<PAGE>
 
                                                                    EXHIBIT 99.1

                            CABOT INDUSTRIAL TRUST

                  PRO FORMA CONDENSED COMBINED BALANCE SHEET

                                  (UNAUDITED)

The pro forma condensed combined balance sheet as of December 31, 1997 has been
prepared to reflect (i) the contribution to the Company of (A) the properties
that were managed by Cabot Partners as of December 31, 1997 that were
contributed to the Company in the Formation Transactions (referred to herein as
the "Existing Investment Property Group") and (B) the properties that were not
managed by Cabot Partners as of December 31, 1997 that were contributed to the
Company in the Formation Transactions, (referred to herein as the "New
Investors Property Group"), (ii) the other Formation Transactions (iii) the
properties acquired by the Company during the six months ended June 30, 1998,
(iv) the use of a portion of the net proceeds of the Offerings to repay
indebtedness and (v) certain other adjustments, as if each of such
contributions, transactions and adjustments had occurred on December 31, 1997.

In the opinion of management, the pro forma condensed combined financial
statements include all adjustments necessary to reflect the effects of the
foregoing transactions and adjustments. The pro forma balance sheet is unaudited
and is not necessarily indicative of what the Company's financial position would
have been or the combined results of the Company's operations that would have
been obtained if the transactions and adjustments reflected therein had been
consummated on the dates indicated, or on any particular date in the future, nor
do they purport to represent the financial position, results of operations or
changes in cash flows of the Company as of any future date or for any future
period.

<PAGE>
 
                             CABOT INDUSTRIAL TRUST

                   PRO FORMA CONDENSED COMBINED BALANCE SHEET

                            AS OF DECEMBER 31, 1997
                                  (UNAUDITED)
                             (DOLLARS IN THOUSANDS)
                                        

<TABLE>
<CAPTION>
                                              EXISTING           NEW                          PRE-OFFERINGS  
                                             ---------           ---                          -------------   
                        CABOT                INVESTORS     INVESTORS               OTHER   CABOT INDUSTRIAL   
                        -----                ---------     ---------               -----   ----------------  
                   INDUSTRIAL       CABOT     PROPERTY      PROPERTY           FORMATION              TRUST             COMPANY 
                   ----------       -----     --------     ---------           ---------              -----             -------
                        TRUST    PARTNERS        GROUP      GROUP(A)        TRANSACTIONS          PRO-FORMA      ACQUISITIONS(H)
                        -----    --------       ------      --------        ------------          ---------      ---------------  
<S>                <C>           <C>         <C>           <C>              <C>            <C>                   <C>              
ASSETS                                                                                                             
Properties, net        $   --     $    --      $377,613     $244,405        $  35,725(B)           $657,743           $ 261,063     

Cash and cash                                                                                                                       

 equivalents                1         509         2,742        1,617           (4,868)(E)                 1            (154,755)    

Rents and other                                                                                                                     

    receivables            --       2,144         1,766          400           (4,310)(E)                --                  --     

Advisory fees                                                                                                                       

    receivables            --         545            --           --             (545)(F)                --                  --     

Restricted cash            --          --            27           --               --                    27                  --     

Deferred rent                                                                                                                       

    receivable             --          --         4,444        3,892           (8,336)(C)                --                  --     

Lease acquisition                                                                                                                   

    costs, net             --          --         6,459        3,552               --                10,011                  --     

Other assets            3,480         916           217          731           (1,787)(D)(E)          3,557                  __     

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

 Total Assets          $3,481     $ 4,114      $393,268     $254,597        $  15,879              $671,339           $ 106,308     

                       ======     =======      ========     ========        =========              ========           =========     

                                                                                                                                    

LIABILITIES AND                                                                                                                     

    SHAREHOLDERS'                                                                                                                   

    EQUITY                                                                                                                          

Mortgage debt          $   --     $    --      $ 18,433     $     --               --              $ 18,433           $ 104,041     

Due to related          1,225      (1,225)       27,476           --          (26,251)(G)(E)          1,225                  --     

    parties                                                                                                                         

Accounts payable                                                                                                                    

    and accrued                                                                                                                     

    liabilities         2,255         760         4,168        1,141            2,644(B)(E)          10,968                  --

Advisory fees                                                                                                                       

    payable                --          --           545        2,099           (2,644)(E)(F)             --                  --     

Other liabilities          --          --         1,046        1,305           (2,324)(E)                27                  --     

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

 Total                                                                                                                              

  Liabilities      
                        3,480        (465)       51,668        4,545          (28,575)               30,653             104,041     

                       ------     -------      --------     --------        ---------              --------           ---------  
                                                                                                                              
Limited Partners                                                                                                              
    interest in                                                                                                               
    Operating                                                                                                                 
    Partnership            --          --            --           --          471,095(B)            471,095               2,267
                                                                                                                              
Owners' equity             --       4,579       341,600      250,052         (596,231)                   --                  --   
Common stock               --          --            --           --               90(B)                 90                  --     
 
Paid in capital             1          --            --           --          169,500(B)            169,501                  --     

                       ------     -------      --------     --------        ---------              --------           --------- 
                                                                                                                              
 Total                                                                                                                        
    Shareholders'  
    Equity                                                                                                                    
                            1       4,579       341,600      250,052         (426,641)              169,591                  --     

                       ------     -------      --------     --------        ---------              --------           --------- 
                                                                                                                              
 Total                                                                                                                        
  Liabilities      
  and                                                                                                                         
    Shareholders'                                                                                                             
    Equity             $3,481     $ 4,114      $393,268     $254,597        $  15,879              $671,339           $ 106,308     

                       ======     =======      ========     ========        =========              ========           ========= 

<CAPTION> 
                                                CABOT  
                                                -----
                      THE OFFERINGS        INDUSTRIAL
                      -------------        ----------
                          PRO FORMA             TRUST  
                 ------------------             ----- 
                 ADJUSTMENTS (I)(J)         PRO-FORMA
                 ------------------         ---------
<S>              <C>                        <C>                 
ASSETS                
Properties, net            $     --         $918,806
Cash and cash                                       
 equivalents                154,755                1
Rents and other                                     
    receivables                  --               --
Advisory fees                                       
    receivables                  --               --
Restricted cash                  --               27
Deferred rent                                       
    receivable                   --               --
Lease acquisition                                   
    costs, net                   --           10,011
Other assets                 (3,480)              77
                           --------         --------
                                                    
 Total Assets                                       
                           $151,275         $928,922
                           ========         ======== 
LIABILITIES AND                                     
    SHAREHOLDERS'                                   
    EQUITY                                          
Mortgage debt                                       
Due to related                                      
    parties                $(13,193)        $109,281
Accounts payable             
    and accrued                                     
    liabilities              (1,225)              --                        
Advisory fees              
    payable                 (10,968)             ---                           
Other liabilities                --               -- 
                                 --               27
                           --------         --------

 Total
  Liabilities               (25,386)         109,308 
                           --------          -------                                                    

Limited Partners           
    interest in                                     
    Operating                                       
    Partnership              (3,723)         469,639(K)
                                                    
Owners' equity                   --               --
Common stock                     96              186  
Paid in capital             180,288          349,789 
                           --------          -------                                                    
 Total                  
    Shareholders'          
    Equity                  180,384          349,975                                                                            
                           --------          -------                                                                            
                           
 Total                                                                                                                          
  Liabilities          
  and                    
    Shareholders'                                                                                                               
    Equity                 $151,275         $928,922                                                                             
                           ========         ========       
</TABLE> 

<PAGE>
 
                            CABOT INDUSTRIAL TRUST 
                                                                           
               NOTES TO PRO FORMA CONDENSED COMBINED BALANCE SHEET       
                                                                    
                            AS OF DECEMBER 31, 1997     
                                  (UNAUDITED)   
                  (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA) 
                                                                           
New Investors Property Group                                               
                                                                           
(A)   The New Investors Property Group is the combination of the financial  
      information for the following contributing investors:                  

      Orlando Central Park and 500 Memorial Drive                            
      Knickerbocker Properties, Inc. II                                      
      Pennsylvania Public School Employes' Retirement System Industrial      
      Properties Portfolio                                                   
      Prudential Properties Group                                            
      West Coast Industrial, LLC
      The 4 B's

Other Formation Transactions

(B)   To record the allocation of cost of real estate properties acquired in
      excess of the properties' historical net book value based on the
      Common Shares and Units issued in connection with the Formation
      Transactions (excluding Units issued to the sponsor, Cabot Partners,
      which are recorded at Cabot Partners' carryover basis), as follows:

<TABLE>
<S>                                                                                   <C>
      Issuance of 32,030,413 Common Shares and Units         
      at $20.00 per Common Share/Unit to the
      contributing investors for equity interests
      in real estate                                                                    $ 640,608
Plus: Mortgage debt assumed                                                                18,433
Plus: Other Acquisition costs and liabilities assumed                                       8,713
Less: Historical net book value of properties and other acquired assets                  (632,029)
                                                                                        
                                                                                        ---------
                                                                                        
Cost of assets acquired in excess of historical book value                              $  35,725
                                                                                        =========
</TABLE>

(C)   To eliminate $8,336 deferred rent receivable which arose from the
      historical straight-lining of rents.

(D)   To write off $780 of intangible assets of Cabot Partners related to
      advisory contracts of Cabot Partners terminated at the time of the
      Formation Transactions and to eliminate $119 of unamortized deferred loan
      costs related to mortgage debt repaid with net proceeds of the Offerings.

(E)   To reflect the distribution of substantially all of the net non-real
      estate assets to the contributing investors as a result of the Formation
      Transactions.

(F)   To eliminate fees receivable (payable) between Cabot Partners and the
      Existing Investors Property Group arising from advisory contracts of Cabot
      Partners which were terminated as a part of the Formation Transactions.

<PAGE>
 
                            CABOT INDUSTRIAL TRUST

      NOTES TO PRO FORMA CONDENSED COMBINED BALANCE SHEET ---(CONTINUED)

                            AS OF DECEMBER 31, 1997
                                  (UNAUDITED)
                   (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

(G)   To reflect the conversion to equity of $27,476 due by certain of the
      contributing investors to certain affiliated entities. 

Acquisitions during the six months ended June 30, 1998

(H)   To reflect the acquisition of the following properties, and the related
      issuance of debt and Units, and assumption of liabilities, during the six
      months ended June 30, 1998:

<TABLE> 
<CAPTION> 
                            NUMBER OF                                                     SQUARE                 ESTIMATED 
PROPERTY LOCATION           BUILDINGS               BUILDING TYPE                          FEET                     COST       
-----------------           ----------              ---------------------------        -----------               --------- 
<S>                         <C>                    <C>                                 <C>                        <C>
Grapevine, TX                  2/1                 Bulk Distribution/Workspace         1,182,361                   $51,734
Mira Loma, CA,                                                                                                             
 Dacula, GA,                                                                                                              
 Mechanicsburg,PA               3                  Bulk Distribution                     916,603                    34,520
Mechanicsburg, PA               2                  Bulk Distribution                     494,400                    17,118
San Diego, CA                   1                  Bulk Distribution                     220,000                    10,898
Orlando, FL                     4                  Workspace                             213,430                    11,053
Tucker, GA                      3                  Workspace                             134,163                     5,575
Atlanta, GA                     2                  Workspace                             128,000                     5,363
Florence, KY                    2                  Workspace                              61,555                     4,054
Tempe, AZ                       1                  Workspace                              81,817                     3,319
Phoenix, AZ                     1                  Multitenant Distribution              144,592                     4,016
Tolleson, AZ                    1                  Bulk Distribution                     278,142                     6,815
Mounds View, MN                1/3                 Multitenant Distribution/Workspace    320,328                    20,242
Mt. Prospect, IL                1                  Workspace                              57,150                     4,872
Kennesaw, GA                    2                  Workspace                             121,384                     5,802
Sun Valley, CA                  1                  Bulk Distribution                     181,670                     9,770
Otay Mesa, CA                   2                  Workspace                             123,136                     7,752
Ontario, CA                     2                  Multitenant Distribution              161,180                     6,310
Mt. Prospect, IL                1                  Workspace                              43,250                     3,617
Cincinnati, OH                  2                  Bulk Distribution                     403,406                    12,320
Plano, TX                       2                  Multitenant Distribution              206,939                     8,393
Huntington Beach, CA            1                  Workspace                             125,000                     7,960
Piscataway, NJ                  1                  Workspace                             101,553                     4,081
Phoenix, AZ                     1                  Multitenant Distribution               89,423                     6,744
Simi Valley, CA                 6                  Workspace                             112,271                     8,735
                               ---                                                      --------                  --------         
                                                                                                                           
                                49                 Total Acquisitions                  5,901,753                  $261,063 
                               ===                                                     =========                  ======== 
</TABLE> 

<PAGE>
 

                            CABOT INDUSTRIAL TRUST

      NOTES TO PRO FORMA CONDENSED COMBINED BALANCE SHEET ---(CONTINUED)
                            AS OF DECEMBER 31, 1997
                                  (UNAUDITED)
                   (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

 
The Offerings

(I)   To reflect the net proceeds derived from (i) the offering of 8,625,000
      Common Shares at a price of $20.00 per share ($172,500), (ii) the
      concurrent private placement of 1,000,000 Common Shares at a price of
      $20.00 per share ($20,000), reduced by (iii) $24,552 of estimated fees and
      expenses associated with the Formation Transactions and the Offerings.

(J)   To reflect the repayment of three mortgage loans totaling $13,193, each
      with a fixed interest rate of 8.375%, due February 1, 1998 with a portion
      of the net proceeds of the Offerings. The total debt to be paid with the
      proceeds of the Offerings is based on the principal outstanding at
      December 31, 1997. The actual amounts repaid differed to the extent of
      amortization of the principal occurring prior to the actual date of
      repayment.

(K)   The following table sets forth the calculation of the minority interest
      (Limited Partners Interest in Operating Partnership) in the Company:


          Total equity in the Operating Partnership                 $819,614
          Minority interest ownership percentage                       57.30%
          Limited partners interest in the Operating partnership    $469,639