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                                                                    EXHIBIT 10.2

                               ADVISORY AGREEMENT


         This ADVISORY AGREEMENT (this "AGREEMENT") is entered into on this the
____ day of February, 2003, by and between BEHRINGER HARVARD REIT I, INC., a
Maryland corporation (the "COMPANY"), and BEHRINGER ADVISORS LP, a Texas limited
partnership (the "ADVISOR").


                                   WITNESSETH

         WHEREAS, the Company will be issuing shares of its common stock, par
value $.0001, to the public, such shares to be registered with the Securities
and Exchange Commission and may subsequently issue additional securities;

         WHEREAS, the Company intends to continue to qualify as a real estate
investment trust and to invest its funds in investments permitted by the terms
of the Company's Articles of Incorporation and Sections 856 through 860 of the
Internal Revenue Code;

         WHEREAS, the Company desires to avail itself of the experience, sources
of information, advice, assistance and certain facilities available to the
Advisor and to have the Advisor undertake the duties and responsibilities
hereinafter set forth, on behalf of, and subject to the supervision of, the
Board of Directors of the Company, all as provided herein; and

         WHEREAS, the Advisor is willing to undertake to render such services,
subject to the supervision of the Board of Directors, on the terms and
conditions hereinafter set forth.

         NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:

                                   ARTICLE ONE

                                   DEFINITIONS

         The following defined terms used in this Agreement shall have the
meanings specified below:

ACQUISITION EXPENSES. Any and all expenses incurred by the Company, the Advisor,
or any Affiliate of either in connection with the selection, acquisition or
development of any Asset, whether or not acquired, including, without
limitation, legal fees and expenses, travel and communications expenses, costs
of appraisals, nonrefundable option payments on property not acquired,
accounting fees and expenses, and title insurance premiums.

ACQUISITION FEES. Any and all fees and commissions, exclusive of Acquisition
Expenses but including the Acquisition and Advisory Fees, paid by any Person to
any other Person (including any fees or commissions paid by or to any Affiliate
of the Company or the Advisor) in connection with making or investing in
Mortgages or the purchase, development or construction of an Asset, including,
without limitation, real estate commissions, selection fees, Development Fees,
Construction Fees, non-recurring management fees, loan fees, points or any other
fees of a similar nature. Excluded shall be Development Fees and Construction
Fees paid to any Person not affiliated with the Sponsor in connection with the
actual development and construction of any Property.

ACQUISITION AND ADVISORY FEES. The fees payable to the Advisor pursuant to
Section 3.01(b).


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ADVISOR. Behringer Advisors LP, a Texas limited partnership, any successor
advisor to the Company, or any Person to which Behringer Advisors LP or any
successor advisor subcontracts all or substantially all of its functions.

AFFILIATE OR AFFILIATED. As to any Person, (i) any Person directly or indirectly
owning, controlling, or holding, with the power to vote, 10% or more of the
outstanding voting securities of such Person; (ii) any Person 10% or more of
whose outstanding voting securities are directly or indirectly owned,
controlled, or held, with power to vote, by such other Person; (iii) any Person,
directly or indirectly, controlling, controlled by, or under common control with
such Person; (iv) any executive officer, director, trustee or general partner of
such Person; and (v) any legal entity for which such Person acts as an executive
officer, director, trustee or general partner.

AGGREGATE ASSETS VALUE. The aggregate book value of the Assets at the time of
measurement before deducting depreciation, bad debts or other similar non-cash
reserves and without reduction for any debt secured by or relating to such
assets; provided, however, that during such periods in which the Company is
obtaining regular independent valuations of the current value of its net assets
for purposes of enabling fiduciaries of employee benefit plan stockholders to
comply with applicable Department of Labor reporting requirements, "Aggregate
Assets Value" will equal the greater of (i) the amount determined pursuant to
the foregoing or (ii) the Assets' aggregate valuation established by the most
recent such valuation report without reduction for depreciation, bad debts or
other non-cash reserves and without reduction for any debt secured by or
relating to such assets.

APPRAISED VALUE. Value according to an appraisal made by an Independent
Appraiser.

ARTICLES OF INCORPORATION. The Articles of Incorporation of the Company filed
with the Maryland State Department of Assessments and Taxation in accordance
with the Maryland General Corporation Law, as amended from time to time.

ASSETS. Properties, Mortgages and other investments (other than investments in
bank accounts, money market funds or other current assets, whether of the
proceeds from an Offering or the sale of an Asset or otherwise) owned by the
Company, directly or indirectly through one or more of its Affiliates.

ASSET MANAGEMENT FEE. The fee payable to the Advisor for day-to-day professional
management services in connection with the Company and its investments in Assets
pursuant to this Agreement.

AVERAGE INVESTED ASSETS. For a specified period, the average of the aggregate
book value of the Assets, computed by taking the average of such values at the
end of each month during such period; provided, however, that during such
periods in which the Company is obtaining regular independent valuations of the
current value of its net assets for purposes of enabling fiduciaries of employee
benefit plan stockholders to comply with applicable Department of Labor
reporting requirements, "Average Invested Assets" will equal the greater of (i)
the amount determined pursuant to the foregoing or (ii) the Assets' aggregate
valuation established by the most recent such valuation report without reduction
for depreciation, bad debts or other non-cash reserves.

BOARD OF DIRECTORS. The Board of Directors of the Company.

BYLAWS. The bylaws of the Company, as the same are in effect from time to time.


CHANGE OF CONTROL. Any issue, transfer or other disposition of Shares of capital
stock of the Company or equity interests in the Partnership (including, without
limitation, pursuant to a merger, share exchange or




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consolidation) which results in a Person or group of Persons beneficially owning
or controlling, directly or indirectly, greater than 50% of the voting power of
the Company or the Partnership.


CODE. Internal Revenue Code of 1986, as amended from time to time, or any
successor statute thereto. Reference to any provision of the Code shall mean
such provision as in effect from time to time, as the same may be amended, and
any successor provision thereto, as interpreted by any applicable regulations as
in effect from time to time.

COMPANY. Behringer Harvard REIT I, Inc., a corporation organized under the laws
of the State of Maryland.

COMPETITIVE REAL ESTATE COMMISSION. A real estate or brokerage commission for
the purchase or sale of a Property which is reasonable, customary, and
competitive in light of the size, type and location of the Property.

CONSTRUCTION FEE. A fee or other remuneration for acting as general contractor
and/or construction manager to construct improvements, supervise and coordinate
projects or to provide major repairs or rehabilitations on a Property.

CONTRACT PURCHASE PRICE. The amount actually paid or allocated in respect of the
purchase, development, construction or improvement of an Asset or the amount of
funds advanced with respect to a Mortgage, exclusive of Acquisition Fees and
Acquisition Expenses.

CONTRACT SALES PRICE. The total consideration provided for in the sales contract
for the sale of a Property.

DEALER MANAGER. Behringer Securities LP, an Affiliate of the Advisor, or such
Person selected by the Board of Directors to act as the dealer manager for an
Offering.

DEVELOPMENT FEE. A fee for the packaging of a Property or Mortgage, including
the negotiation and approval of plans, and any assistance in obtaining zoning
and necessary variances and financing for a specific Property, either initially
or at a later date.

DIRECTOR. A member of the Board of Directors.

DIVIDENDS. Any dividends or other distributions of money or other property by
the Company to owners of Shares, including distributions that may constitute a
return of capital for federal income tax purposes.

GROSS PROCEEDS. The aggregate purchase price of all Shares sold for the account
of the Company through an Offering, without deduction for selling commissions,
volume discounts, any marketing support and due diligence expense reimbursement
or Organization and Offering Expenses. For the purpose of computing Gross
Proceeds, the purchase price of any Share for which reduced selling commissions
are paid to the Dealer Manager or a Soliciting Dealer (where net proceeds to the
Company are not reduced) shall be deemed to be the full amount of the Offering
price per Share pursuant to the Prospectus for such Offering without reduction.

INDEPENDENT APPRAISER. A Person with no material current or prior business or
personal relationship with the Advisor or the Directors and who is a qualified
appraiser of Real Property of the type held by the Company or of other Assets as
determined by the Board of Directors. Membership in a nationally recognized
appraisal society such as the American Institute of Real Estate Appraisers or
the Society of Real Estate Appraisers shall be conclusive evidence of such
qualification as to Real Property.


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INDEPENDENT DIRECTOR. A Director who is not on the date of determination, and
within the last two years from the date of determination has not been, directly
or indirectly associated with the Sponsor, the Advisor or any of their
Affiliates by virtue of (i) ownership of an interest in the Sponsor, the Advisor
or any of their Affiliates, other than the Company, (ii) employment by the
Sponsor, the Advisor or any of their Affiliates, (iii) service as an officer or
director of the Sponsor, the Advisor or any of their Affiliates, other than as a
Director of the Company, (iv) performance of services, other than as a Director
of the Company, (v) service as a director or trustee of more than three real
estate investment trusts organized by the Sponsor or advised by the Advisor, or
(vi) maintenance of a material business or professional relationship with the
Sponsor, the Advisor or any of their Affiliates. A business or professional
relationship is considered material if the aggregate gross revenue derived by
the Director from the Sponsor, the Advisor and their Affiliates exceeds 5.0% of
either the Director's annual gross income during either of the last two years or
the Director's net worth on a fair market value basis. An indirect association
with the Sponsor or the Advisor shall include circumstances in which a
Director's spouse, parent, child, sibling, mother- or father-in-law, son- or
daughter-in-law, or brother- or sister-in-law is or has been associated with the
Sponsor, the Advisor, any of their Affiliates, or the Company.


INTELLECTUAL PROPERTY RIGHTS. All rights, titles and interests, whether foreign
or domestic, in and to any and all trade secrets, confidential information
rights, patents, invention rights, copyrights, service marks, trademarks,
know-how, or similar intellectual property rights and all applications and
rights to apply for such rights, as well as any and all moral rights, rights of
privacy, publicity and similar rights and license rights of any type under the
laws or regulations of any governmental, regulatory, or judicial authority,
foreign or domestic and all renewals and extensions thereof.


INVESTED CAPITAL. The amount calculated by multiplying the total number of
Shares purchased by Stockholders by the issue price, reduced by the portion of
any Dividend that is attributable to Net Sales Proceeds and by any amounts paid
by the Company to repurchase Shares pursuant to the Company's plan for
repurchase of Shares.

JOINT VENTURES. The joint venture or partnership arrangements in which the
Company or the Partnership is a co-venturer or general partner which are
established to acquire or hold Assets.


LISTING OR LISTED. The listing of the Shares of the Company on a national
securities exchange or the quotation of shares on The Nasdaq Stock Market. Upon
such Listing, the Shares shall be deemed Listed.


MORTGAGES. In connection with mortgage financing provided, invested in or
purchased by the Company, all of the notes, deeds of trust, security interests
or other evidences of indebtedness or obligations, which are secured or
collateralized by Real Property owned by the borrowers under such notes, deeds
of trust, security interests or other evidences of indebtedness or obligations.

NET INCOME. For any period, the Company's total revenues applicable to such
period, less the total expenses applicable to such period other than additions
to reserves for depreciation, bad debts or other similar non-cash reserves and
excluding any gain from the sale of the Assets.

NET SALES PROCEEDS. In the case of a transaction described in clause (i)(A) of
the definition of Sale, the proceeds of any such transaction less the amount of
selling expenses incurred by or on behalf of the Company, including all real
estate commissions, closing costs and legal fees and expenses. In the case of a
transaction described in clause (i)(B) of such definition, Net Sales Proceeds
means the proceeds of any such transaction less the amount of selling expenses
incurred by or on behalf of the Company, including any legal fees and expenses
and other selling expenses incurred in connection with such transaction. In the
case of a transaction described in clause (i)(C) of such definition, Net Sales
Proceeds means the proceeds of any such transaction actually distributed to the
Company from the Joint Venture less the



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amount of any selling expenses, including legal fees and expenses incurred by or
on behalf of the Company (other than those paid by the Joint Venture). In the
case of a transaction or series of transactions described in clause (i)(D) of
the definition of Sale, Net Sales Proceeds means the proceeds of any such
transaction (including the aggregate of all payments under a Mortgage or in
satisfaction thereof other than regularly scheduled interest payments) less the
amount of selling expenses incurred by or on behalf of the Company, including
all commissions closing costs and legal fees and expenses. In the case of a
transaction described in clause (i)(E) of such definition, Net Sales Proceeds
means the proceeds of any such transaction less the amount of selling expenses
incurred by or on behalf of the Company, including any legal fees and expenses
and other selling expenses incurred in connection with such transaction. In the
case of a transaction described in clause (ii) of the definition of Sale, Net
Sales Proceeds means the proceeds of such transaction or series of transactions
less all amounts generated thereby which are reinvested in one or more Assets
within 180 days thereafter and less the amount of any real estate commissions,
closing costs, and legal fees and expenses and other selling expenses incurred
by or allocated to the Company in connection with such transaction or series of
transactions. Net Sales Proceeds shall also include any consideration (including
non-cash consideration such as stock, notes, or other property or securities)
that the Company determines, in its discretion, to be economically equivalent to
proceeds of a Sale, valued in the reasonable determination of the Company. Net
Sales Proceeds shall not include any reserves established by the Company in its
sole discretion.


OFFERING. Any public offering of Shares pursuant to an effective registration
statement filed under the Securities Act.

OPERATING EXPENSES. All costs and expenses paid or incurred by the Company, as
determined under generally accepted accounting principles, which are in any way
related to the operation of the Company or to Company business, including the
Asset Management Fee, but excluding (i) the expenses of raising capital such as
Organization and Offering Expenses, legal, audit, accounting, underwriting,
brokerage, listing, registration, and other fees, printing and other such
expenses and tax incurred in connection with the issuance, distribution,
transfer, registration and Listing of the Shares, (ii) interest payments, (iii)
taxes, (iv) non-cash expenditures such as depreciation, amortization and bad
debt reserves, (v) the Subordinated Share of Net Sales Proceeds, (vi) the
Performance Fee, (vii) the Subordinated Incentive Listing Fee, (viii)
Acquisition Fees and Acquisition Expenses, (ix) real estate commissions on the
Sale of Property, and (x) other fees and expenses connected with the
acquisition, disposition, management and ownership of real estate interests,
mortgage loans or other property (including the costs of foreclosure, insurance
premiums, legal services, maintenance, repair and improvement of property).

ORGANIZATION AND OFFERING EXPENSES. Any and all costs and expenses, other than
selling commissions and the 2.5% dealer manager fee, incurred by the Advisor or
any Affiliate in connection with the formation, qualification and registration
of the Company and the marketing and distribution of its Shares, including,
without limitation, the following: legal, accounting and escrow fees; printing,
amending, supplementing, mailing and distributing costs; filing, registration
and qualification fees and taxes; telecopier and telephone costs; and all
advertising and marketing expenses, including the costs related to investor and
broker-dealer sales meetings.

PARTNERSHIP. Behringer Harvard Operating Partnership I LP, a Texas limited
partnership, through which the Company may own Assets.

PERFORMANCE FEE. The fee payable to the Advisor upon termination of this
Agreement under certain circumstances if certain performance standards have been
met pursuant to Section 4.03(b) or (c).

PERSON. An individual, corporation, business trust, estate, trust, partnership,
limited liability company or other legal entity.


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PROPERTY OR PROPERTIES. As the context requires, any, or all, respectively, of
the Real Property acquired by the Company, either directly or through joint
venture arrangements or other partnership or investment interests.


PROPRIETARY PROPERTY. All modeling algorithms, tools, computer programs,
know-how, methodologies, processes, technologies, ideas, concepts, skills,
routines, subroutines, operating instructions and other materials and aides used
in performing the duties set forth in Section 2.02 that relate to investment
advice regarding current and potential Assets, and all modifications,
enhancements and derivative works of the foregoing.


PROSPECTUS. Prospectus has the meaning set forth in Section 2(10) of the
Securities Act, including a preliminary prospectus, an offering circular as
described in Rule 256 of the General Rules and Regulations under the Securities
Act or, in the case of an intrastate offering, any document by whatever name
known, utilized for the purpose of offering and selling securities of the
Company to the public.

REAL PROPERTY. Land, rights in land (including leasehold interests), and any
buildings, structures, improvements, furnishings, fixtures and equipment located
on or used in connection with land and rights or interests in land.

REIT. A corporation, trust, association or other legal entity (other than a real
estate syndication) that is engaged primarily in investing in equity interests
in real estate (including fee ownership and leasehold interest) or in loans
secured by real estate or both in accordance with Sections 856 through 860 of
the Code.

SALE OR SALES. (i) Any transaction or series of transactions whereby: (A) the
Company or the Partnership directly or indirectly (except as described in other
subsections of this definition) sells, grants, transfers, conveys, or
relinquishes its ownership of any Property or portion thereof, including the
lease of any Property consisting of a building only, and including any event
with respect to any Property which gives rise to a significant amount of
insurance proceeds or condemnation awards; (B) the Company or the Partnership
directly or indirectly (except as described in other subsections of this
definition) sells, grants, transfers, conveys, or relinquishes its ownership of
all or substantially all of the interest of the Company or the Partnership in
any Joint Venture in which it is a co-venturer or partner; (C) any Joint Venture
directly or indirectly (except as described in other subsections of this
definition) in which the Company or the Partnership as a co-venturer or partner
sells, grants, transfers, conveys, or relinquishes its ownership of any Property
or portion thereof, including any event with respect to any Property which gives
rise to insurance claims or condemnation awards; (D) the Company or the
Partnership directly or indirectly (except as described in other subsections of
this definition) sells, grants, conveys or relinquishes its interest in any
Mortgage or portion thereof (including with respect to any Mortgage, all
repayments thereunder or in satisfaction thereof other than regularly scheduled
interest payments) and any event with respect to a Mortgage which gives rise to
a significant amount of insurance proceeds or similar awards; or (E) the Company
or the Partnership directly or indirectly (except as described in other
subsections of this definition) sells, grants, transfers, conveys, or
relinquishes its ownership of any other Asset not previously described in this
definition or any portion thereof, but (ii) not including any transaction or
series of transactions specified in clause (i) (A) through (E) above in which
the proceeds of such transaction or series of transactions are reinvested in one
or more Assets within 180 days thereafter.

SECURITIES ACT. The Securities Act of 1933, as amended from time to time, or any
successor statute thereto. Reference to any provision of the Securities Act
shall mean such provision as in effect from time to time, as the same may be
amended, and any successor provision thereto, as interpreted by any applicable
regulations as in effect from time to time.


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SHARES. Any shares of the Company's common stock, par value $.0001 per share.

SOLICITING DEALERS. Broker-dealers who are members of the National Association
of Securities Dealers, Inc., or that are exempt from broker-dealer registration,
and who, in either case, have executed participating broker or other agreements
with the Dealer Manager to sell Shares.

SPONSOR. Robert M. Behringer.

STOCKHOLDERS. The record holders of the Company's Shares as maintained in the
books and records of the Company or its transfer agent.

STOCKHOLDERS' 9.0% RETURN. As of each date, an aggregate amount equal to a 9.0%
cumulative, noncompounded, annual return on Invested Capital.

SUBORDINATED DISPOSITION FEE. The fee payable to the Advisor for services
provided in connection with the Sale of one or more Properties pursuant to
Section 3.01(c).

SUBORDINATED INCENTIVE LISTING FEE. The fee payable to the Advisor under certain
circumstances if the Shares are Listed pursuant to Section 3.01(e).

SUBORDINATED SHARE OF NET SALES PROCEEDS. The fee payable to the Advisor under
certain circumstances following receipt of Net Sales Proceeds pursuant to
Section 3.01(d).

TERMINATION DATE. The date of termination of this Agreement.

2%/25% GUIDELINES. The requirement pursuant to the Statement of Policy Regarding
Real Estate Investment Trusts of the North American Securities Administrators
Association, Inc. that, in any 12 month period, total Operating Expenses not
exceed the greater of 2% of Average Invested Assets during such 12 month period
or 25% of Net Income over the same 12 month period.

                                   ARTICLE II

                                   THE ADVISOR

2.01 APPOINTMENT. The Company hereby appoints the Advisor to serve as its
advisor on the terms and conditions set forth in this Agreement, and the Advisor
hereby accepts such appointment.

2.02 DUTIES OF THE ADVISOR. The Advisor undertakes to use its best efforts to
present to the Company potential investment opportunities and to provide a
continuing and suitable investment program consistent with the investment
objectives and policies of the Company as determined and adopted from time to
time by the Board of Directors. In performance of this undertaking, subject to
the supervision of the Board of Directors and consistent with the provisions of
the Company's most recent Prospectus for Shares, the Articles of Incorporation
and Bylaws, the Advisor shall, either directly or by engaging an Affiliate of
the Advisor or other Person:

         (a) serve as the Company's investment and financial advisor and provide
         research and economic and statistical data in connection with the
         Assets and investment policies;


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         (b) provide the daily management of the Company and perform and
         supervise the various administrative functions reasonably necessary for
         the management and operations of the Company;

         (c) maintain and preserve the books and records of the Company,
         including stock books and records reflecting a record of the
         Stockholders and their ownership of the Company's uncertificated
         Shares, if any, and acting as transfer agent for the Company's Shares;

         (d) investigate, select, and, on behalf of the Company, engage and
         conduct business with such Persons as the Advisor deems necessary to
         the proper performance of its obligations hereunder, including but not
         limited to consultants, accountants, correspondents, lenders, technical
         advisors, attorneys, brokers, underwriters, corporate fiduciaries,
         escrow agents, depositaries, custodians, agents for collection,
         insurers, insurance agents, banks, builders, developers, property
         owners, mortgagors, property management companies, transfer agents and
         any and all agents for any of the foregoing, including Affiliates of
         the Advisor, and Persons acting in any other capacity deemed by the
         Advisor necessary or desirable for the performance of any of the
         foregoing services, including but not limited to entering into
         contracts in the name of the Company with any of the foregoing;

         (e) consult with the officers and the Board of Directors and assist the
         Board of Directors in the formulation and implementation of the
         Company's financial policies, and, as necessary, furnish the Board of
         Directors with advice and recommendations with respect to the making of
         investments consistent with the investment objectives and policies of
         the Company and in connection with any borrowings proposed to be
         undertaken by the Company;

         (f) subject to the provisions of Sections 2.02(h) and 2.03 hereof, (i)
         locate, analyze and select potential investments in Assets, (ii)
         structure and negotiate the terms and conditions of transactions
         pursuant to which investment in Assets will be made; (iii) make
         investments in Assets on behalf of the Company or the Partnership in
         compliance with the investment objectives and policies of the Company;
         (iv) arrange for financing and refinancing and make other changes in
         the asset or capital structure of, and dispose of, reinvest the
         proceeds from the sale of, or otherwise deal with the investments in,
         Assets; and (v) enter into leases of Property and service contracts for
         Assets and, to the extent necessary, perform all other operational
         functions for the maintenance and administration of such Assets,
         including the servicing of Mortgages;

         (g) provide the Board of Directors with periodic reports regarding
         prospective investments in Assets;

         (h) obtain the prior approval of the Board of Directors (including a
         majority of all Independent Directors) for any and all investments in
         Assets;

         (i) negotiate on behalf of the Company with banks or lenders for loans
         to be made to the Company, negotiate on behalf of the Company with
         investment banking firms and broker-dealers, and negotiate private
         sales of Shares and other securities of the Company or obtain loans for
         the Company, as and when appropriate, but in no event in such a way so
         that the Advisor shall be acting as broker-dealer or underwriter; and
         provided, further, that any fees and costs payable to third parties
         incurred by the Advisor in connection with the foregoing shall be the
         responsibility of the Company;


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         (j) obtain reports (which may be prepared by or for the Advisor or its
         Affiliates), where appropriate, concerning the value of investments or
         contemplated investments of the Company in Assets;

         (k) from time to time, or at any time reasonably requested by the Board
         of Directors, make reports to the Board of Directors of its performance
         of services to the Company under this Agreement;

         (l) provide the Company with all necessary cash management services;

         (m) deliver to or maintain on behalf of the Company copies of all
         appraisals obtained in connection with the investments in Assets;

         (n) upon request of the Company, act, or obtain the services of others
         to act, as attorney-in-fact or agent of the Company in making,
         requiring and disposing of Assets, disbursing, and collecting the
         funds, paying the debts and fulfilling the obligations of the Company
         and handling, prosecuting and settling any claims of the Company,
         including foreclosing and otherwise enforcing mortgage and other liens
         and security interests comprising any of the Assets;

         (o) supervise the preparation and filing and distribution of returns
         and reports to governmental agencies and to Stockholders and other
         investors and act on behalf of the Company in connection with investor
         relations;

         (p) provide office space, equipment and personnel as required for the
         performance of the foregoing services as Advisor;

         (q) prepare on behalf of the Company all reports and returns required
         by the Securities and Exchange Commission, Internal Revenue Service and
         other state or federal governmental agencies; and

         (s) do all things necessary to assure its ability to render the
         services described in this Agreement.

2.03 AUTHORITY OF ADVISOR.

         (a) Pursuant to the terms of this Agreement (including the restrictions
         included in this Section 2.03 and in Section 2.06), and subject to the
         continuing and exclusive authority of the Board of Directors over the
         management of the Company, the Board of Directors hereby delegates to
         the Advisor the authority to (i) locate, analyze and select investment
         opportunities, (ii) structure the terms and conditions of transactions
         pursuant to which investments will be made or acquired for the Company
         or the Partnership, (iii) acquire Properties, make and acquire
         Mortgages and invest in other Assets in compliance with the investment
         objectives and policies of the Company, (iv) arrange for financing or
         refinancing of Assets, (v) enter into leases for the Properties and
         service contracts for the Assets, including oversight of Affiliated
         companies that perform property management or other services for the
         Company, (vi) oversee non-affiliated and Affiliated property managers
         and other non-affiliated and Affiliated Persons who perform services
         for the Company, and (vii) undertake accounting and other
         record-keeping functions at the Asset level.

         (b) Notwithstanding the foregoing, any investment in Assets by the
         Company or the Partnership (as well as any financing acquired by the
         Company or the Partnership in connection

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         with such investment), will require the prior approval of the Board of
         Directors (including a majority of the Independent Directors).

         (c) The prior approval of a majority of the Independent Directors and a
         majority of the Board of Directors not otherwise interested in the
         transaction will be required for each transaction with the Advisor or
         its Affiliates.

         (d) If a transaction requires approval by the Board of Directors, the
         Advisor will deliver to the Directors all documents required by them to
         properly evaluate the proposed transaction.

         The Board of Directors may, at any time upon the giving of notice to
the Advisor, modify or revoke the authority set forth in this Section 2.03. If
and to the extent the Board of Directors so modifies or revokes the authority
contained herein, the Advisor shall henceforth submit to the Board of Directors
for prior approval such proposed transactions involving investments in Assets as
thereafter require prior approval, provided however, that such modification or
revocation shall be effective upon receipt by the Advisor and shall not be
applicable to investment transactions to which the Advisor has committed the
Company prior to the date of receipt by the Advisor of such notification.

2.04 BANK ACCOUNTS. The Advisor may establish and maintain one or more bank
accounts in its own name for the account of the Company or in the name of the
Company and may collect and deposit into any such account or accounts, and
disburse from any such account or accounts, any money on behalf of the Company,
under such terms and conditions as the Board of Directors may approve, provided
that no funds shall be commingled with the funds of the Advisor; and the Advisor
shall from time to time render appropriate accountings of such collections and
payments to the Board of Directors, its Audit Committee and the auditors of the
Company.

2.05 RECORDS; ACCESS. The Advisor shall maintain appropriate records of all its
activities hereunder and make such records available for inspection by the Board
of Directors and by counsel, auditors and authorized agents of the Company, at
any time or from time to time during normal business hours. The Advisor shall at
all reasonable times have access to the books and records of the Company.

2.06 LIMITATIONS ON ACTIVITIES. Anything else in this Agreement to the contrary
notwithstanding, the Advisor shall refrain from taking any action which, in its
sole judgment made in good faith, would (a) adversely affect the status of the
Company as a REIT, (b) subject the Company to regulation under the Investment
Company Act of 1940, as amended, or (c) violate any law, rule, regulation or
statement of policy of any governmental body or agency having jurisdiction over
the Company, the Shares or any of the Company's securities, or otherwise not be
permitted by the Articles of Incorporation or Bylaws, except if such action
shall be ordered by the Board of Directors, in which case the Advisor shall
notify promptly the Board of Directors of the Advisor's judgment of the
potential impact of such action and shall refrain from taking such action until
it receives further clarification or instructions from the Board of Directors.
In such event the Advisor shall have no liability for acting in accordance with
the specific instructions of the Board of Directors so given. The Advisor, its
directors, officers, employees and stockholders, and the directors, officers,
employees and stockholders of the Advisor's Affiliates shall not be liable to
the Company or to the Board of Directors or Stockholders for any act or omission
by the Advisor, its directors, officers, employees or stockholders, or for any
act or omission of any Affiliate of the Advisor, its directors, officers or
employees or stockholders except as provided in Section 5.02 of this Agreement.

2.07 RELATIONSHIP WITH DIRECTORS. Directors, officers and employees of the
Advisor or an Affiliate of the Advisor may serve as Directors, officers or
employees of the Company, except that no director, officer or employee of the
Advisor or its Affiliates who also is a Director shall receive any compensation

                                      -10-
<PAGE>
from the Company for serving as a Director other than reasonable reimbursement
for travel and related expenses incurred in attending meetings of the Board of
Directors.

2.08 OTHER ACTIVITIES OF THE ADVISOR. Nothing herein contained shall prevent the
Advisor or its Affiliates from engaging in other activities, including, without
limitation, the rendering of advice to other Persons (including other REITs) and
the management of other programs advised, sponsored or organized by the Advisor
or its Affiliates; nor shall this Agreement limit or restrict the right of any
director, officer, employee, or stockholder of the Advisor or its Affiliates to
engage in any other business or to render services of any kind to any other
Person. The Advisor may, with respect to any investment in which the Company is
a participant, also render advice and service to each and every other
participant therein. The Advisor shall report to the Board of Directors the
existence of any condition or circumstance, existing or anticipated, of which it
has knowledge, which creates or could create a conflict of interest between the
Advisor's obligations to the Company and its obligations to or its interest in
any other Person. The Advisor or its Affiliates shall promptly disclose to the
Board of Directors knowledge of such condition or circumstance. If the Sponsor,
Advisor, Director or Affiliates thereof have sponsored other investment programs
with similar investment objectives which have investment funds available at the
same time as the Company, it shall be the duty of the Board of Directors
(including the Independent Directors) to adopt the method set forth in the
Company's most recent Prospectus for its Shares or another reasonable method by
which investments are to be allocated to the competing investment entities and
to use their best efforts to apply such method fairly to the Company.

                                   ARTICLE III

                                  COMPENSATION

3.01 FEES.

         (a) Asset Management Fee. The Company shall pay the Advisor a monthly
         Asset Management Fee on the 15th day of each month in an amount equal
         to 1/12th of 0.5% of Aggregate Assets Value as of the last day of the
         preceding month. The Asset Management Fee may or may not be taken, in
         whole or in part as to any year, in the sole discretion of the Advisor.
         All or any portion of the Asset Management Fee not taken as to any
         fiscal year shall be deferred without interest and may be taken in such
         other fiscal year as the Advisor shall determine.

         (b) Acquisition and Advisory Fees. The Company shall pay the Advisor a
         fee in the amount of 3.0% of the Contract Purchase Price of each Asset
         as Acquisition and Advisory Fees payable at the time and in respect of
         funds expended for (i) the acquisition of an Asset, (ii) to the extent
         that such funds are capitalized, for the development, construction or
         improvement of an Asset,  or (iii) the making of a Mortgage. The total
         of all Acquisition Fees and any Acquisition Expenses shall be limited
         in accordance with the Articles of Incorporation. All or any portion of
         any Acquisition and Advisory Fees and Acquisition Expenses not taken as
         to any fiscal year shall be deferred without interest and may be taken
         in such other fiscal year as the Advisor shall determine.

         (c) Subordinated Disposition Fee. If the Advisor or an Affiliate
         provides a substantial amount of the services (as determined by a
         majority of the Independent Directors) in connection with the Sale of
         one or more Properties, the Advisor or such Affiliate shall receive a
         Subordinated Disposition Fee equal to the lesser of (i) one-half of a
         Competitive Real Estate Commission or (ii) 3.0% of the sales price of
         such Property or Properties. The Subordinated Disposition Fee will be
         paid only if Stockholders have received total Dividends in an amount
         equal to the sum of their aggregate Invested Capital and Stockholders'
         9.0% Return. To the extent that Subordinated

                                      -11-
<PAGE>


         Disposition Fees are not paid by the Company on a current basis due to
         the foregoing limitation, the unpaid fees will be accrued and paid at
         such time as the subordination conditions have been satisfied. The
         Subordinated Disposition Fee may be paid in addition to real estate
         commissions paid to non-Affiliates, provided that the total real estate
         commissions paid to all Persons by the Company (including the
         Subordinated Disposition Fee) shall not exceed an amount equal to the
         lesser of (i) 6.0% of the Contract Sales Price of a Property or (ii)
         the Competitive Real Estate Commission. In the event this Agreement is
         terminated prior to such time as the Stockholders have received total
         Dividends in an amount equal to 100% of Invested Capital plus an amount
         sufficient to pay the Stockholders' 9.0% Return through the Termination
         Date, an appraisal of the Assets then owned by the Company shall be
         made and the Subordinated Disposition Fee on Properties previously sold
         will be deemed earned and payable if the Appraised Value of the Assets
         plus any investments in bank accounts, money market funds or other
         current assets then owned directly or indirectly by the Company plus
         total Dividends received prior to the Termination Date equals 100% of
         Invested Capital plus an amount sufficient to pay the Stockholders'
         9.0% Return through the Termination Date. Upon Listing, if the Advisor
         has earned and accrued but not been paid such Subordinated Disposition
         Fee, then for purposes of determining whether the subordination
         conditions have been satisfied, Stockholders will be deemed to have
         received Dividends in the amount equal to the product of the total
         number of Shares outstanding and the average closing price of the
         Shares over a period, beginning 180 days after Listing, of 30 days
         during which the Shares are traded (the "MARKET VALUE").


         (d) Subordinated Share of Net Sales Proceeds. The Subordinated Share of
         Net Sales Proceeds shall be payable to the Advisor in an amount equal
         to 15.0% of Net Sales Proceeds remaining after the Stockholders have
         received Dividends equal to the sum of the Stockholders' 9.0% Return
         and 100% of Invested Capital. To the extent that the Subordinated Share
         of Net Sales Proceeds is not paid by the Company on a current basis due
         to the foregoing limitation, the unpaid amount will be accrued and paid
         at such time as the subordination conditions have been satisfied.
         Following Listing, no Subordinated Share of Net Sales Proceeds other
         then any accrued and unpaid Subordinated Share of Net Sales Proceeds
         will be paid to the Advisor.


         (e) Subordinated Incentive Listing Fee. Upon Listing, the Advisor shall
         be entitled to the Subordinated Incentive Listing Fee in an amount
         equal to 15.0% of the amount by which (i) the market value of the
         outstanding Shares, measured by taking the Market Value, plus the total
         of all Dividends paid to Stockholders from the Company's inception
         until the date of Listing, exceeds (ii) the sum of (A) 100% of Invested
         Capital and (B) the total Dividends required to be paid to the
         Stockholders in order to pay the Stockholders' 9.0% Return from
         inception through the date of Listing. The Company shall pay such fee,
         with interest, at such time as the Company completes the first Sale
         after Listing. Payment shall be made from the Net Sales Proceeds of
         such Sale. Interest will accrue beginning on the date of Listing at a
         rate deemed fair and reasonable by the Independent Directors on the
         date of Listing. If the Net Sales Proceeds from the first Sale after
         Listing are insufficient to pay the Subordinated Incentive Listing Fee
         in full, plus accrued interest, then the Subordinated Incentive Listing
         Fee shall be paid in part with such Net Sales Proceeds, and in part
         from the Net Sales Proceeds from the next successive Sales until the
         Subordinated Incentive Listing Fee is paid in full, with interest. If
         the Subordinated Incentive Listing Fee has not been paid in full within
         five years from the date of Listing, then the Advisor, its successors
         or assigns, may elect to convert the balance of the fee, including
         accrued but unpaid interest, into Shares at a price per Share equal to
         the average closing price of the Shares over the ten trading days
         immediately preceding the date of such election. If the Shares are no
         longer listed at such time as the Subordinated Incentive Listing Fee
         becomes convertible into Shares as provided by this paragraph, then the
         price per Share, for purposes of conversion, shall equal the fair
         market





                                      -12-
<PAGE>
         value for the Shares as determined by the Board of Directors based upon
         the Appraised Value of the Assets as of the date of election.

3.02 EXPENSES.

         (a) In addition to the compensation paid to the Advisor pursuant to
         Section 3.01 hereof, the Company shall pay directly or reimburse the
         Advisor for all of the expenses paid or incurred by the Advisor in
         connection with the services it provides to the Company pursuant to
         this Agreement, including, but not limited to:

                  (i) Organization and Offering Expenses; provided, however,
                  that within 60 days after the end of the month in which an
                  Offering terminates, the Advisor shall reimburse the Company
                  for any Organization and Offering Expenses reimbursement
                  received by the Advisor pursuant to this Section 3.02, to the
                  extent that such reimbursement exceeds 2.5% of the Gross
                  Proceeds. The Advisor shall be responsible for the payment of
                  all Organization and Offering Expenses in excess of 2.5% of
                  the Gross Proceeds;

                  (ii) Acquisition Expenses incurred in connection with the
                  selection and acquisition of Assets in an amount equal to up
                  to 0.5% of the Contract Purchase Price of each Asset.


                  (iii) the actual cost of goods, services and materials used by
                  the Company and obtained from Persons not affiliated with the
                  Advisor, other than Acquisition Expenses, including brokerage
                  fees paid in connection with the purchase and sale of Shares
                  or other securities;


                  (iv) interest and other costs for borrowed money, including
                  discounts, points and other similar fees;

                  (v) taxes and assessments on income or property and taxes as
                  an expense of doing business;

                  (vi) costs associated with insurance required in connection
                  with the business of the Company or by the Board of Directors;

                  (vii) expenses of managing and operating Assets owned by the
                  Company, whether payable to an Affiliate of the Company or a
                  non-affiliated Person;

                  (viii) all expenses in connection with payments to the Board
                  of Directors for attendance at meetings of the Board of
                  Directors and Stockholders;

                  (ix) expenses associated with Listing or with the issuance and
                  distribution of Shares and other securities of the Company,
                  such as selling commissions and fees, advertising expenses,
                  taxes, legal and accounting fees, Listing and registration
                  fees, and other Organization and Offering Expenses;

                  (x) expenses connected with payments of Dividends in cash or
                  otherwise made or caused to be made by the Company to the
                  Stockholders;

                  (xi) expenses of organizing, revising, amending, converting,
                  modifying, or terminating the Company or the Articles of
                  Incorporation;

                                      -13-
<PAGE>
                  (xii) expenses of any third party transfer agent for the
                  Shares and of maintaining communications with Stockholders,
                  including the cost of preparation, printing, and mailing
                  annual reports and other Stockholder reports, proxy statements
                  and other reports required by governmental entities;

                  (xiii) administrative service expenses (including personnel
                  costs; provided, however, that no reimbursement shall be made
                  for costs of personnel to the extent that such personnel
                  perform services in transactions for which the Advisor
                  receives a separate fee); and

                  (xiv) audit, accounting and legal fees.

         (b) Expenses incurred by the Advisor on behalf of the Company and
         payable pursuant to this Section 3.02 shall be reimbursed no less than
         quarterly to the Advisor within 60 days after the end of each quarter.
         The Advisor shall prepare a statement documenting the expenses of the
         Company during each quarter, and shall deliver such statement to the
         Company within 45 days after the end of each quarter.

3.03 OTHER SERVICES. Should the Board of Directors request that the Advisor or
any director, officer or employee thereof render services for the Company other
than set forth in Section 2.02, such services shall be separately compensated at
such rates and in such amounts as are agreed by the Advisor and the Independent
Directors, subject to the limitations contained in the Articles of
Incorporation, and shall not be deemed to be services pursuant to the terms of
this Agreement.

3.04 REIMBURSEMENT TO THE ADVISOR. The Company shall not reimburse the Advisor
to the extent that Operating Expenses (including the Asset Management Fee), in
the four consecutive fiscal quarters then ended (the "EXPENSE YEAR") exceed (the
"EXCESS AMOUNT") the greater of 2% of Average Invested Assets or 25% of Net
Income for such year. Any Excess Amount paid to the Advisor during a fiscal
quarter shall be repaid to the Company. Notwithstanding the foregoing, if there
is an Excess Amount in any Expense Year and the Independent Directors determine
that such excess was justified, based on unusual and nonrecurring factors which
they deem sufficient, the Excess Amount may be reimbursed to the Advisor. Within
60 days after the end of any fiscal quarter of the Company for which there is an
Excess Amount which the Independent Directors conclude was justified and
reimbursable to the Advisor, there shall be sent to the Stockholders a written
disclosure of such fact, together with an explanation of the factors the
Independent Directors considered in determining that such Excess Amount was
justified. Such determination shall be reflected in the minutes of the meetings
of the Board of Directors. The Company will not reimburse the Advisor or its
Affiliates for services for which the Advisor or its Affiliates are entitled to
compensation in the form of a separate fee. All figures used in any computation
pursuant to this Section 3.04 shall be determined in accordance with generally
accepted accounting principles applied on a consistent basis.

                                   ARTICLE IV

                              TERM AND TERMINATION

4.01 TERM; RENEWAL. Subject to Section 4.02 hereof, this Agreement shall
continue in force until the first anniversary of the date hereof. Thereafter,
this Agreement may be renewed for an unlimited number of successive one-year
terms upon mutual consent of the parties. It is the duty of the Board of
Directors to evaluate the performance of the Advisor annually before renewing
the Agreement, and each such renewal shall be for a term of no more than one
year.



                                      -14-
<PAGE>

4.02 TERMINATION. This Agreement will automatically terminate upon Listing. This
agreement also may be terminated at the option of either party immediately upon
a Change of Control or upon 60 days



written notice without cause or penalty, by either party (in either case, if
termination is by the Company, then such termination shall be upon the approval
of a majority of the Independent Directors). Notwithstanding any of the
foregoing, the provisions of this Agreement which provide for payment to the
Advisor of expenses, fees or other compensation following the date of
termination (i.e., Sections 3.01(e) and 4.03) shall continue in full force and
effect until all amounts payable thereunder to the Advisor are paid in full.


4.03 PAYMENTS TO AND DUTIES OF ADVISOR UPON TERMINATION.


         (a) After the Termination Date, the Advisor shall not be entitled to
         compensation for further services hereunder except it shall be entitled
         to receive from the Company within 30 days after the effective date of
         such termination all unpaid reimbursements of expenses, subject to the
         provisions of Section 3.04 hereof, and all earned but unpaid fees
         payable to the Advisor prior to termination of this Agreement, provided
         that the Subordinated Incentive Listing Fee, if any, shall be paid in
         accordance with the provisions of Section 3.01(e).



         (b) Upon termination, unless such termination is by the Company because
         of a material breach of this Agreement by the Advisor or occurs upon a
         Change of Control, the Advisor shall be entitled to payment of the
         Performance Fee equal to 15.0% of the amount, if any, by which (i) the
         Appraised Value of the Assets on the Termination Date, less the amount
         of all indebtedness secured by the Assets, plus the total Dividends
         paid to Stockholders from the Company's inception through the
         Termination Date, exceeds (ii) Invested Capital plus an amount equal to
         the Stockholders' 9% Return from inception through the Termination
         Date. The Company shall pay such Performance Fee, with interest, at
         such time as the Company completes the first Sale after the Termination
         Date. Payment shall be made from the Net Sales Proceeds of such Sale.
         Interest will accrue beginning on the Termination Date at a rate deemed
         fair and reasonable by the Independent Directors on the Termination
         Date. If the Net Sales Proceeds from the first Sale after the
         Termination Date are insufficient to pay the Performance Fee in full,
         plus accrued interest, then the Performance Fee shall be paid in part
         with such Net Sales Proceeds, and in part from the Net Sales Proceeds
         from the next successive Sales until the Performance Fee is paid in
         full, with interest. If the Performance Fee has not been paid in full
         within five years from the Termination Date, then the Advisor, its
         successors or assigns, may elect to convert the balance of the fee,
         including accrued but unpaid interest, into Shares at a price per Share
         equal to the average closing price of the Shares over the ten trading
         days immediately preceding the date of such election if the Shares are
         Listed at such time. If the Shares are not Listed at such time, the
         Advisor, its successors or assigns, may elect to convert the balance of
         the fee, including accrued but unpaid interest, into Shares at a price
         per Share equal to the fair market value for the Shares as determined
         by the Board of Directors based upon the Appraised Value of the Assets
         on the date of election.



         (c) Notwithstanding the foregoing, if termination occurs upon a Change
         of Control, the Advisor shall be entitled to payment of the Performance
         Fee equal to 15.0% of the amount, if any, by which (i) the value of the
         Assets on the Termination Date as determined in good faith by the Board
         of Directors, including a majority of the Independent Directors, based
         upon such factors as the consideration paid in connection with the
         Change of Control and the most recent Appraised Value, less the amount
         of all indebtedness secured by the Assets, plus the total Dividends
         paid to Stockholders from the Company's inception through the
         Termination Date, exceeds (ii) Invested Capital plus an amount equal to
         the Stockholders' 9% Return from inception through the Termination
         Date. The surviving entity in the Change of Control (the "Successor")
         shall pay




                                      -15-
<PAGE>


         such Performance Fee, with interest, at such time as the Surviving
         Entity completes the first Sale after the Termination Date. Payment
         shall be made from the Net Sales Proceeds of such Sale. Interest will
         accrue beginning on the Termination Date at the rate of nine percent
         (9%) per annum. If the Net Sales Proceeds from the first Sale after the
         Termination Date are insufficient to pay the Performance Fee in full,
         plus accrued interest, then the Performance Fee shall be paid in part
         with such Net Sales Proceeds, and in part from the Net Sales Proceeds
         from the next successive Sales until the Performance Fee is paid in
         full, with interest. If the Performance Fee has not been paid in full
         within five years from the Termination Date, then the Advisor, its
         successors or assigns, may elect to convert the balance of the fee,
         including accrued but unpaid interest, into shares of common stock of
         the Successor ("Successor Shares") at a price per share equal to the
         average closing price of the Successor Shares over the ten trading days
         immediately preceding the date of such election if the Successor Shares
         are Listed at such time. If the Successor Shares are not Listed at such
         time, the Advisor, its successors or assigns, may elect to convert the
         balance of the fee, including accrued but unpaid interest, into
         Successor Shares at a price per share equal to the fair market value of
         the Successor Shares, as determined in good faith by the board of
         directors of the Successor based upon the appraised value of the assets
         of the Successor on the date of election.



         (d) In the event that the Advisor disagrees with the valuation of
         Shares pursuant to Section 4.03(b) where the Shares are not Listed, or
         the value of the Successor Shares pursuant to Section 4.03(c), where
         the Successor Shares are not Listed, for purposes of determining the
         number of shares to be issued to the Advisor following the Advisor's
         election to convert the balance of the Performance Fee owed to the
         Advisor, then the fair market value of such shares shall be determined
         by an independent appraiser of equity value selected by the Advisor and
         the Successor. If the Advisor and the Successor are unable to agree
         upon an expert independent appraiser, then each of the Successor and
         the Advisor shall name one appraiser and the two named appraisers shall
         promptly agree in good faith to the appointment of one such appraiser
         whose determination shall be final and binding on the parties.



         (e) In the event the Subordinated Incentive Listing Fee is paid to the
         Advisor following Listing, no Performance Fee will be paid to the
         Advisor.



         (f) The Advisor shall promptly upon termination:


                  (i) pay over to the Company all money collected and held for
                  the account of the Company pursuant to this Agreement, after
                  deducting any accrued compensation and reimbursement for its
                  expenses to which it is then entitled;

                  (ii) deliver to the Board of Directors a full accounting,
                  including a statement showing all payments collected by it and
                  a statement of all money held by it, covering the period
                  following the date of the last accounting furnished to the
                  Board of Directors;

                  (iii) deliver to the Board of Directors all assets, including
                  the Assets, and documents of the Company then in the custody
                  of the Advisor; and

                  (iv) cooperate with the Company and take all reasonable
                  actions requested by the Company to provide an orderly
                  management transition.


                                      -16-
<PAGE>
                                    ARTICLE V

                                 INDEMNIFICATION

5.01 INDEMNIFICATION BY THE COMPANY. The Company shall indemnify and hold
harmless the Advisor and its Affiliates, including their respective officers,
directors, partners and employees, from all liability, claims, damages or losses
arising in the performance of their duties hereunder, and related expenses,
including reasonable attorneys' fees, to the extent such liability, claims,
damages or losses and related expenses are not fully reimbursed by insurance,
subject to any limitations imposed by the laws of the State of Maryland, the
Articles of Incorporation and the NASAA Guidelines. The foregoing indemnity
shall extend, without limitation, to any claims to the extent relating to any of
the events or outcomes set forth in the Prospectus as possible results, outcomes
or risks associated with the business and investment objectives of the Company.
Notwithstanding the foregoing, the Advisor shall not be entitled to
indemnification or be held harmless pursuant to this Section 5.01 for any
activity which the Advisor shall be required to indemnify or hold harmless the
Company pursuant to Section 5.02. Any indemnification of the Advisor may be made
only out of the net assets of the Company and not from Stockholders.

5.02 INDEMNIFICATION BY ADVISOR. The Advisor shall indemnify and hold harmless
the Company from contract or other liability, claims, damages, taxes or losses
and related expenses including attorneys' fees, to the extent that such
liability, claims, damages, taxes or losses and related expenses are not fully
reimbursed by insurance and are incurred by reason of the Advisor's bad faith,
fraud, willful misfeasance, misconduct, gross negligence or reckless disregard
of its duties, but the Advisor shall not be held responsible for any action of
the Board of Directors in following or declining to follow any advice or
recommendation given by the Advisor.

                                   ARTICLE VI

                                  MISCELLANEOUS


6.01 ASSIGNMENT TO AN AFFILIATE. This Agreement may be assigned by the Advisor
to an Affiliate of the Advisor with the approval of a majority of the Board of
Directors (including a majority of the Independent Directors). The Advisor may
assign any rights to receive fees or other payments under this Agreement without
obtaining the approval of the Board of Directors. This Agreement shall not be
assigned by the Company without the consent of the Advisor, except in the case
of an assignment by the Company to a corporation or other organization which is
a successor to all of the assets, rights and obligations of the Company, in
which case such successor organization shall be bound hereunder and by the terms
of said assignment in the same manner as the Company is bound by this Agreement.
This Agreement shall be binding on successors to the Company resulting from a
Change of Control or sale of all or substantially all the assets of the Company
or the Partnership, and shall likewise be binding upon any successor to the
Advisor.


6.02 RELATIONSHIP OF ADVISOR AND COMPANY. The Company and the Advisor are not
partners or joint venturers with each other, and nothing in this Agreement shall
be construed to make them such partners or joint venturers or impose any
liability as such on either of them.

6.03 NOTICES. Any notice, report or other communication required or permitted to
be given hereunder shall be in writing unless some other method of giving such
notice, report or other communication is required by the Articles of
Incorporation, the Bylaws, or accepted by the party to whom it is given, and
shall be given by being delivered by hand or by overnight mail or other
overnight delivery service to the addresses set forth herein:



                                      -17-
<PAGE>
To the Directors and to the Company:           Behringer Harvard REIT I, Inc.
                                               1323 N. Stemmons Freeway
                                               Suite 210
                                               Dallas, Texas 75207

To the Advisor:                                Behringer Advisors LP
                                               1323 N. Stemmons Freeway
                                               Suite 210
                                               Dallas, Texas 75207

Either party shall, as soon as reasonably practicable, give notice in writing to
the other party of a change in its address for the purposes of this Section
6.03.

6.04 MODIFICATION. This Agreement shall not be changed, modified, or amended, in
whole or in part, except by an instrument in writing signed by both parties
hereto, or their respective successors or assignees.

6.05 SEVERABILITY. The provisions of this Agreement are independent of and
severable from each other, and no provision shall be affected or rendered
invalid or unenforceable by virtue of the fact that for any reason any other or
others of them may be invalid or unenforceable in whole or in part.

6.06 CHOICE OF LAW; VENUE. The provisions of this Agreement shall be construed
and interpreted in accordance with the laws of the State of Texas, and venue for
any action brought with respect to any claims arising out of this Agreement
shall be brought exclusively in Dallas County, Texas.

6.07 ENTIRE AGREEMENT. This Agreement contains the entire agreement and
understanding among the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements, understandings,
inducements and conditions, express or implied, oral or written, of any nature
whatsoever with respect to the subject matter hereof. The express terms hereof
control and supersede any course of performance and/or usage of the trade
inconsistent with any of the terms hereof. This Agreement may not be modified or
amended other than by an agreement in writing signed by each of the parties
hereto.

6.08 WAIVER. Neither the failure nor any delay on the part of a party to
exercise any right, remedy, power or privilege under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, remedy, power or privilege preclude any other or further exercise of the
same or of any other right, remedy, power or privilege, nor shall any waiver of
any right, remedy, power or privilege with respect to any occurrence be
construed as a waiver of such right, remedy, power or privilege with respect to
any other occurrence. No waiver shall be effective unless it is in writing and
is signed by the party asserted to have granted such waiver.

6.09 GENDER; NUMBER. Words used herein regardless of the number and gender
specifically used, shall be deemed and construed to include any other number,
singular or plural, and any other gender, masculine, feminine or neuter, as the
context requires.

6.10 HEADINGS. The titles and headings of sections and subsections contained in
this Agreement are for convenience only, and they neither form a part of this
Agreement nor are they to be used in the construction or interpretation hereof.

                                      -18-
<PAGE>
6.11 EXECUTION IN COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original as against any
party whose signature appears thereon, and all of which shall together
constitute one and the same instrument. This Agreement shall become binding when
one or more counterparts hereof, individually or taken together, shall bear the
signatures of all of the parties reflected hereon as the signatories.

6.12 NAME. Behringer Advisors LP and/or one or more of its Affiliates has a
proprietary interest in the names "Harvard" (for the businesses engaged in by
the Company and its Affiliates) and "Behringer" (for all purposes). Accordingly,
and in recognition of this right, if at any time the Company ceases to retain
Behringer Advisors LP or an Affiliate thereof to perform the services of
Advisor, the Company will, promptly after receipt of written request from
Behringer Advisors LP, cease to conduct business under or use the name "Harvard"
or "Behringer" or any diminutive thereof and the Company shall use its best
efforts to change the name of the Company to a name that does not contain the
name "Harvard" or "Behringer" or any other word or words that might, in the sole
discretion of Behringer Advisors LP, be susceptible of indication of some form
of relationship between the Company and Behringer Advisors LP or any Affiliate
thereof. Consistent with the foregoing, it is specifically recognized that
Behringer Advisors LP or one or more of its Affiliates has in the past and may
in the future organize, sponsor or otherwise permit to exist other investment
vehicles (including vehicles for investment in real estate) and financial and
service organizations having "Harvard" or "Behringer" as a part of their name,
all without the need for any consent (and without the right to object thereto)
by the Company or its Board of Directors.

6.13 INITIAL INVESTMENT. The Advisor or one of its Affiliates has contributed
$200,000 (the "INITIAL INVESTMENT") in exchange for 20,000 Shares of the
Company. The Advisor or its Affiliates may not sell any of the Shares purchased
with the Initial Investment while the Advisor acts in an advisory capacity to
the Company. The restrictions included above shall not apply to any Shares
acquired by the Advisor or its Affiliates other than the Shares acquired through
the Initial Investment. Neither the Advisor nor its Affiliates shall vote any
Shares they now own, or hereafter acquires, in any vote for the election of
Directors or any vote regarding the approval or termination of any contract with
the Advisor or any of its Affiliates.


6.14 OWNERSHIP OF PROPRIETARY PROPERTY. The Advisor retains ownership of and
reserves all Intellectual Property Rights in the Proprietary Property. To the
extent that the Company has or obtains any claim to any right, title or interest
in the Proprietary Property, including without limitation in any suggestions,
enhancements or contributions that Company may provide regarding the Proprietary
Property, the Company hereby assigns and transfers exclusively to the Advisor
all right, title and interest, including without limitation all Intellectual
Property Rights, free and clear of any liens, encumbrances or licenses in favor
of the Company or any other party, in and to the Proprietary Property. In
addition, at the Advisor's expense, the Company will perform any acts that may
be deemed desirable by the Advisor to evidence more fully the transfer of
ownership of right, title and interest in the Proprietary Property to the
Advisor, including but not limited to the execution of any instruments or
documents now or hereafter requested by the Advisor to perfect, defend or
confirm the assignment described herein, in a form determined by the Advisor.



                                      -19-
<PAGE>



         IN WITNESS WHEREOF, the parties hereto have executed this Advisory
Agreement as of the date and year first above written.

                                   BEHRINGER HARVARD REIT I, INC.


                                   By:
                                      ------------------------------------------
                                       Robert M. Behringer, President


                                   BEHRINGER ADVISORS LP

                                   By:  Harvard Property Trust, LLC,
                                        its General Partner


                                        By:
                                           -------------------------------------
                                           Gerald J. Reihsen, III
                                           Chief Operating Officer


                                      -20-