FORM 10-K/A
                                  Amendment #1
                       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, 1995

[     ]  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 0-10421

                           CORNERSTONE PROPERTIES INC.
             (Exact name of Registrant as specified in its Charter)

                  Nevada                        74-2170858
      (State or other jurisdiction of         (IRS Employer
      incorporation and organization)       Identification No.)

                              126 East 56th Street
                               New York, NY 10022
                              (Address of principal
                               executive offices)

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

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

       Securities registered pursuant to Section 12(g) of the Act:
                                  Common Stock
                                (Title of Class)

   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.    [X]

   The registrant hereby amends Item 7 and Item 14 of its Form 10-K, dated March
27, 1996, as set forth in the pages attached hereto.


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

RESULTS OF OPERATIONS

Interest Rate Swap Agreements
Each of the interest rate swaps referenced in Note 16 is accounted for using the
following method:

The $107 million  interest rate swap  agreement with a maturity date of July 30,
1998,  was  accounted  for on the accrual  method since it was  comprised of two
offsetting  swaps,  resulting  in a  fixed  payment  from  the  Company  to  its
counterparties through the term of the swaps.

The $21  million  interest  rate  swap  agreement  was put in place to hedge the
interest rate risk on  Cornerstone's  $33 million  dollar  credit  facility with
Deutsche Bank. Since this was a floating rate facility, the Company used accrual
accounting  when  accounting for its swap payments.  Upon the refinancing of the
facility into a fixed rate facility in August 1995, this swap was terminated and
the loss recognized as an extraordinary loss.

The $120 million interest rate swap agreement maturing December 31, 2003 was put
in place to hedge the interest  rate risk on the $130  million  letter of credit
facility  with  Deutsche  Bank.  Since this was a floating  rate  facility,  the
Company used accrual accounting when accounting for its swap payments.  Upon the
refinancing of the facility into a fixed rate facility in September  1995,  this
swap was terminated and the loss recognized as an extraordinary loss.

The $110 million interest rate swap agreement maturing December 31, 2003 was put
in place to hedge the interest  rate risk on the $115  million  letter of credit
facility  with  Deutsche  Bank.  Since this was a floating  rate  facility,  the
Company used accrual accounting when accounting for its swap payments.  Upon the
refinancing of the facility into a fixed rate facility in April 1995,  this swap
was terminated and the loss recognized as an extraordinary loss.

For the years ended December 31, 1995,  1994 and 1993,  interest  expense of the
Company included  approximately  $2.25 million,  $8.4 million and $11.9 million,
respectively, of expense related to interest rate swap agreements. Since the $98
million swap is a forward swap and accounted  for on a mark to market basis,  it
had no effect on the reported interest expense of the Company.











                                    21

<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

Cash Flow

Cash flow           
provided by                  For the year ended December 31,
(used in):                   1995         1994         1993
----------------------------------------------------------------
Operating activities   $  20,036    $  28,968    $  20,077
Investing activities    (135,527)      (1,762)      13,240
Financing activities     110,725      (33,141)     (24,137)



Year Ended  December  31, 1995  Compared to Year Ended  December 31, 1994

In the year ended  December 31, 1995,  the Company  generated  net cash of $20.0
million from operating  activities compared to $29.0 million in 1994, a decrease
of $9.0 million or 31%. The  Company's  net loss in the year ended  December 31,
1995  increased to $13.6  million from a loss of $7.0 million in 1994  primarily
due  to  unrealized  losses  on  its  interest  rate  hedge  agreements  and  an
extraordinary  loss related to its prepayment of debt on Washington Mutual Tower
and Norwest Center.  Adjustments to the Company's net loss in 1995 included $7.6
million  to reflect  the  Company's  unrealized  loss on an  interest  rate swap
described  above and a reduction  of $8.1 million in the  Company's  increase in
accounts  payable,  accrued expenses and other  liabilities from 1994 due to the
prepayment  of the rentals  relating to the  priority  distributions  in 1994 on
Washington  Mutual Tower and a major  prepayment of a rent at Washington  Mutual
Tower in the amount of $3.3  million.  In addition,  the  Company's  decrease in
accrued  interest  payable rose to $3.1  million in the year ended  December 31,
1995  compared  to $0.7  million  in 1994 due the  change in the  timing of debt
service  payments  at  Norwest  Center,  and its  change  in  tenant  and  other
receivables  outstanding  increased  by $1.8  million due to  increases in notes
receivable and advisory fees receivable in 1995.

Cash used by the Company in investing  activities  rose to $135.5 million in the
year ended  December  31,  1995  compared  to $1.8  million  in 1994.  Investing
activities in 1995 included the purchase of 125 Summer Street for $105.0 million
and the  acquisition  of Tower 56 for $30.5 million.  Additionally,  the Company
received  prepayment  of the $1 million note  receivable  from Wright  Runstad &
Company.

Cash  provided by financing  activities  amounted to $110.7  million in the year
ended  December 31, 1995  compared to $33.1  million which was used in financing
activities in 1994, for a total increase of $143.8  million.  On August 4, 1995,
the  Company  received  $90.4  million  gross  proceeds  from the  placement  of
6,325,000  new shares of Common Stock at a price of $14.30 per share with retail
investors in Germany through underwriters led by Deutsche Bank. The net proceeds
were used for the purchase of 125 Summer Street and the Tower 56 mortgage  note.
Also on  August  4,  1995,  3,030,303  shares  of the  Company's  7%  Cumulative
Convertible  Preferred  Stock were issued to Deutsche Bank for gross proceeds of
$50.0 million.  The net proceeds from the preferred  share issuance were used to
retire indebtedness existing at the time. On December 27, 1995, the Company also
received  proceeds  through  a  dividend  reinvestment  plan  available  to  all
shareholders of approximately $2.8 million for 207,302 shares of Common Stock.
                                    
                                       23

<PAGE>
For the years ended  December 31, 1995 and 1994,  the  Company's  earnings  were
insufficient to cover its fixed charges by approximately  $13.6 million and $7.0
million, respectively.

Year Ended  December  31,  1994  Compared to Year Ended  December  31, 1993
---------------------------------------------------------------------------

Cash provided by operating  activities increased from $20.1 million for the year
ended  December 31, 1993 to $29.0 million at December 31, 1994. The increase was
mainly  due to the large  prepayment  of rental  income by two large  tenants at
Washington Mutual Tower.

Cash provided by investing  activities  for the year ended December 31, 1993 was
$13.2 million due to the sale of the Atrium adjacent to One Norwest Center.  For
the year ended December 31, 1994, the Company used cash in investing  activities
of $1.8  million.  The majority of this amount was used for tenant  improvements
and leasing  commissions  at the  properties  which was partially  offset by the
principal  repayment of $1.0 million under the $10 million rent notes receivable
from Hines.

Cash used in financing  activities increased from $24.1 million to $33.1 million
as a result of  increased  distributions  and the  repayment  of the zero coupon
notes in 1994. The amount is partially  offset by a large decrease in restricted
cash in 1994. In addition,  distributions  to minority  partners  increased from
$3.4 million to $11.9 million due to the prepayment of the priority distribution
at Washington Mutual Tower.

For the year ended December 31, 1993 the Company's earnings were insufficient to
cover its fixed charges by approximately $5.7 million.



























                                      23-a


<PAGE>
FUNDS FROM OPERATIONS
The Company  calculates Funds from Operations (FFO) based upon guidance from the
National  Association of Real Estate Investment Trusts (NAREIT).  FFO is defined
as net income,  excluding gains or losses from debt  restructuring  and sales of
property,  plus  depreciation  and  amortization,   and  after  adjustments  for
unconsolidated  joint  ventures.  The Company has adjusted FFO by the unrealized
loss on interest rate swap previously discussed due to the unrealized,  non-cash
nature of this charge.

Industry  analysts  generally  consider  FFO  to be an  appropriate  measure  of
performance  of  an  equity  Real  Estate   Investment   Trust  (REIT)  such  as
Cornerstone.  FFO does not represent cash generated from operating activities in
accordance with generally accepted accounting principles and, therefore,  should
not be considered a substitute for net income as a measure of performance or for
cash flow from  operations  as a measure of liquidity  calculated  in accordance
with generally accepted accounting principles.

The  Company  believes  that FFO is  helpful  to  investors  as a measure of the
performance  of an equity  REIT  because,  along with cash flows from  operating
activities, financing activities and investing activities, it provides investors
an  understanding of the ability of the Company to incur and service debt and to
make  capital  expenditures.  For  cash  flows  from  operating,  financing  and
investing activities,  see the Consolidated Statements of Cash Flows included in
the Consolidated Financial Statements which are part of this report.

For comparability purposes, the amounts reported in FFO for 1993 and 1994 differ
from  those  previously  reported  to  adjust  for  the  revisions  to  the  FFO
calculation recently adopted by the Board of Governors of NAREIT.  Additionally,
the Company no longer  reports free and deferred  rents as an  adjustment to FFO
since this is not part of the industry standard.  Therefore, included in FFO for
1995, 1994 and 1993 are $2,058,000, $2,439,000 and $2,813,000,  respectively, of
free and deferred rents.



















                                    24
<PAGE>
The table  below sets forth the  adjustments  which were made to the net loss of
the Company for the last three years in the calculation of FFO (in thousands):

                                                   Funds From Operations (A)

                                                   1995      1994      1993
                                                   ----      ----      ----

 Net loss ................................  ($ 13,574)   ($ 6,990)   ($ 5,748)

 NAREIT Adjustments:
    Depreciation and amortization ........     22,572      22,321      23,417
    Unrealized losses ....................      7,672        --          --
    Extraordinary losses .................      4,445         581        --
    Minority interest adjustments ........     (1,617)     (1,358)       (748)

 Other Adjustments:
    Amortization on rent notes ...........      1,119       1,008         907
    Real estate tax adjustment ...........        807        --          --
    Capital loss (reserves) ..............       --          --         2,697
                                             --------    --------    --------
 Funds From Operations ...................     21,424      15,562      20,525
                                             --------    --------    --------

 Accrued Preferred Dividend ..............     (1,449)       --          --
                                             ---------  ---------    --------

 Funds From Operations
 Available For Common Shares                  $19,975     $15,562     $20,525
                                              ========    =======     =======

            (A) Although the Company believes that this table is a full and fair
            presentation of the Company's FFO, similarly  captioned items may be
            defined differently by other REITs, in which case direct comparisons
            may not be possible.

The increase in FFO from 1994 to 1995 was  primarily  due to the  completion  in
1994 of the Denver garage repair (approximately $1.3 million),  increased rental
revenue in 1995 from existing properties net of minority interest (approximately
$1.8 million),  earnings  arising from the purchase of 125 Summer Street in 1995
(approximately  $1.4 million),  interest savings as a result of the repayment of
the  zero  coupon  debt  in  1994,  the  reduction  of the  outstanding  debt at
Washington  Mutual Tower, and the restructuring of the term loan, which in total
reduced interest expense by approximately $1.3 million,  and additional interest
income of approximately $0.8 million from investment earnings on the proceeds of
the equity offering and increased advisory income of $0.9 million in 1995. These
increases are partially offset by the increase in corporate overhead expenses in
1995 of $1.7 million.






                                      24-a
<PAGE>
The FFO for 1994 and 1993 represents an exceptional low and high,  respectively.
This was anticipated by management and arose from certain  non-recurring events.
The  non-recurring  events  were  the  following:  (i) the  receipt  of  certain
non-recurring income in 1993 of approximately $2.7 million, (ii) the elimination
of the Atrium rental  payments in 1994 of  approximately  $1.3 million and (iii)
the one-time  expense for the repair of the Denver parking  structure in 1994 of
approximately $1.3 million.  Additionally there was a reduction of rental income
of $0.5  million at One Norwest  Center,  which was offset by  interest  expense
savings of $0.9 million.  The  non-recurring  income received in 1993 related to
(i) the final guarantee period contribution in 1993 by Cornerstone's  partner in
Third and University  Limited  Partnership which was triggered upon successfully
attaining 98 percent  leasing  levels at Washington  Mutual Tower,  and (ii) the
reallocation of partnership  income triggered at NWC Limited  Partnership due to
the  achievement  of  increased  property  cash flow.  The sale of the Atrium in
September 1993 was consummated in order to reduce  leverage.  The elimination of
income from the Atrium resulted in an offsetting elimination of interest expense
as the zero coupon  notes  collateralized  by One Norwest  Center in Denver were
retired.  The  one-time  costs  related  to the  repair  of the  Denver  parking
structure are consistent with first-class portfolio  management.  These one-time
events had no impact on the  underlying  operations  or tenancy of the Company's
properties.  After  adjusting  for  these  one-time  events,  FFO  for  1994  is
substantially consistent with the 1993 amount.

The Company will seek to continue  increasing  FFO and the value of its property
portfolio by acquiring  additional  properties  that the Company  believes  will
produce  favorable  returns.  As  part  of its  ongoing  business,  the  Company
periodically engages in discussions with public and private real estate entities
regarding possible portfolio or asset acquisitions or business combinations.

























                                      24-b

<PAGE>
Item 14.   Exhibits, Financial Statement Schedules and Reports on Form
8-K.

               CORNERSTONE PROPERTIES INC. AND SUBSIDIARIES
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 1995, 1994 AND 1993


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

Principles of Consolidation
The accompanying  financial statements include the accounts of Cornerstone,  its
wholly-owned  qualified REIT  subsidiaries  and controlled  partnerships.  As of
December 31, 1993, NWC has been  consolidated  since  Cornerstone has a majority
interest in the economic  benefits and has the right to become managing  general
partner  at  its  sole  discretion;   the  results  of  operations  of  NWC  are
consolidated  for 1994 and reflected on the equity method of accounting prior to
January 1, 1994.  Lincoln and Third  Partnership  balance  sheet  accounts  were
consolidated  as of  December  31,  1992;  the  results  of  operations  of such
partnerships  have been  consolidated  since 1993.  Third  Partnership  has been
consolidated  since Cornerstone has a majority interest in the economic benefits
and has the right to become managing general partner at its sole discretion. All
significant  intercompany  balances and  transactions  have been  eliminated  in
consolidation.


Interest Rate Swap Agreements
The  Company  accounts  for its  interest  rate  swap  agreements  as  hedges in
accordance  with SFAS No. 80 "Accounting  for Futures  Contracts" if the swap is
designated  as a hedge and  effectively  reduces the  exposure to the Company of
market interest rate changes. Changes in the market value of these interest rate
swap  agreements  are deferred and  recognized  in income at the  expiration  or
termination of the underlying  debt.  Forward interest rate swap agreements that
do not meet hedge  criteria are accounted for using  mark-to-market  accounting,
recognizing any unrealized gain or loss on the instrument in the period in which
it is  outstanding.  When  swaps  are  extinguished  at  the  same  time  as the
underlying  debt  instrument,  the cost to  extinguish  the swap is  treated  as
extraordinary  gain or loss.  When a swap remains in place after the  underlying
instrument  matures,  it is accounted for on a  mark-to-market  basis.  The swap
termination  is accounted for as ordinary  gain or loss when it is  extinguished
with no underlying debt instrument in place.

Cornerstone  and/or its  subsidiaries  are parties to several interest rate swap
agreements used to hedge its interest rate exposure on floating rate debt (Notes
9, 13 and 16).  The  differential  to be paid or received is  recognized  in the
period  incurred and included net in interest  expense.  Cornerstone  and/or its
subsidiaries may be exposed to loss in the event of non-performance by the other
party to the  interest  rate  swap  agreements.  However,  Cornerstone  does not
anticipate non-performance by the counterparty.



                                       F-7
<PAGE>
Minority Interest
Minority Interest  represents the Company's partner's capital account balance in
Lincoln, NWC and Third Partnerships.  Debit balances in certain of these capital
accounts  originated  through  special  income  allocations  in accordance  with
certain provisions of the respective partnership agreement. Realizability of the
debit  balances is  continually  monitored by analyzing pro forma sales proceeds
calculations,   whose  terms  are  specified  in  the   respective   partnership
agreements.









































                                      F-7-a
<PAGE>
13.  UNREALIZED LOSS ON INTEREST RATE SWAP
The Company does not trade in  derivative  instruments  but rather uses interest
rate swap  agreements to hedge the interest rate risk on its financings with the
intention of obtaining the lowest effective  interest cost on its  indebtedness.
The  unrealized  loss of  $7,672,000,  which is included  as a liability  in the
balance sheet caption "Unearned revenue and other  liabilities",  represents the
estimated  amount, at December 31, 1995, that the Company would pay to terminate
the $98,000,000  notional amount forward interest rate swap with a maturity date
of February 17, 2007.  The Company has not  terminated  this swap  agreement and
intends to structure its future  financings in accordance with the policy stated
above.  The future  unrealized mark to market  adjustment on this swap agreement
will fluctuate with market interest rates.




































                                      F-20

<PAGE>

      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.

                                    CORNERSTONE PROPERTIES INC.
                                    (Registrant)



                                    /s/ John S. Moody
                                        John S. Moody, President & CEO
               
                                        DATED: February 21, 1997