party in the
transaction, reflecting the decrease in Treasury security yields since the July
1998 commencement of the transaction. Because an offering of the size and
maturity contemplated when the interest rate hedge transaction was executed was
not completed by the time of, or shortly after, the March 31, 1999 settlement
date of the transaction, Cabot Trust recorded a loss related to the settlement
of the treasury lock of approximately $2.5 million during the year ended
December 31, 1999.

During 1999, Cabot Trust sold two properties, which resulted in a net gain of
$2.8 million. On June 22, 1999, Cabot L.P. sold a 120,000 square foot property
located in Massachusetts for a gross sales price of $10.5 million, which
resulted in a gain of $3.4 million, and on August 3, 1999, Cabot L.P. sold a
225,000 square foot property located in New Jersey for a gross sales price of
$6.6 million, which resulted in a loss of $653,000.

Interest and other income, which consists primarily of interest earned on Cabot
Trust's invested cash balances and earnings of Cabot Advisors, decreased by
$124,000, from $1.1 million for the year ended December 31, 1998 to $1.0 million
for the year ended December 31, 1999. The decrease is primarily due to a
decrease in Cabot Trust's share of earnings of Cabot Advisors for the year ended
December 31, 1999 compared with 1998.

Minority interest expense represents net income allocable to holders of Cabot
L.P. Units and its Cumulative Redeemable Perpetual Preferred Units. At December
31, 1999, Cabot Trust owned 93% of Cabot L.P. and the minority common equity
ownership interest was 7%. At December 31, 1998, the minority common equity
ownership interest was 57%. As discussed in Note 1 to the financial statements,
during the year ended December 31, 1999 a significant number of Units were
converted to Common Shares, resulting in a decrease in minority interest expense
related to Limited Partner Unitholders. During 1999, the average minority common
equity ownership interest was 15%, whereas in 1998 it was 57%. Dividends
accruable to Preferred Unitholders, which totaled $6.0 million in 1999, are also
considered minority interest expense.

Cabot Partners

Year Ended December 31, 1997 Compared with Year Ended December 31, 1996
Revenues, primarily consisting of asset management fees and acquisition fees,
increased by $1.2 million for the year ended December 31, 1997, or 14.8%, to
$9.1 million as compared to $7.9 million for the year ended December 31, 1996.
The increase was due to a $191 million increase in average assets under
management for the year ended December 31, 1997, as compared to the year ended
December 31, 1996, which resulted in an $850,000 increase in asset management
fees. In addition, acquisition fees increased by $262,000 in 1997 as compared to
1996, due to an increase in fee-earning acquisitions of $37 million.

                                      31
<PAGE>

General and administrative expenses increased by $1.2 million for the year ended
December 31, 1997, or 19.7%, to $7.0 million as compared to $5.9 million for the
year ended December 31, 1996. Compensation expense increases accounted for
$798,000, or 69.0%, of the increase. The remainder of the increase was primarily
due to higher professional services fees. General and administrative expenses as
a percentage of revenues for 1997 and 1996 was 77.6% and 74.5%, respectively.

Depreciation and amortization expense increased by $558,000 for the year ended
December 31, 1997, to $977,000, due to increased amortization of two advisory
contracts terminated during 1997.

CAPITAL RESOURCES AND LIQUIDITY

Cabot Trust intends to rely on cash provided by operations, unsecured and
secured borrowings from institutional sources, and public debt as its primary
sources of funding for acquisition, development, expansion and renovation of
properties. Cabot Trust may also consider preferred and common equity financing
when such financing is available on attractive terms.

As a result of the completion of the Offerings in February 1998, Cabot Trust
issued 8,625,000 Common Shares to the public and 1,000,000 Common Shares in a
private placement. All of the Common Shares were sold at a price of $20.00 per
share. The proceeds from the Offerings, net of offering costs, were $176.3
million.

As discussed in Note 1 to the financial statements, Cabot L.P. issued an
aggregate of $195 million of Cumulative Redeemable Perpetual Preferred Units in
five separate transactions in 1999. The net proceeds from these transactions
were $189.8 million which was used to pay down outstanding balances under the
Acquisition Facility. These Cumulative Redeemable Perpetual Preferred Units are
callable by Cabot L.P. at par on or after the fifth anniversary of issuance.

In March 1998, Cabot L.P. established a $325 million unsecured revolving line of
credit (the "Acquisition Facility"), with Morgan Guaranty Trust Company of New
York as lead agent for a syndicate of banks. The Acquisition Facility is used to
fund property acquisitions, development activities, building expansions, tenant
leasing costs and other general corporate purposes. The Acquisition Facility
contains certain restrictions and requirements such as total debt-to-assets,
debt service coverage and unencumbered assets to unsecured debt ratios, and
other limitations. Cabot Trust believes cash flow from operations not
distributed to shareholders and unitholders will be sufficient to cover tenant
improvements and other costs associated with renewal or replacement of current
tenants as their leases expire and recurring non-incremental revenue-generating
capital expenditures.

As of December 31, 1999, Cabot L.P. had $163.9 million of fixed rate debt
secured by properties, $163.0 million of unsecured borrowings under its
Acquisition Facility, $200.0 million of unsecured debt and a 35% debt-to-total
market capitalization ratio. The debt-to-total market capitalization ratio is
calculated based on Cabot L.P.'s total consolidated debt as a percentage of the
sum of the market value of its outstanding Partnership Units, plus the
liquidation value of Cumulative Redeemable Perpetual Preferred Units plus debt.

In the normal course of its 2000 operations, through February 29, 2000, Cabot
Trust purchased approximately $58 million of real estate assets in the current
year and has committed to purchase $41 million of additional real estate assets.
The completed real estate asset acquisitions were primarily funded through
Acquisition Facility borrowings and $6.1 million of assumed debt.

                                      32
<PAGE>

Cabot L.P. entered into an interest rate cap arrangement relating to its LIBOR-
based Acquisition Facility for a notional amount of $100 million for the period
October 1, 1999 through April 1, 2000. This arrangement is intended to limit the
LIBOR component of Cabot L.P.'s interest rate on an equivalent amount of
borrowings to 6.5% per annum.

Cash and cash equivalents totaled $22.0 million at December 31, 1999,
representing an increase of $19.7 million. This was the result of $101.3 million
of cash generated from operating activities and $372.6 million provided by
financing activities, reduced by $454.2 million used in investing activities.

YEAR 2000

During 1999, Cabot Trust completed its program of determining whether its
business operations would be affected by date sensitive calculation errors that
might result from computers whose programs do not properly recognize the year
2000 (commonly referred to as the "Year 2000 Issue"). Cabot Trust has not to
date experienced any effects on its results of operations or financial position
from the Year 2000 Issue, nor have any of Cabot Trust's vendors communicated to
Cabot Trust that they have experienced any such effects.

INFLATION

Substantially all of the leases of Cabot Trust's properties require the tenant
to pay, as additional rent, either all real estate taxes and operating expenses
or all increases in real estate taxes and operating expenses over a base amount.
In addition, many of such leases provide for fixed or indexed increases (based
on the consumer price index or other measures) in base rent. Management believes
that inflationary increases in operating expenses will be offset, in part, by
these expense reimbursements and contractual rent increases.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

In addition to using equity capital and retained earnings, Cabot Trust finances
its acquisition and development programs and its ongoing operating cash needs
through the use of debt financing. Cabot Trust uses short-term revolving debt,
primarily in the form of its Acquisition Facility, and long-term secured and
unsecured debt with original maturities of five years or more. Cabot Trust
attempts to manage its debt maturities to reduce its exposure to the refinancing
risk that would arise from having significant maturities of principal at a time
when debt capital may not be available or may be available only at unfavorable
interest rates.

Cabot Trust is exposed to market risk in the form of the effects of changes in
market interest rates on its existing and proposed debt financing. Its
Acquisition Facility bears interest at a variable rate, LIBOR plus 1%, while the
interest rates on proposed fixed-rate unsecured and secured debt instruments
will usually be based on Treasury securities yields plus a market-based spread.
Cabot Trust has entered into various forms of interest rate protection
agreements with investment-grade financial institutions from time to time for
the purpose of managing a portion of its interest rate risk. For variable rate
LIBOR-based borrowings, these agreements include interest rate collar and
interest rate cap agreements that are intended to limit Cabot's effective cost
on variable rate borrowings, either

                                      33
<PAGE>

within an agreed range or below an agreed maximum level. For proposed long-term
instruments, Cabot Trust has also entered into "Treasury Lock transactions" that
are intended to set the Treasury securities component of the interest cost in
advance through agreements for the sale of Treasury securities having notional
amounts and maturities comparable to Cabot Trust's intended debt issuance. Cabot
Trust does not enter into interest rate protection agreements or any other form
of derivative financial instruments for speculative trading purposes.

As of December 31, 1999, Cabot Trust was a party to an interest rate cap
agreement that was intended to limit its exposure to changes in LIBOR through
April 1, 2000 on $100 million of borrowings on its Acquisition Facility. Under
the agreement, Cabot Trust's counter party is required to pay an amount equal to
interest on that notional principal amount of borrowings to the extent that the
relevant LIBOR exceeds 6.5%.

As of December 31, 1998, Cabot Trust also had a Treasury Lock agreement in place
for the purpose of setting the Treasury securities component of the interest
rate on an intended future issuance of fixed rate debt. This agreement provided
for the sale of $100 million of 10-year Treasury securities at a yield of 5.54%
on March 31, 1999. Cabot Trust paid its counter party $2.5 million upon the
maturity of this agreement, reflecting the decrease in Treasury yields and
consequent increase in cost of the notional amount of Treasury securities to be
sold since the July 1998 commencement date of the transaction.

Taking into account $163.0 million of variable rate borrowings that Cabot Trust
had outstanding under its Acquisition Facility at December 31, 1999, and the
above-described interest rate cap agreement that was in effect at that date, an
instantaneous increase of 100 basis points in LIBOR at that date would, if LIBOR
remained at the increased levels thereafter, result in an estimated $1.4 million
reduction in Cabot Trust's net income in 2000. This estimate is provided for the
purpose of illustrating the possible effects on Cabot Trust's results of
operations of changing interest rates and Cabot Trust's interest rate protection
agreements. It does not take into account any other effects that changes in
interest rates might have on Cabot Trust's operations, such as higher interest
rates on new fixed rate borrowings, nor does it consider any additional interest
rate protection agreements that Cabot Trust might enter into in reaction to or
in anticipation of changes in interest rates. While an increase in LIBOR of 100
basis points over a relatively short time period is possible, it is unlikely
that interest rates would increase instantaneously or stay at the same rate for
a sustained period as assumed for purposes of the illustration.

As of December 31, 1999, Cabot Trust also had $163.9 million of fixed rate debt
at stated rates ranging from 7.25% to 9.67% secured by certain properties and
$200.0 million of fixed rate unsecured debt at a stated rate of 7.125%. The
current and future use of fixed rate debt is advantageous to Cabot Trust, as
compared with variable rate debt, in times of rising interest rates. However, in
an environment of falling interest rates, fixed rate debt would place Cabot
Trust at a disadvantage as compared with competitors having larger components of
variable rate debt.


                                       34
<PAGE>

Item 8. Financial Statements and Supplementary Data

                          INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                                           Page
                                                                                           ----
<S>                                                                                         <C>
CABOT INDUSTRIAL TRUST
Report of Independent Public Accountants....................................................36
Consolidated Balance Sheets as of December 31, 1999 and 1998................................37
Consolidated Statements of Operations for the Years Ended December 31, 1999 and 1998........38
Consolidated Statements of Shareholders' Equity for the Years Ended December 31, 1999
and 1998....................................................................................39
Consolidated Statements of Cash Flows for the Years Ended December 31, 1999 and 1998........40
Notes to Consolidated Financial Statements..................................................42
Schedule III - Real Estate and Accumulated Depreciation.....................................59

CABOT PARTNERS LIMITED PARTNERSHIP
Report of Independent Public Accountants....................................................68
Balance Sheets as of December 31, 1997 and 1996.............................................69
Statements of Operations for the Years Ended December 31, 1997 and 1996.....................70
Statements of Partners' Capital for the Years Ended December 31, 1997 and 1996..............71
Statements of Cash Flows for the Years Ended December 31, 1997 and 1996.....................72
Notes to Financial Statements...............................................................73
</TABLE>


                                       35
<PAGE>

                    Report of Independent Public Accountants

To the Board of Trustees
of Cabot Industrial Trust:

We have audited the accompanying consolidated balance sheets of Cabot Industrial
Trust and subsidiaries (Cabot Trust), a Maryland real estate investment trust,
as of December 31, 1999 and 1998, and the related consolidated statements of
operations, shareholders' equity and cash flows for the years then ended (Note
1). These financial statements are the responsibility of Cabot Trust's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Cabot Industrial
Trust and subsidiaries as of December 31, 1999 and 1998 and the results of their
operations and their cash flows for the years then ended, in conformity with
generally accepted accounting principles.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed in the index to the
financial statements is presented for purposes of complying with the Securities
and Exchange Commission's rules and is not a required part of the basic
financial statements. This schedule has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, fairly states, in all material respects, the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.


                                                             ARTHUR ANDERSEN LLP
Boston, Massachusetts
February 14, 2000 (except with
respect to matters discussed
in Note 13, as to which the date is
February 29, 2000)


                                       36
<PAGE>

                             CABOT INDUSTRIAL TRUST

                           CONSOLIDATED BALANCE SHEETS
                        (in thousands, except share data)

<TABLE>
<CAPTION>
                                                                                As of December 31,
                                                                            --------------------------
                                                                                1999           1998
                                                                            -----------    -----------
<S>                                                                         <C>            <C>
ASSETS:

INVESTMENT IN REAL ESTATE:
Land                                                                        $   296,619    $   199,145
Buildings                                                                     1,211,215        873,530
Less:  Accumulated Depreciation                                                 (42,543)       (17,290)
                                                                            -----------    -----------
    Net Rental Properties                                                   $ 1,465,291    $ 1,055,385
Properties under Development                                                     63,938         23,108
                                                                            -----------    -----------
                                                                            $ 1,529,229    $ 1,078,493
                                                                            -----------    -----------

OTHER ASSETS:
Cash and Cash Equivalents                                                   $    22,007    $     2,301
Rents and Other Receivables, net of allowance for uncollectible
    accounts of $574 and $312, in 1999 and 1998, respectively                     3,828          2,872
Deferred Rent Receivable                                                          6,079          2,638
Deferred Lease Acquisition Costs, net                                            23,913         17,362
Deferred Financing Costs, net                                                     3,369          1,255
Investment in and Advances to Related Party                                       1,105            582
Other Assets                                                                      3,954          5,067
                                                                            -----------    -----------

TOTAL ASSETS                                                                $ 1,593,484    $ 1,110,570
                                                                            ===========    ===========

LIABILITIES AND SHAREHOLDERS' EQUITY:

LIABILITIES:
Mortgage Debt                                                               $   163,866    $    48,206
Unsecured Debt                                                                  200,000             --
Line of Credit Borrowings                                                       163,000        200,000
Accounts Payable                                                                    889            511
Accrued Real Estate Taxes                                                        10,254          7,309
Distributions Payable                                                            15,437         14,134
Tenant Security Deposits and Prepaid Rents                                       11,205          4,956
Other Liabilities                                                                20,117         18,156
                                                                            -----------    -----------
                                                                            $   584,768    $   293,272
                                                                            -----------    -----------

COMMITMENTS AND CONTINGENCIES (Note 11)

MINORITY INTEREST:
Preferred Unitholders                                                       $   189,805    $        --
Limited Partner Unitholders                                                      57,169        468,311
                                                                            -----------    -----------
                                                                            $   246,974    $   468,311
                                                                            -----------    -----------

SHAREHOLDERS' EQUITY:
Common Shares, $0.01 par value, 150,000,000 shares authorized; 40,619,420
    shares issued and outstanding at December 31, 1999
    and 18,586,764 shares issued and outstanding at December 31, 1998       $       406    $       186
Paid-in Capital                                                                 767,774        348,912
Retained Deficit                                                                 (6,438)          (111)
                                                                            -----------    -----------

TOTAL SHAREHOLDERS' EQUITY                                                  $   761,742    $   348,987
                                                                            -----------    -----------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                  $ 1,593,484    $ 1,110,570
                                                                            ===========    ===========
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.


                                       37
<PAGE>

                             CABOT INDUSTRIAL TRUST

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 (in thousands, except share and per share data)

<TABLE>
<CAPTION>
                                                              For the Years Ended
                                                   -----------------------------------------
                                                   December 31, 1999       December 31, 1998
                                                   -----------------       -----------------
<S>                                                   <C>                    <C>
                                                                               (Note 1)
REVENUES:
Rental Income                                         $    135,859           $     89,044
Tenant Reimbursements                                       21,612                 13,381
                                                      ------------           ------------
                                                      $    157,471           $    102,425
EXPENSES:
Property Operating                                    $     11,821           $      6,579
Property Taxes                                              17,787                 11,843
Depreciation and Amortization                               31,169                 20,913
General and Administrative                                   8,902                  6,815
Interest                                                    25,360                  7,009
Settlement of Treasury Lock                                  2,492                     --
                                                      ------------           ------------
                Total Expenses                        $     97,531           $     53,159

OTHER INCOME:
Net Gain on Sales of Real Estate                      $      2,751           $        572
Interest and Other Income                                      996                  1,120
                                                      ------------           ------------

Income Before Minority Interest Expense               $     63,687           $     50,958

MINORITY INTEREST EXPENSE:
    Preferred Unitholders                                   (6,009)                    --
    Limited Partner Unitholders                             (8,630)               (29,192)
                                                      ------------           ------------

Net Income                                            $     49,048           $     21,766
                                                      ============           ============

Earnings per Share:
    Basic                                             $       1.32           $       1.17
                                                      ============           ============

    Diluted                                           $       1.32           $       1.17
                                                      ============           ============

Weighted Average Shares:
    Basic                                               37,083,690             18,586,764
                                                      ============           ============

    Diluted                                             37,083,690             18,586,764
                                                      ============           ============
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.


                                       38
<PAGE>

                             CABOT INDUSTRIAL TRUST

                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                 (in thousands, except share and per share data)

<TABLE>
<CAPTION>
                                         Common
                                        Shares of     Common     Capital in     Retained
                                       Beneficial    Share Par    Excess of     Earnings
                                        Interest       Value      Par Value     (Deficit)
                                       ----------   ----------   ----------    ----------
<S>                                    <C>          <C>          <C>           <C>
Balance, December 31, 1997                     50   $       --   $        1    $       --
    Issuance of Common Shares          18,586,714          186      349,116            --
    Effect of Unit Transactions                --           --         (205)           --
    Net Income                                 --           --           --        21,766
    Distributions ($1.177 per share)           --           --           --       (21,877)
                                       ----------   ----------   ----------    ----------

Balance, December 31, 1998             18,586,764   $      186   $  348,912    $     (111)
                                       ----------   ----------   ----------    ----------

    Conversion of Units                22,032,656   $      220   $  418,862    $       --
    Net Income                                 --           --           --        49,048
    Distributions ($1.36 per share)            --           --           --       (55,375)
                                       ----------   ----------   ----------    ----------

Balance, December 31, 1999             40,619,420   $      406   $  767,774    $   (6,438)
                                       ==========   ==========   ==========    ==========
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.


                                       39
<PAGE>

                             CABOT INDUSTRIAL TRUST

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                        (in thousands, except share data)

<TABLE>
<CAPTION>
                                                                                                    For the Years Ended
                                                                                           -------------------------------------
                                                                                           December 31, 1999   December 31, 1998
                                                                                           -----------------   -----------------
<S>                                                                                             <C>                <C>
                                                                                                                    (Note 1)
CASH FLOWS FROM OPERATING ACTIVITIES:
          Net Income                                                                            $  49,048          $  21,766
          Adjustments to Reconcile Net Income to Cash Provided by Operating Activities:
             Depreciation and Amortization                                                         31,169             20,913
             Minority Interest Expense                                                             14,639             29,192
             Amortization of Deferred Financing Costs                                               1,003                466
             Straight Line Rent                                                                    (3,470)            (2,638)
             Cabot Trust's Share of Net Income of Cabot Advisors                                       --               (231)
             Net Gain on Sales of Real Estate                                                      (2,751)              (572)
             Increase in Rents and Other Receivables                                                 (956)            (2,872)
             Increase in Accounts Payable                                                             419                406
             Decrease (Increase) in Other Assets                                                      531             (2,877)
             Increase in Accrued Real Estate Taxes                                                  2,945              7,309
             Increase in Tenant Security Deposits and Prepaid Rents                                 6,249              4,956
             Increase in Other Liabilities                                                          2,467              2,908
                                                                                                ---------          ---------
                Net Cash Provided by Operating Activities                                       $ 101,293          $  78,726
                                                                                                ---------          ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
          Purchases of Investments in Real Estate                                               $(402,150)         $(376,816)
          Properties Under Development                                                            (52,996)           (19,532)
          Proceeds from Sales of Real Estate                                                       16,079              6,874
          Purchases of and Increases in Lease Acquisition Costs                                   (12,369)            (6,857)
          Improvements to Real Estate                                                              (1,938)              (458)
          Acquisition Deposits, net                                                                  (844)            (1,579)
          Advances to Cabot Advisors                                                                 (523)              (351)
          Purchases of Furniture, Fixtures and Equipment                                              (83)               (76)
          Other                                                                                       629                 --
                                                                                                ---------          ---------
                Net Cash Used in Investing Activities                                           $(454,195)         $(398,795)
                                                                                                ---------          ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
          Proceeds from Issuance of Unsecured Debt                                              $ 200,000          $      --
          Net Proceeds from Issuance of Preferred Units                                           191,383                 --
          Proceeds from Issuance of Mortgage Debt                                                  93,215                 --
          Distributions Paid to Common Shareholders                                               (47,438)           (15,836)
          Line of Credit Borrowings (Repayments), net                                             (37,000)           200,000
          Distributions Paid to Minority Interests                                                (16,622)           (21,240)
          Mortgage Debt Principal Repayments                                                       (5,737)           (14,232)
          Increase in Deferred Financing Costs                                                     (2,627)            (1,721)
          Proceeds from the Issuance of Common Shares, net                                         (1,412)           177,606
          Other                                                                                    (1,154)              (490)
          Repurchase of Partnership Units                                                              --             (1,718)
                                                                                                ---------          ---------
                Net Cash Provided by Financing Activities                                       $ 372,608          $ 322,369
                                                                                                ---------          ---------
                     Net Increase in Cash and Cash Equivalents                                  $  19,706          $   2,300

CASH AND CASH EQUIVALENTS-BEGINNING OF YEAR                                                         2,301                  1
                                                                                                ---------          ---------

CASH AND CASH EQUIVALENTS-END OF YEAR                                                           $  22,007          $   2,301
                                                                                                =========          =========

Cash paid for interest, net of amounts capitalized                                              $  23,224          $   5,771
                                                                                                =========          =========
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.


                                       40
<PAGE>

                             CABOT INDUSTRIAL TRUST

                CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
                        (in thousands, except share data)

DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:

      In conjunction with the Offering and Formation Transactions, Cabot L.P.
assumed $18,413 of indebtedness and issued 33,850,000 Common Shares and
Partnership Units in exchange for real estate assets and the advisory business
of Cabot Partners, recorded at $659,021 and $77, respectively.

      In conjunction with a sale of real estate in 1999, Cabot L.P. received a
promissory note in the amount of $627 as a component of total consideration due
from seller. This note was repaid in full during 1999.

      In conjunction with the acquisitions of certain real estate, Cabot L.P.
assumed $44,025 of indebtedness and issued Units valued at $2,268 in 1998 and
assumed $28,182 of indebtedness and issued Units valued at $3,413 in 1999.

      At December 31, 1999 and 1998, accrued capital expenditures (including
amounts included in accounts payable) totaled $6,520 and $7,243, development
costs totaled $3,610 and $3,576, preferred equity offering costs totaled $1,578
and $0, and common equity offering costs totaled $0 and $1,290, respectively.

              The accompanying notes are an integral part of these
                       consolidated financial statements.


                                       41
<PAGE>

                             CABOT INDUSTRIAL TRUST

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 1999

1. GENERAL

Organization

Cabot Industrial Trust (Cabot Trust), a Maryland real estate investment trust,
was formed on October 10, 1997. Cabot Trust is the managing general partner of a
limited partnership, Cabot Industrial Properties, L.P. (Cabot L.P.), and
conducts substantially all of its business through Cabot L.P. As the general
partner of Cabot L.P., Cabot Trust has the exclusive power under the agreement
of limited partnership to manage and conduct the business of Cabot L.P. and,
therefore, Cabot Trust consolidates the financial results of Cabot L.P. for
financial reporting purposes.

Cabot Trust is a fully integrated, internally managed real estate company formed
to continue and expand the national real estate business of Cabot Partners
Limited Partnership (Cabot Partners). Cabot Trust qualifies as a real estate
investment trust (a REIT) for federal income tax purposes.

Since Cabot Trust was formed on October 10, 1997 and did not begin operations
until February 4, 1998 (see The Formation Transactions below), the results for
the year ended December 31, 1998, represent activity for 331 days, or
approximately 11 months.

Initial Capitalization

The initial capitalization of Cabot Trust consisted of 50 common shares of
beneficial interest, par value $.01 per share (Common Shares), issued for a
total consideration of $1,000. In connection with the Formation Transactions and
Offerings (described below), Cabot Trust issued an additional 18,586,714 Common
Shares.

The Formation Transactions

On February 4, 1998, under a Contribution Agreement executed by Cabot Trust,
Cabot L.P., Cabot Partners, and various other contributors, 122 industrial real
estate properties, certain real estate advisory contracts and other assets were
(i) contributed to Cabot L.P. in exchange for Units in Cabot L.P. that may,
subject to certain restrictions, be exchanged for Common Shares of Cabot Trust
or (ii) contributed to Cabot Trust in exchange for Common Shares. The properties
contributed to Cabot Trust were concurrently contributed by it to Cabot L.P. in
exchange for the number of general partnership Units in Cabot L.P. equal to the
number of Common Shares exchanged for the property.

Cabot L.P. contributed the real estate advisory contracts to Cabot Advisors,
Inc. (Cabot Advisors) and received 100% of the nonvoting preferred stock of
Cabot Advisors, which entitles it to 95% of Cabot Advisors' net operating cash
flow. All of the common stock of Cabot Advisors is owned by an officer of Cabot
Trust.

During the year ended December 31, 1999, Cabot L.P. issued 177,448 Units in
conjunction with acquisitions and Cabot Trust issued 22,032,656 Common Shares to
limited partners of Cabot L.P. in exchange for Units of Cabot L.P. As a result,
Cabot Trust owned 93% of the common equity of Cabot L.P. as of December 31,
1999. The remaining 7%, which is owned by investors holding Cabot L.P. Units, is
considered Minority Interest.


                                       42
<PAGE>

                             CABOT INDUSTRIAL TRUST

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                December 31, 1999

1. GENERAL (CONTINUED)

The Offerings

On February 4, 1998, Cabot Trust completed the offering of 8,625,000 Common
Shares at an offering price of $20.00 per share. In addition, Cabot Trust issued
1,000,000 Common Shares in a private offering at $20.00 per share (collectively,
the Offerings). Cabot Trust contributed the net proceeds of the Offerings to
Cabot L.P. in exchange for the number of general partnership interests in Cabot
L.P. equal to the number of Common Shares sold in the Offerings.

Cumulative Redeemable Perpetual Preferred Equity

During 1999, Cabot L.P. completed private sales of the following Cumulative
Redeemable Perpetual Preferred Units (the "Preferred Units"):

<TABLE>
<CAPTION>
        Sale Date                    Series              Unit Price        Liquidation Value         Net Proceeds
--------------------------     --------------------     -------------    ----------------------    -----------------
<S>                              <C>                         <C>             <C>                     <C>
April 29, 1999                   8.625% Series B             $50             $ 65,000,000            $ 63,175,000
September 3, 1999                8.625% Series C              25               65,000,000              63,175,000
September 27, 1999               8.375% Series D              50               10,000,000               9,715,000
December 9, 1999                 8.375% Series E              50               10,000,000               9,715,000
December 22, 1999                8.500% Series F              25               45,000,000              44,025,000
                                                                             ------------            ------------
                                                                             $195,000,000            $189,805,000
                                                                             ============            ============
</TABLE>

The Preferred Units, which may be called by Cabot Trust at par on or after the
fifth anniversary of issuance in each case, have no stated maturity or mandatory
redemption provisions and are not convertible into any other securities of Cabot
L.P.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Cabot
Trust, Cabot L.P. and their subsidiaries over which they exercise control. The
ownership interest in Cabot L.P., which is not owned by Cabot Trust, including
Preferred Units, is reflected as Minority Interest. All significant intercompany
accounts and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.


                                       43
<PAGE>

                             CABOT INDUSTRIAL TRUST

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                December 31, 1999


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Investment in Real Estate

Investments in real estate are carried at cost, less accumulated depreciation.
It is Cabot Trust's policy to review the carrying value of long-lived assets for
impairment whenever events or changes in circumstances indicate that the
carrying value of such assets may not be recoverable. Measurement of the
impairment loss is based on the fair value of the asset. Generally, fair value
is determined using valuation techniques such as the present value of expected
future cash flows. No impairment adjustments have been made as a result of this
review process during 1999 or 1998.

Investments in real estate are primarily depreciated over 40 years using the
straight-line method. Expenditures for ordinary maintenance and repairs are
charged to operations as incurred. Significant building renovations and
improvements that extend the useful life of or improve the assets are
capitalized.

Cash Equivalents

Cabot Trust considers all short-term investments with a maturity of three months
or less to be cash equivalents.

Capitalization of Costs

Cabot Trust has capitalized as deferred costs certain expenditures related to
the financing and leasing of its properties. Capitalized loan fees are amortized
over the term of the related loans and lease acquisition costs are amortized
over the term of the related leases, or the estimated useful life of the
improvement, if shorter. Deferred Lease Acquisition Costs and Deferred Financing
Costs included in the accompanying consolidated balance sheets are presented net
of accumulated amortization totaling $8,620,000 and $1,413,000, respectively, as
of December 31, 1999 and $3,487,000 and $466,000, respectively, as of December
31, 1998.

Investment in Cabot Advisors

Cabot Trust's investment in Cabot Advisors is accounted for using the equity
method. Under the equity method of accounting, Cabot Trust's pro rata share of
Cabot Advisors' income (loss) is recorded as an increase (decrease) in the
carrying value of its investment and any distributions received are recorded as
decreases in the carrying value.

Rental Income

All leases are classified as operating leases. Certain leases provide for tenant
occupancy during periods for which no rent is due and minimum rent payments that
increase during the term of the lease. Cabot Trust records rental income for the
full term of each lease on a straight-line basis. The resulting Deferred Rent
Receivable represents the amount due from tenants, net of reserves, which Cabot
Trust expects to collect over the remaining life of the leases rather than
currently. Deferred rental revenue is not recognized for income tax purposes
until received. Cabot Trust recorded a provision for uncollectible rental income
of $352,000 and $312,000 in 1999 and 1998, respectively, and wrote off $90,000
against its Allowance for Uncollectible Accounts in 1999.


                                       44
<PAGE>

                             CABOT INDUSTRIAL TRUST

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                December 31, 1999


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Interest Rate Protection Agreements

Cabot Trust uses various types of interest rate protection agreements from time
to time to manage its exposures to interest rate risk. During 1999 and 1998,
Cabot Trust used interest rate collar agreements and interest rate cap
agreements to manage a portion of the interest rate risk arising from its
LIBOR-based acquisition facility and may, in the future, use other types of
agreements. The collar agreements effectively limited the LIBOR interest cost of
a portion of the outstanding balance on the acquisition facility to a specified
interest rate range by requiring Cabot Trust's counter party to pay amounts to
Cabot Trust to the extent LIBOR increased above the ceiling of the specified
range and requiring Cabot Trust to make payments to the counter party to the
extent LIBOR declined below the floor of the range. The interest rate cap
agreements limited the LIBOR interest cost of a portion of the outstanding
balance on the acquisition facility to a maximum interest rate by requiring
Cabot Trust's counter party to pay amounts to Cabot Trust to the extent LIBOR
increased above the ceiling as specified. Cabot Trust accounts for such
agreements on the accrual method. Amounts to be received from or paid to the
counter parties of the agreements are accrued during the period to which the
amounts relate and are reflected as increases or decreases in interest expense.
The related amounts payable to the counter parties are included in accounts
payable in the accompanying balance sheets.

During 1998, Cabot Trust entered into an interest rate hedge transaction
(referred to as a Treasury Lock) involving the future sale of $100.0 million of
Treasury securities based on a rate of approximately 5.54% for such securities
in anticipation of a future debt issuance of at least $100.0 million with a
maturity of 10 years. At the March 31, 1999 contractual settlement date for this
transaction, Cabot Trust paid $2.5 million to its counter party in the
transaction, reflecting the decrease in Treasury security yields since the July
1998 commencement of the transaction. Because an offering of the size and
maturity contemplated when the interest rate hedge transaction was executed was
not completed by the time of, or shortly after, the March 31, 1999 settlement
date of the transaction, Cabot Trust recorded a loss of $2.5 million in the year
ended December 31, 1999.

Recent Accounting Pronouncements

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 133, Accounting for Derivative
Instruments and Hedging Activities. In June 1999, the FASB issued SFAS No. 137
which deferred the effective date of SFAS No. 133. The statement is now
effective for fiscal years beginning after June 15, 2000; earlier adoption is
allowed. This statement requires companies to record derivatives on the
balance sheet as assets or liabilities, measured at fair value. Gains or losses
resulting from changes in the values of those derivatives would be accounted for
depending on the use of the derivative and whether it qualifies for hedge
accounting. Cabot Trust is currently evaluating the impact of this statement and
does not anticipate a material effect on its results of operations or financial
position resulting from the adoption of SFAS No. 133, as amended by SFAS No.
137, due to its relatively limited use of derivative instruments.


                                       45
<PAGE>

                             CABOT INDUSTRIAL TRUST

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                December 31, 1999


3. ACQUISITIONS OF REAL ESTATE INVESTMENTS

In accordance with generally accepted accounting principles, Cabot Trust has
accounted for the Formation Transactions using the purchase method of
accounting. As such, the assets acquired and liabilities assumed in connection
with the Formation Transactions are recorded at the fair value of the
consideration surrendered and liabilities assumed, except for the net assets
contributed by Cabot Partners, the sponsor and organizer, which were recorded at
their historical cost basis. The acquisition cost was then allocated to all
identifiable assets based upon their individual estimated fair market values.

The following is a summary of the acquisition costs recorded in connection with
the Formation Transactions:

                                                                  (in thousands)
                                                                  --------------
Fair value of Cabot Trust's Common Shares and
     Cabot L.P.'s Units, based on the
     February 4, 1998 value of $20 per Share/Unit, issued
     to the contributing investors (except Cabot Partners)           $640,608
Value of Partnership Units issued to Cabot Partners,
    recorded at carryover historical cost basis                            77
Mortgage debt assumed                                                  18,413
Other acquisition costs and liabilities assumed                         8,713
                                                                     --------
          Total acquisition cost basis                               $667,811
                                                                     ========

                                                                  (in thousands)
                                                                  --------------
Acquisition cost basis allocated to:
   Land                                                              $129,877
   Buildings                                                          525,471
   Lease acquisition costs                                             12,412
                                                                     --------
   Acquisition cost basis allocated to real estate
     as a result of the Formation Transactions                       $667,760
   Acquisition cost basis allocated to other net assets                    51
                                                                     --------
          Total cost basis allocated                                 $667,811
                                                                     ========

Subsequent to the Formation Transactions, Cabot Trust acquired 84 properties
during 1998 with an aggregate of approximately 9.6 million net rentable square
feet. The aggregate purchase price for the 84 properties was $426.2 million,
including $44.0 million of debt assumed and issuance of $2.3 million in Units of
Cabot L.P.

During 1999, Cabot Trust acquired 113 properties with an aggregate of
approximately 10.0 million net rentable square feet. The aggregate purchase
price for the 113 properties was $448.3 million, including $28.2 million of debt
assumed and issuance of $3.4 million in Units in Cabot L.P.

                                       46
<PAGE>

                             CABOT INDUSTRIAL TRUST

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                December 31, 1999


4. DEBT FACILITIES

The Acquisition Facility

On March 16, 1998, Cabot L.P. obtained a $325 million unsecured revolving line
of credit facility (the Acquisition Facility). The Acquisition Facility matures
on March 16, 2001 and the interest rate for 1999 was LIBOR plus 100 basis
points. At December 31, 1999 and 1998, outstanding borrowings under the
Acquisition Facility were $163 million and $200 million, respectively, and the
interest rate was 7.50% and 6.60%, respectively. The weighted average coupon
interest rate for the years ended December 31, 1999 and 1998 was 6.37% and
6.58%, respectively, including the effect of the interest rate collar and cap
arrangements described below. The Acquisition Facility is used to acquire and
develop properties and for working capital purposes.

Cabot L.P. has entered into an interest rate cap arrangement relating to the
Acquisition Facility for a notional amount of $100 million for the period from
October 1, 1999 through April 1, 2000. This arrangement is intended to result in
limiting the variable nature of the LIBOR component of Cabot L.P.'s interest
rate on an equivalent amount of borrowings to 6.50% per annum. Cabot L.P. also
entered into similar arrangements during 1999 and 1998, which resulted in
interest expense of $86,000 and $47,000, respectively.

Unsecured Debt

On May 4, 1999, Cabot Trust issued $200 million of senior unsecured redeemable
notes, due May 1, 2004. The notes have a 7.125% coupon interest rate and were
priced at 99.724%, resulting in a discount of $552,000.

Mortgage Debt

Cabot Trust assumed certain loans in connection with the Formation Transactions,
entered into loan agreements during 1999, and assumed certain loans in
conjunction with several real estate acquisitions, all secured by certain
existing real estate assets (collectively, the Mortgage Loans). The Mortgage
Loans, totaling $163.9 million, bear coupon rates ranging from 7.25% - 9.67% and
are secured by properties with a net book value of $272.6 million. Certain of
the debt assumed in conjunction with the acquisition of properties bears a
coupon interest rate that differed from the fair market value interest rate at
the date of acquisition. In accordance with generally accepted accounting
principles, such debt was recorded at fair market value and interest expense
recorded in the accompanying consolidated statements of operations was adjusted
based on the fair market interest rate at the date of acquisition.

Aggregate principal payments on mortgage notes payable at December 31, 1999 for
the five years ending December 31 and thereafter are as follows:


                                       47
<PAGE>

                             CABOT INDUSTRIAL TRUST

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                December 31, 1999

4. DEBT FACILITIES (CONTINUED)

(in thousands)

2000.......................................................... $   6,039
2001..........................................................     6,268
2002..........................................................     8,983
2003..........................................................    11,293
2004..........................................................     6,134
Thereafter....................................................   125,149

5. FUTURE MINIMUM RENTS

Future minimum rental receipts due Cabot Trust on noncancelable operating leases
for the 320 industrial properties as of December 31, 1999 were as follows:

(in thousands)

2000.......................................................... $ 149,117
2001..........................................................   128,853
2002..........................................................   101,959
2003..........................................................    76,090
2004..........................................................    51,355
Thereafter....................................................   143,520

Cabot Trust is subject to the usual business risks associated with the
collection of the above-scheduled rents. The above amounts do not include
additional rental receipts that will become due as a result of the expense
reimbursement and escalation provisions in the leases. In addition, Cabot
Trust's minimum future rental receipts related to nonindustrial properties total
$5.9 million.

6. INCOME TAXES

Cabot Trust has elected to be taxed as a REIT under Sections 856 through 860 of
the Internal Revenue Code of 1986, as amended. As a REIT, Cabot Trust generally
will not be subject to federal income tax to the extent it distributes its
taxable income for each tax year to its shareholders. REITs are also subject to
a number of organizational and operational requirements. If Cabot Trust fails to
qualify as a REIT in any taxable year, Cabot Trust will be subject to federal
income tax (including any applicable alternative minimum tax) on its taxable
income at regular corporate tax rates. Even if Cabot Trust qualifies for
taxation as a REIT, Cabot Trust may be subject to state and local income tax and
to federal income tax and excise tax on its undistributed income. In 1999 and
1998, 100% of Cabot Trust's distributions to shareholders were taxable as
ordinary income.


                                       48
<PAGE>

                             CABOT INDUSTRIAL TRUST

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                December 31, 1999


7. EMPLOYEE BENEFIT PLANS

Cabot Trust has adopted the Cabot Industrial Trust Long-Term Incentive Plan (the
LTIP) and the Cabot Industrial Trust 1999 Long-Term Incentive Plan (the 1999
LTIP) (collectively referred to as the Plans), for the purpose of attracting and
retaining highly qualified executive officers, Trustees and employees. The 1999
LTIP is maintained as a broad-based plan within the meaning of the New York
Stock Exchange rules.

The Plans are administered by the Executive Compensation Committee of the Board
of Trustees, (the Administrator). Officers and other employees of Cabot Trust,
Cabot L.P. and designated subsidiaries and members of the Board of Trustees who
are not employees of Cabot Trust are eligible to participate.

Options are awarded to Trustees or employees of Cabot Trust in the form of
Common Shares and to employees of Cabot L.P. or Cabot Advisors in the form of
Units. The LTIP, at December 31, 1999, authorizes the issuance of up to
4,366,792 Common Shares and Units and the 1999 LTIP authorizes the issuance of
up to 2,000,000 Common Shares and Units. The number of Common Shares and Units
available under the LTIP may increase to an amount equal to 10% of the aggregate
number of outstanding Common Shares and Units. The Plans provide for the grant
of (i) Common Share options intended to qualify as incentive options under
Section 422 of the Code (the LTIP only), (ii) Common Share options and Unit
options not intended to qualify as incentive options under Section 422 of the
Code and (iii) dividend equivalent rights and distribution equivalent rights
(collectively, "DEUs") which entitle a Participant to be credited with
additional Common Share or Unit rights.

In connection with the grant of options under the Plans, other than options to
nonemployee Trustees, the Administrator determines the terms of the option,
including the option exercise price, any vesting requirements and whether a DEU
shall be awarded. The Administrator has authority to award options at less than
fair market value but at this time has no intention of doing so. The options
granted under the Plans during 1999 and 1998 have 10-year terms and become
exercisable in four equal annual installments commencing on the first
anniversary of the date of grant, subject to acceleration of vesting upon a
change in control of Cabot Trust (as defined in the Plans). DEUs entitle an
option holder to an award of additional shares or units at year end with a
positive intrinsic value calculated using a formula that is based on the
difference, if any, between the annual distribution rate on the Units and Common
Shares versus the average dividend rate on stocks included in the S&P 500 index.
DEUs vest on a vesting schedule as determined by the Administrator and once
vested entitle the holder to a Common Share or Unit at the earlier of the year
of exercise, or the year of expiration, of the underlying option or, in some
cases, only upon a change in control. The options granted in 1998 were generally
awarded with DEUs, which resulted in compensation expense in 1999 of
approximately $475,000.

                                       49
<PAGE>

                             CABOT INDUSTRIAL TRUST

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                December 31, 1999


7. EMPLOYEE BENEFIT PLANS (CONTINUED)

To the extent an option has not become exercisable at the time of the holder's
termination of employment, it will be forfeited unless the Administrator has
previously exercised its reasonable discretion to make such option exercisable
and all vested options which are not exercised by the expiration date described
in the Plans will be forfeited. Any Common Shares or Units subject to an option
which are forfeited (or which expire without exercise) will again be available
for grant under the Plans.

A summary of Cabot Trust's stock option activity is as follows:

<TABLE>
<CAPTION>
                                                      1999                             1998
                                          -----------------------------   ------------------------------
                                          Number of    Weighted Average    Number of    Weighted Average
                                            Shares      Exercise Price       Shares      Exercise Price
-----------------------------------------------------------------------   ------------------------------
<S>                                       <C>             <C>              <C>             <C>
Options outstanding, beginning of year    3,126,615       $    20.04              --       $     0.00
     Granted                                878,300            19.29       3,195,015            20.04
     Exercised                                   --             0.00              --             0.00
     Forfeited                              (22,325)           19.97         (68,400)           20.00
                                          -----------------------------   ------------------------------

Options outstanding, end of year          3,982,590       $    19.88       3,126,615       $    20.04
                                          =============================   ==============================
Options exercisable, end of year            814,079       $    20.04              --       $     0.00
                                          =============================   ==============================

DEUs outstanding, beginning of year          89,384       $     0.00              --       $     0.00
     Credited                               194,967             0.00          89,384             0.00
     Exercised                                   --             0.00              --             0.00
     Forfeited                                 (646)            0.00              --             0.00
                                          -----------------------------   ------------------------------
DEUs outstanding, end of year               283,705       $     0.00          89,384       $     0.00
                                          =============================   ==============================
DEUs exercisable, end of year                23,733       $     0.00              --       $     0.00
                                          =============================   ==============================

Options available for grant               2,100,497               --       1,131,501               --
                                          =============================   ==============================
</TABLE>

For the DEUs outstanding as of December 31, 1999, 152,797 vest over the shorter
of a four-year period or upon a change of control and 130,908 vest only upon a
change of control.


                                       50
<PAGE>

                             CABOT INDUSTRIAL TRUST

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                December 31, 1999

7. EMPLOYEE BENEFIT PLANS (CONTINUED)

A summary of the status of Cabot Trust's stock options outstanding at December
31, 1999, is as follows:

<TABLE>
<CAPTION>
                                                                        Options Outstanding
                                              -------------------------------------------------------------------------
                                                                           Weighted Average
                                                                         Remaining Contractual     Weighted Average
Range of Exercise Prices                          Number of Shares               Life               Exercise Price
-----------------------------------------------------------------------------------------------------------------------
<S>                                                    <C>                       <C>                    <C>
$17.00  -  $19.99                                      1,758,915                 9.37 years             $19.49

$20.00                                                 2,015,500                 8.09 years             $20.00

$20.01  -  $24.16                                        208,175                 8.77 years             $22.00
</TABLE>

Pro Forma Stock-based Compensation Expense

In October 1995, the Financial Accounting Standards Board issued SFAS No. 123,
Accounting for Stock-based Compensation, which sets forth a fair-value based
method of recognizing stock-based compensation expense. As permitted by SFAS No.
123, Cabot Trust has elected to apply APB Opinion No. 25 to account for its
stock-based compensation plans. Accordingly, except for the DEUs as described
above, no compensation cost has been recognized for Cabot Trust's Plans as the
option prices at the date of grant were equal to market prices. Had compensation
cost for awards in 1999 and 1998 under Cabot Trust's Plans been determined based
on the fair value at the grant dates consistent with the method set forth under
SFAS No. 123, the effect on Cabot Trust's net income and earnings per share
would have been as follows:

                                                  1999            1998
--------------------------------------------------------------------------------
                                        (in thousands, except per share amounts)
Net income:
     As reported                               $   49,048     $   21,766
     Pro forma                                     47,368         21,255
Basic earnings per share:
     As reported                               $     1.32     $     1.17
     Pro forma                                       1.28           1.14
Diluted earnings per share:
     As reported                               $     1.32     $     1.17
     Pro forma                                       1.28           1.14

Pro forma compensation expense for options granted is reflected over the vesting
period; therefore, future pro forma compensation expense may be greater as
additional options are granted.


                                       51
<PAGE>

                             CABOT INDUSTRIAL TRUST

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                December 31, 1999


7. EMPLOYEE BENEFIT PLANS (CONTINUED)

The weighted average fair value per share of options granted was $2.23 in 1999
and $2.58 in 1998. The fair value of each option grant was estimated on the
grant date using the Black-Scholes option pricing model with the following
weighted-average assumptions:

                                              1999                   1998
--------------------------------------------------------------------------------
Expected volatility                          19.21%                 20.66%
Risk-free interest rate                   4.82 - 6.60%          4.52 - 5.60%
Expected life of options                     7 years               7 years
Expected dividend yield                        6.9%                  6.2%

The Black-Scholes option pricing model was developed for use in estimating the
fair value of traded options that have no vesting restrictions and are fully
transferable. In addition, option pricing models require the input of highly
subjective assumptions including expected stock price volatility. Because Cabot
Trust's employee stock options have characteristics significantly different from
those of traded options and because changes in the subjective input assumptions
can materially affect the fair value estimate, in management's opinion, the
existing models do not necessarily provide a reliable single measure of fair
value of its employee stock options.

401(k) Savings Plan

The Cabot Savings Plan 401(k) covers eligible full-time employees of Cabot Trust
and its affiliates. Contributions to the plan are made by both the employee and
the employer. Employer contributions are based on the level of employee
contributions. For this plan, Cabot Trust contributed and charged to expense
$58,000 in 1999 and $44,000 in 1998.

8. EARNINGS PER SHARE

In accordance with SFAS No. 128, Earnings per Share, basic earnings per share
have been computed by dividing net income by the weighted average number of
shares outstanding during the period subsequent to Cabot Trust's commencement of
operations (see Note 1).

Diluted earnings per share have been computed considering the potentially
dilutive effect of the exercise of Unit options granted by Cabot L.P. Basic and
diluted earnings per share were calculated as follows:


                                       52
<PAGE>

                             CABOT INDUSTRIAL TRUST

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                December 31, 1999

8. EARNINGS PER SHARE (CONTINUED)

<TABLE>
<CAPTION>
                                                                                                    Period Ended
                                                                         Year Ended              December 31, 1998
                                                                     December 31, 1999              (see Note 1)
                                                                  -------------------------   -------------------------
                                                                        (in thousands, except per share amounts)
<S>                                                                      <C>                        <C>
Basic:
Net Income                                                               $    49,048                $    21,766
                                                                         ------------               ------------
Weighted Average Shares                                                       37,084                     18,587
                                                                         ------------               ------------
Basic Earnings per Share                                                 $      1.32                $      1.17
                                                                         ============               ============

Diluted:
Net Income                                                               $    49,048                $    21,766
Effect of Unit Options                                                           (26)                       (35)
                                                                         ------------               ------------
Income available to Common Shareholders, as adjusted                     $    49,022                $    21,731
                                                                         ------------               ------------
Weighted Average Shares                                                       37,084                     18,587
                                                                         ------------               ------------
Diluted Earnings per Share                                               $      1.32                $      1.17
                                                                         ============               ============
</TABLE>

9. FAIR VALUE OF FINANCIAL INSTRUMENTS

Statement of Financial Accounting Standards No. 107, Disclosures about Fair
Value of Financial Instruments, requires Cabot Trust to disclose fair value
information for all financial instruments, for which it is practicable to
estimate fair value, whether or not recognized in the balance sheets. Cabot
Trust's financial instruments, other than debt and interest rate protection
agreements are generally short-term in nature and contain minimal credit risk.
These instruments consist of cash and cash equivalents, rents and other
receivables and accounts payable. The carrying amount of these assets and
liabilities in the consolidated balance sheets approximate fair value.

The carrying amount and fair value of Cabot Trust's long-term obligations and
off-balance-sheet financial instruments as of December 31, 1999 and 1998 are as
follows:


                                       53
<PAGE>

                             CABOT INDUSTRIAL TRUST

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                December 31, 1999


9. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

<TABLE>
<CAPTION>
                                                                    1999                       1998
                                                           ----------------------------------------------------
                                                            Carrying       Fair        Carrying       Fair
                                                             Amount        Value        Amount        Value
---------------------------------------------------------------------------------------------------------------
                                                                              (in thousands)
<S>                                                        <C>           <C>           <C>          <C>
Long-term obligations:
     Mortgage loans payable                                $(163,866)    $(167,493)    $(48,206)    $(51,450)
     Unsecured debt                                        $(200,000)    $(192,480)    $      -     $      -

Off-balance-sheet financial instruments:
     Interest rate protection agreements (liability)       $       -     $       1     $      -     $ (6,734)
</TABLE>

Cabot Trust's mortgage loans and unsecured debt are at fixed rates, which in
certain cases differ from borrowing rates currently available to Cabot Trust
with similar terms and average maturities. The fair market values of mortgage
loans payable were estimated using a valuation technique which discounts
expected future cash flows to net present value. The fair market value of Cabot
Trust's unsecured debt was estimated based on publicly quoted market prices,
which represents the amount Cabot would have to pay to repurchase such
borrowings at year end. Cabot Trust's Acquisition Facility is at a variable
rate, which results in a carrying value that approximates its fair value. The
fair value of Cabot Trust's interest rate protection agreements is the estimated
amount that Cabot Trust would receive or pay if it had terminated the contract
as of December 31, 1999 or 1998, taking into account the change in interest
rates and the creditworthiness of the counter parties.

10. CABOT ADVISORS

Cabot Advisors is responsible for various activities including management of
Cabot Trust's properties and properties on behalf of third parties, as well as
providing other real estate related services for third parties. Total management
fees earned by Cabot Advisors related to Cabot Trust's properties are included
in Property Operating Expenses in the accompanying consolidated statements of
operations and amounted to $2,684,000 and $1,037,000 in 1999 and 1998,
respectively.

Summarized unaudited financial information for Cabot Advisors as of December 31,
1999 and 1998 and for the years then ended is as follows:

                                       54
<PAGE>

                             CABOT INDUSTRIAL TRUST

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                December 31, 1999


10. CABOT ADVISORS (CONTINUED)

<TABLE>
<CAPTION>
                                                                     As of and for the Years Ended
                                                          ----------------------------------------------------
                                                             December 31, 1999          December 31, 1998
--------------------------------------------------------------------------------------------------------------
                                                                       (unaudited, in thousands)
<S>                                                             <C>                        <C>
Total assets.................................................    $1,426                      $1,104
Total revenue................................................    $5,344                      $3,281
Net income (loss)............................................    $  (20)                     $  244
Company's share of net income (loss).........................    $  (19)                     $  231
</TABLE>

Cabot Advisors commenced operations on February 4, 1998. Its results for the
year ended December 31, 1998 therefore represent activity for 331 days, or
approximately 11 months. Cabot Trust's share of Cabot Advisors' net income
(loss) is included in Interest and Other Income in the accompanying consolidated
statements of operations.

11. COMMITMENTS AND CONTINGENCIES

Concentration of Credit Risk

Cabot Trust maintains its cash and cash equivalents at financial institutions.
The combined account balances at each institution periodically exceed FDIC
insurance coverage and, as a result, there is a concentration of credit risk
related to amounts on deposit in excess of FDIC insurance coverage. Management
of Cabot Trust believes the risk is not significant.

Environmental

Cabot Trust, as an owner of real estate, is subject to various environmental
laws of federal and local governments. All of Cabot Trust's properties were
subject to Phase I Environmental Assessments, which consist of, among other
things, a visual inspection of the property and its neighborhood and a review of
pertinent public records. Compliance by Cabot Trust with existing laws has not
had a material adverse effect on Cabot Trust's consolidated financial condition
or results of operations and management does not believe it will have such a
material adverse effect in the future.

Litigation

Management of Cabot Trust does not believe there is any litigation threatened
against it other than routine litigation arising out of the ordinary course of
business, some of which is expected to be covered by liability insurance and
none of which is expected to have a material adverse effect on the consolidated
operating results or financial position of Cabot Trust.

                                       55
<PAGE>

                             CABOT INDUSTRIAL TRUST

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                December 31, 1999


11. COMMITMENTS AND CONTINGENCIES (CONTINUED)

Minimum Future Lease Obligations

Minimum future lease obligations of Cabot Trust under noncancelable operating
leases for each of the next five years ending December 31 and thereafter are as
follows:

                                                           (in thousands)
                                                           --------------

2000..........................................................$   712
2001..........................................................    698
2002..........................................................     50
2003..........................................................     22
2004..........................................................     13
Thereafter....................................................      -
                                                              -------
                                                              $ 1,495
                                                              =======

Cabot Trust incurred rental expense of $389,000 and $192,000 for the years ended
December 31, 1999 and 1998, respectively. In addition, Cabot Advisors incurred
rental expense of $374,000 and $181,000 for the years ended December 31, 1999
and 1998, respectively. Cabot Trust's only significant leases are for its office
space. The leases provide for the payment of base rent and reimbursement of
operating expenses and real estate taxes over stated base amounts.

Employment Agreements

Senior executives have entered into employment agreements with Cabot Trust and
Cabot L.P. Agreements with three of the senior executives are for an initial
term of three years, and each year the term automatically extends an additional
year unless terminated in advance. Agreements with four other senior executives
are for an initial term of two years and each year the term automatically
extends an additional year unless terminated in advance. Each agreement provides
for annual base compensation in amounts ranging from $182,000 to $300,000
($1,473,000 in the aggregate in 1999) and an annual cash bonus to be determined
by the Executive Compensation Committee of the Board of Trustees. The base
annual compensation may be increased in subsequent years by action of the
Executive Compensation Committee. Each of the employment agreements provides for
severance payments in the event of a change in control of Cabot Trust equal to
three times the sum of the current base salary and the annual bonus paid for the
preceding year and also provides for tax reimbursements in certain
circumstances.

Severance Agreements

On December 17, 1998, Cabot Trust's Board of Trustees approved a retention and
severance plan covering all full-time employees of Cabot Trust and its
affiliates not covered by employment agreements which will provide for six to 21
months of compensation to be paid, under certain circumstances, in the event of
a change in control.

                                       56
<PAGE>

                             CABOT INDUSTRIAL TRUST

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                December 31, 1999
11. COMMITMENTS AND CONTINGENCIES (CONTINUED)

As of December 31, 1999, total costs payable under the employment and severance
arrangements covering senior executives and other employees in the event of a
change in control approximated $17.2 million.

Shareholder Rights Plan

On June 11, 1998, the Board of Trustees adopted a Rights Agreement and declared
a dividend of one preferred share purchase right (a "Right") for each
outstanding Common Share to be distributed to all holders of record of the
Common Shares on June 15, 1998. In addition, Rights will be issued with each
Common Share to be issued in the future. Each Right entitles the registered
holder to purchase one one-hundredth of a Series A Junior Participating
Preferred Share for an exercise price of $85, subject to adjustment as provided
in the Rights Agreement. The Rights will generally be exercisable only if a
person or group acquires or announces a tender offer for 15% or more of the
Common Shares. Under certain circumstances, upon a shareholder acquisition of
15% or more of the Common Shares, each Right will entitle the holder to
purchase, at the Right's then current exercise price, a number of Common Shares
having a market value of twice the Right's exercise price. The acquisition of
Cabot Trust pursuant to certain mergers or other business transactions will
entitle each holder of a Right to purchase, at the Right's then current exercise
price, a number of the acquiring company's common shares having a market value
at that time equal to twice the Right's exercise price. The Rights held by
certain 15% shareholders will not be exercisable. The Rights will expire on
June 11, 2008, unless the expiration date of the Rights is extended and the
Rights are subject to redemption at a price of $0.01 per Right under certain
circumstances.

12. SUPPLEMENTARY QUARTERLY DATA


<TABLE>
<CAPTION>
                                           March 31,    June 30,   September 30,  December 31,
                                             1999         1999        1999          1999
-----------------------------------------------------------------------------------------------
                                          (unaudited, in thousands, except per share amounts)
<S>                                       <C>          <C>          <C>           <C>
Rental revenue                            $   34,138   $   37,182   $   40,840    $   45,311
Net gain (loss) on sales of real estate           --        3,404         (653)           --
Net income                                     7,691       15,161       12,816        13,380
Earnings per share, basic                        .28          .41          .31           .33
Earnings per share, diluted                      .28          .41          .31           .33
</TABLE>



                                       57
<PAGE>

                             CABOT INDUSTRIAL TRUST

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                December 31, 1999

12. SUPPLEMENTARY QUARTERLY DATA (CONTINUED)

<TABLE>
<CAPTION>
                                   March 31,    June 30,  September 30, December 31,
                                    1998(1)       1998        1998          1998
-------------------------------------------------------------------------------------
                                 (unaudited, in thousands, except per share amounts)
<S>                               <C>          <C>          <C>          <C>
Rental revenue                    $   14,733   $   26,159   $   28,417   $   33,116
Net gain on sale of real estate           --           --           --          572
Net income                             3,478        6,081        6,001        6,206
Earnings per share, basic                .19          .33          .32          .33
Earnings per share, diluted              .19          .33          .32          .33
</TABLE>

(1)   Since Cabot Trust did not begin operations until February 4, 1998, the
      results for the quarter ended March 31, 1998, represent activity for 56
      days.

13. SUBSEQUENT EVENTS

Subsequent to December 31, 1999, Cabot Trust acquired the following industrial
properties, which acquisitions were funded primarily through proceeds from the
Acquisition Facility:

<TABLE>
<CAPTION>
Property Location         Number and Type of Building        Square Feet      Acquisition Cost
-----------------         ---------------------------        -----------      ----------------
                                                                               (in thousands)
<S>                       <C>                                  <C>                <C>
Phoenix, AZ               Five Workspace                       109,568            $ 9,000

Harrisburg, PA            One Bulk Distribution                186,000            $ 7,300

Atlanta, GA               One Bulk Distribution                180,000            $21,000
                          Two Multitenant Distribution         213,537
                          One Workspace                         40,000

Atlanta, GA               Four Multitenant Distribution        636,442            $20,300
</TABLE>

In addition, as of February 29, 2000, Cabot Trust entered into separate
agreements to acquire seven additional industrial properties with an estimated
acquisition cost of $41 million.


                                       58
<PAGE>

                             CABOT INDUSTRIAL TRUST
             Schedule III - Real Estate and Accumulated Depreciation
                                December 31, 1999
                          (dollar amounts in thousands)

<TABLE>
<CAPTION>
                                                                                                                Costs Capitalized
                                                                                                                    Subsequent
                                                                                           Initial Cost           to Acquisition
                                                                                      ----------------------   ---------------------
                                Number of                                                      Buildings and           Buildings and
Property Name(s)                Buildings   Location                Encumbrances        Land    Improvements    Land    Improvements
----------------                ---------   --------                ------------        ----    ------------    ----    ------------
<S>                                  <C>    <C>                         <C>           <C>         <C>             <C>         <C>
North 104th Avenue                   1      Tolleson, AZ                $     --      $    651    $    6,476      $ --        $    5

North 47th Avenue                    1      Phoenix, AZ                       --           471         3,675        --             1

South 55th Avenue                    1      Phoenix, AZ                       --           334         1,953       149           222

South 63rd Avenue                    1      Phoenix, AZ                       --           528         4,471        --             0

South 84th Avenue                    1      Tolleson, AZ                      --           553         6,067        --             0

West Van Buren                       1      Tolleson, AZ                   4,834           475         6,224        --             3

South 41st Avenue                    2      Phoenix, AZ                    8,338         1,261        10,988        --            32

South 49th Avenue                    1      Phoenix, AZ                       --           787         3,069        --             2

North 103rd Street                   1      Phoenix, AZ                       --           773         6,415        --             0

44th Avenue                          1      Phoenix, AZ                    2,962           575         3,629        --           106

South 9th Street                     1      Phoenix, AZ                    2,943         1,394         5,709        --             1

South 39th Avenue                    1      Phoenix, AZ                    4,597           550         7,606        --             2

South 40th Avenue                    2      Phoenix, AZ                    3,608         1,036         7,010        --             2

South 53rd Avenue                    1      Phoenix, AZ                    2,358           226         3,667        --             2

South 40th Avenue,
Building 3                           1      Phoenix, AZ                       --         1,131         5,680        --             1

East Encanto Drive                   1      Tempe, AZ                        850           460         2,906        --             0

South Priest Drive                   1      Tempe, AZ                      2,729           813         3,140        --           148

West Alameda Drive                   4      Tempe, AZ                      4,351         1,000         4,572        --            12

East Watkins Street                  1      Phoenix, AZ                       --         3,707         5,574        --             0

South 16th Street                    1      Phoenix, AZ                       --             0         7,598        --             0

Deforest Circle                      1      Mira Loma, CA                     --         1,870         7,794        --           150

Santa Anita Avenue                   1      Rancho Cucamonga, CA              --         1,641         6,093        --             0

East Jurupa Street                   1      Ontario, CA                       --         1,256         2,702        --           169

South Rockefeller Avenue             1      Ontario, CA                       --         1,259         4,249        --             1

South Vintage Avenue                 2      Ontario, CA                       --         4,026        12,031        --            23

Vintage Avenue                       1      Ontario, CA                       --         2,139         7,224        --             0

                                     Gross Amount Carried
                                   as of December 31, 1999
                                   ------------------------                                   Date                Depreciable
                                              Buildings and                  Accumulated   Constructed     Date      Lives
Property Name(s)                       Land    Improvements       Total(1)  Depreciation  or Renovated   Acquired  in Years
----------------                       ----    ------------       --------  ------------  ------------   --------  --------
<S>                                  <C>         <C>            <C>             <C>          <C>         <C>       <C>
North 104th Avenue                   $    651    $    6,481     $    7,132      $   (308)         1995   02/04/98  10 - 40

North 47th Avenue                         471         3,676          4,147          (187)         1986   02/04/98  10 - 40

South 55th Avenue                         483         2,175          2,658           (96)         1986   02/04/98  10 - 40

South 63rd Avenue                         528         4,471          4,999          (214)         1990   02/04/98  10 - 40

South 84th Avenue                         553         6,067          6,620          (292)         1989   02/04/98  10 - 40

West Van Buren                            475         6,227          6,702          (279)         1997   03/16/98  10 - 40

South 41st Avenue                       1,261        11,020         12,281          (349)    1985/1989   09/22/98  10 - 40

South 49th Avenue                         787         3,071          3,858           (99)         1989   09/22/98  10 - 40

North 103rd Street                        773         6,415          7,188          (141)         1999   02/15/99  10 - 40

44th Avenue                               575         3,735          4,310          (170)         1997   03/16/98  10 - 40

South 9th Street                        1,394         5,710          7,104          (196)         1983   06/30/98  10 - 40

South 39th Avenue                         550         7,608          8,158          (241)         1989   09/22/98  10 - 40

South 40th Avenue                       1,036         7,012          8,048          (233)    1989/1990   09/22/98  10 - 40

South 53rd Avenue                         226         3,669          3,895          (125)         1987   09/22/98  10 - 40

South 40th Avenue,
Building 3                              1,131         5,681          6,812          (153)         1987   12/29/98  10 - 40

East Encanto Drive                        460         2,906          3,366          (129)         1990   03/17/98  10 - 40

South Priest Drive                        813         3,288          4,101          (105)         1998   09/21/98  10 - 40

West Alameda Drive                      1,000         4,584          5,584          (137)         1984   09/21/98  10 - 40

East Watkins Street                     3,707         5,574          9,281             0          1998   12/23/99  10 - 40

South 16th Street                           0         7,598          7,598             0          1998   12/22/99  10 - 40

Deforest Circle                         1,870         7,944          9,814          (365)         1992   02/06/98  10 - 40

Santa Anita Avenue                      1,641         6,093          7,734          (301)         1988   02/04/98  10 - 40

East Jurupa Street                      1,256         2,871          4,127          (156)         1986   02/04/98  10 - 40

South Rockefeller Avenue                1,259         4,250          5,509          (215)         1986   02/04/98  10 - 40

South Vintage Avenue                    4,026        12,054         16,080          (641)         1986   02/04/98  10 - 40

Vintage Avenue                          2,139         7,224          9,363          (350)         1988   02/04/98  10 - 40
</TABLE>


                                       59
<PAGE>

                             CABOT INDUSTRIAL TRUST
       Schedule III - Real Estate and Accumulated Depreciation (continued)
                                December 31, 1999
                          (dollar amounts in thousands)

<TABLE>
<CAPTION>
                                                                                                               Costs Capitalized
                                                                                                                   Subsequent
                                                                                          Initial Cost           to Acquisition
                                                                                     ----------------------   ---------------------
                                Number of                                                     Buildings and           Buildings and
Property Name(s)                Buildings   Location                Encumbrances       Land    Improvements    Land    Improvements
----------------                ---------   --------                ------------       ----    ------------    ----    ------------
<S>                                  <C>    <C>                         <C>          <C>         <C>             <C>         <C>
San Fernando Road                    1      Sun Valley, CA                 6,486        2,612         7,118        --            29

Rowland Street                       1      City of Industry, CA              --        2,000         6,102        --           764

Dahlia Street                        1      Fontana, CA                       --        2,318         7,604        --             0

East Easy Street                     1      Simi Valley, CA                   --        4,751         8,251        --             0

East Dyer Road                       1      Santa Ana, CA                     --        8,160         6,172        --           (53)

Parco Street                         1      Ontario, CA                       --          658         2,224        --             0

Industry Circle                      1      La Mirada, CA                  2,986        1,802         3,325        --            10

East Santa Ana Street                2      Ontario, CA                    3,793        1,230         5,190        --             7

Jersey Court                         1      Rancho Cucamonga, CA           2,063          736         2,420        --             8

12th Street                          1      Chino, CA                      2,778          889         3,170        --            11

West Rincon Street                   1      Corona, CA                        --        1,955         6,318        --             2

Tyburn Street                        1      Los Angeles, CA                   --        2,628         3,239        --             0

E. Vista Bella Way                   1      Rancho Dominguez, CA              --        1,183         3,297        --             0

W. Manville Street                   1      Rancho Dominguez, CA              --        1,347         3,187        --             0

Alondra Blvd                         1      La Mirada, CA                     --        2,002         7,712        --             0

Artesia Avenue                       2      Fullerton, CA                     --        1,186         3,208        --             0

Commonwealth Avenue                  1      Fullerton, CA                     --          640         1,333        --             0

East Howell Avenue                   2      Anaheim, CA                       --        1,382         3,242        --             0

Kovacs Lane                          1      Huntington Beach, CA           5,488        1,750         6,243        --             8

Anza Drive                           3      Valencia, CA                      --          588         1,460        --             0

Royal Avenue                         1      Simi Valley, CA                   --          443         1,320        --             2

Union Place                          2      Simi Valley, CA                   --          915         4,032        --             7

North San Fernando Road              6      Los Angeles, CA                   --       11,796        14,622        --             7

Lassen Street                        1      Chatsworth, CA                    --        2,429         4,370        --             2

E. 166th Street                      1      Cerritos, CA                      --          780         1,404        --             0

Shoemaker Avenue                     4      Santa Fe Springs, CA              --        1,339         3,488        --             0

Dornoch Court                        1      San Diego, CA                     --        1,870         9,030        --             1

<CAPTION>
                                    Gross Amount Carried
                                  as of December 31, 1999
                                  ------------------------                                   Date                Depreciable
                                             Buildings and                  Accumulated   Constructed     Date      Lives
Property Name(s)                      Land    Improvements       Total(1)  Depreciation  or Renovated   Acquired  in Years
----------------                      ----    ------------       --------  ------------  ------------   --------  --------
<S>                                 <C>         <C>            <C>             <C>          <C>         <C>       <C>
San Fernando Road                      2,612         7,147          9,759          (315)         1980   04/07/98  10 - 40

Rowland Street                         2,000         6,866          8,866          (212)         1998   09/01/98  10 - 40

Dahlia Street                          2,318         7,604          9,922           (62)         1989   08/27/99  10 - 40

East Easy Street                       4,751         8,251         13,002           (78)         1990   08/27/99  10 - 40

East Dyer Road                         8,160         6,119         14,279          (299)    1954/1965   02/04/98  10 - 40

Parco Street                             658         2,224          2,882           (36)         1999   08/01/99  10 - 40

Industry Circle                        1,802         3,335          5,137          (101)         1966   10/21/98  10 - 40

East Santa Ana Street                  1,230         5,197          6,427          (209)         1990   05/20/98  10 - 40

Jersey Court                             736         2,428          3,164           (85)         1989   09/30/98  10 - 40

12th Street                              889         3,181          4,070          (105)         1990   09/30/98  10 - 40

West Rincon Street                     1,955         6,320          8,275          (205)         1986   09/30/98  10 - 40

Tyburn Street                          2,628         3,239          5,867           (54)         1965   04/22/99  10 - 40

E. Vista Bella Way                     1,183         3,297          4,480           (42)         1973   07/16/99  10 - 40

W. Manville Street                     1,347         3,187          4,534           (41)         1980   07/16/99  10 - 40

Alondra Blvd                           2,002         7,712          9,714           (61)    1969/1975   08/09/99  10 - 40

Artesia Avenue                         1,186         3,208          4,394          (153)         1991   02/04/98  10 - 40

Commonwealth Avenue                      640         1,333          1,973           (64)         1965   02/04/98  10 - 40

East Howell Avenue                     1,382         3,242          4,624          (155)    1968/1991   02/04/98  10 - 40

Kovacs Lane                            1,750         6,251          8,001          (241)         1988   06/17/98  10 - 40

Anza Drive                               588         1,460          2,048           (62)         1990   06/29/98  10 - 40

Royal Avenue                             443         1,322          1,765           (51)         1988   06/29/98  10 - 40

Union Place                              915         4,039          4,954          (158)    1985/1987   06/29/98  10 - 40

North San Fernando Road               11,796        14,629         26,425          (230)    1965-1993   04/22/99  10 - 40

Lassen Street                          2,429         4,372          6,801           (46)         1968   08/30/99  10 - 40

E. 166th Street                          780         1,404          2,184            (7)         1978   10/19/99  10 - 40

Shoemaker Avenue                       1,339         3,488          4,827             0          1989   12/28/99  10 - 40

Dornoch Court                          1,870         9,031         10,901          (423)         1988   02/06/98  10 - 40
</TABLE>


                                       60
<PAGE>

                             CABOT INDUSTRIAL TRUST
       Schedule III - Real Estate and Accumulated Depreciation (continued)
                                December 31, 1999
                          (dollar amounts in thousands)

<TABLE>
<CAPTION>
                                                                                                               Costs Capitalized
                                                                                                                   Subsequent
                                                                                          Initial Cost           to Acquisition
                                                                                     ----------------------   ---------------------
                                Number of                                                     Buildings and           Buildings and
Property Name(s)                Buildings   Location                Encumbrances       Land    Improvements    Land    Improvements
----------------                ---------   --------                ------------       ----    ------------    ----    ------------
<S>                                 <C>     <C>                         <C>          <C>         <C>             <C>         <C>
Newton Drive                         1      Carlsbad, CA                      --        4,416         8,560        --             0

Avenida Encinas                      2      Carlsbad, CA                      --        3,675         9,900        --             0

Airway Road                          2      Otay Mesa, CA                  5,128        1,301         6,460        --             5

Kellogg Avenue                       1      Carlsbad, CA                      --          954         2,008        --             0

Oak Ridge Way                        1      Vista, CA                         --        1,167         2,914        --             0

Goldentop Road                       1      San Diego, CA                     --        2,108         3,341        --             0

Reed Avenue                          2      West Sacramento, CA               --        1,837         5,843        --             0

McLaughlin Avenue                    1      San Jose, CA                      --        2,709         5,381        --             0

Huntwood Avenue                      1      Hayward, CA                       --          880         3,587        --            10

Brisbane Industrial Park            14      Brisbane, CA                      --       10,007        15,220        --           660

Pepes Farm Road                      1      Milford, CT                       --        1,637         6,533        --           139

Landstreet Road,
Building 1                           1      Orlando, FL                       --        1,340        13,221        --            35

Kingspointe Parkway                  1      Orlando, FL                       --          600         2,791        --            55

Orlando Central Park                 6      Orlando, FL                       --        7,083        31,176        --           360

Exchange Drive                       1      Orlando, FL                    2,563          400         3,270        --           128

N.W. 70th Avenue                     1      Miami, FL                         --        3,529         7,671        --             0

Boggy Creek Road                     2      Orlando, FL                       --          649         4,939        --             0

Landstreet Road                      2      Orlando, FL                       --          649         4,817        --             3

Boggy Creek Road,
Building 3                           1      Orlando, FL                       --          345         1,802        56           103

Boggy Creek                          1      Orlando, FL                       --          320         1,705        --             0

Highway 316                          1      Dacula, GA                        --        1,279        10,424        --            13

Westgate Parkway                     1      Fulton County, GA                 --        1,619         4,782        --           232

Atlanta Industrial Drive             1      Atlanta, GA                    2,927        1,032         2,999        --            79

Westpark Drive                       2      Fulton County, GA                 --        1,404         7,065        --            52

Williams Drive                       3      Marietta, GA                   4,583        1,223         6,030        --            20

Cobb International Place             2      Kennesaw, GA                      --          750         4,605        --            10

South Royal Drive                    3      Tucker, GA                        --        1,125         4,426        --            12


<CAPTION>
                                    Gross Amount Carried
                                  as of December 31, 1999
                                  ------------------------                                   Date                Depreciable
                                             Buildings and                  Accumulated   Constructed     Date      Lives
Property Name(s)                      Land    Improvements       Total(1)  Depreciation  or Renovated   Acquired  in Years
----------------                      ----    ------------       --------  ------------  ------------   --------  --------
<S>                                 <C>         <C>            <C>             <C>          <C>         <C>       <C>
Newton Drive                           4,416         8,560         12,976           (61)         1999   09/29/99  10 - 40

Avenida Encinas                        3,675         9,900         13,575          (472)    1972/1993   02/04/98  10 - 40

Airway Road                            1,301         6,465          7,766          (262)         1996   05/08/98  10 - 40

Kellogg Avenue                           954         2,008          2,962           (26)         1991   06/01/99  10 - 40

Oak Ridge Way                          1,167         2,914          4,081           (39)         1999   06/01/99  10 - 40

Goldentop Road                         2,108         3,341          5,449           (26)         1997   09/30/99  10 - 40

Reed Avenue                            1,837         5,843          7,680          (279)         1988   02/04/98  10 - 40

McLaughlin Avenue                      2,709         5,381          8,090           (46)         1975   08/27/99  10 - 40

Huntwood Avenue                          880         3,597          4,477          (176)         1982   02/04/98  10 - 40

Brisbane Industrial Park              10,007        15,880         25,887          (770)    1960-1969   02/04/98  10 - 40

Pepes Farm Road                        1,637         6,672          8,309          (314)         1980   02/04/98  10 - 40

Landstreet Road,
Building 1                             1,340        13,256         14,596          (631)         1997   02/04/98  10 - 40

Kingspointe Parkway                      600         2,846          3,446          (134)         1991   02/04/98  10 - 40

Orlando Central Park                   7,083        31,536         38,619        (1,545)    1983-1991   02/04/98  10 - 40

Exchange Drive                           400         3,398          3,798          (121)         1979   07/30/98  10 - 40

N.W. 70th Avenue                       3,529         7,671         11,200           (55)         1977   08/09/99  10 - 40

Boggy Creek Road                         649         4,939          5,588          (235)    1992/1996   02/13/98  10 - 40

Landstreet Road                          649         4,820          5,469          (223)    1996/1997   02/13/98  10 - 40

Boggy Creek Road,
Building 3                               401         1,905          2,306           (45)         1998   12/31/98  10 - 40

Boggy Creek                              320         1,705          2,025           (35)         1999   03/01/99  10 - 40

Highway 316                            1,279        10,437         11,716          (489)         1989   02/06/98  10 - 40

Westgate Parkway                       1,619         5,014          6,633          (235)         1988   02/04/98  10 - 40

Atlanta Industrial Drive               1,032         3,078          4,110          (119)         1986   09/11/98  10 - 40

Westpark Drive                         1,404         7,117          8,521          (296)         1981   09/08/98  10 - 40

Williams Drive                         1,223         6,050          7,273           (82)         1987   06/29/99  10 - 40

Cobb International Place                 750         4,615          5,365          (206)         1996   03/13/98  10 - 40

South Royal Drive                      1,125         4,438          5,563          (176)    1987-1989   02/27/98  10 - 40
</TABLE>


                                       61
<PAGE>

                             CABOT INDUSTRIAL TRUST
       Schedule III - Real Estate and Accumulated Depreciation (continued)
                                December 31, 1999
                          (dollar amounts in thousands)

<TABLE>
<CAPTION>
                                                                                                               Costs Capitalized
                                                                                                                   Subsequent
                                                                                          Initial Cost           to Acquisition
                                                                                     ----------------------   ---------------------
                                Number of                                                     Buildings and           Buildings and
Property Name(s)                Buildings   Location                Encumbrances       Land    Improvements    Land    Improvements
----------------                ---------   --------                ------------       ----    ------------    ----    ------------
<S>                                 <C>     <C>                         <C>          <C>         <C>             <C>         <C>
Town Park Drive                      2      Kennesaw, GA                   4,341        1,089         4,716        --             3

Highlands Parkway                    1      Smyrna, GA                        --        2,584         7,787        --             0

Ambassador Road                      1      Naperville, IL                    --        1,060         6,725        --             0

Arthur Avenue                        1      Elk Grove, IL                     --          747         5,877        --             0

Harvester Drive                      1      Chicago, IL                       --          763         6,358        --             0

Mark Street                          1      Wood Dale, IL                     --        1,570         7,541        --             0

Remington Street                     1      Bolingbrook, IL                   --          980         7,542        --             0

West 73rd Street                     3      Bedford Park, IL                  --        2,540        20,809        --            29

North Raddant Road                   1      Batavia, IL                       --          931         5,977        --           (43)

Crossroads Parkway                   1      Bolingbrook, IL                   --        2,048         8,839        --             2

South Frontenac                      1      Naperville, IL                    --          890         5,350        --             0

High Grove Lane                      1      Naperville, IL                    --          800         3,156        --             0

Medinah Road                         2      Chicago, IL                       --        2,936        17,471        --             0

Western Avenue                       1      Lisle, IL                         --          700         2,241        --             0

Swenson Avenue                       1      St. Charles, IL                   --          650         2,479        --             0

South 78th Avenue                    1      Hickory Hills, IL                 --          470         2,709        --             0

Greenleaf Avenue                     1      Elk Grove Village, IL             --        1,409         4,960        --             0

Feehanville Drive                    1      Mount Prospect, IL             3,256        1,043         3,819        --             0

Business Center,
Building 1                           1      Mount Prospect, IL             2,460          757         2,867        --             0

Tower Lane                           1      Bensenville, IL                3,280          740         4,040        --             7

Business Center,
Building 2                           1      Mount Prospect, IL                --        1,456         5,250        --            20

Penny Lane                           2      Schaumburg, IL                    --          579         1,629        --             0

Remington Boulevard                  1      Bolingbrook, IL                   --          505         2,053        --             0

Territorial Drive,
Building 2                           1      Bolingbrook, IL                   --          567         2,844        --             0

Northpoint Court                     1      Bolingbrook, IL                   --          289         1,449        --             0

Territorial Drive,
Building 1                           1      Bolingbrook, IL                   --          569         2,605        --             0

Beeline Drive & Meyer
Road                                 1      Bensenville, IL                   --        1,046         2,833        --             0

<CAPTION>
                                    Gross Amount Carried
                                  as of December 31, 1999
                                  ------------------------                                   Date                Depreciable
                                             Buildings and                  Accumulated   Constructed     Date      Lives
Property Name(s)                      Land    Improvements       Total(1)  Depreciation  or Renovated   Acquired  in Years
----------------                      ----    ------------       --------  ------------  ------------   --------  --------
<S>                                 <C>         <C>            <C>             <C>          <C>         <C>       <C>
Town Park Drive                        1,089         4,719          5,808          (192)         1995   03/31/98  10 - 40

Highlands Parkway                      2,584         7,787         10,371             0          1997   11/09/99  10 - 40

Ambassador Road                        1,060         6,725          7,785          (321)         1996   02/04/98  10 - 40

Arthur Avenue                            747         5,877          6,624          (253)         1978   02/04/98  10 - 40

Harvester Drive                          763         6,358          7,121          (304)         1974   02/04/98  10 - 40

Mark Street                            1,570         7,541          9,111          (335)         1985   02/04/98  10 - 40

Remington Street                         980         7,542          8,522          (359)         1996   02/04/98  10 - 40

West 73rd Street                       2,540        20,838         23,378          (956)    1979-1986   02/04/98  10 - 40

North Raddant Road                       931         5,934          6,865          (206)         1991   08/31/98  10 - 40

Crossroads Parkway                     2,048         8,841         10,889           (65)         1995   09/23/99  10 - 40

South Frontenac                          890         5,350          6,240           (27)         1975   10/22/99  10 - 40

High Grove Lane                          800         3,156          3,956          (150)         1994   02/04/98  10 - 40

Medinah Road                           2,936        17,471         20,407          (834)         1986   02/04/98  10 - 40

Western Avenue                           700         2,241          2,941          (107)    1979/1985   02/04/98  10 - 40

Swenson Avenue                           650         2,479          3,129           (80)         1988   09/24/98  10 - 40

South 78th Avenue                        470         2,709          3,179           (27)         1981   08/25/99  10 - 40

Greenleaf Avenue                       1,409         4,960          6,369           (38)    1968/1995   09/30/99  10 - 40

Feehanville Drive                      1,043         3,819          4,862          (169)         1987   03/31/98  10 - 40

Business Center,
Building 1                               757         2,867          3,624          (115)         1985   05/26/98  10 - 40

Tower Lane                               740         4,047          4,787          (156)         1977   07/14/98  10 - 40

Business Center,
Building 2                             1,456         5,270          6,726          (159)         1989   10/16/98  10 - 40

Penny Lane                               579         1,629          2,208           (22)         1988   05/25/99  10 - 40

Remington Boulevard                      505         2,053          2,558           (11)         1996   10/12/99  10 - 40

Territorial Drive,
Building 2                               567         2,844          3,411           (14)         1998   10/12/99  10 - 40

Northpoint Court                         289         1,449          1,738            (7)         1998   10/12/99  10 - 40

Territorial Drive,
Building 1                               569         2,605          3,174           (13)         1998   10/12/99  10 - 40

Beeline Drive & Meyer
Road                                   1,046         2,833          3,879           (11)         1968   11/08/99  10 - 40
</TABLE>


                                       62
<PAGE>

                             CABOT INDUSTRIAL TRUST
       Schedule III - Real Estate and Accumulated Depreciation (continued)
                                December 31, 1999
                          (dollar amounts in thousands)

<TABLE>
<CAPTION>
                                                                                                               Costs Capitalized
                                                                                                                   Subsequent
                                                                                          Initial Cost           to Acquisition
                                                                                     ----------------------   ---------------------
                                Number of                                                     Buildings and           Buildings and
Property Name(s)                Buildings   Location                Encumbrances       Land    Improvements    Land    Improvements
----------------                ---------   --------                ------------       ----    ------------    ----    ------------
<S>                                 <C>     <C>                         <C>          <C>         <C>             <C>         <C>
Kingsland Drive                      1      Batavia, IL                       --          291         1,775        --             0

North State Road #9                  1      Howe, IN                          --          239         6,583        --             0

Rudolph Way                          1      Greendale, IN                     --          210           803        --             0

Holton Drive                         1      Independence, KY                  --        2,100         8,244        --            25

International Way                    1      Hebron, KY                        --          663         4,897        --            72

Empire Drive, Building 3             1      Florence, KY                      --          403         2,563        --             0

Spiral Drive                         2      Florence, KY                      --          317         3,734        --             2

Airport Exchange Drive               1      Erlanger, KY                   3,015          744         3,769        --             1

Foundation Drive                     8      Elsmere, KY                       --        1,407         5,763        --            22

Kentucky Drive                       1      Florence, KY                   2,246          848         4,542        --             1

Power Line Drive                     1      Elsmere, KY                       --           69           267        --             0

Empire Drive                         2      Florence, KY                      --          938         2,786        --             0

Jamike Drive                         7      Erlanger, KY                      --        1,656         6,055        --             8

Turfway Road                         3      Erlanger, KY                   2,607        1,083         3,870        --             0

Kenwood Circle                       1      Franklin, MA                      --          920         5,020        --             2

Progress Road                        2      Billerica, MA                     --        1,147         4,522        --             4

Sunnyslope Avenue                    1      Tewksbury, MA                     --          705         5,535        --             2

South Street                         1      Hopkinton, MA                     --          636         2,015        --             2

John Hancock Road                    1      Taunton, MA                    1,455          257         1,872        --             2

Technology Drive                     1      Auburn, MA                        --          663         1,269        --            17

Oceano Avenue                        1      Jessup, MD                        --        1,629         7,862        --             1

Tar Bay Drive                        1      Jessup, MD                        --        1,415         6,475        --             1

Port Capital Drive                   1      Jessup, MD                     1,066          900         4,106        --            36

Greenwood Place                      1      Savage, MD                        --          533         2,453        --             2

Bollman Place                        1      Savage, MD                        --        1,079         3,916        --             2

Stayton Drive                        1      Jessup, MD                        --        1,149         4,123        --             2

The Crysen Center                    2      Jessup, MD                        --        1,365         5,454        --            27

<CAPTION>
                                    Gross Amount Carried
                                  as of December 31, 1999
                                  ------------------------                                   Date                Depreciable
                                             Buildings and                  Accumulated   Constructed     Date      Lives
Property Name(s)                      Land    Improvements       Total(1)  Depreciation  or Renovated   Acquired  in Years
----------------                      ----    ------------       --------  ------------  ------------   --------  --------
<S>                                 <C>         <C>            <C>             <C>          <C>         <C>       <C>
Kingsland Drive                          291         1,775          2,066            (5)         1990   11/08/99  10 - 40

North State Road #9                      239         6,583          6,822          (316)         1988   02/04/98  10 - 40

Rudolph Way                              210           803          1,013           (18)         1990   03/11/99  10 - 40

Holton Drive                           2,100         8,269         10,369          (394)         1996   02/04/98  10 - 40

International Way                        663         4,969          5,632          (234)         1990   02/04/98  10 - 40

Empire Drive, Building 3                 403         2,563          2,966          (126)         1991   02/04/98  10 - 40

Spiral Drive                             317         3,736          4,053          (160)    1988/1989   03/19/98  10 - 40

Airport Exchange Drive                   744         3,770          4,514          (122)         1997   09/18/98  10 - 40

Foundation Drive                       1,407         5,785          7,192           (96)    1983-1990   03/11/99  10 - 40

Kentucky Drive                           848         4,543          5,391           (86)         1991   03/11/99  10 - 40

Power Line Drive                          69           267            336            (5)         1994   03/11/99  10 - 40

Empire Drive                             938         2,786          3,724           (51)         1990   03/11/99  10 - 40

Jamike Drive                           1,656         6,063          7,719          (126)    1985-1988   03/11/99  10 - 40

Turfway Road                           1,083         3,870          4,953           (73)    1990-1996   03/11/99  10 - 40

Kenwood Circle                           920         5,022          5,942           (74)         1987   05/25/99  10 - 40

Progress Road                          1,147         4,526          5,673           (74)         1988   05/07/99  10 - 40

Sunnyslope Avenue                        705         5,537          6,242           (78)         1987   05/07/99  10 - 40

South Street                             636         2,017          2,653           (33)         1987   05/07/99  10 - 40

John Hancock Road                        257         1,874          2,131           (89)         1986   02/04/98  10 - 40

Technology Drive                         663         1,286          1,949           (61)         1973   02/04/98  10 - 40

Oceano Avenue                          1,629         7,863          9,492          (375)         1987   02/04/98  10 - 40

Tar Bay Drive                          1,415         6,476          7,891          (309)         1990   02/04/98  10 - 40

Port Capital Drive                       900         4,142          5,042          (145)         1974   08/06/98  10 - 40

Greenwood Place                          533         2,455          2,988           (53)         1985   03/11/99  10 - 40

Bollman Place                          1,079         3,918          4,997           (72)         1985   03/11/99  10 - 40

Stayton Drive                          1,149         4,125          5,274           (86)         1985   03/11/99  10 - 40

The Crysen Center                      1,365         5,481          6,846          (252)         1985   02/04/98  10 - 40
</TABLE>


                                       63
<PAGE>

                             CABOT INDUSTRIAL TRUST
       Schedule III - Real Estate and Accumulated Depreciation (continued)
                                December 31, 1999
                          (dollar amounts in thousands)

<TABLE>
<CAPTION>
                                                                                                               Costs Capitalized
                                                                                                                   Subsequent
                                                                                          Initial Cost           to Acquisition
                                                                                     ----------------------   ---------------------
                                Number of                                                     Buildings and           Buildings and
Property Name(s)                Buildings   Location                Encumbrances       Land    Improvements    Land    Improvements
----------------                ---------   --------                ------------       ----    ------------    ----    ------------
<S>                                 <C>     <C>                         <C>          <C>         <C>             <C>         <C>
Guilford Road                        1      Annapolis Junction, MD            --        1,123         4,718        --            20

Bristol Court, Building 1            1      Jessup, MD                        --          785         3,132        --            24

West Nursery Road                    2      Linthicum, MD                  3,348        1,019         6,749        --            41

Fontana Lane                         2      Baltimore, MD                  4,496          915         5,771        --            45

Bristol Court, Building 2            1      Jessup, MD                        --          561         2,194        --             1

Sysco Court                          1      Grand Rapids, MI               1,877          354         1,788        --             0

Woodale Drive                        4      Mounds View, MN               11,797        2,835        17,455        --             4

Trenton Lane                         1      Plymouth, MN                   3,412        1,440         4,497        --             0

Lexington Avenue                     1      Eagan, MN                      3,678        1,207         4,454        --             0

Cahill Road                          1      Edina, MN                      1,248          665         2,000        --             0

Monticello Lane                      1      Maple Grove, MN                  994          278         1,416        --             0

West 82nd Street                     1      Bloomington, MN                   --        1,215         3,340        --             0

Industrial Drive South               1      Gluckstadt, MS                    --          320         5,697        --             0

Reames Road                          1      Charlotte, NC                     --          365         2,922        --            53

Cordage Street                       1      Charlotte, NC                     --          562         2,223        --             1

Old Charlotte Highway                1      Monroe, NC                        --          833         4,196        --             0

Airport Road                         1      Monroe, NC                        --          555         2,793        --             0

Woodpark Blvd                        3      Charlotte, NC                     --          803         4,503        --            26

Commerce Blvd                        1      Charlotte, NC                     --          416         2,181        --             3

N. I-85 Service Road                 1      Charlotte, NC                     --          351         1,998        --             3

Westinghouse Blvd                    4      Charlotte, NC                  2,186        2,606        17,592        --             0

Birch Creek Road                     1      Bridgeport, NJ                    --          862         6,900        --             2

Herrod Boulevard                     1      South Brunswick, NJ               --        2,600        15,289        --             2

Pierce Street                        1      Franklin Township, NJ             --        1,400         6,716        --             3

Colony Road                          2      Jersey City, NJ                   --        2,816        10,266        --            14

Industrial Drive                     3      Port Jersey, NJ                   --        3,024        13,298        --             5

Port Jersey Boulevard                2      Port Jersey, NJ                   --        5,493        18,974        --           162

<CAPTION>
                                    Gross Amount Carried
                                  as of December 31, 1999
                                  ------------------------                                   Date                Depreciable
                                             Buildings and                  Accumulated   Constructed     Date      Lives
Property Name(s)                      Land    Improvements       Total(1)  Depreciation  or Renovated   Acquired  in Years
----------------                      ----    ------------       --------  ------------  ------------   --------  --------
<S>                                 <C>         <C>            <C>             <C>          <C>         <C>       <C>
Guilford Road                          1,123         4,738          5,861          (169)         1989   08/03/98  10 - 40

Bristol Court, Building 1                785         3,156          3,941          (115)         1988   08/03/98  10 - 40

West Nursery Road                      1,019         6,790          7,809          (220)         1989   08/03/98  10 - 40

Fontana Lane                             915         5,816          6,731          (202)         1988   08/03/98  10 - 40

Bristol Court, Building 2                561         2,195          2,756           (30)         1986   06/01/99  10 - 40

Sysco Court                              354         1,788          2,142           (85)         1985   02/04/98  10 - 40

Woodale Drive                          2,835        17,459         20,294          (783)    1989-1992   03/31/98  10 - 40

Trenton Lane                           1,440         4,497          5,937          (100)         1994   03/30/99  10 - 40

Lexington Avenue                       1,207         4,454          5,661           (96)    1979/1994   03/30/99  10 - 40

Cahill Road                              665         2,000          2,665           (47)         1979   03/30/99  10 - 40

Monticello Lane                          278         1,416          1,694           (30)         1986   03/30/99  10 - 40

West 82nd Street                       1,215         3,340          4,555             0          1967   09/10/99  10 - 40

Industrial Drive South                   320         5,697          6,017          (273)         1988   02/04/98  10 - 40

Reames Road                              365         2,975          3,340          (140)         1994   02/04/98  10 - 40

Cordage Street                           562         2,224          2,786           (15)         1981   09/24/99  10 - 40

Old Charlotte Highway                    833         4,196          5,029          (201)    1957/1972   02/04/98  10 - 40

Airport Road                             555         2,793          3,348          (134)    1957/1972   02/04/98  10 - 40

Woodpark Blvd                            803         4,529          5,332           (73)    1985-1987   06/23/99  10 - 40

Commerce Blvd                            416         2,184          2,600           (36)         1988   06/23/99  10 - 40

N. I-85 Service Road                     351         2,001          2,352           (32)         1988   06/23/99  10 - 40

Westinghouse Blvd                      2,606        17,592         20,198          (222)    1988-1994   08/17/99  10 - 40

Birch Creek Road                         862         6,902          7,764          (348)    1991/1997   02/04/98  10 - 40

Herrod Boulevard                       2,600        15,291         17,891          (731)         1989   02/04/98  10 - 40

Pierce Street                          1,400         6,719          8,119          (323)         1984   02/04/98  10 - 40

Colony Road                            2,816        10,280         13,096          (497)    1974/1976   02/04/98  10 - 40

Industrial Drive                       3,024        13,303         16,327          (642)    1972-1976   02/04/98  10 - 40

Port Jersey Boulevard                  5,493        19,136         24,629          (983)    1974/1982   02/04/98  10 - 40
</TABLE>


                                       64
<PAGE>

                             CABOT INDUSTRIAL TRUST
       Schedule III - Real Estate and Accumulated Depreciation (continued)
                                December 31, 1999
                          (dollar amounts in thousands)

<TABLE>
<CAPTION>
                                                                                                               Costs Capitalized
                                                                                                                   Subsequent
                                                                                          Initial Cost           to Acquisition
                                                                                     ----------------------   ---------------------
                                Number of                                                     Buildings and           Buildings and
Property Name(s)                Buildings   Location                Encumbrances       Land    Improvements    Land    Improvements
----------------                ---------   --------                ------------       ----    ------------    ----    ------------
<S>                                 <C>     <C>                         <C>          <C>         <C>             <C>         <C>
South Middlesex Avenue               2      Cranbury, NJ                      --        2,700        12,532        --            22

Memorial Drive                       1      Franklin Township, NJ             --        1,859         4,844        --           115

New England Avenue                   1      Piscataway, NJ                 2,621        1,350         2,423        --            76

Westbelt Drive                       2      Columbus, OH                      --        1,849        12,301        --            43

Dividend Drive                       1      Columbus, OH                      --          449         3,712        --             6

International Street                 1      Columbus, OH                      --          517         2,657        --             1

Port Road                            2      Franklin County, OH               --        1,402        10,085        --           191

Twin Creek Drive                     1      Columbus, OH                      --          702         3,416        --            41

Equity Drive                         2      Columbus, OH                      --        1,854         7,301        --           281

Alum Creek Road                      1      Columbus, OH                      --          331         1,278        --             1

International Road                   2      Cincinnati, OH                    --        2,041         9,833        --             0

Kingsley Drive                       2      Cincinnati, OH                 7,944        2,766         9,519         1            31

Lake Forest Drive                    2      Blue Ash, OH                      --        2,320         9,482        --           196

Kenwood Road                         7      Blue Ash, OH                      --        2,978        11,712        --             0

Creek Road                           1      Blue Ash, OH                      --          902         2,790        --            74

Commerce Boulevard                   1      Loveland, OH                      --          393         1,215        --             0

Brackbill Blvd                       2      Mechanicsburg, PA              6,456        3,722        14,226        --             1

Cumberland Parkway                   1      Harrisburg, PA                    --        1,851        11,317        --            15

Ritter Road                          1      Mechanicsburg, PA              1,368          332         1,934        --             1

Marine Drive                         1      Rock Hill, SC                     --        1,290        12,866        --             0

Pilot Drive                          1      Memphis, TN                       --        1,364         6,231        --           112

DFW Trade Center                     3      Grapevine, TX                     --        5,273        45,755        --           127

Luna Road                            1      Carrollton, TX                    --        1,020         6,097        --             0

Patriot Drive                        2      Coppell, TX                       --        2,264        15,207        --             0

113th Street                         1      Arlington, TX                     --          506         2,055        --             0

Airline Drive                        2      Coppell, TX                       --        1,012         5,999        --             0

North Lake Drive                     1      Coppell, TX                       --        1,165         4,914        --             0

<CAPTION>
                                    Gross Amount Carried
                                  as of December 31, 1999
                                  ------------------------                                   Date                Depreciable
                                             Buildings and                  Accumulated   Constructed     Date      Lives
Property Name(s)                      Land    Improvements       Total(1)  Depreciation  or Renovated   Acquired  in Years
----------------                      ----    ------------       --------  ------------  ------------   --------  --------
<S>                                 <C>         <C>            <C>             <C>          <C>         <C>       <C>
South Middlesex Avenue                 2,700        12,554         15,254          (607)    1982/1989   02/04/98  10 - 40

Memorial Drive                         1,859         4,959          6,818          (247)         1988   02/04/98  10 - 40

New England Avenue                     1,350         2,499          3,849           (99)    1975/1995   06/26/98  10 - 40

Westbelt Drive                         1,849        12,344         14,193          (592)    1979/1980   02/04/98  10 - 40

Dividend Drive                           449         3,718          4,167          (190)         1980   02/04/98  10 - 40

International Street                     517         2,658          3,175          (127)         1988   02/04/98  10 - 40

Port Road                              1,402        10,276         11,678          (493)         1995   02/04/98  10 - 40

Twin Creek Drive                         702         3,457          4,159          (163)         1989   02/04/98  10 - 40

Equity Drive                           1,854         7,582          9,436          (389)         1980   02/04/98  10 - 40

Alum Creek Road                          331         1,279          1,610           (21)         1988   03/11/99  10 - 40

International Road                     2,041         9,833         11,874          (490)         1990   02/04/98  10 - 40

Kingsley Drive                         2,767         9,550         12,317          (378)         1981   06/09/98  10 - 40

Lake Forest Drive                      2,320         9,678         11,998          (489)    1978/1979   02/04/98  10 - 40

Kenwood Road                           2,978        11,712         14,690             0     1963-1973   12/15/99  10 - 40

Creek Road                               902         2,864          3,766          (137)         1983   02/04/98  10 - 40

Commerce Boulevard                       393         1,215          1,608           (21)         1989   03/11/99  10 - 40

Brackbill Blvd                         3,722        14,227         17,949          (706)    1984/1994   02/17/98  10 - 40

Cumberland Parkway                     1,851        11,332         13,183          (531)         1992   02/06/98  10 - 40

Ritter Road                              332         1,935          2,267           (91)         1986   02/04/98  10 - 40

Marine Drive                           1,290        12,866         14,156          (192)         1997   06/30/99  10 - 40

Pilot Drive                            1,364         6,343          7,707          (298)         1987   02/04/98  10 - 40

DFW Trade Center                       5,273        45,882         51,155        (2,110)    1996-1997   02/04/98  10 - 40

Luna Road                              1,020         6,097          7,117          (291)         1996   02/04/98  10 - 40

Patriot Drive                          2,264        15,207         17,471             0          1997   12/28/99  10 - 40

113th Street                             506         2,055          2,561           (98)         1979   02/04/98  10 - 40

Airline Drive                          1,012         5,999          7,011          (286)    1990/1991   02/04/98  10 - 40

North Lake Drive                       1,165         4,914          6,079          (244)         1982   02/04/98  10 - 40
</TABLE>


                                       66
<PAGE>

                             CABOT INDUSTRIAL TRUST
       Schedule III - Real Estate and Accumulated Depreciation (continued)
                                December 31, 1999
                          (dollar amounts in thousands)

<TABLE>
<CAPTION>
                                                                                                               Costs Capitalized
                                                                                                                   Subsequent
                                                                                          Initial Cost           to Acquisition
                                                                                     ----------------------   ---------------------
                                Number of                                                     Buildings and           Buildings and
Property Name(s)                Buildings   Location                Encumbrances       Land    Improvements    Land    Improvements
----------------                ---------   --------                ------------       ----    ------------    ----    ------------
<S>                                 <C>     <C>                         <C>          <C>         <C>             <C>         <C>
10th Street                          2      Plano, TX                      5,543        1,677         6,532        --             1

Diplomat Drive, Building 2           1      Farmers Branch, TX                --          437         2,840        --             0

Hillguard Road                       3      Dallas, TX                        --        1,448         6,011        --             1

East Plano Parkway                   1      Plano, TX                         --        1,163         7,903        --             0

Diplomat Drive, Building 1           1      Farmers Branch, TX                --          110         2,456        --             0

Bradley Lane                         1      Carrollton, TX                    --          262         1,941        --             0

Avenue F                             1      Plano, TX                         --          653         4,161        --             0

Shiloh Road                          1      Plano, TX                         --          594         3,489        --             0

Oakville Industrial Park             6      Alexandria, VA                    --        5,720        13,736         1           393

Nokes Boulevard,
Building 1                           1      Sterling, VA                      --        1,344         4,799        --            25

Nokes Boulevard,
Building 2                           1      Sterling, VA                      --        1,115         4,886        --             0

Guilford Road                        2      Ashburn, VA                    3,736        1,562         5,113        --             0

Beaumeade Circle                     1      Ashburn, VA                    3,071        1,208         4,267        --             0

Kent West Corporate Park II          1      Kent, WA                          --        2,528         9,256        --            58

Kent West Corporate Park I           4      Kent, WA                          --        1,549         5,691        --            26
                                   ---                                  --------     --------    ----------      ----        ------

                                   320                                  $163,866     $296,412    $1,205,116      $207        $6,099
                                   ===                                  ========     ========    ==========      ====        ======

<CAPTION>
                                    Gross Amount Carried
                                  as of December 31, 1999
                                  ------------------------                                   Date                Depreciable
                                             Buildings and                  Accumulated   Constructed     Date      Lives
Property Name(s)                      Land    Improvements       Total(1)  Depreciation  or Renovated   Acquired  in Years
----------------                      ----    ------------       --------  ------------  ------------   --------  --------
<S>                                 <C>         <C>            <C>             <C>          <C>         <C>       <C>
10th Street                            1,677         6,533          8,210          (254)         1997   06/10/98  10 - 40

Diplomat Drive, Building 2               437         2,840          3,277           (68)         1984   01/28/99  10 - 40

Hillguard Road                         1,448         6,012          7,460           (63)         1980   09/30/99  10 - 40

East Plano Parkway                     1,163         7,903          9,066             0          1998   12/09/99  10 - 40

Diplomat Drive, Building 1               110         2,456          2,566          (117)         1997   02/04/98  10 - 40

Bradley Lane                             262         1,941          2,203           (43)         1984   02/25/99  10 - 40

Avenue F                                 653         4,161          4,814           (46)         1984   07/30/99  10 - 40

Shiloh Road                              594         3,489          4,083             0          1998   12/09/99  10 - 40

Oakville Industrial Park               5,721        14,129         19,850          (683)    1940-1955   02/04/98  10 - 40

Nokes Boulevard,
Building 1                             1,344         4,824          6,168          (120)         1998   12/15/98  10 - 40

Nokes Boulevard,
Building 2                             1,115         4,886          6,001           (44)         1999   08/27/99  10 - 40

Guilford Road                          1,562         5,113          6,675           (28)    1987/1988   10/15/99  10 - 40

Beaumeade Circle                       1,208         4,267          5,475           (24)         1990   10/15/99  10 - 40

Kent West Corporate Park II            2,528         9,314         11,842          (444)         1989   02/04/98  10 - 40

Kent West Corporate Park I             1,549         5,717          7,266          (273)         1989   02/04/98  10 - 40
                                 -----------    ----------     ----------      --------

                                 $   296,619    $1,211,215     $1,507,834      $(42,543)
                                 ===========    ==========     ==========      ========
</TABLE>

(1)   The aggregate cost for federal income tax purposes as of December 31,
      1999, was approximately $1,404 million.


                                       66
<PAGE>

                             CABOT INDUSTRIAL TRUST
       Schedule III - Real Estate and Accumulated Depreciation (continued)
                                December 31, 1999

                          Reconciliation of Real Estate

The changes in total investment in real estate assets for the years ended
December 31, 1999 and 1998 are as follows:

<TABLE>
<CAPTION>
                                                  December 31, 1999               December 31, 1998
                                                ----------------------          ----------------------
                                                    (in thousands)                  (in thousands)
<S>                                                 <C>                             <C>
Balance, Beginning of Year                          $   1,072,675                   $          --
Acquisitions                                              443,951                       1,077,863
Improvements                                                5,086                           1,220
Dispositions                                              (13,878)                         (6,408)
                                                    -------------                   -------------
Balance, End of Year                                $   1,507,834                   $   1,072,675
                                                    =============                   =============
</TABLE>

                   Reconciliation of Accumulated Depreciation

The changes in accumulated depreciation for the years ended December 31, 1999
and 1998 are as follows:

<TABLE>
<CAPTION>
                                                  December 31, 1999               December 31, 1998
                                                ----------------------          ----------------------
                                                    (in thousands)                  (in thousands)
<S>                                                 <C>                             <C>
Balance, Beginning of Year                          $      17,290                   $          --
Depreciation Expense                                       25,677                          17,396
Dispositions                                                 (424)                           (106)
                                                    -------------                   -------------
Balance, End of Year                                $      42,543                   $      17,290
                                                    =============                   =============
</TABLE>


                                       67
<PAGE>

                    Report of Independent Public Accountants

To the Partners of
   Cabot Partners Limited Partnership:

We have audited the accompanying balance sheets of Cabot Partners Limited
Partnership as of December 31, 1997 and 1996, and the related statements of
operations, partners' capital and cash flows for the years then ended. These
financial statements are the responsibility of the management of the
Partnership. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Cabot Partners Limited
Partnership as of December 31, 1997 and 1996, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.


Boston, Massachusetts                                        ARTHUR ANDERSEN LLP
March 27, 1998


                                       68
<PAGE>

                       CABOT PARTNERS LIMITED PARTNERSHIP

                                 BALANCE SHEETS
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                    As of December 31,
                                                                    ------------------
                                                                      1997     1996
                                                                     ------   ------
<S>                                                                  <C>      <C>
ASSETS:
Cash and cash equivalents                                            $  509   $1,709
Accounts receivable                                                   2,689    1,637
Accounts receivable from related party                                1,225       --
Investments                                                              39      836
Cost of investment advisory contracts acquired, net of accumulated
amortization of $824 and $2,425, respectively                           780    1,729

OTHER ASSETS                                                             97      164
                                                                     ------   ------

TOTAL ASSETS                                                         $5,339   $6,075
                                                                     ======   ======

LIABILITIES AND PARTNERS' CAPITAL:
Accrued compensation                                                 $  373   $  385
Accounts payable and accrued liabilities                                387      100
                                                                     ------   ------
                                                                        760      485
                                                                     ------   ------

COMMITMENTS (NOTE 4)

PARTNERS' CAPITAL:                                                    4,579    5,590
                                                                     ------   ------

TOTAL LIABILITIES AND PARTNERS' CAPITAL                              $5,339   $6,075
                                                                     ======   ======
</TABLE>

   The accompanying notes are an integral part of these financial statements.


                                       69
<PAGE>

                       CABOT PARTNERS LIMITED PARTNERSHIP

                            STATEMENTS OF OPERATIONS
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                                 For the Years Ended
                                                                ------------------------------------------------------
                                                                   December 31, 1997            December 31, 1996
                                                                -------------------------    -------------------------
<S>                                                                    <C>                          <C>
REVENUES:
     Advisory fees                                                     $    9,010                   $   7,871
     Other income                                                              70                          37
                                                                       -----------                 -----------
                                                                            9,080                       7,908
                                                                       -----------                 -----------

EXPENSES:
     Compensation                                                           4,685                       3,887
     Other general and administrative                                       2,360                       2,001
     Depreciation and amortization                                            977                         419
                                                                       -----------                 -----------
          Total Expenses                                                    8,022                       6,307
                                                                       -----------                 -----------
Income before income (loss) from
   unconsolidated subsidiary                                                1,058                       1,601

Equity in income (loss) from unconsolidated
   subsidiary                                                                  --                          (7)
                                                                       -----------                 -----------

Net income                                                             $    1,058                   $   1,594
                                                                       ===========                 ===========
</TABLE>

   The accompanying notes are an integral part of these financial statements.


                                       70
<PAGE>

                       CABOT PARTNERS LIMITED PARTNERSHIP

                         STATEMENTS OF PARTNERS' CAPITAL
                 For the Years Ended December 31, 1997 and 1996
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                   Limited Partners      Total
                                                       General    ------------------   Partners'
                                                       Partner    Class A    Class B    Capital
                                                       -------    -------    -------    -------
<S>                                                    <C>        <C>        <C>        <C>
Partners' Capital, December 31, 1995                   $    --    $ 5,065    $    --    $ 5,065

     Net income for the year ended December 31, 1996        10      1,194        390      1,594
     Distributions                                          --     (1,069)        --     (1,069)
                                                       -------    -------    -------    -------

Partners' Capital, December 31, 1996                        10      5,190        390      5,590

     Net income for the year ended December 31, 1997        --      1,058         --      1,058
     Distributions                                         (10)    (1,669)      (390)    (2,069)
                                                       -------    -------    -------    -------

Partners' Capital, December 31, 1997                   $    --    $ 4,579    $    --    $ 4,579
                                                       =======    =======    =======    =======
</TABLE>

   The accompanying notes are an integral part of these financial statements.


                                       71
<PAGE>

                       CABOT PARTNERS LIMITED PARTNERSHIP

                            STATEMENTS OF CASH FLOWS
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                                               For the Years Ended
                                                                             ------------------------------------------------------
                                                                                 December 31, 1997           December 31, 1996
                                                                             --------------------------  --------------------------
<S>                                                                                 <C>                        <C>
OPERATING ACTIVITIES:
Net income                                                                          $    1,058                 $     1,594
Adjustments to reconcile net income to net cash provided by
   operating activities:
   Depreciation and amortization                                                           977                         419
   Unrealized equity in loss of investment                                                  --                           7
   (Increase) in accounts receivable                                                    (1,052)                       (695)
   Increase (Decrease) in accrued liabilities                                               37                         (70)

   Decrease in accounts payable                                                             (5)                         (9)
   Decrease in other assets                                                                 47                          37
                                                                                   ------------               -------------
   Net cash provided by operating activities                                             1,062                       1,283
                                                                                   ------------               -------------

INVESTING ACTIVITIES:
   Increase in accounts receivable from related party                                     (984)                         --
   Dividends received                                                                      797                         183

   Purchase of furniture, fixtures and equipment                                            (6)                        (50)
   Additional cost-basis investments                                                        --                         (20)
                                                                                   ------------               -------------
   Net cash provided (used in) by investing activities                                    (193)                        113
                                                                                   ------------               -------------

FINANCING ACTIVITIES:
   Distributions to partners                                                            (2,069)                     (1,069)
                                                                                   ------------               -------------

   Net (decrease) increase in cash and cash equivalents                                 (1,200)                        327
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR                                            1,709                       1,382
                                                                                   ------------               -------------
CASH AND CASH EQUIVALENTS - END OF YEAR                                             $      509                 $     1,709
                                                                                   ============               =============
</TABLE>

   The accompanying notes are an integral part of these financial statements.


                                       72
<PAGE>

                       CABOT PARTNERS LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS
                             (dollars in thousands)

1. ORGANIZATION

Cabot Partners Limited Partnership (the Partnership), a Massachusetts limited
partnership, was formed as of July 11, 1990 to provide a variety of real estate
investment advisory and management services, primarily to a small number of
pension and profit-sharing plans and other institutional investors. Eight
investors represented 70% of fee revenues for 1997 and nine investors
represented 77% of fee revenues for 1996.

The Partnership has two classes of limited partners. The Class A limited
partners contributed cash on a disproportionate basis to their ownership
interest and are entitled to a cumulative guaranteed return on their Adjusted
Capital Contributions, as defined, of 10% through December 31, 1995 and 5%
thereafter, payable only out of available cash. In addition, the Class A limited
partners are entitled to a 5% return of their Adjusted Capital Contributions
prior to distributions of available cash to all the partners in accordance with
their ownership interest. As of December 31, 1997, the cumulative unpaid and
unrecognized return was $2,795.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Income Taxes

No provision for federal and state income taxes has been recorded relating to
the Partnership, as the partners report their respective shares of the net
taxable income on their individual tax returns. The tax basis of assets and
liabilities does not significantly differ from their historical cost basis.

Furniture, Fixtures and Equipment

Furniture and equipment additions are recorded at cost and are depreciated over
an estimated useful life of five years. Fixtures include leasehold improvements
that are recorded at cost and amortized over the shorter of their useful life or
the remaining lease term.

Cost of Investment Advisory Contracts Acquired

The investment advisory contracts acquired are recorded at their fair market
value at the date of acquisition, based on independent appraisals, and are being
amortized over their estimated lives, which range from eight to 16 years.

Allocation of Profits and Losses

Income and losses have been allocated to the partners in accordance with the
provisions of the partnership agreement.

Cash Equivalents

At December 31, 1997, the Partnership had invested excess funds in money market
mutual funds, which have an original maturity of less than three months. For
purposes of the statement of cash flows, this investment has been considered a
cash equivalent.


                                       73
<PAGE>

                       CABOT PARTNERS LIMITED PARTNERSHIP

                    NOTES TO FINANCIAL STATEMENTS (continued)
                             (dollars in thousands)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Pervasiveness of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

Fair Value of Financial Instruments

The carrying amounts reported on the accompanying balance sheets for cash and
cash equivalents, receivables, accounts payable and accrued expenses approximate
fair value, due to the short-term nature of these investments.

3. INVESTMENTS

The Partnership owns a 1% managing general partnership interest in a real estate
operating company, CP Private Partners, L.P.-I (Private Partners), and accounts
for this investment under the equity method. Under this method of accounting,
the Partnership's pro rata share of Private Partners' income (loss) is recorded
each year as an increase (decrease) in the carrying value of its investment and
any distributions received are recorded as decreases in the carrying value.

The condensed unaudited historical cost balance sheets of Private Partners at
December 31, 1997 and 1996 is as follows:

                                                             As of December 31,
                                                           ---------------------
                                                             1997          1996
                                                           -------       -------
Assets
Cash and cash equivalents                                  $   576       $   186
Real estate assets, net                                      3,140        58,776
Other assets                                                   179        18,203
                                                           -------       -------
   Total Assets                                            $ 3,895       $77,165
                                                           =======       =======
Liabilities and Partners' Capital
Accounts payable and accrued liabilities                   $    29       $   453
Partners' Capital
The Partnership                                                 39           767
Other Partners                                               3,827        75,945
                                                           -------       -------
   Total Partners' Capital                                   3,866        76,712
                                                           -------       -------
   Total Liabilities and Partners' Capital                 $ 3,895       $77,165
                                                           =======       =======


                                       74
<PAGE>

                       CABOT PARTNERS LIMITED PARTNERSHIP

                    NOTES TO FINANCIAL STATEMENTS (continued)
                             (dollars in thousands)

3. INVESTMENTS (CONTINUED)

The condensed unaudited historical cost income statements of Private Partners
for the years ended December 31, 1997 and 1996 are as follows:

                                                               Years ended
                                                               December 31,
                                                            1997         1996
                                                            ----         ----

Sale of real estate assets                                $ 60,268     $ 20,817
Rental revenues                                              6,448       11,726
Cost of real estate sold                                   (51,728)     (20,411)
Note receivable reduction                                   (2,078)      (7,688)
Operating expenses                                          (1,213)      (5,163)
Write down of real estate to net realizable value           (4,860)          --
                                                          --------     --------
Net income                                                $  6,837     $   (719)
                                                          ========     ========
Dividends paid                                            $ 79,683     $ 18,292
                                                          ========     ========
The Partnership's share of:
Net income                                                $     68     $     (7)
                                                          ========     ========
Dividends paid                                            $    797     $    183
                                                          ========     ========

Private Partners' remaining real estate is vacant land that is held for sale. As
of December 31, 1997, its carrying cost has been reduced to its estimated net
realizable value.

4. MINIMUM FUTURE LEASE OBLIGATIONS

Minimum future lease obligations under noncancelable operating leases for each
of the next five years ending December 31 and thereafter are as follows:

1998.......................................................... $   298
1999..........................................................     313
2000..........................................................     325
2001..........................................................     310
Thereafter....................................................       -
                                                               -------
                                                               $ 1,246
                                                               =======

The Partnership incurred rental expense of $332 and $304 for the years ended
December 31, 1997 and 1996, respectively. The Partnership's only significant
lease is for its office space. The lease provides for the payment of base rent
and operating expenses and real estate taxes over stated base amounts.


                                       75
<PAGE>

                       CABOT PARTNERS LIMITED PARTNERSHIP

                    NOTES TO FINANCIAL STATEMENTS (continued)
                             (dollars in thousands)

5. RELATED PARTY TRANSACTIONS

Under two separate agreements, the Partnership provides acquisition, asset
management and property management services to a partnership and a company
separately controlled by two Class A limited partners. The agreements are
cancelable by either party with 30 days notice. After a recent amendment, one
agreement provides for annual fixed fees of $158. The other agreement provides
for an acquisition fee of .25% of acquisition cost and an asset management fee
of 5% of net operating income. The Partnership received acquisition fees from
related parties of $345 for the year ended December 31, 1997, and other related
party fees of $287 and $164 for the years ended December 31, 1997 and 1996,
respectively.

As of December 31, 1997, the Partnership had incurred costs related to the
Formation Transactions described below of $1,225, of which $241 is unpaid and
included in accounts payable and accrued expenses. These costs are to be
reimbursed by Cabot Industrial Trust subsequent to the Formation Transactions.

6. SUBSEQUENT EVENTS

Formation Transactions

Under the provisions of an agreement executed by the Partnership and several
other investors, Cabot Partners contributed its Advisory Contracts and certain
of its other net assets to Cabot Industrial Properties, L.P. (Cabot L.P.), a
subsidiary partnership of Cabot Industrial Trust (Cabot Trust) and received
1,819,587 Units from Cabot L.P. The units are convertible into common shares of
Cabot Trust on a one-to-one basis subject to certain limitations. As of February
4, 1998, the common shares had a fair market value of $20 per share. The
remainder of the Partnership's net assets will be distributed to its partners.
The impact of these proposed transactions is not reflected in the accompanying
financial statements.

The cumulative unpaid and unrecognized return discussed in Note 1 was settled
through these distribution of Units received in conjunction with these
transactions.

Sales of Assets Under Management

Under the terms of the investment advisory agreements, investors have the right
to terminate the Partnership as advisor with 30 days notice. In addition, a
significant portion of the Partnership's assets under management may be
transferred to other advisors or sold as a part of the investor's investment
strategy.

During 1997, all the properties of three portfolios have been sold. These
portfolios accounted for advisory and property management fees of $2,985 and
$3,249 for the years ended December 31, 1997 and 1996, respectively.


                                       76
<PAGE>

Item 9. Changes in and Disagreements With Accountants on Accounting and
        Financial Disclosure

None.

                                    PART III

Item 10. Directors and Executive Officers of Registrant

The information required by this Item is incorporated herein by reference to the
portions of the registrant's proxy statement to be filed with the Securities and
Exchange Commission pursuant to Regulation 14A in connection with the
registrant's annual meeting of shareholders to be held on May 10, 2000, (the
"Proxy Statement") captioned "Election of Trustees" and "Principal and
Management Shareholders".

Item 11. Executive Compensation

The information required by this Item is incorporated herein by reference to the
portion of the Proxy Statement captioned "Executive Compensation".

Item 12. Principal and Management Shareholders

The information required by this Item is incorporated herein by reference to the
portion of the Proxy Statement captioned "Principal and Management
Shareholders".

Item 13. Certain Relationships and Related Transactions

The information required by this Item is incorporated herein by reference to the
portion of the Proxy Statement captioned "Certain Transactions".


                                       77
<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

                                            CABOT INDUSTRIAL TRUST

                                            By       /s/  Robert E. Patterson
                                                     ---------------------------
                                            Title:        President
                                                     ---------------------------

                                            Date:    March 23, 2000

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
                                                     Title                                   Date
                                                     -----                                   ----
<S>                                          <C>                                        <C>
/s/Ferdinand Colloredo-Mansfeld              Chairman of the Board and                  March 23, 2000
-----------------------------------          Chief Executive Officer
Ferdinand Colloredo-Mansfeld

/s/Robert E. Patterson                       President and Trustee                      March 23, 2000
-----------------------------------
Robert E. Patterson

/s/Franz Colloredo-Mansfeld                  Senior Vice President and                  March 23, 2000
-----------------------------------          Chief Financial Officer
Franz Colloredo-Mansfeld

/s/Neil E. Waisnor                           Senior Vice President - Finance,           March 23, 2000
-----------------------------------          Treasurer and Secretary
Neil E. Waisnor                              Chief Accounting Officer

/s/George M. Lovejoy, Jr.                    Trustee                                    March 23, 2000
-----------------------------------
George M. Lovejoy, Jr.

/s/Christopher C. Milliken                   Trustee                                    March 23, 2000
-----------------------------------
Christopher C. Milliken

/s/Maurice Segall                            Trustee                                    March 23, 2000
-----------------------------------
Maurice Segall

/s/W. Nicholas Thorndike                     Trustee                                    March 23, 2000
-----------------------------------
W. Nicholas Thorndike

/s/Ronald L. Skates                          Trustee                                    March 23, 2000
-----------------------------------
Ronald L. Skates
</TABLE>


                                       78
<PAGE>

                                     PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a) The following documents are filed as part of this report:

                   INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
                           Included in Item 8 hereof.

                                INDEX TO EXHIBITS

Exhibit
Number            Document Description
------            --------------------

3.1               Amended and Restated Cabot Trust Declaration of Trust, dated
                  January 26, 1998. Incorporated by reference to Exhibit 3.1 to
                  Cabot Trust's Form S-11 Registration Statement (File No.
                  333-38383); the "Form S-11").

3.2               Amended and Restated Bylaws of Cabot Trust. Incorporated by
                  reference to Exhibit 2 to Cabot Trust's Current Report on Form
                  8-K filed on September 16, 1998.

3.3               Second Amended and Restated Agreement of Limited Partnership
                  Agreement of Cabot L.P., dated February 4, 1998. Incorporated
                  by reference to Exhibit 3.5 to the Form S-11.

4.1               Contribution Agreement relating to the Capitalization of Cabot
                  Trust, dated as of October 10, 1997, among Cabot Trust, Cabot
                  L.P., Cabot Partners and Various Contributors and Title
                  Holding Entities Identified Therein. Incorporated by reference
                  to Exhibit 4.1 to the Form S-11.

4.2               Form of Indenture by and among Cabot L.P., Cabot Trust and
                  Bank of New York as trustee. Incorporated by reference to
                  Exhibit 4.11 to Cabot Trust's and Cabot L.P.'s Form S-3
                  Registration Statement (File No. 333-71585).

4.3               Form of Mortgage, Assignment of Leases and Rents, Security
                  Agreement and Fixture Filing Statement of Cabot L.P., as
                  borrower, for the benefit of Teachers Insurance and Annuity
                  Association of America, as lender, used in connection with
                  mortgage loans. Incorporated by reference to Exhibit 4.3 to
                  Cabot Trust's Annual Report on Form 10-K for the year ended
                  December 31, 1998.

4.4               Form of Promissory Note of Cabot L.P., as borrower, in favor
                  of Teachers Insurance and Annuity Association of America, as
                  lender, used in connection with mortgage loans. Incorporated
                  by reference to Exhibit 4.4 to Cabot Trust's Annual Report on
                  Form 10-K for the year ended December 31, 1998.

4.5               First Amendment to Second Amended and Restated Agreement of
                  Limited Partnership of Cabot Industrial Properties, L.P.,
                  dated April 29, 1999.

4.6               Articles Supplementary, 1,300,000 Shares of 8.625% Series B
                  Cumulative Redeemable Preferred Shares, dated April 29, 1999.

4.7               Second Amendment to Second Amended and Restated Agreement of
                  Limited Partnership of Cabot Industrial Properties, L.P.,
                  dated September 3, 1999.

4.8               Articles Supplementary, 2,600,000 Shares of 8.625% Series C
                  Cumulative Redeemable Preferred Shares, dated September 3,
                  1999.


                                       79
<PAGE>

4.9               Third Amendment to Second Amended and Restated Agreement of
                  Limited Partnership of Cabot Industrial Properties, L.P.,
                  dated September 27, 1999.

4.10              Articles Supplementary, 200,000 Shares of 8.375% Series D
                  Cumulative Redeemable Preferred Shares, dated September 27,
                  1999.

4.11              Fourth Amendment to Second Amended and Restated Agreement of
                  Limited Partnership of Cabot Industrial Properties, L.P.,
                  dated December 9, 1999.

4.12              Articles Supplementary, 200,000 Shares of 8.375% Series E
                  Cumulative Redeemable Preferred Shares, dated December 9,
                  1999.

4.13              Fifth Amendment to Second Amended and Restated Agreement of
                  Limited Partnership of Cabot Industrial Properties, L.P.,
                  dated December 22, 1999.

4.14              Articles Supplementary, 1,800,000 Shares of 8.5% Series F
                  Cumulative Redeemable Preferred Shares, dated December 22,
                  1999.

10.1              Form of Indemnification Agreement between Cabot Trust and the
                  Trustees. Incorporated by reference to Exhibit 10.1 to the
                  Form S-11.

10.2              Form of Indemnification Agreement entered into between Cabot
                  Trust and the officers of Cabot Trust. Incorporated by
                  reference to Cabot Trust's Form S-11 Registration Statement
                  (File No. 333-61543).

10.3              Form of Registration Rights and Lock-Up Agreement, dated as of
                  February 4, 1998, between Cabot Trust, the Contributing
                  Investors and various other persons identified therein
                  (included as Exhibit B to Exhibit 4.1).

10.4              Form of Registration Rights and Lock-Up Agreement, between
                  Cabot Trust and Morgan Stanley Asset Management Inc., on
                  behalf of certain of its institutional investors. Incorporated
                  by reference to Exhibit 10.3 to the Form S-11.

10.5              Cabot Trust Long-Term Incentive Plan (as Amended and Restated
                  Effective as of January 26, 1998).

10.6              Amended Employment Agreement between Cabot L.P. and Ferdinand
                  Colloredo-Mansfeld. Incorporated by reference to Exhibit 10.6
                  to Cabot Trust's Annual Report on Form 10-K for the year ended
                  December 31, 1998.

10.7              Amended Employment Agreement between Cabot L.P. and Robert E.
                  Patterson. Incorporated by reference to Exhibit 10.7 to Cabot
                  Trust's Annual Report on Form 10-K for the year ended December
                  31, 1998.

10.8              Amended Employment Agreement between Cabot L.P. and Franz
                  Colloredo-Mansfeld. Incorporated by reference to Exhibit 10.8
                  to Cabot Trust's Annual Report on Form 10-K for the year ended
                  December 31, 1998.

10.9              Amended Employment Agreement between Cabot L.P. and Andrew D.
                  Ebbott. Incorporated by reference to Exhibit 10.9 to Cabot
                  Trust's Annual Report on Form 10-K for the year ended December
                  31, 1998.

10.10             Amended Employment Agreement between Cabot L.P. and Howard B.
                  Hodgson, Jr. Incorporated by reference to Exhibit 10.10 to
                  Cabot Trust's Annual Report on Form 10-K for the year ended
                  December 31, 1998.

10.11             Amended Employment Agreement between Cabot L.P. and Neil
                  E.Waisnor. Incorporated by reference to Exhibit 10.11 to Cabot
                  Trust's Annual Report on Form 10-K for the year ended December
                  31, 1998.

10.12             Amended Employment Agreement between Cabot L.P. and Eugene F.
                  Reilly. Incorporated by reference to Exhibit 10.12 to Cabot
                  Trust's Annual Report on Form 10-K for the year ended December
                  31, 1998.


                                       80
<PAGE>

10.13             Revolving Credit Agreement between Cabot L.P. and Morgan
                  Guaranty Trust Company of New York, dated March 27, 1998.
                  Incorporated by reference to Exhibit 10.9 to Cabot Trust's
                  Annual Report on Form 10-K for the year ended December 31,
                  1997.

10.14             Rights Agreement, dated as of June 11, 1998, as amended,
                  between Cabot Trust and BankBoston, N.A., as Rights Agent,
                  including Exhibit A thereto (Form of Articles Supplementary
                  relating to Series A Junior Participating Preferred Shares)
                  and Exhibit B thereto (Form of Right Certificate).
                  Incorporated by reference to Exhibit 1 to Cabot Trust's
                  Current Report on Form 8-K dated September 10, 1998.

10.15             Cabot Trust 1999 Long-Term Incentive Plan.

23.1              Consent of Arthur Andersen LLP.

27                Financial Data Schedule.

                               REPORTS ON FORM 8-K

No reports on Form 8-K were filed during the fourth quarter of 1999.


                                       81
<PAGE>

                                     PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a) The following documents are filed as part of this report:

                   INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
                           Included in Item 8 hereof.

                                INDEX TO EXHIBITS

Exhibit
Number        Document Description

3.1           Amended and Restated Cabot Trust Declaration of Trust, dated
              January 26, 1998. Incorporated by reference to Exhibit 3.1 to
              Cabot Trust's Form S-11 Registration Statement (File No.
              333-38383); the "Form S-11").

3.2           Amended and Restated Bylaws of Cabot Trust. Incorporated by
              reference to Exhibit 2 to Cabot Trust's Current Report on Form 8-K
              filed on September 16, 1998.

3.3           Second Amended and Restated Agreement of Limited Partnership
              Agreement of Cabot L.P., dated February 4, 1998. Incorporated by
              reference to Exhibit 3.5 to the Form S-11.

4.1           Contribution Agreement relating to the Capitalization of Cabot
              Trust, dated as of October 10, 1997, among Cabot Trust, Cabot
              L.P., Cabot Partners and Various Contributors and Title Holding
              Entities Identified Therein. Incorporated by reference to Exhibit
              4.1 to the Form S-11.

4.2           Form of Indenture by and among Cabot L.P., Cabot Trust and Bank of
              New York as trustee. Incorporated by reference to Exhibit 4.11 to
              Cabot Trust's and Cabot L.P.'s Form S-3 Registration Statement
              (File No. 333-71585).

4.3           Form of Mortgage, Assignment of Leases and Rents, Security
              Agreement and Fixture Filing Statement of Cabot L.P., as borrower,
              for the benefit of Teachers Insurance and Annuity Association of
              America, as lender, used in connection with mortgage loans.
              Incorporated by reference to Exhibit 4.3 to Cabot Trust's Annual
              Report on Form 10-K for the year ended December 31, 1998.

4.4           Form of Promissory Note of Cabot L.P., as borrower, in favor of
              Teachers Insurance and Annuity Association of America, as lender,
              used in connection with mortgage loans. Incorporated by reference
              to Exhibit 4.4 to Cabot Trust's Annual Report on Form 10-K for the
              year ended December 31, 1998.

4.5           First Amendment to Second Amended and Restated Agreement of
              Limited Partnership of Cabot Industrial Properties, L.P., dated
              April 29, 1999.

4.6           Articles Supplementary, 1,300,000 Shares of 8.625% Series B
              Cumulative Redeemable Preferred Shares, dated April 29, 1999.

4.7           Second Amendment to Second Amended and Restated Agreement of
              Limited Partnership of Cabot Industrial Properties, L.P., dated
              September 3, 1999.

4.8           Articles Supplementary, 2,600,000 Shares of 8.625% Series C
              Cumulative Redeemable Preferred Shares, dated September 3, 1999.
<PAGE>

4.9           Third Amendment to Second Amended and Restated Agreement of
              Limited Partnership of Cabot Industrial Properties, L.P., dated
              September 27, 1999.

4.10          Articles Supplementary, 200,000 Shares of 8.375% Series D
              Cumulative Redeemable Preferred Shares, dated September 27, 1999.

4.11          Fourth Amendment to Second Amended and Restated Agreement of
              Limited Partnership of Cabot Industrial Properties, L.P., dated
              December 9, 1999.

4.12          Articles Supplementary, 200,000 Shares of 8.375% Series E
              Cumulative Redeemable Preferred Shares, dated December 9, 1999.

4.13          Fifth Amendment to Second Amended and Restated Agreement of
              Limited Partnership of Cabot Industrial Properties, L.P., dated
              December 22, 1999.

4.14          Articles Supplementary, 1,800,000 Shares of 8.5% Series F
              Cumulative Redeemable Preferred Shares, dated December 22, 1999.

10.1          Form of Indemnification Agreement between Cabot Trust and the
              Trustees. Incorporated by reference to Exhibit 10.1 to the Form
              S-11.

10.2          Form of Indemnification Agreement entered into between Cabot Trust
              and the officers of Cabot Trust. Incorporated by reference to
              Cabot Trust's Form S-11 Registration Statement (File No.
              333-61543).

10.3          Form of Registration Rights and Lock-Up Agreement, dated as of
              February 4, 1998, between Cabot Trust, the Contributing Investors
              and various other persons identified therein (included as Exhibit
              B to Exhibit 4.1).

10.4          Form of Registration Rights and Lock-Up Agreement, between Cabot
              Trust and Morgan Stanley Asset Management Inc., on behalf of
              certain of its institutional investors. Incorporated by reference
              to Exhibit 10.3 to the Form S-11.

10.5          Cabot Trust Long-Term Incentive Plan (as Amended and Restated
              Effective as of January 26, 1998).

10.6          Amended Employment Agreement between Cabot L.P. and Ferdinand
              Colloredo-Mansfeld. Incorporated by reference to Exhibit 10.6 to
              Cabot Trust's Annual Report on Form 10-K for the year ended
              December 31, 1998.

10.7          Amended Employment Agreement between Cabot L.P. and Robert E.
              Patterson. Incorporated by reference to Exhibit 10.7 to Cabot
              Trust's Annual Report on Form 10-K for the year ended December 31,
              1998.

10.8          Amended Employment Agreement between Cabot L.P. and Franz
              Colloredo-Mansfeld. Incorporated by reference to Exhibit 10.8 to
              Cabot Trust's Annual Report on Form 10-K for the year ended
              December 31, 1998.

10.9          Amended Employment Agreement between Cabot L.P. and Andrew D.
              Ebbott. Incorporated by reference to Exhibit 10.9 to Cabot Trust's
              Annual Report on Form 10-K for the year ended December 31, 1998.

10.10         Amended Employment Agreement between Cabot L.P. and Howard B.
              Hodgson, Jr. Incorporated by reference to Exhibit 10.10 to Cabot
              Trust's Annual Report on Form 10-K for the year ended December 31,
              1998.

10.11         Amended Employment Agreement between Cabot L.P. and Neil E.
              Waisnor. Incorporated by reference to Exhibit 10.11 to Cabot
              Trust's Annual Report on Form 10-K for the year ended December 31,
              1998.

10.12         Amended Employment Agreement between Cabot L.P. and Eugene F.
              Reilly. Incorporated by reference to Exhibit 10.12 to Cabot
              Trust's Annual Report on Form 10-K for the year ended December 31,
              1998.
<PAGE>

10.13         Revolving Credit Agreement between Cabot L.P. and Morgan Guaranty
              Trust Company of New York, dated March 27, 1998. Incorporated by
              reference to Exhibit 10.9 to Cabot Trust's Annual Report on Form
              10-K for the year ended December 31, 1997.

10.14         Rights Agreement, dated as of June 11, 1998, as amended, between
              Cabot Trust and BankBoston, N.A., as Rights Agent, including
              Exhibit A thereto (Form of Articles Supplementary relating to
              Series A Junior Participating Preferred Shares) and Exhibit B
              thereto (Form of Right Certificate). Incorporated by reference to
              Exhibit 1 to Cabot Trust's Current Report on Form 8-K dated
              September 10, 1998.

10.15         Cabot Trust 1999 Long-Term Incentive Plan.

23.1          Consent of Arthur Andersen LLP.

27            Financial Data Schedule.

                               REPORTS ON FORM 8-K

No reports on Form 8-K were filed during the fourth quarter of 1999.