<PAGE>
 
                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549
                                   FORM 10-Q

[X]       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                      SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 1997

                                       OR

[_]       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                      SECURITIES AND EXCHANGE ACT OF 1934

            For the Transition Period from __________ to __________

                         Commission File No. 011-13254
                                             ---------

                               WEEKS CORPORATION
            (Exact name of Registrant as specified in its Charter)

             Georgia                               58-1525322
             -------                               ----------
    (State of Incorporation)          (I.R.S. Employer Identification No.)


                   4497 Park Drive, Norcross, Georgia 30093
         (Address of principal executive offices, including zip code)

                                 (770)923-4076
             (Registrant's telephone number, including area code)

                                      N/A
                                      ---
  (Former name, former address and former fiscal year, if changed since last
                                    report)

     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 such shorter period that the Registrant
was required to file such reports) and (2) has been subject to such filing
requirements for the past ninety (90) days.    (X) YES  (  ) NO

     Indicate the number of shares outstanding of each of the issuer's classes
of common stock as of the latest practicable date (17,683,626 shares of common
stock outstanding as of August 8, 1997)

                                       1
<PAGE>
 
<TABLE>
<CAPTION>
INDEX                                                                                        PAGE
==================================================================================================
<S>                                                                                          <C>
PART I.   FINANCIAL INFORMATION
--------------------------------------------------------------------------------------------------

          ITEM 1.  FINANCIAL STATEMENTS
                   Consolidated Condensed Balance Sheets
                   at June 30, 1997 and December 31, 1996...................................     3

                   Consolidated Condensed Statements of Operations
                   for the three and six months ended June 30, 1997 and 1996................     4

                   Consolidated Condensed Statements of Cash Flows
                   for the six months ended June 30, 1997 and 1996..........................     5

                   Notes to Consolidated Condensed Financial
                   Statements...............................................................     6

          ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                   FINANCIAL CONDITION AND RESULTS OF OPERATIONS............................    15

PART II.           OTHER INFORMATION
--------------------------------------------------------------------------------------------------

          ITEM 2.  CHANGES IN SECURITIES....................................................    32

       ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS......................    32
       ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K.........................................    33

SIGNATURES..................................................................................    34
--------------------------------------------------------------------------------------------------
</TABLE>

                                       2
<PAGE>
 
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS

                               WEEKS CORPORATION
                     CONSOLIDATED CONDENSED BALANCE SHEETS

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
                                                                                  June 30,   December 31,
(Unaudited; in thousands, except per share amounts)                                 1997         1996
=========================================================================================================
<S>                                                                               <C>        <C>
ASSETS
Real estate assets
  Land                                                                            $ 88,644       $ 77,233
  Buildings and improvements                                                       516,266        450,002
  Accumulated depreciation                                                         (51,031)       (41,469)
---------------------------------------------------------------------------------------------------------
     Operating real estate assets                                                  553,879        485,766
---------------------------------------------------------------------------------------------------------
  Developments in progress                                                          73,236         56,571
  Land held for future development                                                   9,763          9,035
---------------------------------------------------------------------------------------------------------
     Net real estate assets                                                        636,878        551,372
---------------------------------------------------------------------------------------------------------
Real estate loans                                                                   16,112          9,455
Cash and cash equivalents                                                              124            260
Direct financing lease, net                                                          5,075          5,136
Receivables                                                                          7,427          5,858
Deferred costs, net                                                                 11,324         10,286
Investments in and notes receivable
  from unconsolidated entities                                                       8,909          7,760
Other assets                                                                         2,346          1,722
---------------------------------------------------------------------------------------------------------
     TOTAL ASSETS                                                                 $688,195       $591,849
---------------------------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Mortgage notes payable                                                            $169,056       $197,575
Credit facility borrowings                                                         101,790         99,400
Accounts payable and accrued expenses                                               13,910          9,970
Other liabilities                                                                    3,873          2,963
---------------------------------------------------------------------------------------------------------
     Total liabilities                                                             288,629        309,908
---------------------------------------------------------------------------------------------------------
Minority interests in Operating Partnership                                         88,863         68,230
---------------------------------------------------------------------------------------------------------
Commitments and contingencies
Shareholders' equity
  Common Stock, $0.01 par value; 100,000,000 shares authorized;
     17,682,788 and 14,048,593 shares issued and outstanding
     at June 30, 1997 and December 31, 1996, respectively                              177            140
  Preferred Stock, $0.01 par value; 20,000,000 shares
     authorized; none issued                                                            --             --
  Additional paid-in capital                                                       375,638        267,634
  Deferred compensation                                                             (1,005)            --
  Accumulated deficit                                                              (64,107)       (54,063)
---------------------------------------------------------------------------------------------------------
     Total shareholders' equity                                                    310,703        213,711
---------------------------------------------------------------------------------------------------------
     TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                   $688,195       $591,849
---------------------------------------------------------------------------------------------------------
</TABLE> 

The accompanying notes are an integral part of these condensed balance sheets.

                                       3
<PAGE>
 
                               WEEKS CORPORATION
                CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------- 
                                                                      Three Months    Three Months     Six Months      Six Months
                                                                         Ended           Ended           Ended           Ended
(Unaudited; in thousands, except per share amounts)                  June 30, 1997   June 30, 1996   June 30, 1997   June 30, 1996
===================================================================================================================================
<S>                                                                  <C>             <C>             <C>             <C>
REVENUE
  Rental income                                                            $18,879         $11,163         $36,279         $21,943
  Tenant reimbursements                                                      2,259             959           4,416           2,007
  Direct financing lease                                                       188             192             376             384
  Other                                                                        113              65             267             174
----------------------------------------------------------------------------------------------------------------------------------- 
                                                                            21,439          12,379          41,338          24,508
----------------------------------------------------------------------------------------------------------------------------------- 
EXPENSES
  Property operating and maintenance                                         2,399           1,393           4,622           2,687
  Real estate taxes                                                          1,768           1,085           3,467           2,153
  Depreciation and amortization                                              5,700           3,049          11,044           6,000
  Interest                                                                   4,488           2,520           9,554           4,955
  Amortization of deferred financing costs                                     226             221             452             421
  General and administrative                                                 1,250             698           2,419           1,414
----------------------------------------------------------------------------------------------------------------------------------- 
                                                                            15,831           8,966          31,558          17,630
----------------------------------------------------------------------------------------------------------------------------------- 
Income before equity in earnings of unconsolidated
  subsidiaries, interest income and gain on sale
  of real estate asset                                                       5,608           3,413           9,780           6,878
  Equity in earnings of unconsolidated
     subsidiaries                                                              576             277           1,224             543
  Interest income                                                              305             115             543             198
  Gain on sale of real estate asset                                            209              --             209              --
----------------------------------------------------------------------------------------------------------------------------------- 
Income before minority interests                                             6,698           3,805          11,756           7,619
  Minority interests                                                        (1,618)           (713)         (2,850)         (1,426)
===================================================================================================================================
NET INCOME                                                                 $ 5,080         $ 3,092         $ 8,906         $ 6,193
===================================================================================================================================
NET INCOME PER SHARE                                                         $0.32           $0.28           $0.59           $0.56
----------------------------------------------------------------------------------------------------------------------------------- 
WEIGHTED AVERAGE SHARES OUTSTANDING                                         15,906          11,156          14,994          11,156
===================================================================================================================================
</TABLE> 

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

                                       4
<PAGE>
 
                               WEEKS CORPORATION
                CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
                                                                                          Six Months      Six Months
                                                                                            Ended           Ended
(Unaudited; in thousands)                                                               June 30, 1997   June 30, 1996
=====================================================================================================================
<S>                                                                                     <C>             <C>
OPERATING ACTIVITIES
Net income                                                                                   $  8,906        $  6,193
Adjustments to reconcile net income to net cash
  provided by operating activities:
  Minority interests                                                                            2,850           1,426
  Depreciation and amortization                                                                11,044           6,000
  Amortization of deferred financing costs                                                        452             421
  Amortization of deferred compensation                                                           145              --
  Income from direct financing lease                                                             (376)           (384)
  Straight-line rent revenue                                                                     (324)           (191)
  Equity in earnings of unconsolidated subsidiaries                                            (1,224)           (543)
  Gain on sale of real estate asset                                                              (209)             --
Net change in:
  Receivables and other assets                                                                 (2,010)           (892)
  Deferred costs                                                                               (2,414)         (1,018)
  Accounts payable and accrued expenses                                                         5,666           2,042
  Other liabilities                                                                               910              78
----------------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES                                                      23,416          13,132
----------------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Property acquisition, development and construction                                            (80,647)        (31,317)
Real estate loans                                                                              (6,657)         (3,124)
Proceeds from sale of real estate asset                                                         2,484              --
Payments received on direct financing lease                                                       437             425
----------------------------------------------------------------------------------------------------------------------
NET CASH USED IN INVESTING ACTIVITIES                                                         (84,383)        (34,016)
----------------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Proceeds from equity offering, stock option exercises
  and dividend reinvestment plan                                                              106,891               4
Line of credit proceeds, net                                                                    2,390          31,402
Payments of construction and mortgage notes payable                                           (32,879)           (237)
Deferred financing costs                                                                          (70)           (181)
Dividends to shareholders                                                                     (12,105)         (8,924)
Distributions to minority interests                                                            (3,396)         (2,055)
----------------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES                                                      60,831          20,009
----------------------------------------------------------------------------------------------------------------------
DECREASE IN CASH AND CASH EQUIVALENTS                                                            (136)           (875)
----------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                                    260             982
----------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD                                                     $    124        $    107
=====================================================================================================================

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
The Company's 1997 property acquisitions included the assumption of indebtedness of $4,360,000 and the issuance of 
Units valued at $14,334,000.

The accompanying notes are an integral part of these condensed financial statements.
</TABLE>

                                       5
<PAGE>
 
                               WEEKS CORPORATION
             NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

1.   THE COMPANY

Weeks Corporation and its subsidiaries own, operate, develop, construct, acquire
and manage industrial and suburban office buildings in Atlanta, Georgia and the
southeast United States.  As used herein, the term "Company" includes Weeks
Corporation and its subsidiaries, including Weeks Realty, L.P. (the "Operating
Partnership"), unless the context indicates otherwise.  The Company, through its
subsidiaries, is the general partner and owns a majority interest in the
Operating Partnership which, including the operations of its subsidiaries,
conducts substantially all of the on-going operations of the Company.  The
Company has elected to qualify and operate as a self-administered and self-
managed real estate investment trust ("REIT") under the Internal Revenue Code of
1986, as amended (the "Code").  As a REIT, the Company will not generally be
subject to corporate federal income taxes as long as it satisfies certain
technical requirements of the Code relating to the composition of its income and
assets, including the requirement to distribute 95% of its taxable income to its
shareholders.

As of June 30, 1997, the Company had outstanding 17,682,788 shares of common
stock and owned the same number of units of partnership interest in the
Operating Partnership ("Units"), and the Company's ownership interest in the
Operating Partnership was 77.8%.  Units held by persons other than the Company
totaled 5,057,836 as of June 30, 1997, and represented a 22.2% minority interest
in the Operating Partnership.  Units representing the 22.2% minority interest in
the Operating Partnership are convertible by their holders into shares of common
stock on a one-for-one basis, or into cash, at the Company's option.  The
Company's weighted average ownership interest in the Operating Partnership was
75.9% and 81.3% for the three months ended June 30, 1997 and 1996, respectively,
and 75.8% and 81.3% for the six months ended June 30, 1997 and 1996,
respectively.

The Company conducts its third-party service businesses through two subsidiaries
(the "Subsidiaries"):  Weeks Realty Services, Inc. conducts third-party
landscape, property management and leasing services and Weeks Construction
Services, Inc. conducts third-party construction services.  The Company holds
100% of the nonvoting and 1% of the voting common stock of the Subsidiaries.
The remaining voting common stock is held by three executive officers of the
Company.  The ownership of the common stock of the Subsidiaries entitles the
Company to substantially all (99%) of the economic benefits from the results of
the Subsidiaries' operations.

As of June 30, 1997, the Company owned 195 industrial properties, 18 suburban
office properties and three retail properties comprising 14.8 million square
feet.  The Company's primary markets and the concentration of the Company's
portfolio (based on square footage) are Atlanta, Georgia (74%), Nashville,
Tennessee (11%), Raleigh-Durham-Chapel Hill, North Carolina (9%), Orlando,
Florida (3%), and Spartanburg, South Carolina (3%).  In addition, 32 industrial
and suburban office properties and one property expansion were under development
or in lease-up and 16 industrial and suburban office properties were under
agreement to be acquired as of August 1, 1997, comprising an additional 5.0
million square feet.

                                       6
<PAGE>
 
2.   BASIS OF PRESENTATION

The accompanying consolidated condensed financial statements include the
consolidated condensed financial position of the Company and its subsidiaries at
June 30, 1997, and December 31, 1996, and their results of operations and cash
flows for the three and six months ended June 30, 1997 and 1996. The operating
results of the Subsidiaries are reflected in the accompanying financial
statements on the equity method of accounting.  All significant intercompany
balances and transactions have been eliminated in the consolidated condensed
financial statements.  Certain prior year amounts have been reclassified to
conform to the 1997 presentation.

The accompanying interim unaudited financial statements have been prepared by
the Company's management in accordance with generally accepted accounting
principles for interim financial information and in conformity with the rules
and regulations of the Securities and Exchange Commission.  In the opinion of
management, the interim financial statements presented herein reflect all
adjustments of a normal and recurring nature which are necessary to fairly state
the interim financial statements.  The results of operations for the interim
periods are not necessarily indicative of the results that may be expected for
the year ending December 31, 1997.  These financial statements should be read in
conjunction with the Company's audited financial statements and the notes
thereto included in the Company's Form 10-K for the year ended December 31,
1996.

RECENT ACCOUNTING PRONOUNCEMENTS
In February 1997, Statement of Financial Accounting Standards ("SFAS") 128,
"Earnings per Share" was issued prescribing a new method for computing earnings
per share.  When implemented, SFAS 128 will supercede Accounting Principles
Board Opinion ("APB") 15, "Earnings per Share," the current accounting
literature utilized in computing earnings per share under generally accepted
accounting principles.  Under SFAS 128, the Company will be required to present
both basic and diluted earnings per share in its interim and annual financial
statements for periods beginning with its financial statements for the quarter
and year ended December 31, 1997.  As defined by SFAS 128, basic earnings per
share shall be computed by dividing net income by the weighted average number of
common shares outstanding during the period.  Diluted earnings per share shall
be computed to present the dilutive impact of all instruments or securities
which are convertible into shares of the Company's common stock, as more
specifically defined in SFAS 128.

The Company will continue to present earnings per share under the provisions of
APB 15 for all interim periods of 1997 until the mandated SFAS 128
implementation date in the fourth quarter of 1997.  Upon the adoption of SFAS
128, all prior period earnings per share amounts will be restated.  The impact
of SFAS 128 on the Company's consolidated earnings per share amounts for the
three and six months ended June 30, 1997 and 1996 is discussed in Note 6.

In June 1997, SFAS 131, "Disclosures About Segments of an Enterprise and Related
Information" was issued prescribing new guidelines for the reporting of segment
data.  SFAS 131 will apply to all public, for-profit companies and will be
effective for calendar year end companies in the year ended December 31, 1998.
The Company was not subject to segment reporting under prior accounting
standards, but may be required to provide certain segment disclosures under SFAS
131. The Company is evaluating SFAS 131, but has not determined the specific
nature and magnitude of the disclosures required by SFAS 131.

                                       7
<PAGE>
 
3.   BANK CREDIT FACILITY AND MORTGAGE NOTES PAYABLE

The Operating Partnership, the Subsidiaries and Weeks Development Partnership
(Note 4), as co-borrowers, have a $175 million syndicated revolving credit
facility (the "Credit Facility") with four banks.  The Credit Facility is
unsecured and can be used for development and construction, acquisitions and
general corporate purposes.  Each co-borrower is liable for its own borrowing;
however, the entire Credit Facility is guaranteed by the Company.  Additionally,
the Company and the co-borrowers are required to meet certain financial and non-
financial covenants including limitations on secured borrowings and a
restriction on the amount of dividends and distributions to not more than 95% of
"funds from operations," a REIT industry measure of operating performance,
unless the additional amounts are necessary to maintain the Company's REIT
status under the Code.  The Credit Facility matures on December 31, 1999, and
may be extended annually through December 31, 2002, subject to an annual renewal
fee of 0.125%.

The Credit Facility provides for advances of up to $175 million, subject to
certain covenants, including those governing the Company's maximum unsecured
borrowings and total leverage.  Maximum available advances currently total $175
million.  As of June 30, 1997, Credit Facility borrowings are detailed as
follows (in thousands):

<TABLE>
<CAPTION>
             -------------------------------------------------------
               BORROWER                                     AMOUNT
             =======================================================
             <S>                                        <C>
 
               Operating Partnership                    $  101,790

               Weeks Realty Services, Inc.                   3,315

               Weeks Construction Services, Inc.               350

               Weeks Development Partnership                   245
             -------------------------------------------------------
                                                        $  105,700
             =======================================================
</TABLE>

Interest under the Credit Facility is payable monthly at bank prime minus 0.25%
or at LIBOR plus 1.35% at the election of the co-borrowers. The weighted average
interest rate on Credit Facility borrowings, excluding the effect of the
interest rate swap agreements described below, was 7.15% at June 30, 1997.  Fees
on the unused portion of the Credit Facility are 0.20% annually.

Interest paid, net of amounts capitalized, totaled $9,250,000 and $4,787,000 for
the three months ended June 30, 1997 and 1996, respectively.  Interest costs
capitalized totaled $1,283,000 and $513,000 for the three months ended and
$2,222,000 and $928,000 for the six months ended June 30, 1997 and 1996,
respectively.

The Company has in place three interest rate swap agreements with a commercial
bank to effectively change the interest costs on $50,000,000 of Credit Facility
borrowings from the variable rates discussed above to fixed rates.  The
agreements, with notional principal amounts of $10,000,000, $10,000,000 and
$30,000,000, mature in July 1998, July 1999 and July 2001 with effective fixed
interest rates of 7.72%, 7.89% and 8.14%, respectively.

                                       8
<PAGE>
 
Mortgage notes payable at June 30, 1997 and December 31, 1996, specifically
listed for notes with outstanding balances in excess of $10 million, consist of
the following (in thousands):

<TABLE>
<CAPTION>
     ====================================================================================
                                                               JUNE 30,      DECEMBER 31,
                                                                1997            1996
     ====================================================================================
     <S>                                                       <C>           <C>
     FIXED RATE
     Mortgage note, interest only at 7.13%,                                            
     due in 1999                                               $ 38,000      $ 38,000  
     Three mortgage notes, interest only at 7.75%,                                     
     due in 1998                                                     --        31,170  
     Mortgage note, principal and interest at 9.24%,                                   
     due in 2005                                                 15,908        16,028  
     Mortgage note, principal and interest at 8.10%,                                   
     due in 2006                                                 12,149        12,278  
     Mortgage note, interest only at 7.625%,                                           
     due in 2000                                                 10,300        10,300    
     Other mortgage notes (21 at June 30, 1997),                                       
     principal and interest at 6.71% to 9.80%,                                         
     due in 1998 to 2006                                         86,879        83,956
     VARIABLE RATE                                                                     
     Industrial revenue bonds, interest at 4.20% to 6.65%                              
     at June 30, 1997, due in 2004 and 2010                       5,820         5,843     
     ------------------------------------------------------------------------------------
                                                               $169,056      $197,575
     ------------------------------------------------------------------------------------
</TABLE>

At June 30, 1997, fixed rate mortgage notes payable included 25 notes with a
weighted average interest rate of 8.05%.  The weighted average term to maturity
of fixed rate mortgage notes payable was 5.5 years at June 30, 1997.  Fixed rate
mortgage indebtedness decreased by $28,519,000 in 1997 due to the prepayment,
without penalty, of three mortgage notes totaling $31,170,000, net of the
assumption of a $3,750,000, 8.625% mortgage note in conjunction with the
Company's acquisitions (Note 7), and net of principal repayments and
retirements.  Certain Company officers and Unitholders guarantee a portion of
fixed rate mortgage notes.

Variable rate industrial revenue bonds include two separate arrangements.  One
bond issue with an outstanding balance of $5,140,000 accrues interest at rates
equivalent to short-term tax-exempt Aa2 rated securities.  The second bond issue
accrues interest at 78% of the prime lending rate.  The weighted average
interest rate under these arrangements was 4.49% at June 30, 1997.  The bonds
are supported by letters of credit totaling $5,345,000.

Exclusive of letters of credit supporting industrial revenue bond financings,
letters of credit totaling $1,317,000 at June 30, 1997, were issued to third
parties.

                                       9
<PAGE>
 
Scheduled maturities of mortgage notes payable at June 30, 1997, are summarized
as follows (in thousands):

<TABLE>
<CAPTION>
            -------------------------------------------------------
              YEAR                                         AMOUNT
            =======================================================
            <S>                                          <C>
              Remainder of 1997                          $  1,044
              1998                                          8,155
              1999                                         48,582
              2000                                         21,483
              2001                                         10,849
              2002 and thereafter                          78,943
            -------------------------------------------------------
                                                         $169,056
            =======================================================
</TABLE> 


4.   INVESTMENTS IN AND NOTES RECEIVABLE
     FROM UNCONSOLIDATED SUBSIDIARIES

The Company conducts its third-party construction, landscape, property
management and leasing service businesses through the Subsidiaries.  Through
Weeks Development Partnership ("Weeks Development"), wholly owned by the
Subsidiaries, the Subsidiaries also own land in various business parks, either
directly or through ownership interests in real estate partnerships and joint
ventures.  The Company intends, based on market conditions, to acquire land from
Weeks Development and its affiliated partnerships and joint ventures for the
development of future operating properties.  As discussed in Note 2, the
Subsidiaries are accounted for on the equity method of accounting.  Under the
equity method, the Company recognizes, in its consolidated statements of
operations, its economic share (99%) of the Subsidiaries' earnings and losses.

The following information summarizes the financial position, results of
operations and cash flows of the Subsidiaries and Weeks Development on a
combined basis (in thousands):

<TABLE>
<CAPTION>
     ---------------------------------------------------------------------------
                                                       JUNE 30,     DECEMBER 31,
     FINANCIAL POSITION                                  1997          1996
     ===========================================================================
     <S>                                               <C>          <C>
     ASSETS
     Real estate assets                                $ 4,943        $ 7,200
     Investments in real estate partnerships                                 
        and joint ventures                               2,860          3,025
     Receivables and other assets                       10,610         13,113
     ---------------------------------------------------------------------------
                                                       $18,413        $23,338
     ===========================================================================
     LIABILITIES AND EQUITY                                                  
     Notes payable to the Company                      $10,921        $10,921
     Credit facility borrowings                          3,910          3,595
     Other borrowings                                       --          1,261
     Other liabilities                                   5,584         10,725
     Total equity                                       (2,002)        (3,164)
     ---------------------------------------------------------------------------
                                                       $18,413        $23,338 
     ===========================================================================
</TABLE>

                                       10
<PAGE>
 
At June 30, 1997, the Company's investment in and notes receivable from the
Subsidiaries totaling $8,909,000 includes notes receivable from the Subsidiaries
of $10,921,000 and the Company's investment in the Subsidiaries of ($2,012,000).

<TABLE>
<CAPTION>
     ---------------------------------------------------------------------------------------------------------------------------
                                                    THREE MONTHS          THREE MONTHS          SIX MONTHS          SIX MONTHS    
                                                        ENDED                ENDED                 ENDED              ENDED       
     RESULTS OF OPERATIONS                          JUNE 30, 1997        JUNE 30, 1996        JUNE 30, 1997        JUNE 30, 1996  
     ===========================================================================================================================  
     <S>                                            <C>                  <C>                  <C>                  <C>             
     REVENUE                                                                                                                      
     Construction and development fees                   $    520             $    435             $  1,057             $    828    
     Landscape                                              1,719                1,345                2,871                2,378    
     Property management fees                                  53                   48                  100                  106    
     Commissions                                              284                   --                  462                   78    
     Other                                                     86                   73                  186                  142    
     ---------------------------------------------------------------------------------------------------------------------------
                                                            2,662                1,901                4,676                3,532    
     ---------------------------------------------------------------------------------------------------------------------------
     COSTS AND EXPENSES                                                                                                             
     Direct costs                                           1,569                1,111                2,461                1,918    
     Interest expense - Company                               328                  329                  655                  657    
     Interest expense - other                                  87                   76                  164                  215    
     General and administrative                               570                  394                1,039                  761    
     Other                                                     84                   58                  282                  101    
     ---------------------------------------------------------------------------------------------------------------------------
                                                            2,638                1,968                4,601                3,652    
     ---------------------------------------------------------------------------------------------------------------------------
     INCOME (LOSS) BEFORE GAINS ON SALE OF                                                                                          
       PROPERTIES AND EQUITY IN EARNINGS                                                                                            
       OF PARTNERSHIPS AND JOINT VENTURES                      24                  (67)                  75                 (120)   
     Gain on sale of properties - third parties               234                   --                  234                   --    
     Gain on sale of property - Company                        --                   --                  580                   --    
     Equity in earnings of partnerships                                                                                             
       and joint ventures                                      (8)                  15                  271                    5    
     ---------------------------------------------------------------------------------------------------------------------------
     NET INCOME (LOSS)                                   $    250             $    (52)            $  1,160             $   (115)   
     ===========================================================================================================================
     Net income (loss) attributable                                                                                                 
       to Company                                        $    248             $    (52)            $  1,149             $   (114)   
     Interest expense - Company                               328                  329                  655                  657    
     Gain on sale of property - Company                        --                   --                 (580)                  --    
     ---------------------------------------------------------------------------------------------------------------------------
     Equity in earnings of Subsidiaries                  $    576             $    277             $  1,244             $    543    
     ===========================================================================================================================
     DISTRIBUTIONS AND INTEREST PAID                                                                                                
       TO COMPANY                                        $     --             $     --             $     --             $     --    
     ===========================================================================================================================
</TABLE> 

<TABLE> 
<CAPTION> 
     ---------------------------------------------------------------------------------------------------------------------------
                                                                                                SIX MONTHS          SIX MONTHS
                                                                                                    ENDED              ENDED
     CASH FLOWS                                                                                JUNE 30, 1997       JUNE 30, 1996
     ===========================================================================================================================
     <S>                                                                                       <C>                 <C>      
     OPERATING ACTIVITIES                                                                          $ (3,556)            $  3,974
     INVESTING ACTIVITIES                                                                             1,432               (1,437)
     FINANCING ACTIVITIES                                                                               315               (1,076)
     --------------------------------------------------------------------------------------------------------------------------- 
</TABLE>

                                       11
<PAGE>
 
Third-party service revenues detailed above include development and construction
fees, landscaping fees and lease commissions from affiliated partnerships and
joint ventures totaling $28,000, $98,000 and $246,000, respectively, for the
three months ended June 30, 1997, and $95,000, $75,000 and $0, respectively, for
the three months ended june 30, 1996.  Development and construction fees,
landscaping fees and lease commissions from affiliated entities totaled
$142,000, $160,000 and $370,000, respectively, for the six months ended June 30,
1997 and $135,000, $128,000 and $72,000, respectively, for the six months ended
June 30, 1996.

5.   SHAREHOLDERS' EQUITY

On May 13, 1997, the Company completed a public offering of 3,200,000 shares of
common stock and received net proceeds of approximately $95.1 million. In June
1997, the Company sold 384,200 shares of common stock to the underwriters of the
offering to cover over-allotments and received additional net proceeds of
approximately $11.5 million.  The proceeds were used to reduce the Company's
outstanding Credit Facility borrowings (Note 3).

The Company declared and paid quarterly dividends relating to the first quarter
of 1997 of $6,062,000 or $0.43 per share during the three months ended June 30,
1997.  Additionally, the minority Unitholders in the Operating Partnership
received cash distributions totaling $1,949,000 or $0.43 per Unit during the
three months ended June 30, 1997.  In July 1997, the Company declared and paid
quarterly dividends and made distributions relating to the second quarter of
1997 of $7,604,000 or $0.43 per share and $2,175,000 or $0.43 per Unit,
respectively.

In February 1997, restricted shares of common stock valued at $1,150,000 were
granted to certain Company officers and employees in recognition of successful
prior service and as an incentive for future service and continued financial
performance of the Company.  These shares vest ratably over a four year period
provided the Company achieves 10% annual growth in per share funds from
operations, a REIT industry measure of operating performance, for each year of
the four year vesting period.  Compensation expense is recognized ratably over
the four year vesting period.

6.   EARNINGS PER SHARE

Under APB 15, earnings per share is calculated using the weighted average number
of common shares outstanding of 15,906,000 and 11,156,000 for the three months
ended, and 14,994,000 and 11,156,000 for the six months ended June 30, 1997 and
1996, respectively.  The impact of outstanding stock options was not dilutive,
as defined in APB 15, in 1997 or 1996.  An assumed conversion of Units into
common stock would not affect net income per share.  A comparison of earnings
per share as calculated under APB 15, to proforma earnings per share, as
calculated under the provisions of SFAS 128, is as follows:

<TABLE>
<CAPTION>
     -------------------------------------------------------------------------------------------------------
                                                  THREE MONTHS   THREE MONTHS     SIX MONTHS    SIX MONTHS
                                                       ENDED         ENDED           ENDED          ENDED
                                                  JUNE 30, 1997  JUNE 30, 1996  JUNE 30, 1997  JUNE 30, 1996
     =======================================================================================================
     <S>                                          <C>            <C>            <C>            <C>
     Primary and fully diluted
       earnings per share (APB 15)                    $0.32          $0.28          $0.59          $0.56    
     Basic earnings per share (SFAS 128)              $0.32          $0.28          $0.59          $0.56    
     Diluted earnings per share (SFAS 128)            $0.32          $0.28          $0.59          $0.55    
</TABLE>

                                       12
<PAGE>
 
7.   ACQUISITIONS

The Company acquired initial property portfolios and the business operations of
NWI Wharehouse Group, L.P. ("NWI") in Nashville, Tennessee, and Lichtin
Properties, Inc. and affiliates ("Lichtin") in the Raleigh-Durham-Chapel Hill
area of North Carolina, on November 1, 1996 and December 31, 1996, respectively,
in transactions accounted for under the purchase method.  The Company's
consolidated condensed results of operations for the three and six months ended
June 30, 1997, included the operating results of NWI and Lichtin for the entire
period.  The unaudited pro forma information below presents the consolidated
condensed results of operations as if the initial phases of the NWI and Lichtin
acquisitions had occurred as of January 1, 1996.  The unaudited pro forma
information is not necessarily indicative of the results of operations of the
Company had the acquisitions occurred as of January 1, 1996, nor is it
necessarily indicative of future results.  Additionally, the unaudited pro forma
information excludes the impact of the buildings and land acquired or to be
acquired from NWI and Lichtin subsequent to the initial acquisition dates
detailed above.

<TABLE>
<CAPTION>
                                                             Six Months
                                                                Ended
(Unaudited, in thousands, except per share amount)          June 30, 1996
-------------------------------------------------------------------------
<S>                                                         <C>
Revenues                                                      $  33,023
Net income                                                        5,070
Earnings per share                                            $    0.44
</TABLE>

On May 30, 1997, the Company acquired 17 industrial buildings totaling
approximately 546,000 square feet located in the Northwest submarket of Atlanta,
Georgia for approximately $29.2 million, including closing costs and acquisition
expenses.  The acquisition was funded through Credit Facility borrowings.  On
April 22, 1997, the Company acquired an industrial building totaling
approximately 61,000 square feet located in Orlando, Florida for $2.9 million,
including closing costs and acquisition expenses.  This acquisition was also
funded through Credit Facility borrowings.

On January 31, 1997 and March 31, 1997, the Company acquired a total of five
industrial buildings totaling 447,528 square feet.  Three buildings totaling
154,341 square feet were acquired from Lichtin and two buildings totaling
293,187 square feet were acquired from NWI.  Total acquisition consideration of
approximately $17.7 million was comprised of the assumption of approximately
$4.4 million of indebtedness and the issuance of approximately $13.3 million of
Units in the Operating Partnership.  Additionally, as part of these
transactions, the Company acquired approximately five net usable acres of
development land in exchange for $1.0 million of Units.

                                       13
<PAGE>
 
8.   PROPERTY SALE

On April 3, 1997, the Company sold a 96,000 square foot industrial building
located in Spartanburg, South Carolina to one of the buildings' tenants for
approximately $2.5 million, resulting in a gain of $209,000.  For income tax
purposes, the Company completed a tax-deferred, like-kind exchange involving the
industrial building acquired in Orlando, Florida (see Note 7).

9.   REAL ESTATE LOAN

In the second quarter of 1997, the Company advanced $3.5 million to NWI (see
Note 7) under a $5.7 million demand loan agreement.  The loan bears interest at
LIBOR plus 2.10% and is secured by real estate properties held by NWI.  Interest
income earned under the agreement and included in the accompanying statements of
operations totaled approximately $37,000 in the three and six months ended June
30, 1997.

                                       14
<PAGE>
 
PART I - FINANCIAL INFORMATION
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the
accompanying consolidated condensed financial statements of the Company and the
notes thereto.

GENERAL BACKGROUND
The Company was founded in 1965 and operated as a private real estate company
until August 1994, when it completed an initial public offering and elected to
be taxed as a REIT.  As a self-administered and self-managed REIT, the Company
owns, develops, acquires and manages primarily high-quality industrial and
suburban office properties in Atlanta, Georgia and the southeast United
States.  For a further description of the Company, see Note 1 to the
consolidated condensed financial statements.

RESULTS OF OPERATIONS
Operating information relating to the Company's properties for the three and six
months ended June 30, 1997 and 1996, respectively, is summarized below (in
thousands):

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------
                                         THREE MONTHS    THREE MONTHS                 SIX MONTHS     SIX MONTHS
                                             ENDED           ENDED          %             ENDED         ENDED         %
                                         JUNE 30, 1997  JUNE 30, 1996     CHANGE     JUNE 30, 1997  JUNE 30, 1996   CHANGE
==========================================================================================================================
<S>                                      <C>            <C>               <C>        <C>            <C>             <C>
Rental income                                  $18,879        $11,163       69.1%          $36,279        $21,943     65.3%
Tenant reimbursements                            2,259            959      135.6%            4,416          2,007    120.0%
--------------------------------------------------------------------------------------------------------------------------
Property operating revenues                     21,138         12,122       74.4%           40,695         23,950     69.9%
--------------------------------------------------------------------------------------------------------------------------
Operating and maintenance                                                         
  expenses                                       2,399          1,393       72.2%            4,622          2,687     72.0%
Real estate taxes                                1,768          1,085       62.9%            3,467          2,153     61.0%
Depreciation and amortization                    5,700          3,049       86.9%           11,044          6,000     84.1%
--------------------------------------------------------------------------------------------------------------------------
Property operating expenses                      9,867          5,527       78.5%           19,133         10,840     76.5%
--------------------------------------------------------------------------------------------------------------------------
Property operating revenues less                                                   
  property operating expenses..                $11,271        $ 6,595       70.9%          $21,562        $13,110     64.5%
==========================================================================================================================
</TABLE>

Period to period comparisons of property operating revenues and expenses for
1997 and 1996 are discussed herein using the categories "core properties,"
"development properties" and "acquisition properties."  Core properties are
defined as properties which were stabilized and operating as of january 1, 1996.
The Company defines a property as stabilized upon the earlier of substantial
lease-up or one year from building shell completion.  Development properties
reflect properties completed and stabilized, and acquisition properties are
properties acquired, subsequent to January 1, 1996.

                                       15
<PAGE>
 
For the comparable three and six month periods ended June 30, 1997 and 1996,
operating results of the core properties, representing 134 properties totaling
approximately 8,861,000 square feet, are summarized below (in thousands):

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
                                      THREE MONTHS   THREE MONTHS                 SIX MONTHS      SIX MONTHS
                                          ENDED          ENDED          %           ENDED           ENDED          %
                                     JUNE 30, 1997   JUNE 30, 1996    CHANGE     JUNE 30, 1997   JUNE 30, 1996   CHANGE
========================================================================================================================
<S>                                  <C>             <C>              <C>        <C>             <C>             <C>
RENTAL REVENUES                            $10,813         $10,584       2.2%          $21,496         $21,153      1.6%
TENANT REIMBURSEMENTS                        1,063             945      12.5%            2,226           1,982     12.3%
------------------------------------------------------------------------------------------------------------------------
PROPERTY OPERATING REVENUES                 11,876          11,529       3.0%           23,722          23,135      2.5%
------------------------------------------------------------------------------------------------------------------------
OPERATING AND MAINTENANCE                                                     
  EXPENSES                                   1,415           1,367       3.5%            2,776           2,654      4.6%
REAL ESTATE TAXES                            1,100           1,051       4.7%            2,211           2,090      5.8%
DEPRECIATION AND AMORTIZATION                3,114           2,965       5.0%            6,122           5,842      4.8%
------------------------------------------------------------------------------------------------------------------------
PROPERTY OPERATING EXPENSES                  5,629           5,383       4.6%           11,109          10,586      4.9%
------------------------------------------------------------------------------------------------------------------------
PROPERTY OPERATING REVENUES LESS                                              
  PROPERTY OPERATING EXPENSES              $ 6,247         $ 6,146       1.6%           12,613          12,549      0.5%
========================================================================================================================
AVERAGE OCCUPANCY                             94.8%           96.1%                       95.4%           96.1%
========================================================================================================================
</TABLE>

COMPARISON OF OPERATING RESULTS FOR THREE MONTHS ENDED JUNE 30, 1997, TO THE
THREE MONTHS ENDED JUNE 30, 1996

Property operating revenues (rental revenue plus tenant reimbursements)
increased $9,016,000 or 74.4% between periods.  Of this increase, $7,197,000,
$1,472,000 and $347,000 were attributable to acquisition, development and core
properties, respectively.  The increases relating to acquisition and development
properties were due to the acquisition of 69 properties (46 in 1996 and 23 in
1997) totaling approximately 4,328,000 square feet and the stabilization of 14
development properties (8 in 1996 and 6 in 1997) and two property expansions
(one each year) totaling approximately 1,693,000 square feet.  Property
operating expenses increased $4,340,000 or 78.5% between periods due primarily
to the growth in the property portfolio resulting from the acquisition and
development properties discussed above.

Property operating revenues from core properties increased 3.0% despite the
impact of lost property operating revenues of approximately $75,000 from the
sale of a 96,000 square foot building in April 1997 (see Note 8 to the
consolidated condensed financial statements) and a decrease in overall average
occupancy.  Adjusted for these factors between periods, property operating
revenues from core properties increased approximately 5.0%.  This increase was
due primarily to rental rate increases between periods.  Property operating
expenses increased 4.6% due primarily to both increased utility and real estate
tax expenses in 1997.  Property operating revenues less property operating
expenses from core properties increased 3.4%, exclusive of depreciation and
amortization expense, and increased approximately 5.0% after adjusting for the
building sale discussed herein and the decrease in weighted average occupancy
between periods.

Interest expense increased by $1,968,000 or 78.1% from $2,520,000 for the three
months ended June 30, 1996, to $4,488,000 for the three months ended June 30,
1997, as a result of increased mortgage interest of $1,676,000 due to mortgage
debt assumed in conjunction with certain of the Company's 1996 and 1997 property
acquisitions, and increased Credit Facility interest of $292,000.  Interest
expense of $4,488,000 for the three months ended June 30, 1997, consisted of
mortgage interest of $3,768,000 and Credit Facility interest of $720,000.

                                       16
<PAGE>
 
Amortization of deferred financing costs increased $5,000 or 2.3% from $221,000
for the three months ended June 30, 1996, to $226,000 for the three months ended
June 30, 1997, due primarily to the amortization of deferred financing costs
associated with increasing the availability under and restructuring the Credit
Facility in 1996.

Company general and administrative expenses increased by $552,000 or 79.1% from
$698,000 for the three months ended June 30, 1996, to $1,250,000 for the three
months ended June 30, 1997, due primarily to increased personnel and related
costs associated with the Company's southeast expansion.  The majority of the
increase relates to the additional general and administrative expenses
associated with the Company's Nashville, Tennessee and Raleigh, North Carolina
operations, both of which were acquired in the fourth quarter of 1996, and to a
lesser extent expenses related to the establishment of an office in Orlando,
Florida, which also occurred in the fourth quarter of 1996.  As a percentage of
total revenue, general and administrative expenses were 5.8% in the second
quarter of 1997 and 5.6% in the second quarter of 1996.  General and
administrative expenses of the Company when combined with the general and
administrative expenses of the Subsidiaries increased $728,000 or 66.7% from
$1,092,000 in 1996 to $1,820,000 in 1997 for the same reasons discussed above
having to do with the Company's southeast expansion.  As a percentage of the
combined revenues of the Company and the Subsidiaries, the combined general and
administrative expenses of the Company and the Subsidiaries were 7.6% in the 
second quarter of 1996 and 1997.

Interest income increased $190,000 or 165.2% from $115,000 for the three months
ended June 30, 1996 to $305,000 for the three months ended June 30, 1997, due
primarily to increased real estate loan balances between periods.  Real estate
loans consist primarily of loans to affiliated entities and other parties for
the development of industrial buildings.  The Company generally has options to
acquire the developed buildings upon their completion.

Equity in earnings of the Subsidiaries of $576,000 and $277,000 for the three
months ended June 30, 1997 and 1996, respectively, represents the Company's 99%
economic interest in the earnings of the Subsidiaries after the elimination of
interest expense and gains on property sales to the Company (see Note 4 to the
consolidated condensed financial statements).  Changes in the Subsidiaries'
third-party operations between periods are discussed below.

Construction and development fees, net of associated costs, increased $85,000 or
19.5% from $435,000 for the three months ended June 30, 1996, to $520,000 for
the three months ended June 30, 1997.  This increase was due to higher fees from
both general construction contracting jobs and tenant interior work jobs
reflecting increased tenant work volumes and more profitable general
construction contracting jobs in 1997 compared to 1996.

Landscape revenue increased $374,000 or 27.8% from $1,345,000 for the three
months ended June 30, 1996, to $1,719,000 for the three months ended June 30,
1997, due primarily to an increase in landscape installation revenue of
approximately $293,000 resulting from a higher volume of landscape installation
jobs in progress in the second quarter of 1997 compared to 1996.

Commission income increased from $0 for the three months ended June 30, 1996, to
$284,000 for the three months ended June 30, 1997, due to both land sales
commissions in the second quarter of 1997 and leasing commissions from
properties managed for third parties.  There were no commissioned transactions
in the second quarter of 1996.

                                       17
<PAGE>
 
Direct costs increased by $458,000 or 41.2% from $1,111,000 for the three months
ended June 30, 1996, to $1,569,000 for the three months ended June 30, 1997, due
to increased costs associated with higher landscape installation volume and
higher landscape maintenance volumes, and higher commission costs on brokered
land sales and lease transactions in 1997 as discussed above.

Gains on sales of properties to third parties in 1997 includes a $158,000 gain
on a land sale and a $76,000 gain on the sale of an operating property under a
build-to-suit for sale arrangement.

Equity in earnings of partnerships and joint ventures decreased from income of
$15,000 for the three months ended June 30, 1996 to a loss of $8,000 for the
three months ended June 30, 1997 due to lower profits from land sales to third-
party users in 1997 compared to 1996.

COMPARISON OF OPERATING RESULTS FOR SIX MONTHS ENDED JUNE 30, 1997, TO THE SIX
MONTHS ENDED JUNE 30, 1996

Property operating revenues (rental revenue plus tenant reimbursements)
increased $16,745,000 or 69.9% between periods.  Of this increase, $13,424,000,
$2,734,000 and $587,000 were attributable to acquisition, development and core
properties, respectively.  The increases relating to acquisition and development
properties were due to the acquisition of 69 properties (46 in 1996 and 23 in
1997) totaling approximately 4,328,000 square feet and the stabilization of 14
development properties (8 in 1996 and 6 in 1997) and two property expansions
(one each year) totaling approximately 1,693,000 square feet.  Property
operating expenses increased $8,293,000 or 76.5% between periods due primarily
to the growth in the property portfolio resulting from the acquisition and
development properties discussed above.

Property operating revenues from core properties increased 2.5% despite the
impact of lost property operating revenues of approximately $166,000 resulting
from the sale of a 96,000 square foot building in April 1997 (see Note 8 to the
consolidated condensed financial statements) and a slight decrease in overall
average occupancy.  Adjusted for these factors between periods, property
operating revenues from core properties increased approximately 3.6%.  This
increase was due primarily to rental rate increases between periods.  Property
operating expenses increased 4.9% due primarily to increased utilities, repairs
and maintenance and real estate tax expenses in 1997.  Property operating
revenues less property operating expenses from core properties increased 2.3%,
exclusive of depreciation and amortization expense, and increased approximately
3.2% after adjusting for the building sale discussed herein and the decrease in
weighted average occupancy between periods.

Interest expense increased by $4,599,000 or 92.8% from $4,955,000 for the six
months ended June 30, 1996, to $9,554,000 for the six months ended June 30,
1997, as a result of increased mortgage interest of $3,522,000 due to mortgage
debt assumed in conjunction with certain of the Company's 1996 and 1997 property
acquisitions, and increased Credit Facility interest of $1,077,000 in the first
half of 1997.  Interest expense of $9,554,000 in the first half of 1997
consisted of mortgage interest of $7,707,000 and Credit Facility interest of
$1,847,000.

Amortization of deferred financing costs increased $31,000 or 7.4% from $421,000
for the six months ended June 30, 1996, to $452,000 for the six months ended
June 30, 1997, due primarily to the amortization of deferred financing costs
associated with increasing the availability under and restructuring the
Credit Facility in 1996.

                                       18
<PAGE>
 
Company general and administrative expenses increased by $1,005,000 or 71.1%
from $1,414,000 for the six months ended June 30, 1996, to $2,419,000 for the
six months ended June 30, 1997, due primarily to increased personnel and related
costs associated with the Company's southeast expansion.  The majority of the
increase relates to the additional general and administrative expenses
associated with the Company's Nashville, Tennessee and Raleigh, North Carolina
operations, both of which were acquired in the fourth quarter of 1996, and to a
lesser extent expenses related to the establishment of an office in Orlando,
Florida, which also occurred in the fourth quarter of 1996.  As a percentage of
total revenue, general and administrative expenses increased from 5.8% in the
first half of 1996 to 5.9% in the first half of 1997.  General and
administrative expenses of the Company when combined with the general and
administrative expenses of the Subsidiaries increased $1,283,000 or 59.0% from
$2,175,000 in 1996 to $3,458,000 in 1997 for the same reasons discussed above
having to do with the Company's southeast expansion.  As a percentage of the
combined revenues of the Company and the Subsidiaries, the combined general and
administrative expenses of the Company and the Subsidiaires decreased from 7.8%
in the first half of 1996 to 7.5% in the first half of 1997.

Interest income increased $345,000 or 174.2% from $198,000 for the six months
ended June 30, 1996 to $543,000 for the six months ended June 30, 1997, due
primarily to increased real estate loan balances between periods.  Real estate
loans consist primarily of loans to affiliated entities and other parties for
the development of industrial buildings.  The Company generally has options to
acquire the developed buildings upon their completion.

Equity in earnings of the Subsidiaries of $1,224,000 and $543,000 for the six
months ended June 30, 1997 and 1996, respectively, represents the Company's 99%
economic interest in the earnings of the Subsidiaries after the elimination of
interest expense and gains on property sales to the Company (see Note 4 to the
consolidated condensed financial statements).  Changes in the Subsidiaires'
third-party operations between periods are discussed below.

Construction and development fees increased $229,000 or 27.7% from $828,000 for
the six months ended June 30, 1996, to $1,057,000 for the six months ended June
30, 1997.  This increase was due primarily to more profitable general
construction contracting jobs in 1997 compared to 1996.

Landscape revenue increased $493,000 or 20.7% from $2,378,000 for the six months
ended June 30, 1996, to $2,871,000 for the six months ended June 30, 1997, due
to an increase in landscape installation revenue of approximately $376,000
resulting from more and larger installation jobs in progress in the first half
of 1997 compared to 1996, with the remaining increase due primarily to the
growth in the number of landscape maintenance contracts between periods.

Commission income increased from $78,000 for the six months ended June 30, 1996,
to $462,000 for the six months ended June 30, 1997, due to both higher land
sales commissions between periods and higher leasing commissions from properties
managed for third parties.

Direct costs increased by $543,000 or 28.3% from $1,918,000 for the six months
ended June 30, 1996, to $2,461,000 for the six months ended June 30, 1997, due
primarily to increased costs associated with higher landscape installation
volume and higher landscape maintenance volumes, and higher commission costs on
brokered land sales and lease transactions in 1997 as discussed above.

Equity in earnings of partnerships and joint ventures increased from earnings of
$5,000 for the six months ended June 30, 1996, to earnings of $271,000 for the
six months ended June 30, 1997, due 

                                       19
<PAGE>
 
primarily to higher profits from underlying partnership and joint venture land
sales activities between periods.

Gains on sales of properties to third parties in 1997 includes a $158,000 gain
on a land sale and a $76,000 gain on the sale of an operating property under a
build-to-suit for sale arrangement.

The gain on sale of property to the Company in 1997 represents the results of a
sale of land to the Operating Partnership for the development of an industrial
building.  This gain was eliminated in the consolidated condensed financial
statements of the Company as reflected in Note 4 to the consolidated condensed
financial statements.

LIQUIDITY AND CAPITAL RESOURCES

The Company's net cash provided by operating activities increased from
$13,132,000 for the six months ended June 30, 1996, to $23,416,000 for the six
months ended June 30, 1997, due primarily to the growth in the Company's
operating income resulting from 14 development properties (8 in 1996 and 6 in
1997) and two property expansions (one each year) stabilized and from 69
buildings acquired (46 in 1996 and 23 in 1997).

Net cash used in investing activities increased from $34,016,000 for the six
months ended June 30, 1996, to $84,383,000 for the six months ended June 30,
1997, due primarily to higher property development and land and building
acquisition volumes in the first six months of 1997 compared to 1996.

Net cash provided by financing activities increased from $20,009,000 for the six
months ended June 30, 1996, to $60,831,000 for the six months ended June 30,
1997.  This net increase between periods reflects primarily the net proceeds of
approximately $107 million from an equity offering in 1997, net of debt
retirements, used to finance the Company's property portfolio growth.

The Company's net cash flow from operations is currently sufficient to meet the
Company's current operational needs and to satisfy the Company's current
quarterly dividends.  Management believes that operating cash flows will
continue to be adequate to fund these requirements in 1997.  The Company
operates as and intends to maintain its qualification as a REIT under the Code.
As a REIT, the Company will generally not be subject to corporate federal income
taxes as long as it satisfies certain technical requirements of the Code,
including the requirement to distribute 95% of its taxable income to its
shareholders.

In addition to its operating cash flow, the Company has a $175 million unsecured
revolving Credit Facility with a syndicated bank group (see Note 3 to the
consolidated condensed financial statements), which may be used, among other
things, to meet its operational obligations and annual REIT dividend
requirements.  The Company currently intends to finance its development,
construction and acquisition activities primarily through borrowings under the
Credit Facility.  As of June 30, 1997, the Company had available capacity under
the Credit Facility of approximately $69.3 million (Note 3).

                                       20
<PAGE>
 
In May and June 1997, the Company completed a public offering of 3,584,200
shares of common stock, including shares issued to cover over-allotments, and
received net proceeds of approximately $107 million.  The net proceeds were
applied to outstanding Credit Facility borrowings, increasing the Company's
available capacity under the Credit Facility.  The Company utilized
approximately $31.2 million of the additional borrowing capacity to prepay,
without penalty, three mortgage notes scheduled to mature in 1998 and
approximately $32.1 million to acquire additional properties during the second
quarter.

The Company believes it has adequate liquidity, borrowing capacity and sources
of capital, including available capacity under its existing Credit Facility and
remaining capacity of approximately $187 million under an equity shelf
registration ($600 million under a recently filed combined equity and debt shelf
registration upon the registration being declared effective), to meet its
current operational requirements, to fund annual principal requirements under
existing mortgage notes payable, and to fund its current development and
acquisition activity.  It is management's expectation that the Company will
continue to have access to the additional capital resources necessary to further
expand and develop its business and to refinance mortgage notes payable as they
mature.  These resources include long-term mortgage debt, expansion of the
available borrowing capacity under the Credit Facility and other forms of debt
and equity financing, in both public and private markets.  Future development
and acquisition activities will be undertaken by the Company only as suitable
opportunities arise.  Such activities are not expected to be undertaken unless
adequate sources of financing are available and a satisfactory budget with an
appropriate return on investment has been internally approved.  The Company
maintains staffing levels sufficient to meet its existing construction and
leasing activities and capitalizes a portion of the costs relating to these
activities to development projects and leasing transactions, respectively.  If
market conditions warrant, the Company may adjust staffing levels to avoid a
negative impact on the Company's results of operations.

Total consolidated debt amounted to $270.9 million at June 30, 1997, including
borrowings under the Credit Facility of $101.8 million and mortgage notes
payable of  $169.1 million.  Of the $169.1 million of mortgage indebtedness,
$163.3 million is fixed rate and $5.8 million is variable rate.  The weighted
average interest rate on the Company's fixed rate mortgage debt was 8.05% and on
its variable rate mortgage debt was 4.49% at June 30, 1997.  The weighted
average interest rate under the Credit Facility at June 30, 1997, (excluding the
effect of the interest rate swap agreements described below) was 7.15%.   The
Company has in place interest rate swap agreements to fix the Company's interest
costs on $50.0 million of the Company's Credit Facility borrowings.   The
weighted average effective interest rate under the fixed swap arrangements is
approximately 8.0%.  If interest rates under the Credit Facility, in excess of
the $50.0 million discussed herein, and under the Company's variable rate
mortgage debt, fluctuated by 1%, interest costs to the Company, before
capitalization of interest, if any, based on outstanding borrowings at June 30,
1997, would increase or decrease by approximately $600,000 on an annualized
basis.

Based on the outstanding balance of mortgage notes payable at June 30, 1997, the
weighted average interest rates on the mortgage notes with a final maturity in
each of the next five years were 8.8% in 1998, 7.4% in 1999, 8.5% in 2000 and
7.0% in 2001.  None of the mortgage notes mature in 1997.

                                       21
<PAGE>
 
At June 30, 1997, the Company's mortgage debt on its consolidated properties was
$169.1 million.  All mortgage debt at the Company's unconsolidated subsidiaries
was retired or assumed by third parties during the second quarter.  Including
Credit Facility borrowings of $101.8 million for the Company and $3.9 million
for the Subsidiaries, the total debt obligations of the Company and the
Subsidiaries were $274.8 million or 28% of total market capitalization (assuming
the exchange of all Units for shares of common stock).  At June 30, 1997 (based
on the closing price of the common stock of $31.250 on June 30, 1997, the last
trading day of the quarter, and assuming the exchange of all Units for shares of
common stock), there would be 22,740,624 shares of common stock outstanding with
a total market value of $710.6 million.

                                       22
<PAGE>
 
CURRENT DEVELOPMENT ACTIVITY

The Company's current development activity as of August 1, 1997,  is summarized
below.  All of the properties are located in metropolitan Atlanta, Georgia,
unless otherwise indicated.

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
                                                                                ESTIMATED          ESTIMATED             
                                            SQUARE           ESTIMATED          COMPLETION       STABILIZATION          
                                           FEET/(1)/         COST/(2)/          DATE/(3)/          DATE/(4)/          
==============================================================================================================
<S>                                       <C>              <C>                 <C>               <C>                  
MULTI-TENANT                                                                                                         
5195 Southridge Pkwy.                        60,000        $  2,758,000        3Q95/(5)/            4Q97/(6)/           
5149 Southridge Pkwy. (expansion)            46,800           2,497,000        1Q96/(5)/            4Q97/(6)/           
5025 Derrick Jones Rd.                       89,600           4,458,000        2Q96/(5)/            3Q97/(6)/           
3240 Town Point Dr.                         140,400           5,585,000        3Q96/(5)/            3Q97              
1335 Northmeadow Pkwy.                       88,783           6,950,000        4Q96/(5)/            3Q97/(6)/           
250 Hembree Park Dr.                         94,500           4,942,000        4Q96/(5)/            4Q97/(6)/           
120 Declaration Dr.                         301,200           7,841,000        1Q97/(5)/            4Q97              
3805 Crestwood Pkwy.                        105,295          10,646,000        1Q97/(5)/            1Q98              
3280 Summit Ridge Pkwy.                     173,360           4,999,000        1Q97/(5)/            1Q98              
1629 Prime Ct. (Orlando, FL)                 43,200           2,416,000        1Q97/(5)/            1Q98              
1750 Beaver Ruin Rd.                         67,600           4,860,000        2Q97/(5)/            1Q98              
2490 Principal Row (Orlando, FL)            101,800           3,491,000        2Q97/(5)/            4Q97              
11390 Old Roswell Rd.                        47,600           3,527,000        4Q97                 2Q98/(6)/           
250 Horizon Dr.                             267,619           7,661,000        3Q97                 3Q98              
736 Melrose Ave. (Nashville, TN)            103,473           5,454,000        4Q97                 4Q98              
2755 Eastside Pkwy.                          79,588           3,500,000        4Q97                 4Q98              
3300 Briley Park Blvd. (Nashville, TN)      194,750           6,374,000        4Q97                 4Q98              
2885 Breckinridge Blvd.                      82,349           5,866,000        4Q97                 4Q98              
130 Declaration Dr.                         210,000           5,373,000        4Q97                 4Q98              
3270 Summit Ridge Pkwy.                     152,000           4,198,000        4Q97                 4Q98              
Celebration Blvd. (Orlando, FL)              58,702           4,879,000        1Q98                 1Q99              
2550 Northwinds Pkwy.                       149,797          16,169,000        1Q98                 1Q99              
3885 Crestwood Pkwy.                        105,295          11,109,000        1Q98                 1Q99              
1700 Perimeter Park Dr. (Raleigh, NC)        81,000           7,947,000        1Q98                 1Q99              
5400 McCrimmon Pkwy. (Raleigh, NC)          146,250           9,166,000        1Q98                 1Q99              
660 Hembree Pkwy.                            94,500           4,226,000        1Q98                 1Q99              
Technology Park (Orlando, FL)                52,777           3,257,000        1Q98                 1Q99              
--------------------------------------------------------------------------------------------------------------
                                          3,138,238        $160,149,000                                               
==============================================================================================================
BUILD-TO-SUIT                                                                                                        
5755 Peachtree Industrial Blvd.              50,000           4,615,000           3Q97              3Q97              
5765 Peachtree Industrial Blvd.              60,000           3,913,000           3Q97              3Q97              
5775 Peachtree Industrial Blvd.              60,000           3,194,000           3Q97              3Q97              
2435 Principal Row (Orlando, FL)            126,818           4,464,000           3Q97              3Q97              
2850 Eastside Pkwy.                          86,000           2,938,000           4Q97              4Q97              
Paramount Pkwy. (Raleigh, NC)                99,684           9,164,000           2Q98              1Q99              
--------------------------------------------------------------------------------------------------------------
                                            482,502          28,288,000                                                
==============================================================================================================
                                          3,620,740        $188,437,000
==============================================================================================================
</TABLE>

(1)  Actual leasable square feet may vary upon completion.
(2)  Estimated cost information includes the Company's estimated future
     capitalized costs through the development stabilization date (defined as
     the earlier of 95% occupancy or one year from shell completion), including
     costs incurred to acquire certain properties after completion. There can be
     no assurance that the actual capitalized cost of a building will not exceed
     the estimated capitalized costs.
(3)  For multi-tenant buildings, represents building shell completion. There can
     be no assurance that a property will be completed by the estimated
     completion date.
(4)  Represents the Company's current estimate of the date the property will
     reach stabilization for financial reporting purposes. Properties are
     considered stabilized for financial reporting purposes upon the earlier of
     substantial lease-up or one year from building shell 

                                       23
<PAGE>
 
     completion. There can be no assurance that the property will reach
     stabilization for financial reporting purposes by the estimated
     stabilization date.
(5)  Shell completed; interior tenant finish to be completed.
(6)  The Company is the developer of and has an option to acquire these
     properties from affiliated joint ventures upon stabilization, as defined in
     the joint venture agreement. The date above reflects the estimated
     stabilization and resulting acquisition date by the Company.

CURRENT ACQUISITION ACTIVITY

In conjunction with the NWI and Lichtin acquisition transactions (see Note 7 to
the consolidated condensed financial statements), the Company has agreed,
subject to certain closing conditions, including updating its due diligence
procedures, to the future acquisition from NWI and Lichtin of approximately 164
net usable acres of undeveloped land, eight completed buildings and eight
buildings under development.  The aggregate acquisition consideration is
estimated to total approximately $100.3 million, subject to adjustment for the
actual operating results of certain properties to be acquired as more fully
discussed in the acquisition agreements.  It is expected that these future
acquisitions will be consummated primarily through a combination of the issuance
of Units and the assumption of indebtedness, some of which, in amounts up to
approximately $44 million, will be repaid through borrowings under the Credit
Facility.

The information provided above relating to the Company's current development and
acquisition activities includes forward-looking data based on current
construction schedules, the status of lease negotiations with potential tenants,
the satisfactory completion of due diligence procedures and other relevant
factors currently available to the Company.  There can be no assurance that any
of these factors will not change or that any change will not affect the accuracy
of such forward-looking information.

SUPPLEMENTAL DISCLOSURE OF FUNDS FROM OPERATION
The Company believes that funds from operations ("FFO") provides an additional
indicator of the financial performance of the Company.  FFO is defined by the
National Association of Real Estate Investment Trusts ("NAREIT") to mean net
income (loss) determined in accordance with generally accepted accounting
principles ("GAAP") excluding gains (or losses) from debt restructuring and
sales of property, plus depreciation and amortization of real property, 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 is influenced not only by the
operations of the properties, but also by the capital structure of the Company.
Accordingly, management expects that FFO will be one of the factors considered
by the Board of Directors in determining the amount of cash dividends the
Company will pay to its shareholders.  FFO does not represent cash flow from
operating, investing and financing activities as defined by GAAP, which are
discussed under "Liquidity and Capital Resources" in this section.
Additionally, FFO does not measure whether cash flow is sufficient to fund all
cash flow needs, including principal amortization, capital expenditures and
dividends to shareholders, and should not be considered as an alternative to net
income for purposes of evaluating the Company's operating performance or as an
alternative to cash flow, as defined by GAAP, as a measure of liquidity.

The Company's calculation of FFO follows the guidelines issued by NAREIT,
including the recognition of rental income on the "straight-line" basis
consistent with its treatment in the Company's statement of operations under
GAAP.  The "straight-line" rental adjustment increased rental revenues by
$174,000 and $120,000 for the three months ended and $324,000 and $191,000 for
the six months ended June 30, 1997 and 1996, respectively.  In accordance with
the NAREIT guidelines, the Company excludes gains or losses on sales of
operating (previously depreciated) real estate assets in calculating FFO, but
includes 

                                       24
<PAGE>
 
gains or losses on sales of undepreciated assets (land) that are of a recurring
nature. Pretax gains on land sales are included in FFO in the amount of $158,000
and $17,000, respectively, for the three months ended, and $448,000 and $40,000,
respectively, for the six months ended June 30, 1997 and 1996.

FFO presented herein under NAREIT guidelines is not necessarily comparable to
FFO presented by other real estate companies due to the fact that not all real
estate companies use the same definition.  However, the Company's FFO is
comparable to the FFO of real estate companies that use the current NAREIT
definition.

For the three months ended June 30, 1997, FFO increased by $3,609,000 or 64.7%
to $9,189,000 compared to FFO of $5,580,000  for the three months ended June 30,
1996.  For the six months ended June 30, 1997, FFO increased by $5,977,000 or
53.9% to $17,065,000 compared to FFO of $11,088,000 for the six months ended
June 30, 1996. FFO calculated under the current guidelines for the three and six
months ended June 30, 1997 and 1996, respectively, are detailed below (in
thousands):

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
                                                  THREE MONTHS     THREE MONTHS      SIX MONTHS       SIX MONTHS    
                                                      ENDED            ENDED            ENDED            ENDED      
                                                  JUNE 30, 1997    JUNE 30, 1996    JUNE 30, 1997    JUNE 30, 1996  
===================================================================================================================
<S>                                               <C>              <C>              <C>              <C>            
Net income                                              $ 5,080          $ 3,092          $ 8,906          $ 6,193  
Minority interests                                        1,618              713            2,850            1,426  
Depreciation & amortization                               5,700            3,049           11,044            6,000  
Depreciation and amortization -- subsidiaries                --               10               10               20  
Gain on sale of operating real estate asset                (209)              --             (209)              --  
Gain on sale of operating real estate asset --                                                                      
  subsidiaries                                              (76)              --              (76)              --  
-------------------------------------------------------------------------------------------------------------------
Funds from operations (Operating                                                                                   
  Partnership Units fully converted)                     12,113            6,864           22,525           13,639  
Ownership of Operating Partnership/(1)/                    75.9%            81.3%            75.8%            81.3% 
-------------------------------------------------------------------------------------------------------------------
FUNDS FROM OPERATIONS ATTRIBUTABLE TO                                                                              
  THE COMPANY'S SHAREHOLDERS                            $ 9,189          $ 5,580          $17,065          $11,088  
-------------------------------------------------------------------------------------------------------------------
WEIGHTED AVERAGE SHARES OUTSTANDING                      15,906           11,156           14,994           11,156   
===================================================================================================================
</TABLE>

(1)  Represents the Company's weighted average ownership of the Operating
     Partnership for the period.

                                       25
<PAGE>
 
SUPPLEMENTAL INFORMATION ON CAPITAL EXPENDITURES AND LEASING COSTS
The following table details the Company's capital expenditures and leasing costs
for the three and six months ended June 30, 1997 and 1996, respectively (in
thousands):

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------- 
                                                  THREE MONTHS     THREE MONTHS      SIX MONTHS       SIX MONTHS    
                                                      ENDED            ENDED            ENDED            ENDED      
                                                  JUNE 30, 1997    JUNE 30, 1996    JUNE 30, 1997    JUNE 30, 1996  
=======================================================================================================================
<S>                                               <C>              <C>              <C>              <C>            
Building acquisitions                                   $32,060          $ 9,411      $    49,758       $    9,411  
Development and land acquisition activity/(1)/           27,236           10,723           47,827           18,469  
Non-revenue-producing building                                                                                      
  Improvements                                              266              127              362              284  
Tenant improvement and leasing costs                                                                                
  on second-generation leases/(2)/                        1,161              741            2,094            1,445  
Tenant improvement expenditures to be                                                                               
  reimbursed by tenants                                      --              121               --              121  
-----------------------------------------------------------------------------------------------------------------------
                                                        $60,723          $21,123      $   100,041/(3)/  $   29,730/(4)/   
=======================================================================================================================
</TABLE>

(1)  Includes first-generation leasing costs on stabilized development
     properties totaling $249,000 and $450,000 in the three months ended and
     $1,346,000 and $554,000 in the six months ended June 30, 1997 and 1996,
     respectively.
(2)  Includes second-generation leasing costs totaling $510,000 and $278,000 in
     the three months ended and $1,067,000 and $464,000 in the six months ended
     June 30, 1997 and 1996, respectively.
(3)  Reflects aggregate capital expenditures and leasing costs including the
     assumption of indebtedness of $4,360,000, the issuance of $14,334,000 of
     Units and other changes in construction and acquisition related payables,
     net of receivables, of $1,714,000 for the six months ended June 30, 1997.
(4)  Reflects aggregate capital expenditures and leasing costs, exclusive of the
     decrease in construction accounts payable of $2,605,000 for the six months
     ended June 30, 1996.

                                       26
<PAGE>
 
The following table summarizes by period the Company's capitalized tenant
improvement and leasing costs incurred in the renewal or re-leasing of
previously occupied space for the six months ended June 30, 1997, and the year
ended December 31, 1996, respectively.  The information detailed below is
presented based on the date the tenants occupy the leased space.

CAPITALIZED TENANT IMPROVEMENTS AND LEASING COSTS

<TABLE> 
<CAPTION> 
--------------------------------------------------------------------------------------------------------
                                                                        SIX MONTHS              YEAR   
                                                                           ENDED                ENDED  
(In thousands, except per square foot information)                   JUNE 30, 1997        DEC. 31, 1996
========================================================================================================
<S>                                                                  <C>                  <C>          
Industrial Properties                                                                                
  Re-leasing                                                                                        
    Square feet re-leased                                                      678                 678
    Capitalized tenant improvements and leasing commissions                 $1,031              $1,395
    Capitalized tenant improvements and leasing commissions                                      
      per square foot                                                       $ 1.52              $ 2.06
  RENEWAL                                                                                           
    Square feet renewed                                                      1,212               1,027 
    Capitalized tenant improvements and leasing commissions                 $  776              $1,055
    Capitalized tenant improvements and leasing commissions                                      
      per square foot                                                       $ 0.64              $ 1.03
  TOTAL                                                                                             
    Square feet                                                              1,890               1,705
    Capitalized tenant improvements and leasing commissions                 $1,807              $2,450
    Capitalized tenant improvements and leasing commissions                                      
      per square foot                                                       $ 0.96              $ 1.44
=======================================================================================================
SUBURBAN OFFICE PROPERTIES                                                                            
      RE-LEASING                                                                                        
    Square feet re-leased                                                       58                   16  
    Capitalized tenant improvements and leasing commissions                 $  243               $   45  
    Capitalized tenant improvements and leasing commissions                                             
     per square foot                                                        $ 4.18               $ 2.80   
 RENEWAL                                                                                               
    Square feet renewed                                                         86                  106  
    Capitalized tenant improvements and leasing commissions                 $   87               $  290  
    Capitalized tenant improvements and leasing commissions                                             
      per square foot                                                       $ 1.01               $ 2.74  
 TOTAL                                                                                                 
   Square feet                                                                 144                  122
   Capitalized tenant improvements and leasing commissions                  $  330               $  335 
   Capitalized tenant improvements and leasing commissions                                             
     per square foot                                                        $ 2.28               $ 2.75  
-------------------------------------------------------------------------------------------------------
</TABLE>

                                       27
<PAGE>
 
SUPPLEMENTAL DISCLOSURE OF TENANT AND LEASE EXPIRATION INFORMATION

TENANTS
As of June 30, 1997, the Company's properties were leased to 695 tenants
including local, regional, national and international companies.  The Company's
30 largest tenants (measured by annualized base rent for leases in place in
stabilized properties and in properties under development or in lease-up where
tenants were paying rent at June 30, 1997) occupy a total of approximately 4.4
million square feet and represent 28.1% of the annualized base rent as shown in
the table below.

30 LARGEST TENANTS MEASURED BY ANNUALIZED BASE RENT

<TABLE> 
<CAPTION> 

------------------------------------------------------------------------------------------------------------------
                                                                                       % OF TOTAL              
                                            SQUARE        NUMBER        ANNUALIZED        ANNUALIZED           
RANK TENANT                                  FEET       OF LEASES    BASE RENT/(1)/    BASE RENT/(1)/     STATE  
-----------------------------------------------------------------------------------------------------------------
<S>                                         <C>         <C>          <C>               <C>                <C>     
 1   Scientific Atlanta/(2)/                600,413         11       $ 2,668,779            3.1%            GA      
 2   GTE Mobilnet Service Corporation       126,124          3         1,320,976            1.6%          GA,NC     
 3   Radian International LLC                90,159          2         1,170,275            1.4%            NC      
 4   DeVry Inc.                              64,981          1           959,120            1.1%            GA      
 5   Honeywell, Inc.                         70,016          3           947,995            1.1%            GA      
 6   The Athlete's Foot Group, Inc.         162,651          1           897,155            1.1%            GA      
 7   Fisher Scientific Company              223,219          1           875,019            1.0%            GA      
 8   Tridom Corporation                     120,989          5           820,952            1.0%            GA      
 9   National Data Corporation               50,283          4           786,777            0.9%            GA      
10   AT&T Corp.                              67,551          5           752,082            0.9%         GA,NC,TN   
11   PPD Pharmaco, Inc.                      72,416          4           747,368            0.9%            NC      
12   Best Buy Stores, L.P.                  222,643          1           703,552            0.8%            GA      
13   United Healthcare                       72,991          2           699,856            0.8%          GA,SC     
14   Intelligent Systems Corporation        137,100          1           685,500            0.8%            GA      
15   Sally Foster, Inc.                     197,200          2           673,237            0.8%            GA      
16   Vanstar Corporation                     86,880          4           666,746            0.8%            GA      
17   Yokohama Tire Corporation              252,092          1           665,383            0.8%            GA      
18   Auto-Lok, Inc.                         222,900          2           658,879            0.8%            GA      
19   360 Degree Communications               42,557          6           652,556            0.8%            NC      
20   Ahlstrom Recovery, Inc.                 62,893          2           649,493            0.8%            GA      
21   Astronet Corporation                    34,138          1           648,622            0.8%            GA      
22   Siemens Energy & Automation, Inc.      240,000          3           637,200            0.7%            GA      
23   The Bombay Company, Inc.               253,890          2           631,344            0.7%            GA      
24   United Parcel Service, Inc.            128,275          3           594,201            0.7%         GA,FL,TN   
25   Appleton Papers, Inc.                  210,600          1           593,892            0.7%            GA      
26   Southern Multimedia                                                                                            
     Communications, Inc.                   117,647          3           581,172            0.7%            GA      
27   Tekelec, Inc.                           68,236          2           579,322            0.7%            NC      
28   Intersolv, Inc.                         39,280          1           571,701            0.6%            NC      
29   Deutz Corporation                      137,061          1           561,950            0.6%            GA      
30   Reckitt & Colman, Inc.                 256,000          1           547,840            0.6%            GA      
------------------------------------------------------------------------------------------------------------------
                                           4,431,185         79      $23,948,944           28.1%                    
------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)  Annualized cash base rent net of rental concessions, if any, based on
     leases in place for stabilized properties and in properties under
     development or in lease-up where tenants were paying rent as of June 30,
     199 7.
(2)  Scientific Atlanta announced plans during the second quarter of 1996 to
     relocate over a period of several years certain facilities to a new, owned
     corporate campus. Based on scheduled lease termination dates and assuming
     the spaces were not re-leased, there would be less than a $0.01 per share
     impact on the Company's funds from operations and net income in 1997.

                                       28
<PAGE>
 
LEASE EXPIRATIONS

The following tables show scheduled lease expirations for the Company's total
property portfolio, for its industrial property portfolio and for its suburban
office portfolio, respectively, based on leases under which tenants were paying
rent in both stabilized and pre-stabilized properties as of June 30, 1997,
assuming no exercise of renewal options or termination rights, if any:

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------- 
                                          SQUARE                          ANNUALIZED        % OF TOTAL     
                         YEAR OF           FEET%            OF TOTAL     BASE RENT/(1)/     ANNUALIZED
                       EXPIRATION      (IN THOUSANDS)     SQUARE FEET    (IN THOUSANDS)    BASE RENT/(1)/
---------------------------------------------------------------------------------------------------------
<S>                   <C>              <C>                <C>            <C>               <C> 
TOTAL PORTFOLIO
                         1997              1,434              9.5%        $ 8,049              9.0%
                         1998              2,494             16.5%         13,233             14.8%
                         1999              1,896             12.5%         12,049             13.4%
                         2000              2,590             17.1%         15,729             17.5%
                         2001              1,278              8.5%          7,052              7.9%
                         2002              1,282              8.5%         10,071             11.2%
                         2003                592              3.9%          5,242              5.8%
                         2004              1,283              8.5%          6,170              6.9%
                         2005                523              3.5%          2,606              2.9%
                         2006                603              4.0%          3,011              3.4%
                         2007                514              3.4%          2,442              2.7%
                         2008                223              1.5%            783              0.9%
                         2011                294              1.9%          1,704              1.9%
                         2012                109              0.7%          1,497              1.7%
----------------------------------------------------------------------------------------------------------
                                          15,115/(2)/       100.0%        $89,638            100.0%
==========================================================================================================
 INDUSTRIAL PROPERTIES
                         1997              1,395             10.0%        $ 7,525             10.4% 
                         1998              2,387             17.2%         11,666             16.2%
                         1999              1,816             13.1%         10,922             15.2%
                         2000              2,340             16.8%         12,420             17.2%
                         2001              1,197              8.6%          6,017              8.4%
                         2002              1,037              7.4%          6,156              8.6%
                         2003                420              3.0%          2,688              3.7%
                         2004              1,179              8.5%          4,523              6.3%
                         2005                493              3.5%          2,167              3.0%
                         2006                582              4.2%          2,642              3.7%
                         2007                514              3.7%          2,442              3.4%
                         2008                223              1.6%            783              1.1%
                         2011                294              2.1%          1,704              2.4%
                         2012                 44              0.3%            295              0.4%
---------------------------------------------------------------------------------------------------------
                                          13,921            100.0%        $71,950            100.0%
==========================================================================================================
</TABLE>

                                             (Table continued on following page)

                                       29
<PAGE>
 
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
                                                        SQUARE                        ANNUALIZED         % OF TOTAL
                                    YEAR OF             FEET          % OF TOTAL     BASE RENT/(1)/      ANNUALIZED
                                   EXPIRATION      (IN THOUSANDS)     SQUARE FEET    (IN THOUSANDS)    BASE RENT/(1)/
=====================================================================================================================
<S>                                <C>             <C>                <C>            <C>               <C> 
 SURBURBAN                                                                                            
 OFFICE PROPERTIES                                                                                    
                                      1997                37              3.2%          $   506              2.9%
                                      1998               106              9.2%            1,556              9.0%
                                      1999                79              6.9%            1,105              6.4%
                                      2000               213             18.6%            3,000             17.4%
                                      2001                81              7.1%            1,036              6.0%
                                      2002               245             21.4%            3,915             22.8%
                                      2003               172             15.0%            2,554             14.9%
                                      2004               104              9.1%            1,646              9.6%
                                      2005                26              2.2%              382              2.2%
                                      2006                17              1.5%              309              1.8%
                                      2007                 0              0.0%                0              0.0%
                                      2008                 0              0.0%                0              0.0%
                                      2011                 0              0.0%                0              0.0%
                                      2012                65              5.8%            1,204              7.0%
---------------------------------------------------------------------------------------------------------------------
                                                       1,145            100.0%          $17,213            100.0%                
=====================================================================================================================
</TABLE>

(1)  Annualized base rent represents the annualized monthly base rental at the
     time of lease expiration.
(2)  The total square footage as of June 30, 1997, is comprised of approximately
     14,271,240 square feet of leases in stabilized properties, and
     approximately 843,724 square feet of leases in properties under development
     or in lease-up where tenants are paying rent as of June 30, 1997.

RECENT ACCOUNTING PRONOUNCEMENTS
In February 1997, Statement of Financial Accounting Standards ("SFAS") 128,
"Earnings per Share" was issued prescribing a new method for computing earnings
per share.  When implemented, SFAS 128 will supercede Accounting Principles
Board Opinion ("APB") No. 15, "Earnings per Share," the current accounting
literature utilized in computing earnings per share under generally accepted
accounting principles.  Under SFAS 128, the Company will be required to present
both basic and diluted earnings per share in its interim and annual financial
statements for periods beginning with its financial statements for the quarter
and year ended December 31, 1997.  For the three and six months ended June 30,
1997 and 1996, basic and diluted earnings per share calculated under the
provisions of SFAS 128 would be the same as primary and fully diluted earnings
per share calculated under current accounting standards (see Notes 2 and 6 to
the consolidated condensed financial statements).

In June 1997, SFAS 131, "Disclosures About Segments of an Enterprise and Related
Information" was issued prescribing new guidelines for the reporting of segment
data.  SFAS 131 will apply to all public, for-profit companies and will be
effective for calendar year end companies in the year ended December 31, 1998.
The Company is reporting under prior accounting standards, but may be required
to provide certain segment disclosures under SFAS 131.  The Company is
evaluating SFAS 131, but has not determined the specific nature and magnitude of
the disclosures required by SFAS 131.

                                       30
<PAGE>
 
IMPACT OF INFLATION
In the last three years, inflation has not had a significant impact on the
Company because of the relatively low inflation rate.  Substantially all tenant
leases do, however, contain provisions designed to protect the Company from the
impact of inflation.  Most of the leases require tenants to pay their share of
operating expenses, including common area maintenance, real estate taxes and
insurance, thereby reducing the Company's exposure to increases in costs and
operating expenses resulting from inflation.  In addition, many of the leases
are for terms of less than seven years, which may enable the Company to replace
existing leases with new leases at higher base rentals if rents under the
existing leases are below the then-existing market rate.  However, there can be
no assurance that the Company would be able to replace existing leases with new
leases at higher base rentals.

                                       31
<PAGE>
 
PART II -OTHER INFORMATION
ITEM 2 - CHANGE IN SECURITIES

         On March 31, 1997, the Company caused the Operating Partnership to
         issue a total of 501,488 Units in the Operating Partnership, in full
         consideration for the acquisition of real estate properties from NWI.
         The aggregate value of the properties acquired by the Company in
         exchange for such Units was approximately $12.5 million. Units are
         convertible by their holders into shares of common stock on a one-for-
         one basis, or into cash, at the Company's option. The Units were issued
         pursuant to an exemption from registration under Section 4(2) of the
         Securities Act in reliance, in part, upon the representations and
         warranties set forth in the NWI acquisition agreements. These Units are
         subject to a registration rights and lock-up agreement which restricts
         the disposition of the Units for a period of one year from the date of
         issuance with respect to all Units and further restricts the
         disposition of Units beneficially owned by the Company's principal
         executive officers in Nashville, Tennessee (approximately 43% of the
         total Units issued) until November 1, 1999.

         On January 31, 1997, the Company caused the Operating Partnership to
         issue 71,158 Units in partial consideration for the acquisition of real
         estate properties from Lichtin. The aggregate value of the properties
         acquired by the Company in exchange for such Units was approximately
         $1.8 million. Units are convertible by their holders into shares of
         common stock on a one-for-one basis, or into cash, at the Company's
         option. The Units and shares of common stock were issued pursuant to an
         exemption from registration under Section 4(2) of the Securities Act in
         reliance, in part, upon the representations and warranties set forth in
         the Lichtin acquisition agreements. The shares of common stock and
         Units are subject to a registration rights and lock-up agreement which
         generally restricts the disposition of the Units until December 31,
         1999.

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

         The Company held its annual shareholders' meeting on May 21, 1997.  The
         following directors were elected.

<TABLE>
<CAPTION>
                                                    Votes      Votes
                                    Board Term       For      Against    Abstain
         -----------------------------------------------------------------------
         <S>                       <C>            <C>         <C>        <C>
         A. Ray Weeks, Jr.         Through 2000   10,874,533     --      550,205
         George D. Busbee          Through 2000   10,874,533     --      550,205
         William O. McCoy          Through 2000   10,874,533     --      550,205
         John W. Nelley, Jr.       Through 1999   10,874,533     --      550,205
         William Cavanaugh, III    Through 1999   10,872,833     --      551,905
         Harold S. Lichtin         Through 1998   10,861,338     --      563,400
</TABLE>

         Four additional directors, Forrest W. Robinson, Charles R. Eitel,
         Barrington H. Branch and Thomas D. Senkbeil, continue to serve their
         existing terms through 1998 or 1999, as applicable.

                                       32
<PAGE>
 
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K


         (a)   Exhibits

               11.1 - Computation of earnings per share.

               27.1 - Financial data schedule.

         (b)   Reports on Form 8-K

               Form 8-K dated May 2, 1997, and filed on May 2, 1997, reporting
               certain information relating to the Company's financial results 
               for the quarter ended March 31, 1997.

               Form 8-K dated May 7, 1997, and filed on May 12, 1997, reporting
               certain information relating to the Company's public offering of 
               common stock in May 1997.

                                       33
<PAGE>
 
SIGNATURES


Pursuant to the requirements 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.
 
 
                                        WEEKS CORPORATION
                                        ----------------------------------------
                                        (Registrant)
                                        
                                        
August 12, 1997                         /s/ A. R. Weeks, Jr.
                                        ----------------------------------------
                                        A. R. Weeks, Jr.         
                                        Chairman of the Board and
                                        Chief Executive Officer   
                                        
                                        
August 12, 1997                         /s/ David P. Stockert
                                        ----------------------------------------
                                        David P. Stockert
                                        Senior Vice President and
                                        Chief Financial Officer

                                       34
<PAGE>
 
                                 EXHIBIT INDEX

Exhibit No.     Description                                             Page No.
--------------------------------------------------------------------------------
   11.1         Computation of earnings per share of common stock          36

   27.1         Financial Data Schedule


                                       35