<PAGE>
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                       SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549

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

                                   FORM 10-K

                       FOR ANNUAL AND TRANSITION REPORTS
                    PURSUANT TO SECTIONS 13 OR 15(D) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

(MARK ONE)

<TABLE>
<C>        <S>
   /X/     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
           SECURITIES EXCHANGE ACT OF 1934
</TABLE>

                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000
                                       OR

<TABLE>
<C>        <S>
   / /     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
           SECURITIES EXCHANGE ACT OF 1934
</TABLE>

        FOR THE TRANSITION PERIOD FROM ______________ TO ______________

                         COMMISSION FILE NUMBER 0-25323

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

                         BEACON CAPITAL PARTNERS, INC.
             (Exact Name of Registrant as Specified in Its Charter)

<TABLE>
<S>                                                           <C>
                          MARYLAND                                         04-3403281
      (State or Other Jurisdiction of Incorporation or        (I.R.S. Employer Identification No.)
                       Organization)

    ONE FEDERAL STREET, 26TH FLOOR BOSTON, MASSACHUSETTS                     02110
          (Address of Principal Executive Offices)                         (Zip Code)
</TABLE>

      Registrant's telephone number, including area code:  (617) 457-0400

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

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

                     COMMON STOCK, PAR VALUE $.01 PER SHARE
                                (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 registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

    The Registrant's Common Stock trades only in the Portal market. There is no
established public trading market for the Common Stock. Because there is no
public trading market for the Common Stock, it is not possible to accurately
estimate the aggregate market value of the Common Stock.

    As of March 21, 2001, there were 21,730,888 outstanding shares of the
Registrant's Common Stock.

                      DOCUMENTS INCORPORATED BY REFERENCE

Portions of the following documents are incorporated by reference into the Parts
of this Report on Form 10-K indicated below:

(1) Certain portions of our definitive proxy statement for the Annual Meeting of
    Stockholders to be held in June 2001.

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
                         BEACON CAPITAL PARTNERS, INC.
                                    INDEX TO
                           ANNUAL REPORT ON FORM 10-K

<TABLE>
<CAPTION>
                                                                                   PAGE
                                                                                 --------
<S>                <C>                                                           <C>
Part I.

    Item 1.        Business....................................................       3
    Item 2.        Properties..................................................      25
    Item 3.        Legal Proceedings...........................................      26
    Item 4.        Submission of Matters to a Vote of Security Holders.........      26

Part II.

    Item 5.        Market for Registrant's Common Equity and Related
                   Stockholder Matters.........................................      27
    Item 6.        Selected Financial Data.....................................      28
    Item 7.        Management's Discussion and Analysis of Financial Condition
                   and Results of Operations...................................      28
    Item 7A.       Quantitative and Qualitative Disclosures About Market
                   Risk........................................................      37
    Item 8.        Financial Statements and Supplementary Data.................      38
    Item 9.        Changes in and Disagreements with Accountants on Accounting
                   and Financial Disclosure....................................      38

Part III.

    Item 10.       Directors and Executive Officers of the Registrant..........      39
    Item 11.       Executive Compensation......................................      39
    Item 12.       Security Ownership of Certain Beneficial Owners and
                   Management..................................................      39
    Item 13.       Certain Relationships and Related Transactions..............      39

Part IV.

    Item 14.       Exhibits, Financial Statement Schedules, and Reports on
                   Form 8-K....................................................      40

Signatures.....................................................................      41
</TABLE>

                                       2
<PAGE>
                                     PART I

ITEM 1. BUSINESS.

GENERAL

    Beacon Capital Partners, Inc. ("we", "BCP" or the "Company") is a Maryland
corporation established to conduct real estate investment and development
activities. The Company was originally formed on January 21, 1998 as a
Massachusetts corporation and reincorporated (through a merger) in Maryland on
March 17, 1998. We are headquartered in Boston, Massachusetts and have a
regional office in Los Angeles, California. We are qualified as a real estate
investment trust (a "REIT") under the Internal Revenue Code of 1986, as amended
(the "Code"). We are the sole General Partner of Beacon Capital Partners, L.P.
(the "Operating Partnership").

    At December 31, 2000, excluding Technology Square which was sold on
February 9, 2001, we owned, directly or through a joint venture, 16 operating
properties, consisting of 29 buildings and approximately 1.6 million square
feet, which were 88% leased. We are developing two office/R&D buildings in
Sunnyvale, California and a high-rise building in Seattle, Washington with joint
venture partners. We redeveloped two warehouse buildings in South Boston,
Massachusetts into residential condominiums, of which, at December 31, 2000, 87
of 120 units had been sold. In 1999, we established Beacon Capital Strategic
Partners, L.P., which will be our exclusive real estate investment vehicle for a
period of up to two years from October 1, 1999.

    On March 7, 2001, we submitted a proxy statement to our stockholders in
connection with a Special Meeting of Stockholders scheduled to be held on
April 4, 2001. At this meeting, our stockholders will be voting on a plan that
authorizes the Company to sell, transfer or exchange all or substantially all of
its assets (the "Asset Sale Plan").

    Since our inception, we have made numerous distributions to our unitholders
and stockholders. We have paid cash dividends and have also distributed
interests in three voting trusts (the "Wyndham Voting Trust", the "Cypress
Voting Trust" and the "CO Space Voting Trust") established to hold stock of
companies in which we made investments. Through March 1, 2001, we have
distributed $11.98 in cash per share of common stock of BCP. In addition, we
have also distributed interests in three voting trusts that were valued at $7.94
per share of common stock of BCP at the time of original distribution. The value
of the securities held through the voting trusts has and will continue to
fluctuate.

    The following chart summarizes these distributions. The numbers in the chart
assume you have held 1,000 shares of common stock of the Company since
March 1998. If you did not hold any common stock on the record date for each of
the distributions of the interests in the voting trusts, you would not have
received an interest in the relevant voting trust and will not receive any
distributions made in respect of that particular voting trust. An interest in
each of the voting trusts is equivalent to one share of the underlying
securities held by that specific voting trust.

<TABLE>
    DATE OF RECORD          DISTRIBUTION RATE           DESCRIPTION           YOUR DISTRIBUTION
<S>                      <C>                      <C>                      <C>
March 19, 1998           N/A                      Purchase of 1,000        1,000 shares of the
                                                  shares of common stock   Company's common stock
                                                  of Beacon Capital
                                                  Partners, Inc.

December 28, 1998        $0.48 per share of the   1998 cash dividend       $480.00
                         Company's common stock
</TABLE>

                                       3
<PAGE>

<TABLE>
    DATE OF RECORD          DISTRIBUTION RATE           DESCRIPTION           YOUR DISTRIBUTION
<S>                      <C>                      <C>                      <C>
June 8, 1999             0.04433462 interests in  Distribution of          44.3346 interests in
                         The Wyndham Voting       Series I Interests in    The Wyndham Voting
                         Trust per share of the   The Wyndham Voting       Trust
                         Company's common stock   Trust
                         (valued at
                         ($4.343683857 per share
                         of the Company's common
                         stock)

September 30, 1999       Annual 9.75%, Dividend   Wyndham Series I         $32.42 and .7564
                         Payment Period = 1       preferred stock          additional interests in
                         (See Note 1)             quarterly dividend       The Wyndham Voting
                                                                           Trust

December 31, 1999        Annual 9.75%, Dividend   Wyndham Series I         $32.42 and .7752
                         Payment Period = 2       preferred stock          additional interests in
                         (See Note 1)             quarterly dividend       The Wyndham Voting
                                                                           Trust

January 5, 2000          0.039632294 interests    Distribution of The      39.6323 interests in
                         in The Cypress Voting    Cypress Voting Trust     The Cypress Voting
                         Trust per share of the                            Trust
                         Company's common stock
                         (valued at ($.75301344
                         per share of the
                         Company's common stock)

February 10, 2000        4.5 for 1 split of The   Cypress stock split      178.3449 converted
                         Cypress Voting Trust     from 1 share of          interests in The
                         interests                preferred stock to 4.5   Cypress Voting Trust
                                                  shares of common stock

February 24, 2000        $0.50 per share of the   2000 cash dividend       $500.00
                         Company's common stock

March 22, 2000           0.224568409 interests    Distribution of The CO   224.5684 interests in
                         in The CO Space Voting   Space Voting Trust       The CO Space Voting
                         Trust per share of the                            Trust
                         Company's common stock
                         (valued at ($.33685262
                         per share of the
                         Company's common stock)

March 31, 2000           Annual 9.75%, Dividend   Wyndham Series I         $32.42 and .7938
                         Payment Period = 3       preferred stock          additional interests in
                         (See Note 1)             quarterly dividend       The Wyndham Voting
                                                                           Trust

June 16, 2000            $3.00 per share of the   2000 cash dividend       $3,000.00
                         Company's common stock
</TABLE>

                                       4
<PAGE>

<TABLE>
    DATE OF RECORD          DISTRIBUTION RATE           DESCRIPTION           YOUR DISTRIBUTION
<S>                      <C>                      <C>                      <C>
June 22, 2000            0.24488 for 1            Each interest in The CO  54.9923 interests in
                         conversion of The CO     Space Voting Trust       The CO Space Voting
                         Space Voting Trust       represents .24488        Trust represent 54.9923
                         common stock for         shares of InterNAP       shares of InterNAP
                         InterNAP common stock    common stock             common stock

June 30, 2000            Annual 9.75%, Dividend   Wyndham Series I         $32.42 and .8131
                         Payment Period = 4       preferred stock          additional interests in
                         (See Note 1)             quarterly dividend       The Wyndham Voting
                                                                           Trust

September 30, 2000       Annual 9.75%, Dividend   Wyndham Series I         $32.42 and .8330
                         Payment Period = 5       preferred stock          additional interests in
                         (See Note 1)             quarterly dividend       The Wyndham Voting
                                                                           Trust

November 2, 2000         0.027663488 interests    Distribution of          27.6634 interests in
                         in The Wyndham Voting    Series II Interests in   The Wyndham Voting
                         Trust per share of the   The Wyndham Voting       Trust
                         Company's common stock   Trust
                         (valued at ($2.503 per
                         share of the Company's
                         common stock)

November 13, 2000        45% of the shares held   Distribution of 45% of   24 InterNAP shares
                         by The CO Space Voting   the InterNAP Shares      distributed; 30.9923
                         Trust                    subject to The CO Space  InterNAP shares remain
                                                  Voting Trust             in The CO Space Voting
                                                                           Trust

December 31, 2000        Annual 9.75%, Dividend   Wyndham Series I         $32.42 and .8533
                         Payment Period = 6       preferred stock          additional interests in
                         (See Note 1)             quarterly dividend       The Wyndham Voting
                                                                           Trust

December 31, 2000        Annual 9.75%, Dividend   Wyndham Series II        $18.56 and .4886
                         Payment Period = 6       preferred stock          additional interests in
                         (See Note 1)             quarterly dividend       The Wyndham Voting
                                                                           Trust

January 5, 2001          $2.00 per share of the   Proceeds from property   $2,000.00
                         Company's common stock   sale--2001 cash
                                                  dividend

February 2, 2001         50% of the shares held   Distribution of 50% of   28 InterNAP shares
                         by The CO Space Voting   the InterNAP Shares      distributed; 2.9923
                         Trust                    subject to The CO Space  InterNAP shares remain
                                                  Voting Trust             in The CO Space Voting
                                                                           Trust

February 20, 2001        $6.00 per share of the   Proceeds from property   $6,000.00
                         Company's common stock   sale--2001 cash
                                                  dividend
</TABLE>

                                       5
<PAGE>
--------------------------

Note 1:  The Wyndham dividend is paid quarterly, partially in cash and partially
in paid-in-kind shares. The cash portion of the dividend is based on a formula
that keeps the cash dividend flat over the first six years. As defined in the
Certificate of Designation of the Wyndham Voting Trust, "Cash Percentage" means,
as to any date, the amount calculated on the basis of the following formula
(expressed as a percentage), with the dividend payment period ("DPP") referring
to the number of dividend payment dates that have occurred prior to such date:
73,125/(7,000,000 times 1.024375 raised to the power of DPP (i.e.,
1.024375(DPP)), plus 3,000,000).

RECENT EVENTS

THE ATHENAEUM PORTFOLIO, CAMBRIDGE, MA

    Prior to the following sales, we owned The Athenaeum Portfolio with our
joint venture partner, PW Acquisitions IX, LLC (an affiliate of PaineWebber). In
June 2000, the joint venture sold 215 First Street, 195 First Street and Doc
Linskey Way for $68 million and in December 2000, the joint venture sold the
remainder of the portfolio, One Kendall Square, for $191.9 million. In 2000, the
joint venture recognized gains on the sales of approximately $64.8 million of
which our share was 50%.

TECHNOLOGY SQUARE AND THE DRAPER BUILDING, CAMBRIDGE, MA

    In April 2000, we sold The Draper Building for $72.5 million and recognized
a gain on the sale of approximately $27.3 million. Simultaneously with the sale,
the Interim Financing was partially paid down by approximately $32.2 million.
During 2000, we completed the renovation plan for Technology Square started in
1999 and commenced a new development plan to construct approximately 617,000
square feet of additional office and laboratory space. In February 2001, we sold
Technology Square for $278.8 million and will record a significant gain on the
sale in 2001. Under the terms of the purchase and sale agreement, in order to
avoid financial penalties, we are required to complete the construction of the
new buildings by specific dates and within budget.

DALLAS OFFICE AND INDUSTRIAL PORTFOLIO, DALLAS, TX

    We have initiated the sale of the Dallas Office and Industrial Portfolio. It
is expected that the portfolio, which consists of fourteen separate properties,
will be sold through multiple transactions.

MATHILDA RESEARCH CENTRE I AND II, SUNNYVALE, CA

    We own Mathilda Research Centre I with our joint venture partner, Mathilda
Partners LLC, an affiliate of Menlo Equities (a California based developer). In
June 2000, the first of two buildings was completed and the second building is
expected to be completed in the spring of 2001. Both buildings are leased to
Juniper Networks, Inc. ("Juniper"). In August 2000, we entered into an agreement
with Mathilda Partners II LLC, another affiliate of Menlo Equities, to develop
an additional phase of the project for Juniper, known as Mathilda Research
Centre II. The estimated cost of the 158,000 square foot building is
approximately $40.6 million and will be funded from equity contributions of
approximately $8 million, of which our portion will be approximately
$7 million, and a construction loan of approximately $32.6 million.

MILLENNIUM TOWER, SEATTLE, WA

    We are developing Millennium Tower, a 20-story, approximately 261,000 square
foot office/retail and residential tower with our joint venture partner, HA
L.L.C., an affiliate of Martin Smith Real Estate Services (a Seattle based real
estate company). The project is expected to be completed in the first quarter of
2001. As of December 31, 2000, leases have been executed representing
approximately 88% of the office space. Two of the tenants include a major
financial services firm and a national law firm. We initiated the residential
condominium sales program in the first quarter of 2001.

                                       6
<PAGE>
FORT POINT PLACE, SOUTH BOSTON, MA

    The Fort Point Place office property consists of two buildings of
approximately 145,000 square feet. In 2000, the major tenant of the property
(approximately 96,000 square feet) signed a new five year lease at a rate of
$39.50 per square foot, nearly three times the prior rent. The Fort Point Place
residential property consists of two buildings that we redeveloped from
warehouse space into residential condominiums. In September 2000, we commenced
the sales of the residential condominiums and as of December 31, 2000, 87 of 120
units had been sold.

WYNDHAM INTERNATIONAL, INC.

    In November 2000, we distributed additional preferred stock of Wyndham
International, Inc. ("Wyndham") and Wyndham Voting Trust interests
(approximately 607,382 shares) to the Wyndham Voting Trust, and then distributed
our interest in the Wyndham Voting Trust to our stockholders and unitholders.
The shares will be held through the Wyndham Voting Trust subject the same terms
and conditions as the shares distributed in June 1999 and held through the
Wyndham Voting Trust. The Wyndham preferred stock held in the Wyndham Voting
Trust continues to distribute quarterly dividends, paid in combination of cash
and additional paid-in-kind shares.

CYPRESS COMMUNICATIONS, INC.

    In 1998 and 1999, we invested an aggregate of $11 million to acquire
preferred stock in Cypress Communications, Inc. ("Cypress"). In January 2000, we
distributed all of the preferred stock of Cypress to the Cypress Voting Trust,
and then distributed our interest in the Cypress Voting Trust to our
stockholders and unitholders. On February 10, 2000, Cypress successfully
completed its initial public offering and at that time, each share of preferred
stock split into 4.5 shares of common stock. Cypress trades on the NASDAQ
National Market under the symbol CYCO. The Cypress Voting Trust is subject to
certain terms and conditions, including limitations on transferability. Through
a vote by interest holders in the Cypress Voting Trust, on February 15, 2001,
the term of the Cypress Voting Trust was extended for six months, and the
Trustee was given the authority to extend the termination date for a second
additional six month period.

CO SPACE INC.

    In 1999, we invested $8 million to acquire preferred stock in CO
Space, Inc. ("CO Space"). In March 2000, we distributed all of the preferred
stock of CO Space to the CO Space Voting Trust, and then distributed our
interest in the CO Space Voting Trust to our stockholders and unitholders. On
June 20, 2000, CO Space was acquired by InterNAP Network Services Corporation
("InterNAP") and the underlying security of the CO Space Voting Trust was
converted to common shares of InterNAP. InterNAP trades on the NASDAQ National
Market under the symbol INAP. In November 2000, 45% of the InterNAP common stock
held in the CO Space Voting Trust was distributed to the beneficial owners and
in February 2001, 50% of the InterNAP common stock originally held in the CO
Space Voting Trust was distributed to the beneficial owners. The CO Space Voting
Trust is subject to certain terms and conditions, including limitations on
transferability.

BEACON CAPITAL STRATEGIC PARTNERS, L.P.

    In October 1999, we established Beacon Capital Strategic Partners, L.P.
("BCSP"), a real estate limited partnership, of which BCP Strategic Partners
LLC, our wholly owned subsidiary, is the general partner. BCSP's equity
commitments total $287.5 million, of which our share is 20% or $57.5 million. We
will receive an additional allocation of income from BCSP when the partners of
BCSP have achieved certain return hurdles. See--"Beacon Capital Strategic
Partners, L.P. Financial Statements Footnote 7." BCSP will invest in U.S.
domestic real estate with a primary focus on office properties. The strategy
will

                                       7
<PAGE>
include redevelopment, development and other real estate opportunities where we
can maximize value through our operating skills and expertise. For a period of
up to two years from October 1, 1999, BCSP will be our exclusive real estate
investment vehicle. As of December 31, 2000, we have contributed $3.2 million of
our committed capital.

    In June 2000, BCSP sold 233 Fremont Street, a property located in San
Francisco, California, that was undergoing redevelopment. The property was sold
for approximately $145.9 million, including approximately $15.9 million held in
escrow pending completion of the property's redevelopment. BCSP will continue to
oversee the redevelopment and the buyer will fund the remaining redevelopment
costs. The redevelopment is scheduled to be completed in the first quarter of
2001. Our share of the recognized gain on the sale and the related distribution
was approximately $25.7 million and $25.2 million, respectively.

SHARE REPURCHASE PROGRAM

    On January 28, 2000, we announced a six month share repurchase program of up
to $30 million of our common stock. In July 2000, we repurchased approximately
1.8 million shares of common stock of BCP and certain voting trust interests for
approximately $25.4 million which equated to approximately 8.4% of the common
stock outstanding. On July 28, 2000, the share repurchase program was extended
for an additional six months to January 28, 2001. No additional shares were
repurchased during the extension period.

OPERATING PARTNERSHIP UNITS CONVERSION

    On October 17, 2000, Luddite Associates, an affiliate of The Prudential
Insurance Company of America, converted its 2,528,296 units in the Operating
Partnership into an equivalent number of shares of common stock of BCP.

INVESTMENT STRATEGIES

    On March 7, 2001, we filed a proxy statement with the Securities and
Exchange Commission for a Special Meeting of Stockholders to be held to vote on
the Asset Sale Plan, a plan to sell, transfer or exchange all or substantially
all of our wholly-owned and jointly held properties over a period of two years.
See--"Item 2. Properties". If this plan is approved by the stockholders and
successfully implemented, our only remaining substantial asset will be our
interest in BCSP.

    Our real estate investment strategy is being implemented through BCSP, a
real estate limited partnership, which we established in October 1999. For a
period of up to two years from October 1, 1999, BCSP will serve as our exclusive
real estate investment vehicle. We have committed to invest 20%, or
$57.5 million, of the total capital of $287.5 million in BCSP and will serve as
its General Partner. The investment strategy of BCSP is consistent with the
strategy that has been employed by the Company since its inception. In addition,
the Company may elect to make investments in non-real estate entities.

    Similar to our investment strategy in BCP, BCSP's investment activity is
focused in the following types of real estate-related assets: (i) value-added
repositionings and discounted purchases; (ii) development and re-development;
(iii) multiple-property portfolios; (iv) joint ventures and strategic
partnerships; and (v) real estate operating companies.

CORPORATE STRATEGY

    As outlined in our proxy statement for a Special Meeting of Stockholders
currently scheduled to be held on April 4, 2001, we do not believe that it is in
the best interest of the Company to complete an initial public offering in the
foreseeable future. We have determined that in the interest of maximizing
returns and providing liquidity to our stockholders, we should implement a
strategy of selling assets and returning

                                       8
<PAGE>
capital. Therefore, we have submitted a plan to our stockholders asking them to
approve the Asset Sale Plan.

ENVIRONMENTAL MATTERS

    We do not expect any costs associated with environmental issues at our
properties to have a material adverse effect on the Company.

COMPETITION

    We compete in the leasing and sales of office, laboratory, residential and
industrial space with a considerable number of other realty concerns, some of
which may have greater marketing and financial resources than us.

SEASONALITY

    The Company's office, laboratory, residential and industrial properties have
not traditionally experienced significant seasonality.

EMPLOYEES

    As of December 31, 2000, we had 26 full time employees.

RISK FACTORS

    Set forth below are certain risks that we believe are material to our
stockholders.

RISKS ASSOCIATED WITH THE ASSET SALE PLAN

    On March 7, 2001, the Company distributed a proxy statement to its common
stockholders requesting that the stockholders approve a plan which would result
in the Company selling, transferring or exchanging all or substantially all of
its assets. The adoption of the Asset Sale Plan could impact the market for the
Company's common stock and the price at which the common stock may trade. In
addition, the distribution of the proceeds of the Asset Sale Plan to the
stockholders will have tax implications (either a return of basis or capital
gain) for the individual stockholder that would likely not be realized if the
Company was not selling its assets and returning the proceeds of the sales to
its stockholders. Because of the individual tax consequences, some potential
buyers of the common stock may be deterred from purchasing the common stock,
resulting in less liquidity and a potentially depressed sale price for the
common stock.

    If approved by the stockholders, the Company will attempt to sell all of its
wholly-owned properties and its interest in each of its jointly-owned
properties. There can be no assurance that the Company will successfully sell
any of its properties for amounts equaling or exceeding those currently
projected, or that the Company will be able to make distributions to the
stockholders of the Company in the amounts projected in the proxy statement.
Though we currently intend to distribute the proceeds of the Asset Sale Plan in
the two year period following the approval of the Plan, there can be no
assurance that such distributions will actually occur during this period.

ECONOMIC AND BUSINESS RISKS

WE DEPEND ON KEY PERSONNEL WHOSE CONTINUED SERVICE IS NOT GUARANTEED

    We believe that our success depends in large part upon the experience of our
senior management whose continued service is not guaranteed. If we lost the
services of any members of our senior management team, we might be less capable
of:

                                       9
<PAGE>
    --  obtaining real estate investment opportunities;

    --  capitalizing upon relationships in the real estate industry; and

    --  structuring and executing potential investments.

    We cannot assure you that we would be able to replace any members of our
senior management team that leave. In addition, we do not currently maintain
key-man life insurance on any of our executive officers.

WE MAY NOT SUCCESSFULLY IMPLEMENT OUR INVESTMENT STRATEGY

    ADDITIONAL FINANCING MAY NOT BE AVAILABLE

    Our ability to implement our investment strategy depends on access to the
capital necessary to invest in assets. If we fail to obtain the necessary
capital, our ability to acquire assets could suffer.

    WE MAY FAIL TO EFFECTIVELY MANAGE THE INTEGRATION OF ASSETS

    To successfully implement our investment strategy, we must integrate
acquired assets into our existing operations. As such, we must consolidate
functions and integrate the departments, systems and procedures of the acquired
assets with our operations. Integration presents a significant challenge to us.
If we fail to effectively integrate new assets, our results of operations and
financial condition could suffer.

    COMPLEX ACQUISITIONS HAVE A GREATER RISK OF FAILURE

    BCSP may acquire multiple assets in a single transaction. This technique
reduces acquisition expenses and provides us with operating leverage. However,
portfolio acquisitions are more complex than single-property acquisitions. The
risk that a multiple property acquisition will not close is greater than in a
single-property acquisition. In addition, the cost of a failed portfolio
acquisition closing is greater than the cost of a failed single-property
acquisition closing. If one of our portfolio acquisition closings failed, we
would incur a charge against our earnings for the costs related to that failed
acquisition.

    Our portfolio acquisitions may result in the acquisition of assets located
in geographically dispersed markets that are geographically removed from our
principal markets. This geographic diversity could strain our ability to manage
such dispersed assets. In addition, a seller may demand that we purchase a group
of properties together despite one or more failing to meet our investment
criteria. If this were to occur, we would attempt to either:

    --  make a joint bid with another buyer; or

    --  purchase the portfolio with the intent to subsequently dispose of those
        assets which do not meet our investment criteria.

This strategy presents two problems:

    --  If we participate in a joint bid, the other buyer may default on its
        obligations and increase the risk that the acquisition may not close.

    --  If we intend to dispose of assets that we do not wish to own, there can
        be no assurance as to how quickly we could sell or exchange such assets
        or the terms on which they could be sold or exchanged.

    DEVELOPMENT OR REDEVELOPMENT OF ASSETS IS COSTLY AND MAY NOT YIELD ECONOMIC
     BENEFITS

    We intend to develop and construct real estate-related assets in accordance
with our development and underwriting policies. Risks associated with such
development and construction activities include the risks that:

                                       10
<PAGE>
    (i) we may abandon development opportunities after expending resources to
       determine feasibility;

    (ii) construction costs may exceed original estimates (for example, in order
       to avoid financial penalties, we are required to complete the
       construction of the new buildings at Technology Square and the
       redevelopment of 233 Fremont Street by specific dates and within budget);

    (iii) occupancy rates and rents at a newly completed property may not be
       sufficient to make the project profitable;

    (iv) financing may not be available on favorable terms;

    (v) construction and lease-up may not be completed on schedule and thus
       result in increased debt service expenses and construction costs;

    (vi) we may be unable to obtain (or be delayed in obtaining) all necessary
       zoning, land-use, building, occupancy, and other required governmental
       permits and authorizations;

    (vii) since new projects require a substantial portion of management's time
       and attention, management may be significantly preoccupied with these new
       projects (regardless of whether or not they are ultimately successful);

    (viii)permanent financing may not be available or may only be available on
       unfavorable terms;

    (ix) our losses may exceed our investment return if the project is
       unsuccessful; and

    (x) condominium sales may not occur at prices anticipated and a substantial
       portion of the profits in condominium sales are realized upon the sale of
       the last units in a project.

CONFLICTS OF INTEREST EXIST BETWEEN THE COMPANY AND OTHERS

    CONFLICTS RELATING TO THE OPERATING PARTNERSHIP

    The Company (as the General Partner of the Operating Partnership) will have
fiduciary obligations to the limited partners of the Operating Partnership that
may conflict with the interests of our stockholders. In addition, the limited
partners will have the right to vote:

    --  as a class on certain amendments to the Operating Partnership agreement;
        and

    --  individually to approve certain amendments that would adversely affect
        their rights.

    The limited partners' voting rights may be exercised in a manner that
conflicts with your interests if you should acquire shares of our Common Stock.

    Under the terms of the Operating Partnership agreement, the General Partner
(currently the Company) must obtain approval from the partners of the Operating
Partnership to engage in certain transactions if, pursuant to the Maryland
General Corporate Laws or our organizational documents, a transaction would
require a vote of our stockholders. As such, approval of the stockholders and
the partners would be necessary before certain transactions could be
consummated. The partners' interest in approving any such transaction may or may
not align with the stockholders' interest in approving the transaction. Thus,
the partners may prevent consummation of a transaction which the stockholders
believe is in their best interest.

    CONFLICTS RELATING TO OUR MANAGEMENT INCENTIVE PLAN

    We adopted a new Management Incentive Plan (the "Plan") in 2000. The Plan
contemplates that Beacon Capital Participation Plan, L.P. ("BCPP"), a
partnership whose partners are all members of the Company's senior management,
will receive incentive distributions equal to 20% of all distributions after our
investors have received a return of their capital with a ten percent per annum
cumulative compounded

                                       11
<PAGE>
return. For purposes of determining the amounts of incentive distributions
payable under the Plan, our June 1999 distribution of interests in the voting
trust formed to hold shares of Wyndham's preferred stock (the "Wyndham Preferred
Stock"), the January 2000 distribution of interests in the voting trust formed
to hold shares of Cypress' preferred stock, the March 2000 distribution of
interests in the voting trust formed to hold shares of CO Space's preferred
stock and the November 2000 distribution of additional interests in the Wyndham
Voting Trust were NOT treated as distributions to the partners of the Operating
Partnership. Instead, the shares held by the voting trusts will be treated as if
held by the Operating Partnership until such time as those shares (or the
property into which such shares may be converted) are deemed distributed to the
beneficial holders of the interests in the voting trusts, at which time all of
the partners of the Operating Partnership will be treated (for purposes of
calculating the incentive distributions) as receiving a pro rata distribution
from the Operating Partnership in the amount of the then value of the property
deemed distributed from the voting trusts (regardless of the extent to which the
investors continue to hold interests in the voting trusts). In the case of any
distribution to the beneficial owners of the Wyndham Voting Trust, the then
value of the Wyndham Preferred Stock will be grossed up to appropriately account
for the Operating Partnership's repurchase and subsequent redistribution of
certain interests in the Wyndham Voting Trust. The value of a security
distributed from a voting trust will be determined with reference to the status
of the security and limitations on its transfer. Depending upon the specific
limitations applicable to the security, its value will be based on trading
averages or fair market values as reasonably determined in good faith by the
Company in accordance with generally accepted accounting principles. Similarly,
payment-in-kind dividends of additional shares of Wyndham Preferred Stock
received by the Wyndham Voting Trust and retained in the trust in accordance
with the terms of the voting trust agreement will also be treated (for purposes
of calculating the incentive distributions) as distributed pro rata to the
partners of the Operating Partnership when ultimately distributed out of the
Wyndham Voting Trust. Similarly, cash or other property received by the voting
trusts will be treated (for purposes of calculating the incentive distributions)
as pro rata distributions to the partners of the Operating Partnership at such
times that such cash or other amounts are distributed out of the voting trusts
to the holders of beneficial interests in the voting trusts. Similar rules would
apply to any additional voting trust or similar arrangement established by the
Company. As a result of treating distributions by the voting trusts as
distributions by us for purposes of computing BCPP's incentive distributions,
BCPP may, in any given period, receive more incentive distributions from us than
it would receive if its incentive distributions were calculated solely with
reference to assets held within the Company and our actual distributions.
PURCHASERS OF OUR COMMON STOCK WHO DO NOT SIMULTANEOUSLY PURCHASE A
PROPORTIONATE AMOUNT OF THE SHARES HELD THROUGH THESE THREE VOTING TRUSTS MAY
NOT REALIZE ALL OF THE ECONOMIC BENEFITS UPON WHICH MANAGEMENT'S INCENTIVE
DISTRIBUTIONS WILL BE CALCULATED AND MAY EFFECTIVELY BEAR A DISPROPORTIONATE
SHARE OF THE COST OF SUCH INCENTIVE DISTRIBUTIONS.

    The Plan was designed to align the interests of our management with the
interests of our stockholders by having members of management purchase an equity
interest in BCPP. However, we cannot assure you that conflicts will not arise
between management's interests and stockholders' interests.

    POLICIES WITH RESPECT TO CONFLICTS OF INTEREST

    We have adopted policies designed to eliminate or minimize conflicts of
interest. One such policy requires that all transactions in which officers or
directors have a conflicting interest must be approved by a majority of our
Independent Directors. However, we cannot assure you that any policy will
successfully minimize or eliminate conflicts of interest. If our policies fail,
decisions could be made that do not fully reflect the stockholders' interests.

LEVERAGE CAN REDUCE INCOME AVAILABLE FOR DISTRIBUTION TO STOCKHOLDERS

    We have leveraged our assets by borrowings through bank credit facilities,
mortgage loans on real estate and other borrowings. Our return on investments
and cash available for distribution to stockholders

                                       12
<PAGE>
might suffer by changes in market conditions which cause the cost of the
financing to exceed the income from the asset. If we do not engage in a
successful hedging strategy with respect to our variable rate financings, an
increase in the interest rate payable on such financings could cause higher debt
payments and could materially adversely affect liquidity and results from
operations.

    Leverage creates an opportunity for increased returns on equity, but also
creates risks. For example, debt service payments can reduce the net income
available for distributions to stockholders. We cannot assure you that we will
be able to meet our debt service obligations and, to the extent that we cannot,
we may lose some or all of our assets to foreclosure or sale to satisfy our debt
obligations. Interest rate changes can affect our income by affecting:

    --  the spread between the income on our assets and interest-bearing
        liabilities;

    --  the value of our interest-earning assets; and

    --  our ability to realize gains from the sale of assets.

    We have adopted guidelines to maintain a debt to total market capitalization
ratio not in excess of 60%. This policy enables us to incur additional
indebtedness as the value of our assets increases even though there has not
necessarily been a corresponding increase in our ability to service our
indebtedness. For purposes of this policy, our debt to market capitalization
ratio is calculated as:

    --  our proportionate share of total consolidated and unconsolidated debt as
        a percentage of our proportionate share of the market value of our
        assets.

    Our Charter and Bylaws do not limit the amount of indebtedness we can incur.
Accordingly, our Board of Directors could alter or eliminate this policy. They
would do so, for example, if it were necessary for us to continue to qualify as
a REIT.

RISKS ASSOCIATED WITH HEDGING INVESTMENTS AND INVESTMENTS IN DERIVATIVES

    Interest rate changes may adversely affect our investments. Interest rates
are highly sensitive to many factors, including:

    --  governmental, monetary and tax policies;

    --  domestic and international economic and political considerations; and

    --  other factors beyond our control.

    We may employ a hedging strategy to limit the effects of interest rate
changes on our operations, including engaging in interest rate swaps, caps,
floors and other interest rate exchange contracts. Our use of these types of
derivatives to hedge our assets and liabilities carries certain risks, such as:

    --  losses on a hedge position may reduce the funds available for
        distribution to stockholders; and

    --  losses on a hedge position may exceed the amount invested in such
        instruments.

    We have no formal policy with respect to hedging investments or investments
in derivatives. There is no perfect hedge for any investment, and a hedge may
not perform its intended use of offsetting losses on an investment. Moreover, we
are exposed to the risk that the counter parties with whom we trade may stop
making markets and quoting prices in such instruments. If this happened, we
would be unable to enter into an offsetting transaction with respect to an open
position.

    Any losses incurred may be amplified if the hedging vehicle moves more or
less than the price movement of the asset being hedged. We cannot assure you of
a correlation between price movements in a hedging vehicle and an asset being
hedged. This presents the risk that both the hedging vehicle and the hedged
asset may decline in value at the same time. In addition, if a party to a
hedging transaction defaults, we may only have contractual remedies (which may
be limited by bankruptcy, insolvency or similar laws)

                                       13
<PAGE>
pursuant to the agreement related to the transaction. Our profitability may be
adversely affected during any period as a result of changing interest rates or
due to losses incurred in hedging transactions. This could possibly result in a
material adverse impact on our liquidity and results from operations.

THE COMPANY'S INSURANCE WILL NOT COVER ALL LOSSES

    We intend to maintain comprehensive insurance on each of our significant
assets. This coverage includes liability and fire and extended coverage, in
amounts sufficient to permit the replacement of the assets in the event of a
total loss, subject to applicable deductibles. We will endeavor to obtain
coverage of the type and in the amount customarily obtained by owners of similar
properties. However, certain losses are generally uninsurable or not
economically insurable:

    --  catastrophic losses such as fire, flood and hurricane;

    --  economic conditions such as inflation;

    --  legal conditions such as changes in building codes and ordinances;

    --  environmental considerations; or

    --  other conditions or considerations which may make it infeasible to use
        insurance proceeds to replace an asset if it is damaged or destroyed.

    Under such circumstances, the insurance proceeds we received might not be
adequate to restore our economic position with respect to the affected asset.

PROPERTY TAXES DECREASE RETURNS ON REAL ESTATE

    Each of our assets will be subject to real and (in some instances) personal
property taxes. The real and personal property taxes on our assets may increase
or decrease as property tax rates change or as the assets are assessed or
reassessed by taxing authorities. If property taxes on our investments increase,
our cash available for distribution to our stockholders would be adversely
affected.

COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT AND OTHER CHANGES IN
GOVERNMENTAL RULES AND REGULATIONS MAY BE COSTLY

    Under the Americans with Disabilities Act of 1990 (the "ADA"), all public
properties are required to meet certain federal requirements related to access
and use by disabled persons. Properties we acquire may not be in compliance with
the ADA. If a property is not in compliance with the ADA, we will be required to
make modifications to such property to bring it into compliance. If we fail to
comply, we face the possibility of an imposition of fines or an award of damages
to private litigants. In addition, we could face changes in governmental
rules and regulations or enforcement policies affecting the use and operation of
the properties, including changes to building codes and fire and life-safety
codes. If we were required to make substantial modifications to our properties
to comply with the ADA or other changes in governmental rules and regulations,
our ability to make expected distributions to stockholders could be adversely
affected.

ADVERSE EFFECT ON RESULTS OF OPERATIONS DUE TO POSSIBLE ENVIRONMENTAL
  LIABILITIES

    Our operating costs may be affected by the obligation to pay for the cost of
complying with existing and future environmental laws, ordinances and
regulations. Environmental problems could materially impair the value of assets.
Under various federal, state and local environmental laws, ordinances and
regulations, a current or previous owner or operator of real property may be
liable (often regardless of knowledge or responsibility) for the costs of
removal or remediation of hazardous or toxic substances releases at its
property. These costs could be substantial. The presence of such substances (or
the failure to

                                       14
<PAGE>
properly remediate the contamination) may materially and adversely affect the
owner's ability to borrow against, sell or rent the affected property.

    Persons who arrange for the transportation, disposal or treatment of
hazardous or toxic substances may also be liable for the costs of removal or
remediation of such substances at the disposal or treatment facility, whether or
not such facility is or ever was owned or operated by such person. In addition,
certain environmental laws and common law principles impose liability for
releases of hazardous materials into the environment, including
asbestos-containing materials ("ACMs"). These laws may impose liability for
release of ACMs and may provide for third parties to seek recovery from owners
or operators of real properties for personal injury associated with exposure to
released ACMs or other hazardous materials. In connection with our ownership and
operation of certain assets, we may potentially be liable for such costs.

    Environmental laws may also impose restrictions on the use or transfer of
property and on the manner in which a business is operated. These restrictions
may require expenditures. We may be liable for any such costs in connection with
certain of our assets. In addition, the cost of defending against claims of
liability or remediating contaminated property and the cost of complying with
such environmental laws could materially adversely affect our results of
operations and financial condition.

    In connection with the acquisition of assets, we intend to obtain Phase I
environmental site assessments ("ESAs") prepared by qualified independent
environmental engineers. The purpose of ESAs is to identify potential sources of
contamination for which the assets may be responsible and to assess the status
of environmental regulatory compliance. It is possible, however, that these ESAs
will not reveal all environmental liabilities or that such assets may be subject
to material environmental liabilities of which we are unaware.

INVESTMENT ACTIVITY RISKS

APPROPRIATE INVESTMENTS MAY NOT BE AVAILABLE

    Although we may invest in other assets as opportunities arise, we intend to
focus primarily on acquiring real estate-related assets consistent with our
investment strategy. We cannot assure you that:

    --  we will identify assets that meet our investment criteria;

    --  we will be successful in acquiring any assets that may be identified; or

    --  acquired assets will produce a return on our investment.

    We will have broad authority to invest in assets consistent with our
investment strategy. We may invest in highly-leveraged assets, which may
increase the likelihood of a loss of our assets through foreclosure. No
assurance can be made that our decisions in this regard will result in a profit
for the Company. Investment in real estate is a highly competitive business and
the acquisition of assets is often based on competitive bidding. Consequently,
our inability to identify appropriate assets may have an adverse effect on our
results of operations.

REAL ESTATE IS ILLIQUID AND VALUE IS DEPENDENT ON CONDITIONS BEYOND THE
  COMPANY'S CONTROL

    We expect to invest in assets which may be subject to varying degrees of
risk generally incident to the ownership of real property. Real estate
investments are relatively illiquid. Our ability to vary investments in response
to changes in economic and other conditions will be limited. We cannot assure
you that the fair market value of any assets we own or acquire will not decrease
in the future. The underlying value of our assets, our income and our ability to
make distributions to stockholders are dependent upon our ability to operate our
assets in a manner sufficient to maintain or increase revenue in excess of
operating expenses and debt service. Our revenue may be adversely affected by
the following:

    --  adverse changes in national or local economic conditions;

                                       15
<PAGE>
    --  competition from other properties offering the same or similar services;

    --  changes in interest rates and in the availability, cost and terms of
       mortgage funds;

    --  impact of present or future environmental legislation and compliance
       with environmental laws;

    --  ongoing need for capital improvements (particularly in older
       structures); changes in real estate tax rates and other operating
       expenses; adverse changes in governmental rules and fiscal policies;

    --  civil unrest;

    --  acts of God, including earthquakes, hurricanes and other natural
       disasters (which may result in uninsured losses);

    --  acts of war;

    --  adverse changes in zoning laws; and other factors which are beyond our
       control either in whole or in part.

WE MUST COMPETE WITH OTHER COMPANIES FOR ACQUISITIONS

    We intend to invest in real estate industry sectors which are highly
competitive. We may compete for assets with entities which have substantially
greater economic and personnel resources than the Company and better
relationships with sellers of assets, lenders and others. These entities may
also generally be able to accept more risk than we can prudently manage.
Competition may generally reduce the number of suitable prospective assets
offered to us and increase the bargaining power of property owners seeking to
sell, thereby increasing prices.

WE MUST BE ABLE TO PAY OFF OUR FINANCING

    We are subject to the risks normally associated with debt financing. This
includes the risk that our cash flow will be insufficient to meet required debt
service. In addition, we may be unable to refinance our existing indebtedness.
If we do refinance, the terms of the financing may not be as favorable as the
existing indebtedness terms.

REAL ESTATE INVESTMENT RISKS

    Real property investments have varying degrees of risks. Our cash flow and
ability to make distributions to stockholders will be adversely affected if our
assets do not generate revenues sufficient to meet operating expenses, including
debt service and capital expenditures. An asset's revenues and value may be
adversely affected by the following:

    --  the general economic climate; the local economic climate;

    --  local real estate conditions;

    --  the ability of the owner to provide adequate management, maintenance and
       insurance; and

    --  increased operating costs.

    Certain significant expenditures associated with an equity investment are
generally not reduced when circumstances cause a reduction in income from the
investment. These include mortgage payments, real estate taxes, or insurance and
maintenance costs. In addition, we face numerous competitors for development and
acquisitions of properties which may have greater resources than the Company.

RISKS RELATING TO OUR INVESTMENT IN BCSP

    If we successfully implement the Asset Sale Plan, our only substantial
remaining asset will be our interest in BCSP. Pursuant to the limited
partnership agreement of BCSP, we must make all of our real

                                       16
<PAGE>
estate investments through BCSP until the earlier of October 1, 2001 or when 85%
of the capital has been invested. We have committed to invest $57.5 million in
BCSP. Our investment in BCSP entails risks including the following:

    THE TERMS OF OUR INVESTMENT POTENTIALLY REDUCE POTENTIAL PROFITS TO THE
     COMPANY FROM INDIVIDUAL INVESTMENTS

    We will only be entitled to a pro rata portion of the profits of BCSP which
are distributed to limited partners, based upon the proportion that our
investment in BCSP as a limited partner bears to the aggregate capital
commitments of all limited partners in BCSP. Since individual real estate
investment opportunities are often of fixed size, the Company will have to share
profits of individual investments with its partners in BCSP which, absent its
arrangement with BCSP, it might otherwise secure for itself by making a larger
investment on its own behalf than is represented by its share of BCSP's
investment.

    WE ARE RESTRICTED FROM MAKING CERTAIN TYPES OF INVESTMENTS

    A wholly-owned subsidiary of the Company is the general partner of BCSP and,
as general partner, is entitled to a portion of the profits of BCSP. While our
wholly-owned subsidiary, as general partner, exercises investment control over
BCSP in most instances, BCSP's limited partnership agreement places certain
restrictions on the general partner which may be waived, with respect to a
particular investment, by limited partners in BCSP representing a voting
interest of the limited partners in excess of 50% (not including any Beacon
affiliate). These restrictions include the following:

    --  the general partner shall not make an investment if the amount of such
       investment would exceed 25% of the aggregate capital commitments for a
       period of more than 180 days after such investment has been made, unless
       the general partner obtains the prior approval of the board of advisors
       of BCSP for such investment; provided that at no time may the amount of
       capital invested in any single investment exceed 35% of the aggregate
       capital commitments;

    --  with respect to an investment in an operating company, the general
       partner shall not make such an investment if the amount invested in all
       such operating companies would exceed 20% of the aggregate capital
       commitments divided by 35%;

    --  with respect to an investment in new development, the general partner
       shall not make such an investment if the amount invested in all such new
       development would exceed 40% of the aggregate capital commitments of
       BCSP; and

    --  the general partner shall not make an investment in any real estate
       assets located outside of the United States, or in companies organized,
       headquartered or having substantially all of their assets outside of the
       United States.

In addition, unless waived as set forth above, BCSP may not:

    --  engage in speculative investment activity involving derivatives that
       would subject BCSP to unlimited exposure;

    --  make any investments in an entity that invests primarily in oil or gas
       development or in any collective investment entity whose constituent
       documents provide for the payment of incentive compensation based on the
       investment returns of the collective investment entity to a person other
       than BCSP, unless the general partner or BCSP has the power to direct the
       investment decisions of such collective investment entity or prevent
       investments from being made by such collective investment entity;

    --  make non-influence bearing investments in publicly traded securities if
       the amount invested in all such securities would exceed 5% of the
       aggregate capital commitments divided by 35%; or

                                       17
<PAGE>
    --  incur indebtedness if, immediately after giving effect to the incurrence
       of such indebtedness, the aggregate indebtedness of BCSP would exceed 65%
       of the sum of (a) the aggregate amount of all uncontributed capital
       commitments plus (b) the aggregate value of BCSP's investments,
       determined on the basis of the most recent valuations available.

    We would not face these restrictions if we were not obligated to make our
investments through BCSP. As a result, our arrangement with BCSP may prohibit us
from making investments that we might otherwise make absent such arrangement.

RISKS RELATED TO INVESTMENTS IN MORTGAGE LOANS

    Mortgage loan investments have certain risks that other types of investment
do not, including without limitation the following:

    COMMERCIAL MORTGAGE LOANS MAY INVOLVE A RISK OF LOSS

    Commercial mortgage loans have a high degree of risk because of a variety of
factors, including:

    --  the loans are dependent for repayment on successful operation of the
       mortgaged property and any tenant businesses operating on the property;

    --  the loans are usually non-recourse to the borrower;

    --  the loans have terms that include amortization schedules longer than
       stated maturity.

    --  the loan terms provide for balloon payments at stated maturity rather
       than periodic principal payments; and

    --  the value of the property underlying the loan can be affected
       significantly by the supply and demand in the market for that type of
       property.

    VOLATILITY OF VALUES OF MORTGAGED PROPERTIES MAY ADVERSELY AFFECT THE
     COMPANY'S MORTGAGE LOANS

    Commercial real estate values and the net operating income derived from the
property are subject to volatility and may be affected adversely by a number of
factors, including, but not limited to:

    --  national, regional and local economic conditions;

    --  local real estate conditions;

    --  changed or continued weakness in specific industry segments;

    --  general public perceptions of the safety, convenience, services and
       attractiveness of the property;

    --  willingness and ability of the property's owner to:

       (i) provide capable management,

       (ii) provide adequate maintenance,

       (iii) make capital expenditures and improvements, and

       (iv) provide leasing concessions;

    --  construction quality, age and design; and

    --  increases in operating expenses (such as energy costs).

    GENERAL DEFAULT RISKS

    With respect to our investments in mortgage loans, we face the risks of
borrower defaults, bankruptcies, fraud and special hazard losses (which are not
covered by standard hazard insurance). If a borrower defaults, we bear a risk of
loss of principal to the extent that the value of the collateral is less than
the amount due on the mortgage loan. In addition, failure to receive interest
payments because of borrower

                                       18
<PAGE>
default could have a materially adverse effect on our cash flow from operations.
If a borrower declares bankruptcy, we face the following risks:

    --  the bankruptcy court determines the value of the underlying collateral
       at the time of bankruptcy;

    --  the bankruptcy trustee may avoid the lien securing the mortgage loan;
       and

    --  the debtor-in-possession may avoid the lien securing the mortgage loan
       to the extent the lien is unenforceable under state law.

    If we have to foreclose a mortgage, the process can be expensive and
lengthy. These costs could adversely affect our anticipated return on the
foreclosed mortgage loan.

OUR MULTI-SECTOR INVESTMENT STRATEGY IS MORE COMPLICATED THAN A SINGLE-SECTOR
  INVESTMENT STRATEGY

    Our current investment strategy is to acquire assets in a variety of real
estate product-types within a variety of geographic locations. Initially, we
will emphasize office assets. Accordingly, we will be required to maintain
expertise, relationships and market knowledge across a broad range of
product-types and geographic regions.

    In addition, we face market conditions that affect each such product-type in
the various markets, including such factors as:

    --  local economic climate;

    --  business layoffs;

    --  industry slowdowns;

    --  changing demographics; and

    --  local supply and demand issues affecting each such market.

    Our multi-sector approach could require more management time, staff support
and expense than a company focused upon a single product-type in fewer
jurisdictions than contemplated by the Company.

GEOGRAPHICALLY CONCENTRATED ASSETS ARE VULNERABLE TO DOWNTURNS IN LOCAL ECONOMIC
  CONDITIONS

    The economic performance and value of our assets are subject to all of the
risks incident to the ownership and operation of real estate. These include the
risks normally associated with changes in national, regional and local economic
and market conditions. Such conditions can affect tenants' ability to make
rental payments. Our assets are located in six markets--East Cambridge,
Massachusetts; South Boston, Massachusetts; Sunnyvale, California; Dallas,
Texas; Loudoun County, Virginia; and Seattle, Washington. We have no limits on
becoming more geographically concentrated.

    Local real estate market conditions may include a large supply of competing
space and competition for tenants, including competition based on:

    --  rental rates;

    --  attractiveness;

    --  location of property; and

    --  quality of maintenance, insurance and management services.

    Other factors may adversely affect the performance and value of an asset,
including:

    --  changes in laws and governmental regulations (including those governing
       usage, zoning and taxes);

    --  changes in interest rates; and

    --  availability of financing.

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<PAGE>
    If the assets do not generate sufficient income to meet operating expenses,
our income and ability to make distributions to stockholders may be adversely
affected.

NEW MARKETS MAY HAVE CONDITIONS UNLIKE OUR EXISTING MARKETS

    Although our management has historical experience with real estate related
assets and other assets and investments in a variety of geographic areas of the
country, our expertise in those markets may not assist us in new markets. In
such event, we may be exposed to risks associated with:

    --  lack of market knowledge and understanding of the local economy;

    --  inability to access land and property acquisition opportunities;

    --  inability to obtain construction tradespeople;

    --  sudden adverse shifts in supply and demand factors; and

    --  unfamiliarity with local governmental procedures.

WE DO NOT HAVE FULL CONTROL OVER INVESTMENTS MADE THROUGH PARTNERSHIPS AND JOINT
  VENTURES

    Instead of purchasing properties directly, we may invest as a partner or a
co-venturer. Partnership or joint venture investments may involve risks not
otherwise present, including:

    --  our partner or co-venturer might become bankrupt;

    --  our partner or co-venturer might at any time have economic or other
       business interests or goals which are inconsistent with our business
       interests or goals; and

    --  our partner or co-venturer may be in a position to take action:

       (i) contrary to our instructions or requests; or

       (ii) contrary to our policies or objectives, including our policy with
           respect to maintaining our qualification as a REIT.

    These investments may also have the potential risk of impasse on decisions
because neither we nor our partner or co-venturer would have full control over
the partnership or joint venture. We will seek to maintain sufficient control of
such partnerships or joint ventures to achieve our objectives. Our
organizational documents do not limit the amount of available funds which we may
invest in partnerships or joint ventures.

LEGAL AND TAX RISKS

TAX RISKS

    Since our inception, we have intended to operate so as to qualify as a REIT
for United States federal income tax purposes, and it is our belief that we have
satisfied and will continue to satisfy the Code's REIT organizational and
operational requirements. We have not and do not intend, however, to request a
ruling from the IRS as to our REIT status. Moreover, the Code provisions
governing our qualification as a REIT are highly technical and complex.
Consequently, we cannot guarantee that we have qualified or will qualify as a
REIT.

    If we have qualified and continue to qualify for taxation as a REIT, we
generally will not be subject to federal corporate income taxes on that portion
of our ordinary income or capital gain (including gains from sales consummated
under the Asset Sale Plan) that we distribute to stockholders, unless we incur
net gain from "prohibited transactions," as discussed below.

    If we were to fail to qualify as a REIT in any taxable year, we would be
subject to federal income tax (including any applicable alternative minimum tax)
on our taxable income at regular corporate rates, and distributions to
stockholders would not be deductible by the Company in computing its taxable
income.

                                       20
<PAGE>
Any such corporate tax liability could be substantial and would reduce the
amount of cash available for distribution to stockholders, which in turn could
have an adverse impact on the value of (and trading prices for) our Common
Stock. Unless entitled to relief under certain REIT provisions of the Code, we
also would be disqualified from taxation as a REIT for the four taxable years
subsequent to the year during which we ceased to qualify as a REIT.

    In order to qualify as a REIT, we must distribute annually at least 90% of
our net taxable income (excluding any net capital gain). Even if we meet this
90% minimum distribution requirement, we will be taxed at ordinary corporate
rates on our undistributed ordinary income and net capital gain. We also will be
subject to a 4% nondeductible excise tax on the amount, if any, by which certain
distributions paid or deemed paid by the Company with respect to any calendar
year are less than the sum of:

    --  85% of the Company's ordinary income for that year;

    --  95% of the Company's capital gain net income for that year; and

    --  100% of the Company's undistributed taxable income from prior years.

The amount of any taxable income that we elect to retain and pay income tax on
will be treated as distributed for purposes of the 4% excise tax.

    We intend to make sufficient distributions to our stockholders to comply
with the 90% minimum distribution requirement, and to avoid incurring corporate
income or excise tax on undistributed income. We anticipate reserving cash to
fund the Company's obligations under the Management Incentive Plan. The need to
retain such amounts could prevent us from distributing 90% of our income,
although based on our current projections, we expect to meet our distribution
requirements, but we cannot guarantee that such reserves would not impair our
ability to distribute all of our income. However, differences in timing between
the recognition of taxable income and the actual receipt of cash or
non-deductible expenditures (such as debt repayment or funding reserves) could
impair our ability to meet these distribution requirements. If such
circumstances impaired our ability to meet the 90% minimum distribution
requirement, the Company would have to borrow funds to meet the 90% distribution
requirement.

    So long as we continue to qualify as a REIT, any net gain from "prohibited
transactions" will be subject to a 100% penalty tax (unless such gain arises in
one of our taxable subsidiaries, in which case such gain would be subject to tax
at normal corporate rates). We cannot avoid this tax by distributing these gains
to stockholders. "Prohibited transactions" are sales of property held primarily
for sale to customers in the ordinary course of a trade or business. Whether a
real estate property constitutes property held primarily for sale to customers
in the ordinary course of a trade or business is determined on the basis of all
relevant facts and circumstances.

    We do not believe that any of our properties (other than residential
portions of certain properties held through taxable subsidiaries) are held
primarily for the sale to customers in the ordinary course of business. Thus, we
do not believe that any gains from sales of our properties (including sales
under the Asset Sale Plan) will be subject to the 100% penalty tax.
Nevertheless, because the determination as to whether or not property is held
for sale to customers in a trade or business is inherently factual, there can be
no assurance that the IRS or the courts would agree with our characterization.

VOTING TRUST DISTRIBUTIONS

    In order to qualify as a REIT, we must satisfy certain requirements
regarding the sources of our gross income. In June 1999 and November 2000 we
distributed to our shareholders interests in a voting trust formed to hold
shares of Wyndham, in January 2000 we distributed to our shareholders interests
in a voting trust formed to hold shares of Cypress, and in March 2000 we
distributed to our shareholders interests in a voting trust formed to hold
shares of CO Space. CO Space was subsequently acquired by InterNAP. When we
distributed interests in the Wyndham, Cypress, and CO Space voting trusts, we
recognized gain (if any) with respect to each distribution equal to any excess
of the value of the shares

                                       21
<PAGE>
distributed through the voting trust on the date of distribution over our tax
basis therein, and any such gain constituted income from non-real estate sources
for purposes of one of the REIT gross income tests that generally limits our
non-real estate gross income to 25% of our total gross income for the taxable
year. Based on our valuations of the Wyndham shares, Cypress shares, and CO
Space shares on the dates of distribution, we do not believe that the gains
recognized by us on the distributions violated this REIT gross income test for
1999 or 2000. Although these valuations reflect our judgment as to the value of
the shares distributed on their respective distribution dates, the valuation of
shares is a factual determination and could be challenged by the IRS, possibly
causing us to fail our REIT income tests for 1999 or 2000, as the case may be.
Unless we were able to avail ourselves of certain relief provisions, failure to
meet the income tests would cause us to lose our REIT status, in which case we
would incur significant corporate taxes and distributions to shareholders likely
would be reduced. In addition, we likely would not be able to reelect REIT
status until the fifth year following loss of REIT status.

AGGREGATE STOCK OWNERSHIP LIMIT MAY RESTRICT BUSINESS COMBINATION OPPORTUNITIES

    To maintain our qualification as a REIT, five or fewer individuals may not
own (directly or indirectly) more than 50% of our Common Stock at any time
during the last half of our taxable year. Therefore, our Charter contains an
aggregate stock ownership provision which generally prohibits any single
stockholder from owning more than 9.8% of our Common Stock. In addition, our
Charter contains a look-through ownership limit that permits certain mutual
funds and certain other widely-held entities (other than pension plans as
described in Section 401(a) of the Code) to own up to 15% of our Common Stock.
The Board of Directors may waive or modify either of these two provisions if it
is satisfied (based upon the receipt of a ruling from the IRS or the advice of
tax counsel) that ownership in excess of this limit will not jeopardize our
status as a REIT. To date, the Board has waived this provision with respect to
Standard Pacific Capital Management and its affiliates and also with respect to
The Prudential Insurance Company of America and its affiliates. These ownership
limits may inhibit or impede a change in control. Such inhibitions and
impediments could adversely affect stockholders' ability to realize a premium
over the then-prevailing market price for our Common Stock in connection with
such a transaction.

FOREIGN INVESTORS SHOULD CONSIDER TAX RISKS UNDER FIRPTA

    Distributions by us that are attributable to gain from the sale or exchange
of a United States real property interest, such as distributions of gain from
sales of properties under the proposed Asset Sale Plan, will be taxed to a
foreign stockholder under the Foreign Investment in Real Property Tax Act of
1980 ("FIRPTA"). Under FIRPTA, such distributions are taxed to a foreign
stockholder as if the distributions were gains "effectively connected" with a
United States trade or business. Accordingly, a foreign stockholder will be
taxed at the normal capital gain rate applicable to a domestic stockholder
(subject to any applicable alternative minimum tax and special alternative
minimum tax in the case of a non-resident alien individual). Distributions
subject to FIRPTA also may be subject to a 30% branch profit tax when made to a
foreign corporate stockholder that is not entitled to treaty exemptions.

    We will be required to withhold from distributions to foreign stockholders,
and remit to the IRS, 35% of the designated capital gain dividends (or, if
greater, 35% of the amount of any distributions that could be designated as
capital gain dividends). In addition, if we designate prior distributions as
capital gain dividends, subsequent distributions, up to the amount of such prior
distributions, will be treated as capital gain dividends for purposes of
withholding. Other distributions to foreign stockholders will generally be
subject to 30% withholding, unless the withholding rate is reduced by an
applicable tax treaty. If the amount of tax withheld by us with respect to a
distribution to a foreign stockholder exceeds the stockholder's United States
tax liability with respect to such distribution, the foreign stockholder may
file for a refund of such excess from the IRS.

    If the Company is not a domestically controlled REIT, non-U.S. Stockholders
generally will be taxed under FIRPTA on sales of our common stock. We will be a
domestically controlled REIT if non-U.S.

                                       22
<PAGE>
persons own (directly or indirectly) less than 50% of our Common Stock during
specified testing periods. We cannot assure you that we will continue to be a
domestically-controlled REIT. Even if not subject to FIRPTA, non-U.S.
stockholders are subject to taxation under certain other circumstances.

PLANS SHOULD CONSIDER ERISA RISKS OF INVESTING IN COMMON STOCK

    ERISA is a broad statutory framework that governs non-governmental employee
benefit plans in the United States. Fiduciaries of pension, profit-sharing or
other employee benefit plans subject to Title I of ERISA ("ERISA Plans") should
carefully consider the impact of ERISA and the regulations of the Department of
Labor (the "DOL") thereunder on the ERISA Plan's decision to invest in our
Common Stock. In particular, a fiduciary of an ERISA Plan should consider
whether its decisions with respect to these matters would satisfy the
requirements set forth in Part 4 of subtitle B of Title I of ERISA, including:

    --  the diversification and prudence requirements of ERISA;

    --  the requirement that the decisions be in the best interests of the
       participants and beneficiaries of the ERISA Plan; and

    --  the requirement that the decisions be authorized under the appropriate
       governing instruments and investment policies of the ERISA Plan.

    ERISA also prohibits certain transactions involving an ERISA Plan and
persons who are "parties in interest" with respect to the ERISA Plan. In
addition, the Code provides for similar prohibited transaction rules applicable
to "plans" (as defined in Section 4975 of the Code) and "disqualified persons"
with respect to such plans. The fiduciary of an ERISA Plan or a plan described
in Section 4975 of the Code (referred to together herein as "Plans")
contemplating an investment in our Common Stock should consider whether the
acquisition of such Common Stock would result in a prohibited transaction under
ERISA and/or the Code, and (if so) whether an exemption from these prohibited
transaction rules is available. In addition, the Plan Assets Regulation provides
that (subject to certain exceptions) the assets of an entity in which a Plan
holds an equity interest may be treated as assets of the investing Plan, in
which event the underlying assets of such entity (and transactions involving
such assets) would be subject to ERISA and applicable provisions of the Code
(including prohibited transaction provisions of ERISA and the Code).

CHANGES IN MANAGEMENT MAY BE DETERRED

    We are subject to the Maryland General Corporation Law (the "MGCL") because
we are incorporated in Maryland. Certain provisions of the MGCL:

    --  impose restrictions and require procedures with respect to business
       combinations, including (but not limited to) transactions with holders of
       more than 10% of the voting power of our equity securities; and

    --  limit voting rights for holders of 20% or more of the voting power of
       our stock.

    These provisions could discourage a takeover or other transaction involving
a change in control. Our Charter exempts from the MGCL any business combination
with Alan M. Leventhal, Lionel P. Fortin or current or future affiliates,
associates or other persons acting in concert as a group with either of
Messrs. Leventhal or Fortin.

BOARD OF DIRECTORS MAY CHANGE CERTAIN POLICIES WITHOUT STOCKHOLDER CONSENT

    Our policies will be determined by our Board of Directors. The Board of
Directors may amend or revise these policies, or approve transactions that
deviate from these policies without a vote of the stockholders. These changes in
policy may be positive or negative.

                                       23
<PAGE>
LOSS OF INVESTMENT COMPANY ACT EXEMPTION WOULD ADVERSELY AFFECT THE COMPANY

    We intend to avoid regulation as an investment company under the Investment
Company Act of 1940. The Investment Company Act exempts entities that (directly
or through majority-owned subsidiaries) are "primarily engaged in the business
of purchasing or otherwise acquiring mortgages and other liens on and interests
in real estate" (the "Qualifying Interests"). The commission currently
interprets the Investment Company Act to exempt companies that:

    --  maintain at least 55% of their Assets in Qualifying Interests, and

    --  maintain an additional 25% in Qualifying Interests or other real
       estate-related assets.

    As such, the assets we may acquire are limited by this exemption. In
addition, we could be required to either:

    --  change the manner in which we conduct our operations to avoid being
       required to register as an investment company; or

    --  register as an investment company.

    Either of these possibilities could have an adverse effect on the Company
and the market price for our Common Stock.

LIMITATION ON LIABILITY OF OFFICERS AND DIRECTORS OF THE COMPANY

    Our Charter limits the liability of a director or officer to the Company and
our stockholders for money damages, except for liability resulting from:

    --  actual receipt of an improper benefit or profit in money, property or
       services; or

    --  active and deliberate dishonesty established by a final judgment as
       being material to the cause of action.

OTHER RISKS

RISK THAT OUR COMMON STOCK HAS NO ESTABLISHED TRADING MARKET

    Our Common Stock presently has no established trading market and there is no
assurance one will develop. Our Common Stock has been accepted for trading in
the PORTAL Market, a real-time electronic National Association of Securities
Dealers marketplace that facilitates trading in securities offered pursuant to
Rule 144A transactions. We cannot assure you that an active trading market for
our Common Stock will develop in the PORTAL Market or elsewhere. In addition,
access to the PORTAL Market (unlike other prominent stock exchanges or Nasdaq
markets) is restricted to certain parties and can only be used for the trading
of certain restricted securities. Accordingly, we cannot assure you as to:

    --  the likelihood that an active market for our Common Stock will develop;

    --  the liquidity of any such market;

    --  your ability to sell your Common Stock; or

    --  the prices that you may obtain for your Common Stock.

    In addition, we expect our stockholders to vote on a proposal to amend the
charter of BCP that would eliminate the appraisal rights of stockholders. We
currently expect that this proposal will be voted on at a meeting scheduled for
April 4, 2001. If adopted, the elimination of appraisal rights could further
reduce the liquidity of the common stock.

                                       24
<PAGE>
ITEM 2. PROPERTIES.

    Set forth below are summary descriptions of the Properties. (1)(2)(3)

<TABLE>
<CAPTION>
                                                                                              RENTABLE
                                 YEAR BUILT/   OWNERSHIP     NO. OF          PROPERTY          AREA IN       PERCENT LEASED AT
PROPERTY                          RENOVATED     INTEREST     BLDGS.          LOCATION        SQUARE FEET   DECEMBER 31, 2000 (1)
--------                         -----------   ----------   --------   --------------------  -----------   ---------------------
<S>                              <C>           <C>          <C>        <C>                   <C>           <C>
SOUTH BOSTON, MA:
Fort Point Place (4)...........  1910 / 1988       100%         2      South Boston, MA         145,222             100%
                                                            --------                         -----------------------------------
  Subtotal / Weighted Average
    South Boston, MA...........                                 2                               145,222             100%
                                                            --------                         -----------------------------------

SUBURBAN DALLAS, TX:
OFFICE
Bank One LBJ...................     1982           100%         1      Dallas, TX                42,000              78%
Brandywine Place...............     1984           100%         4      Plano, TX                 66,237              92%
Crosspoint Atrium..............     1981           100%         1      Dallas, TX               220,212              88%
Forest Abrams Place............     1983           100%         2      Dallas, TX                68,827              77%
6500 Greenville Avenue (5).....  1981 / 1996       100%         1      Dallas, TX               114,600              62%
Northcreek Place II (6)........     1984           100%         2      Dallas, TX               163,303              84%
One Glen Lakes (7).............     1982           100%         1      Dallas, TX               166,272              94%
                                                            --------                         -----------------------------------
  Subtotal / Weighted
    Average....................                                12                               841,451              84%
                                                            --------                         -----------------------------------

R & D / INDUSTRIAL
Park North Business Center.....     1979           100%         2      Richardson, TX            36,885             100%
Plaza at Walnut Hill...........     1982           100%         2      Dallas, TX                88,280              90%
Richardson Business Center.....     1983           100%         2      Richardson, TX            66,300             100%
Richardson Commerce Centre.....     1981           100%         3      Dallas, TX                60,517              88%
Sherman Tech...................     1981           100%         1      Richardson, TX            16,176             100%
T I Business Park..............     1980           100%         3      Richardson, TX            96,902              88%
Venture Drive Tech Center......     1975           100%         1      Farmers Branch, TX       128,322              76%
                                                            --------                         -----------------------------------
  Subtotal / Weighted
    Average....................                                14                               493,382              88%
                                                            --------                         -----------------------------------
  Subtotal / Weighted Average
    Suburban Dallas, TX........                                26                             1,334,833              85%
                                                            --------                         -----------------------------------

SUNNYVALE, CA:
Mathilda Research Centre (8)...     2000          87.5%         1      Sunnyvale, CA            144,315             100%
                                                            --------                         -----------------------------------
  Subtotal / Weighted Average
    Sunnyvale, CA..............                                 1                               144,315             100%
                                                            --------                         -----------------------------------
  Total / Weighted Average
    Properties.................                                29                             1,624,370              88%
                                                            ========                         ===================================
</TABLE>

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

(1) This table is as of December 31, 2000, excluding properties controlled by
    BCSP and excluding Technology Square which was sold on February 9, 2001.

(2) Millennium Tower has not been included in these figures because it is a
    development project. The joint venture between the Company and HA L.L.C. is
    building a Class A high-rise building in downtown Seattle, Washington.

(3) Mathilda Research Centre II has not been included in these figures because
    it is a development project. The joint venture between the Company and
    Mathilda Partners II LLC is developing a Class A office/R&D building in
    Sunnyvale, California which has been leased to Juniper.

(4) Fort Point Place includes two additional buildings that are not included in
    these figures. The two buildings consist of approximately 137,000 square
    feet of recently converted residential condominiums. We are currently in the
    process of selling the condominiums. As of December 31, 2000, 87 of the 120
    condomimiums had been sold.

(5) 6500 Greenville Avenue includes 281 structured parking spaces.

(6) Northcreek Place II includes 232 structured parking spaces.

(7) One Glen Lakes includes 546 structured parking spaces.

(8) Mathilda Research Centre is a joint venture between the Company and Mathilda
    Partners LLC that is building two Class A office/R&D buildings in Sunnyvale,
    California. The first building has recently been completed, is leased to
    Juniper and is included in this table. Juniper has also leased the second
    building which will be added to this table upon its completion.

                                       25
<PAGE>
ITEM 3. LEGAL PROCEEDINGS.

    From time to time, we are involved in legal proceedings incurred in the
normal course of business. We believe that none of these proceedings will have a
material adverse effect on the financial condition or liquidity of the Company.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

    There were no matters submitted to a vote of Stockholders during the fourth
quarter of the fiscal year covered by this report through solicitation of
proxies or otherwise.

                                       26
<PAGE>
                                    PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

    (a) MARKET INFORMATION. Our common stock is trading in the PORTAL Market, a
       real-time, electronic National Association of Securities Dealers
       marketplace that facilitates trading in securities offered pursuant to
       Rule 144A transactions. Our common stock has no established public
       trading market.

    (b) HOLDERS. As of March 15, 2001, there were approximately 300 record
       holders of our common stock.

    (c) DIVIDENDS. On December 28, 1998 we declared a cash dividend of $0.48 per
       share. On June 30, 1999, we distributed preferred stock of Wyndham valued
       at $4.343683857 per share to a voting trust and then distributed our
       interest in the voting trust to our stockholders and unitholders. On
       January 5, 2000, we distributed preferred stock of Cypress valued at
       $.75301344 per share to a voting trust and then distributed our interest
       in the voting trust to our stockholders and unitholders. On February 24,
       2000, we declared a cash dividend of $0.50 per share. On March 24, 2000,
       we distributed preferred stock of CO Space valued at $.33685262 per share
       to a voting trust and then distributed our interest in the voting trust
       to our stockholders and unitholders. On June 16, 2000, we declared a cash
       dividend of $3.00 per share. On November 8, 2000, we distributed
       preferred stock of Wyndham valued at $2.503 per share to a voting trust
       and then distributed our interest in the voting trust to our stockholders
       and unitholders. On January 5, 2001, we declared a cash dividend of $2.00
       per share. On February 20, 2001, we declared a cash dividend of $6.00 per
       share.

    (d) RECENT SALE OF UNREGISTERED SECURITIES. On October 17, 2000, Luddite
       Associates, an affiliate of The Prudential Insurance Company of America,
       converted its 2,528,296 units in the Operating Partnership into an
       equivalent number of shares of common stock of BCP. This stock was issued
       pursuant to the exemption from registration requirements under
       Section 4(2) of the Securities Act of 1933, as amended.

                                       27
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA.

    The selected financial data should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations", our
historical financial statements and notes thereto, each included elsewhere
herein.

<TABLE>
<CAPTION>
                                                                                         AS OF AND FOR
                                                                                        THE PERIOD FROM
                                                 AS OF AND FOR       AS OF AND FOR     JANUARY 21, 1998
                                                THE YEAR ENDED      THE YEAR ENDED      (INCEPTION) TO
                                               DECEMBER 31, 2000   DECEMBER 31, 1999   DECEMBER 31, 1998
                                               -----------------   -----------------   -----------------
                                                     (IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)
<S>                                            <C>                 <C>                 <C>
Income Statement Data:
  Revenues...................................      $ 52,522            $ 38,597            $ 26,536
  Net income.................................        83,824               2,965               9,054
  Net income per common share-basic and
    diluted..................................          4.03                0.14                0.44
Balance Sheet Data:
  Real estate, net...........................      $251,421            $262,124            $214,768
  Investments in partnership, joint ventures
    and corporations.........................        55,274             163,677              90,136
  Total assets...............................       403,266             513,097             484,000
  Mortgage notes payable.....................        30,797              31,172              21,570
  Note payable--interim financing............        97,830             122,500                  --
</TABLE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS.

OVERVIEW

    This Form 10-K contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. The words "believe", "expect", "anticipate", "intend",
"estimate" and other expressions which are predictions of or indicate future
events and trends and which do not relate to historical matters identify
forward-looking statements. Our actual results could differ materially from
those set forth in the forward-looking statements. Certain factors that might
cause such a difference include the following: risks associated with the
adoption or failure to adopt our proposed Asset Sale Plan, real estate
investment considerations, such as the effect of economic and other conditions
in the market area on cash flows and values; the need to renew leases or relet
space upon the expiration of current leases, the need to lease new developments
and redevelopments and the ability of a property to generate revenue sufficient
to meet debt service payments and other operating expenses; risks associated
with borrowing, such as the possibility that we will not have sufficient funds
available to make principal payments on outstanding debt and outstanding debt
may be refinanced at higher interest rates or otherwise on terms less favorable
to us; the impact of pending or future litigation; variations in quarterly
operating results; securities held for investment are subject to fluctuations in
valuation based upon the performance of the underlying businesses; risks that
some of our investments could cause us to fail to qualify as a REIT; and those
risks and uncertainties contained elsewhere in this report.

    The following discussion and analysis of the financial condition and results
of operations should be read in conjunction with the accompanying consolidated
financial statements and notes thereto. Our consolidated financial statements
include Beacon Capital Partners, Inc. ("BCP") and Beacon Capital Partners, L.P.
(the "Operating Partnership"), our majority-owned partnership.

                                       28
<PAGE>
RESULTS OF OPERATIONS

    SUMMARY

    Changes in revenues and expenses for the years and period ended
December 31, 2000, 1999 and 1998 were primarily due to the timing of investment,
financing and sale transactions and redevelopment and releasing programs during
1998, 1999 and 2000. Equity capital was raised in March and April 1998 (the
"Offering"); The Athenaeum Portfolio investment was made in May 1998; Technology
Square and The Draper Building were acquired in June 1998; the Dallas Office and
Industrial Portfolio was acquired in July 1998; the Batterymarch mortgage note
receivable was funded in May 1999 and repaid in July 1999; the secured interim
financing (the "Interim Financing") from Bankers Trust Company closed in
June 1999, was increased in December 1999 and was partially paid down in
April 2000; the investments in preferred stock of Wyndham International, Inc.
("Wyndham") were made primarily in June and July 1999; Technology Square
Building 200 was released in July 1999; Technology Square Buildings 400 and 500
were taken out of service in 1999 and underwent substantial redevelopment and
releasing in 1999 and early 2000; Fort Point Place was acquired in July 1999;
the Fort Point Place residential condominium conversion commenced in the fall of
1999, was substantially completed in the summer of 2000 and sales of the units
commenced in September 2000; Beacon Capital Strategic Partners, L.P. ("BCSP")
was established in October 1999; the Fort Point Place mortgage debt was obtained
in October 1999; the Technology Square Building 300 development commenced in
January 2000; The Athenaeum Portfolio was refinanced in April 2000; The Draper
Building was sold in April 2000; some of the assets in The Athenaeum Portfolio
(215 First Street, 195 First Street and Doc Linskey Way) were sold in June 2000;
BCSP sold 233 Fremont Street in June 2000; the first building in Mathilda
Research Centre was completed in June 2000; the repurchase of common stock of
BCP and certain voting trust interests in accordance with the share repurchase
program occurred in July 2000; the development of Technology Square Buildings
600 and 700 commenced in August 2000; additional Wyndham preferred stock was
distributed in November 2000; $3.2 million of capital was contributed to BCSP in
December 2000; the remaining assets in The Athenaeum Portfolio (One Kendall
Square) were sold in December 2000; and investments in Mathilda Research Centre
I and II, Millennium Tower, Cypress Communications, Inc. ("Cypress") and
CO Space, Inc. ("CO Space") occurred over time from 1998 through 2000.

    COMPARISON OF THE YEARS ENDED DECEMBER 31, 2000 AND 1999 AND THE PERIOD FROM
     JANUARY 21, 1998 (INCEPTION) TO DECEMBER 31, 1998

    Total revenues were $52.5 million, $38.6 million and $26.5 million for the
years and period ended December 31, 2000, 1999 and 1998, respectively. Rental
income was $35.6 million, $23.3 million and $10.7 million for the years and
period ended December 31, 2000, 1999 and 1998, respectively. The increase from
1998 to 1999 of $12.6 million was due to the acquisitions of Technology Square
and The Draper Building, Fort Point Place and the Dallas Office and Industrial
Portfolio. The increase from 1999 to 2000 of $12.3 million was primarily due to
Technology Square releasing. Reimbursement of operating expenses and real estate
taxes was $1.3 million, $2.2 million and $1.7 million for the years and period
ended December 31, 2000, 1999 and 1998, respectively. The increase from 1998 to
1999 of $.5 million was primarily due to the acquisition of the Dallas Office
and Industrial Portfolio. The decrease from 1999 to 2000 of $.9 million was
primarily due Technology Square releasing which established tenant expense bases
at current levels. Equity in earnings of partnership and joint ventures was
$6.1 million, $4.8 million and $3.2 million for the years and period ended
December 31, 2000, 1999 and 1998, respectively. The increase from 1998 to 1999
of $1.6 million was due to a full year of investment in The Athenaeum Portfolio
in 1999. The increase from 1999 to 2000 of $1.3 million was due to income from
BCSP and Mathilda Research Centre offset by an earnings reduction from The
Athenaeum Portfolio due to the property refinancing and the sale of assets in
2000. Interest and dividend income was $5.6 million, $6.6 million and
$10.7 million for the years and period ended December 31, 2000, 1999 and 1998,
respectively. The decrease from 1998 to 1999 of $4.1 million was primarily the
result of a reduction in investment cash on hand due to the use of

                                       29
<PAGE>
Offering proceeds to fund property acquisitions and investments, offset by the
interest earned on the Batterymarch mortgage note receivable and Wyndham
dividends received in 1999. The decrease from 1999 to 2000 of $1 million was
primarily due to interest earned on the Batterymarch mortgage note receivable in
1999. Other income was $3.9 million, $1.7 million and $.2 million for the years
and period ended December 31, 2000, 1999 and 1998, respectively. The increase
from 1998 to 1999 of $1.5 million was primarily due to reimbursements received
from 233 Fremont Street in 1999 and increased management fees. The increase from
1999 to 2000 of $2.2 million was primarily due to the gain recognized on the
distribution of the Cypress investment offset by losses on the CO Space
investment, the loss recognized on the distribution of the Wyndham investment
and reimbursements received from 233 Fremont Street in 1999.

    Total expenses were $40.7 million, $34.1 million and $16.8 million for the
years and period ended December 31, 2000, 1999 and 1998, respectively. Property
operating expenses were $10.1 million, $6.3 million and $3.4 million for the
years and period ended December 31, 2000, 1999 and 1998, respectively. The
increase from 1998 to 1999 of $2.9 million was primarily due to the acquisition
of the Dallas Office and Industrial Portfolio. The increase from 1999 to 2000 of
$3.8 million was primarily due to increased occupancy at Technology Square, the
acquisition of Fort Point Place and increased costs at the Dallas Office and
Industrial Portfolio. Real estate taxes were $5.3 million, $4.7 million and
$1.9 million for the years and period ended December 31, 2000, 1999 and 1998,
respectively. The increase from 1998 to 1999 of $2.8 million was primarily due
to the acquisitions of Technology Square and The Draper Building, Fort Point
Place and the Dallas Office and Industrial Portfolio. The increase from 1999 to
2000 of $.6 million was primarily due Technology Square increases. General and
administrative expenses were $11.1 million, $9.8 million and $8.4 million for
the years and period ended December 31, 2000, 1999 and 1998, respectively.
Affiliate formation expenses were $2.1 million and $4.0 million for the years
ended December 31, 2000 and 1999, respectively. Affiliate formation expenses
were costs incurred in the formation of BCSP and consist of underwriter
commissions and fees for legal and professional services not reimbursed by the
partners of BCSP. Interest expense was $3.7 million, $2.7 million and
$.9 million for the years and period ended December 31, 2000, 1999 and 1998,
respectively. The increases from 1998 to 1999 of $1.8 million and 1999 to 2000
of $1 million were primarily due to interest on the Interim Financing and the
Fort Point Place mortgage, offset by capitalized interest.

    The gains on sales of real estate for the year ended December 31, 2000 of
$85.5 million resulted from the gain on the sale of The Draper Building of
$27.3 million, our share of the gain on the sale of The Athenaeum Portfolio of
$32.4 million, our share of the gain on the sale of 233 Fremont Street of
$25.7 million and the gain from the sales of residential condominiums of Fort
Point Place of $.1 million. The minority interest in consolidated partnership of
$8.9 million, $.5 million and $.7 million for the years and period ended
December 31, 2000, 1999 and 1998, respectively represent the portion of the
Operating Partnership that is not owned by BCP. The extraordinary loss, net of
minority interest for the years ended December 31, 2000 and 1999 of
$4.6 million and $1.0 million, respectively resulted from debt refinancings. In
2000, The Athenaeum Portfolio refinancing, which extinguished the previous
mortgage debt, required the write-off of related transaction costs and
unamortized deferred financing costs. In 1999, the Interim Financing original
$100 million note was substantially modified and required the write-off of
unamortized deferred financing costs.

    FUTURE RESULTS OF OPERATIONS

    We anticipate that future periods will be impacted by the year 2000 sales
and distribution of assets and by future dispositions expected under the Asset
Sale Plan. See--"Item 1. BUSINESS". Rental income will decline as a result of
the sales of The Draper Building and Technology Square in 2000 and 2001,
respectively and by future sales expected under the Asset Sale Plan. Equity in
earnings of partnership and joint ventures will decline as a result of the sale
of The Athenaeum Portfolio in 2000 which decline may be partially offset by
earnings from Mathilda Research Centre and Millennium Tower in 2001. Interest
and

                                       30
<PAGE>
dividend income is expected to decline in 2001 as a result of the 2000
distribution of Wyndham preferred stock and the Asset Sale Plan that anticipates
the distribution of available cash. Property operating and related expenses are
also expected to decline as a result of sales of assets and the associated
payoff of debt.

    Under the new management incentive plan adopted in 2000, members of
management will be entitled to participate in all returns realized by the
Company after specified benchmarks are achieved. To the extent that return
hurdles are achieved, we will record an allocation of earnings as a minority
interest charge in amounts that could be material. In addition, we intend to
retain assets in amounts sufficient to fund amounts owed to the minority
interest unitholders.

LIQUIDITY AND CAPITAL RESOURCES

    Cash and cash equivalents were $83.8 million at December 31, 2000 as
compared to $76.9 million at December 31, 1999. The increase of $6.9 million was
primarily the result of (i) distributions received from The Athenaeum Portfolio,
(ii) proceeds received from the sale of The Draper Building, (iii) proceeds
received from the sales of residential condominiums of Fort Point Place,
(iv) distributions received from BCSP, (v) cash flow from operations, and
(vi) proceeds received from the Interim Financing, all offset by (i) the
payments of the March and June dividends to stockholders and distributions to
unitholders, (ii) the payment of Technology Square development costs, (iii) the
partial repayment of the Interim Financing, (iv) the repurchase of approximately
1.8 million shares of common stock of BCP and certain voting trust interests in
accordance with the share repurchase program, (v) the payment of Fort Point
Place development costs, and (vi) investments in Millennium Tower and Mathilda
Research Centre II.

SHORT AND LONG-TERM LIQUIDITY

    We have considered our short-term (up to 12 months) liquidity needs and the
adequacy of expected liquidity sources to meet these needs. We believe that our
principal short-term operating liquidity needs are to fund normal recurring
expenses, debt service requirements and the minimum distribution required to
maintain the Company's REIT qualification under the Internal Revenue Code of
1986, as amended. We believe that these needs will be provided for by cash flow
from operating activities and current cash balances. We believe that our 2001
distribution requirement to maintain our REIT qualification will be met from our
2001 cash distributions to date ($8.00 per share of common stock of BCP) and
from future distributions expected from the implementation of the Asset Sale
Plan. We believe our other short-term liquidity needs are the funding of BCSP
capital commitments, the completion of current development projects and funding
of the management incentive plan. We expect to fund these needs from current
cash balances, mortgages and other debt instruments, and through sales of
assets.

    We expect to meet long-term (greater than 12 months) liquidity requirements
for the completion of current development projects, scheduled debt maturities,
other non-recurring capital improvements and funding of the management incentive
plan through indebtedness, joint ventures, sales of assets, and from current
cash balances.

CAPITALIZATION

    As of December 31, 2000, adjusted to reflect the sale of Technology Square,
which closed on February 9, 2001, our total consolidated debt was approximately
$30.8 million and our total consolidated debt plus our proportionate share of
total unconsolidated debt was approximately $94.8 million. The following table
sets forth certain information regarding our consolidated and unconsolidated
debt obligations, including obligations relating to specific properties. We have
not entered into any hedging transactions and the variable interest rates
reflected in the table are the weighted averages of the outstanding loan layers.
All of the debt is non-recourse to us, with certain exceptions such as liability
for fraud, misapplication of insurance proceeds, environmental matters and
certain guarantees for completion of construction.

                                       31
<PAGE>

<TABLE>
<CAPTION>
                                                                       CURRENT
                                                                       INTEREST
                                                       COMPANY'S       RATE AT
                                          PRINCIPAL     PORTION      DECEMBER 31,   MATURITY        PREPAYMENT
DEBT                                       AMOUNT     OF PRINCIPAL       2000         DATE          PROVISIONS
----                                      ---------   ------------   ------------   --------       -------------
                                             (DOLLAR AMOUNTS IN
                                                 MILLIONS)
<S>                                       <C>         <C>            <C>            <C>            <C>
CONSOLIDATED DEBT
FIXED RATE:

DALLAS OFFICE AND INDUSTRIAL PORTFOLIO:

Northcreek Place........................   $  4.1        $  4.1           7.80%      12/1/05       Prepayable
                                                                                                   subject to
                                                                                                   conditions(a)

One Glen Lakes..........................      5.5           5.5           7.75%       9/1/05       Prepayable
                                                                                                   subject to
                                                                                                   conditions(b)

Greenville Place........................      3.3           3.3           7.80%      12/1/04       Prepayable
                                                                                                   subject to
                                                                                                   conditions(c)

Plaza at Walnut Hill....................      1.4           1.4           9.00%             (d)    Prepayable
                                                                                                   subject to
                                                                                                   conditions(e)

Richardson Business Center..............      1.5           1.5           9.00%             (f)    Prepayable
                                                                                                   subject to
                                                                                                   conditions(g)

Park North Business Center..............      1.0           1.0           8.25%             (h)    Prepayable
                                                                                                   subject to
                                                                                                   conditions(i)

T. I. Business Park.....................      1.5           1.5           9.25%       5/1/02       Prepayable
                                          -------      --------         ------                     subject to
                                                                                                   conditions(j)

Subtotal / Weighted Average

  Fixed Rate Debt.......................     18.3          18.3           8.12%
                                           ------        ------         ------

VARIABLE RATE:

Fort Point Place........................     12.5          12.5           8.78%             (k)    Prepayable
                                          -------      --------       --------                     subject to
                                                                                                   conditions(l)

Subtotal / Weighted Average
  Variable Rate Debt....................     12.5          12.5           8.78%
                                           ------        ------         ------

Subtotal / Weighted Average
  Consolidated Debt.....................     30.8          30.8           8.39%
                                           ------        ------         ------
</TABLE>

                                       32
<PAGE>

<TABLE>
<CAPTION>
                                                                       CURRENT
                                                                       INTEREST
                                                       COMPANY'S       RATE AT
                                          PRINCIPAL     PORTION      DECEMBER 31,   MATURITY        PREPAYMENT
DEBT                                       AMOUNT     OF PRINCIPAL       2000         DATE          PROVISIONS
----                                      ---------   ------------   ------------   --------       -------------
                                             (DOLLAR AMOUNTS IN
                                                 MILLIONS)
<S>                                       <C>         <C>            <C>            <C>            <C>
UNCONSOLIDATED DEBT
VARIABLE RATE:

Beacon Capital Strategic
  Partners, L.P. (m)....................     62.1          12.4           7.56%             (m)    Prepayable
                                                                                                   subject to
                                                                                                   conditions(l)

Mathilda Research Centre I..............     35.1          30.7           9.19%     10/25/02       Prepayable
                                                                                                   subject to
                                                                                                   conditions(l)

Mathilda Research Centre II.............      3.5           3.1           9.19%     12/29/03       Prepayable
                                                                                                   subject to
                                                                                                   conditions(l)

Millennium Tower........................     26.6          17.8           9.07%             (n)    Prepayable
                                          -------      --------       --------                     subject to
                                                                                                   conditions(l)

Subtotal / Weighted Average
  Unconsolidated Debt...................    127.3          64.0           8.84%
                                           ------        ------         ------

Total / Weighted Average................   $158.1        $ 94.8           8.69%
                                           ======        ======         ======
</TABLE>

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

 (a) Prepayable after January 1, 2001 subject to a yield maintenance payment
     based on the rate of United States Treasury Notes having a term closest to
     the date of maturity but in no event less than 1% of the then balance.

 (b) Prepayable after October 1, 2000 subject to a yield maintenance payment
     based on the rate of United States Treasury Notes having a term closest to
     the date of maturity but in no event less than 1% of the then balance.

 (c) Prepayable after January 1, 2002 subject to a yield maintenance payment
     based on the rate of United States Treasury Notes having a term closest to
     the date of maturity but in no event less than 1% of the then balance.

 (d) Plaza at Walnut Hill loan matures on July 1, 2017. The lender has the right
     to accelerate the maturity in the sixth, eleventh or sixteenth loan years,
     on six months' notice. No prepayment penalties apply in that event.

 (e) Prepayable after June 12, 2002 subject to payment of 5% of the amount
     prepaid, reducing by 1% per annum to a minimum payment of 1% of the amount
     prepaid.

 (f) The Richardson Business Center loan matures on November 1, 2021. The lender
     has the right to accelerate the maturity in the sixth, eleventh, sixteenth
     or twenty-first loan years, on six months' notice. No prepayment penalties
     apply in that event.

 (g) Prepayable after October 24, 2001 subject to payment of 5% of the amount
     prepaid, reducing by 1% per annum to a minimum prepayment of 1% of the
     amount prepaid.

 (h) The Park North Business Center loan matures on October 1, 2022. The lender
     has the right to accelerate the maturity in the sixth, eleventh, sixteenth
     or twenty-first loan years, on six months' notice. No prepayment penalties
     apply in that event.

 (i) Prepayable after September 8, 2002 subject to payment of 5% of the amount
     prepaid, reducing by 1% per annum to a minimum prepayment of 1% of the
     amount prepaid.

 (j) Prepayable after March 1, 2000 subject to a yield maintenance payment based
     on the rate of United States Treasury Notes having a term closest to the
     date of maturity but in no event less than 2% of the then balance.

                                       33
<PAGE>
 (k) The Fort Point Place loan matures on April 1, 2002. The loan may be
     extended for one year if certain conditions are met.

 (l) Prepayable any time in whole or in part subject to payment of applicable
     breakage costs and in some cases fees.

 (m) Includes a subscription line and a construction loan with varying maturity
     dates.

 (n) The Millennium Tower loan matures on June 1, 2002. The loan may be extended
     for one year if certain conditions are met.

    The following table, which includes both consolidated and unconsolidated
debt, summarizes the scheduled amortization of principal and maturities of the
loans outstanding, adjusted to reflect the sale of Technology Square which
closed on February 9, 2001.

<TABLE>
<CAPTION>
                                               SCHEDULED
                                              AMORTIZATION   MATURITIES    TOTAL
                                              ------------   ----------   --------
                                                     (DOLLARS IN THOUSANDS)
<S>                                           <C>            <C>          <C>
2001........................................     $  372       $ 11,500    $ 11,872
2002........................................        389         63,395      63,784
2003........................................        414          3,093       3,507
2004........................................        422          3,103       3,525
2005........................................        282          8,509       8,791
Thereafter..................................      3,379             --       3,379
                                                 ------       --------    --------
  Total.....................................     $5,258       $ 89,600    $ 94,858
                                                 ======       ========    ========
</TABLE>

FUNDS FROM OPERATIONS

    We believe that to facilitate a clear understanding of our operating
results, Funds from Operations ("FFO") should be examined in conjunction with
net income. The definition of FFO was clarified in the National Association of
Real Estate Investment Trusts, Inc. ("NAREIT") White Paper, adopted by the
NAREIT Board of Governors in March 1995, and subsequently clarified in October,
1999, as net income (loss) (computed in accordance with generally accepted
accounting principles), excluding gains (losses) from sales of properties, plus
real estate related depreciation and amortization, and after adjustments for
unconsolidated partnerships and joint ventures. Adjustments for unconsolidated
partnerships and joint ventures will be calculated to reflect FFO on the same
basis. FFO should not be considered as a substitute

                                       34
<PAGE>
for net income, as an indication of our performance, as a substitute for cash
flow or as a measure of our liquidity. The following table presents the
calculations of FFO:

<TABLE>
<CAPTION>
                                                                                       FOR THE PERIOD FROM
                                            YEAR ENDED           YEAR ENDED       JANUARY 21, 1998 (INCEPTION)
                                        DECEMBER 31, 2000    DECEMBER 31, 1999        TO DECEMBER 31, 1998
                                        ------------------   ------------------   -----------------------------
                                                           (UNAUDITED, DOLLARS IN THOUSANDS)
<S>                                     <C>                  <C>                  <C>
Income before minority interest and
  extraordinary item..................        $11,856              $ 4,539                   $ 9,772
Add real estate related depreciation
  and amortization:
  Consolidated entities...............          7,365                4,963                     2,146
  Joint venture entities..............          2,731                2,083                     1,441
                                              -------              -------                   -------
Funds from operations before minority
  interest............................         21,952               11,585                    13,359
Company share of consolidated
  partnership.........................          90.77%               88.40%                    92.65%
                                              -------              -------                   -------
Company funds from operations.........        $19,926              $10,241                   $12,377
                                              =======              =======                   =======
Weighted average number of common
  shares outstanding (in thousands)...         20,817               20,974                    20,766
                                              =======              =======                   =======
</TABLE>

    For the periods presented above, our FFO results would be the same using
both the March 1995 and October 1999 FFO definitions.

                                       35
<PAGE>
PROPERTY INFORMATION

    The following table sets forth the Total Area, the Percentage Leased, the
Average Base Rent (as defined below) and the Average Net Effective Rent (as
defined below) per square foot for each of the properties we owned or had an
interest in (excluding properties controlled by BCSP and excluding Technology
Square which was sold on February 9, 2001) as of December 31, 2000. Base Rent is
gross rent excluding payments by tenants on account of real estate tax and
operating expense escalation charges. Net Effective Rent is Base Rent adjusted
on a straight-line basis for contractual rent step-ups and free rent periods,
plus tenant payments on account of real estate tax and operating expense
escalation charges, less total operating expenses and real estate taxes.

<TABLE>
<CAPTION>
                                                                               AVERAGE    AVERAGE NET
PROPERTY                                              TOTAL AREA   % LEASED   BASE RENT    EFF RENT
--------                                              ----------   --------   ---------   -----------
<S>                                                   <C>          <C>        <C>         <C>
SOUTH BOSTON, MA:

Fort Point Place (1)................................    145,222      100%      $32.16        $25.72
                                                      ---------      ---       ------        ------
  Subtotal / Weighted Average South Boston, MA......    145,222      100%       32.16         25.72
                                                      ---------      ---       ------        ------
SUBURBAN DALLAS, TX:
OFFICE
Bank One LBJ........................................     42,000       78%       14.22          6.66
Brandywine Place....................................     66,237       92%       14.06         10.19
Crosspoint Atrium...................................    220,212       88%       14.13          9.57
Forest Abrams Place.................................     68,827       77%       14.43          7.45
6500 Greenville Avenue..............................    114,600       62%       15.89          8.55
Northcreek Place II.................................    163,303       84%       15.54          9.00
One Glen Lakes......................................    166,272       94%       17.76         13.76
                                                      ---------      ---       ------        ------
  Subtotal / Weighted Average.......................    841,451       84%       15.41         10.04
                                                      ---------      ---       ------        ------
R&D / INDUSTRIAL
Park North Business Center..........................     36,885      100%        9.11          7.19
Plaza at Walnut Hill................................     88,280       90%        8.53          8.34
Richardson Business Center..........................     66,300      100%        6.00          6.40
Richardson Commerce Centre..........................     60,517       88%        7.40          5.46
Sherman Tech........................................     16,176      100%        7.49          4.63
T I Business Park...................................     96,902       88%        8.20          6.62
Venture Drive Tech Center...........................    128,322       76%        4.99          3.70
                                                      ---------      ---       ------        ------
  Subtotal / Weighted Average.......................    493,382       88%        7.15          6.07
                                                      ---------      ---       ------        ------
  Subtotal / Weighted Average Suburban Dallas, TX...  1,334,833       85%       12.26          8.53
                                                      ---------      ---       ------        ------
SUNNYVALE, CA:
Mathilda Research Centre (2)........................    144,315      100%       30.00         36.50
                                                      ---------      ---       ------        ------
  Subtotal / Weighted Average Sunnyvale, CA.........    144,315      100%       30.00         36.50
                                                      ---------      ---       ------        ------
  Total / Weighted Average Properties...............  1,624,370       88%      $16.07        $13.10
                                                      =========      ===       ======        ======
</TABLE>

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

(1) Fort Point Place includes two additional buildings that are not included in
    these figures. The two buildings consist of approximately 137,000 square
    feet of recently converted residential condominiums. We are currently in the
    process of selling the condominiums. As of December 31, 2000, 87 of the 120
    condominiums had been sold.

(2) We own Mathilda Research Centre with our joint venture partner, Mathilda
    Partners LLC, an affiliate of Menlo Equities. Mathilda Research Centre is
    comprised of two buildings, which are leased to

                                       36
<PAGE>
    Juniper. The first building is included in the table and the second building
    will be added to the table upon its completion in the spring of 2001.

    The following table sets forth Lease Expirations (in square feet) for the
portfolio of properties we owned or had an interest in (excluding properties
controlled by BCSP and excluding Technology Square which was sold on
February 9, 2001) as of December 31, 2000.

<TABLE>
<CAPTION>
                                                % OF                   %
                                   SQUARE      SQUARE     ANNUAL     ANNUAL       # OF
                                   FEET(1)    FEET(2)    RENT(3)    RENT(4)    TENANTS(5)
                                  ---------   --------   --------   --------   ----------
<S>                               <C>         <C>        <C>        <C>        <C>
2001............................    157,847      9.7%    $ 1,714       6.4%         62
2002............................    259,453     16.0%      4,118      15.5%         64
2003............................    319,508     19.7%      4,272      16.0%         77
2004............................    122,361      7.5%      1,816       6.8%         36
2005............................    260,225     16.0%      5,739      21.5%         35
Thereafter......................    310,100     19.1%      8,998      33.8%         16
                                  ---------     ----     -------     -----         ---
Total...........................  1,429,494     88.0%    $26,657     100.0%        290
                                  =========     ====     =======     =====         ===
</TABLE>

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

(1) Total area in square feet covered by such leases.

(2) Percentage of total square feet of our portfolio.

(3) Annualized expiring base rental income represented by such leases in the
    year of expiration plus the current tenant payments on account of operating
    expense and real estate tax escalation charges.

(4) Calculated as annual rent divided by the total annual rent.

(5) The number of tenants whose leases will expire.

ENVIRONMENTAL MATTERS

    We believe, based upon internal reviews, environmental site assessments
performed by consultants, existing plans to mitigate and monitor the sites and
financial commitments of certain prior owners and tenants, that the future costs
relating to environmental remediation and compliance will not have a material
adverse effect on our financial condition, results of operations, or liquidity.

INFLATION

    Most of our leases require tenants to pay increases in operating expenses,
including common area charges and real estate taxes, thereby reducing our risk
of the adverse effects of inflation. Leases also generally vary in term from
three years to ten years, further reducing our risk of the adverse effects of
inflation.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

    We are exposed to certain financial market risks, the most predominant being
fluctuations in the prime, Eurodollar and LIBOR interest rates. Interest rate
fluctuations are monitored by management as an integral part of our overall risk
management program, which recognizes the unpredictability of financial markets
and seeks to reduce the potentially adverse effect on our results of operations.
The effect of interest rate fluctuations historically has been small relative to
other factors affecting operating results, such as rental rates and occupancy.

    The following table summarizes our debt obligations outstanding as of
December 31, 2000, adjusted to reflect the sale of Technology Square which
closed on February 9, 2001. This information should be read in

                                       37
<PAGE>
conjunction with Notes 6 and 7 to the consolidated financial statements and with
the information contained under Capitalization in Part II--Item 7.

                             EXPECTED MATURITY DATE

<TABLE>
<CAPTION>
                                          2001       2002       2003       2004       2005     THEREAFTER    TOTAL     FAIR VALUE
                                        --------   --------   --------   --------   --------   ----------   --------   ----------
                                                                         (DOLLARS IN THOUSANDS)
<S>                                     <C>        <C>        <C>        <C>        <C>        <C>          <C>        <C>
Liabilities
DEBT:
--------------------------------------
FIXED RATE............................    $372     $ 1,815      $414      $3,525     $8,791     $ 3,379     $ 18,296    $ 19,035
Weighted Average Fixed Interest
  Rate................................     8.1%        8.0%      8.0%        8.1%       8.8%        8.8%         8.3%

VARIABLE RATE.........................      --     $12,500        --          --         --          --     $ 12,500    $ 12,500
Current Variable Interest Rate........      --         8.8%       --          --         --          --          8.8%
</TABLE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

    The response to this item is submitted in a separate section of this report.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE.

    None.

                                       38
<PAGE>
                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

    The information required by this item is hereby incorporated by reference to
the material appearing in the Proxy Statement under the caption "Information
Regarding Nominees and Directors."

ITEM 11. EXECUTIVE COMPENSATION.

    The information required by this item is hereby incorporated by reference to
the material appearing in the Proxy Statement under the caption "Executive
Compensation."

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

    The information required by this item is hereby incorporated by reference to
the material appearing in the Proxy Statement under the caption "Principal and
Management Stockholders."

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

    The information required by this item is hereby incorporated by reference to
the material appearing in the Proxy Statement under the caption "Certain
Relationships and Related Transactions."

                                       39
<PAGE>
                                    PART IV

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

(a) (1) and (2)-- The response to this portion of Item 14 is submitted as a
                 separate section of this report. All other schedules for which
                 provision is made in the applicable accounting regulations of
                 the Securities and Exchange Commission are not required under
                 the related instructions or are not applicable, and therefore
                 have been omitted.

(a) (3)         See Index to Exhibits included elsewhere in this report.

(b) REPORTS ON FORM 8-K.

    Current Report on Form 8-K filed on February 16, 2001 disclosing the
declaration of a dividend following the sale of Technology Square.

    Current Report on Form 8-K filed on January 19, 2001 announcing the sale of
Technology Square.

    Current Report on Form 8-K filed on January 9, 2001 announcing the sale of
One Kendall Square.

    Current Report on Form 8-K filed on October 5, 2000 filing the Company's
2000 Mid-Year Report.

(c) EXHIBITS.

    The Company hereby files as part of this report on Form 10-K the Exhibits
listed in the attached Exhibit Index of this report.

(d) FINANCIAL STATEMENT SCHEDULES.

    The response to this portion of Item 14 is submitted as a separate section
of this report.

                                       40
<PAGE>
                                   SIGNATURES

    Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

<TABLE>
<S>                                                    <C>  <C>
                                                       BEACON CAPITAL PARTNERS, INC.

                                                       By:             /s/ RANDY J. PARKER
                                                            -----------------------------------------
                                                                         Randy J. Parker
                                                            SENIOR VICE PRESIDENT AND CHIEF FINANCIAL
                                                                             OFFICER
</TABLE>

Dated: March 21, 2001

    Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
                      SIGNATURE                                   TITLE                    DATE
                      ---------                                   -----                    ----
<C>                                                    <S>                          <C>
                                                       Chairman of the Board,
                /s/ ALAN M. LEVENTHAL                    Chief Executive Officer
     -------------------------------------------         and Director (Principal      March 21, 2001
                  Alan M. Leventhal                      Executive Officer)

                /s/ LIONEL P. FORTIN
     -------------------------------------------       President, Chief Operating     March 21, 2001
                  Lionel P. Fortin                       Officer and Director

                                                       Senior Vice President and
                 /s/ RANDY J. PARKER                     Chief Financial Officer
     -------------------------------------------         (Principal Financial and     March 21, 2001
                   Randy J. Parker                       Accounting Officer)

                /s/ STEPHEN T. CLARK
     -------------------------------------------       Director                       March 21, 2001
                  Stephen T. Clark

                /s/ ROBERT M. MELZER
     -------------------------------------------       Director                       March 21, 2001
                  Robert M. Melzer

                 /s/ STEVEN SHULMAN
     -------------------------------------------       Director                       March 21, 2001
                   Steven Shulman

                /s/ SCOTT M. SPERLING
     -------------------------------------------       Director                       March 21, 2001
                  Scott M. Sperling
</TABLE>

                                       41
<PAGE>
                           ANNUAL REPORT ON FORM 10-K

                       ITEM 14(A)(1) AND (2), (C) AND (D)

             INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT
                                   SCHEDULES

                              FINANCIAL STATEMENTS

                         FINANCIAL STATEMENT SCHEDULES

                                CERTAIN EXHIBITS

                          YEAR ENDED DECEMBER 31, 2000

                         BEACON CAPITAL PARTNERS, INC.

                             BOSTON, MASSACHUSETTS
<PAGE>
                           ANNUAL REPORT ON FORM 10-K

                        ITEM 14(A) (1) AND (2) AND 14(D)

                         BEACON CAPITAL PARTNERS, INC.

        INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES

<TABLE>
<S>                                                           <C>
Beacon Capital Partners, Inc.
  Report of Independent Auditors............................   F-2
  Consolidated Balance Sheets as of December 31, 2000 and
    1999....................................................   F-3
  Consolidated Statements of Operations for the Years Ended
    December 31, 2000 and 1999 and the Period from January
    21, 1998 (Inception) to December 31, 1998...............   F-4
  Consolidated Statements of Stockholders' Equity for the
    Years Ended December 31, 2000 and 1999 and the Period
    from January 21, 1998 (Inception) to December 31,
    1998....................................................   F-5
  Consolidated Statements of Cash Flows for the Years Ended
    December 31, 2000 and 1999 and the Period from January
    21, 1998 (Inception) to December 31, 1998...............   F-6
  Notes to Consolidated Financial Statements................   F-8

Beacon/PW Kendall LLC
  Report of Independent Auditors............................  F-25
  Consolidated Balance Sheets as of December 31, 2000 and
    1999....................................................  F-26
  Consolidated Statements of Operations for the Years Ended
    December 31, 2000 and 1999 and the Period from April 16,
    1998 (Inception) to December 31, 1998...................  F-27
  Consolidated Statements of Members' Equity for the Years
    Ended December 31, 2000 and 1999 and the Period from
    April 16, 1998 (Inception) to December 31, 1998.........  F-28
  Consolidated Statements of Cash Flows for the Years Ended
    December 31, 2000 and 1999 and the Period from April 16,
    1998 (Inception) to December 31, 1998...................  F-29
  Notes to Consolidated Financial Statements................  F-30

Beacon Capital Strategic Partners, L.P.
  Report of Independent Auditors............................  F-33
  Balance Sheets as of December 31, 2000 and 1999...........  F-34
  Statements of Operations for the Year Ended December 31,
    2000 and the Period from October 1, 1999 (Inception) to
    December 31, 1999.......................................  F-35
  Statements of Partners' Equity (Deficit) for the Year
    Ended December 31, 2000 and the Period from October 1,
    1999 (Inception) to December 31, 1999...................  F-36
  Statements of Cash Flows for the Year Ended December 31,
    2000 and the Period from October 1, 1999 (Inception) to
    December 31, 1999.......................................  F-37
  Notes to Financial Statements.............................  F-38

Financial Statement Schedules
  Beacon Capital Partners, Inc.
    Schedule III--Real Estate and Accumulated
    Depreciation............................................   S-1
  Beacon/PW Kendall LLC
    Schedule III--Real Estate and Accumulated
    Depreciation............................................   S-2
  Beacon Capital Strategic Partners, L.P.
    Schedule III--Real Estate and Accumulated
     Depreciation...........................................   S-3
</TABLE>

    Other schedules have been omitted since the required information is not
present or not present in amounts sufficient to require submission of the
schedule, or because the information required is included in the consolidated
financial statements, including the notes thereto.

                                      F-1
<PAGE>
                         REPORT OF INDEPENDENT AUDITORS

To the Board of Directors and Stockholders of
Beacon Capital Partners, Inc.

    We have audited the accompanying consolidated balance sheets of Beacon
Capital Partners, Inc. as of December 31, 2000 and 1999, and the related
consolidated statements of operations, stockholders' equity, and cash flows for
the years ended December 31, 2000 and 1999 and for the period from January 21,
1998 (inception) to December 31, 1998. Our audit also included the financial
statement schedule listed in the Index at Item 14(a). These financial statements
and schedule are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
schedule based on our audits.

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

    In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Beacon Capital
Partners, Inc. at December 31, 2000 and 1999, and the consolidated results of
its operations and its cash flows for the years ended December 31, 2000 and 1999
and for the period from January 21, 1998 (inception) to December 31, 1998, in
conformity with accounting principles generally accepted in the United States.
Also, in our opinion, the related financial statement schedule, when considered
in relation to the basic financial statements taken as a whole, presents fairly
in all material respects the information set forth therein.

                                          [LOGO]

Boston, Massachusetts
January 24, 2001

                                      F-2
<PAGE>
                         BEACON CAPITAL PARTNERS, INC.

                          CONSOLIDATED BALANCE SHEETS

              (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                                  DECEMBER 31,
                                                              ---------------------
                                                                2000        1999
                                                              ---------   ---------
<S>                                                           <C>         <C>
ASSETS
Real Estate:
  Land......................................................  $  35,264   $  52,182
  Buildings, improvements and equipment.....................    228,764     216,967
                                                              ---------   ---------
                                                                264,028     269,149
  Less accumulated depreciation.............................     12,607       7,025
                                                              ---------   ---------
                                                                251,421     262,124

Deferred financing and leasing costs, net of accumulated
  amortization of $1,421 and $434, respectively.............      4,396       3,085
Cash and cash equivalents...................................     83,821      76,927
Restricted cash.............................................        366       1,203
Accounts receivable, net....................................      4,262       3,393
Deferred rent receivable....................................      2,222         783
Other assets................................................      1,504       1,905
Investments in partnership, joint ventures and
  corporations..............................................     55,274     163,677
                                                              ---------   ---------
      Total assets..........................................  $ 403,266   $ 513,097
                                                              =========   =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
  Mortgage notes payable....................................  $  30,797   $  31,172
  Note payable--interim financing...........................     97,830     122,500
  Accounts payable and accrued expenses.....................     17,205      15,209
                                                              ---------   ---------
      Total liabilities.....................................    145,832     168,881
                                                              ---------   ---------
Commitments and contingencies...............................         --          --

Minority interest in consolidated partnership...............      2,544      43,639
                                                              ---------   ---------
Stockholders' equity:
  Preferred stock; $.01 par value, 200,000,000 shares
    authorized, none issued or outstanding..................         --          --
  Excess stock; $.01 par value, 250,000,000 shares
    authorized, none issued or outstanding..................         --          --
  Common stock; $.01 par value, 500,000,000 shares
    authorized, 21,730,888 and 20,973,932 shares issued and
    outstanding, respectively...............................        217         210
  Additional paid-in capital................................    412,414     389,520
  Cumulative net income.....................................     95,843      12,019
  Cumulative dividends......................................   (251,827)   (101,172)
  Unrealized loss on marketable equity securities...........     (1,757)         --
                                                              ---------   ---------
      Total stockholders' equity............................    254,890     300,577
                                                              ---------   ---------
      Total liabilities and stockholders' equity............  $ 403,266   $ 513,097
                                                              =========   =========
</TABLE>

SEE ACCOMPANYING NOTES.

                                      F-3
<PAGE>
                         BEACON CAPITAL PARTNERS, INC.

                     CONSOLIDATED STATEMENTS OF OPERATIONS

              (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                                                        FOR THE PERIOD
                                                                                             FROM
                                                                                       JANUARY 21, 1998
                                                  YEAR ENDED          YEAR ENDED        (INCEPTION) TO
                                               DECEMBER 31, 2000   DECEMBER 31, 1999   DECEMBER 31, 1998
                                               -----------------   -----------------   -----------------
<S>                                            <C>                 <C>                 <C>
Revenues:
  Rental income..............................       $35,634             $23,339              $10,643
  Reimbursement of operating expenses and
    real estate taxes........................         1,267               2,199                1,721
  Equity in earnings of partnership and joint
    ventures.................................         6,106               4,819                3,203
  Interest and dividend income, including
    affiliated interest of $1,462 in 1998....         5,607               6,620               10,736
  Other income...............................         3,908               1,620                  233
                                                    -------             -------              -------
      Total revenues.........................        52,522              38,597               26,536
                                                    -------             -------              -------
Expenses:
  Property operating.........................        10,103               6,320                3,366
  Real estate taxes..........................         5,282               4,720                1,863
  General and administrative.................        11,058               9,723                8,419
  Affiliate formation expenses...............         2,054               3,977                   --
  Interest expense...........................         3,735               2,713                  906
  Depreciation and amortization..............         8,434               6,605                2,210
                                                    -------             -------              -------
      Total expenses.........................        40,666              34,058               16,764
                                                    -------             -------              -------
Income before gains on sales of real estate,
  minority interest and extraordinary
  items......................................        11,856               4,539                9,772
Gains on sales of real estate................        85,521                  --                   --
                                                    -------             -------              -------
Income before minority interest and
  extraordinary items........................        97,377               4,539                9,772
Minority interest in consolidated
  partnership................................        (8,979)               (527)                (718)
                                                    -------             -------              -------
Income before extraordinary items............        88,398               4,012                9,054
Extraordinary items, net of minority
  interest...................................        (4,574)             (1,047)                  --
                                                    -------             -------              -------
      Net income.............................       $83,824             $ 2,965              $ 9,054
                                                    =======             =======              =======
Income before extraordinary items per common
  share-basic and diluted....................       $  4.25             $  0.19              $  0.44
Extraordinary items per common share-basic
  and diluted................................         (0.22)              (0.05)                  --
                                                    -------             -------              -------
Net income per common share-basic and
  diluted....................................       $  4.03             $  0.14              $  0.44
                                                    =======             =======              =======
Weighted average number of common shares
  outstanding (in thousands).................        20,817              20,974               20,766
                                                    =======             =======              =======
</TABLE>

SEE ACCOMPANYING NOTES.

                                      F-4
<PAGE>
                         BEACON CAPITAL PARTNERS, INC.

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

     FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999 AND FOR THE PERIOD FROM
               JANUARY 21, 1998 (INCEPTION) TO DECEMBER 31, 1998

              (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                                                            ACCUMULATED
                                                    ADDITIONAL   CUMULATIVE                    OTHER
                            NUMBER OF     COMMON     PAID-IN        NET       CUMULATIVE   COMPREHENSIVE
                              SHARES      STOCK      CAPITAL       INCOME     DIVIDENDS    INCOME (LOSS)    TOTAL
                            ----------   --------   ----------   ----------   ----------   -------------   --------
<S>                         <C>          <C>        <C>          <C>          <C>          <C>             <C>
Issuance of common stock,
  net.....................  20,973,932     $210      $389,520      $    --    $      --      $      --     $389,730
Net income................          --       --            --        9,054           --             --        9,054
Dividends declared
  ($.48/share)............          --       --            --           --      (10,068)            --      (10,068)
                            ----------     ----      --------      -------    ---------      ---------     --------
Balance at December 31,
  1998....................  20,973,932      210       389,520        9,054      (10,068)            --      388,716

Net income................          --       --            --        2,965           --             --        2,965
Dividends declared
  ($4.34/share)...........          --       --            --           --      (91,104)            --      (91,104)
                            ----------     ----      --------      -------    ---------      ---------     --------
Balance at December 31,
  1999....................  20,973,932      210       389,520       12,019     (101,172)            --      300,577

Repurchase of common
  stock, net..............  (1,771,340)     (18)      (13,125)          --           --             --      (13,143)
Issuance of common stock,
  net.....................   2,528,296       25        36,019           --           --             --       36,044
Net income................          --       --            --       83,824           --             --       83,824
Unrealized holding losses
  on available for sale
  securities..............          --       --            --           --           --         (3,612)      (3,612)
Reclassification
  adjustment for losses
  included in net
  income..................          --       --            --           --           --          1,855        1,855
                            ----------     ----      --------      -------    ---------      ---------     --------
Other comprehensive income
  (loss)..................          --       --            --           --           --         (1,757)      (1,757)
                            ----------     ----      --------      -------    ---------      ---------     --------
Comprehensive income......          --       --            --           --           --             --       82,067
Dividends declared
  ($7.09/share)...........          --       --            --           --     (150,655)            --     (150,655)
                            ----------     ----      --------      -------    ---------      ---------     --------
Balance at December 31,
  2000....................  21,730,888     $217      $412,414      $95,843    $(251,827)     $  (1,757)    $254,890
                            ==========     ====      ========      =======    =========      =========     ========
</TABLE>

SEE ACCOMPANYING NOTES.

                                      F-5
<PAGE>
                         BEACON CAPITAL PARTNERS, INC.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                                 FOR THE PERIOD FROM
                                                                                                  JANUARY 21, 1998
                                                            YEAR ENDED          YEAR ENDED         (INCEPTION) TO
                                                         DECEMBER 31, 2000   DECEMBER 31, 1999    DECEMBER 31, 1998
                                                         -----------------   -----------------   -------------------
<S>                                                      <C>                 <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income...........................................      $  83,824           $   2,965            $   9,054
  Adjustments to reconcile net income to net cash
    provided by operating activities:
    Depreciation.......................................          6,730               4,857                2,168
    Amortization, net of capitalized amortization of
      $91 in 1999......................................          1,704               1,748                   42
    Extraordinary items, net of minority interest......          4,574               1,047                   --
    Gains on sales of real estate......................        (85,521)                 --                   --
    Equity in earnings of partnership and joint
      ventures.........................................         (6,106)             (4,819)              (3,203)
    Distributions from partnership and joint venture...          9,403               6,000                  900
    Gains on investments, net..........................         (2,455)                 --                   --
    Minority interest in consolidated partnership......          8,979                 527                  718
  Increase (decrease) in cash arising from changes in
    operating assets and liabilities:
    Restricted cash....................................            837                (506)                (697)
    Accounts receivable................................           (869)               (929)              (2,464)
    Deferred rent receivable...........................         (1,439)               (550)                (233)
    Other assets.......................................         (4,805)             (1,036)                (641)
    Accounts payable and accrued expenses..............          1,996               7,867                7,341
                                                             ---------           ---------            ---------
      Net cash provided by operating activities........         16,852              17,171               12,985
                                                             ---------           ---------            ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Real estate asset acquisitions and improvements......        (70,408)            (52,213)            (143,855)
  Proceeds from sales of real estate...................        101,851                  --                   --
  Payment of deferred leasing costs....................         (2,642)             (2,060)                (353)
  Investments in partnership, joint ventures and
    corporations.......................................        (29,853)            (74,722)             (87,833)
  Distributions from partnership and joint venture.....        112,619                  --                   --
  Funding of mortgage note receivable..................             --             (45,000)                  --
  Repayment of mortgage note receivable................             --              45,000                   --
  Investment in 233 Fremont Street.....................             --             (34,889)                  --
  Proceeds from transfer of investment in
    233 Fremont Street to an affiliate.................             --              34,889                   --
  Purchase of Wyndham stock............................             --            (102,874)                  --
                                                             ---------           ---------            ---------
      Net cash provided (used) by investing
        activities.....................................        111,567            (231,869)            (232,041)
                                                             ---------           ---------            ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from mortgage note..........................              1              12,500                   --
  Repayments on mortgage notes.........................           (376)             (2,898)                (152)
  Proceeds from note payable--interim financing........          7,500             122,500                   --
  Repayment on note payable--interim financing.........        (32,170)                 --                   --
  Payment of deferred financing costs..................           (295)             (3,544)                (103)
  Proceeds from loans payable--affiliate...............             --                  --                3,560
  Payment of loans payable--affiliate..................             --                  --               (3,560)
  Sale of Operating Partnership units..................             --                  --                4,228
  Sale of common stock.................................             --                  --              417,871
  Offering costs.......................................             --                  --              (28,141)
  Repurchase of common stock...........................        (13,143)                 --                   --
  Distribution payments to minority interests..........         (9,637)             (1,321)                  --
  Dividend payments to stockholders....................        (73,405)            (10,259)                  --
                                                             ---------           ---------            ---------
      Net cash (used) provided by financing
        activities.....................................       (121,525)            116,978              393,703
                                                             ---------           ---------            ---------
Net increase (decrease) in cash and cash equivalents...          6,894             (97,720)             174,647
Cash and cash equivalents, beginning of period.........         76,927             174,647                   --
                                                             ---------           ---------            ---------
Cash and cash equivalents, end of period...............      $  83,821           $  76,927            $ 174,647
                                                             =========           =========            =========
</TABLE>

                                      F-6
<PAGE>
                         BEACON CAPITAL PARTNERS, INC.

               CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                                 FOR THE PERIOD FROM
                                                                                                  JANUARY 21, 1998
                                                            YEAR ENDED          YEAR ENDED         (INCEPTION) TO
                                                         DECEMBER 31, 2000   DECEMBER 31, 1999    DECEMBER 31, 1998
                                                         -----------------   -----------------   -------------------
<S>                                                      <C>                 <C>                 <C>
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND
  FINANCING ACTIVITIES:
Issuance of Operating Partnership units to acquire
  property.............................................      $      --           $      --            $  51,359
Assumption of mortgage debt to acquire property........             --                  --               21,722
Distribution of Wyndham stock to minority interests....            564              11,961                   --
Dividend of Wyndham stock to stockholders..............         54,392              90,913                   --
Distribution of Cypress stock to minority interests....          2,073                  --                   --
Dividend of Cypress stock to stockholders..............         15,793                  --                   --
Distribution of CO Space stock to minority interests...            928                  --                   --
Dividend of CO Space stock to stockholders.............          7,065                  --                   --
Conversion of Operating Partnership units to common
  stock................................................         36,044                  --                   --
SUPPLEMENTAL DISCLOSURE:
Cash paid for interest, net of capitalized interest of
  $8,697, $3,126 and $0, respectively..................      $   3,763           $   1,970            $     742
</TABLE>

SEE ACCOMPANYING NOTES.

                                      F-7
<PAGE>
                         BEACON CAPITAL PARTNERS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               DECEMBER 31, 2000

              (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)

1. ORGANIZATION

    Beacon Capital Partners, Inc. ("BCP") was incorporated on January 21, 1998
as a Massachusetts corporation (the "Formation") and was initially capitalized
through loans from the two founders of BCP, Messrs. Leventhal and Fortin. The
loans were repaid in May 1998. BCP qualifies as a real estate investment trust
under the Internal Revenue Code of 1986, as amended. BCP was established to
conduct real estate investment and development activities and currently operates
in one segment.

    On March 17, 1998, BCP was reincorporated as a Maryland corporation and on
March 20, 1998 it completed an initial private offering (the "Offering") in
accordance with Section 4(2) of the Securities Act. BCP initially issued
17,360,769 common shares with proceeds, net of expenses, of $323,110. In April,
1998, 3,613,163 additional shares were issued through the exercise of the
underwriter's over-allotment, with proceeds, net of expenses, of $66,620.

    In connection with the reincorporation of BCP in Maryland, BCP established
Beacon Capital Partners, L.P. (the "Operating Partnership"). BCP and the
Operating Partnership are collectively referred to as the "Company". The
Operating Partnership is a Delaware limited partnership. BCP is the sole general
partner of, and, as of December 31, 2000, holds approximately 99% of the
economic interest in the Operating Partnership. BCP holds an approximate 1%
general partnership interest in the Operating Partnership and the balance is
held as a limited partnership interest. The limited partnership interests not
held by BCP are presented as minority interest in the accompanying consolidated
financial statements. The term of the Operating Partnership commenced on
March 16, 1998 and shall continue until January 1, 2056 or until such time as a
Liquidating Event, as defined, has occurred.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF ACCOUNTING

    The accompanying consolidated financial statements are prepared in
accordance with accounting principles generally accepted in the United States
and include the accounts of BCP and its majority-owned subsidiary, Beacon
Capital Partners, L.P. BCP consolidates all wholly-owned subsidiaries and those
majority-owned subsidiaries in which it exercises control. BCP uses the equity
method of accounting for its investments and earnings in partnership, joint
ventures and corporations in which BCP shares influence over, but does not
control, operating and financial policy. BCP uses the cost method of accounting
to account for its investments and earnings in entities in which BCP does not
influence operating and financial policy. Losses in excess of investments are
not recorded where BCP is under no legal obligation and has neither guaranteed
nor intends to provide any future financial support to the respective
investment. All significant intercompany transactions and balances have been
eliminated in consolidation.

    Minority interest in consolidated partnership represents Operating
Partnership units not held by BCP. On June 24, 1998, $51,359 in units were
issued to Luddite Associates, an affiliate of The Prudential Insurance Company
of America, in connection with the purchase of the property known as Technology
Square and The Draper Building. On October 17, 2000, Luddite Associates
converted its Operating Partnership units to common stock. As of December 31,
2000, $4,228 in units had been issued to Messrs. Leventhal's and Fortin's family
trusts for cash.

                                      F-8
<PAGE>
                         BEACON CAPITAL PARTNERS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               DECEMBER 31, 2000

              (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
USE OF ESTIMATES

    The preparation of financial statements in accordance with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amount of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements. Actual results could differ from those estimates.

REAL ESTATE

    Buildings are recorded at cost and are depreciated on the straight-line
method over their estimated useful life of forty years. The cost of buildings
includes the purchase price of the property, capitalized interest, legal fees,
and other acquisition and development costs. Acquisition and development costs
generally consist of third party costs and internal direct costs. Internal costs
relating to the acquisition of operating properties are expensed as incurred.

    BCP measures impairment in accordance with FASB Statement No. 121,
ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE
DISPOSED OF, which requires impairment losses to be recorded on specific
long-lived assets used in operations where indicators of impairment are present
and the undiscounted cash flows estimated to be generated by those assets are
less than the assets' carrying amount.

    Furniture, fixtures and equipment are depreciated using the straight-line
method over their expected useful lives of three to ten years.

DEFERRED FINANCING AND LEASING COSTS

    Deferred financing costs are fees and costs incurred to obtain long-term
financing and are being amortized over the terms of the respective loans.
Deferred leasing costs are fees and costs incurred in the successful negotiation
of leases, including brokerage, legal and other costs, and are being amortized
on a straight-line basis over the terms of the respective leases.

CASH AND CASH EQUIVALENTS

    Cash and cash equivalents consist of short-term, highly liquid assets with
original maturities of three months or less from the date of purchase.

RESTRICTED CASH

    Restricted cash consists of cash held in escrow as required by lenders to
satisfy real estate taxes.

FAIR VALUE OF FINANCIAL INSTRUMENTS

    BCP is required to disclose the fair values of financial instruments for
which it is practicable to estimate such fair value. The fair values of
financial instruments are estimates based upon market conditions and perceived
risks at December 31, 2000 and 1999 and require varying degrees of management

                                      F-9
<PAGE>
                         BEACON CAPITAL PARTNERS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               DECEMBER 31, 2000

              (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
judgment. The fair values of financial instruments presented may not be
indicative of amounts BCP could realize on the disposition of the financial
instruments.

    Cash, cash equivalents and restricted cash are carried at an amount, which
due to their nature, approximates fair value.

    BCP computes the fair value of its mortgage notes payable based upon the
discounted cash flows of the collateralized properties at a discount rate that
approximates BCP's effective borrowing rate. BCP has determined that the fair
value of its mortgage notes approximates their carrying value.

INVESTMENTS IN MARKETABLE EQUITY SECURITIES

    Marketable equity securities are classified as available for sale and
carried at fair value, with temporary unrealized gains and losses reported as a
separate component of stockholders' equity. At December 31, 2000, the Company's
investments in marketable equity securities were included in other assets and
had a fair value of approximately $609 resulting in an unrealized loss in 2000
of approximately $3,612, of which $1,855 has been determined to be other than
temporary and is reflected as a component of other income in the accompanying
Consolidated Statements of Operations.

REVENUE RECOGNITION

    Revenues are recognized when earned and the amounts can be reasonably
estimated on the accrual basis of accounting. Rental income from operating
leases is recognized on a straight-line basis over the life of the lease
agreements.

INCOME TAXES

    BCP is taxed as a real estate investment trust ("REIT") under the Internal
Revenue Code. As a REIT, BCP will generally not be subject to Federal income
taxes to the extent that it makes timely distributions to its shareholders at
least equal to its taxable income and meets certain other requirements for
qualification as a real estate investment trust.

    BCP from time to time acquires and operates businesses that do not satisfy
the REIT qualification tests prescribed by the Internal Revenue Code.
Transactions that give rise to such assets and income are owned through taxable
corporate subsidiaries in which BCP holds the majority of economic interest but
less than 10% of the voting power. Such subsidiaries are subject to Federal,
state and local taxation.

STOCK OPTIONS AND OTHER AWARDS

    BCP has elected to follow Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" (APB 25) and related Interpretations
in accounting for its employee stock options because the alternative fair value
accounting provided for under FASB Statement No. 123, "Accounting for
Stock-Based Compensation," requires use of option valuation models that were not
developed for use in valuing employee stock options. Under APB 25, because the
exercise price of BCP's employee stock options equals the market price of the
underlying stock on the date of grant, no compensation expense is recognized.

                                      F-10
<PAGE>
                         BEACON CAPITAL PARTNERS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               DECEMBER 31, 2000

              (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
    Compensation attributable to the Company's management incentive plan will be
reflected as an element of minority interest in consolidated partnership in
future periods to the extent that allocations to management are made based upon
the achievement of specified benchmarks.

EARNINGS PER COMMON SHARE

    The computation of earnings per common share is based upon the weighted
average number of shares of common stock outstanding during the periods
subsequent to the Offering. As BCP has no dilutive securities, there is no
difference between basic and diluted earnings per share of common stock.

NEW ACCOUNTING PRONOUNCEMENTS

    The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities" ("FAS 133"). FAS 133 is effective for years beginning after
June 15, 2000. BCP has concluded that it is not currently a party to any
derivatives, and, consequently, does not believe that the adoption of FAS 133
will have a material impact on BCP's financial position or results of
operations.

3. REAL ESTATE SALES

    On April 19, 2000, the Company sold The Draper Building for $72,500. The
Company recognized a gain on the sale of approximately $27,321. In September
2000, the Company commenced the sales of the Fort Point Place residential
condominiums. As of December 31, 2000, 87 of the 120 units had been sold and the
Company recognized a gain on the sales of approximately $133. Subsequent to
December 31, 2000, the Company entered into an agreement to sell Technology
Square. The Company expects to close on the sale in February 2001 and recognize
a substantial gain on the transaction.

4. INVESTMENTS IN PARTNERSHIP, JOINT VENTURES AND CORPORATIONS

    The investments in partnership, joint ventures and corporations represent
the Company's interest in (i) a joint venture with PW Acquisitions IX, LLC,
known as Beacon/PW Kendall LLC ("The Athenaeum Portfolio"), (ii) a joint venture
with Mathilda Partners LLC ("Mathilda Research Centre"), (iii) a joint venture
with Mathilda Partners II LLC ("Mathilda Research Centre II"), (iv) a joint
venture with HA L.L.C. ("Millennium Tower") and (v) an investment in Beacon
Capital Strategic Partners, L.P. ("BCSP").

                                      F-11
<PAGE>
                         BEACON CAPITAL PARTNERS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               DECEMBER 31, 2000

              (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)

4. INVESTMENTS IN PARTNERSHIP, JOINT VENTURES AND CORPORATIONS (CONTINUED)
    A reconciliation of the underlying net assets to the Company's carrying
value of investments in partnership, joint ventures and corporations is as
follows:

<TABLE>
<CAPTION>
                                              THE      MATHILDA    MATHILDA
                                           ATHENAEUM   RESEARCH    RESEARCH    MILLENNIUM
                                           PORTFOLIO    CENTRE    CENTRE II      TOWER        BCSP      TOTAL
                                           ---------   --------   ----------   ----------   --------   --------
<S>                                        <C>         <C>        <C>          <C>          <C>        <C>
Operating Partnership equity interest
  (including accumulated earnings, net
  of distributions).....................    $   221    $17,868      $10,628     $19,000     $ 1,845    $49,562
Other costs.............................         --      2,535          115       3,012          50      5,712
                                            -------    -------      -------     -------     -------    -------
Carrying value of investments in
  partnership, joint ventures and
  corporations at December 31, 2000.....    $   221    $20,403      $10,743     $22,012     $ 1,895    $55,274
                                            =======    =======      =======     =======     =======    =======
Equity in earnings of partnership and
  joint ventures
  Year Ended December 31, 2000..........    $ 2,011    $   745      $    --     $    --     $ 3,350    $ 6,106
  Year Ended December 31, 1999..........      4,836         --           --          --         (17)     4,819
  Period Ended December 31, 1998........      3,203         --           --          --          --      3,203
Operating Partnership share of gains on
  sales of real estate
  Year Ended December 31, 2000..........    $32,393    $    --      $    --     $    --     $25,674    $58,067
  Year Ended December 31, 1999..........         --         --           --          --          --         --
  Period Ended December 31, 1998........         --         --           --          --          --         --
Operating Partnership share of
  extraordinary items
  Year Ended December 31, 2000..........    $(5,149)   $    --      $    --     $    --     $   (25)   $(5,174)
  Year Ended December 31, 1999..........         --         --           --          --          --         --
  Period Ended December 31, 1998........         --         --           --          --          --         --
</TABLE>

THE ATHENAEUM PORTFOLIO

    Beacon/PW Kendall LLC was formed on April 16, 1998 and is jointly owned by
the Company and PW Acquisitions IX, LLC, an affiliate of PaineWebber. Initially
each member made a $5,000 contribution and the Company provided a loan to the
joint venture of approximately $117,000. The joint venture acquired The
Athenaeum Portfolio, an eleven building 970,000 square foot mixed-use portfolio
located in Cambridge, Massachusetts. In August 1998, the Company and PW
Acquisitions IX, LLC each made equity contributions of approximately $58,500,
which were used to repay the Company's loan receivable.

    On April 14, 2000, The Athenaeum Portfolio was refinanced and the joint
venture distributed refinancing proceeds in the amount of $90,700. The previous
mortgage was treated as extinguished and an extraordinary loss of approximately
$10,298 was incurred for the write-off of related transaction costs and
unamortized deferred financing costs. The Company's share of the distribution
and extraordinary loss was approximately $45,350 and $5,149, respectively. On
June 7, 2000, the joint venture sold some of the assets in The Athenaeum
Portfolio (215 First Street, 195 First Street and Doc Linskey Way) for $68,000
and recorded a gain on the sale of approximately $25,228. Simultaneously with
the sale, the debt was paid down by $50,940 and the joint venture distributed
$16,000 to its members. The Company's share of the gain on

                                      F-12
<PAGE>
                         BEACON CAPITAL PARTNERS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               DECEMBER 31, 2000

              (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)

4. INVESTMENTS IN PARTNERSHIP, JOINT VENTURES AND CORPORATIONS (CONTINUED)
the sale and distribution were approximately $12,614 and $8,000, respectively.
On December 28, 2000, the joint venture sold the remaining assets in The
Athenaeum Portfolio for $191,900 and the buyer assumed the outstanding debt. The
joint venture recorded a gain on the sale of approximately $39,637 and
distributed $68,200 of the sale proceeds to its members. The Company's share of
the gain on the sale and distribution was approximately $19,818 and $34,100,
respectively.

    Summarized financial information for this joint venture follows:

<TABLE>
<CAPTION>
                                                                                        FOR THE PERIOD FROM
                                                                                          APRIL 16, 1998
                                                 YEAR ENDED           YEAR ENDED          (INCEPTION) TO
                                              DECEMBER 31, 2000    DECEMBER 31, 1999     DECEMBER 31, 1998
                                              -----------------   -------------------   -------------------
<S>                                           <C>                 <C>                   <C>
Total revenues..............................      $ 29,295             $ 30,543               $ 19,130
Total expenses..............................        25,274               20,871                 16,658
                                                  --------             --------               --------
Income before gains on sales of real estate
  and extraordinary item....................         4,021                9,672                  2,472
Gains on sales of real estate...............        64,865                   --                     --
                                                  --------             --------               --------
Income before extraordinary item............        68,886                9,672                  2,472
Extraordinary item..........................       (10,298)                  --                     --
                                                  --------             --------               --------
Net income..................................      $ 58,588             $  9,672               $  2,472
                                                  ========             ========               ========
Net income
  Company's share of income.................      $ 29,294             $  4,836               $  1,184
  Other member's share of income............        29,294                4,836                  1,288
                                                  --------             --------               --------
                                                  $ 58,588             $  9,672               $  2,472
                                                  ========             ========               ========
</TABLE>

    The Company's gains on sales of real estate in 2000 also included the
write-off of unamortized investment costs of approximately $39 and equity in
earnings in 1998 also included intercompany interest income of $2,019.

<TABLE>
<CAPTION>
                                                                 DECEMBER 31,
                                                              -------------------
                                                                2000       1999
                                                              --------   --------
<S>                                                           <C>        <C>
Real estate and equipment, net..............................   $   --    $191,378
Cash and cash equivalents...................................    1,956       5,030
Other assets................................................      346       2,127
                                                               ------    --------
Total assets................................................   $2,302    $198,535
                                                               ======    ========

Mortgage note payable.......................................   $   --    $ 68,280
Accounts payable and accrued expenses.......................    1,762       4,892
                                                               ------    --------
Total liabilities...........................................    1,762      73,172
                                                               ------    --------
Minority interest...........................................       (6)          5
                                                               ------    --------
Members' equity
  Company's share of equity.................................      221      62,627
  Other member's share of equity............................      325      62,731
                                                               ------    --------
Total members' equity.......................................      546     125,358
                                                               ------    --------
Total liabilities and members' equity.......................   $2,302    $198,535
                                                               ======    ========
</TABLE>

                                      F-13
<PAGE>
                         BEACON CAPITAL PARTNERS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               DECEMBER 31, 2000

              (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)

4. INVESTMENTS IN PARTNERSHIP, JOINT VENTURES AND CORPORATIONS (CONTINUED)
MATHILDA RESEARCH CENTRE

    On August 9, 1998, the Company entered into a joint venture agreement with
Mathilda Partners LLC, an affiliate of Menlo Equities, a California based
developer, to develop two four-story Class A office/R&D buildings with surface
parking in Sunnyvale, California, known as Mathilda Research Centre. The Company
and Mathilda Partners LLC have agreed to fund 87.5% and 12.5% of the equity
required, respectively. On November 4, 1998, the venture acquired a twelve-acre
site on Mathilda Avenue in Sunnyvale, California, on which it is developing
Mathilda Research Centre. The first building (approximately 144,000 square feet)
was completed in June 2000 and is currently 100% occupied by Juniper Networks,
Inc. ("Juniper Networks"). The estimated cost of the 267,000 square foot
development is approximately $64,000. The joint venture has obtained a $44,000
construction loan from an institutional lender to finance the development, and
the balance of the development costs will be funded by equity contributions from
the venturers. As of December 31, 2000, the venturers have funded equity
contributions of $20,000, of which the Company's portion was $17,500.

MATHILDA RESEARCH CENTRE II

    On August 9, 2000, the Company entered into a joint venture agreement with
Mathilda Partners II LLC, an affiliate of Menlo Equities, a California based
developer, to develop an additional phase of Mathilda Research Centre in
Sunnyvale, California, also for Juniper Networks. The Company and Mathilda
Partners II LLC have agreed to fund 87.5% and 12.5% of the equity required,
respectively. On November 30, 2000, the joint venture acquired
1220 N. Mathilda Avenue in Sunnyvale, California on which it will develop the
additional phase of Mathilda Research Centre. The estimated cost of the 158,000
square foot building is approximately $40,650. The project will be funded from
equity contributions of approximately $8,040, of which the Company's portion
will be approximately $7,035, and a $32,610 construction loan from an
institutional lender. As of December 31, 2000, the members had funded equity
contributions of approximately $12,146, of which the Company's portion was
approximately $10,628. In January 2001, the joint venture distributed loan
proceeds to its members that reduced the equity contributions to approximately
$8,803, of which the Company's portion was approximately $7,703. The Company
expects an additional distribution of approximately $668 from loan proceeds when
certain conditions are met.

MILLENNIUM TOWER

    On September 1, 1998 the Company entered into a joint venture agreement with
HA L.L.C., an affiliate of Martin Smith Real Estate Services, a Seattle based
real estate company, to develop a 20-story office/retail and residential tower
in downtown Seattle, Washington, known as Millennium Tower. The Company and HA
L.L.C. have agreed to fund 66 2/3% and 33 1/3% of the equity required,
respectively. Land was contributed to the joint venture by HA L.L.C. at an
agreed value of $10,500, and the Company agreed to fund the first $19,000 of
cash requirements for the venture. As of December 31, 2000, the Company has
funded its total commitment of $19,000. The joint venture has obtained a $45,000
construction loan from two institutional lenders to finance the balance of the
development costs. The estimated cost of the project is $72,000, including the
value of the land.

                                      F-14
<PAGE>
                         BEACON CAPITAL PARTNERS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               DECEMBER 31, 2000

              (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)

4. INVESTMENTS IN PARTNERSHIP, JOINT VENTURES AND CORPORATIONS (CONTINUED)
    The Company's residential portion of this investment is held by BCP
Millennium Residential, Inc., a Massachusetts corporation ("BCP Millennium
Residential"). The voting common stock of BCP Millennium Residential is
controlled by Messrs. Leventhal and Fortin. The Operating Partnership owns
approximately 99% of the economic interests in BCP Millennium Residential. For
financial statement presentation purposes, the Company consolidates
BCP Millennium Residential.

BCSP

    On October 1, 1999, the Company completed the initial closing for BCSP, a
real estate limited partnership, of which BCP Strategic Partners LLC, the
Company's wholly-owned subsidiary, is the General Partner. Subsequent to
October 1, 1999, the Company completed additional closings and as of March 28,
2000 (the BCSP final closing date), equity commitments totaled $287,500, of
which the Company's equity commitment was $57,500. The commitments include
investments from various endowments, foundations, pension funds and other
institutional investors. For a period of up to two years from October 1, 1999,
BCSP will be the Company's exclusive real estate investment vehicle. As of
December 31, 2000, the Company has funded approximately $3,200 of its committed
investment. In connection with the formation of BCSP, for the years ended
December 31, 2000 and 1999, the Company incurred affiliate formation expenses of
approximately $2,054 and $3,977, respectively. The expenses consist of
underwriter commissions and fees for legal and professional services not
reimbursed by the partners of BCSP.

    On March 17, 2000, BCSP obtained a $137,500 secured revolving credit
facility. On June 14, 2000, BCSP sold 233 Fremont Street, a property located in
San Francisco, California that is currently undergoing redevelopment. The
property was sold for approximately $145,894, including approximately $15,894
held in escrow pending completion of the property's redevelopment. BCSP will
continue to oversee the redevelopment and the buyer will fund the remaining
redevelopment costs. The redevelopment is scheduled to be completed in the first
quarter of 2001. As of December 31, 2000, BCSP recognized a gain on the sale of
approximately $71,643. Pursuant to the applicable accounting rules, an
additional gain estimated at approximately $7,960 has been deferred and is
expected to be realized in 2001. On June 28, 2000, BCSP distributed $70,000 of
the sale proceeds. The Company's share of the recognized gain on the sale and
distribution was approximately $25,736 and $25,169, respectively.

                                      F-15
<PAGE>
                         BEACON CAPITAL PARTNERS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               DECEMBER 31, 2000

              (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)

4. INVESTMENTS IN PARTNERSHIP, JOINT VENTURES AND CORPORATIONS (CONTINUED)
    Summarized information for this partnership follows:

<TABLE>
<CAPTION>
                                                                             FOR THE PERIOD
                                                                             OCTOBER 1, 1999
                                                               YEAR ENDED    (INCEPTION) TO
                                                              DECEMBER 31,    DECEMBER 31,
                                                                  2000            1999
                                                              ------------   ---------------
<S>                                                           <C>            <C>
Total revenues..............................................    $  1,999        $      6
Total expenses..............................................       4,072              72
                                                                --------        --------
Loss before gain on sale of real estate and extraordinary
  item......................................................      (2,073)            (66)
Gain on sale of real estate.................................      71,643              --
                                                                --------        --------
Income (loss) before extraordinary item.....................      69,570             (66)
Extraordinary item..........................................         (71)             --
                                                                --------        --------
Net income (loss)...........................................    $ 69,499        $    (66)
                                                                ========        ========
Net income (loss)
  Company's share of income (loss)..........................    $ 29,061        $    (17)
  Other partners' share of income (loss)....................      40,438             (49)
                                                                --------        --------
                                                                $ 69,499        $    (66)
                                                                ========        ========
</TABLE>

    The Company's gains on sales of real estate in 2000 also included the
write-off of unamortized investment costs of approximately $62.

<TABLE>
<CAPTION>
                                                                    DECEMBER 31,
                                                              -------------------------
                                                                 2000          1999
                                                              ----------   ------------
<S>                                                           <C>          <C>
Real estate and equipment, net..............................   $ 71,922      $ 40,285
Cash and cash equivalents...................................     17,953           291
Other assets................................................      6,951           136
                                                               --------      --------
Total assets................................................   $ 96,826      $ 40,712
                                                               ========      ========
Credit facility.............................................     57,500        40,180
Note payable................................................      4,567            --
Accounts payable and accrued expenses.......................     25,479         1,598
                                                               --------      --------
Total liabilities...........................................     87,546        41,778
                                                               --------      --------
Partners' equity (deficit)
  Company's share of equity (deficit).......................      1,493          (445)
  Other partners' share of equity (deficit).................      7,787          (621)
                                                               --------      --------
Total partners' equity (deficit)............................      9,280        (1,066)
                                                               --------      --------
Total liabilities and partners' equity (deficit)............   $ 96,826      $ 40,712
                                                               ========      ========
</TABLE>

    The Company's equity interest at December 31, 2000 and 1999 included
unamortized offering costs of approximately $352 and $428, respectively.

                                      F-16
<PAGE>
                         BEACON CAPITAL PARTNERS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               DECEMBER 31, 2000

              (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)

5. OTHER INVESTMENTS

CYPRESS COMMUNICATIONS, INC.

    On September 8, 1998 and October 8, 1999, the Company invested an aggregate
of $11,000 to acquire preferred stock in Cypress Communications, Inc.
("Cypress"), representing a 9.5% fully diluted ownership position. Cypress
provides bundled communications services to tenants in multi-tenant commercial
buildings. Prior to January 5, 2000, the investment was held by both the
Operating Partnership and Tenant Communications, Inc., a Massachusetts
corporation ("Tenant Communications"). On January 5, 2000, the Company
distributed all of its preferred stock of Cypress (held by the Operating
Partnership and Tenant Communications), valued at approximately $0.75 per share
of common stock of BCP and operating partnership unit of the Operating
Partnership to a voting trust (the "Cypress Voting Trust") (the trustee of which
is a subsidiary of BCP), and then distributed its interest in the Cypress Voting
Trust to its stockholders and unitholders. The distribution was recorded by the
Company at the estimated fair value of the Cypress preferred stock as of the
date of distribution, which resulted in a gain in the amount of approximately
$6,405. This gain is reflected as a component of other income in the
accompanying Consolidated Statements of Operations. On February 10, 2000,
Cypress successfully completed its initial public offering. At the IPO, each
share of preferred stock split into 4.5 shares of common stock. The Cypress
common stock held in the Cypress Voting Trust is subject to certain terms and
conditions, including limitations on transferability.

MORTGAGE NOTE RECEIVABLE-PAH BATTERYMARCH REALTY COMPANY, LLC

    On May 21, 1999 and June 25, 1999, the Company funded mortgage note advances
of approximately $12,300 and $32,700, respectively (net of interest and fees) to
PAH Batterymarch Realty Company, LLC, an entity wholly owned by Patriot American
Hospitality Partnership, L.P., for the development of the Wyndham Batterymarch
Hotel located in Boston, Massachusetts. The mortgage note was collateralized by
a first mortgage lien on the property and was guaranteed by Wyndham and Patriot
American Hospitality Partnership, L.P. The mortgage note had an interest rate of
LIBOR plus 250 basis points and was repaid on July 1, 1999.

233 FREMONT STREET

    On June 30, 1999, the Company acquired 233 Fremont Street, a 299,000 square
foot building located in the South Financial District of San Francisco,
California. The purchase price was $33,500. On October 25, 1999, this investment
was transferred to an affiliate of the Company, BCSP. The Company was reimbursed
for all costs associated with the acquisition, redevelopment, and carrying of
the property.

WYNDHAM INTERNATIONAL, INC.

    On June 30, 1999, the Company purchased 1,050,000 shares of Series B
Convertible Preferred Stock ("Series B Preferred") of Wyndham
International, Inc. ("Wyndham") at a net price of approximately $102,874.
Simultaneously with this transaction, the Company transferred all of these
shares of Series B Preferred to a voting trust (the "Wyndham Voting Trust") (the
trustee of which is a subsidiary of BCP) and declared and paid a dividend of
approximately $4.34 per share of common stock of BCP and a distribution of
approximately $4.34 per operating partnership unit of the Operating Partnership.
The aggregate value

                                      F-17
<PAGE>
                         BEACON CAPITAL PARTNERS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               DECEMBER 31, 2000

              (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)

5. OTHER INVESTMENTS (CONTINUED)
of the dividend and distribution was approximately $103,064 and primarily
consisted of the Company's interest in shares of the Series B Preferred, subject
to the Wyndham Voting Trust. Stockholders not able to receive such interests
received cash of equivalent value. Subsequent to June 30, 1999, the Company
purchased 120,409.3061 Wyndham Voting Trust interests (which represent
120,409.3061 shares of Series B Preferred) at an aggregate price of
approximately $11,419.

    On July 1, 1999, the Company purchased 450,000 shares of Series B Preferred
at a net price of approximately $44,055. On October 29, 1999, the Company
transferred 244,340 of these shares of Series B Preferred to Beacon Lodging,
Inc., a Massachusetts corporation ("Beacon Lodging"). The voting common stock of
Beacon Lodging is controlled by Messrs. Leventhal and Fortin. The Operating
Partnership owns 99% of the economic interests in Beacon Lodging. For financial
statement presentation purposes, the Company consolidates Beacon Lodging. On
December 9, 1999, Wyndham completed a rights offering to its current common
shareholders and redeemed 8,398.818 shares of Series B Preferred held by the
Company at a price of approximately $857.

    Wyndham's annual dividend on the Series B Preferred is 9.75%, paid
quarterly, partially in cash and partially in paid-in-kind shares. On
November 2, 2000, the Company declared a dividend and distribution of all of its
Wyndham Voting Trust interests and remaining Series B Preferred (607,382.0251
shares of Series B Preferred, which includes 45,371.537 paid-in-kind shares) to
its shareholders and unitholders. This dividend and distribution valued at
approximately $2.50 per share of common stock of BCP and approximately
$2.50 per operating partnership unit of the Operating Partnership resulted in a
loss in the amount of approximately $743. This loss is reflected as a component
of other income in the accompanying Consolidated Statements of Operations. The
shares are held in the Wyndham Voting Trust subject to the same terms and
conditions as the shares held in the Wyndham Voting Trust that was established
in June 1999. The June 1999 dividend and distribution is referenced as
"Series I" Interests and the November 2000 dividend and distribution is
referenced as "Series II" Interests in the Wyndham Voting Trust.

CO SPACE, INC.

    On November 12, 1999, the Company invested $8,000 to acquire preferred stock
in CO Space, Inc. ("CO Space") representing an approximate 18% fully diluted
ownership position. CO Space provided co-location space for data storage,
telecommunication carriers, and web-hosting applications. Prior to January 28,
2000, the investment was held by the Operating Partnership. On January 28, 2000,
the Operating Partnership transferred 10% of its shares of CO Space
(representing 100% of its voting interest) to Shared Communications
Spaces, Inc., a Massachusetts corporation ("Shared Communications"). On
March 24, 2000, the Company distributed all of its preferred stock of CO Space
(held by the Operating Partnership and Shared Communications), valued at
approximately $0.34 per share of common stock of BCP and operating partnership
unit of the Operating Partnership to a voting trust (the "CO Space Voting
Trust") (the trustee of which is a subsidiary of BCP), and then distributed its
interest in the CO Space Voting Trust to its stockholders and unitholders. On
June 20, 2000, CO Space was acquired by InterNAP Network Services Corporation
("InterNAP"). InterNAP was founded in 1996 and provides internet connectivity
that is faster and more reliable than conventional internet services. In
conjunction with the acquisition of CO Space by InterNAP, each share of
preferred stock held in the CO Space Voting Trust was converted to one share of
CO Space common stock. The shares of CO Space common stock were

                                      F-18
<PAGE>
                         BEACON CAPITAL PARTNERS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               DECEMBER 31, 2000

              (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)

5. OTHER INVESTMENTS (CONTINUED)
exchanged for shares of InterNAP common stock based upon a formula set forth in
the definitive agreement. Each share of CO Space common stock which was
equivalent to a unit in the CO Space Voting Trust was exchanged for .24488
shares of InterNAP common stock. The InterNAP common stock held in the CO Space
Voting Trust is subject to certain terms and conditions, including limitations
on transferability.

6. MORTGAGE NOTES PAYABLE

    The mortgage notes payable, collateralized by certain properties and
assignment of leases, total $30,797 at December 31, 2000. Mortgage notes payable
with fixed interest rates ranging from 7.75% to 9.25% and maturities ranging
from May 2002 to October 2022 total $18,296. Variable rate mortgage notes
payable totaling $12,501 with current interest rates of 8.776% and 9.5% at
December 31, 2000 mature in April 2002 and November 2003. The net book value of
the mortgaged assets was approximately $79,828 at December 31, 2000. Future
minimum principal payments due during the next five years and thereafter are as
follows:

<TABLE>
<S>                                          <C>
2001.......................................  $   372
2002.......................................   14,315
2003.......................................      415
2004.......................................    3,525
2005.......................................    8,791
Thereafter.................................    3,379
                                             -------
Total                                        $30,797
                                             =======
</TABLE>

7. NOTE PAYABLE--INTERIM FINANCING

    On June 28, 1999, the Company obtained $100,000 of secured interim financing
(the "Interim Financing") from Bankers Trust Company. On December 3, 1999, the
Company executed an amendment to the Interim Financing that increased the loan
amount to $130,000. In connection with the Interim Financing amendment, the
Company recorded an extraordinary item of $1,047, net of minority interest, for
the write-off of fees and costs to establish the original $100,000 loan. On
April 19, 2000, The Draper Building was sold. The Draper Building was part of
the collateral for the Interim Financing and as a condition of the property's
release, on April 19, 2000, the Interim Financing was paid down by approximately
$32,170. The Interim Financing matured in June 2000 and pursuant to the terms of
the note, the Company exercised its option to extend the maturity date to June
2001. Outstanding balances under the Interim Financing bear interest at a rate
spread over the base rate or Eurodollar rate, as applicable. The spread is based
upon certain loan to value ratios. The Interim Financing requires monthly
payments of interest only, is secured by mortgages and assignments of rents on
certain properties and requires the Company's ongoing compliance with a number
of financial and other covenants. At December 31, 2000, the outstanding balance
of the Interim Financing was approximately $97,830, the interest rate was 9.155%

                                      F-19
<PAGE>
                         BEACON CAPITAL PARTNERS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               DECEMBER 31, 2000

              (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)

7. NOTE PAYABLE--INTERIM FINANCING (CONTINUED)
and the net book value of the collateralized assets was approximately $130,350.
Subsequent to December 31, 2000, the Company entered into an agreement to sell
Technology Square. The sale would require the payoff of the Interim Financing.

8. STOCK INCENTIVE PLAN

    At inception, the Company adopted a Stock Incentive Plan, which authorizes
the grant of options to purchase shares of common stock and other stock-based
awards to the Company's executive officers, independent directors, employees and
other key persons. In connection with the adoption of the Company's new
management incentive plan in 2000, the executive officers of the Company
surrendered all of their outstanding options and also forfeited their right to
receive new grants under the Stock Incentive Plan. The Stock Incentive Plan is
administered by the Compensation Committee of the Board of Directors (the
"Administrator").

    The maximum number of shares of common stock reserved and available for
issuance under the Stock Incentive Plan is such aggregate number of shares as
does not exceed the sum of (i) 12% of the outstanding equity interests in the
Company (including common stock and units subject to redemption rights) as
determined as of the final original offering closing date plus (ii) as of the
last business day of each calendar quarter ending after the final original
offering closing date, an additional positive number equal to 10% of any net
increase of outstanding equity interests in the Company. As of December 31,
2000, 2,796,726 shares of common stock have been reserved.

    The Stock Incentive Plan permits the granting of (i) options to purchase
common stock intended to qualify as incentive stock options ("Incentive
Options") under Section 422 of the Internal Revenue Code and (ii) options that
do not so qualify ("Non-Qualified Options"). The option exercise price of each
option may not be less than 100% of the fair market value of the common stock on
the date of grant in the case of Incentive Options, and may not be less than 25%
of the fair market value of the common stock on the date of grant in the case of
Non-Qualified Options. The term of each option will be fixed and may not exceed
ten years from date of grant in the case of an Incentive Option. The
Administrator will determine at what time or times each option may be exercised
and, subject to the provisions of the Stock Incentive Plan, the period of time,
if any, after retirement, death, disability or termination of employment during
which options may be exercised. Options may be made exercisable in installments,
and the exercise of options may be accelerated by the Administrator.

                                      F-20
<PAGE>
                         BEACON CAPITAL PARTNERS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               DECEMBER 31, 2000

              (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)

8. STOCK INCENTIVE PLAN (CONTINUED)
    Changes in options outstanding under the Stock Incentive Plan during the
period were as follows:

<TABLE>
<CAPTION>
                                                       NUMBER OF       PER SHARE
                                                      SHARES UNDER      OPTION
                                                         OPTION      PRICE-AVERAGE
                                                      ------------   -------------
<S>                                                   <C>            <C>
Granted at Initial Private Offering.................      649,500       $20.00
Granted March 20-December 31, 1998..................    1,730,250        19.96
                                                       ----------       ------

Shares under option at December 31, 1998............    2,379,750        19.97
Granted during 1999.................................       35,695         9.59
Cancelled during 1999...............................         (400)       20.00
                                                       ----------       ------
Shares under option at December 31, 1999............    2,415,045        19.82
Granted during 2000.................................       37,517        10.87
Cancelled during 2000...............................   (2,168,000)       20.00
                                                       ----------       ------
Shares under option at December 31, 2000............      284,562        17.25
                                                       ==========       ======

Options available for grant at end of period........    2,512,164
                                                       ==========
</TABLE>

    Options granted in 2000 and 1999 were to directors of the Company at less
than the current market value of the stock. Any difference between market value
and the strike price of the option has been recognized in the current period as
compensation expense.

    The Company has adopted SFAS No. 123, "Accounting for Stock-Based
Compensation". SFAS No. 123 requires the recognition of, or disclosure of,
compensation expense for grants of stock options or other equity instruments
issued to employees based on the fair value at the date of grant.

    As required under SFAS No. 123, the following pro forma net income and net
income per share presentations reflect the amortization of the option grant fair
value as expense. For purposes of this disclosure, the estimated fair value of
the options is amortized to expense over the options' vesting periods. The
following is the Company's pro forma information for the years ended
December 31, 2000 and 1999 and for the period from January 21, 1998 (Inception)
to December 31, 1998:

<TABLE>
<CAPTION>
                                                                  FOR THE PERIOD FROM
                               YEAR ENDED                           JANUARY 21, 1998
                              DECEMBER 31,       YEAR ENDED           (INCEPTION)
                                  2000        DECEMBER 31, 1999   TO DECEMBER 31, 1998
                              -------------   -----------------   --------------------
<S>                           <C>             <C>                 <C>
Pro forma net income........     $83,658           $2,965                $9,054
Pro forma net income per
  share--basic and
  diluted...................        4.02             0.14                  0.44
</TABLE>

    Significant assumptions used in determining this value include a risk free
interest rate of six percent, expected life of the options of five years, and a
dividend rate of 10%.

                                      F-21
<PAGE>
                         BEACON CAPITAL PARTNERS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               DECEMBER 31, 2000

              (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)

8. STOCK INCENTIVE PLAN (CONTINUED)
    The effects on pro forma disclosures of applying SFAS No. 123 are not likely
to be representative of the effects on pro forma disclosures in future years as
the period presented includes only two years of option grants under the Stock
Incentive Plan.

9. MANAGEMENT INCENTIVE PLAN

    The Company's new management incentive plan contemplates that the Company's
management will participate in all returns realized by the Company after
specified benchmarks are achieved. This plan was ratified by the stockholders in
May 2000 and was implemented through an amendment to the partnership agreement
of the Operating Partnership. This amendment provides Beacon Capital
Participation Plan, L.P. ("BCPP"), a partnership whose partners are all members
of the Company's senior management, with incentive distributions from the
Operating Partnership after defined investor return objectives are met. BCPP
will distribute the incentive distributions received by it to its partners, in
accordance with the terms of the BCPP Partnership Agreement.

    Under the amendment, BCPP does not receive any incentive distributions from
the Operating Partnership until the partners of the Operating Partnership have
received distributions equal to:

    - a cumulative, compounded annual return of 10% (the "Preferred Return") on
      the Invested Capital (as defined below) of the Operating Partnership
      outstanding from time to time, commencing from the date of the Company's
      original offering of common stock; and

    - a return of 100% of the Invested Capital, which is defined as the
      aggregate amount of the capital raised in the Company's offering of common
      stock, less shares repurchased, plus any capital contributions made by
      limited partners to the Operating Partnership, less all distributions from
      the Operating Partnership in excess of the Preferred Return.

Until this hurdle is achieved, all distributions from the Operating Partnership
will be made PRO RATA to the partners of the Operating Partnership (including
BCPP) in accordance with their relative percentage interests. Currently, the
Company and BCPP are the only partners in the Operating Partnership and their
percentage interests (which correspond to their relative capital contributions
to the Operating Partnership) are approximately 99% and 1%, respectively. Only
after this hurdle had been achieved would BCPP receive incentive distributions
from the Operating Partnership as follows:

    - first, 50% to the partners of the Operating Partnership (PRO RATA in
      accordance with percentage interests) and 50% to BCPP, until BCPP receives
      an amount equal to 20% of all distributions made to the partners of the
      Operating Partnership to date other than distributions of Invested Capital
      described above; and

    - thereafter, 80% to the partners of the Operating Partnership (PRO RATA in
      accordance with percentage interests) and 20% to BCPP.

    For purposes of calculating the incentive distributions due to management,
the Company has agreed to treat the stock purchased by the Operating Partnership
and subsequently distributed to the Company's stockholders subject to the terms
of various voting trusts as if such stock was distributed pro rata to the
partners of the Operating Partnership, at the times those shares (or the
property into which such shares

                                      F-22
<PAGE>
                         BEACON CAPITAL PARTNERS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               DECEMBER 31, 2000

              (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)

9. MANAGEMENT INCENTIVE PLAN (CONTINUED)
may be converted) are deemed distributed from the voting trusts to the
beneficial holders of the shares (generally based on the value of such stock).
BCPP's share of distributions paid by the Operating Partnership is then
increased so that BCPP receives 50% or 20% (as applicable) of the sum of the
distributions of the Operating Partnership plus the distributions of the voting
trusts.

10. LEASES

    Minimum future rentals under operating leases in effect at December 31,
2000, excluding rents attributable to Technology Square, which subsequent to
December 31, 2000, the Company entered into an agreement to sell, are summarized
as follows:

<TABLE>
<S>                                         <C>
2001......................................  $ 18,227
2002......................................    16,771
2003......................................    11,621
2004......................................     8,906
2005......................................     6,519
Thereafter................................     6,083
                                            --------
Total.....................................  $ 68,127
                                            ========
</TABLE>

    Terms of leases range from one to fifteen years and in certain cases provide
for operating expense reimbursement, real estate tax escalations and increases
in minimum rents. The net book value of property on lease, excluding Technology
Square, was $102,874 at December 31, 2000.

11. RENTAL EXPENSE

    The Company leases office space under operating leases which expire on
March 31, 2003 and June 30, 2003. Rental expense under the leases was $788, $755
and $523 for the years and period ended December 31, 2000, 1999 and 1998,
respectively. Future minimum payments through the lease expiration dates will be
$1,715.

                                      F-23
<PAGE>
                         BEACON CAPITAL PARTNERS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               DECEMBER 31, 2000

              (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)

12. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

    The following is a summary of unaudited quarterly results of operations of
the Company for the years ended December 31, 2000 and 1999, respectively.

<TABLE>
<CAPTION>
                                                                             2000
                                                         --------------------------------------------
                                                          FIRST         SECOND     THIRD      FOURTH
                                                         QUARTER       QUARTER    QUARTER    QUARTER
                                                         --------      --------   --------   --------
<S>                                                      <C>           <C>        <C>        <C>
Revenues...............................................  $19,549       $12,382    $12,198    $ 8,393
Income (loss) before gains on sales of real estate,
  minority interest and extraordinary items............    7,560 (a)     3,065      2,779     (1,548)
Gains on sales of real estate..........................       --        58,537      2,979     24,005
Income before minority interest and extraordinary
  items................................................    7,560        61,602      5,758     22,457
Extraordinary items, net of minority interest..........      (12)       (4,562)        --         --
Net income.............................................    6,671        49,891      5,048     22,214
Income per common share--basic and diluted.............     0.32          2.38       0.26       1.02
</TABLE>

<TABLE>
<CAPTION>
                                                                                1999
                                                            --------------------------------------------
                                                             FIRST         SECOND     THIRD      FOURTH
                                                            QUARTER       QUARTER    QUARTER    QUARTER
                                                            --------      --------   --------   --------
<S>                                                         <C>           <C>        <C>        <C>
Revenues..................................................   $9,445        $9,611     $8,721    $10,820
Income (loss) before minority interest and extraordinary
  item....................................................    2,875         3,429        676     (2,441)(b)
Extraordinary item, net of minority interest..............       --            --         --     (1,047)
Net income (loss).........................................    2,541         3,031        598     (3,205)
Income (loss) per common share--basic and diluted.........     0.12          0.14       0.03      (0.15)
</TABLE>

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

(a) Includes affiliate formation expenses of $2,054.

(b) Includes affiliate formation expenses of $3,977.

                                      F-24
<PAGE>
                         REPORT OF INDEPENDENT AUDITORS

To the Members of Beacon/PW Kendall LLC

    We have audited the accompanying consolidated balance sheets of Beacon/PW
Kendall LLC as of December 31, 2000 and 1999 and the related consolidated
statements of operations, members' equity and cash flows for the years ended
December 31, 2000 and 1999 and for the period from April 16, 1998 (inception) to
December 31, 1998. Our audit also included the financial statement schedule
listed in the Index at Item 14(a). These financial statements and schedule are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements and schedule based on our audits.

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

    In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Beacon/PW
Kendall LLC at December 31, 2000 and 1999, and the consolidated results of its
operations and its cash flows for the years ended December 31, 2000 and 1999 and
for the period from April 16, 1998 (inception) to December 31, 1998, in
conformity with accounting principles generally accepted in the United States.
Also in our opinion, the related financial statement schedule, when considered
in relation to the basic financial statements taken as a whole, presents fairly
in all material respects the information set forth therein.

                                          [LOGO]

Boston, Massachusetts
January 24, 2001

                                      F-25
<PAGE>
                             BEACON/PW KENDALL LLC

                          CONSOLIDATED BALANCE SHEETS

                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                 DECEMBER 31,
                                                              -------------------
                                                                2000       1999
                                                              --------   --------
<S>                                                           <C>        <C>
ASSETS
Real Estate
  Land......................................................  $     --   $ 35,773
  Buildings, improvements and equipment.....................        --    162,335
                                                              --------   --------
                                                                    --    198,108
  Less accumulated depreciation.............................        --      6,730
                                                              --------   --------
                                                                    --    191,378
Deferred financing and leasing costs, net of accumulated
  amortization of $0 and $108, respectively.................        --        612
Cash and cash equivalents...................................       798      2,309
Restricted cash.............................................     1,158      2,721
Accounts receivable, net....................................       346      1,366
Other assets................................................        --        149
                                                              --------   --------
    Total assets............................................  $  2,302   $198,535
                                                              ========   ========
LIABILITIES AND MEMBERS' EQUITY
Liabilities:
  Mortgage note payable.....................................  $     --   $ 68,280
  Accounts payable and accrued expenses.....................     1,762      4,892
                                                              --------   --------
    Total liabilities.......................................     1,762     73,172
                                                              --------   --------
Commitments and contingencies...............................        --         --

Minority interest...........................................        (6)         5
                                                              --------   --------
Members' equity:
  Members' equity (deficit).................................   (70,186)   113,214
  Cumulative net income.....................................    70,732     12,144
                                                              --------   --------
    Total members' equity...................................       546    125,358
                                                              --------   --------
    Total liabilities and members' equity...................  $  2,302   $198,535
                                                              ========   ========
</TABLE>

SEE ACCOMPANYING NOTES.

                                      F-26
<PAGE>
                             BEACON/PW KENDALL LLC

                     CONSOLIDATED STATEMENTS OF OPERATIONS

                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                      FOR THE PERIOD
                                                       YEAR ENDED     YEAR ENDED    FROM APRIL 16, 1998
                                                      DECEMBER 31,   DECEMBER 31,     (INCEPTION) TO
                                                          2000           1999        DECEMBER 31, 1998
                                                      ------------   ------------   -------------------
<S>                                                   <C>            <C>            <C>
Revenues:
  Rental income.....................................    $ 21,293        $21,760           $13,368
  Reimbursement of operating expenses and real
    estate taxes....................................       7,068          7,538             4,997
  Interest and other income.........................         934          1,245               765
                                                        --------        -------           -------
    Total revenues..................................      29,295         30,543            19,130
                                                        --------        -------           -------
Expenses:
  Property operating................................       6,119          6,442             3,990
  Real estate taxes.................................       3,933          4,349             2,559
  Interest expense, including affiliated interest of
    $3,481 in 1998..................................      10,324          5,912             7,434
  Depreciation and amortization.....................       4,898          4,168             2,675
                                                        --------        -------           -------
    Total expenses..................................      25,274         20,871            16,658
                                                        --------        -------           -------
Income before gains on sales of real estate and
  extraordinary item................................       4,021          9,672             2,472
Gains on sales of real estate.......................      64,865             --                --
                                                        --------        -------           -------
Income before extraordinary item....................      68,886          9,672             2,472
Extraordinary item..................................     (10,298)            --                --
                                                        --------        -------           -------
    Net income......................................    $ 58,588        $ 9,672           $ 2,472
                                                        ========        =======           =======
</TABLE>

SEE ACCOMPANYING NOTES.

                                      F-27
<PAGE>
                             BEACON/PW KENDALL LLC

                   CONSOLIDATED STATEMENTS OF MEMBERS' EQUITY

  FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999 AND THE PERIOD FROM APRIL 16,
                                1998 (INCEPTION)
                              TO DECEMBER 31, 1998

                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                 PW
                                                           BEACON CAPITAL   ACQUISITIONS
                                                           PARTNERS, L.P.     IX, LLC        TOTAL
                                                           --------------   ------------   ---------
<S>                                                        <C>              <C>            <C>
Contribution of members' equity..........................     $63,507         $63,507      $ 127,014
Net income...............................................       1,184           1,288          2,472
Distributions............................................        (900)           (900)        (1,800)
                                                              -------         -------      ---------
Balance at December 31, 1998.............................      63,791          63,895        127,686
Net income...............................................       4,836           4,836          9,672
Distributions............................................      (6,000)         (6,000)       (12,000)
                                                              -------         -------      ---------
Balance at December 31, 1999.............................      62,627          62,731        125,358
Net income...............................................      29,294          29,294         58,588
Distributions............................................     (91,700)        (91,700)      (183,400)
                                                              -------         -------      ---------
Balance at December 31, 2000.............................     $   221         $   325      $     546
                                                              =======         =======      =========
</TABLE>

SEE ACCOMPANYING NOTES.

                                      F-28
<PAGE>
                             BEACON/PW KENDALL LLC

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                      FOR THE PERIOD
                                                       YEAR ENDED     YEAR ENDED    FROM APRIL 16, 1998
                                                      DECEMBER 31,   DECEMBER 31,     (INCEPTION) TO
                                                          2000           1999        DECEMBER 31, 1998
                                                      ------------   ------------   -------------------
<S>                                                   <C>            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income........................................    $  58,588      $  9,672          $   2,472
  Adjustments to reconcile net income to net cash
    provided by operating activities:
    Depreciation....................................        3,832         4,062              2,668
    Amortization....................................        1,066           106                  7
    Extraordinary item..............................       10,298            --                 --
    Gains on sales of real estate...................      (64,865)           --                 --
  Increase (decrease) in cash arising from changes
    in operating assets and liabilities:
    Restricted cash.................................        1,563         1,770             (4,491)
    Accounts receivable.............................        1,163           583             (1,949)
    Other assets....................................          (57)          (33)              (116)
    Accounts payable and accrued expenses...........       (3,130)        1,007              3,885
                                                        ---------      --------          ---------
      Net cash provided by operating activities.....        8,458        17,167              2,476
                                                        ---------      --------          ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Real estate asset acquisitions and improvements...         (430)       (2,292)          (126,698)
  Payment of deferred leasing costs.................         (662)         (466)              (228)
  Proceeds from sales of real estate................      132,183            --                 --
                                                        ---------      --------          ---------
      Net cash provided (used) by investing
        activities..................................      131,091        (2,758)          (126,926)
                                                        ---------      --------          ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Advances from Beacon Capital Partners, L.P........           --            --            117,014
  Repayment of advances from Beacon Capital
    Partners, L.P...................................           --            --           (117,014)
  Proceeds from mortgage note.......................      175,000            --                 --
  Repayments on mortgage note.......................     (119,220)         (524)              (314)
  Payment of defeasance costs.......................      (10,270)           --                 --
  Payment of deferred financing costs...............       (3,159)           --                (31)
  Contributions from members........................           --            --            127,014
  Contributions from minority interest..............           --            --                  6
  Distributions to members..........................     (183,400)      (12,000)            (1,800)
  Distributions to minority interest................          (11)           (1)                --
                                                        ---------      --------          ---------
      Net cash (used) provided by financing
        activities..................................     (141,060)      (12,525)           124,875
                                                        ---------      --------          ---------
Net (decrease) increase in cash and cash
  equivalents.......................................       (1,511)        1,884                425
Cash and cash equivalents, beginning of period......        2,309           425                 --
                                                        ---------      --------          ---------
Cash and cash equivalents, end of period............    $     798      $  2,309          $     425
                                                        =========      ========          =========
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest..............................    $  10,646      $  5,898          $   7,126
NON CASH ITEMS:
Mortgage note assumed in connection with real estate
  acquisition.......................................    $      --      $     --          $  69,118
Mortgage note released in connection with sale of
  real estate.......................................      124,060            --                 --
</TABLE>

SEE ACCOMPANYING NOTES.

                                      F-29
<PAGE>
                             BEACON/PW KENDALL LLC

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               DECEMBER 31, 2000

                             (DOLLARS IN THOUSANDS)

1. ORGANIZATION

    Beacon/PW Kendall LLC ("the Company") was formed on April 16, 1998 as a
Delaware limited liability company. The members of the Company are Beacon
Capital Partners, L.P. and PW Acquisitions IX, LLC (the "Members"). Each of the
Members holds a fifty percent economic interest in the Company and each made a
$63,507 equity contribution. Beacon Capital Partners, L.P. is the managing
member of the Company. Beacon Capital Partners, L.P. and PW Acquisitions IX, LLC
made their initial equity contributions on May 1, 1998 and May 20, 1998,
respectively. Net operating activity for the period May 1, 1998 through May 20,
1998 has been allocated one hundred percent to Beacon Capital Partners, L.P.

    On April 14, 2000, due to the debt refinancing, the Company organizational
structure was revised. The Company is the managing member of CAMEZZ LLC and
Kendall Athenaeum LLC, holding 99.3849% and 99% economic interests,
respectively. The Company and Kendall Athenaeum LLC are the members of CAMEZZ
LLC, holding 99.3849% and .6151% economic interests, respectively. CAMEZZ LLC is
the sole member of One Kendall LLC and Cambridge Athenaeum LLC. Prior to the
following sales, One Kendall LLC and Cambridge Athenaeum LLC had invested in an
eleven building, 970,000 square foot mixed-use portfolio in Cambridge,
Massachusetts referred to as The Athenaeum Portfolio. On June 7, 2000, the
Company sold some of the assets in The Athenaeum Portfolio (215 First Street,
195 First Street and Doc Linskey Way) for $68,000 and recorded a gain on the
sale of approximately $25,228. On December 28, 2000, the Company sold the
remaining assets in The Athenaeum Portfolio for $191,900 and recorded a gain on
the sale of approximately $39,637.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF ACCOUNTING

    The accompanying consolidated financial statements are prepared in
accordance with accounting principles generally accepted in the United States
and include the accounts of the Company, its direct and indirect majority-owned
subsidiaries, Kendall Athenaeum LLC, CAMEZZ LLC, One Kendall LLC and Cambridge
Athenaeum LLC. The Company consolidates all wholly-owned subsidiaries and those
majority-owned subsidiaries in which it exercises control. All significant
intercompany transactions and balances have been eliminated in consolidation.

USE OF ESTIMATES

    The preparation of financial statements in accordance with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amount of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements. Actual results could differ from those estimates.

REAL ESTATE

    Buildings are recorded at cost and are depreciated on the straight-line
method over their estimated useful life of forty years. The cost of buildings
includes the purchase price of the property, legal fees, and other acquisition
costs. Acquisition costs associated with the purchase of new property consist of
third party costs and have been capitalized to the appropriate assets.

                                      F-30
<PAGE>
                             BEACON/PW KENDALL LLC

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               DECEMBER 31, 2000

                             (DOLLARS IN THOUSANDS)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
    The Company measures impairment in accordance with FASB Statement No. 121,
ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE
DISPOSED OF, which requires impairment losses to be recorded on specific
long-lived assets used in operations where indicators of impairment are present
and the undiscounted cash flows estimated to be generated by those assets are
less than the assets' carrying amount.

    Equipment is depreciated using the straight-line method over their expected
useful lives of three to ten years.

DEFERRED FINANCING AND LEASING COSTS

    Deferred financing costs are fees and costs incurred to obtain long-term
financing and are being amortized over the term of the respective loan. Deferred
leasing costs are fees and costs incurred in the successful negotiation of
leases, including brokerage, legal and other costs and are being amortized on a
straight-line basis over the terms of the respective leases.

CASH AND CASH EQUIVALENTS

    Cash and cash equivalents consist of short-term, highly liquid assets with
original maturities of three months or less from the date of purchase.

RESTRICTED CASH

    Restricted cash consists of funds held in escrow as required by the lender
to satisfy real estate taxes and various other expenses associated with the
operations of the properties.

FAIR VALUE OF FINANCIAL INSTRUMENTS

    The Company is required to disclose the fair values of financial instruments
for which it is practicable to estimate such fair value. The fair values of
financial instruments are estimates based upon market conditions and perceived
risks and require varying degrees of management judgment. The fair values of
financial instruments presented may not be indicative of amounts the Company
could realize on the disposition of the financial instruments.

    Cash, cash equivalents and restricted cash are carried at an amount, which
due to their nature, approximates fair value.

    The Company computes the fair value of its mortgage note payable based upon
the collateral assets' discounted cash flows at a discount rate that
approximates the Company's effective borrowing rate. At December 31, 1999, the
Company had determined that the fair value of its mortgage note approximated its
carrying value.

                                      F-31
<PAGE>
                             BEACON/PW KENDALL LLC

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               DECEMBER 31, 2000

                             (DOLLARS IN THOUSANDS)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
REVENUE RECOGNITION

    Revenues are recognized when earned and the amounts can be reasonably
estimated on the accrual basis of accounting. Rental income from operating
leases is recognized on a straight-line basis over the life of the lease
agreements.

INCOME TAXES

    As limited liability companies, the Company and its consolidated
subsidiaries are deemed to be partnerships for federal and state income tax
purposes. As such, no provision or credit has been made in the accompanying
financial statements for federal or state income taxes since the Members are
required to include their respective share of profits or losses in their own tax
returns.

3. MORTGAGE NOTE PAYABLE

    On April 14, 2000, The Athenaeum Portfolio was refinanced with $175,000 of
mortgage debt. The previous mortgage was treated as extinguished and an
extraordinary loss of approximately $10,298 was incurred for the write-off of
related transaction costs and the unamortized deferred financing costs. On
June 7, 2000, simultaneously with the sale of some of the assets in The
Athenaeum Portfolio, the debt was paid down by $50,940. On December 28, 2000, in
conjunction with the sale of the remaining assets in The Athenaeum Portfolio,
the buyer assumed the outstanding debt.

4. TRANSACTIONS WITH RELATED PARTIES

    Beacon Capital Partners, L.P. advanced $117,014 to the Company to fund the
acquisition of the certain land and buildings in Cambridge, Massachusetts owned
by One Kendall LLC and Cambridge Athenaeum LLC. On August 28, 1998, this advance
was repaid with funds generated by equity contributions from the Members.

                                      F-32
<PAGE>
                         REPORT OF INDEPENDENT AUDITORS

To the Partners of

Beacon Capital Strategic Partners, L.P.

    We have audited the accompanying balance sheets of Beacon Capital Strategic
Partners, L.P. as of December 31, 2000 and 1999, and the related statements of
operations, partners' equity (deficit), and cash flows for the year ended
December 31, 2000 and for the period from October 1, 1999 (inception) to
December 31, 1999. Our audit also included the financial statement schedule
listed in the Index at Item 14(a). These financial statements and schedule are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements and schedule based on our
audits.

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

    In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Beacon Capital Strategic
Partners, L.P. at December 31, 2000 and 1999, and the results of its operations
and its cash flows for the year ended December 31, 2000 and for the period from
October 1, 1999 (inception) to December 31, 1999, in conformity with accounting
principles generally accepted in the United States. Also, in our opinion, the
related financial statement schedule, when considered in relation to the basic
financial statements taken as a whole, presents fairly in all material respects
the information set forth therein.

                                          [LOGO]

Boston, Massachusetts
January 24, 2001

                                      F-33
<PAGE>
                    BEACON CAPITAL STRATEGIC PARTNERS, L.P.

                                 BALANCE SHEETS

                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                              DECEMBER 31, 2000   DECEMBER 31, 1999
                                                              -----------------   -----------------
<S>                                                           <C>                 <C>
ASSETS
Real Estate:
  Land......................................................      $  8,943             $10,094
  Buildings, improvements and equipment.....................        63,569              30,191
                                                                  --------             -------
                                                                    72,512              40,285
  Less accumulated depreciation.............................           590                  --
                                                                  --------             -------
                                                                    71,922              40,285
Deferred financing and leasing costs, net of accumulated
  amortization of $461 and $82, respectively................           702                 121
Cash and cash equivalents...................................         2,059                 291
Restricted cash.............................................        15,894                  --
Accounts receivable, net....................................           544                   3
Deferred rent receivable....................................           152                  --
Other assets................................................         5,553                  12
                                                                  --------             -------
  Total assets..............................................      $ 96,826             $40,712
                                                                  ========             =======
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Liabilities:
  Credit facility...........................................      $ 57,500             $40,180
  Note payable..............................................         4,567                  --
  Accounts payable and accrued expenses.....................        17,519               1,598
  Deferred gain on sale of real estate......................         7,960                  --
                                                                  --------             -------
    Total liabilities.......................................        87,546              41,778
                                                                  --------             -------
Commitments and contingencies...............................            --                  --

Partners' equity(deficit):
  Partners' deficit.........................................       (60,153)             (1,000)
  Cumulative net income (deficit)...........................        69,433                 (66)
                                                                  --------             -------
    Total partners' equity (deficit)........................         9,280              (1,066)
                                                                  --------             -------
    Total liabilities and partners' equity (deficit)........      $ 96,826             $40,712
                                                                  ========             =======
</TABLE>

SEE ACCOMPANYING NOTES.

                                      F-34
<PAGE>
                    BEACON CAPITAL STRATEGIC PARTNERS, L.P.

                            STATEMENTS OF OPERATIONS

                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                  FOR THE PERIOD FROM
                                                                                    OCTOBER 1, 1999
                                                                 YEAR ENDED         (INCEPTION) TO
                                                              DECEMBER 31, 2000    DECEMBER 31, 1999
                                                              -----------------   -------------------
<S>                                                           <C>                 <C>
Revenues:
  Rental income.............................................       $ 1,664                $ --
  Interest income...........................................           335                   6
                                                                   -------                ----
    Total revenues..........................................         1,999                   6
                                                                   -------                ----
Expenses:
  Property operating........................................           342                  --
  Real estate taxes.........................................           276                  --
  General and administrative................................           678                  66
  Interest expense..........................................         1,924                   6
  Depreciation and amortization.............................           852                  --
                                                                   -------                ----
    Total expenses..........................................         4,072                  72
                                                                   -------                ----
Loss before gain on sale of real estate and extraordinary
  item......................................................        (2,073)                (66)
Gain on sale of real estate.................................        71,643                  --
                                                                   -------                ----
Income (loss) before extraordinary item.....................        69,570                 (66)
Extraordinary item..........................................           (71)                 --
                                                                   -------                ----
  Net income (loss).........................................       $69,499                $(66)
                                                                   =======                ====
</TABLE>

SEE ACCOMPANYING NOTES.

                                      F-35
<PAGE>
                    BEACON CAPITAL STRATEGIC PARTNERS, L.P.

                    STATEMENTS OF PARTNERS' EQUITY (DEFICIT)

    FOR THE YEAR ENDED DECEMBER 31, 2000 AND THE PERIOD FROM OCTOBER 1, 1999
                                  (INCEPTION)
                              TO DECEMBER 31, 1999

                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                              GENERAL    LIMITED
                                                              PARTNER    PARTNERS    TOTAL
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
Offering costs..............................................  $    (1)   $  (999)   $(1,000)
Net loss....................................................       --        (66)       (66)
                                                              -------    -------    -------
Balance at December 31, 1999................................       (1)    (1,065)    (1,066)

Net income..................................................   19,039     50,460     69,499
Contributions...............................................       11     15,989     16,000
Distributions...............................................  (19,153)   (56,000)   (75,153)
                                                              -------    -------    -------
Balance at December 31, 2000................................  $  (104)   $ 9,384    $ 9,280
                                                              =======    =======    =======
</TABLE>

SEE ACCOMPANYING NOTES.

                                      F-36
<PAGE>
                    BEACON CAPITAL STRATEGIC PARTNERS, L.P.

                            STATEMENTS OF CASH FLOWS

                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                  FOR THE PERIOD FROM
                                                                                    OCTOBER 1, 1999
                                                                 YEAR ENDED         (INCEPTION) TO
                                                              DECEMBER 31, 2000    DECEMBER 31, 1999
                                                              -----------------   -------------------
<S>                                                           <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss).........................................      $ 69,499              $   (66)
  Adjustments to reconcile net income (loss) to net cash
    (used) provided by operating activities:
    Depreciation............................................           590                   --
    Amortization............................................           262                   --
    Extraordinary item......................................            71                   --
    Gain on sale of real estate.............................       (71,643)                  --
  (Decrease) increase in cash arising from changes in
    operating assets and liabilities:
    Restricted cash.........................................       (15,894)                  --
    Accounts receivable.....................................          (541)                  (3)
    Deferred rent receivable................................          (152)                  --
    Other assets............................................           (11)                 (12)
    Accounts payable and accrued expenses...................        15,921                  598
                                                                  --------              -------
      Net cash (used) provided by operating activities......        (1,898)                 517
                                                                  --------              -------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Acquisition deposits and deferred costs...................        (5,530)                  --
  Real estate asset acquisitions and improvements...........       (82,327)             (40,202)
  Payment of deferred leasing costs.........................          (429)                  --
  Proceeds from sale of real estate.........................       130,000                   --
                                                                  --------              -------
      Net cash provided (used) by investing activities......        41,714              (40,202)
                                                                  --------              -------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from credit facility.............................        61,820               40,180
  Repayment on credit facility..............................       (44,500)                  --
  Proceeds from note payable................................         4,567                   --
  Payment of deferred financing costs.......................          (782)                (204)
  Contributions received from partners......................        16,000                   --
  Distribution payments to partners.........................       (75,153)                  --
                                                                  --------              -------
      Net cash (used) provided by financing activities......       (38,048)              39,976
                                                                  --------              -------
Net increase in cash and cash equivalents...................         1,768                  291
Cash and cash equivalents, beginning of period..............           291                   --
                                                                  --------              -------
Cash and cash equivalents, end of period....................      $  2,059              $   291
                                                                  ========              =======
SUPPLEMENTAL DISCLOSURE:
Cash paid for interest......................................      $  3,870              $   427
</TABLE>

SEE ACCOMPANYING NOTES.

                                      F-37
<PAGE>
                    BEACON CAPITAL STRATEGIC PARTNERS, L.P.

                         NOTES TO FINANCIAL STATEMENTS

                               DECEMBER 31, 2000

                             (DOLLARS IN THOUSANDS)

1.  ORGANIZATION OF THE PARTNERSHIP

    Beacon Capital Strategic Partners, L.P. (the "Partnership") was formed on
October 1, 1999. On that date, the Partnership completed an initial closing of
equity commitments in the amount of approximately $116,667. Subsequent to
October 1, 1999, the Partnership completed additional closings and as of
March 28, 2000 (the Partnership's final closing date), equity commitments
totaled $287,500. BCP Strategic Partners, LLC, an affiliate of Beacon Capital
Partners, L.P., is the General Partner; the limited partners consist of various
endowments, foundations, pension funds, and other institutional investors. As of
December 31, 2000, $16,000 of the committed capital had been contributed.

    The Partnership will terminate by March 2007, unless the term is extended
for up to twelve months, in accordance with the Partnership Agreement. The
purpose of the Partnership is to engage in the investment and operation of real
estate related assets.

2.  SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

    The accompanying financial statements are prepared in accordance with
accounting principles generally accepted in the United States.

USE OF ESTIMATES

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

REAL ESTATE

    Buildings are recorded at cost and are depreciated on the straight-line
method over their estimated useful life of forty years. The cost of buildings
includes the purchase price of the property, capitalized interest and
amortization, legal fees, and other third party acquisition and development
costs. For the year and period ended December 31, 2000 and 1999, the Partnership
capitalized interest of $2,040 and $453, respectively and capitalized
amortization of $297 and $82, respectively.

    The Partnership measures impairment in accordance with FASB Statement
No. 121, ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED
ASSETS TO BE DISPOSED OF, which requires impairment losses to be recorded on
specific long-lived assets used in operations where indicators of impairment are
present and the undiscounted cash flows estimated to be generated by those
assets are less than the assets' carrying value.

    Furniture, fixtures and equipment are depreciated using the stright-line
method over their expected useful life of three to ten years.

                                      F-38
<PAGE>
                    BEACON CAPITAL STRATEGIC PARTNERS, L.P.

                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                               DECEMBER 31, 2000

                             (DOLLARS IN THOUSANDS)

2.  SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
DEFERRED FINANCING AND LEASING COSTS

    Deferred financing costs are fees and costs incurred to obtain financing and
are being amortized over the term of the loan. Deferred leasing costs are fees
and costs incurred in the successful negotiation of leases, including brokerage,
legal and other costs, and are being amortized on a straight-line basis over the
terms of the respective leases.

CASH AND CASH EQUIVALENTS

    Cash and cash equivalents consist of short-term, highly liquid assets with
original maturities of three months or less from the date of purchase.

RESTRICTED CASH

    Restricted cash consists of funds held in escrow as required by the 233
Fremont Street sale agreement pending completion of the property's
redevelopment.

FAIR VALUE OF FINANCIAL INSTRUMENTS

    The Partnership is required to disclose the fair values of financial
instruments for which it is practicable to estimate such fair value. The fair
values of financial instruments are estimated based upon market conditions and
perceived risks at December 31, 2000 and require varying degrees of management
judgement. The fair values of financial instruments presented may not be
indicative of amounts the Partnership could realize on the disposition of the
financial instruments.

    Cash, cash equivalents and restricted cash are carried at an amount, which
due to their nature, approximate fair value.

    The carrying amounts of borrowings under the Partnership's credit facility
and note payable, which bear interest at variable rates and mature in 2001 and
2002, respectively, approximate their fair value.

REVENUE RECOGNITION

    Revenues are recognized when earned and the amounts can be reasonably
estimated on the accrual basis of accounting. Rental income from operating
leases is recognized on a straight-line basis over the life of lease agreements.

INCOME TAXES

    Income taxes are neither payable nor provided for the Partnership.
Partnership net income or loss is allocated to the partners and may be subject
to tax depending upon the nature and character of the income or expense and the
tax status of the partner.

3.  REAL ESTATE SALES

    On June 14, 2000, the Partnership sold 233 Fremont Street, a property
located in San Francisco, California. The property, which is currently
undergoing redevelopment, was sold for approximately

                                      F-39
<PAGE>
                    BEACON CAPITAL STRATEGIC PARTNERS, L.P.

                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                               DECEMBER 31, 2000

                             (DOLLARS IN THOUSANDS)

3.  REAL ESTATE SALES (CONTINUED)
$145,894, including approximately $15,894 held in escrow pending completion of
the property's redevelopment. The Partnership will continue to oversee the
redevelopment and the buyer will fund the remaining redevelopment costs. The
redevelopment is scheduled to be completed in the first quarter of 2001. As of
December 31, 2000, the Partnership recognized a gain of approximately $71,643.
Pursuant to the applicable accounting rules, an additional gain estimated at
approximately $7,960 has been deferred and is expected to be realized in 2001.

4.  CREDIT FACILITY

    On October 8, 1999, the Partnership entered into a $42,000 revolving credit
agreement (the "Credit Agreement") with Bank of America, N.A. On March 17, 2000,
the Partnership replaced the Credit Agreement with a $137,500 secured revolving
credit facility (the "Credit Facility") from Bank of America, N.A. and a bank
syndicate group. At that time, the Partnership recorded an extraordinary item of
approximately $71 for the write-off of fees and costs to establish the Credit
Agreement. The Credit Facility matures on June 30, 2001 and bears interest at a
rate of LIBOR plus 87.5 basis points. At December 31, 2000, the balance
outstanding on the Credit Facility was $57,500 and the weighted average interest
rate was 7.46%. The Credit Facility requires monthly payments of interest only,
is fully recourse to the Partnership, and is secured by, among other things, a
pledge and assignment of all uncalled capital commitments of the partners. The
Partnership's ability to borrow under the Credit Facility is subject to its
ongoing compliance with a number of financial and other covenants.

5.  NOTE PAYABLE

    On July 10, 2000, Cape Court Property LLC, an affiliate of the Partnership,
obtained a construction loan in the amount of approximately $8,135 to finance
the balance of the development costs for the Beaumeade Technology Campus. The
loan, which matures on July 10, 2002, contains options to extend for two
additional twelve month periods if certain conditions are met. The loan
initially bears interest at the base rate or the LIBOR rate plus 200 basis
points and may decrease when the project achieves certain leasing thresholds. At
December 31, 2000, the balance outstanding was $4,567 and the weighted average
interest rate was 8.725%. The Partnership has provided a completion guarantee.

6.  DUE TO GENERAL PARTNER

    Included in accounts payable and accrued expenses at December 31, 1999 was
$1,000 payable to an affiliate of the General Partner for expenses incurred in
the formation of the entity, which were reimbursable to the General Partner in
accordance with the provisions of the Limited Partnership Agreement. This
liability was paid in 2000.

7.  THE PARTNERSHIP AGREEMENT

ALLOCATION OF INCOME AND LOSS

    Net income shall be allocated as follows:

    (i) First, to reverse prior allocations of net loss,

                                      F-40
<PAGE>
                    BEACON CAPITAL STRATEGIC PARTNERS, L.P.

                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                               DECEMBER 31, 2000

                             (DOLLARS IN THOUSANDS)

7.  THE PARTNERSHIP AGREEMENT (CONTINUED)
    (ii) Second, to the partners in proportion to their capital commitments, an
         amount equal to a cumulative compounded annual preferred return of 10%,

   (iii) Third, further allocations to the partners are divided between the
         limited partners and the General Partner as follows:

       (a) 50% to the limited partners and 50% to the General Partner until the
           General Partner has been allocated an amount equal to 20% of the
           allocations of cumulative net income to the limited partners in
           excess of net losses, then

       (b) 80% to the limited partners and 20% to the General Partner.

    Net losses shall be allocated first to reverse prior allocations of net
income under tier (iii) above and then to partners in proportion to their
capital commitments.

DISTRIBUTIONS

    Distributable cash from operations and from the disposition of real estate
is distributed as follows:

    (i) First, to the partners in proportion to their capital commitments, an
        amount equal to a return of their capital contributions and a cumulative
        compounded annual preferred return of 10%,

    (ii) Second, further distributions to the partners are divided between the
         limited partners and the General Partner as follows:

       (a) 50% to the limited partners and 50% to the General Partner until the
           General Partner has received an amount equal to 20% of the
           distributions made to the limited partners in excess of the limited
           partner's capital contribution, then

       (b) 80% to the limited partners and 20% to the General Partner.

SPECIAL ALLOCATIONS

    The General Partner is entitled to an allocation of income and a quarterly
special distribution of cash (the "Quarterly GP Priority Distribution Amount").
During the specified investment period, the Quarterly GP Priority Distribution
Amount is based upon the partners' capital commitments. After the investment
period, the Quarterly GP Priority Distribution Amount is based upon the
unreturned capital contributions of the partners. For the year ended
December 31, 2000, income equal to the Quarterly GP Priority Distribution Amount
of $5,153 was allocated and paid to the General Partner, including $1,030
attributable to the period from October 1, 1999 to December 31, 1999.

                                      F-41
<PAGE>
                    BEACON CAPITAL STRATEGIC PARTNERS, L.P.

                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                               DECEMBER 31, 2000

                             (DOLLARS IN THOUSANDS)

8.  LEASES

    Minimum future rentals under operating leases in effect at December 31, 2000
are summarized as follows:

<TABLE>
<S>                                          <C>
2001.......................................  $ 2,147
2002.......................................    1,232
2003.......................................    1,098
2004.......................................      985
2005.......................................      872
Thereafter.................................   17,319
                                             -------
Total......................................  $23,653
                                             =======
</TABLE>

    Terms of leases range from one to twenty years and in certain cases provide
for operating expense reimbursement, real estate tax escalations and increases
in minimum rents. The net book value of property on lease is $49,030 at
December 31, 2000.

                                      F-42
<PAGE>
                                  SCHEDULE III
                         BEACON CAPITAL PARTNERS, INC.
                    REAL ESTATE AND ACCUMULATED DEPRECIATION
                               DECEMBER 31, 2000
                             (DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                        COSTS CAPITALIZED         GROSS AMOUNT AT WHIGROS
                                                                          SUBSEQUENT TO                  CARRIED
                                               INITIAL COST                ACQUISITION              AT CLOSE OF PERIOAT C
                                         ------------------------   --------------------------   ------------------------
                                                    BUILDINGS AND                BUILDINGS AND              BUILDINGS AND
DESCRIPTION              ENCUMBRANCES      LAND     IMPROVEMENTS       LAND      IMPROVEMENTS      LAND     IMPROVEMENTS
-----------              -------------   --------   -------------   ----------   -------------   --------   -------------
<S>                      <C>             <C>        <C>             <C>          <C>             <C>        <C>
PROPERTIES
Fort Point Place, South
  Boston, MA...........    $ 12,500      $ 1,088      $ 24,011      $      --       $23,336      $ 1,088      $ 17,713
Technology Square & The
  Draper Building,
  Cambridge, MA........      78,732       36,162        87,172             --        69,929       19,244       128,131
Dallas Office and
  Industrial Portfolio,
  Dallas, TX...........      37,395       14,932        77,083             --         4,999       14,932        82,082
                           --------      -------      --------      ----------      -------      -------      --------
Total..................    $128,627      $52,182      $188,266      $      --       $98,264      $35,264      $227,926
                           ========      =======      ========      ==========      =======      =======      ========
                                                                                                                    (2)

<CAPTION>
                                GROSS AMOUNT AT WHICH
                                    CARRIED                                                  LIFE ON WHICH
                                AT CLOSE OF PERIOD                                          DEPRECIATION IN
                                ---------------                     DATE OF                  LATEST INCOME
                                 AND              ACCUMULATED    CONSTRUCTION/     DATE        STATEMENT
DESCRIPTION                     NTS     TOTAL     DEPRECIATION    RENOVATION     ACQUIRED     IS COMPUTED
-----------                     ----   --------   ------------   -------------   --------   ---------------
<S>                                    <C>        <C>            <C>             <C>        <C>
PROPERTIES
Fort Point Place, South
  Boston, MA...........                $ 18,801     $   388        1910/2000     7/13/99          (1)
Technology Square & The
  Draper Building,
  Cambridge, MA........                 147,375       6,242        1965/2000     6/24/98          (1)
Dallas Office and
  Industrial Portfolio,
  Dallas, TX...........                  97,014       5,561        1975/1996      7/1/98          (1)
                                       --------     -------
Total..................                $263,190     $12,191
                                       ========     =======
                                             (2)         (2)
</TABLE>

(1) Depreciaton of building, improvements and personal property is calculated
    over the following useful lives using the straight-line method.

   Buildings and improvements--40 years

   Tenant improvements--over the terms of the related leases

   Personal property--3 to 10 years

(2) Included in the BCP financial statements are corporate equipment and
    improvements which are not included in this schedule.

The aggregate cost for federal income tax purposes was approximately $155,154,
$224,111 and $215,542 at December 31, 1998, 1999 and 2000, respectively.

The changes in total real estate assets and accumulated depreciation for the
Period January 21, 1998 (Inception) to December 31, 1998 and for the Years Ended
December 31, 1999 and 2000 are as follows:
<TABLE>
<CAPTION>
                       REAL ESTATE ASSETS
----------------------------------------------------------------
<S>                                            <C>
Balance, 1/21/98 (Inception).................      $     --
1/21/98 (Inception) - 12/31/98 Acquisitions,
  construction costs and improvements........       216,474
                                                   --------
Balance, 12/31/98............................       216,474
1999 Acquisitions, construction costs and
  improvements...............................        51,990
                                                   --------
Balance 12/31/99.............................       268,464
2000 Construction costs and improvements.....        70,248
2000 Dispositions............................       (75,522)
                                                   --------
Balance 12/31/00.............................      $263,190
                                                   ========

<CAPTION>
                       REAL ESTATE ASSETS                          ACCUMULATED DEPRECIATION
---------------------------------------------  ----------------------------------------------------------------
<S>                                            <C>                                            <C>
Balance, 1/21/98 (Inception).................  Balance, 1/21/98 (Inception).................      $     --
1/21/98 (Inception) - 12/31/98 Acquisitions,   1/21/98 (Inception) - 12/31/98
  construction costs and improvements........  Depreciation.................................         2,116
                                                                                                  --------
Balance, 12/31/98............................  Balance, 12/31/98............................         2,116
1999 Acquisitions, construction costs and
  improvements...............................  1999 Depreciation............................         4,690
                                                                                                  --------
Balance 12/31/99.............................  Balance 12/31/99.............................         6,806
2000 Construction costs and improvements.....  2000 Depreciation............................         6,533
2000 Dispositions............................  2000 Dispositions write-offs.................        (1,148)
                                                                                                  --------
Balance 12/31/00.............................  Balance 12/31/00.............................      $ 12,191
                                                                                                  ========
</TABLE>

                                      S-1
<PAGE>
                                  SCHEDULE III
                             BEACON/PW KENDALL LLC
                    REAL ESTATE AND ACCUMULATED DEPRECIATION
                               DECEMBER 31, 2000
                             (DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                                   COSTS CAPITALIZED
                                                                                     SUBSEQUENT TO
                                                          INITIAL COST                ACQUISITION
                                                    ------------------------   --------------------------
                                                               BUILDINGS AND                BUILDINGS AND
DESCRIPTION                          ENCUMBRANCES     LAND     IMPROVEMENTS       LAND      IMPROVEMENTS
-----------                          ------------   --------   -------------   ----------   -------------
<S>                                  <C>            <C>        <C>             <C>          <C>
PROPERTIES
The Athenaeum Portfolio, Cambridge,
  MA...............................    $    --      $35,773       $159,729     $      --        $3,036
                                       =======      =======       ========     ==========       ======

<CAPTION>

                                        GROSS AMOUNT AT WHICH CARRIED                                                 LIFE ON WHICH
                                             AT CLOSE OF PERIOD                                                      DEPRECIATION IN
                                     -----------------------------------                     DATE OF                  LATEST INCOME
                                                BUILDINGS AND              ACCUMULATED    CONSTRUCTION/     DATE        STATEMENT
DESCRIPTION                            LAND     IMPROVEMENTS     TOTAL     DEPRECIATION    RENOVATION     ACQUIRED     IS COMPUTED
-----------                          --------   -------------   --------   ------------   -------------   --------   ---------------
<S>                                  <C>        <C>             <C>        <C>            <C>             <C>        <C>
PROPERTIES
The Athenaeum Portfolio, Cambridge,
  MA...............................  $    --       $     --     $     --      $   --        1885/1994      5/1/98          (1)
                                     =======       ========     ========      ======
</TABLE>

(1) Depreciaton of building, improvements and personal property is calculated
    over the following useful lives using the straight line method.
   Buildings and improvements--40 years
   Tenant improvements--over the terms of the related leases
   Personal property--3 to 10 years

The aggregate cost for federal income tax purposes was approximately $195,816,
$198,108 and $0 at December 31, 1998, 1999 and 2000, respectively.

The changes in total real estate assets and accumulated depreciation for the
Period April 16, 1998 (Inception) to December 31, 1998 and for the Years Ended
December 31, 1999 and 2000 are as follows:

<TABLE>
<CAPTION>
                      REAL ESTATE ASSETS                                                ACCUMULATED DEPRECIATION
--------------------------------------------------------------       --------------------------------------------------------------
<S>                                            <C>                   <C>                                            <C>
Balance 4/16/98 (Inception)..................     $      --          Balance, 4/16/98 (Inception).................     $      --
4/16/98 (Inception) - 12/31/98                                       4/16/98 (Inception) - 12/31/98
  Acquisitions and improvements..............       160,043          Depreciation.................................         2,668
                                                  ---------                                                            ---------
Balance 12/31/98.............................       160,043          Balance, 12/31/98............................         2,668
1999 Improvements............................         2,292          1999 Depreciation............................         4,062
                                                  ---------                                                            ---------
Balance 12/31/99.............................       162,335          Balance 12/31/99.............................         6,730
2000 Improvements............................           430          2000 Depreciation............................         3,832
2000 Dispositions............................      (162,765)         2000 Dispositions write-offs.................       (10,562)
                                                  ---------                                                            ---------
Balance 12/31/00.............................     $      --          Balance 12/31/00.............................     $      --
                                                  =========                                                            =========
</TABLE>

                                      S-2
<PAGE>
                                  SCHEDULE III
                    BEACON CAPITAL STRATEGIC PARTNERS, L.P.
                    REAL ESTATE AND ACCUMULATED DEPRECIATION
                               DECEMBER 31, 2000
                             (DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                        COSTS CAPITALIZED         GROSS AMOUNT AT WHIGROS
                                                                          SUBSEQUENT TO                  CARRIED
                                               INITIAL COST                ACQUISITION              AT CLOSE OF PERIOAT C
                                         ------------------------   --------------------------   ------------------------
                                                    BUILDINGS AND                BUILDINGS AND              BUILDINGS AND
DESCRIPTION              ENCUMBRANCES      LAND     IMPROVEMENTS       LAND      IMPROVEMENTS      LAND     IMPROVEMENTS
-----------              -------------   --------   -------------   ----------   -------------   --------   -------------
<S>                      <C>             <C>        <C>             <C>          <C>             <C>        <C>
PROPERTIES
Boston Midway
  Portfolio,
  South Boston, MA.....    $     --      $ 3,984      $ 41,374      $      --       $ 1,118      $ 3,984      $ 42,492
Beaumeade Technology
  Campus,
  Loudoun County, VA...       4,567        2,458            --              7         7,830        2,465         7,830
233 Fremont Street,
  San Francisco, CA....          --        7,633        27,256             --        15,302           --            --
Von Karman Property,
  Irvine, CA...........          --        2,494        13,221             --            26        2,494        13,247
                           --------      -------      --------      ----------      -------      -------      --------
Total..................    $  4,567      $16,569      $ 81,851      $       7       $24,276      $ 8,943      $ 63,569
                           ========      =======      ========      ==========      =======      =======      ========

<CAPTION>
                                GROSS AMOUNT AT WHICH
                                    CARRIED                                                  LIFE ON WHICH
                                AT CLOSE OF PERIOD                                          DEPRECIATION IN
                                ---------------                     DATE OF                  LATEST INCOME
                                 AND              ACCUMULATED    CONSTRUCTION/     DATE        STATEMENT
DESCRIPTION                     NTS     TOTAL     DEPRECIATION    RENOVATION     ACQUIRED     IS COMPUTED
-----------                     ----   --------   ------------   -------------   --------   ---------------
<S>                                    <C>        <C>            <C>             <C>        <C>
PROPERTIES
Boston Midway
  Portfolio,
  South Boston, MA.....                $ 46,476      $  552      early 1900's       6/00          (1)
Beaumeade Technology
  Campus,
  Loudoun County, VA...                  10,295          38             2000     11/3/99          (1)
233 Fremont Street,
  San Francisco, CA....                      --          --        1928/2000     10/25/99         (1)
Von Karman Property,
  Irvine, CA...........                  15,741          --             1974     12/28/00         (1)
                                       --------      ------
Total..................                $ 72,512      $  590
                                       ========      ======
</TABLE>

(1) Depreciaton of building, improvements and personal property is calculated
    over the following useful lives using the straight-line method.

   Buildings and improvements--40 years

   Tenant improvements--over the terms of the related leases

   Personal property--3 to 10 years

The aggregate cost for federal income tax purposes was approximately $30,191 and
$63,569 at December 31, 1999 and December 31, 2000, respectively.

The changes in total real estate assets and accumulated depreciation for the
Period October 1, 1999 (Inception) to December 31, 1999 and for the Year Ended
December 31, 2000 are as follows:
<TABLE>
<CAPTION>
                       REAL ESTATE ASSETS
----------------------------------------------------------------
<S>                                            <C>
Balance, 10/1/99 (Inception).................      $     --
10/1/99 (Inception) - 12/31/99 Acquisitions,
  construction costs and improvements........        40,285
                                                   --------
Balance, 12/31/99............................        40,285
2000 Acquisitions, construction costs and
  improvements...............................        82,418
2000 Disposition.............................       (50,191)
                                                   --------
Balance 12/31/00.............................      $ 72,512
                                                   ========

<CAPTION>
                       REAL ESTATE ASSETS                          ACCUMULATED DEPRECIATION
---------------------------------------------  ----------------------------------------------------------------
<S>                                            <C>                                            <C>
Balance, 10/1/99 (Inception).................  Balance, 10/1/99 (Inception).................      $     --
10/1/99 (Inception) - 12/31/99 Acquisitions,   10/1/99 (Inception) - 12/31/99
  construction costs and improvements........  Depreciation.................................            --
                                                                                                  --------
Balance, 12/31/99............................  Balance, 12/31/99............................            --
2000 Acquisitions, construction costs and
  improvements...............................  2000 Depreciation............................           590
2000 Disposition.............................
                                                                                                  --------
Balance 12/31/00.............................  Balance 12/31/00.............................      $    590
                                                                                                  ========
</TABLE>

                                      S-3
<PAGE>
                                 EXHIBIT INDEX

    Listed and indexed below are all Exhibits filed as part of this Report.
Certain Exhibits are incorporated by reference to documents previously filed by
the Company with the Securities and Exchange Commission pursuant to Rule 12b-32
under the Securities Exchange Act of 1934, as amended.

<TABLE>
<CAPTION>
EXHIBIT
NO.                                             DESCRIPTION
-------                                         -----------
<C>                     <S>
         1.1            Placement Agent Agreement between NationsBanc Montgomery
                        Securities LLC and the Company, as amended.(1)
         2.1            Agreement and Plan of Merger by and between the Predecessor
                        and the Company.(1)
         3.1            Articles of Incorporation.(1)
         3.2            Certificate of Correction to Articles of Incorporation.(1)
         3.3            Amended and Restated By-laws.(1)
         3.4            Amended and Restated Agreement of Limited Partnership of
                        Beacon Capital Partners, L.P.
         4.1            Specimen certificate for shares of Common Stock, $.01 par
                        value, of the Company.(1)
        10.1            Employment and Non-Competition Agreement for Alan M.
                        Leventhal.(1)
        10.2            Employment and Non-Competition Agreement for Lionel P.
                        Fortin.(1)
        10.3            Beacon Capital Partners 1998 Stock Option and Incentive
                        Plan.(1)
        10.4            Form of Indemnification Agreement between the Registrant and
                        its directors and executive officers.(1)
        10.5            Purchase and Sale Contract between Eastern Properties Master
                        LLC and the Registrant.(1)
        10.6            Contract of Sale for Bank One Building.(2)
        10.7            Contract of Sale for 6500 Greenville Building.(2)
        10.8            Contract of Sale for North Creek II Building.(2)
        10.9            Contract of Sale for One Glen Lakes Building.(2)
        10.10           Contract of Sale for Crosspoint Atrium Building.(2)
        10.11           Contract of Sale for Brandywine Place Building.(2)
        10.12           Contract of Sale for Forest Abrams Building.(2)
        10.13           Contract of Sale for Sherman Tech Building.(2)
        10.14           Contract of Sale for Venture Tech Building.(2)
        10.15           Contract of Sale for Plaza at Walnut Building.(2)
        10.16           Contract of Sale for Richardson BC Building.(2)
        10.17           Contract of Sale for Park North SC Building.(2)
        10.18           Contract of Sale for TI Business Center.(2)
        10.19           Contract of Sale for Richardson CC Building.(2)
        21.1            Subsidiaries of the Registrant.
        23.             Consent of Ernst & Young LLP.
        24.             Power of Attorney.(1)
</TABLE>

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

(1) Previously filed as an exhibit to the Company's Registration Statement on
    Form S-11 (SEC File No. 333-56937) filed with the Commission on June 16,
    1998.

(2) Previously filed as an exhibit to Amendment No. 1 to the Company's
    Registration Statement on Form S-11 (SEC File No. 333-56937) filed with the
    Commission on August 21, 1998.