<PAGE>
--------------------------------------------------------------------------------
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                                  FORM 10-K/A
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

[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 1-12861

                            CORNERSTONE PROPERTIES INC.

               (Exact name of Registrant as specified in its Charter)

<TABLE>
<S>                                           <C>
                   NEVADA                                      74-2170858
      (State or other jurisdiction of
      incorporation and organization)              (IRS Employer Identification No.)
</TABLE>

                                126 EAST 56TH STREET
                                 NEW YORK, NEW YORK
                      (Address of principal executive offices)

                                       10022
                                     (Zip Code)

                                   (212) 605-7100
                (Registrant's telephone number, including area code)

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

<TABLE>
<S>                                              <C>
TITLE OF EACH CLASS:                             NAME OF EACH EXCHANGE ON WHICH REGISTERED:
-------------------------------------            --------------------------------------------

Common Stock, no par value                       New York Stock Exchange
                                                 Dusseldorf Stock Exchange
                                                 Frankfurt Stock Exchange
</TABLE>

    Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X   No _

    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 the registrant's knowledge in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendments to
this Form 10-K.   [  ]

                                EXPLANATORY NOTE

    Pursuant to Rule 12b-5 under the Securities Exchange Act of 1934, as
amended, Cornerstone Properties Inc. (the "Company") hereby amends the Company's
Annual Report on Form 10-K as filed with the Securities and Exchange Commission
on March 27, 2000, to add the financial statement schedule required by Item 14
of Form 10-K.

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
                                    PART III

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

    See the Financial Statements included as a part hereof.

                                    PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

    The following documents are filed as part of this annual report:

    (A) FINANCIAL STATEMENTS:

<TABLE>
<CAPTION>
                                                              PAGE NUMBER
                                                              ------------
<S>                                                           <C>
(i) The Company:                                                       F-1

  The following financial statements and report of
    independent accountants are filed herewith at the pages
    indicated:
  Report of Independent Accountants.........................           F-2
  Consolidated Balance Sheets at December 31, 1999 and
    1998....................................................           F-3
  Consolidated Statements of Income for the years ended
    December 31, 1999, 1998 and 1997........................           F-4
  Consolidated Statements of Comprehensive Income for the
    years ended December 31, 1999, 1998 and 1997............           F-5
  Consolidated Statements of Stockholders' Equity for the
    years ended December 31, 1999, 1998 and 1997............           F-6
  Consolidated Statements of Cash Flows for the years ended
    December 31, 1999, 1998 and 1997........................           F-7
  Notes to Consolidated Financial Statements................   F-8 to F-30
  Schedule III..............................................  F-31 to F-34
</TABLE>

    (B) REPORTS ON FORM 8-K:

           NONE.

    (C) EXHIBITS:

<TABLE>
<CAPTION>
       EXHIBIT
         NO.                                    DESCRIPTION
---------------------   ------------------------------------------------------------
<S>                     <C>
 2.1                    Agreement and Plan of Merger among Equity Office Properties
                        Trust, EOP Operating Limited Partnership, Cornerstone
                        Properties Inc. and Cornerstone Properties Limited
                        Partnership dated February 11, 2000 incorporated by
                        reference to Exhibit 2.1 of the Company's Current Report on
                        Form 8-K dated February 16, 2000.

 3.1(a)                 Restated Articles of Incorporation of Cornerstone Properties
                        Inc., as of March 12, 1996, incorporated by reference to
                        Exhibit 3.1 of the Company's Annual Report on Form 10-K for
                        the year ended December 31, 1996.

 3.1(b)                 Certificate of Amendment of Restated Articles of
                        Incorporation of the Company, dated October 27, 1997,
                        incorporated by reference to Exhibit 4.2(b) of the Company's
                        Registration Statement on Form S-3 filed March 2, 1998
                        (Registration Statement No. 333-47149).

 3.2                    Amended and Restated Bylaws of Cornerstone Properties Inc.,
                        incorporated by reference to Exhibit 3.1 of the Company's
                        Current Report on Form 8-K dated December 16, 1998.
</TABLE>

                                       2
<PAGE>

<TABLE>
<CAPTION>
       EXHIBIT
         NO.                                    DESCRIPTION
---------------------   ------------------------------------------------------------
<S>                     <C>
 4.1                    Specimen Common Stock Certificate, incorporated by reference
                        to Exhibit 4.1 of the Company's Registration Statement on
                        Form S-3 filed March 2, 1998 (Registration Statement No.
                        333-47149).

 4.2                    Certificate of Voting Powers, Designations, Preferences,
                        Limitations, Restrictions and Relative Rights of 7%
                        Cumulative Convertible Preferred Stock of the Company,
                        incorporated by reference to Exhibit 10.57 of the Company's
                        Annual Report on Form 10-K for the year ended December 31,
                        1995.

10.1                    Convertible Promissory Note dated January 1, 1996 made by
                        Cornerstone Properties Inc., with Hines Colorado Limited in
                        the amount of $12,925,976.48, incorporated by reference to
                        Exhibit 10.63 of the Company's Annual Report on Form 10-K
                        for the year ended December 31, 1996.

10.2                    Agreement of Limited Partnership of Cornerstone Properties
                        Limited Partnership dated as of December 23, 1997,
                        incorporated by reference to Exhibit 10.118 of the Company's
                        Annual Report on Form 10-K for the year ended December 31,
                        1997.

10.3                    First Amendment to Agreement of Limited Partnership of
                        Cornerstone Properties Limited Partnership, incorporated by
                        reference to Exhibit 10.6 of the Company's Annual Report on
                        Form 10-K for the year ended December 31, 1998.

10.4                    Second Amendment to Agreement of Limited Partnership of
                        Cornerstone Properties Limited Partnership, incorporated by
                        reference to Exhibit 10.7 of the Company's Annual Report on
                        Form 10-K for the year ended December 31, 1998.

10.5                    Third Amendment to Agreement of Limited Partnership of
                        Cornerstone Properties Limited Partnership, incorporated by
                        reference to Exhibit 10.8 of the Company's Annual Report on
                        Form 10-K for the year ended December 31, 1998.

10.6                    Fourth Amendment to Agreement of Limited Partnership of
                        Cornerstone Properties Limited Partnership, incorporated by
                        reference to Exhibit 10.9 of the Company's Annual Report on
                        Form 10-K for the year ended December 31, 1998.

10.7*                   Fifth Amendment to Agreement of Limited Partnership of
                        Cornerstone Properties Limited Partnership.

10.8                    Stock Option Agreement, dated February 11, 2000, by and
                        among Cornerstone Properties Inc., Equity Office Properties
                        Trust, Deutsche Bank AG and Deutscher Herold
                        Lebensversicherungs-AG, incorporated by reference to
                        Exhibit 10.1 to the Company's Current Report on Form 8-K
                        dated February 16, 2000.

10.9                    Employment Agreement dated December 16, 1998 between
                        Cornerstone Properties Inc. and Cornerstone Properties
                        Limited Partnership and William Wilson III, incorporated by
                        reference to Exhibit 10.10 of the Company's Annual Report on
                        Form 10-K for the year ended December 31, 1998.

10.10                   Employment Agreement dated December 16, 1998 between
                        Cornerstone Properties Inc. and Cornerstone Properties
                        Limited Partnership and John S. Moody, incorporated by
                        reference to Exhibit 10.11 of the Company's Annual Report on
                        Form 10-K for the year ended December 31, 1998.

10.11                   Amended and Restated Cornerstone Properties Inc. 1998
                        Long-Term Incentive Plan, incorporated by reference to
                        Annex D of the Company's definitive Proxy Statement on
                        Schedule 14A dated November 13, 1998.

10.12                   Form of Retention Agreement for executive officers of the
                        Company, incorporated by reference to Exhibit 10.13 to the
                        Company's Annual Report on Form 10-K for the year ended
                        December 31, 1998.
</TABLE>

                                       3
<PAGE>

<TABLE>
<CAPTION>
       EXHIBIT
         NO.                                    DESCRIPTION
---------------------   ------------------------------------------------------------
<S>                     <C>
10.13                   Second Amended and Restated Revolving Credit and Guaranty
                        Agreement dated November 3, 1998 among Cornerstone
                        Properties Inc. and Cornerstone Properties Limited
                        Partnership (the "Borrowers"), the subsidiaries of the
                        Borrowers (the "Guarantors"), the Lenders, Bankers Trust
                        Company and The Chase Manhattan Bank and NationsBank, N.A.,
                        incorporated by reference to Exhibit 99.2 of the Company's
                        Current Report on Form 8-K dated December 1, 1998.

10.14*                  First Amendment to Second Amended and Restated Revolving
                        Credit and Guaranty Agreement dated November 3, 1998 among
                        Cornerstone Properties Inc. and Cornerstone Properties
                        Limited Partnership (the "Borrowers"), the subsidiaries of
                        the Borrowers (the "Guarantors"), the Lenders, Bankers Trust
                        Company and The Chase Manhattan Bank and NationsBank, N.A.

10.15                   Amended and Restated Registration Rights and Voting
                        Agreement dated as of December 16, 1998 among PGGM, DIHC
                        and Cornerstone Properties Inc. incorporated by reference to
                        the Company's Annual Report on Form 10-K for the year ended
                        December 31, 1998.

10.16                   Registration Rights and Lockup Agreement dated as of
                        December 16, 1998 by and among Cornerstone Properties Inc.
                        and the investors listed therein, incorporated by reference
                        to Annex B of the Company's definitive Proxy Statement on
                        Schedule 14A dated November 13, 1998.

10.17                   Voting Agreement, dated February 11, 2000, by and among
                        Equity Office Properties Trust, EOP Operating Limited
                        Partnership, WCP Services, Inc. and Stichting Pensioenfonds
                        voor de Gezondheid, Gaestelijke en Meatschappelljke
                        Belangen, incorporated by reference to Exhibit 10.2 to the
                        Company's Current Report on Form 8-K dated February 16,
                        2000.

12.1*                   Statement of Computation of Earnings to Fixed Charges and
                        Preferred Stock Dividend Requirements.

21*                     List of Subsidiaries.

23+                     Consent of PricewaterhouseCoopers LLP.

27*                     For EDGAR filing purposes only, this report contains Exhibit
                        27, Financial Data Schedule.
</TABLE>

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

*   Previously filed.

+   Filed herewith.

    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.

<TABLE>
<S>                                                    <C>  <C>
                                                       CORNERSTONE PROPERTIES INC.
                                                       (Registrant)

                                                            /s/ JOHN S. MOODY
                                                            -----------------------------------------
DATED: April 25, 2000                                       John S. Moody, PRESIDENT & CEO
</TABLE>

                                       4
<PAGE>
    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>
<C>                                                    <S>
     -------------------------------------------       Chairman of the Board and Director
                 William Wilson III

                  /s/ JOHN S. MOODY                    Chief Executive Officer, President and
     -------------------------------------------         Director
                    John S. Moody                        (Principal Executive Officer)

                /s/ RODNEY C. DIMOCK
     -------------------------------------------       Executive Vice President and Director
                  Rodney C. Dimock

                /s/ KEVIN P. MAHONEY                   Senior Vice President and Chief Financial
     -------------------------------------------         Officer (Principal Financial and Accounting
                  Kevin P. Mahoney                       Officer)

                 /s/ CECIL D. CONLEE
     -------------------------------------------       Director
                   Cecil D. Conlee

                   /s/ BLAKE EAGLE
     -------------------------------------------       Director
                     Blake Eagle

             /s/ DR. KARL-LUDWIG HERMANN
     -------------------------------------------       Director
               Dr. Karl-Ludwig Hermann

                 /s/ HANS C. MAUTNER
     -------------------------------------------       Director
                   Hans C. Mautner

     -------------------------------------------       Director
                 Dr. Lutz Mellinger

     -------------------------------------------       Director
                 Craig R. Stapleton

               /s/ MICHAEL J.G. TOPHAM
     -------------------------------------------       Director
                 Michael J.G. Topham
</TABLE>

                                       5
<PAGE>
<TABLE>
<C>                                                    <S>
     -------------------------------------------       Director
                  Dick van den Bos

     -------------------------------------------       Director
                  Jan van der Vlist

     -------------------------------------------       Director
                  Donald G. Fisher

                 /s/ RANDALL A. HACK
     -------------------------------------------       Director
                   Randall A. Hack
</TABLE>

DATED: April 25, 2000

                                       6
<PAGE>
                          CORNERSTONE PROPERTIES INC.
                                AND SUBSIDIARIES
                       CONSOLIDATED FINANCIAL STATEMENTS
                         AS OF DECEMBER 31, 1999, 1998
                            AND FOR THE YEARS ENDED
                        DECEMBER 31, 1999, 1998 AND 1997

                                      F-1
<PAGE>
                       REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders of
Cornerstone Properties Inc.

    In our opinion, the consolidated financial statements listed in the index
appearing under Item 14(a)(i) of this Form 10-K/A present fairly, in all
material respects, the financial position of Cornerstone Properties Inc. and
subsidiaries ("Cornerstone") at December 31, 1999 and 1998, and the results of
their operations and their cash flows for each of the three years in the period
ended December 31, 1999, in conformity with accounting principles generally
accepted in the United States. In addition, in our opinion, the financial
statement schedule listed in the index appearing under Item 14(a)(i) of this
Form 10-K/A presents fairly, in all material respects, the information set forth
therein when read in conjunction with the related consolidated financial
statements. These financial statements and financial statement schedule are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements and financial statement schedule based on
our audits. We conducted our audits of these statements in accordance with
auditing standards generally accepted in the United States, which 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, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for the opinion expressed above.

    As discussed in Note 1 of the consolidated financial statements, on
February 11, 2000, Cornerstone announced a definitive plan of merger with Equity
Office Properties Trust.

/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
New York, New York
March 3, 2000

                                      F-2
<PAGE>
                  CORNERSTONE PROPERTIES INC. AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS

                           DECEMBER 31, 1999 AND 1998

                         (DOLLAR AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                 1999         1998
                                                              ----------   ----------
<S>                                                           <C>          <C>
ASSETS
Developments in progress:
  Land......................................................  $   46,132   $   10,437
  Development costs.........................................      17,000        2,519
Rental Property, at cost:
  Land......................................................     646,852      702,840
  Buildings, leasehold interests and improvements...........   3,084,466    3,403,152
  Deferred lease costs......................................     157,015      143,188
                                                              ----------   ----------
                                                               3,951,465    4,262,136
  Less: Accumulated depreciation and amortization...........     290,998      286,664
                                                              ----------   ----------
      Total Development and Rental Property.................   3,660,467    3,975,472

Assets held for sale........................................      62,185       77,568
Cash and cash equivalents...................................      19,679       61,869
Restricted cash.............................................     222,043        9,114
Investment in joint ventures................................      31,725       31,500
Other deferred costs, net of accumulated amortization of
  $7,092 and $999...........................................      42,655       47,807
Deferred tenant receivables.................................      77,243       53,489
Tenant and other receivables, net...........................      14,725       10,326
Other assets................................................      39,506       14,839
                                                              ----------   ----------
TOTAL ASSETS................................................  $4,170,228   $4,281,984
                                                              ==========   ==========
LIABILITIES

Long-term debt, inclusive of $16,149 and $25,031 of
  unamortized premium.......................................  $1,448,331   $1,532,474
Credit facility.............................................     329,000      465,000
Accrued interest............................................      10,961       10,933
Accrued real estate taxes...................................      16,457       16,395
Accounts payable and accrued expenses.......................      45,006       51,454
Distributions payable.......................................          --       38,163
Unearned revenue and other liabilities......................      40,881       23,890
                                                              ----------   ----------
TOTAL LIABILITIES...........................................   1,890,636    2,138,309
                                                              ==========   ==========

MINORITY INTEREST
Minority interest in operating partnership..................     284,566      283,388
Minority interest in joint ventures.........................      22,532       23,420
                                                              ----------   ----------
TOTAL MINORITY INTEREST.....................................     307,098      306,808
                                                              ==========   ==========

Commitments and contingencies

Redeemable preferred stock; 344,828 shares authorized; 0
  shares issued and outstanding.............................          --           --

STOCKHOLDERS' EQUITY
7% Cumulative convertible preferred stock, $16.50 stated
  value; 65,000,000 shares authorized; 3,030,303 shares
  issued and outstanding....................................      50,000       50,000
Common stock, no par value; 250,000,000 shares authorized;
  129,610,536 shares issued and 129,252,303 shares
  outstanding...............................................          --           --
Paid-in capital.............................................   1,808,943    1,788,567
Retained earnings...........................................     111,150           --
Accumulated other comprehensive income......................       9,424           --
Deferred compensation.......................................      (2,012)      (1,700)
                                                              ----------   ----------
                                                               1,977,505    1,836,867
Treasury stock, 358,233 shares, at cost.....................      (5,011)          --
                                                              ----------   ----------
TOTAL STOCKHOLDERS' EQUITY..................................   1,972,494    1,836,867
                                                              ----------   ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY..................  $4,170,228   $4,281,984
                                                              ==========   ==========
</TABLE>

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

                                      F-3
<PAGE>
                  CORNERSTONE PROPERTIES INC. AND SUBSIDIARIES

                       CONSOLIDATED STATEMENTS OF INCOME

              FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

            (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                                1999       1998       1997
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
REVENUES
  Office and parking rentals................................  $607,409   $338,515   $159,828
  Earnings in joint ventures................................       898     11,420         --
  Interest and other income.................................     9,141      9,551     14,083
                                                              --------   --------   --------
    TOTAL REVENUES..........................................   617,448    359,486    173,911
                                                              --------   --------   --------

EXPENSES
  Building operating expenses...............................   132,630     75,663     35,962
  Real estate taxes.........................................    71,554     46,760     25,560
  Interest expense..........................................   137,759     67,533     33,977
  Depreciation and amortization.............................    96,726     59,278     30,978
  General and administrative................................    27,006     12,939      7,564
                                                              --------   --------   --------
    TOTAL EXPENSES..........................................   465,675    262,173    134,041
                                                              --------   --------   --------
                                                               151,773     97,313     39,870
                                                              --------   --------   --------
OTHER INCOME (EXPENSES)
  Gain (loss) on sale of real estate assets.................   131,034     (2,076)        --
  Net gain on interest rate swaps...........................        --         --         99
                                                              --------   --------   --------
    TOTAL OTHER INCOME (EXPENSES)...........................   131,034     (2,076)        99
                                                              --------   --------   --------

MINORITY INTEREST
  Minority interest in operating partnership................   (34,982)    (2,850)        --
  Minority interest in joint ventures.......................    (5,755)    (4,619)    (2,368)
                                                              --------   --------   --------
    TOTAL MINORITY INTEREST.................................   (40,737)    (7,469)    (2,368)
                                                              --------   --------   --------
Income before cumulative effect of a change in accounting
  principle and extraordinary loss..........................   242,070     87,768     37,601

Cumulative effect of a change in accounting principle.......      (630)        --         --
Extraordinary loss..........................................   (10,787)    (4,303)       (54)
                                                              --------   --------   --------
NET INCOME..................................................  $230,653   $ 83,465   $ 37,547
                                                              ========   ========   ========

INCOME APPLICABLE TO PREFERRED STOCK........................  $ (3,500)  $ (3,500)  $(10,160)
                                                              --------   --------   --------

INCOME APPLICABLE TO COMMON STOCK...........................  $227,153   $ 79,965   $ 27,387
                                                              ========   ========   ========
INCOME BEFORE CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING
  PRINCIPLE AND EXTRAORDINARY LOSS PER COMMON SHARE.........  $   1.85   $   0.84   $   0.63
                                                              ========   ========   ========
CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLE AND
  EXTRAORDINARY LOSS PER COMMON SHARE.......................  $  (0.09)  $  (0.04)  $     --
                                                              ========   ========   ========

BASIC INCOME PER COMMON SHARE...............................  $   1.76   $   0.80   $   0.63
                                                              ========   ========   ========

DILUTED INCOME PER COMMON SHARE.............................  $   1.74   $   0.80   $   0.63
                                                              ========   ========   ========
</TABLE>

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

                                      F-4
<PAGE>
                  CORNERSTONE PROPERTIES INC. AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

              FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

                         (DOLLAR AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                1999       1998       1997
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
Net income..................................................  $230,653   $83,465    $37,547
                                                              ========   =======    =======
OTHER COMPREHENSIVE INCOME:
  Unrealized gain on investments............................     3,911        --         --
  Unrealized gain on interest rate swaps during the
    period..................................................     5,513        --         --
                                                              --------   -------    -------
  Other comprehensive income................................     9,424        --         --
                                                              --------   -------    -------

COMPREHENSIVE INCOME........................................  $240,077   $83,465    $37,547
                                                              ========   =======    =======
</TABLE>

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

                                      F-5
<PAGE>
                  CORNERSTONE PROPERTIES INC. AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

              FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

            (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
                                      COMMON STOCK            PREFERRED STOCK                    ACCUMULATED
                                ------------------------   ----------------------   RETAINED        OTHER
                                OUTSTANDING    PAID-IN     OUTSTANDING   PAID-IN    EARNINGS    COMPREHENSIVE    TREASURY
                                  SHARES       CAPITAL       SHARES      CAPITAL    (DEFICIT)       INCOME        STOCK
                                -----------   ----------   -----------   --------   ---------   --------------   --------
<S>                             <C>           <C>          <C>           <C>        <C>         <C>              <C>
BALANCE, JANUARY 1, 1997......  20,609,754    $  160,577    3,030,303    $50,000    $(30,789)           --            --

Common stock proceeds, net of
  $17,204 in stock issuance
  costs.......................  16,100,000       208,196           --         --          --            --            --
Preferred stock conversion....  11,482,760       162,515           --         --          --            --            --
Dividend reinvestment, net of
  $296 in stock issuance
  costs.......................     696,013        10,808           --         --          --            --            --
PGGM stock....................  34,185,500       547,000           --         --          --            --            --
Restricted stock grants.......     107,292         1,761           --         --          --            --            --
Restricted stock grant
  vesting.....................          --            --           --         --          --            --            --
Net income....................          --            --           --         --      37,547            --            --
Option exercise...............      10,500           150           --         --          --            --            --
Preferred stock
  distributions...............          --        (3,402)          --         --      (6,758)           --            --
Common stock distributions
  ($1.04/shr).................          --       (39,418)          --         --          --            --            --
                                -----------   ----------    ---------    -------    --------        ------       -------
BALANCE, DECEMBER 31, 1997....  83,191,819    $1,048,187    3,030,303    $50,000    $     --        $   --       $    --

Common stock proceeds, net of
  $14,463 in stock issuance
  costs.......................  25,969,203       447,881           --         --          --            --            --
Dividend reinvestment, net of
  $410 in stock issuance
  costs.......................     397,404         6,294           --         --          --            --            --
Tower 56 residual purchase....     307,692         5,500           --         --          --            --            --
Restricted stock grants.......      31,678           577           --         --          --            --            --
Restricted stock grant
  vesting.....................          --            --           --         --          --            --            --
Net income....................          --            --           --         --      83,465            --            --
Minority adjustment...........          --        49,219           --         --          --            --            --
Preferred stock
  distributions...............          --            --           --         --      (3,500)           --            --
Common stock distributions
  ($1.50/shr).................          --       (70,963)          --         --     (79,965)           --            --
One Memorial acquisition......   3,428,571        60,000           --         --          --            --            --
Wilson Acquisition............  14,884,417       241,872           --         --          --            --            --
                                -----------   ----------    ---------    -------    --------        ------       -------
BALANCE, DECEMBER 31, 1998....  128,210,784   $1,788,567    3,030,303    $50,000    $     --        $   --       $    --

Stock issuance costs..........          --          (378)          --         --          --            --            --
Restricted stock grants.......          --         1,760           --         --          --            --            --
Restricted stock grant
  vesting.....................          --            --           --         --          --            --            --
Net income....................          --            --           --         --     230,653            --            --
Minority adjustment...........          --         1,464           --         --          --            --            --
Unrealized gain on
  investments.................          --            --           --         --          --         3,911            --
Unrealized gain on swaps......          --            --           --         --          --         5,513            --
DRIP..........................     147,577         2,318           --         --          --            --            --
Options exercised.............     127,000         1,827           --         --          --            --            --
Unitholder redemption.........   1,125,175        13,385           --         --          --            --            --
Treasury stock................    (358,233)           --           --         --          --            --        (5,011)
Preferred stock
  distributions...............          --            --           --         --      (3,500)           --            --
Common stock distributions
  ($0.90/shr).................          --            --           --         --    (116,003)           --            --
                                -----------   ----------    ---------    -------    --------        ------       -------
BALANCE, DECEMBER 31, 1999....  129,252,303   $1,808,943    3,030,303    $50,000    $111,150        $9,424       $(5,011)
                                ===========   ==========    =========    =======    ========        ======       =======

<CAPTION>

                                  DEFERRED
                                COMPENSATION      TOTAL
                                -------------   ----------
<S>                             <C>             <C>
BALANCE, JANUARY 1, 1997......     $(1,248)     $  178,540
Common stock proceeds, net of
  $17,204 in stock issuance
  costs.......................          --         208,196
Preferred stock conversion....          --         162,515
Dividend reinvestment, net of
  $296 in stock issuance
  costs.......................          --          10,808
PGGM stock....................          --         547,000
Restricted stock grants.......      (1,868)           (107)
Restricted stock grant
  vesting.....................         928             928
Net income....................          --          37,547
Option exercise...............          --             150
Preferred stock
  distributions...............          --         (10,160)
Common stock distributions
  ($1.04/shr).................          --         (39,418)
                                   -------      ----------
BALANCE, DECEMBER 31, 1997....     $(2,188)     $1,095,999
Common stock proceeds, net of
  $14,463 in stock issuance
  costs.......................          --         447,881
Dividend reinvestment, net of
  $410 in stock issuance
  costs.......................          --           6,294
Tower 56 residual purchase....          --           5,500
Restricted stock grants.......        (577)             --
Restricted stock grant
  vesting.....................       1,065           1,065
Net income....................          --          83,465
Minority adjustment...........          --          49,219
Preferred stock
  distributions...............          --          (3,500)
Common stock distributions
  ($1.50/shr).................          --        (150,928)
One Memorial acquisition......          --          60,000
Wilson Acquisition............          --         241,872
                                   -------      ----------
BALANCE, DECEMBER 31, 1998....     $(1,700)     $1,836,867
Stock issuance costs..........          --            (378)
Restricted stock grants.......      (1,760)             --
Restricted stock grant
  vesting.....................       1,448           1,448
Net income....................          --         230,653
Minority adjustment...........          --           1,464
Unrealized gain on
  investments.................          --           3,911
Unrealized gain on swaps......          --           5,513
DRIP..........................          --           2,318
Options exercised.............          --           1,827
Unitholder redemption.........          --          13,385
Treasury stock................          --          (5,011)
Preferred stock
  distributions...............          --          (3,500)
Common stock distributions
  ($0.90/shr).................          --        (116,003)
                                   -------      ----------
BALANCE, DECEMBER 31, 1999....     $(2,012)     $1,972,494
                                   =======      ==========
</TABLE>

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

                                      F-6
<PAGE>
                  CORNERSTONE PROPERTIES INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

              FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

                         (DOLLAR AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                1999        1998        1997
                                                              ---------   ---------   ---------
<S>                                                           <C>         <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income................................................  $ 230,653   $  83,465   $  37,547
  Adjustments to reconcile net income to net cash provided
    by operating activities:
    Depreciation and amortization...........................     90,790      58,980      31,826
    Deferred compensation amortization......................      1,312       1,065         928
    Net change in real estate joint ventures................       (225)      5,670          --
    Cumulative effect of a change in accounting principle...        630          --          --
    Net gain on interest rate swap..........................         --          --         (99)
    Extraordinary loss......................................     10,787       4,303          54
    Unbilled rental revenue.................................    (25,858)    (13,712)     (3,015)
    Increase in accrued interest............................         27       6,799       3,052
    Minority interest share of income.......................     40,737       7,469       2,368
    (Gain) loss on sale of real estate assets...............   (131,034)      2,076          --
    Increase in tenant and other receivables and other
      assets................................................    (15,745)     (6,833)    (16,920)
    Increase in accounts payable, accrued expenses and other
      liabilities...........................................     21,431      33,515      10,181
                                                              ---------   ---------   ---------
    Total adjustments.......................................     (7,148)     99,332      28,375
                                                              ---------   ---------   ---------
    Net cash provided by operating activities...............    223,505     182,797      65,922
                                                              ---------   ---------   ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Additions to investment property..........................    (79,359)   (797,181)   (464,096)
  Repayment of notes receivable.............................        134       1,518       1,259
  Other investments.........................................     (5,000)    (41,893)
  Investments in real estate joint ventures.................         --     (31,391)         --
  Proceeds from sale of real estate assets net of amounts in
    escrow..................................................    136,713      45,865          --
                                                              ---------   ---------   ---------
    Net cash provided by (used in) investing activities.....     52,488    (823,082)   (462,837)
                                                              ---------   ---------   ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from common stock offering.......................         --     462,344     225,400
  Purchase of treasury shares...............................     (4,889)         --          --
  Borrowings under mortgage loans...........................    455,000      92,377          --
  Borrowings under credit facility..........................    130,000     567,500     187,000
  Repayments under credit facility..........................   (266,000)   (289,500)         --
  Repayment of term loan....................................         --          --     (32,500)
  Repayments under mortgage loans...........................   (432,958)     (3,426)     (1,094)
  Proceeds from dividend reinvestment plan..................      2,318       6,704      11,104
  Debt prepayment costs.....................................    (14,898)     (1,762)       (216)
  (Increase) decrease in restricted cash....................     (2,542)     (7,211)      2,524
  Stock and debt issuance costs.............................     (2,758)    (20,813)    (20,715)
  Options exercised.........................................      1,827          --          --
  Unitholder redemptions....................................     (1,169)         --
  Distributions to minority partners........................    (28,086)    (12,524)     (2,717)
  Distributions to preferred stockholders...................     (3,500)     (3,500)    (10,160)
  Distributions to common stockholders......................   (150,528)   (112,765)    (51,784)
                                                              ---------   ---------   ---------
    Net cash (used in) provided by financing activities.....   (318,183)    677,424     306,842
                                                              ---------   ---------   ---------
  (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS..........    (42,190)     37,139     (90,073)
  CASH AND CASH EQUIVALENTS, beginning of year..............     61,869      24,730     114,803
                                                              ---------   ---------   ---------
  CASH AND CASH EQUIVALENTS, end of year....................  $  19,679   $  61,869   $  24,730
                                                              =========   =========   =========
</TABLE>

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

                                      F-7
<PAGE>
                  CORNERSTONE PROPERTIES INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 1999, 1998 AND 1997

1. NATURE OF COMPANY'S BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

NATURE OF THE COMPANY'S BUSINESS

    Cornerstone Properties Inc. (together with its subsidiaries, "Cornerstone"
or the "Company") is a self-administered equity real estate investment trust
("REIT") which owns, through subsidiaries, interests in 83 Class A office
buildings comprising approximately 17 million rentable square feet, a shopping
center, a hotel and developable land (collectively, the "Properties," and each
interest, a "Property"). The Properties are primarily located in nine major
metropolitan areas throughout the United States: Atlanta, Boston, suburban
Chicago, Minneapolis, New York City, San Francisco Bay Area, Seattle, Southern
California and Washington, D.C. and surrounding suburbs. The Company's strategy
is to own and develop Class A office properties in prime Central Business
District locations and major suburban office markets in U.S. metropolitan areas.
Class A office properties are generally considered to be those that have the
most favorable locations and physical attributes, command premium rents and
experience the highest tenant retention rates within their markets. The Company
also provides property management, leasing, development and tenant improvement
services to third parties on a fee basis through WCP Services, Inc., a taxable
corporate subsidiary in which the Company owns 95% of the equity, but only 1% of
the voting common stock. In January 1998, Cornerstone converted its corporate
structure into an umbrella limited partnership REIT ("UPREIT"). Under the UPREIT
structure, Cornerstone owns all of its properties and conducts all of its
business through Cornerstone Properties Limited Partnership, a Delaware limited
partnership (the "Operating Partnership"), of which the Company is the sole
general partner. As of December 31, 1999, Cornerstone owned approximately 87.1%
of the common units of partnership interest ("UPREIT Units") in the Operating
Partnership.

    On February 11, 2000, the Company announced that it had entered into an
agreement and plan of merger with Equity Office Properties Trust ("EOP") (the
"EOP Merger"). The merger agreement provides for a merger of Cornerstone with
and into EOP and a merger of the Operating Partnership with and into EOP
Operating Limited Partnership. In the mergers, holders of common stock of
Cornerstone and holders of Units in the Operating Partnership shall be entitled
to elect to receive, for each share or unit, as the case may be, either 0.7009
of a share of beneficial interest of EOP (or, in the case of the Cornerstone
Units, 0.7009 of a Class A Unit of EOP Operating Limited Partnership), or $18.00
per share (or per Unit, as the case may be) in cash, subject to pro ration as
provided in the merger agreement. Each share of 7% Cumulative Convertible
Preferred Stock, liquidation preference $16.50 per share, of Cornerstone shall
be converted into the right to receive $18.00, plus accrued and unpaid
dividends, in cash. For U.S. federal income tax purposes, the merger is expected
to be tax-free to Cornerstone stockholders who are U.S. persons and who receive
EOP shares in the merger, except that any such stockholder who receives cash in
addition to EOP shares generally will recognize gain (but not loss) in an amount
equal to the amount of cash received in the merger, or, if less, the excess of
the fair market value of the EOP shares and cash received in the merger over the
stockholder's basis in the Cornerstone common stock exchanged in the merger. The
merger is also expected in most cases to be tax-free to Cornerstone stockholders
who are non-U.S. persons, although certain non-U.S. stockholders may be subject
to U.S. tax under the provisions of the Foreign Investment in Real Property Tax
Act. The mergers are subject to customary closing conditions, including the
approval of the merger by the shareholders of EOP and the stockholders of
Cornerstone and the approval of the partnership merger, to the extent necessary,
by the partners of EOP Operating Limited Partnership and the Operating
Partnership.

                                      F-8
<PAGE>
PRINCIPLES OF CONSOLIDATION

    The accompanying financial statements include the accounts of Cornerstone,
its wholly-owned qualified REIT subsidiary, the Operating Partnership and
controlled partnerships. The Company has consolidated the following partnerships
because it has a majority interest in the economic benefits and is or has the
right to become the managing general partner at its sole discretion: the
Operating Partnership; NWC Limited Partnership ("NWC"); Third and University
Limited Partnership ("Third Partnership"); Two Twenty Two Berkeley Venture ("222
Berkeley"); Five Hundred Boylston West Venture ("500 Boylston"); One Ninety One
Peachtree Associates ("191 Peachtree"); 191 Finance Associates, L.P. ("191
Finance"); Avenue Associates Limited Partnership ("Market Square"); and 120
Montgomery Associates, LLC ("120 Montgomery"). The Company's investments in the
One Post Property and WCP Services, Inc. are accounted for as equity investments
(see Note 4). All significant intercompany balances and transactions have been
eliminated in consolidation.

INVESTMENT PROPERTY

    The costs of the buildings, garages, leasehold interests and improvements
are being depreciated using the straight-line method over their estimated useful
lives, ranging from 20 years for electrical and mechanical installations to
40 years for structural components. Tenant improvements are being amortized over
the terms of the related leases.

    Investment properties are carried at cost less accumulated depreciation.
Whenever events or changes in circumstances indicate that the carrying value of
an asset may not be recoverable (such as a significant adverse action by a
regulator, a significant physical change in the property or significant changes
in market conditions), the Company's policy is to assess any impairment in value
by making a comparison of the current and projected cash flows of each property
over its remaining useful life (undiscounted and without interest charges) to
the carrying amount of each property. Such carrying amount would be adjusted, if
necessary, to estimated fair value to reflect the impairment in value of the
property. No significant adjustments have been made in the accompanying
financial statements.

    Costs directly related to the acquisition and development of rental
properties are capitalized. Capitalized development costs include interest,
property taxes, insurance and other project costs incurred during the period of
construction. Ordinary repairs and maintenance are expensed as incurred; major
replacements and betterments, which improve or extend the life of the asset, are
capitalized and depreciated over their estimated useful lives.

ASSETS HELD FOR SALE

    Included in Assets Held for Sale at December 31, 1999 are four properties,
which are expected to be sold by the Company within the next year. The
Properties are valued at approximately $62.2 million, the lower of the carrying
amount or the fair value less estimated costs to sell. For the year ended
December 31, 1999, the fair value less estimated costs to sell exceeds the
carrying amount for each of these properties and therefore, the Company has not
recorded a write down on these assets. The Company discontinues the recognition
of depreciation on the assets when the property is considered held for sale.

CASH AND CASH EQUIVALENTS

    For purposes of reporting cash flows, cash and cash equivalents include
investments with original maturities of three months or less from the date of
purchase. At December 31, 1999 and 1998, Cornerstone had on deposit with major
financial institutions substantially all of its cash and cash equivalents which
balances at times exceed federally insurable limits. Cornerstone believes it
mitigates its risk by investing in or through major financial institutions.
Recoverability of investments is dependent upon the performance of the issuer.

                                      F-9
<PAGE>
DEFERRED LEASE COSTS

    As an inducement to execute a lease, incentives are sometimes offered which
may include cash and/or other allowances. These incentives and other lease
costs, such as commissions, which are directly related to specific leases, are
deferred and amortized over the terms of the related leases.

OTHER DEFERRED COSTS

    Costs incurred in the underwriting and issuance of long-term debt and
revolving lines of credit are being amortized over the term of the debt. As part
of the acquisition of the DIHC Portfolio (see Note 2), the Company purchased
several management contracts to which Stichting Pensioenfonds Voor de Gezondheid
Geestelijke en Maatschappelijke Belangen ("PGGM") was a party. The price paid
for these contracts is being amortized over four years. Included in Other
Deferred Costs is the purchase price for the intangible management and
development company assets that were acquired as part of the Wilson Acquisition
which are being amortized over a term of ten years (see Note 2).

OTHER ASSETS

    The Company records costs incurred for potential investments as Other
Assets. Upon consummation of an investment, the Company capitalizes all such
costs as an adjustment to the purchase price and depreciates these costs over
the useful life of the asset. All such costs are expensed at the time it is
determined that a potential investment will not be consummated. In addition, the
Company adopted EITF 97-11 and in accordance therewith, the Company expenses all
internal acquisition costs.

    Included in Other Assets is the Company's $1.5 million equity investment in
Allied Riser Communications Corp. ("ARCC") and its $3.5 million equity
investment in Cypress Communications, Inc. ("CYCO"). ARCC and CYCO are providers
of voice, video and data telecommunications services. As part of the terms of
the agreements with both ARCC and CYCO, the Company received warrants for shares
of common stock by providing ARCC and CYCO access to certain of the Company's
buildings. As such, the value of the warrants received from ARCC and CYCO of
$5.1 million and $2.1 million, respectively, is included in Other Assets. Per
the applicable requirements of Statement of Financial Accounting Standards
No. 115 "Accounting for Certain Investments in Debt and Equity Securities"
("SFAS 115"), the Company recorded an unrealized gain on its total investment in
ARCC as of December 31, 1999 of $3.9 million. A corresponding adjustment was
posted to a separate component of stockholder's equity through Other
Comprehensive Income. As of December 31, 1999, CYCO was not publicly traded and
did not fall within in the scope of SFAS 115.

MINORITY INTEREST

    Minority interest in the Operating Partnership relates to the interest in
the Operating Partnership that the Company does not own, which as of
December 31, 1999 amounted to 12.9%. The Company allocates income to the
minority interest in the Operating Partnership based on the weighted-average
percentage ownership in the Operating Partnership through the year. Persons who
contributed assets to the Operating Partnership received UPREIT Units, shares of
Cornerstone's common stock (the "Common Stock"), cash or a combination thereof.
At the request of a unitholder, the Company will be obligated to redeem each
UPREIT Unit held by such unitholder for one share of Common Stock or, at the
option of the Company, cash equal to the fair market value of one share of
Common Stock at the time of redemption. Such redemptions will cause the
Company's percentage ownership in the Operating Partnership to increase. As of
December 31, 1999, the number of issued and outstanding UPREIT Units held by
unitholders other than the Company was 19,131,785 and as of such date, 1,125,175
UPREIT Units have been redeemed for shares of Common Stock on a one-for-one
basis and 76,647 UPREIT Units have been redeemed for cash.

    Minority interest in real estate joint ventures represents the minority
partner's or venturer's capital account balances in NWC, Third Partnership, 222
Berkeley, 500 Boylston, 191 Peachtree, 191 Finance, Market Square and 120
Montgomery. Debit balances in certain of these capital accounts originated

                                      F-10
<PAGE>
through special cash distributions in excess of the partner's share of income in
accordance with certain provisions of the respective partnership and joint
venture agreements. Realizability of the debit balances is continually monitored
by calculating pro forma sales proceeds under the respective agreements.

TREASURY STOCK

    As of December 31, 1999, the Company reacquired 358,233 shares of Common
Stock, which was accounted for using the cost method. Of these shares, 347,400
shares were acquired under the Repurchase Program (see Note 8).

REVENUE RECOGNITION

    Rental revenue is recognized ratably as earned over the terms of the leases.
Deferred tenant receivables result from rental revenues which have been earned
but will be received in future periods as a result of rent concessions provided
to tenants and scheduled future rent increases. Deferred tenant receivables were
approximately $77,243,000 and $53,489,000 at December 31, 1999 and 1998,
respectively. Expense reimbursement and escalation income for the years ended
December 31, 1999, 1998 and 1997 was approximately $101,595,000, $77,821,000 and
$36,990,000, respectively.

    An allowance for doubtful accounts of approximately $3,803,000 and $253,000
has been recorded at December 31, 1999 and 1998, respectively, relating to
tenant and other receivables. Bad debt expense totaled approximately $3,694,000,
$232,000 and $221,000 during 1999, 1998, and 1997, respectively. The Company's
policy is to reserve against all trade receivables greater than 90 days past
due.

INTEREST RATE SWAP AGREEMENTS

    The Company uses interest rate swaps to effectively fix the interest rates
on certain floating-rate debt. Specific types of loans and amounts that are
hedged are determined based on prevailing market conditions and the current
shape of the yield curve. The specific terms and notional amount of the swaps
are determined based on management's assessment of future interest rates, as
well as short-term strategic initiatives.

    During 1999, the Company entered into and subsequently amended swap
agreements that effectively fixed the rate on $250.0 million of the amount
outstanding on the Company's Revolving Credit Facility at 6.47% for 1999 and
5.41% through the maturity of the swaps in December 2000. The swaps have been
designated as "cash flow hedges" within the meaning defined in SFAS 133 (as
defined hereinafter). At December 31, 1999, the Company recorded an unrealized
gain of $5,513,000 in Other Assets with a corresponding adjustment posted to a
separate component of stockholder's equity through Other Comprehensive Income as
defined in Statement of Financial Accounting Standards No. 130. Based on the
expiration of these instruments, the unrealized gain is expected to be
reclassified to earnings during the next twelve months. These swaps are
considered hedges for federal income tax purposes.

FEDERAL INCOME TAXES

    No provision for United States Federal income taxes has been made in the
accompanying financial statements. Cornerstone has elected to be taxed as a REIT
under Sections 856-859 of the United States Internal Revenue Code (the "Code").
Under these sections of the Code, Cornerstone is permitted to deduct dividends
paid to stockholders in computing its taxable income. All taxable earnings and
profits of Cornerstone since inception have been distributed to the
stockholders.

RECLASSIFICATIONS

    Certain prior year amounts have been reclassified to conform to the 1999
financial statement presentation.

                                      F-11
<PAGE>
RECENTLY ISSUED ACCOUNTING STANDARDS

    During the first quarter of 1999, the Company adopted Statement of Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities" ("SFAS 133"). SFAS 133 requires that all derivative instruments be
recorded on the balance sheet at their fair value. Changes in the fair value of
derivatives are recorded each period in current earnings or in other
comprehensive income, depending on whether a derivative is designated as part of
a hedge transaction and, if it is, the type of hedge transaction.

    During the first quarter of 1999, the Company also adopted Statement of
Position 98-5, "Reporting on the Costs of Start-Up Activities" ("SOP 98-5"). SOP
98-5 requires that certain costs incurred in conjunction with start-up and
organizational activities be expensed. Pursuant to the requirements of SOP 98-5,
the Company has written off all unamortized organizational costs and has
recorded a cumulative effect of a change in accounting principle of $630,044.

    In addition, during the first quarter of 1999, the Company adopted Statement
of Position 98-1, "Accounting for the Costs of Computer Software Developed or
Obtained for Internal Use" ("SOP 98-1"). SOP 98-1 provides guidance on whether
the costs of computer software developed or obtained for internal use should be
capitalized or expensed. The adoption of SOP 98-1 did not have a significant
effect on the Company's financial statements.

ESTIMATES AND RISKS

    The preparation of financial statements in conformity with generally
accepted accounting principles ("GAAP") 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. The most significant risks, estimates and assumptions are
related to the recoverability and depreciable lives of investment property, the
recoverability of deferred tenant receivables and the qualification of the
Company as a REIT. Actual results could differ from those estimates.

                                      F-12
<PAGE>
2. PROPERTIES

    The following table summarizes Cornerstone's interest in real estate
investments at December 31, 1999:

<TABLE>
<CAPTION>
MARKET NAME                                     TOTAL RENTABLE   CORNERSTONE
PROPERTY                                         SQUARE FEET     INTEREST (A)   YEAR CONSTRUCTED    LEASED     NOTES
-----------                                     --------------   ------------   ----------------   --------   --------
<S>                                             <C>              <C>            <C>                <C>        <C>
BOSTON, MASSACHUSETTS
  Sixty State Street..........................       823,014        100.0%          1979             100%         B
  500 Boylston Street.........................       714,513         91.5%          1988             100%         C
  222 Berkeley Street.........................       530,844         91.5%          1991             100%         C
  125 Summer Street...........................       463,691        100.0%          1989              74%
  One Memorial Drive..........................       352,764        100.0%          1985             100%         D
                                                  ----------                                         ---
  MARKET TOTAL................................     2,884,826                                          96%

SAN MATEO COUNTY, CALIFORNIA
  Bayhill (4 buildings).......................       514,255        100.0%       1982-1987            96%         E
  Peninsula Office Park (7 buildings).........       492,044        100.0%       1971-1998           100%         E
  Seaport Centre..............................       463,418        100.0%          1988             100%         E
  Bay Park Plaza (2 buildings)................       257,058        100.0%       1985-1998           100%         E
  One Bay Plaza...............................       176,533        100.0%          1979              99%         E
                                                  ----------                                         ---
  MARKET TOTAL................................     1,903,308                                          99%

ATLANTA, GEORGIA
  191 Peachtree Street........................     1,215,288         80.0%          1991              98%       C,F
  200 Galleria................................       432,698        100.0%          1985              98%         C
                                                  ----------                                         ---
  MARKET TOTAL................................     1,647,986                                          98%

EAST BAY, CALIFORNIA
  Corporate Centre (2 buildings)..............       329,348        100.0%       1985-1987            96%         E
  ADP Plaza (2 buildings).....................       300,308        100.0%       1987-1989            95%         E
  PeopleSoft Plaza............................       277,562        100.0%          1984             100%         E
  Norris Tech Center (3 buildings)............       260,513        100.0%       1984-1990           100%         E
  Golden Bear Center..........................       160,587        100.0%          1986              99%         E
  2700 Ygnacio Valley Road....................       103,214        100.0%          1984              99%         E
  Park Plaza..................................        87,040        100.0%          1986             100%         E
  1600 South Main.............................        83,277        100.0%          1983              98%         E
                                                  ----------                                         ---
  MARKET TOTAL................................     1,601,849                                          98%
</TABLE>

                                      F-13
<PAGE>

<TABLE>
<CAPTION>
MARKET NAME                                    TOTAL RENTABLE   CORNERSTONE
PROPERTY                                        SQUARE FEET     INTEREST (A)   YEAR CONSTRUCTED    LEASED     NOTES
-----------                                    --------------   ------------   ----------------   --------   --------
<S>                                            <C>              <C>            <C>                <C>        <C>
SEATTLE, WASHINGTON
  Washington Mutual Tower (3 buildings)......     1,154,560         50.0%          1988              98%         G
  110 Atrium Place...........................       215,172        100.0%          1981             100%         E
  Island Corporate Center....................       100,009        100.0%          1987              97%         E
                                                 ----------                                         ----
  MARKET TOTAL...............................     1,469,741                                          98%

SANTA CLARA COUNTY, CALIFORNIA
  Pruneyard Office (3 buildings).............       354,629        100.0%       1971-1999            99%       E,H
  10 Almaden.................................       294,809        100.0%          1989             100%         E
  Pruneyard Shopping Center..................       252,210        100.0%         1970s              90%         E
  Embarcadero Place (4 buildings)............       192,081        100.0%          1984             100%         E
  Pruneyard Inn..............................        94,500        100.0%          1989              N/A       E,I
                                                 ----------                                         ----
  MARKET TOTAL...............................     1,188,229                                          98%

SAN FRANCISCO, CALIFORNIA
  120 Montgomery Street......................       420,310         66.7%          1955              95%         E
  One Post...................................       391,450         50.0%          1969              99%         E
  201 California Street......................       240,230        100.0%          1980              96%         J
  188 Embarcadero............................        85,183        100.0%          1985              99%         E
                                                 ----------                                         ----
  MARKET TOTAL...............................     1,137,173                                          97%

MINNEAPOLIS, MINNESOTA
  Norwest Center.............................     1,117,439         50.0%          1988             100%         K
                                                 ----------                                         ----
  MARKET TOTAL...............................     1,117,439                                         100%

WASHINGTON, D.C./ALEXANDRIA, VIRGINIA
  Market Square (2 buildings)................       688,709         70.0%          1990              99%       C,L
  99 Canal Center............................       137,945        100.0%          1986             100%         C
  TransPotomac Plaza 5.......................        96,392        100.0%          1983             100%         C
  11 Canal Center............................        70,365        100.0%          1986              98%         C
                                                 ----------                                         ----
  MARKET TOTAL...............................       993,411                                          99%

SUBURBAN CHICAGO, ILLINOIS
  Corporate 500 Centre (4 buildings).........       679,039        100.0%       1986/1990            99%         M
  One Lincoln Centre.........................       297,040        100.0%          1986              89%
                                                 ----------                                         ----
  MARKET TOTAL...............................       976,079                                          96%

SANTA MONICA/WEST LOS ANGELES, CALIFORNIA
  West Wilshire (2 buildings)................       235,787        100.0%       1960-1976            94%         E
  Wilshire Palisades.........................       186,714        100.0%          1981             100%         J
  Janss Court................................       125,709        100.0%          1989             100%       E,N
  Searise Office Tower.......................       122,292        100.0%          1975             100%         E
  Commerce Park..............................        94,367        100.0%          1977              79%       E,O
  429 Santa Monica...........................        83,243        100.0%          1982              88%         E
                                                 ----------                                         ----
  MARKET TOTAL...............................       848,112                                          95%

ORANGE COUNTY, CALIFORNIA
  Bixby Ranch................................       277,289        100.0%          1987              98%         E
  18301 Von Karman...........................       219,508        100.0%          1991              88%         E
  2677 North Main............................       213,318        100.0%          1987              94%         E
                                                 ----------                                         ----
  MARKET TOTAL...............................       710,115                                          94%
</TABLE>

                                      F-14
<PAGE>

<TABLE>
<CAPTION>
MARKET NAME                                    TOTAL RENTABLE   CORNERSTONE
PROPERTY                                        SQUARE FEET     INTEREST (A)   YEAR CONSTRUCTED    LEASED     NOTES
-----------                                    --------------   ------------   ----------------   --------   --------
<S>                                            <C>              <C>            <C>                <C>        <C>
SAN DIEGO, CALIFORNIA
  Centerside II..............................       286,949        100.0%          1987              93%         E
  Crossroads.................................       133,553        100.0%          1983             100%         E
                                                 ----------                                         ----
  MARKET TOTAL...............................       420,502                                          95%

NEW YORK CITY, NEW YORK
  527 Madison Avenue.........................       215,332        100.0%          1986             100%
  Tower 56...................................       163,633        100.0%          1983              99%         P
                                                 ----------                                         ----
  MARKET TOTAL...............................       378,965                                          99%

LOS ANGELES, CALIFORNIA
  700 North Brand............................       202,531        100.0%          1981              94%         E
  Warner Park Center.........................        57,366        100.0%          1986             100%         E
                                                 ----------                                         ----
  MARKET TOTAL...............................       259,897                                          95%

CONEJO VALLEY (VENTURA), CALIFORNIA
  Westlake Spectrum (2 buildings)............       118,990        100.0%          1990              97%         E
  Agoura Hills...............................       115,208        100.0%          1987             100%         E
                                                 ----------                                         ----
  MARKET TOTAL...............................       234,198                                          99%

OTHER REGIONS
  U.S. West (Murray, Utah)...................       136,608        100.0%          1985              76%         E
  Exposition Centre (Sacramento,
    California)..............................        72,971        100.0%          1984              70%         E
                                                 ----------                                         ----
  MARKET TOTAL...............................       209,579                                          74%

  TOTAL PORTFOLIO............................    17,981,409                                          97%
                                                 ----------                                         ----
  Minority Interest Adjustment (Q)...........      (728,307)
                                                 ----------
  CORNERSTONE PORTFOLIO......................    17,253,102                                          96%
                                                                                                    ====
  Adjustment For Pruneyard Inn...............       (94,500)
                                                 ----------
  CORNERSTONE OFFICE PORTFOLIO...............    17,158,602
                                                 ==========
</TABLE>

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

(A) Unless noted below, cash flow and residual proceeds will be distributed to
    Cornerstone according to its percentage interest.

(B) On December 31, 1997, the Company purchased the second mortgage on Sixty
    State Street. The mortgage is a cash flow mortgage through which all the
    economic benefits/risks (subject to the first mortgage) inure to the
    Company. The Company controls all major decisions regarding management and
    leasing. The total purchase price for the second mortgage was
    $131.5 million and is consolidated in buildings due to the above factors.
    The $78.4 million first mortgage on the Property was originally recorded by
    the Company as an $89.6 million liability due to its above-market interest
    rate.

    The second mortgage, which the Company holds, is collateralized only by the
    improvements on Sixty State Street. Title to the improvements is owned by
    Sixty State Street Trust, the ground lessee under a ground lease that
    expires on December 28, 2067. The lease payments on the ground lease are
    $398,896 per annum throughout the term.

(C) On October 27, 1997, the Company acquired interests in nine Class A office
    properties comprising approximately 4.5 million rentable square feet in
    Alexandria, Virginia (3 properties), Atlanta (2 properties), Boston (2
    properties), Charlotte and Washington, D.C., as well as an undeveloped
    parcel of land in Chicago (collectively, "the DIHC Portfolio"). The Company
    acquired the DIHC Portfolio for a purchase price of approximately
    $1.06 billion, consisting of approximately 34.2 million shares of Common
    Stock valued and recorded at $16.00 per share, approximately $260.0 million
    in cash and $250.0 million in promissory notes. The cash portion of the
    acquisition was financed with proceeds

                                      F-15
<PAGE>
    from the Company's initial public offering in April 1997 and $54.0 million
    from its Revolving Credit Facility. The Company has since sold the asset in
    Charlotte as well as the undeveloped parcel of land in Chicago.

(D) On April 28, 1998, the Company purchased One Memorial Drive in Cambridge,
    Massachusetts. The total purchase price for the Property was approximately
    $112.5 million, approximately $23.5 million of which was paid in cash,
    approximately $29.0 million of which was paid in UPREIT Units valued at
    $17.50 per unit and approximately $60.0 million of which was paid in Common
    Stock valued at $17.50 per share.

(E) Property was acquired as a result of the Wilson Acquisition in
    December 1998. After receiving stockholder approval on December 14, 1998,
    the Company acquired substantially all of the properties and real estate
    operations of William Wilson & Associates and related entities ("WW&A") (the
    "Wilson Acquisition"). As part of the Wilson Acquisition, the Company
    acquired interests in 69 Class A office Properties, comprising approximately
    9.2 million rentable square feet primarily in the San Francisco Bay Area and
    in Southern California, a shopping center consisting of approximately
    252,000 rentable square feet in Santa Clara, California, a hotel consisting
    of 94,500 square feet in Santa Clara, California and 12.8 acres of
    developable land in the San Francisco Bay Area. The Company has since sold
    eleven assets comprising approximately 1.2 million square feet.

    The Company acquired WW&A for a purchase price of approximately
    $1.8 billion, consisting of approximately 14.9 million shares of Common
    Stock valued at $17.25 per share (recorded at $16.25 per share for GAAP
    purposes), approximately 16.2 million UPREIT Units valued at $17.25 per unit
    (recorded at $16.25 per unit for GAAP purposes), approximately
    $465.0 million in cash and the assumption of approximately $760.0 million of
    property and construction related debt (recorded at $773.7 million for GAAP
    purposes). The cash portion of the transaction was financed primarily from
    the Company's Revolving Credit Facility and the sale of $200.0 million of
    Common Stock to PGGM, an approximate 33.6% stockholder prior to the Wilson
    Acquisition, priced at $17.25 per share.

(F) While the Company's stated interest in the partnership that owns 191
    Peachtree Street is 80.0%, its economic interest is significantly larger
    since it has acquired the first mortgage note on the Property in the amount
    of $145.0 million, which earns interest at 9.375% and will receive a
    priority distribution on its acquired capital base. In 1999, the partner in
    the transaction, CH Associates, Ltd., received an annual Incentive
    Distribution (as defined) of $250,000, with the Company receiving the
    remainder of the cash flow of the Property.

    The partnership that owns 191 Peachtree Street leases a portion of the land
    upon which the project is located pursuant to a ground lease agreement. The
    agreement requires annual payments of $45,000 through January 31, 2002 and
    $75,000 through January 31, 2008. Thereafter, the annual rent increases
    $2,500 per year until the expiration date of January 31, 2087. The
    partnership records ground rental expense relating to this agreement on a
    straight-line basis. The ground lease is renewable for an additional
    99 years.

(G) While the Company's stated interest in the partnership that owns Washington
    Mutual Tower is 50.0%, its economic interest in the Property is
    significantly larger due to priority distributions it receives on its
    invested capital base. For the year ended December 31, 1999, the Company
    received 100% of the cash distributions from the partnership that owns
    Washington Mutual Tower.

(H) Pruneyard Place construction was completed and occupied on April 1, 1999.
    The building was entirely pre-leased.

(I) The Pruneyard Inn is a three-story hotel. An expansion was completed in
    May 1999, increasing the number of rooms from 118 to 172.

(J) On June 3, 1998, the Company purchased 201 California Street and Wilshire
    Palisades. The total purchase price for the Properties was approximately
    $121.5 million, approximately $29.5 million of which was paid in cash,
    approximately $29.1 million of which was paid in UPREIT Units valued at

                                      F-16
<PAGE>
    $17.50 per unit and approximately $62.9 million of assumed debt (recorded at
    $64.6 million for GAAP purposes).

(K) While the Company's stated interest in the partnership that owns Norwest
    Center is 50.0%, its economic interest in the Property is significantly
    larger due to priority distributions it receives on its invested capital
    base. For the year ended December 31, 1999, the Company's share of earnings
    and cash distributions from the partnership that owns Norwest Center was
    74.4%.

(L) During 1998, through a series of transactions, the Company acquired
    partnership interests with a stated interest of approximately 70.0% in the
    partnerships that own Market Square. The Company's economic interest is
    significantly larger since it has acquired the first mortgage note on the
    Property in the amount of $181.0 million which earns interest at 9.75% and
    will receive a priority distribution on its acquired capital base. In
    addition, the Company acquired a "buffer loan", with accrued principal and
    interest of $49.0 million at purchase, which accrues interest at a rate of
    Prime plus 1.25% and is payable from cash flow, refinancing or sales
    proceeds in excess of the first mortgage. During the year ended
    December 31, 1999, the Company received 100% of the cash flow from the
    Property. On November 14, 1998, the Company purchased an additional interest
    in the partnerships that own Market Square which enabled it to gain
    sufficient control in order to consolidate the investment.

(M) On January 28, 1998, the Company purchased Corporate 500 Centre in
    Deerfield, Illinois. This Property consists of four Class A office buildings
    with approximately 679,000 rentable square feet. The consideration paid for
    this Property was approximately $135.0 million in cash and approximately
    $15.0 million in UPREIT Units valued at $18.50 per unit, for a total
    purchase price of approximately $150.0 million. The Company financed a
    portion of the purchase price with an $80.0 million mortgage loan from
    Bankers Trust Company; this mortgage was subsequently refinanced in
    October 1998.

(N) Janss Court is a seven-story Class A mixed-use building containing
    approximately 126,000 square feet. In addition to approximately 93,000
    square feet of retail and office space, Janss Court offers 32 apartments for
    a total of 33,000 rentable square feet of residential space.

(O) The Property is subject to a ground lease agreement. The agreement requires
    annual payments of $115,000 through March 31, 2002 and $121,000 from
    April 1, 2002 through March 31, 2007. The lease payment increases every ten
    years thereafter according to a formula based on the Consumer Price Index.
    The ground lease expires on March 31, 2041.

(P) On January 5, 1998, the Company purchased for approximately $5.5 million,
    the remaining participation rights in the cash flow and residual value of
    Tower 56 from the former participants for 307,692 shares of Common Stock. As
    a result, all of the cash flow and the residual value of Tower 56 inures to
    the Company.

(Q) Rentable square feet includes an adjustment for the interest of a joint
    venture or minority partner. Calculations are based on the partners'
    percentage interest in the cash flows of the Property.

    On March 31, 1998, the Company sold the Dearborn Land (an undeveloped parcel
of land in Chicago that was acquired as part of the acquisition of the DIHC
Portfolio in October 1997) for gross proceeds of approximately $19,000,000,
resulting in a loss of $212,228.

    On April 29, 1998, the Company sold the Frick Building, located in
Pittsburgh, Pennsylvania, for gross proceeds of approximately $26,748,000,
resulting in a loss of $2,111,540.

    On December 29, 1998, Avenue Associates Limited Partnership sold a
condominium unit in Market Square, located in Washington D.C., for gross
proceeds of $326,154, resulting in a gain of $247,972.

    During 1999, the Company sold 13 properties for gross proceeds of
$495,705,000 resulting in a net gain of $131,033,847.

                                      F-17
<PAGE>
    The future minimum lease payments to be received by the Company under
noncancellable operating leases as of December 31, 1999 are as follows (Dollar
amounts in thousands):

<TABLE>
<S>                                                           <C>
2000........................................................  $  396,159
2001........................................................     373,079
2002........................................................     327,096
2003........................................................     269,223
2004........................................................     211,497
Thereafter..................................................     737,345
                                                              ----------
TOTAL.......................................................  $2,314,399
                                                              ==========
</TABLE>

3. RESTRICTED CASH

    Restricted cash includes security deposits for some of the Company's office
properties and escrow and reserve funds for real estate taxes, property
insurance, capital improvements, tenant improvements and leasing costs. These
funds were established pursuant to certain mortgage and construction financing
arrangements.

    The proceeds from the sales of certain properties during 1999 totaling
approximately $211.5 million, are included in restricted cash pursuant to the
terms of Section 1031 of the Internal Revenue Code of 1986, as amended,
"Exchange of property held for productive use or investment."

4. INVESTMENT IN REAL ESTATE JOINT VENTURES

    Investment in real estate joint ventures represents the Company's two
investments that are accounted for using the equity method of accounting. The
first investment is the Company's 50.0% interest in a co-tenancy with Crocker
Plaza Company for One Post, a 38-story, Class A office tower in San Francisco,
California. The Company and Crocker co-manage and lease the Property. The second
equity investment is the Company's interest in WCP Services, Inc. The Company
owns 1% of the voting common stock and 100% of the non-voting common stock of
WCP Services, Inc. The remaining shares of voting common stock of WCP
Services, Inc. are owned by certain executive officers of the Company. The
Company's ownership of voting and nonvoting common stock together represents a
95% economic interest in the earnings of WCP Services, Inc. WCP Services, Inc.
provides property management, development and tenant construction supervision
services to third parties. WCP Services, Inc. also provides tenant construction
supervision services to tenants in Properties owned by Cornerstone.

                                      F-18
<PAGE>
5. LONG-TERM DEBT

    The following table sets forth certain information regarding the
consolidated debt obligations of the Company as of December 31, 1999 and 1998,
including mortgage obligations relating to the Properties. All of this debt,
with the exception of the Convertible Promissory Note due 2001, is nonrecourse
to the Company. However, notwithstanding the nonrecourse indebtedness, the
lender may have the right to recover deficiencies from the Company in certain
circumstances, including fraud, misappropriation of funds and environmental
liabilities (Dollar amounts in thousands).

<TABLE>
<CAPTION>
PROPERTY
--------
FIXED RATE                            AMORTIZATION    INTEREST RATE (A)       MATURITY DATE        12/31/99     12/31/98
----------                            -------------   -----------------       -------------       ----------   ----------
<S>                                   <C>             <C>                     <C>                 <C>          <C>
TransPotomac Plaza (B)..............  Interest Only               7.28%         Oct-2000              65,000       65,000
West Wilshire Office and Medical....  25 year                     6.90%         Jan-2002              16,926       17,301
Searise Office Tower................  25 year                     6.90%         Jan-2002              11,607       11,864
Exposition Centre...................  25 year                     6.90%         May-2002               5,081        5,200
Wilshire Palisades..................  22 year                     6.70%         Jul-2002              29,047       29,902
110 Atrium Place....................  30 year                     6.90%         Mar-2004              21,517       21,838
527 Madison Avenue and
  One Lincoln Centre (B)............  Interest only               7.47%         Oct-2004              65,000       65,000
Sixty State Street..................  30 year                     6.84%         Jan-2005              85,420       87,627
Island Corporate Center.............  30 year                     6.90%         Apr-2005              13,170       13,294
Washington Mutual Tower.............  Interest only               7.53%         Nov-2005              79,100       79,100
Norwest Center......................  Interest only               8.74%         Dec-2005             110,000      110,000
Agoura Hills........................  25 year                     6.90%         Dec-2005              12,003       12,328
Janss Court.........................  30 year                     6.90%         Dec-2005              18,357       18,723
Bayhill 4,5,6 & 7...................  25 year                     6.90%         Dec-2006              57,764       59,071
Market Square (C) and
  200 Galleria (B)..................  Interest only               7.54%         Oct-2007             120,000      120,000
Corporate 500 Centre................  25 year                     6.66%         Nov-2008              88,424       89,765
188 Embarcadero (D).................  25 year                     7.26%         Aug-2009              15,606        9,135
Centerside II (D)...................  25 year                     7.26%         Aug-2009              24,254       13,818
700 North Brand (D).................  25 year                     7.26%         Aug-2009              26,938       18,108
Golden Bear Center (D)..............  25 year                     7.26%         Aug-2009              20,477       15,753
Bixby Ranch (D).....................  25 year                     7.26%         Aug-2009              28,528       20,243
One Memorial Drive (D)..............  25 year                     7.26%         Aug-2009              63,119           --
125 Summer Street (E)...............  25 year                     7.23%         Nov-2009              78,844       50,000
Tower 56 (E)........................  25 year                     7.23%         Nov-2009              25,024       17,548
Peninsula Office
  Park 1,3,4,5,6,8 & 9 (E)..........  25 year                     7.23%         Nov-2009              88,128       60,242
Embarcadero Place (E)...............  25 year                     7.23%         Nov-2009              38,149       26,061
201 California Street (E)...........  25 year                     7.23%         Nov-2009              44,504       33,071
                                                                                                  ----------   ----------
  TOTAL FIXED RATE DEBT.............                              7.31%(F)       7.1 yrs(F)        1,251,987    1,069,992
                                                                                                  ----------   ----------

VARIABLE RATE
------------------------------------
Seaport Centre (G)..................  Interest only    LIBOR plus 1.50%         Dec-2000              58,000       58,000
The Pruneyard.......................  24 year          LIBOR plus 1.50%         Jul-2000              60,947       49,384
Convertible Promissory Note
  due 2001 (H)......................  Interest only          8.11% max(I)       Jan-2001              12,926       12,926
120 Montgomery Street...............  24 year          LIBOR plus 1.40%         Nov-2002              48,160       46,930
Norris Tech Center..................  25 year          LIBOR plus 1.65%         Dec-2003              16,066       16,392
Other loans.........................  Various                  Various           Various                 245          597
                                                                                                  ----------   ----------
  TOTAL VARIABLE RATE DEBT..........                              7.40%(F)       1.5 yrs(F)          196,344      184,229
                                                                                                  ----------   ----------
</TABLE>

                                      F-19
<PAGE>
<TABLE>
<CAPTION>
PROPERTY
--------
REPAID DEBT                           AMORTIZATION    INTEREST RATE (A)       MATURITY DATE        12/31/99     12/31/98
-----------                           -------------   -----------------       -------------       ----------   ----------
<S>                                   <C>             <C>                     <C>                 <C>          <C>
18301 Von Karman (J)................  --                            --                --                  --       10,647
1600 South Main (J).................  --                            --                --                  --        5,038
Biltmore Lakes (J)..................  --                            --                --                  --       11,468
Belmont Shores (J)..................  --                            --                --                  --        9,839
2677 North Main (J).................  --                            --                --                  --       10,774
2700 Ygnacio Valley Road (J)........  --                            --                --                  --        5,035
Westlake Spectrum (J)...............  --                            --                --                  --        3,993
Park Plaza (J)......................  --                            --                --                  --        4,940
Warner Park Center (J)..............  --                            --                --                  --        5,213
429 Santa Monica (J)................  --                            --                --                  --       10,176
Crossroads (J)......................  --                            --                --                  --        7,339
Westlake Spectrum II (J)............  --                            --                --                  --        5,284
Two ADP Plaza (K)...................  --                            --                --                  --       13,400
Two Corporate Centre (K)............  --                            --                --                  --       18,600
One & Two Gateway (L)...............  --                            --                --                  --        8,679
Scottsdale Centre (L)...............  --                            --                --                  --        7,745
66 Bovet (L)........................  --                            --                --                  --        3,939
One Norwest Center (M)..............  --                            --                --                  --       98,252
1300 South El Camino (L)............  --                            --                --                  --        4,007
10 Almaden (N)......................  --                            --                --                  --       33,885
                                                                                                  ----------   ----------
  TOTAL REPAID DEBT.................                                                                      --      278,253
                                                                                                  ----------   ----------
Total Debt..........................                              7.32%(F)       6.4 yrs(F)       $1,448,331   $1,532,474
                                                                                                  ==========   ==========
</TABLE>

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

(A) The interest rate is the stated interest rate (for Cornerstone originated
    debt) or the mark to market rate at the time of acquisition (for debt
    assumed as part of an acquisition).

(B) The three notes arising from the acquisition of several properties in the
    DIHC Portfolio are cross-collateralized, having the effect of forming a
    "collateral pool" for the underlying notes.

(C) The collateral for this loan is a pledge of the $181.0 million first
    mortgage loan on Market Square that the Company purchased from PGGM.

(D) The six notes arising from the restructuring of certain debt with Prudential
    Insurance Company of America and Northwestern Mutual Life Insurance Company
    are cross-collateralized, having the effect of forming a "collateral pool"
    for the underlying notes.

(E) During October 1999 the Company restructured approximately $219.9 million of
    individual property-related debt with Northwestern Mutual Life Insurance
    Company. The restructuring involved retiring the individual property-related
    debt and creating a single $275.0 million term loan which is cross-
    collateralized by six of the original seven properties. The loan has a ten
    year term and bears interest at 7.23%. Upon closing the loan, the lien on 10
    Almaden was released and the property was added to Cornerstone's
    unencumbered pool.

(F) Weighted-average interest rate and maturity of the Company's long-term debt.

(G) On December 15, 1999, through an extension and modification agreement, the
    maturity date of the $58.0 million variable rate debt held on Seaport Centre
    was extended from December 31, 1999 to December 31, 2000. All other terms of
    the note remain unchanged.

(H) The lender, Hines Colorado Limited, has the right to convert the note into
    Common Stock at a conversion price of $14.30 per share. At maturity, the
    Company is entitled to repay the principal of the note with Common Stock
    priced at the lesser of $14.30 per share or the then existing share price.

(I) Lesser of 30-day LIBOR plus 0.5% or 8.11%.

(J) These 12 notes were prepaid as part of the Prudential Insurance Company of
    America and Northwestern Mutual Life Insurance Company restructuring, see
    note (D) above. All the notes had a mark to market interest rate of 6.9% and
    maturity dates ranging from April 2000 to March 2003.

                                      F-20
<PAGE>
(K) On January 4, 1999, in connection with the Wilson Acquisition, the Company
    prepaid the notes on Two ADP Plaza and Two Corporate Centre.

(L) These notes were prepaid in conjunction with the sale of these properties.

(M) The note was assumed by the purchaser as of the date of closing, in
    conjunction with the sale of this property during the fourth quarter.

(N) This note was prepaid as part of the Northwestern Mutual Life Insurance
    Company restructuring, see note (E) above. This note had a mark to market
    interest rate of 6.9% and a maturity of April 2004.

    The combined aggregate amount of maturities for all long-term borrowings for
2000 through 2004 are $183,947,000, $12,926,000, $110,821,000, $16,066,000 and
$86,517,000, respectively.

    Since most of the long-term debt is property-related, there are restrictive
covenants that limit the total amount of indebtedness that can be placed on
individual properties.

6. CREDIT FACILITY

    The Company has a $550.0 million Revolving Credit Facility with a syndicate
of 17 banks led by Deutsche Bank, The Chase Manhattan Bank and Bank of America
for acquisitions and general working capital purposes as well as the issuance of
letters of credit (the "Revolving Credit Facility"). The interest rate on the
facility depends on the Company's ratio of total debt to asset value (as
defined) at the time of borrowing and will be at a spread of 1.10% to 1.40% over
the applicable LIBOR or Prime Rate at the borrower's option. The letters of
credit will be priced at the applicable Eurodollar credit spread. The Revolving
Credit Facility expires on November 3, 2001. As of December 31, 1999,
$329.0 million of the facility was outstanding at a rate of approximately 8.0%.
Of this amount, approximately $250.0 million is fixed with interest rate swaps,
which effectively fix the rate at 6.47%. Beginning January 2000, the rate will
be reduced to 5.41% through the expiration of the swaps in December 2000. The
Revolving Credit Facility contains certain restrictive covenants including:
(i) a limitation on the Company's dividend to 90.0% of funds from operations and
110.0% of funds available for distribution, both as defined in the agreement;
(ii) the percentage of total liabilities to total property asset value (as
defined) cannot exceed 55.0%; (iii) the ratio of adjusted EBITDA to interest
expense may not be less than 2.00 to 1.00 through July 1, 1999 and 2.25 to 1.00
thereafter; (iv) the fixed charge coverage ratio may not be less than 1.75 to
1.00; and (v) the ratio of total property asset value (as defined) to secured
indebtedness may not be less than 2.22 to 1.00. The above terms reflect an
amendment to the Revolving Credit Facility that occurred during 1999. The
amendment allowed the Company temporarily to increase its leverage from 55.0% to
60.0% in (ii) above for a short period, which has since expired. The Company
also increased its ability to enter into mortgage debt under (v) above by
decreasing the required ratio from 2.5 to 1.00 to 2.22 to 1.00.

7. COMMITMENTS AND CONTINGENCIES

    In the ordinary course of business, the Company is subject to tenant and
property related claims and other litigation. It is the opinion of management,
after consultation with outside counsel, that the resolution of these claims
will not have a material adverse effect on the financial position, results of
operations or cash flows of the Company.

    In April 1998, the Company entered into a contract to acquire from the
developer the 928,857 square-foot Piper Jaffray building under construction in
Minneapolis. In November 1999, this contract was amended in connection with a
350,000 square-foot expansion lease with a major tenant of the building. The
contract was amended to provide for a purchase price equal to the costs incurred
in construction and development plus a fixed amount to the developer plus an
additional amount based on the leasing of the building. In addition, at the
Company's election, the closing of the acquisition may occur prior to the
completion of the building, but the developer will remain obligated to complete
the project. Through December 31, 1999, approximately $109.4 million has been
spent on the construction. The project is scheduled to be completed in the year
2000 and is approximately 75.0% pre-leased.

                                      F-21
<PAGE>
8. STOCKHOLDERS' EQUITY

    The 7% Cumulative Convertible Preferred Stock is convertible into Common
Stock at $16.50 per share at any time after August 4, 2000.

    On February 6, 1998, Cornerstone completed a secondary public offering of
14,375,000 shares of Common Stock at a price of $18.25 per share. The shares
were placed in the U.S. through a syndicate of seven investment banks led by
Merrill Lynch & Co. Net proceeds to the Company were approximately
$247.9 million (approximately $262.3 million gross proceeds less an underwriting
discount of approximately $13.7 million and expenses of approximately
$0.7 million). The net proceeds were used to repay outstanding borrowings under
the Revolving Credit Facility and for working capital purposes.

    On December 9, 1999, the Company's Board of Directors approved a stock
repurchase program ("Repurchase Program") under which the Company is permitted
to purchase up to $100.0 million of the Company's outstanding Common Stock. The
Company may make periodic purchases on or prior to December 31, 2000 using
available working capital on the open market at prevailing prices or in
privately negotiated transactions. As of December 31, 1999, the Company
repurchased 347,400 shares of its outstanding Common Stock for an aggregate cost
of approximately $4.9 million. The Repurchase Program has been discontinued as a
result of the merger with EOP.

    The following tables summarize the stock options and restricted stock grants
for certain officers of the Company as of December 31, 1999:

STOCK OPTIONS

<TABLE>
<CAPTION>
                                     OPTIONS GRANTED   EXERCISE PRICE                          OPTIONS     OPTIONS      OPTIONS
DATE OF GRANT                        (NO. OF SHARES)    (PER SHARE)           VESTING         EXERCISED   FORFEITED   EXERCISABLE
-------------                        ---------------   --------------   -------------------   ---------   ---------   -----------
<S>                                  <C>               <C>              <C>                   <C>         <C>         <C>
August, 1995.......................       637,500          $14.30       33.3%/yr, 10yr term    75,000            0      562,500
October, 1995......................       150,000          $14.30       33.3%/yr, 10yr term    10,500            0      139,500
March, 1997........................       880,000          $14.50       33.3%/yr, 10yr term    52,000            0      534,666
November, 1997.....................        70,000          $18.44       33.3%/yr, 10yr term         0            0       46,667
February, 1998.....................        70,000          $18.13       33.3%/yr, 10yr term         0       46,667       23,333
February, 1998.....................       595,000          $18.25       33.3%/yr, 10yr term         0       26,668      198,333
March, 1998........................       200,000          $18.25       33.3%/yr, 10yr term         0      133,334       66,666
December, 1998.....................     3,000,000          $17.25       33.3%/yr, 10yr term         0       34,533      978,800
January, 1999......................        20,000          $17.25       33.3%/yr, 10yr term         0            0            0
February, 1999.....................        10,000          $17.25       33.3%/yr, 10yr term         0       10,000            0
June, 1999.........................        10,000          $17.25       33.3%/yr, 10yr term         0            0            0
</TABLE>

    The weighted average fair value of options granted during 1999, 1998 and
1997 was $0.33 per share, $0.28 per share, and $2.00 per share, respectively.
The weighted average fair value of options exercised during 1999 and 1997 was
$4.55 and $2.45, respectively. There were no options exercised during 1998. The
weighted average life of options outstanding at December 31, 1999 was
approximately 8.1 years.

                                      F-22
<PAGE>
RESTRICTED STOCK GRANTS
<TABLE>
<CAPTION>
                          VALUE AT GRANT       SHARES INITIALLY       SHARES FORFEITED   SHARES OUTSTANDING    SHARES VESTED
DATE OF GRANT            DATE (PER SHARE)   GRANTED (NO. OF SHARES)   (NO. OF SHARES)     (NO. OF SHARES)     (NO. OF SHARES)
-------------            ----------------   -----------------------   ----------------   ------------------   ---------------
<S>                      <C>                <C>                       <C>                <C>                  <C>
August, 1995...........       $14.30                186,713                19,091             167,622              89,396
March, 1997............       $16.40                100,000                     0             100,000              26,666
November, 1997.........       $18.44                 12,500                     0              12,500               3,333
March, 1998............       $18.13                 12,500                10,833               1,667               1,667
March, 1998............       $18.25                 19,178                     0              19,178              19,178
February, 1999.........       $15.50                113,500                 1,700             111,800               1,400

<CAPTION>
                         VESTING (A)
DATE OF GRANT             SEE NOTES
-------------            -----------
<S>                      <C>
August, 1995...........     (B)
March, 1997............     (C)
November, 1997.........     (D)
March, 1998............     (E)
March, 1998............     (F)
February, 1999.........     (G)
</TABLE>

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

(A) Deferred compensation of approximately $5,600,000 is being amortized
    according to the respective amortization schedule for each vesting period
    noted below, with the unamortized balance shown as a deduction from
    stockholders' equity. Regular distributions are paid on restricted stock.

(B) The grant will fully vest with respect to 13.333% on June 30, 1996, 1997,
    1998, 1999 and with respect to 46.668% on June 30, 2000.

(C) The grant will fully vest with respect to 13.333% on June 30, 1998, 1999,
    2000, 2001 and with respect to 46.668% on June 30, 2002.

(D) The grant will fully vest with respect to 13.333% on June 30, 1998, 1999,
    2000, 2001 and with respect to 46.668% on June 30, 2002.

(E) The grant will fully vest with respect to 13.333% on March 15, 1999, 2000,
    2001, 2002 and with respect to 46.668% on March 15, 2003.

(F) The initial grant was to vest with respect to 13.333% on March 15, 1999,
    2000, 2001, 2002 and with respect to 46.668% on March 15, 2003. Pursuant to
    the terms of a separation agreement, the vesting with respect to 16,621
    shares was accelerated to fully vest on December 31, 1999.

(G) The grant will fully vest on February 1, 2004. Pursuant to the terms of
    certain separation agreements, the vesting with respect to 1,400 shares was
    accelerated to fully vest on July 1, 1999.

    The Company has adopted the disclosure-only provision of Statement of
Financial Accounting Standard No. 123, "Accounting for Stock-Based Compensation"
("SFAS 123"). Accordingly, no compensation cost has been recognized for the
options described above since the exercise price equaled the fair value at the
grant date. Had compensation cost for these options been determined based on the
fair value at the grant date consistent with the provisions of SFAS 123, the
Company's net income and net income per common share would have been reduced to
the following pro forma amounts (Dollar amounts in thousands, except per share
amounts):

<TABLE>
<CAPTION>
                                                       BASIC NET     DILUTED NET
                                                       INCOME PER     INCOME PER
                                         NET INCOME   COMMON SHARE   COMMON SHARE
                                         ----------   ------------   ------------
<S>                                      <C>          <C>            <C>
Year ended December 31, 1999...........   $229,622       $ 1.76         $ 1.73
Year ended December 31, 1998...........   $ 81,561       $ 0.78         $ 0.78
Year ended December 31, 1997...........   $ 36,887       $ 0.61         $ 0.61
</TABLE>

                                      F-23
<PAGE>
    The Company has computed the value of all stock options using the
Black-Scholes option pricing model with the following weighted average
assumptions:

<TABLE>
<CAPTION>
ASSUMPTIONS                                1999         1998          1997
-----------                              ---------   -----------   -----------
<S>                                      <C>         <C>           <C>
Risk-free interest rate................     5.31%        5.31%         6.56%
Assumed dividend yield.................     7.50%        7.50%         7.50%
Expected term..........................   6 years      6 years       6 years
Assumed volatility.....................    10.00%       10.00%        10.00%
</TABLE>

9. STOCKHOLDERS' AND UNITHOLDERS' DISTRIBUTIONS

    On December 7, 1998, in connection with the Wilson Acquisition, the Company
declared a distribution of $0.15 per share/unit to Common Stockholders and
Unitholders of record as of December 15, 1998 and a distribution of $0.15 per
share/unit to Common Stockholders and Unitholders of record as of January 29,
1999. Both distributions were paid on February 26, 1999. A distribution of $0.30
per share/unit was declared for the second quarter of 1999 and paid on May 28,
1999, to Common Stockholders and Unitholders of record as of April 30, 1999. A
distribution of $0.30 per share/unit was declared for the third quarter of 1999
and paid on August 31, 1999, to Common Stockholders and Unitholders of record as
of July 30, 1999. A distribution of $0.30 per share/unit was declared on
September 28, 1999 for the fourth quarter of 1999 and paid on November 30, 1999,
to Common Stockholders and Unitholders of record as of October 29, 1999.

    On August 4, 1999, the Company paid a dividend of $1.155 per share to all
preferred stockholders of record as of July 30, 1999.

10. EXTRAORDINARY LOSS

    For the year ended December 31, 1999, the Company recorded extraordinary
loss of approximately $10.8 million. This amount represents the prepayment fees
paid in connection with the property debt restructurings that were completed
during June 1999 and October 1999, as well as the net write off of any remaining
unamortized premium/discount recorded by the Company related to the retired
debt. See Notes 5 and 16 for more information about the two restructurings.

                                      F-24
<PAGE>
11. NET INCOME PER COMMON SHARE

    The table below sets forth the calculation of income per common share for
1999, 1998 and 1997 (Dollar amounts in thousands, except per share amounts):

<TABLE>
<CAPTION>
                                                   1999                  1998                  1997
                                            -------------------   -------------------   -------------------
                                             BASIC     DILUTED     BASIC     DILUTED     BASIC     DILUTED
                                            --------   --------   --------   --------   --------   --------
<S>                                         <C>        <C>        <C>        <C>        <C>        <C>
Proceeds upon exercise of options.........        --   $ 22,045        --    $23,871          --   $ 25,162
Market price of shares average for the
  respective year.........................        --   $  15.28        --    $ 16.80          --   $  17.13
Treasury shares that could be repurchased
  (options)...............................        --      1,443        --      1,421          --      1,469
Option shares outstanding.................        --      1,530        --      1,657          --      1,727
Weighted common stock equivalent shares
  (excess shares under option over
  Treasury shares that could be
  repurchased)............................        --         87        --        236          --        236
Convertible preferred stock...............        --      3,030        --         --          --         --
Convertible debt shares...................        --        904        --         --          --         --
Weighted average common shares
  outstanding.............................   128,817    128,817   100,319    100,319      43,572     43,572
                                            --------   --------   -------    -------    --------   --------
Adjusted weighted average common Shares
  outstanding.............................   128,817    132,838   100,319    100,555      43,572     43,808
Net income for the period.................  $230,653   $230,653   $83,465    $83,465    $ 37,547   $ 37,547
Interest on convertible debt..............        --   $    745        --         --          --         --
                                                                                        $(10,160)
Income applicable to preferred stock......  $ (3,500)  $     --   $(3,500)   $(3,500)           $(10,
                                            --------   --------   -------    -------    --------   --------
Net income applicable to common stock.....  $227,153   $231,398   $79,965    $79,965    $ 27,387   $ 27,387
Net income per common share...............  $   1.76   $   1.74   $  0.80    $  0.80    $   0.63   $   0.63
</TABLE>

    The stock options issued in November 1997, February 1998, March 1998,
December 1998, January 1999, February 1999 and June 1999 were not included in
the calculation of diluted earnings per share as such options were anti-dilutive
during the period. In addition, the Company will be obligated to redeem each
UPREIT Unit held by such unitholder for one share of Common Stock or, at the
option of the Company, cash equal to the fair market value of one share of
Common Stock at the time of redemption. As of December 31, 1999, 1,125,175
UPREIT Units have been redeemed for shares of Common Stock on a one-for-one
basis and 76,647 UPREIT Units have been redeemed for approximately $1.2 million
in cash.

12. RETIREMENT PLANS

    Effective July 1, 1995, the eligible employees of the Company participate in
a noncontributory age-weighted profit sharing plan. The Company's cash
contribution to such plan was approximately $134,000, $100,000, and $91,400 for
the years ended December 31, 1999, 1998, and 1997 respectively.

    Effective July 1, 1995, the eligible employees of the Company also
participate in a 401(k) contributory savings plan. Under the plan, the Company
matches contributions made by eligible employees based on a percentage of the
employee's salary. The Company will match 100% of contributions up to 5.0% of
such employee's salary with an annual maximum matching contribution of $4,000
per employee. The Company's matching contribution was approximately $654,000,
$69,600, and $52,600 for the years ended December 31, 1999, 1998, and 1997
respectively.

    The Company has adopted the Cornerstone Properties Inc. 1998 Long-Term
Incentive Plan (the "Incentive Plan") to provide incentives to attract and
retain officers and key employees. Under the Incentive Plan as amended and
restated on December 14, 1998, the number of shares available for option grant
are approximately 7,400,000. During 1999, options on approximately 40,000 shares
of Common Stock

                                      F-25
<PAGE>
at an exercise price of $17.25 per share have been granted under the plan. As of
December 31, 1999, 10,000 of these shares have been forfeited. Refer to Note 8
for additional vesting information.

13. CONCENTRATION OF RISK

    Approximately 5.8 million of the Company's 17 million rentable square feet
is located in the San Francisco metropolitan market, accounting for
approximately 29% of the Company's total assets at December 31, 1999. In
addition, five of the Company's 83 office Properties are located in the Downtown
Boston market, accounting for approximately 19.4% of the Company's office and
parking revenues for the year ended December 31, 1999. This concentration of
assets makes the Company particularly vulnerable to adverse changes in economic
conditions in the San Francisco and Boston metropolitan areas. A significant
decline in these economic conditions could have a material adverse effect on the
Company.

    Norwest Corporation and its subsidiary, Norwest Bank Denver N.A., tenants of
the Company, provided approximately 6.2%, 9.5% and 20.0% of office and parking
rental income for the years ended December 31, 1999, 1998 and 1997,
respectively. Included in deferred tenant receivables is approximately
$34.8 million and $33.9 million due from Norwest Corporation at December 31,
1999 and 1998, respectively. As a result of the sale of the Company's property
located in Denver during the fourth quarter of 1999, the concentration of
revenue received from this tenant will be significantly reduced.

14. RELATED PARTY TRANSACTIONS

    The Company has entered into $250.0 million of mortgage debt with one of its
major stockholders, PGGM, as further described in Note 5.

    In connection with the Wilson Acquisition, certain third-party services
business of WW&A was acquired by WCP Services, Inc., a Delaware corporation
("WCP Services"). The Operating Partnership owns 100% of the non-voting common
stock and 1% of the voting common stock of WCP Services. Mr. Wilson and
Mr. Moody each own 49.5% of the voting common stock of WCP Services. To fund the
purchase of such shares of voting common stock, the Operating Partnership loaned
$178,750 to each of Mr. Wilson and Mr. Moody, all of which remained outstanding
as of December 31, 1999. The notes accrue interest at a rate equal to 140 basis
points plus the one-year London Interbank Offered Rate, which rate is adjusted
annually. The notes are due and payable on or before December 16, 2008. In
connection with the EOP Merger Agreement, Messrs. Wilson and Moody entered into
an agreement to sell their voting common stock of WCP Services to EOP at a
purchase price of $200,000 each.

15. FAIR VALUE OF FINANCIAL INSTRUMENTS

    Cornerstone is required to disclose the fair value of financial instruments
for which it is practicable to estimate that value. The Company determines the
fair value based on discounting future cash flows at a rate that approximates
the Company's effective current borrowing rate (see also Note 5). For the year
ended December 31, 1999 and 1998, the fair value of the Company's long term debt
was approximately $1,183,000 and $1,555,000, respectively.

16. SUPPLEMENTAL CASH FLOW INFORMATION

    Cash paid for interest was approximately $138,375,000, $60,992,000 and
$30,204,000 for the years ended December 31, 1999, 1998 and 1997, respectively.

NON-CASH INVESTING AND FINANCING ACTIVITIES

    On October 27, 1997, the Company acquired the PGGM Portfolio for a purchase
price of approximately $1.06 billion, consisting of approximately 34.2 million
shares of Common Stock valued and

                                      F-26
<PAGE>
recorded at $16.00 per share, approximately $260.0 million in cash and
$250.0 million in promissory notes. The Company also recorded a minority
interest of $33.2 million in connection with this acquisition.

    On January 5, 1998, the Company purchased for approximately $5.5 million,
the participation rights in the cash flow and residual value of Tower 56 from
the former participants for 307,692 shares of Common Stock.

    On January 28, 1998, the Company purchased Corporate 500 Centre. As part of
the total purchase price of approximately $150.0 million, the Company issued
822,794 UPREIT Units valued at $18.50 per unit.

    On April 28, 1998, the Company purchased One Memorial Drive. As part of the
total purchase price of approximately $112.5 million, the Company issued
3,428,571 shares of common stock and 1,657,426 UPREIT Units, both valued at
$17.50.

    On June 3, 1998, the Company purchased 201 California Street and Wilshire
Palisades. As part of the total purchase price for the Properties of
approximately $121.5 million, the Company assumed $64.6 million in debt and
issued 1,665,663 UPREIT Units valued at $17.50 per unit.

    On September 25, 1998, in conjunction with the refinancing of the One
Norwest Center mortgage, the Company incurred an extraordinary loss of
approximately $2,269,000, which represents the unamortized deferred financing
costs and prepayment fees on the previous One Norwest Center mortgage at the
time of the refinancing.

    On October 9, 1998, in conjunction with the refinancing of the Corporate 500
Centre mortgage, the Company incurred an extraordinary loss of $354,717, which
represents the unamortized deferred financing costs on the previous Corporate
500 Centre mortgage at the time of the refinancing.

    On November 3, 1998, the Company obtained a $550.0 million Revolving Credit
Facility from a syndicate of 17 banks led by Deutsche Bank, The Chase Manhattan
Bank and Bank of America. In conjunction with obtaining this new Revolving
Credit Facility, the Company incurred an extraordinary loss of $1,680,016, which
represents the unamortized deferred financing costs related to the previous
$350.0 million facility, which was extinguished at the time that the new
Revolving Credit Facility was obtained.

    On December 16, 1998, the Company consummated the Wilson Acquisition for a
purchase price of approximately $1.8 billion, consisting of approximately
14.9 million shares of Common Stock valued at $17.25 per share (recorded at
$16.25 per share for GAAP purposes), approximately 16.2 million UPREIT Units
valued at $17.25 per unit (recorded at $16.25 for GAAP purposes), approximately
$465.0 million in cash and the assumption of approximately $760.0 million of
property and construction related debt (recorded at $773.7 million for GAAP
purposes). The Company also recorded a minority interest of $241.0 million in
connection with this acquisition.

    During the first quarter of 1999, pursuant to the requirements of SOP 98-5
(as defined in Note 1), the Company wrote off all unamortized organizational
costs and recorded a cumulative effect of a change in accounting principle of
$630,044.

    On February 1, 1999, the Company issued 113,500 shares of restricted stock
valued at $15.50 per share to certain employees of the Company. Refer to Note 8
for the vesting of this grant.

    On June 23, 1999, in conjunction with the restructuring of property-related
debt with Prudential Insurance Company of America and Northwestern Mutual Life
Insurance Company, the Company incurred an extraordinary loss of approximately
$3,355,000, of which approximately $1,560,000 represents the unamortized
premium/discounts associated with various debt instruments that were assumed as
part of the Wilson Acquisition. See Note 5 for more information about this
restructuring.

                                      F-27
<PAGE>
    During 1999, 1,700 shares of restricted Common Stock issued to certain
employees of the Company were forfeited as a result of their separation from the
Company.

    On July 30, 1999, 562,588 UPREIT Units were redeemed for shares of Common
Stock on a one-for-one basis.

    On August 3, 1999, 562,587 UPREIT Units were redeemed for shares of Common
Stock on a one-for-one basis.

    On August 17, 1999, the Company reacquired 10,833 shares of restricted
Common Stock as a result of the forfeiture of these shares by a certain employee
of the Company.

    On October 6, 1999, in conjunction with the restructuring of
property-related debt with Northwestern Mutual Life Insurance Company, the
Company incurred an extraordinary loss of approximately $7,432,000, of which
approximately $2,551,000 represents the unamortized premium/discounts associated
with various debt instruments. See Note 5 for more information about this
restructuring.

    On December 10, 1999, in conjunction with the sale of One Norwest Center in
Denver, Colorado, $97.3 million of outstanding debt was assumed by the
purchaser.

17. SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

    (Dollar amounts in thousands except per share amounts):

<TABLE>
<CAPTION>
                                                                    QUARTER ENDED
                                                   ------------------------------------------------
                                                   DECEMBER 31   SEPTEMBER 30   JUNE 30    MARCH 31
                                                   -----------   ------------   --------   --------
<S>                                                <C>           <C>            <C>        <C>
1999
Revenues.........................................   $155,515       $156,539     $153,629   $151,765
Income before cumulative effect of a change in
  accounting principle and extraordinary loss....    141,046         42,267       29,095     29,662
Cumulative effect of a change in accounting
  principle......................................         --             --           --       (630)
Extraordinary loss...............................     (7,432)            --       (3,355)        --
Net income.......................................    133,614         42,267       25,740     29,032
Per share data:
  Income before cumulative effect of a change in
    accounting principle and extraordinary
    item.........................................       1.08           0.32         0.22       0.22
  Basic net income per common share..............       1.02           0.32         0.19       0.22
  Diluted net income per common share............       1.00           0.32         0.19       0.22

1998
Revenues.........................................   $102,402       $ 89,038     $ 86,490   $ 81,556
Income before extraordinary item.................     24,535         21,227       19,252     22,754
Extraordinary loss...............................     (2,034)        (2,269)          --         --
Net income.......................................     22,501         18,958       19,252     22,754
Per share data:
  Income before extraordinary item...............       0.22           0.20         0.18       0.24
  Basic and diluted net income per common
    share........................................       0.20           0.18         0.18       0.24
</TABLE>

                                      F-28
<PAGE>
18. SEGMENT REPORTING

    The Company has one reportable segment--real estate. The Company does not
have any foreign operations. The accounting policies of the segment are the same
as those described in Note 1. See Note 13 for information regarding
concentration of risk.

    The Company evaluates performance based on net operating income from the
individual properties in the segment. (Dollar amounts in thousands)

<TABLE>
<CAPTION>
                                                           CORPORATE &    COMPANY
                                           TOTAL SEGMENT    OTHER(A)       TOTAL
                                           -------------   -----------   ----------
<S>                                        <C>             <C>           <C>
Total revenues (B):
1999.....................................   $  611,657      $   5,791    $  617,448
1998.....................................      354,145          5,341       359,486
1997.....................................      160,490         13,421       173,911
Total operating and Interest expenses
  (C):
1999.....................................   $  212,686      $ 156,263    $  368,949
1998.....................................      122,423         80,472       202,895
1997.....................................       61,522         41,541       103,063
Net operating income (D):
1999.....................................   $  398,971      $(150,472)   $  248,499
1998.....................................      231,722        (75,131)      156,591
1997.....................................       98,968        (28,120)       70,848
Total long-lived assets (E):
1999.....................................   $3,770,924      $  66,064    $3,836,988
1998.....................................    4,137,302         54,782     4,192,084
1997.....................................    1,996,404          9,147     2,005,551
Total assets:
1999.....................................   $3,776,765      $ 393,463    $4,170,228
1998.....................................    4,198,099         83,885     4,281,984
1997.....................................    1,757,372        294,109     2,051,481
</TABLE>

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

(A) Corporate and Other represents all corporate-level items (including interest
    income, interest expense and general and administrative expenses) as well as
    intercompany eliminations necessary to reconcile to consolidated Company
    totals.

(B) Total revenues represents all revenues during the period (including the
    Company's earnings in real estate joint ventures). All interest income is
    excluded from the segment amounts and is classified in Corporate and Other
    for all periods.

(C) Total operating and interest expenses represents the sum of building
    operating expenses, real estate taxes, interest expense and general and
    administrative expenses. All interest expense (including property level
    mortgages) is excluded from the segment amounts and is classified in
    Corporate and Other for all periods. Amounts presented exclude depreciation
    and amortization of $96,726,000, $59,278,000 and $30,978,000 in 1999, 1998
    and 1997, respectively.

(D) Net operating income represents total revenues (as defined in note (B)
    above) less total operating and interest expense (as defined in note (C)
    above) for the period.

(E) Long-lived assets is composed of total rentals property, investments in
    joint ventures, other deferred costs, deferred tenant receivables and
    certain other assets.

                                      F-29
<PAGE>
19. SUBSEQUENT EVENTS

    On January 20, 2000, the Company declared a distribution of $0.31 per
share/unit paid on February 29, 2000, to Common Stockholders and Unitholders of
record as of January 31, 2000.

    On January 21, 2000, the Company purchased 400 Capitol Mall in Sacramento,
California. This property contains approximately 502,000 rentable square feet.
The total purchase price for the Property was approximately $130.0 million,
consisting of approximately $128.0 million in cash, of which $104.8 million was
Section 1031 exchange funds from the sale of One Norwest Center in Denver,
Colorado, and approximately $2.0 million of which was paid in UPREIT Units
valued at $17.25 per unit.

    On March 8, 2000, as provided in the merger agreement with EOP, the Board of
Directors declared a distribution of $0.20 per share/unit, payable on April 14,
2000, to Common Stockholders and Unitholders of record as of March 31, 2000.
This distribution was declared to make Cornerstone's distribution schedule
consistent with that of EOP pending the merger (see above). Thereafter, it is
anticipated that Cornerstone's dividends will be paid as of the end of each
quarter until the completion of the EOP Merger.

    On March 8, 2000, 9,200 UPREIT Units were redeemed for shares of Common
Stock on a one-for-one basis.

    On March 15, 2000, the Company sold its interest in a Property located in
East Bay, California for gross proceeds of $14,425,000. The Property had been
acquired as part of the Wilson Acquisition in December 1998.

    On March 23, 2000, the Company sold its interest in a Property located in
East Bay, California for gross proceeds of $12,800,000. The Property had been
acquired as part of the Wilson Acquisition in December 1998.

                                      F-30
<PAGE>
                          CORNERSTONE PROPERTIES INC.
                    REAL ESTATE AND ACCUMULATED DEPRECIATION
                                  SCHEDULE III
                               DECEMBER 31, 1999
<TABLE>
<CAPTION>
                     COLUMN A                         COLUMN B           COLUMN C              COLUMN D             COLUMN E
--------------------------------------------------  ------------  -----------------------  ----------------  ----------------------
                                                                                           COST CAPITALIZED  GROSS AMOUNT AT WHICH
                                                                                            SUBSEQUENT TO     CARRIED AT CLOSE OF
                                                                  INITIAL COST TO COMPANY    ACQUISITION             PERIOD
          (DOLLAR AMOUNTS IN THOUSANDS)                           -----------------------  ----------------  ----------------------
                                                                              BUILDING &        LAND &                  BUILDING &
                   DESCRIPTION                      ENCUMBRANCES    LAND     IMPROVEMENTS    IMPROVEMENTS      LAND    IMPROVEMENTS
--------------------------------------------------  ------------  ---------  ------------  ----------------  --------  ------------
<S>                                                 <C>           <C>        <C>           <C>               <C>       <C>
Boston, Massachusetts
  Sixty State Street..............................   $   85,420   $     --    $  221,568       $  6,813      $     --   $  228,381
  500 Boylston Street.............................                  45,132       181,574           (112)       45,132      181,462
  222 Berkeley Street.............................                  29,262       118,180            284        29,262      118,464
  125 Summer Street...............................       78,844     15,750        89,250          7,867        15,750       97,117
  One Memorial Drive..............................       63,119     22,500        90,873             (6)       22,500       90,867

San Mateo County, California
  Bayhill (4 buildings)...........................       57,764     26,353       105,412          2,166        26,353      107,578
  Peninsula Office Park (7 buildings).............       88,128     25,426       101,705          2,885        25,426      104,590
  Seaport Centre..................................       58,000     23,530        94,119          5,259        23,530       99,378
  Bay Park Plaza (2 buildings)....................                  13,139        52,556            244        13,139       52,800
  One Bay Plaza...................................                   9,125        36,499          1,165         9,125       37,664

East Bay, California
  Corporate Centre (2 buildings)..................                   9,808        39,233            637         9,808       39,870
  ADP Plaza (2 buildings).........................                  10,278        41,110            502        10,278       41,612
  PeopleSoft Plaza................................                  10,025        40,100            644        10,025       40,744
  Norris Tech Center (3 buildings)................       16,066      7,223        28,893            379         7,223       29,272
  Golden Bear Center..............................       20,477      6,426        25,705            250         6,426       25,955
  2700 Ygnacio Valley Road........................                   2,375         9,498            192         2,375        9,690
  Park Plaza......................................                   2,673        10,693            323         2,673       11,016
  1600 South Main.................................                   2,501        10,003            175         2,501       10,178

Atlanta, Georgia
  191 Peachtree Street............................                  40,110       228,962          4,575        40,110      233,537
  200 Galleria....................................      120,000(B)   11,994       48,443          3,622        12,726       51,332

Seattle, Washington
  Washington Mutual Tower (3 buildings)...........       79,100     21,167        43,153        150,354        21,173      193,501
  110 Atrium Place................................       21,517      7,810        31,242            357         7,810       31,599
  Island Corporate Center.........................       13,170      3,751        15,004            325         3,751       15,329

<CAPTION>
                     COLUMN A                                       COLUMN F           COLUMN G        COLUMN H       COLUMN I
--------------------------------------------------              -----------------  -----------------  -----------  ---------------

                                                                                                                    LIFE ON WHICH
                                                                                                                   DEPRECIATION IN
          (DOLLAR AMOUNTS IN THOUSANDS)                                               (UNAUDITED)     (UNAUDITED)   LATEST INCOME
                                                                   ACCUMULATED           YEAR            DATE       STATEMENTS IS
                   DESCRIPTION                        TOTAL       DEPRECIATION        CONSTRUCTED      ACQUIRED     COMPUTED (A)
--------------------------------------------------  ----------  -----------------  -----------------  -----------  ---------------
<S>                                                 <C>         <C>                <C>                <C>          <C>
Boston, Massachusetts
  Sixty State Street..............................  $  228,381          $(11,312)              1979    12/31/97          40
  500 Boylston Street.............................     226,594            (9,949)              1988    10/27/97          40
  222 Berkeley Street.............................     147,726            (6,515)              1991    10/27/97          40
  125 Summer Street...............................     112,867           (12,611)              1989     11/1/95          40
  One Memorial Drive..............................     113,367            (3,812)              1985     4/28/98          40
San Mateo County, California
  Bayhill (4 buildings)...........................     133,931            (2,836)        1982--1987    12/16/98          40
  Peninsula Office Park (7 buildings).............     130,016            (2,759)        1971--1998    12/16/98          40
  Seaport Centre..................................     122,908            (2,772)              1988    12/16/98          40
  Bay Park Plaza (2 buildings)....................      65,939            (1,403)        1985--1998    12/16/98          40
  One Bay Plaza...................................      46,789              (997)              1979    12/16/98          40
East Bay, California
  Corporate Centre (2 buildings)..................      49,678            (1,066)        1985--1987    12/16/98          40
  ADP Plaza (2 buildings).........................      51,890            (1,110)        1987--1989    12/16/98          40
  PeopleSoft Plaza................................      50,769            (1,069)              1984    12/16/98          40
  Norris Tech Center (3 buildings)................      36,495              (761)        1984--1998    12/16/98          40
  Golden Bear Center..............................      32,381              (702)              1986    12/16/98          40
  2700 Ygnacio Valley Road........................      12,065              (155)              1984    12/16/98          40
  Park Plaza......................................      13,689              (321)              1986    12/16/98          40
  1600 South Main.................................      12,679              (271)              1983    12/16/98          40
Atlanta, Georgia
  191 Peachtree Street............................     273,647           (13,469)              1991    10/27/97          40
  200 Galleria....................................      64,058            (3,146)              1985    10/27/97          40
Seattle, Washington
  Washington Mutual Tower (3 buildings)...........     214,674           (82,749)              1988      5/1/88          40
  110 Atrium Place................................      39,409              (839)              1981    12/16/98          40
  Island Corporate Center.........................      19,080              (404)              1987    12/16/98          40
</TABLE>

                                      F-31
<PAGE>
                          CORNERSTONE PROPERTIES INC.
                    REAL ESTATE AND ACCUMULATED DEPRECIATION
                                  SCHEDULE III
                               DECEMBER 31, 1999
<TABLE>
<CAPTION>
                     COLUMN A                         COLUMN B           COLUMN C              COLUMN D             COLUMN E
--------------------------------------------------  ------------  -----------------------  ----------------  ----------------------
                                                                                           COST CAPITALIZED  GROSS AMOUNT AT WHICH
                                                                                            SUBSEQUENT TO     CARRIED AT CLOSE OF
                                                                  INITIAL COST TO COMPANY    ACQUISITION             PERIOD
          (DOLLAR AMOUNTS IN THOUSANDS)                           -----------------------  ----------------  ----------------------
                                                                              BUILDING &        LAND &                  BUILDING &
                   DESCRIPTION                      ENCUMBRANCES    LAND     IMPROVEMENTS    IMPROVEMENTS      LAND    IMPROVEMENTS
--------------------------------------------------  ------------  ---------  ------------  ----------------  --------  ------------
<S>                                                 <C>           <C>        <C>           <C>               <C>       <C>

Santa Clara, California
  Pruneyard Office (3 buildings)..................       60,947     11,896        47,583         13,162        11,896       60,745
  10 Almaden......................................                  14,306        57,223            314        14,306       57,537
  Pruneyard Shopping Center.......................                   8,491        33,966          1,053         8,491       35,019
  Embarcadero Place (4 buildings).................       38,149     11,728        46,913            (63)       11,728       46,850
  Pruneyard Inn (C)...............................                   3,057        12,228          3,126         3,057       15,354

San Francisco, California
  120 Montgomery Street...........................       48,160     16,427        65,709          2,958        16,427       68,667
  201 California Street...........................       44,504     11,350        46,040          2,007        11,350       48,047
  188 Embarcadero.................................       15,606      4,718        18,871            399         4,718       19,270

Minneapolis, Minnesota
  Norwest Center..................................      110,000     18,000        33,613        152,888        18,000      186,501

Washington, D.C./Alexandria, Virginia
  Market Square (2 buildings).....................             (B)   50,199      201,084          2,964        50,199      204,048
  99 Canal Center.................................                   4,551        18,380          1,574         4,551       19,954
  TransPotomac Plaza 5............................       65,000(B)    2,124        8,577          1,000         2,124        9,577
  11 Canal Center.................................                   2,326         9,394            500         2,326        9,894

Suburban Chicago, Illinois
  Corporate 500 Centre (4 buildings)..............       88,424     30,000       120,163          3,456        30,000      123,619
  One Lincoln Centre..............................       65,000(B)    2,192       47,758          4,302         2,192       52,060

Santa Monica/West Los Angeles, California
  West Wilshire (2 buildings).....................       16,926      7,492        29,970            629         7,492       30,599
  Wilshire Palisades..............................       29,047     12,650        52,247          1,291        12,650       53,538
  Janss Court (D).................................       18,357      7,274        29,098            147         7,274       29,245
  Searise Office Tower............................       11,607      6,043        24,172            347         6,043       24,519
  Commerce Park...................................                   2,653        10,613            149            --       13,415
  429 Santa Monica................................                   3,899        15,595            317         3,899       15,912

Orange County, California
  Bixby Ranch.....................................       28,528      9,681        38,723            300         9,681       39,023
  18301 Von Karman................................                   8,052        32,206          2,224         8,052       34,430
  2677 South Main.................................                   5,696        22,786          1,571         5,696       24,357

<CAPTION>
                     COLUMN A                                     COLUMN F        COLUMN G        COLUMN H       COLUMN I
--------------------------------------------------              ------------  -----------------  -----------  ---------------

                                                                                                               LIFE ON WHICH
                                                                                                              DEPRECIATION IN
          (DOLLAR AMOUNTS IN THOUSANDS)                                          (UNAUDITED)     (UNAUDITED)   LATEST INCOME
                                                                ACCUMULATED         YEAR            DATE       STATEMENTS IS
                   DESCRIPTION                        TOTAL     DEPRECIATION     CONSTRUCTED      ACQUIRED     COMPUTED (A)
--------------------------------------------------  ----------  ------------  -----------------  -----------  ---------------
<S>                                                 <C>         <C>           <C>                <C>          <C>
Santa Clara, California
  Pruneyard Office (3 buildings)..................      72,641      (1,517)         1971--1999    12/16/98          40
  10 Almaden......................................      71,843      (1,510)               1989    12/16/98          40
  Pruneyard Shopping Center.......................      43,510        (922)              1970s    12/16/98          40
  Embarcadero Place (4 buildings).................      58,578      (1,221)               1984    12/16/98          40
  Pruneyard Inn (C)...............................      18,411        (339)               1989    12/16/98          40
San Francisco, California
  120 Montgomery Street...........................      85,094      (1,846)               1955    12/16/98          40
  201 California Street...........................      59,397      (1,845)               1969      6/3/98          40
  188 Embarcadero.................................      23,988        (504)               1980    12/16/98          40
Minneapolis, Minnesota
  Norwest Center..................................     204,501     (84,164)               1988      7/1/88          40
Washington, D.C./Alexandria, Virginia
  Market Square (2 buildings).....................     254,247      (6,142)               1990     11/1/98          40
  99 Canal Center.................................      24,505      (1,089)               1986    10/27/97          40
  TransPotomac Plaza 5............................      11,701        (544)               1983    10/27/97          40
  11 Canal Center.................................      12,220        (573)               1986    10/27/97          40
Suburban Chicago, Illinois
  Corporate 500 Centre (4 buildings)..............     153,619      (5,958)          1986/1990     1/28/98          40
  One Lincoln Centre..............................      54,252      (4,361)               1986     11/8/96          40
Santa Monica/West Los Angeles, California
  West Wilshire (2 buildings).....................      38,091        (411)         1960--1976    12/16/98          40
  Wilshire Palisades..............................      66,188      (2,155)               1981      6/3/98          40
  Janss Court (D).................................      36,519        (772)               1989    12/16/98          40
  Searise Office Tower............................      30,562        (657)               1975    12/16/98          40
  Commerce Park...................................      13,415        (349)               1977    12/16/98          40
  429 Santa Monica................................      19,811        (411)               1982    12/16/98          40
Orange County, California
  Bixby Ranch.....................................      48,704      (1,024)               1987    12/16/98          40
  18301 Von Karman................................      42,482        (971)               1991    12/16/98          40
  2677 South Main.................................      30,053        (681)               1987    12/16/98          40
</TABLE>

                                      F-32
<PAGE>
                          CORNERSTONE PROPERTIES INC.
                    REAL ESTATE AND ACCUMULATED DEPRECIATION
                                  SCHEDULE III
                               DECEMBER 31, 1999
<TABLE>
<CAPTION>
                     COLUMN A                         COLUMN B           COLUMN C              COLUMN D             COLUMN E
--------------------------------------------------  ------------  -----------------------  ----------------  ----------------------
                                                                                           COST CAPITALIZED  GROSS AMOUNT AT WHICH
                                                                                            SUBSEQUENT TO     CARRIED AT CLOSE OF
                                                                  INITIAL COST TO COMPANY    ACQUISITION             PERIOD
          (DOLLAR AMOUNTS IN THOUSANDS)                           -----------------------  ----------------  ----------------------
                                                                              BUILDING &        LAND &                  BUILDING &
                   DESCRIPTION                      ENCUMBRANCES    LAND     IMPROVEMENTS    IMPROVEMENTS      LAND    IMPROVEMENTS
--------------------------------------------------  ------------  ---------  ------------  ----------------  --------  ------------
<S>                                                 <C>           <C>        <C>           <C>               <C>       <C>

San Diego, California
  Centerside II...................................       24,254      7,524        30,094            609         7,523       30,703
  Crossroads......................................                   3,207        12,828            222         3,207       13,050

Los Angeles, California
  700 North Brand.................................       26,938      8,112        32,450            145         8,112       32,595
  Warner Park Center..............................                   1,746         6,986            123         1,746        7,109

New York City, New York
  527 Madison Avenue..............................             (B)   21,440       46,643          2,627        21,440       49,270
  Tower 56........................................       25,024      5,528        25,203          9,434         5,528       34,637

Conejo Valley (Ventura), California
  Westlake Spectrum (2 buildings).................                   3,510        14,038            177         3,510       14,215
  Agoura Hills....................................       12,003      3,821        15,284            241         3,821       15,525

Other
  U.S. West (Murray, Utah)........................                   3,311        13,245            185         3,311       13,430
  Exposition Centre (Sacramento, CA)..............        5,081      1,772         7,089            209         1,772        7,298

  Projects under development......................                  46,720        10,103          6,309        46,132       17,000
                                                     ----------   --------    ----------       --------      --------   ----------

  Grand Total.....................................   $1,435,160   $707,854    $2,900,650       $405,796      $705,350   $3,308,948
                                                     ==========   ========    ==========       ========      ========   ==========

<CAPTION>
                     COLUMN A                                     COLUMN F        COLUMN G        COLUMN H       COLUMN I
--------------------------------------------------              ------------  -----------------  -----------  ---------------

                                                                                                               LIFE ON WHICH
                                                                                                              DEPRECIATION IN
          (DOLLAR AMOUNTS IN THOUSANDS)                                          (UNAUDITED)     (UNAUDITED)   LATEST INCOME
                                                                ACCUMULATED         YEAR            DATE       STATEMENTS IS
                   DESCRIPTION                        TOTAL     DEPRECIATION     CONSTRUCTED      ACQUIRED     COMPUTED (A)
--------------------------------------------------  ----------  ------------  -----------------  -----------  ---------------
<S>                                                 <C>         <C>           <C>                <C>          <C>
San Diego, California
  Centerside II...................................      38,226        (803)               1987    12/16/98          40
  Crossroads......................................      16,257        (358)               1983    12/16/98          40
Los Angeles, California
  700 North Brand.................................      40,707        (852)               1981    12/16/98          40
  Warner Park Center..............................       8,855        (183)               1986    12/16/98          40
New York City, New York
  527 Madison Avenue..............................      70,710      (3,762)               1986     2/14/97          40
  Tower 56........................................      40,165      (3,501)               1983     4/24/96          40
Conejo Valley (Ventura), California
  Westlake Spectrum (2 buildings).................      17,725        (367)               1990    12/16/98          40
  Agoura Hills....................................      19,346        (417)               1987    12/16/98          40
Other
  U.S. West (Murray, Utah)........................      16,741        (375)               1985    12/16/98          40
  Exposition Centre (Sacramento, CA)..............       9,070        (222)               1984    12/16/98          40
  Projects under development......................      63,132          --                 N/A          --        N/ A
                                                    ----------   ---------
  Grand Total.....................................  $4,014,298   $(291,834)
                                                    ==========   =========
</TABLE>

(A) The life to compute depreciation on Buildings is 40 years. The life to
    compute depreciation on Building Improvements is 3 to 40 years.

(B) The three notes arising from the acquisition of several properties from PGGM
    (a major stockholder and related party) are cross-collateralized, having the
    effect of forming a "collateral pool" for the underlying notes. In addition,
    the $181.0 million first mortgage loan on Market Square, which the Company
    purchased from PGGM in 1997, has been pledged as collateral for the $120.0
    million 200 Galleria loan.

(C) The Pruneyard Inn is a 172-room hotel.

(D) In addition to 92,000 square feet of retail and office space, Janss Court
    contains 32 apartments comprising 33,000 rentable square feet of residential
    space.

                                      F-33
<PAGE>
                          CORNERSTONE PROPERTIES INC.
                     REAL ESTATE AND ACCUMULATED DEPRECIATION
                                   SCHEDULE III
                                DECEMBER 31, 1999

                                  (CONTINUED)

Reconciliation of "Real Estate and Accumulated Depreciation"

<TABLE>
<CAPTION>
                                                                 1999         1998         1997
                                                              ----------   ----------   ----------
<S>                                                           <C>          <C>          <C>
INVESTMENT IN REAL ESTATE

Balance, beginning of period................................  $4,340,449   $1,947,272   $  799,662
  Additions during period:
    Acquisitions............................................      38,437    2,410,427    1,135,629
    Improvements............................................      14,904       30,690       12,468
  Deductions during period:
    Properties disposed of..................................    (358,670)     (47,940)          --
    Retirements and writeoffs...............................     (20,822)          --         (487)
                                                              ----------   ----------   ----------
Balance, end of period......................................  $4,014,298   $4,340,449   $1,947,272
                                                              ==========   ==========   ==========
ACCUMULATED DEPRECIATION

Balance, beginning of period................................  $  288,448   $  229,652   $  198,686
  Additions during period:
    Depreciation............................................      96,726       59,278       30,976
  Deductions during period:
    Properties disposed of..................................     (73,131)        (478)          --
    Retirements and writeoffs...............................     (20,209)          (4)         (12)
                                                              ----------   ----------   ----------
Balance, end of period......................................  $  291,834   $  288,448   $  229,652
                                                              ==========   ==========   ==========
</TABLE>

                                      F-34