<PAGE>   1

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549
                                    FORM 10-Q

(Mark One)

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


           FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998

                                       OR

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


                       COMMISSION FILE NUMBER 33-98372-01


                             SPIEKER PROPERTIES L.P.

             (Exact name of registrant as specified in its charter)


          CALIFORNIA                                            94-3188774
(State or other jurisdiction of                                (IRS Employer
incorporation or organization)                              Identification No.)


2180 SAND HILL ROAD, MENLO PARK, CA                               94025
(Address of principal executive offices)                        (Zip code)


                                 (650) 854-5600
              (Registrant's telephone number, including area code)

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


Page 1 of 23


<PAGE>   2



                             SPIEKER PROPERTIES L.P.

               QUARTERLY REPORT FOR THE PERIOD ENDED JUNE 30, 1998

                                TABLE OF CONTENTS



<TABLE>
<CAPTION>
PART I.         FINANCIAL INFORMATION                                                                      Page No.
<S>            <C>                                                                                         <C>
     Item 1.   Financial Statements (unaudited)...........................................................    3

               Consolidated Balance Sheets as of June 30, 1998, and December 31, 1997.....................    4
               Consolidated Statements of Operations for the Three and Six Months
                   Ended June 30, 1998 and 1997...........................................................    6
               Consolidated Statement of Partners' Capital for the Six Months Ended June 30, 1998.........    7
               Consolidated Statements of Cash Flows for the Six Months Ended June 30, 1998 and 1997......    8
               Notes to Consolidated Financial Statements.................................................    9

     Item 2.   Management's Discussion and Analysis of Financial Condition and Results of Operations......   16

PART II.       OTHER INFORMATION

     Item 6.   Exhibits and Reports on Form 8-K...........................................................   22
     Signatures...........................................................................................   23

</TABLE>


                                       2
<PAGE>   3


PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS


Attached are the following unaudited financial statements of Spieker Properties
L.P. (the "Operating Partnership"):

           (i) Consolidated Balance Sheets as of June 30, 1998, and December 31,
           1997

           (ii) Consolidated Statements of Operations for the Three and Six
           Months Ended June 30, 1998 and 1997

           (iii) Consolidated Statement of Partners' Capital for the Six Months
           Ended June 30, 1998

           (iv) Consolidated Statements of Cash Flows for the Six Months Ended
           June 30, 1998 and 1997

           (v) Notes to Consolidated Financial Statements

The financial statements referred to above should be read in conjunction with
the Operating Partnership's Annual Report on Form 10-K for the year ended
December 31, 1997.



                                       3
<PAGE>   4


                             SPIEKER PROPERTIES L.P.

                           CONSOLIDATED BALANCE SHEETS
                   AS OF JUNE 30, 1998, AND DECEMBER 31, 1997
                       (unaudited, dollars in thousands)

                                            ASSETS


<TABLE>
<CAPTION>
                                                         June 30, 1998      December 31, 1997
                                                         -----------        -----------
<S>                                                      <C>                <C>        
INVESTMENTS IN REAL ESTATE
   Land, land improvements and leasehold interests       $   902,325        $   694,621
   Buildings and improvements                              2,887,391          2,159,581
   Construction in progress                                  149,153             89,509
                                                         -----------        -----------
                                                           3,938,869          2,943,711
   Less - Accumulated depreciation                          (201,788)          (169,051)
                                                         -----------        -----------
                                                           3,737,081          2,774,660
   Investments in mortgages                                  123,101            271,675
   Property held for disposition, net                          7,663             37,186
                                                         -----------        -----------

       Net investments in real estate                      3,867,845          3,083,521

CASH AND CASH EQUIVALENTS                                     28,649             22,628

ACCOUNTS RECEIVABLE, net of allowance for doubtful
   accounts of $382 and $260 as
   of June 30, 1998, and December 31, 1997,
   respectively                                                6,350              8,661

DEFERRED RENT RECEIVABLE                                       8,406              5,276

RECEIVABLE FROM AFFILIATES                                     1,476                294

DEFERRED FINANCING AND LEASING COSTS, net of
   accumulated amortization of $11,730
   and $10,036 as of June 30, 1998, and
   December 31, 1997, respectively                            38,250             30,983

FURNITURE, FIXTURES AND EQUIPMENT, net                         4,066              3,375

PREPAID EXPENSES AND OTHER ASSETS                             19,664             50,892

INVESTMENT IN AFFILIATE                                       37,304             37,304
                                                         -----------        -----------

                                                         $ 4,012,011        $ 3,242,934
                                                         ===========        ===========

</TABLE>

        The accompanying notes are an integral part of these statements.


                                       4
<PAGE>   5

                             SPIEKER PROPERTIES L.P.

                           CONSOLIDATED BALANCE SHEETS
                   AS OF JUNE 30, 1998, AND DECEMBER 31, 1997
              (unaudited, dollars in thousands, except share data)

                      LIABILITIES AND STOCKHOLDERS' EQUITY


<TABLE>
<CAPTION>
                                                                         June 30, 1998    December 31, 1997
                                                                         ----------       ----------
<S>                                                                      <C>              <C>       
DEBT
   Unsecured notes                                                       $1,436,500       $1,135,000
   Unsecured short-term borrowings                                          275,000          200,000
   Mortgage loans                                                           112,803           96,502
                                                                         ----------       ----------
       Total debt                                                         1,824,303        1,431,502
                                                                         ----------       ----------

ASSESSMENT BONDS PAYABLE                                                     16,351           12,672
ACCOUNTS PAYABLE                                                             22,150            9,519
ACCRUED REAL ESTATE TAXES                                                     2,418            1,003
ACCRUED INTEREST                                                             29,916           21,541
UNEARNED RENTAL INCOME                                                       17,288           13,712
PARTNER DISTRIBUTIONS PAYABLE                                                45,265           41,110
OTHER ACCRUED EXPENSES AND LIABILITIES                                       42,499           32,034
                                                                         ----------       ----------
   Total liabilities                                                      2,000,190        1,563,093
                                                                         ----------       ----------

COMMITMENTS AND CONTINGENCIES                                                    --               --

PARTNERS' CAPITAL
   General Partner, including a liquidation preference of $381,250                         
     and $281,250, at June 30, 1998 and 1997, respectively                1,721,404        1,493,828
   Limited Partners                                                         290,417          186,013
                                                                         ----------       ----------
       Total Partners' Capital                                            2,011,821        1,679,041
                                                                         ----------       ----------

                                                                         $4,012,011       $3,242,934
                                                                         ==========       ==========
</TABLE>

        The accompanying notes are an integral part of these statements.

                                       5
<PAGE>   6

                             SPIEKER PROPERTIES L.P.

                      CONSOLIDATED STATEMENTS OF OPERATIONS
            FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1998 and 1997
                  (dollars in thousands, except share amounts)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                      Three Months Ended                Six Months Ended
                                                                            June 30                          June 30
                                                                   --------------------------       --------------------------
                                                                     1998             1997            1998             1997
                                                                   ---------        ---------       ---------        ---------
<S>                                                                <C>              <C>             <C>              <C>      
REVENUES
   Rental income                                                   $ 132,443        $  74,459       $ 250,080        $ 138,921
   Interest and other income                                           6,173            1,419          13,844            3,374
                                                                   ---------        ---------       ---------        ---------
                                                                     138,616           75,878         263,924          142,295
                                                                   ---------        ---------       ---------        ---------
OPERATING EXPENSES
   Rental expenses                                                    29,086           15,411          53,476           27,083
   Real estate taxes                                                  10,350            5,785          19,650           11,039
   Interest expense, including amortization of finance costs          30,931           12,687          60,198           24,700
   Depreciation and amortization                                      22,646           12,416          42,231           23,015
   General and administrative and other expenses                       4,973            3,468           9,795            6,535
                                                                   ---------        ---------       ---------        ---------
                                                                      97,986           49,767         185,350           92,372
                                                                   ---------        ---------       ---------        ---------

   Income from operations before disposition of property              40,630           26,111          78,574           49,923
                                                                   ---------        ---------       ---------        ---------

GAIN ON DISPOSITION OF PROPERTIES                                      6,689           12,691          15,715           14,180
                                                                   ---------        ---------       ---------        ---------

   Net income                                                         47,319           38,802          94,289           64,103
                                                                   ---------        ---------       ---------        ---------

Preferred Operating Partnership Unit Distribution                     (2,223)              --          (3,489)              --
                                                                   ---------        ---------       ---------        ---------
Net income available to general and limited partners               $  45,096        $  38,802       $  90,800        $  64,103
                                                                   =========        =========       =========        =========

General Partner                                                    $  40,547        $  34,080       $  81,775        $  56,284
Limited Partner                                                        4,549            4,722           9,025            7,819
                                                                   ---------        ---------       ---------        ---------
   Total                                                           $  45,096        $  38,802       $  90,800        $  64,103
                                                                   =========        =========       =========        =========

NET INCOME PER OPERATING PARTNERSHIP UNIT
   Basic earnings                                                  $     .63        $     .70       $    1.29        $    1.19
                                                                   =========        =========       =========        =========
   Diluted earnings                                                $     .62        $     .69       $    1.27        $    1.18
                                                                   =========        =========       =========        =========

DISTRIBUTION PER OPERATING PARTNERSHIP UNITS
   General Partner                                                 $     .67        $     .52       $    1.32        $    1.08
                                                                   =========        =========       =========        =========
   Limited Partners                                                $     .55        $     .47       $    1.12        $     .97
                                                                   =========        =========       =========        =========

</TABLE>


        The accompanying notes are an integral part of these statements.


                                       6
<PAGE>   7

                             SPIEKER PROPERTIES L.P.

                   CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL
                     FOR THE SIX MONTHS ENDED JUNE 30, 1998
                             (dollars in thousands)
                                   (UNAUDITED)



<TABLE>
<CAPTION>
                                                         General        Limited       General        Limited
                                                      Partner Units  Partner Units    Partner        Partners        Total
                                                      -------------  -------------  -----------    -----------    -----------
<S>                                                   <C>             <C>           <C>            <C>            <C>        
BALANCE AT DECEMBER 31, 1997                            60,700,260     7,322,126    $ 1,493,828    $   186,013    $ 1,679,841
  Contribution - Proceeds from sale of Common Stock      2,485,803            --         96,039             --         96,039
  Contribution - Common Stock issued for property          165,985            --          6,900             --          6,900
  Contribution - Proceeds from Sale of Preferred
    Operating Partnership Units                                 --            --             --         73,125         73,125
  Contribution - Proceeds from Sale of Series E
    Preferred Stock                                             --            --         96,401             --         96,401
  Acquisition of limited partnership interests                  --     1,332,644             --         55,420         55,420
  Conversion of Preferred Operating Units to
    Common Stock                                           259,694            --         10,096        (10,096)            --
  Conversion of Operating Partnership Units to
    Common Stock                                            57,500       (57,500)           971           (971)            --
  Restricted stock grant                                    86,401            --             --             --             --
  Exercise of stock options                                275,025            --          5,749             --          5,749
  Amortization of deferred compensation                         --            --             42             --             42
  Allocation from General Partner to Limited Partner            --            --         13,126        (13,126)            --
  Partner Distributions                                         --            --        (83,523)       (12,462)       (95,985)
  Net Income                                                    --            --         81,775         12,514         94,289
                                                       -----------   -----------    -----------    -----------    -----------

BALANCE AT JUNE 30, 1998                                64,030,668     8,597,270    $ 1,721,404    $   290,417    $ 2,011,821
                                                       ===========   ===========    ===========    ===========    ===========

</TABLE>

        The accompanying notes are an integral part of these statements.


                                       7
<PAGE>   8

                             SPIEKER PROPERTIES L.P.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE SIX MONTHS ENDED JUNE 30, 1998 and 1997
                             (dollars in thousands)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                             Six Months Ended June 30
                                                                             ------------------------
                                                                               1998         1997
                                                                             ---------    ---------
<S>                                                                          <C>          <C>      
CASH FLOWS FROM OPERATING ACTIVITIES
   Net Income                                                                $  94,289    $  64,103
   Adjustments to reconcile net income to net cash provided by
     operating activities-
   Depreciation and amortization                                                42,231       23,015
   Amortization of prepaid interest and deferred financing costs                 1,165          532
   Non-cash compensation                                                            42          398
   Gain on disposition of property                                             (15,715)     (14,180)
   Increase in deferred rent receivable                                         (3,130)        (471)
   Decrease in accounts receivable                                               2,311           51
   Increase in receivable from affiliates                                       (1,182)      (2,933)
   Decrease in prepaid expenses and other assets                                 1,016        6,611
   Decrease in assessment bonds payable                                           (517)        (486)
   Increase in accounts payable                                                 12,633        7,066
   Increase in accrued real estate taxes                                         1,415           97
   Increase in accrued interest                                                  8,375          683
   Increase in other accrued expenses and liabilities                            5,789        6,072
   Increase in unearned rental income                                            3,576        3,402
                                                                             ---------    ---------
       Net cash provided by operating activities                               152,298       93,960
                                                                             ---------    ---------
CASH FLOWS FROM INVESTING ACTIVITIES
   Additions to properties                                                    (923,209)    (529,445)
   Reductions to deposits on properties, net                                    29,018           --
   Additions to investment in mortgages                                        (11,610)          --
   Additions to leasing costs                                                   (7,561)      (3,200)
   Proceeds from investment in mortgages                                       160,184           --
   Proceeds from disposition of property                                        56,436       76,862
                                                                             ---------    ---------
       Net cash used for investing activities                                 (696,742)    (455,783)
                                                                             ---------    ---------
CASH FLOWS FROM FINANCING ACTIVITIES
   Proceeds from debt                                                          981,500      127,000
   Payments on debt                                                           (607,326)    (112,104)
   Payments of financing fees                                                   (3,192)        (146)
   Partner distributions                                                       (91,839)     (49,745)
   Capital contributions - Common Stock, net of issuance costs                  96,039      374,835
   Capital contributions - Stock options exercised                               5,748        1,871
   Capital contributions - Preferred Stock, net of issuance costs               96,401           --
   Capital contributions - Preferred Operating Partnership Units                73,125           --
   Capital contributions - Operating Partnership Units                              --           25
                                                                             ---------    ---------
       Net cash provided by financing activities                               550,465      341,736
                                                                             ---------    ---------
       Net increase (decrease) in cash and cash equivalents                      6,021      (20,087)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                22,628       29,336
                                                                             ---------    ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                                   $  28,649    $   9,249
                                                                             =========    =========
SUPPLEMENTAL CASH FLOW DISCLOSURE
   Cash paid for interest                                                    $  50,734    $  26,014
SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS
Liabilities assumed in relation to property acquisitions                        23,252       51,852
Increase to land and assessment bonds payable                                    4,196        1,049
Limited Partnership interest recorded in relation to properties acquired
  with Operating Partnership Units                                              55,420       26,072
Write-off of fully depreciated property                                          4,660        3,103
Write-off of fully amortized deferred financing and leasing costs                   --        1,170

</TABLE>

        The accompanying notes are an integral part of these statements.

                                       8
<PAGE>   9



                             SPIEKER PROPERTIES L.P.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             JUNE 30, 1998 and 1997
                        (in thousands, except share data)
                                   (UNAUDITED)


1.   ORGANIZATION AND BASIS OF PRESENTATION

     Spieker Properties, L.P.

     Spieker Properties, L.P. (the "Operating Partnership") was formed on
     November 10, 1993, and commenced operations on November 19, 1993, when
     Spieker Properties, Inc. (the "Company"), the general partner in the
     Operating Partnership, completed its initial public offering ("IPO") on
     November 18, 1993. The Company qualifies as a real estate investment trust
     ("REIT") under the Internal Revenue Code of 1986 (the "Code"), as amended.
     As of June 30, 1998, the Company owned an approximate 88.2 percent general
     and limited partnership interest in the Operating Partnership.


2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Consolidation

     The Operating Partnership's consolidated financial statements include the
     consolidated financial position of the Operating Partnership and its
     subsidiaries as of June 30, 1998, and December 31, 1997, and its
     consolidated results of operations for the three and six months ended June
     30, 1998 and 1997 and its consolidated cash flows for the six months ended
     June 30, 1998 and 1997. The Operating Partnership's investment in Spieker
     Northwest, Inc. (an unconsolidated Preferred Stock subsidiary) and its
     investment in Spieker Griffin/W9 Associates, LLC is accounted for under the
     equity method. All significant intercompany balances and transactions have
     been eliminated in the consolidated financial statements.

     Interim Financial Information

     The consolidated financial statements have been prepared pursuant to the
     rules and regulations of the Securities and Exchange Commission ("SEC")
     and, in management's opinion, include all adjustments necessary for a fair
     presentation of results for such interim periods. Certain information and
     note disclosures normally included in annual financial statements prepared
     in accordance with generally accepted accounting principles have been
     condensed or omitted pursuant to SEC rules or regulations; however, the
     Operating Partnership believes that adequate disclosures have been made.

     The interim results for the three and six months ended June 30, 1998 and
     1997, are not necessarily indicative of results for the full year. It is
     suggested that these financial statements be read in conjunction with the
     consolidated financial statements and notes thereto included in the
     Operating Partnership's Annual Report on Form 10-K for the year ended
     December 31, 1997.

     Properties

     Properties are recorded at cost and are depreciated using the straight-line
     method over the estimated useful lives of the properties. The estimated
     lives are as follows:

<TABLE>
<S>                                                     <C>     
     Land improvements and leasehold interests          18 to 40 years
     Buildings and improvements                         10 to 40 years
     Tenant improvements                                Term of the related lease
</TABLE>

     The cost of buildings and improvements includes the purchase price of the
     property or interests in property, legal fees, acquisition costs and
     interest, property taxes and other costs incurred during the period of
     construction.



                                       9
<PAGE>   10

     Expenditures for maintenance and repairs are charged to operations as
     incurred. Significant renovations or betterments which extend the economic
     useful life of assets are capitalized.

     Investments in real estate are stated at the lower of depreciated cost or
     estimated fair value. Fair value for financial reporting purposes is
     evaluated periodically by the Operating Partnership on a property by
     property basis using undiscounted cash flow. If a potential impairment is
     identified, it is measured by the property's fair value based on either
     sales comparables or the net cash expected to be generated by the property,
     less estimated carrying costs (including interest) throughout the
     anticipated holding period, plus the estimated cash proceeds from the
     ultimate disposition of the property. To the extent that the carrying value
     exceeds the estimated fair value, a provision for decrease in net
     realizable value is recorded. Estimated fair value is not necessarily an
     indication of a property's current value or the amount that will be
     realized upon the ultimate disposition of the property. As of June 30,
     1998, and December 31, 1997, none of the carrying values of the properties
     exceeded their estimated fair values. As of June 30, 1998, and December 31,
     1997, the properties are located primarily in California, Oregon and
     Washington. As a result of this geographic concentration, the operations of
     these properties could be adversely affected by a recession or general
     economic downturn in the areas where these properties are located.

     The Operating Partnership owns mortgage loans that are secured by real
     estate. Certain of the loans are with an affiliate of the Operating
     Partnership (see note 4). The Operating Partnership assesses possible
     impairment of these loans by reviewing the fair value of the underlying
     real estate. As of June 30, 1998, the estimated fair value of the
     underlying real estate was in excess of the Operating Partnership's book
     value of the mortgage loans.

     Construction in Progress

     Project costs clearly associated with the development and construction of a
     real estate project are capitalized as construction in progress. In
     addition, interest, real estate taxes and other costs are capitalized
     during the period in which activities necessary to get the property ready
     for its intended use are in progress.

     Cash and Cash Equivalents

     Highly liquid investments with an original maturity of three months or less
     when purchased are classified as cash equivalents.

     Deferred Financing and Leasing Costs

     Costs incurred in connection with financing or leasing are capitalized and
     amortized on a straight-line basis over the term of the related loan or
     lease. Unamortized financing and leasing costs are charged to expense upon
     the early termination of the lease or upon the early payment of financing.

     Fair Value of Financial Instruments

     Based on the borrowing rates currently available to the Operating
     Partnership, the carrying amount of debt approximates fair value. Cash and
     cash equivalents consist of demand deposits, certificates of deposit, and
     overnight repurchase agreements with financial institutions. The carrying
     amount of cash and cash equivalents approximates fair value.



                                       10
<PAGE>   11

     Preferred Operating Partnership Units

     In November, 1997, the Operating Partnership issued limited partners'
     interest of 2,007,495 Preferred Operating Partnership Units. Preferred
     Operating Partnership Units are convertible into 1,824,994 Operating
     Partnership Units at the discretion of the holder subsequent to May 3,
     1998, or they may be redeemable for cash at the discretion of the Operating
     Partnership subsequent to December 3, 2002. Preferred Operating Partnership
     Units are paid distributions quarterly in the amount of $.63 per share.
     During the quarter ended June 30, 1998, 285,664 Preferred Operating
     Partnership Units were converted into 259,694 Shares of Common Stock, held
     by the general partner as Operating Partnership Units.

     In April 1998, the Operating Partnership sold 1,500,000 Series D Preferred
     Units to an institutional investor for $50.00 per unit. The net proceeds
     of $73.1 million for the Series D Preferred Units were used to pay down
     the line of credit and to fund future growth for the Company.

     Revenues

     All leases are classified as operating leases. Rental income is recognized
     on the straight-line basis over the terms of the leases. Deferred rent
     receivable represents the excess of rental revenue recognized on a
     straight-line basis over cash received under the applicable lease
     provisions.

     Interest and Other Income

     Interest and other income includes interest income on cash, cash
     equivalents, investments in mortgages, and management fee income.

     Net Income Per Unit

     Per unit amounts for the Operating Partnership are computed using the
     weighted average units outstanding during the period. The diluted weighted
     average general partner units and limited partner units outstanding include
     the dilutive effect of stock options. The basic and diluted weighted
     average common units outstanding for the three and six months ended June
     30, 1998 and 1997, are as follows:

<TABLE>
<CAPTION>
                              Basic Weighted Average         Diluted Weighted Average
                               General Partner Units          General Partner Units
                               ---------------------          ---------------------
<S>                           <C>                            <C>       
Three months ended:
   June 30, 1998                      63,564,032                     64,509,703
   June 30, 1997                      48,460,550                     49,138,960

Six months ended:
   June 30, 1998                      62,402,618                     63,339,954
   June 30, 1997                      46,648,799                     47,342,428

                              Basic Weighted Average         Diluted Weighted Average
                               Limited Partner Units          Limited Partner Units
                               ---------------------          ---------------------
Three months ended:
   June 30, 1998                       8,373,023                      8,373,023
   June 30, 1997                       7,213,675                      7,213,675

Six months ended:
   June 30, 1998                       8,007,419                      8,007,419
   June 30, 1997                       7,123,689                      7,123,689
</TABLE>

     Reclassifications

     Certain items in the 1997 financial statements have been reclassified to
     conform to the 1998 presentation.

Use of Estimates

     The preparation of financial statements in conformity with generally
     accepted accounting principles requires management to make estimates and
     assumptions that affect the reported amounts of assets and liabilities and



                                       11
<PAGE>   12

     disclosure of contingent assets and liabilities at the date of the
     financial statements and the reported amounts of revenues and expenses
     during the reporting period. Actual results could differ from those
     estimates.


3.   ACQUISITIONS AND DISPOSITIONS

     The Operating Partnership acquired the following properties (the "1998
     Acquisitions") during the six months ended June 30, 1998:

<TABLE>
<CAPTION>
                                                                        Property       Total Rentable
Project Name                            Location                        Type (1)         Square Feet      Initial Cost (2)
--------------------------------------  ----------------------------   ------------   -----------------   ----------------
<S>                                     <C>                            <C>            <C>                 <C>
The Concourse                           San Jose, CA                        O               540,224           $172,421 (4)
Koll Bellefield Center                  Bellevue, WA                        O                65,946             10,324
Santa Monica Business Park (3)          Santa Monica, CA                    O               960,081            105,649
Marina Business Center (3)              Marina Del Rey, CA                  O               261,966             21,613
The City Office Park                    Orange, CA                          O               409,492             97,306 (5)
Skyport Plaza                           San Jose, CA                        O               359,600             56,873 (6)
Hayward Business Park                   Hayward, CA                         I               630,944             33,610
Enterprise Business Park II             Sacramento, CA                      I               579,945             26,202 (7)
Brea Park Center - Building C           Brea, CA                            O                26,856              2,297
Allegiance Center                       Ontario, CA                         O                73,778              5,191
Ontario Corporate Center                Ontario, CA                         O                97,703             10,479
2600 Michelson (3)                      Irvine, CA                          O               391,166             64,287
Cerritos Towne Center (3)               Cerritos, CA                        O               332,608             41,531
Metro Center (3)                        San Mateo, CA                       O               711,584            131,058
Biltmore Commerce Center (3)            Phoenix, AZ                         O               262,875             41,786
Benjamin Franklin Plaza                 Portland, OR                        O               273,239             50,047

</TABLE>



     (1)  "O" indicates office property; "I" indicates industrial property.

     (2)  Represents the initial acquisition costs of the properties excluding
          any additional repositioning costs.

     (3)  Previously identified as a part of the TDC Portfolio.

     (4)  Includes approximately $22.1 million allocated to 6.6 acres of land
          held for future development.

     (5)  Includes approximately $3.5 million allocated to 10.5 acres of land
          held for future development and $27.6 million allocated to a property
          currently under redevelopment.

     (6)  Includes approximately $23.1 million allocated to 20.0 acres of land
          held for future development.

     (7)  Includes approximately $2.0 million allocated to 11.5 acres of land 
          held for future development.

     The Operating Partnership disposed of the following properties (the "1998
     Dispositions") during the six months ended June 30, 1998:

<TABLE>
<CAPTION>
                                                                        Property       Total Rentable
Project Name                            Location                          Type           Square Feet        Sales Price
------------------------------          ---------------------        --------------    --------------       --------------
<S>                                     <C>                          <C>               <C>                  <C>      
Rose Pavilion                           Pleasanton, CA                   Retail             292,902           $  40,928
Camino West Business Park               Carlsbad, CA                     Office              44,574               2,750
Fresno Warehouse II                     Fresno, CA                     Industrial           122,000               3,934
Fresno Warehouse III                    Fresno, CA                     Industrial           100,200               3,653
Fresno Associates I                     Fresno, CA                     Industrial           175,900               6,463

</TABLE>


During the six months ended June 30, 1998, the Operating Partnership acquired
nine parcels of land for development which were purchased in addition to the
1998 Acquisitions land parcels listed above. The total initial cost of these
nine parcels was $34,658.



                                       12
<PAGE>   13

4.   TRANSACTIONS WITH AFFILIATES

     Revenues and Expenses

     The Operating Partnership received $1,856 and $17 for six months ended June
     30, 1998, and 1997, respectively, for management services provided to
     certain properties that are controlled and operating by Spieker Northwest,
     Inc., Spieker Griffin/W9 Associates, LLC and Spieker Partners related
     entities (collectively, "Spieker Partners"). Certain officers of Spieker
     Properties, Inc. are partners in Spieker Partners.

     Receivable From Affiliates

     The receivable from affiliates at June 30, 1998, and December 31, 1997,
     represents management fees and reimbursements due from Spieker Northwest,
     Inc., Spieker Griffin/W9 Associates, LLC and Spieker Partners related
     entities.

     Investments in Mortgages

     Included in Investments in Mortgages are $108,720 of loans to Spieker
     Northwest, Inc.. The loans are secured by deeds of trust on real property,
     bear interest at 8.5%, and mature in 2012. Interest income of $9,209 is
     included in interest and other income for the six months ended June 30,
     1998.

     Investment in Affiliate

     The investment in affiliate represents an investment in Spieker Northwest,
     Inc. ("SNI"). The Operating Partnership owns 95% of the Preferred Stock of
     SNI. Certain Senior Officers of the Company own 100% of the voting stock of
     SNI. SNI owns 1.1 million square feet of office and industrial property
     located in various states. In addition, SNI owns three parcels of land
     totaling 30.2 acres. The entire portfolio of property is held for sale at
     June 30, 1998. In addition to property ownership, SNI provides property
     management services to certain properties owned by Spieker Partners.

     Additionally, investment in affiliates represents the 12.5% interest in
     Spieker Griffin/W9 Associates, LLC. Spieker Griffin/W9 Associates purchased
     in April 1998 a 535,000 square foot office complex, which is managed by the
     Operating Partnership, located in Orange County, California for an initial
     cost of $100,000.


5.   PROPERTY HELD FOR DISPOSITION

     The Operating Partnership has determined to focus exclusively on properties
     that meet its long-term strategic objectives. The Operating Partnership has
     therefore decided to divest itself of certain properties. Included in
     property held for disposition of $7,663 at June 30, 1998, one industrial
     property located in Southern California and one industrial property located
     in Washington. The divestiture of these properties is subject to
     identification of a purchaser, negotiation of acceptable terms and other
     customary conditions.


6.   DEBT

     Unsecured Notes

     As of June 30, 1998, the Operating Partnership has outstanding $1,436,500
     in investment grade rated unsecured debt securities with interest rates
     ranging from 6.65% to 8.00% payable semi-annually. The debt securities
     mature on various dates from 2000 to 2027.



                                       13
<PAGE>   14


     On April 30, 1998, the Operating Partnership sold $25,000 of unsecured
     investment grade rated notes bearing interest at 6.88% and due April 30,
     2007. Net proceeds of $23,400 were used principally to fund the TDC
     acquisition.

     Unsecured Short-Term Borrowings

     The Operating Partnership has an Unsecured Line of Credit facility. The
     maximum amount available under the facility is $250,000. The facility
     carries interest at LIBOR (London Interbank Offered Rates) plus 0.80%,
     matures in August 2001, includes an annual administrative fee of $50 and an
     annual facility fee of .20%. As of June 30, 1998, the amount drawn on the
     facility was $75,000. In addition, the Operating Partnership has a $200,000
     short-term bank facility. This short-term facility carries interest at
     LIBOR plus .65% and matures November 1998 with an option to extend for one
     more year.

     Mortgage Loans

     Mortgage loans of $ 112,803 as of June 30, 1998, are secured by deeds of
     trust on related properties. The mortgage loans carry interest rates
     ranging from 7.37% to 9.88%, require monthly principal and interest
     payments, and mature on various dates from 1998 to 2013.


7.   PARTNER DISTRIBUTIONS PAYABLE

     The partners distributions payable at June 30, 1998, and December 31, 1997,
     represent amounts payable to partners for the quarter then ended.


8.   PARTNERS' CAPITAL

     Equity Offerings

     The Company placed 1,166,144 shares of Common Stock at $39.88 per share on
     April 23, 1998, in a Registered Unit Investment Trust. Net proceeds of
     $44,059, were contributed to the Operating Partnership and were used to
     repay borrowings on the Unsecured Line of Credit and to fund the ongoing
     acquisition and development of properties.

     In June 1998, the Company sold 4,000,000 shares of Series E Cumulative
     Redeemable Preferred Stock for $25.00 per share through an underwritten
     public offering. The aggregate net proceeds of $96,800 were used primarily
     to repay short term borrowings.

9.   COMMITMENTS AND CONTINGENCIES

     The land on which three of the Operating Partnership's properties are
     located is owned by Stanford University and is subject to ground leases.
     The ground leases expire in 2039 or 2040 and, unless the leases are
     extended, the use of the land, together with all improvements, will revert
     back to Stanford University. The former owners of the three properties
     prepaid the ground leases through 2011, 2012 and 2017; thereafter, the
     Operating Partnership will be responsible for the ground lease payments, as
     defined under the terms of the leases. These ground lease payments have
     been segregated from the total purchase price of the properties,
     capitalized as leasehold interests in the accompanying consolidated balance
     sheet, and are being amortized ratably over the terms of the related
     original prepayment periods (18 to 24 years).

     In addition, the Operating Partnership has entered into operating ground
     leases on certain land parcels with periods ranging from 16 to 53 years,
     certain of the operating ground leases contain purchase options.


10.  GAIN ON DISPOSITION OF PROPERTIES

     Gain on disposition of property for the six months ended June 30, 1998,
     represents the gain on dispositions of one retail property located in
     Pleasanton, California, one office property located in Carlsbad, California
     and three industrial buildings located in Fresno, California.


                                       14
<PAGE>   15

11.  SUBSEQUENT EVENTS


     On various dates subsequent to June 30, 1998, through July 10, 1998, the
     Operating Partnership acquired one property totaling approximately 63,000
     square feet at a total initial acquisition cost of $16,000 and land parcels
     for an initial acquisition cost of $19,430. These acquisitions were funded
     by proceeds from Common Stock offerings, borrowings from short-term
     unsecured bank facilities, and issuances of Operating Partnership Units.


                                       15
<PAGE>   16


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

     Statements contained in this Item 2, "Management's Discussion and Analysis
     of Financial Conditions and Results of Operations," and elsewhere in this
     Quarterly Report on Form 10-Q which are not historical facts may be
     forward-looking statements. Such statements are subject to certain risks
     and uncertainties which could cause actual results to differ materially
     from those projected, including, but not limited to, those risks and
     special considerations set forth in the Operating Partnership's other SEC
     filings. Readers are cautioned not to place undue reliance on these
     forward-looking statements which speak only as of the date hereof. The
     Operating Partnership undertakes no obligation to publicly release any
     revisions to these forward-looking statements to reflect events or
     circumstances after the date hereof or to reflect the occurrence of
     unanticipated events.

     RESULTS OF OPERATIONS

     The following comparison is of the Operating Partnership's consolidated
     operations for the three and six month period ended June 30, 1998, as
     compared to the corresponding periods ended June 30, 1997.

     Rental revenues for the second quarter of 1998 increased by $57.9 million
     or 77.7% to $132.4 million, as compared with $74.5 million for the quarter
     ended June 30, 1997. Of this increase, $21.6 million was generated by
     properties acquired during the first six months of 1998 (the "1998
     Acquisitions"). In the second quarter of 1998 the Operating Partnership
     acquired properties totaling 2.0 million square feet for a total investment
     of $339.5 million. As used herein, the terms "invested" and "total
     investment" represent the initial purchase price of acquisitions, plus
     projected cost of certain repositioning and rehab capital expenditures
     anticipated at the time of purchase. The properties acquired in the second
     quarter were acquired on various dates throughout the quarter and, as such,
     a full quarter's revenue and expenses were not recognized during the
     quarter.

     $32.9 million of the rental revenue increase in the second quarter of 1998
     was generated by properties acquired during 1997. During 1997, the
     Operating Partnership invested $1.5 billion to acquire properties totaling
     12.5 million square feet (the "1997 Acquisitions").

     $2.7 million of the increase in rental revenues is attributable to revenue
     increases in properties owned at January 1, 1997, and still owned at June
     30, 1998 (the "Core Portfolio"). This increase in the Core Portfolio is due
     to increased rental rates realized on the renewal and re-leasing of
     second-generation space and contractual rent increases in existing leases.
     During the quarter ended June 30, 1998, the Operating Partnership completed
     361 lease transactions for the renewal or re-leasing of 2.6 million square
     feet of second-generation space. On average for the quarter, the new
     effective rates were 40.0% higher than the expiring coupon rent.

     $4.2 million of the rental revenue increase in the second quarter of 1998
     was generated by properties developed by the Operating Partnership (the
     "Developments"). The Developments include both properties completed and
     added to the Operating Partnership's portfolio of stabilized properties
     during 1997 and 1998, as well as properties currently under development.
     During the six months ended June 30, 1998, two properties totaling 383,690
     square feet were completed for an estimated final cost of $26.0 million and
     were added to the Operating Partnership's portfolio of stabilized
     properties. Properties are considered stabilized when a 95.0% occupancy
     rate has been achieved. The Operating Partnership also has a current
     development pipeline of 3.8 million square feet representing a total
     projected cost of $432.6 million. Certain of the properties in the
     development pipeline are shell complete and partially occupied but are not
     considered stabilized.

     The increases in rental revenue are partially offset by a decrease of $3.5
     million attributable to the disposition of properties which were owned by
     the Operating Partnership during the quarter ended June 30, 1997 and sold
     subsequent to the end of such quarter (the "Property Dispositions").

     Rental revenues for the six month period ended June 30, 1998, increased by
     $111.2 million or 80.1% to $250.1 million as compared to $138.9 million for
     the same period ended June 30, 1997. $30.8 million and $75.4 million,
     respectively, of this increase was attributable to the 1998 and 1997
     Acquisitions, $5.4 million relates to 



                                       16
<PAGE>   17

     the Core Portfolio, $7.7 million is attributable to the Developments, with
     the remainder attributable to a $8.1 million decrease from Property
     Dispositions.

     As a result of the 1998 Acquisitions, the 1997 Acquisitions, and the
     Developments, the Operating Partnership's rentable square footage,
     increased by 16.3 million square feet or 67.3% to 40.4 million square feet
     on June 30, 1998, from 24.1 million on June 30, 1997. At June 30, 1998, the
     portfolio of stabilized properties was 95.6% occupied. By property type,
     the office portfolio was 94.5% occupied and the industrial portfolio was
     96.7% occupied.

     Interest and other income increased by $4.8 million and $10.4 million or
     342.9% and 305.9% for the three and six month periods ended June 30, 1998,
     over the same periods ended June 30, 1997. The net increase in interest and
     other income is due to interest income from mortgage loans made to Spieker
     Northwest, Inc. (SNI), an affiliate of the Operating Partnership, in
     relation to SNI's acquisition of non-core assets in the WCB Portfolio.
     Refer to footnote (4) Transactions with Affiliates --"Investment in
     Affiliate" for further explanation.

     Rental expenses increased by $13.7 million or 89.0% for the quarter ended
     June 30, 1998, as compared with the same period in 1997. Real estate taxes
     increased by $4.6 million or 79.3% in 1998, as compared to $5.8 million in
     1997. The overall increase in rental expenses and real estate taxes
     (collectively referred to as "property operating expenses") is primarily a
     result of the growth in the total square footage of the Operating
     Partnership's portfolio of properties. Of the total $18.3 million increase
     in property operating expenses, $9.6 million is attributable to the 1997
     Acquisitions, $8.2 million is attributable to the 1998 Acquisitions, $1.4
     million is attributable to the Developments, and $0.2 million is
     attributable to the Core Portfolio offset by a $1.1 million decrease
     attributable to the Property Dispositions. On a percentage basis, property
     operating expenses were 29.8% and 28.5% of rental revenues for the quarter
     ended June 30, 1998, and June 30, 1997, respectively. The increase in
     property operating expenses as a percentage of rental revenues is
     attributable to the increased percentage of office properties in the
     Operating Partnership's portfolio. For the quarter ended June 30, 1998,
     66.2% of the Operating Partnership's net operating income (rental revenues
     less property operating expenses) was generated by office properties as
     compared with 62.5% during the same period in 1997.

     In relation to the Operating Partnership's decision to divest itself of
     certain properties, the following analysis is presented: Rental revenues
     net of property operating expenses (referred to as "property operating
     income") increased by $42.0 million or 82.8% to $92.7 million, as compared
     to $50.7 million for the quarter ended June 30, 1997. Of this increase,
     $23.3 million and $13.4 million relates to the 1997 and 1998 Acquisitions,
     $2.5 million is attributable to the Core Portfolio, and $2.8 million is
     attributable to the Developments. For the six month period ended June 30,
     1998, property operating income increased by $81.9 million or 87.4% from
     $93.7 million to $175.6 million at June 30, 1997. $53.0 million and $19.0
     million related to the 1997 and 1998 Acquisitions, $4.7 million is related
     to the Core Portfolio, and $5.2 million is attributed to the Developments.

     For the six month period ended June 30, 1998, rental expenses increased by
     $26.4 million from $27.1 million for the six months ended September 30,
     1997. This represents a 97.4% increase year over year. Real estate taxes
     increased by $8.6 million or 78.2% to $19.6 million for the first two
     quarters of 1998 as compared to $11.0 million for the same period in 1997.
     Of the total $35.0 million increase in property operating expenses, $22.4
     million is attributable to the 1997 Acquisitions, $11.8 million is for the
     1998 Acquisitions, $2.5 million relates to the Developments, $0.7 million
     is attributed to the Core Portfolio, and a $2.4 reduction attributable to
     the Property Dispositions. On a percentage basis property operating
     expenses were 29.2% and 27.4% of rental revenues for the six months ended
     June 30, 1998, and 1997, respectively.

     Interest expense increased by $18.2 million or 143.3% to $30.9 million for
     the three months ended June 30, 1998, from $12.7 million for the same
     period in 1997. For the six month period ended June 30, 1998, interest
     expense increased by $35.5 million or 143.7% to $60.2 million from $24.7
     million for the same period in 1997. These increases in interest expense
     are due to increases in the total average outstanding debt balances. The
     average outstanding debt for the three months ended June 30, 1998, and 1997
     was $1.9 billion and $0.8 billion respectively. The average balance
     outstanding for the six months ended June 30, 1998, was $1.8 billion and
     $0.7 billion for the same period in 1997. The increases in the average
     outstanding debt balances are consistent with the increases in the size of
     the Operating Partnership's portfolio of properties.



                                       17
<PAGE>   18

     Depreciation and amortization expenses increased by $10.2 million and $19.2
     million or 82.3% and 83.5% for the three and six month periods ended June
     30, 1998, respectively, as compared with the same periods in 1997, due to
     the 1998 and 1997 Acquisitions and the completed Developments.

     General and administrative expenses and other expenses increased by $1.5
     million and $3.3 million for the three and six month periods ended June 30,
     1998 as compared with the same period in 1997, primarily as a result of the
     increased growth in the portfolio. On a percentage basis, general and
     administrative expenses were 3.8% and 3.9% of rental revenues for the three
     and six month periods ended June 30, 1998, respectively, as compared with
     4.7% for the same periods in 1997.

     During the second quarter of 1998, the Operating Partnership disposed of
     properties resulting in a gain on disposition of $6.7 million. This brings
     the total gain on disposition of property for the first two quarters of
     1998 to $15.7 million on five properties.

     Net income before minority interests and disposition of property increased
     by $14.5 million or 55.6% to $40.6 million for the three month period ended
     June 30, 1998, from $26.1 million for the same period in 1997. For the six
     month period ended June 30, 1998, net income before minority interests and
     disposition of property increased by $28.6 million or 57.2% to $78.6
     million, from $50.0 million for the same period in 1997. The increase in
     net income is due to the 1998 and 1997 Acquisitions and revenue growth in
     the Company's Core Portfolio.

     LIQUIDITY AND CAPITAL RESOURCES

     For the quarter ended June 30, 1998, cash provided by operating activities
     increased by $58.3 million, or 62.0%, to $152.3 million, as compared to
     $94.0 million for 1997. The increase is primarily due to the increase in
     net income resulting from the 1997 and 1998 Acquisitions, the Developments,
     increased property operating income generated by the Core Portfolio and is
     partially offset by an increase in interest expense. Cash used for
     investing activities increased by $240.9 million, or 52.9%, to $696.7
     million for the first six months of 1998, as compared to $455.8 million for
     the first six months of 1997. The increase is attributable to the Operating
     Partnership's ongoing acquisition and development of office and industrial
     properties offset by proceeds from dispositions. Cash provided by financing
     activities increased by $208.8 million, or 61.1%, to $550.5 million for the
     first six months of 1998, as compared to $341.7 million for the same period
     in 1997. During the first six months of 1998, cash provided by financing
     activities consisted primarily of $265.6 million in net proceeds from the
     sale of Common and Preferred Stock and Preferred Operating Partnership
     Units, $299.1 million in proceeds from the issuance of unsecured notes (see
     below), net borrowings of $75.0 million on the Facility (as defined below)
     and an $19.3 million increase in mortgage loans due to loans assumed in
     conjunction with property acquisitions. Additionally, payments of
     distributions increased by $42.1 million to $91.8 million for the first six
     months of 1998, as compared with $49.7 million for the same period in 1997.
     The distribution payment increase is due to the greater number of shares
     outstanding and a 21.3% increase in the distribution rate of $.94 per share
     for the first six months of 1998 from $1.14 per share in 1997.

     The principal sources of funding for acquisitions, development, expansion
     and renovation of the properties are unsecured short-term borrowings,
     public and privately placed equity financing, public unsecured debt
     financing, the issuance of partnership units in the Operating Partnership,
     the assumption of secured debt on properties acquired and cash flow
     provided by operations. The Operating Partnership believes that its
     liquidity and its ability to access capital are adequate to continue to
     meet liquidity requirements for the foreseeable future.

     At June 30, 1998, the Operating Partnership had no material commitments for
     capital expenditures related to the renewal or re-leasing of space. The
     Operating Partnership believes that the cash provided by operations and its
     line of credit provide sufficient sources of liquidity to fund capital
     expenditure costs associated with the renewal or re-leasing of space.

     In January 1997, the Company sold 11,500,000 shares of Common Stock
     (including 1,500,000 shares sold to the underwriters in the exercise of
     their over-allotment option in February 1997) through an underwritten
     public offering at $34.50 per share. The net proceeds of $374.8 million
     were used to purchase properties during the 



                                       18
<PAGE>   19

     first quarter of 1997, many of which were under contract or letter of
     intent at the time of the offering, and to repay indebtedness. Also, in
     January 1997, the Company and the Operating Partnership filed a shelf
     registration statement with the SEC which registered $500.0 million of
     equity securities of the Company and $500.0 million of debt securities of
     the Operating Partnership and became effective in January 1997.

     In September 1997, the Company and the Operating Partnership filed a shelf
     registration statement (the "September 1997 Shelf Registration Statement")
     with the SEC which registered $500.0 million of equity securities of the
     Company and $500.0 million of debt securities of the Operating Partnership
     which became effective in October 1997.

     On October 10, 1997, the Company sold 6,000,000 shares of Series C
     Cumulative Redeemable Preferred Stock for $25.00 per share. Dividends are
     payable at an annual rate of 7.875% of the liquidation preference of $150.0
     million. Net proceeds of $146.0 million were used principally to repay
     borrowings on the unsecured line of credit and to fund the ongoing
     acquisition and development of property.

     In November 1997, the Company sold 11,500,000 shares of Common Stock
     (including 1,500,000 shares sold to the underwriters in the exercise of
     their over-allotment option) through an underwritten public offering at
     $38.875 per share. The net proceeds of $425.0 million were used to repay
     indebtedness and to purchase properties which were under contract at the
     time of the offering.

     In December 1997, the Company placed 573,134 shares of Common Stock in a
     Registered Unit Investment Trust at $41.875 per share together with other
     publicly traded REITs. The net proceeds of $22.8 million were used to repay
     borrowings on the unsecured line of credit and to fund the ongoing
     acquisition and development of properties.

     In February, March and April 1998, the Company placed 710,832 shares,
     608,828 shares and 1,166,144 shares, respectively, of Common Stock at
     prices of $42.25, $41.06 and $39.88 in Registered Unit Investment Trusts
     along with other publicly traded REITs. The net proceeds of $96.3 million
     were used to paydown borrowings on the line of credit and to fund the
     ongoing acquisition and development of properties.

     In April 1998, the Company sold 1,500,000 Series D Cumulative Redeemable
     Preferred Units (the "Series D Preferred Units") to an institutional
     investor for $50.00 per unit. Dividends are payable at an annual rate of
     7.6875%. The Series D Preferred Units may be called at par on or after
     April 20, 2003, and have no stated maturity or mandatory redemption. The
     Series D Preferred Units are exchangeable for the Series D Cumulative
     Redeemable Preferred Stock of the Company on or after April 20, 2008. The
     net proceeds of $73.1 million for the Series D Preferred Units were used to
     paydown the line of credit and fund future growth of the Operating
     Partnership.

     In June 1998, the Company sold 4,000,000 shares of Series E Cumulative
     Redeemable Preferred Stock for $25.00 per share. Dividends are payable at
     an annual rate of 8.00% of the liquidation preference of $100.0 million.
     Net proceeds of $96.8 million were used principally to repay borrowings on
     the unsecured line of credit and to fund the ongoing acquisition and
     development of property.

     In 1997 the Operating Partnership issued $500.0 million of investment grade
     rated debt in three tranches as follows: On July 14, 1997, the Operating
     Partnership issued $150.0 million of investment grade rated unsecured
     notes. The notes carry an interest rate of 7.125%, were priced to yield
     7.183%, and mature on July 1, 2009. On September 29, 1997, the Operating
     Partnership issued $150.0 million of investment grade rated unsecured
     debentures. The debentures carry an interest rate of 7.5%, were priced to
     yield 7.57% and mature on October 1, 2027. On December 8, 1997, the
     Operating Partnership issued $200.0 million of 7.35% debentures, priced to
     yield 7.37%, and mature on December 1, 2017. Net proceeds from the July
     1997, September 1997 and December 1997 unsecured debt securities of $489.0
     million were used to repay borrowings on the unsecured line of credit and
     to fund the ongoing acquisition and development of properties.

     During the first six months of 1998 the Operating Partnership issued $301.5
     million of investment grade rated unsecured notes in four tranches as
     follows: $150.0 million of 6.75% notes due January 15, 2008, 



                                       19
<PAGE>   20


     $125.0 million of 6.875% notes due February 1, 2005; $1.5 million of 7.0%
     notes due February 2, 2007 and $25.0 million of 6.875% notes due April 30,
     2007.

     As of June 30, 1998, the Operating Partnership had in total $1.4 billion of
     investment grade rated unsecured debt securities outstanding. The debt
     securities have interest rates which vary from 6.65% to 8.0%, and maturity
     dates which range from 2000 to 2027. Through its issuance of debt the
     Company has extended the average maturity for its unsecured debt from 6.4
     years at June 30, 1997, to 9.7 years at June 30, 1998.

     The Operating Partnership has a $250.0 million unsecured line of credit
     facility (the "Facility") with interest at London Interbank Offered Rates
     ("LIBOR") plus .80%. The Facility matures in August 2001. This facility has
     a competitive bid option that allows the Operating Partnership to request
     bids from the Lenders for advances up to $150.0 million. At June 30, 1998,
     the Operating Partnership had $75.0 million outstanding under the Facility.
     In addition, the Operating Partnership had $200.0 million outstanding under
     a separate short-term bank facility at December 31, 1997. This short-term
     facility carries interest at LIBOR plus 0.65% and matures in November 1998
     with an option to extend for one more year.

     In addition to the unsecured debt securities and the Facility, the
     Operating Partnership has $112.8 million of secured indebtedness (the
     "Mortgages") at June 30, 1998. The Mortgages have interest rates varying
     from 10.0% to 7.4% and maturity dates from 1998 to 2013. The Mortgages are
     secured by a first or second deed of trust on the related properties and
     generally require monthly principal and interest payments. The Company also
     has $16.4 million of assessment bonds outstanding as of June 30, 1998.

     The Company and Operating Partnership filed a shelf registration statement
     (the "May 1998 Shelf Registration Statement") with SEC which registered
     $500.0 million of equity securities of the Company and $500.0 million of
     debt securities of the Operating Partnership, which became effective in May
     1998.

     After completion of the equity and debt offerings, the Company has the
     capacity pursuant to a shelf registration statement declared effective in
     September 1997 (the "September 1997 Registration Statement") and the May
     1998 Shelf Registration Statement to issue up to approximately $663.8
     million in equity securities and the Operating Partnership has the capacity
     pursuant to the September 1997 Registration Statement and the May 1998
     Shelf Registration Statement to issue up to $813.5 million in debt
     securities.

     FUNDS FROM OPERATIONS

     The Operating Partnership considers Funds from Operations to be a useful
     financial measure of the operating performance of an equity REIT because,
     together with net income and cash flows, Funds from Operations provides
     investors with an additional basis to evaluate the ability of a REIT to
     incur and service debt and to fund acquisitions, developments, and other
     capital expenditures. Funds from Operations does not represent net income
     or cash flows from operations as defined by generally accepted accounting
     principles ("GAAP") and Funds from Operations should not be considered as
     an alternative to net income as an indicator of the Company's operating
     performance or as an alternative to cash flows as a measure of liquidity.
     Funds from Operations does not measure whether cash flow is sufficient to
     fund all of the Operating Partnership's cash needs including principal
     amortization, capital improvements, and distributions to stockholders.
     Funds from Operations does not represent cash flows from operating,
     investing, or financing activities as defined by GAAP. Further, Funds from
     Operations as disclosed by other REITs may not be comparable to the
     Operating Partnership's calculation of Funds from Operations, as described
     below.

     Pursuant to the National Association of Real Estate Investment Trusts
     ("NAREIT") revised definition of Funds from Operations, the Operating
     Partnership calculates Funds from Operations by adjusting net income before
     minority interest, calculated in accordance with GAAP, for certain non-cash
     items, principally the amortization and depreciation of real property and
     for dividends on shares and other equity interests that are not convertible
     into shares of Common Stock. The Operating Partnership does not add back
     the depreciation of corporate 



                                       20
<PAGE>   21

     items, such as computers or furniture and fixtures, or the amortization of
     deferred financing costs or debt discount. However, the Operating
     Partnership eliminates the effect of straight-lined rents, as defined under
     GAAP, in its FFO calculation, as management believes this presents a more
     meaningful picture of rental income over the reporting period.

     Funds from Operations per share is calculated based on weighted average
     share equivalents outstanding, assuming the conversion of all shares of
     Series A Preferred Stock, Class B and, Class C Common Stock and all
     partnership units in the Operating Partnership into shares of Common Stock
     and including the dilutive effect of stock options.


                       STATEMENT OF FUNDS FROM OPERATIONS
                             (dollars in thousands)


<TABLE>
<CAPTION>
                                            Three Months Ended                 Six Months Ended
                                      -----------------------------     -------------------------------
                                      June 30, 1998   June 30, 1997     June 30, 1998     June 30, 1997
                                      -------------   -------------     -------------     -------------
<S>                                   <C>             <C>               <C>               <C>      
Net income before disposition of
  property and minority interest       $  40,630        $  26,111        $  78,574        $  49,923
Adjustments:
Dividends on Series B Preferred           (2,510)          (2,510)          (5,020)          (5,020)
Stock
Dividends on Series C Preferred           (2,953)              --           (5,906)              --
Stock
Dividends on Series E Preferred             (600)              --             (600)              --
Stock
Distributions on Preferred
Operating Partnership Units               (2,223)              --           (3,488)              --
Depreciation and Amortization             22,404           12,276           41,769           22,753
Other, net                                   (14)             187              (28)             375
Straight-lined rent                       (1,508)            (579)          (3,488)            (576)
                                       ---------        ---------        ---------        ---------
     Funds from Operations             $  53,226        $  35,485        $ 101,813        $  67,455
                                       =========        =========        =========        =========

</TABLE>


                                       21
<PAGE>   22


     PART II. OTHER INFORMATION

     Item 6. Exhibits and Reports on Form 8-K

     (A)  Exhibits

          The exhibits listed below are filed as part of this quarterly report
          on Form 10-Q.

          Exhibit Number

          12.1 Statement of Computation of Ratio of Earnings to Combined Fixed
               Charges and Preferred Dividends

          27.1 Article 5 Financial Data Schedule (EDGAR Filing Only)

     (B) Reports on Form 8-K

               The Company filed a current report on Form 8-K dated July 1,
               1998, which included certain audited historical and unaudited
               proforma financial information concerning the TDC Portfolio.




                                       22
<PAGE>   23


                                   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 there unto duly authorized.




                                    Spieker Properties, Inc.
                                    (Registrant)




Dated:  August 14, 1998               /s/  Elke Strunka
      ------------------------      --------------------------------------------
                                    Elke Strunka
                                    Vice President and
                                    Principal Accounting Officer


                                       23
<PAGE>   24

                                 EXHIBIT INDEX


          Exhibit Number

          12.1 Statement of Computation of Ratio of Earnings to Combined Fixed
               Charges and Preferred Dividends

          27.1 Article 5 Financial Data Schedule (EDGAR Filing Only)