<PAGE>
 
                                                                     EXHIBIT 3.2

                                    FORM OF
                                    BY-LAWS
                                      OF
                     MARYLAND PROPERTY CAPITAL TRUST, INC.


                                   ARTICLE I
                                   ---------

                            Definitions and Offices
                            -----------------------

    1.1 Definitions  For purposes of these By-laws, the following words shall
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have the meanings set forth below:

        (a) "Articles" shall mean the Articles of Incorporation of the
             --------                                                 
Corporation, as amended from time to time.

        (b) "Affiliate" of a Person shall mean (i) any Person that, directly or
             ---------                                                         
indirectly, controls or is controlled by or is under common control with such
other Person, (ii) any Person that owns, beneficially, directly or indirectly,
5% or more of the outstanding capital stock, shares or equity interests of such
other Person or (iii) any officer, director, employee, partner or trustee of
such other Person or any Person controlling, controlled by or under common
control with such Person (excluding directors and Persons serving in similar
capacities who are not otherwise Affiliates of such Person).  For the purposes
of this definition, the term "Person" shall mean, and includes, any natural
person, corporation, partnership, association, trust, limited liability company
or any other legal entity.  For the purposes of this definition, "control"
(including the correlative meanings of the terms "controlled by" and "under
common control with"), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, through the ownership
of voting securities, partnership interests or other equity interests.

        (c) "Corporation" shall mean Maryland Property Capital Trust, Inc.
             -----------                                                  

        (d) "Equity Stock" shall mean the common stock, par value $.01 per
             ------------                                                 
share, and the preferred stock, par value $.01 per share, of the Corporation.

        (e) "Public Announcement" shall mean: (i) disclosure in a press release
             -------------------                                               
reported by the Dow Jones News Service, Associated Press or other similar
national news service, (ii) a report or other document filed publicly with the
Securities and Exchange Commission (including, without limitation, a Form 8-K)
or (iii) a letter or report sent to stockholders of record of the Corporation at
the time of the mailing of such letter or report.

        (f) "MGCL" shall mean the Maryland General Corporation Law, as amended
             ----                                                             
from time to time.

    1.2 Principal Office.  The principal office of the Corporation shall be
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located at such place or places as the Board of Directors may designate.

    1.3 Additional Offices.  The Corporation may have additional offices at such
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places as the Board 

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of Directors may from time to time determine or the business of the Corporation
may require.


                                  ARTICLE II
                                  ----------

                           Meetings of Stockholders
                           ------------------------

    2.1 Places of Meetings.  All meetings of the stockholders shall be held at
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such place, either within or without the State of Maryland but within the United
States, as from time to time may be fixed by the majority of the Board of
Directors, the Chairman of the Board, if one is elected, or the President, which
place may subsequently be changed at any time by vote of the Board of Directors.

    2.2 Annual Meetings.  The annual meeting of the stockholders, for the
        ---------------                                                  
election of Directors and transaction of such other business as may come
properly before the meeting, shall be held at such date and time as shall be
determined by a majority of the Board of Directors, the Chairman of the Board,
if one is elected, or the President, which date and time may subsequently be
changed at any time by vote of the Board of Directors.  If no annual meeting has
been held for a period of thirteen months after the Corporation's last annual
meeting of stockholders, a special meeting in lieu thereof may be held, and such
special meeting shall have, for the purposes of these By-laws or otherwise, all
the force and effect of an annual meeting.  Any and all references hereafter in
these By-laws to an annual meeting or annual meetings also shall be deemed to
refer to any special meeting(s) in lieu thereof.

    At any annual meeting of stockholders or any special meeting in lieu of
annual meeting of stockholders, only such business shall be conducted, and only
such proposals shall be acted upon, as shall have been properly brought before
such annual meeting.  To be considered as properly brought before an annual
meeting, business must be:  (a) specified in the notice of meeting, (b)
otherwise properly brought before the meeting by, or at the direction of, the
Board of Directors, or (c) otherwise properly brought before the meeting by any
holder of record (both as of the time notice of such proposal is given by the
stockholder as set forth below and as of the record date for the annual meeting
in question) of any shares of stock of the Corporation entitled to vote at such
annual meeting who complies with the requirements set forth in Section 2.9.

    2.3 Special Meetings.  Except as otherwise required by law and subject to
        ----------------                                                     
the rights, if any, of the holders of any series of preferred stock of the
Corporation, special meetings of the stockholders may be called only by the
President or the Board of Directors pursuant to a resolution approved by the
affirmative vote of a majority of the Directors then in office.  Only those
matters set forth in the notice of the special meeting may be considered or
acted upon at a special meeting of stockholders of the Corporation, unless
otherwise provided by law.  Special meetings of stockholders shall also be
called by the secretary of the Corporation upon the written request of the
holders of shares entitled to cast not less than a majority of all the votes
entitled to be cast at such meeting.  Such request shall state the purpose of
such meeting and the matters proposed to be acted on at such meeting.  The
secretary shall inform such stockholders of the reasonably estimated cost of
preparing and mailing notice of the meeting and, upon payment to the Corporation
by such stockholders of such costs, the secretary shall give notice to each
stockholder entitled to notice of the meeting.

    2.4 Notice of Meetings; Adjournments.  A written notice of each annual
        --------------------------------                                  
meeting stating the hour, date and place of such annual meeting shall be given
by the Secretary or an Assistant Secretary of the Corporation (or other person
authorized by these By-laws or by law) not less than 10 days nor more than 90
days before the annual meeting, to each stockholder entitled to vote thereat and
to each stockholder who, by 

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law or under the Articles or under these By-laws, is entitled to such notice, by
personally delivering such notice to him or her, by leaving such notice at his
or her residence or usual place of business or by mailing it, postage prepaid,
addressed to such stockholder at the address of such stockholder as it appears
on the stock transfer books of the Corporation. Such notice shall be deemed to
be delivered when hand-delivered to such address or deposited in the mail so
addressed, with postage prepaid.

    Notice of all special meetings of stockholders shall be given in the same
manner as provided for annual meetings, except that the written notice of all
special meetings shall state the purpose or purposes for which the meeting has
been called.

    Notice of an annual meeting or special meeting of stockholders need not be
given to a stockholder if a written waiver of notice is signed before or after
such meeting by such stockholder or if such stockholder attends such meeting,
unless such attendance was for the express purpose of objecting at the beginning
of the meeting to the transaction of any business because the meeting was not
lawfully called or convened. Neither the business to be transacted at, nor the
purpose of, any annual meeting or special meeting of stockholders need be
specified in any written waiver of notice.

    The Board of Directors may postpone and reschedule any previously scheduled
annual meeting or special meeting of stockholders and any record date with
respect thereto, regardless of whether any notice or public disclosure with
respect to any such meeting has been sent or made pursuant to this Section 2.4
or otherwise.   In no event shall the Public Announcement of an adjournment,
postponement or rescheduling of any previously scheduled meeting of stockholders
commence a new time period for the giving of a stockholder's notice under
Section 2.9 of these By-laws.

    When any meeting is convened, the presiding officer of the meeting may
adjourn the meeting if (a) no quorum is present for the transaction of business,
(b) the Board of Directors determines that adjournment is necessary or
appropriate to enable the stockholders to consider fully information that the
Board of Directors determines has not been made sufficiently or timely available
to stockholders or (c) the Board of Directors determines that adjournment is
otherwise in the best interests of the Corporation.  When any annual meeting or
special meeting of stockholders is adjourned to another hour, date or place,
notice need not be given of the adjourned meeting, other than an announcement at
the meeting at which the adjournment is taken, of the hour, date and place to
which the meeting is adjourned; provided, however, that if the adjournment is
                                --------  -------                            
for more than 30 days, or if after the adjournment a new record date is fixed
for the adjourned meeting, notice of the adjourned meeting shall be given to
each stockholder of record entitled to vote thereat and each stockholder who, by
law or under the Articles or under these By-laws, is entitled to such notice.

    2.5 Quorum.  Except as otherwise required by the Articles or law, any number
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of stockholders together holding at least a majority of the outstanding shares
of capital stock entitled to vote with respect to the business to be transacted,
who shall be present in person or represented by proxy at any meeting duly
called, shall constitute a quorum for the transaction of business.  Where a
separate vote by a class or classes is required, a majority of the outstanding
shares of such class or classes, present in person or represented by proxy,
shall constitute a quorum entitled to take action with respect to that matter.
If, however, such quorum shall not be present at any meeting of the
stockholders, the stockholders entitled to vote at such meeting, present in
person or by proxy, shall have the power to adjourn the meeting from time to
time to a date not more than 120 days after the original record date without
notice other than announcement at the meeting.  At such adjourned meeting at
which a quorum is present, any business may be transacted which might have been
transacted at the meeting as originally noticed.  The stockholders present at a
duly constituted meeting may continue to transact business until adjournment,
notwithstanding the withdrawal of 

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enough stockholders to leave less than a quorum.

    2.6   Voting and Proxies.  Stockholders shall have one vote for each share
          ------------------                                                  
of stock entitled to vote owned by them of record according to the stock
transfer books of the Corporation, unless otherwise provided by law or by the
Articles.  A stockholder may cast the votes entitled to be cast by the shares of
stock owned of record by him either in person or by proxy executed in writing by
the stockholder or by his duly authorized agent.  Such proxy shall be filed with
the secretary of the Corporation before or at the time of the meeting.  No proxy
shall be valid after eleven months from the date of its execution, unless
otherwise provided in the proxy.  Proxies shall be filed with the Secretary of
the meeting before being voted.  Except as otherwise limited therein or as
otherwise provided by law, proxies authorizing a person to vote at a specific
meeting shall entitle the persons authorized thereby to vote at any adjournment
of such meeting, but they shall not be valid after final adjournment of such
meeting.  A proxy with respect to stock held in the name of two or more persons
shall be valid if executed by or on behalf of any one of them unless at or prior
to the exercise of the proxy the Corporation receives a specific written notice
to the contrary from any one of them.  A proxy purporting to be executed by or
on behalf of a stockholder shall be deemed valid, and the burden of proving
invalidity shall rest on the challenger.

    2.7   Action at Meeting.  When a quorum is present, any matter before any
          -----------------                                                  
meeting of stockholders shall be decided by the affirmative vote of the majority
of shares present in person or represented by proxy at such meeting and entitled
to vote on such matter, except where a larger vote is required by law, by the
Articles or by these By-laws.  Where a separate vote by a class or classes is
required, the affirmative vote of the majority of shares of such class or
classes present in person or represented by proxy at the meeting shall be the
act of such class.  Any election by stockholders shall be determined by a
plurality of the votes of the shares present in person or represented by proxy
at the meeting and entitled to vote on the election of Directors, except where a
larger vote is required by law, by the Articles or by these By-laws.  The
Corporation shall not directly or indirectly vote any shares of its own stock;
provided, however, that the Corporation may vote shares which it holds in a
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fiduciary capacity to the extent permitted by law.

    2.8   Stockholder List.  The officer or agent having charge of the stock
          ----------------                                                  
transfer books of the Corporation shall make, at least 10 days before every
annual meeting or special meeting of stockholders, a complete list of the
stockholders entitled to vote at the meeting or any adjournment thereof, in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder.  Such list shall be open
to the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least 10 days prior to the
meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held.  The list shall also be
produced and kept at the hour, date and place of the meeting during the whole
time thereof, and may be inspected by any stockholder who is present.

    2.9   Stockholder Proposals.  In addition to any other applicable
          ---------------------                                      
requirements, for business to be properly brought before an annual meeting by a
stockholder of record (both as of the time notice of such proposal is given by
the stockholder as set forth below and as of the record date for the annual
meeting in question) of any shares of capital stock entitled to vote at such
annual meeting, such stockholder shall: (i) give timely written notice as
required by this Section 2.9 to the Secretary of the Corporation and (ii) be
present at such meeting, either in person or by a representative.  For an annual
meeting, a stockholder's notice shall be timely if delivered to, or mailed to
and received by, the Corporation at its principal executive office not less than
75 days nor more than 120 days prior to the anniversary date of the immediately
preceding annual meeting (the "Anniversary Date"); provided, however, that in
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the event the annual meeting is scheduled to be held on a date more than 30 days
before the Anniversary Date or more than 60 

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days after the Anniversary Date, a stockholder's notice shall be timely if
delivered to, or mailed to and received by, the Corporation at its principal
executive office not later than the close of business on the later of (1) the
75th day prior to the scheduled date of such annual meeting or (2) the 15th day
following the day on which Public Announcement of the date of such annual
meeting is first made by the Corporation.

    A stockholder's notice to the Secretary of the Corporation shall set forth
as to each matter proposed to be brought before an annual meeting:  (i) a brief
description of the business the stockholder desires to bring before such annual
meeting and the reasons for conducting such business at such annual meeting,
(ii) the name and address, as they appear on the stock transfer books of the
Corporation, of the stockholder proposing such business, (iii) the class and
number of shares of the capital stock of the Corporation beneficially owned by
the stockholder proposing such business, (iv) the names and addresses of the
beneficial owners, if any, of any capital stock of the Corporation registered in
such stockholder's name on such books, and the class and number of shares of the
capital stock of the Corporation beneficially owned by such beneficial owners,
(v) the names and addresses of other stockholders known by the stockholder
proposing such business to support such proposal, and the class and number of
shares of the capital stock of the Corporation beneficially owned by such other
stockholders and (vi) any material interest of the stockholder proposing to
bring such business before such meeting (or any other stockholders known to be
supporting such proposal) in such proposal.

    If the Board of Directors or a designated committee thereof determines that
any stockholder proposal was not made in a timely fashion in accordance with the
provisions of this Section 2.9 or that the information provided in a
stockholder's notice does not satisfy the information requirements of this
Section 2.9 in any material respect, such proposal shall not be presented for
action at the annual meeting in question.  If neither the Board of Directors nor
such committee makes a determination as to the validity of any stockholder
proposal in the manner set forth above, the presiding officer of the annual
meeting shall determine whether the stockholder proposal was made in accordance
with the terms of this Section 2.9.  If the presiding officer determines that
any stockholder proposal was not made in a timely fashion in accordance with the
provisions of this Section 2.9 or that the information provided in a
stockholder's notice does not satisfy the information requirements of this
Section 2.9 in any material respect, such proposal shall not be presented for
action at the annual meeting in question.  If the Board of Directors, a
designated committee thereof or the presiding officer determines that a
stockholder proposal was made in accordance with the requirements of this
Section 2.9, the presiding officer shall so declare at the annual meeting and
ballots shall be provided for use at the meeting with respect to such proposal.

    Notwithstanding the foregoing provisions of this Section 2.9, a stockholder
shall also comply with all applicable requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and the rules and regulations
thereunder with respect to the matters set forth in this Section 2.9, and
nothing in this Section 2.9 shall be deemed to affect any rights of stockholders
to request inclusion of proposals in the Corporation's proxy statement pursuant
to Rule 14a-8 under the Exchange Act (or any successor provision thereof).

    2.10 Voting Procedures and Inspectors of Elections.  The Corporation shall,
         ---------------------------------------------                         
in advance of any meeting of stockholders, appoint one or more inspectors to act
at the meeting and make a written report thereof.  The Corporation may designate
one or more persons as alternate inspectors to replace any inspector who fails
to act.  If no inspector or alternate is able to act at a meeting of
stockholders, the presiding officer shall appoint one or more inspectors to act
at the meeting.  Any inspector may, but need not, be an officer, employee or
agent of the Corporation.  Each inspector, before entering upon the discharge of
his or her duties, shall take and sign an oath faithfully to execute the duties
of inspector with strict impartiality and according to the best of his or her
ability.  The inspectors shall perform such duties as 

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are required by the MGCL, including the counting of all votes and ballots. The
inspectors may appoint or retain other persons or entities to assist the
inspectors in the performance of the duties of the inspectors. The presiding
officer may review all determinations made by the inspectors, and in so doing
the presiding officer shall be entitled to exercise his or her sole judgment and
discretion and he or she shall not be bound by any determinations made by the
inspectors. All determinations by the inspectors and, if applicable, the
presiding officer, shall be subject to further review by any court of competent
jurisdiction.

    2.11 Presiding Officer.  The Chairman of the Board, if one is elected, or if
         -----------------                                                      
not elected or in his or her absence, one of the following officers shall
preside at any annual meeting or special meeting of stockholders in the order
stated:  the President, the vice presidents in their order of rank and
seniority, the Secretary, an Assistant Secretary or a person chosen by the
stockholders entitled to cast a majority of the votes which all stockholders
present in person or by proxy are entitled to cast.  Such presiding officer
shall have the power, among other things, to adjourn such meeting at any time
and from time to time, subject to Sections 2.4 and 2.5 of this Article II.  The
order of business and all other matters of procedure at any meeting of the
stockholders shall be determined by the presiding officer.

                                  ARTICLE III
                                  -----------

                                   Directors
                                   ---------

    3.1 General Powers.  The business and affairs of the Corporation shall be
        --------------                                                       
managed under the direction of the Board of Directors and, except as otherwise
expressly provided by law, the Articles or these By-laws, all of the powers of
the Corporation shall be vested in such Board.

    3.2 Number of Directors.  The number of Directors shall be as provided in
        -------------------                                                  
Article VI of the Articles.  The Directors shall hold office in the manner
provided in the Articles.

    3.3 Election and Removal of Directors; Quorum.
        ----------------------------------------- 

        (a) Directors shall be elected and removed in the manner provided for in
Article VI of the Articles.

        (b) Vacancies in the Board of Directors shall be filled in the manner
provided for in Article VI of the Articles.

        (c) At any meeting of the Board of Directors, a majority of the number
of Directors then in office shall constitute a quorum for the transaction of
business.  However, if less than a quorum is present at a meeting, a majority of
the Directors present may adjourn the meeting from time to time, and the meeting
may be held as adjourned without further notice, except as provided in Section
3.6 of this Article III.  Any business which might have been transacted at the
meeting as originally noticed may be transacted at such adjourned meeting at
which a quorum is present.

        (d) No Director need be a stockholder of the Corporation.

        (e) A Director may resign at any time by giving written notice to the
Chairman of the Board, if one is elected, the President or the Secretary.  A
resignation shall be effective upon receipt, unless the resignation otherwise
provides.

    3.4 Regular Meetings.  The regular annual meeting of the Board of Directors
        ----------------                                                       
shall be held, 

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<PAGE>
 
without notice other than this Section 3.4, on the same date and at the same
place as the annual meeting following the close of such meeting of stockholders.
Other regular meetings of the Board of Directors may be held at such hour, date
and place as the Board of Directors may by resolution from time to time
determine without notice other than such resolution.

    3.5 Special Meetings.  Special meetings of the Board of Directors may be
        ----------------                                                    
called, orally or in writing, by or at the request of a majority of the
Directors, the Chairman of the Board, if one is elected, or the President.  The
person calling any such special meeting of the Board of Directors may fix the
hour, date and place thereof.

    3.6 Notice of Meetings.  Notice of the hour, date and place of all special
        ------------------                                                    
meetings of the Board of Directors shall be given to each Director by the
Secretary or an Assistant Secretary, or in case of the death, absence,
incapacity or refusal of such persons, by the Chairman of the Board, if one is
elected, or the President or such other officer designated by the Chairman of
the Board, if one is elected, or the President. Notice of any special meeting of
the Board of Directors shall be given to each Director in person, by telephone,
or by facsimile, telex, telecopy, telegram, or other written form of electronic
communication, sent to his or her business or home address, at least 24 hours in
advance of the meeting, or by written notice mailed to his or her business or
home address, at least 48 hours in advance of the meeting.  Such notice shall be
deemed to be delivered when hand delivered to such address, read to such
Director by telephone, deposited in the mail so addressed, with postage thereon
prepaid if mailed, dispatched or transmitted if faxed, telexed or telecopied, or
when delivered to the telegraph company if sent by telegram.

    When any Board of Directors meeting, either regular or special, is adjourned
for 30 days or more, notice of the adjourned meeting shall be given as in the
case of an original meeting.  It shall not be necessary to give any notice of
the hour, date or place of any meeting adjourned for less than 30 days or of the
business to be transacted thereat, other than an announcement at the meeting at
which such adjournment is taken of the hour, date and place to which the meeting
is adjourned.

    A written waiver of notice signed before or after a meeting by a Director
and filed with the records of the meeting shall be deemed to be equivalent to
notice of the meeting.  The attendance of a Director at a meeting shall
constitute a waiver of notice of such meeting, except where a Director attends a
meeting for the express purpose of objecting at the beginning of the meeting to
the transaction of any business because such meeting is not lawfully called or
convened.  Except as otherwise required by law, by the Articles or by these By-
laws, neither the business to be transacted at, nor the purpose of, any meeting
of the Board of Directors need be specified in the notice or waiver of notice of
such meeting.

    3.7 Nominations.  Nominations of candidates for election as Directors of the
        -----------                                                             
Corporation at any annual meeting may be made only (a) by, or at the direction
of, a majority of the Board of Directors or (b) by any stockholder of record
(both as of the time notice of such nomination is given by the stockholder as
set forth below and as of the record date for the annual meeting in question) of
any shares of the stock of the Corporation entitled to vote at such annual
meeting who complies with the timing, informational and other requirements set
forth in this Section 3.7.  Any stockholder who has complied with the timing,
informational and other requirements set forth in this Section 3.7 and who seeks
to make such a nomination must be, or his, her or its representative must be,
present in person at the annual meeting.  Only persons nominated in accordance
with the procedures set forth in this Section 3.7 shall be eligible for election
as Directors at an annual meeting.

    Nominations, other than those made by, or at the direction of, the Board of
Directors shall be made pursuant to timely notice in writing to the Secretary of
the Corporation as set forth in this Section 3.7.  For 

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an annual meeting, a stockholder's notice shall be timely if delivered to, or
mailed to and received by, the Corporation at its principal executive office not
less than 75 days nor more than 120 days prior to the Anniversary Date;
provided, however, that in the event the annual meeting is scheduled to be held
--------  -------  
on a date more than 30 days before the Anniversary Date or more than 60 days
after the Anniversary Date, a stockholder's notice shall be timely if delivered
to, or mailed and received by, the Corporation at its principal executive office
not later than the close of business on the later of (x) the 75th day prior to
the scheduled date of such annual meeting or (y) the 15th day following the day
on which Public Announcement of the date of such annual meeting is first made by
the Corporation.

    A stockholder's notice to the Secretary of the Corporation shall set forth
as to each person whom the stockholder proposes to nominate for election or re-
election as a Director: (1) the name, age, business address and residence
address of such person; (2) the principal occupation or employment of such
person; (3) the class and number of shares of the capital stock of the
Corporation which are beneficially owned by such person on the date of such
stockholder notice; and (4) the consent of each nominee to serve as a Director
if elected.  A stockholder's notice to the Secretary of the Corporation shall
further set forth as to the stockholder giving such notice: (a) the name and
address, as they appear on the stock transfer books of the Corporation, of such
stockholder and of the beneficial owners (if any) of the capital stock of the
Corporation registered in such stockholder's name and the name and address of
other stockholders known by such stockholder to be supporting such nominee(s);
(b) the class and number of shares of the capital stock of the Corporation which
are held of record, beneficially owned or represented by proxy by such
stockholder and by any other stockholders known by such stockholder to be
supporting such nominee(s) on the record date for the annual meeting in question
(if such date shall then have been made publicly available and shall be earlier
than the date of such stockholder notice) and on the date of such stockholder's
notice; and (c) a description of all arrangements or understandings between such
stockholder and each nominee and any other person or persons (naming such person
or persons) pursuant to which the nomination or nominations are to be made by
such stockholder.

    If the Board of Directors or a designated committee thereof determines that
any stockholder nomination was not made in accordance with the terms of this
Section 3.7 or that the information provided in a stockholder's notice does not
satisfy the informational requirements of this Section 3.7 in any material
respect, then such nomination shall not be considered at the annual meeting in
question.  If neither the Board of Directors nor such committee makes a
determination as to whether a nomination was made in accordance with the
provisions of this Section 3.7, the presiding officer of the annual meeting
shall determine whether a nomination was made in accordance with such
provisions.  If the presiding officer determines that any stockholder nomination
was not made in accordance with the terms of this Section 3.7 or that the
information provided in a stockholder's notice does not satisfy the
informational requirements of this Section 3.7 in any material respect, then
such nomination shall not be considered at the annual meeting in question.  If
the Board of Directors, a designated committee thereof or the presiding officer
determines that a nomination was made in accordance with the terms of this
Section 3.7, the presiding officer shall so declare at the annual meeting and
ballots shall be provided for use at the meeting with respect to such nominee.

    Notwithstanding anything to the contrary in the second paragraph of this
Section 3.7, in the event that the number of Directors to be elected to the
Board of Directors is increased and there is no Public Announcement by the
Corporation naming all of the nominees for Director or specifying the size of
the increased Board of Directors at least 75 days prior to the Anniversary Date,
a stockholder's notice required by this Section 3.7 shall also be considered
timely, but only with respect to nominees for any new positions created by such
increase, if such notice shall be delivered to, or mailed to and received by,
the Corporation at its principal executive office not later than the close of
business on the 15th day following the day on 

                                       8
<PAGE>
 
which such Public Announcement is first made by the Corporation.

   No person shall be elected by the stockholders as a Director of the
Corporation unless nominated in accordance with the procedures set forth in this
Section 3.7.  Election of Directors at an annual meeting need not be by written
ballot, unless otherwise provided by the Board of Directors or presiding officer
at such annual meeting.  If written ballots are to be used, ballots bearing the
names of all the persons who have been nominated for election as Directors at
the annual meeting in accordance with the procedures set forth in this Section
3.7 shall be provided for use at the annual meeting.

   3.8  Action at Meeting and by Consent.  (a)  At any meeting of the Board of
        --------------------------------                                      
Directors at which a quorum is present, a majority of the Directors present may
take any action on behalf of the Board of Directors, unless otherwise required
by law, by the Articles or by these By-laws.

        (b) Any action required or permitted to be taken at any meeting of the
Board of Directors may be taken without a meeting if all members of the Board of
Directors consent thereto in writing.  Such written consent shall be filed with
the records of the meetings of the Board of Directors and shall be treated for
all purposes as a vote at a meeting of the Board of Directors.

   3.9  Manner of Participation.  Directors may participate in meetings of the
        -----------------------                                               
Board of Directors by means of conference telephone or similar communications
equipment by means of which all Directors participating in the meeting can hear
each other, and participation in a meeting in accordance herewith shall
constitute presence in person at such meeting for purposes of these By-laws.

   3.10 Compensation of Directors.  By resolution of the Board of Directors,
        -------------------------                                           
Directors may be allowed a fee for serving as a Director and a fee and expenses
for attendance at a meeting of the Board, but nothing herein shall preclude
Directors from serving the Corporation in other capacities and receiving
compensation for such other services.

   3.11 Reliance.  Each Director, officer, employee and agent of the Corporation
        --------                                                                
shall, in the performance of his duties with respect to the Corporation, be
fully justified and protected with regard to any act or failure to act in
reliance in good faith upon the books of account or other records of the
Corporation, upon an opinion of counsel or upon reports made to the Corporation
by any of its officers or employees or by the adviser, accountants, appraisers
or other experts or consultants selected by the Board of Directors or officers
of the Corporation, regardless of whether such counsel or expert may also be a
Director.

   3.12 Certain Rights of Directors, Officers, Employees or Agents.  The
        ----------------------------------------------------------      
directors shall have no responsibility to devote their full time to the affairs
of the Corporation.   Any directors or officer, employee or agent of the
Corporation, in his personal capacity or in a capacity as an affiliate,
employee, or agent of any other person, or otherwise, may have business
interests and engage in business activities similar to or in addition to or in
competition with those of or relating to the Corporation.


                                  ARTICLE IV
                                  ----------

                                  Committees
                                  ----------


   4.1  Number, Tenure and Qualifications.  The Board of Directors may appoint
        ---------------------------------                                     
from among its members an Executive Committee, an Audit Committee, a
Compensation Committee and other standing or 

                                       9
<PAGE>
 
special committees of the Board of Directors as it may deem advisable, composed
of one two or more Directors, to serve at the pleasure of the Board of
Directors. The members, terms and authority of such committees shall be as set
forth in the resolutions establishing the same.

    4.2 Powers.  The Board of Directors may delegate to committees appointed
        ------                                                              
under Section 4.1 of this Article any of the powers of the Board of Directors,
except as prohibited by law.

    4.3 Meetings.  Notice of committee meetings shall be given in the same
        --------                                                          
manner as notice for special meetings of the Board of Directors.  A majority of
the members of the committee shall constitute a quorum for the transaction of
business at any meeting of the committee.  The act of a majority of the
committee members present at a meeting shall be the act of such committee.  The
Board of Directors may designate a chairman of any committee, and such chairman
or any two members of any committee (if there are at least two members of the
Committee) may fix the time and place of its meeting unless the Board shall
otherwise provide.  In the absence of any member of any such committee, the
members thereof present at any meeting, whether or not they constitute a quorum,
may appoint another Director to act in the place of such absent member.  Each
committee shall keep minutes of its proceedings.

    4.4 Telephone Meetings.  Members of a committee of the Board of Directors
        ------------------                                                   
may participate in a meeting by means of a conference telephone or similar
communications equipment if all persons participating in the meeting can hear
each other at the same time.  Participation in a meeting by these means shall
constitute presence in person at the meeting.

    4.5 Informal Action by Committees.  Any action required or permitted to be
        -----------------------------                                         
taken at any meeting of a committee of the Board of Directors may be taken
without a meeting, if a consent in writing to such action is signed by each
member of the committee and such written consent is filed with the minutes of
proceedings of such committee.

    4.6 Vacancies.  Subject to the provisions hereof, the Board of Directors
        ---------                                                           
shall have the power at any time to change the membership of any committee, to
fill all vacancies, to designate alternate members, to replace any absent or
disqualified member or to dissolve any such committee.

                                   ARTICLE V
                                   ---------

                                   Officers
                                   --------

    5.1 Enumeration.  The officers of the Corporation shall consist of a
        -----------                                                     
President, a Treasurer, a Secretary and such other officers, including, without
limitation, a Chairman of the Board of Directors, a Chief Executive Officer, a
Chief Operating Officer and one or more Vice Presidents (including Executive
Vice Presidents or Senior Vice Presidents), Assistant Vice Presidents, Assistant
Treasurers and Assistant Secretaries, and such other officers as the Board of
Directors may determine.

    5.2 Election.  At the regular annual meeting of the Board following the
        --------                                                           
annual meeting of stockholders, the Board of Directors shall elect the
President, the Treasurer and the Secretary.  Other officers may be elected by
the Board of Directors at such regular annual meeting of the Board of Directors
or at any other regular or special meeting.

    5.3 Qualification.  No officer need be a stockholder or a Director.  Any
        -------------                                                       
person may occupy more than one office of the Corporation at any time; provided,
                                                                       -------- 
that such officer does not serve concurrently as both President and Vice
President.  Any officer may be required by the Board of Directors to give bond
for

                                       10
<PAGE>
 
the faithful performance of his or her duties in such amount and with such
sureties as the Board of Directors may determine.

    5.4  Tenure.  Except as otherwise provided by the Articles or by these By-
         ------                                                              
laws, each of the officers of the Corporation shall hold office until the
regular annual meeting of the Board of Directors following the next annual
meeting of stockholders and until his or her successor is elected and qualified
or until his or her earlier resignation or removal.

    5.5  Resignation.  Any officer may resign by delivering his or her written
         -----------                                                          
resignation to the Corporation addressed to the President or the Secretary, and
such resignation shall be effective upon receipt unless it is specified to be
effective at some other time or upon the happening of some other event; provided
                                                                        --------
however, that such resignation shall be without prejudice to the contract
-------                                                                  
rights, if any, of the Corporation.

    5.6  Removal. Except as otherwise provided by law, if the Board of Directors
         -------
in its judgement finds that the best interests of the Corporation will be
served, it may remove any officer by the affirmative vote of a majority of the
Directors then in office; provided however, that such removal shall be without
                          -------- -------
prejudice to the contract rights, if any, of the person so removed.

    5.7  Absence or Disability. In the event of the absence or disability of any
         ---------------------
officer, the Board of Directors may designate another officer to act temporarily
in place of such absent or disabled officer.

    5.8  Vacancies.  Any vacancy in any office may be filled for the unexpired
         ---------                                                            
portion of the term by the Board of Directors.

    5.9  President.  The President shall, subject to the direction of the Board
         ---------                                                             
of Directors, have general supervision and control of the Corporation's
business.  If there is no Chairman of the Board or if he or she is absent, the
President shall preside, when present, at all meetings of stockholders and of
the Board of Directors.  The President shall have such other powers and perform
such other duties as the Board of Directors may from time to time designate.

    5.10 Chairman of the Board.  The Chairman of the Board, if one is elected,
         ---------------------                                                
shall preside, when present, at all meetings of the stockholders and of the
Board of Directors.  The Chairman of the Board shall have such other powers and
shall perform such other duties as the Board of Directors may from time to time
designate.

    5.11 Chief Executive Officer.  The Chief Executive Officer, if one is
         -----------------------                                         
elected, shall have such powers and shall perform such duties as the Board of
Directors may from time to time designate.  If there shall be a Chief Executive
Officer at any time, such officer shall have authority to take any action that
the President is authorized to take.

    5.12 Vice Presidents and Assistant Vice Presidents.  Any Vice President
         ---------------------------------------------                     
(including any Executive Vice President or Senior Vice President) and any
Assistant Vice President shall have such powers and shall perform such duties as
the Board of Directors or the Chief Executive Officer may from time to time
designate.

    5.13 Treasurer and Assistant Treasurers. The Treasurer shall, subject to the
         ----------------------------------
direction of the Board of Directors and except as the Board of Directors or the
President may otherwise provide, have general charge of the financial affairs of
the Corporation and shall cause to be kept accurate books of account. The
Treasurer shall have custody of all funds, securities, and valuable documents of
the Corporation. He or she

                                       11
<PAGE>
 
shall have such other duties and powers as may be designated from time to time
by the Board of Directors or the Chief Executive Officer.

    Any Assistant Treasurer shall have such powers and perform such duties as
the Board of Directors or the Chief Executive Officer may from time to time
designate.

    5.14 Secretary and Assistant Secretaries. The Secretary shall record all the
         -----------------------------------
proceedings of the meetings of the stockholders and the Board of Directors
(including committees of the Board) in books kept for that purpose. In his or
her absence from any such meeting, a temporary secretary chosen at the meeting
shall record the proceedings thereof. The Secretary shall have charge of the
stock ledger (which may, however, be kept by any transfer or other agent of the
Corporation). The Secretary shall have custody of the seal of the Corporation,
and the Secretary, or an Assistant Secretary, shall have authority to affix it
to any instrument requiring it, and, when so affixed, the seal may be attested
by his or her signature or that of an Assistant Secretary. The Secretary shall
have such other duties and powers as may be designated from time to time by the
Board of Directors or the Chief Executive Officer. In the absence of the
Secretary, any Assistant Secretary may perform his or her duties and
responsibilities.

    Any Assistant Secretary shall have such powers and perform such duties as
the Board of Directors or the Chief Executive Officer may from time to time
designate.

    5.15 Other Powers and Duties.  Subject to these By-laws and to such
         -----------------------                                       
limitations as the Board of Directors may from time to time prescribe, the
officers of the Corporation shall each have such powers and duties as generally
pertain to their respective offices, as well as such powers and duties as from
time to time may be conferred by the Board of Directors, the Chairman of the
Board or the President.

                                  ARTICLE VI
                                  ----------

                                     Stock
                                     -----

    6.1 Certificates.  Each stockholder shall be entitled to a certificate of
        ------------                                                         
the stock of the Corporation, which shall represent and certify the number of
shares of each class held by such stockholder in the Corporation, in such form
as may from time to time be prescribed by the Board of Directors.  Such
certificate shall be signed by the Chairman of the Board, the President or a
Vice President and countersigned by the Treasurer or an Assistant Treasurer, or
the Secretary or an Assistant Secretary.  The Corporation seal and the
signatures by the Corporation's officers, the transfer agent or the registrar
may be either manual or facsimile.  In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed on such
certificate shall have ceased to be such officer, transfer agent or registrar
before such certificate is issued, the certificate may be issued by the
Corporation with the same effect as if he or she were such officer, transfer
agent or registrar at the time of its issue.  Each certificate representing
shares which are restricted as to their transferability or voting powers, which
are preferred or limited as to their dividends or as to their allocable portion
of the assets upon liquidation or which are redeemable at the option of the
Corporation, shall have a statement of such restriction, limitation, preference
or redemption provision, or a summary thereof, plainly stated on the
certificate.  If the Corporation has authority to issue stock of more than one
class, the certificate shall contain on the face or back a full statement or
summary of the designations and any preferences, conversion on other rights,
voting powers, restrictions, limitations as to dividends and other
distributions, qualifications and terms and conditions of redemption of each
class of stock and, if the Corporation is authorized to issue any preferred or
special class in series, the differences in the relative rights and preferences
between the shares of each series to the extent they have been set and the
authority of the Board of Directors to set the relative rights

                                       12
<PAGE>
 
and preferences of subsequent series. In lieu of such statement or summary, the
certificate may state that the Corporation will furnish a full statement of such
information to any stockholder upon request and without charge. If any class of
stock is restricted by the Corporation as to transferability, the certificate
shall contain a full statement of the restriction or state that the Corporation
will furnish information about the restrictions to the stockholder on request
and without charge. Every certificate for shares of stock which are subject to a
restriction on transfer (as provided in Article IX of the Articles) and every
certificate issued when the Corporation is authorized to issue more than one
class or series of stock shall contain such legend (as provided in Article VII
of the Articles) with respect thereto as is required by law.

    6.2 Lost, Destroyed and Mutilated Certificates.  Holders of the shares of
        ------------------------------------------                           
the stock of the Corporation shall immediately notify the Corporation of any
loss, destruction or mutilation of the certificate therefor, and the Board of
Directors may in its discretion cause one or more new certificates for the same
number of shares in the aggregate to be issued to such stockholder upon the
surrender of the mutilated certificate or upon satisfactory proof of such loss
or destruction, and the deposit of a bond in such form and amount and with such
surety as the Board of Directors may require.

    6.3 Transfer of Stock.  Subject to the restrictions on transfer of stock
        -----------------                                                   
described in Article IX of the Articles, shares of stock of the Corporation
shall be transferable or assignable only on the stock transfer books of the
Corporation by the holder in person or by attorney upon surrender to the
Corporation or its transfer agent of the certificate theretofore properly
endorsed or, if sought to be transferred by attorney, accompanied by a written
assignment or power of attorney properly executed, with transfer stamps (if
necessary) affixed, and with such proof of the authenticity of signatures as the
Corporation or its transfer agent may reasonably require.

    6.4 Record Holders.  Except as may otherwise be required by law, by the
        --------------                                                     
Articles or by these By-laws, the Corporation shall be entitled to treat the
record holder of stock as shown on its books as the owner of such stock for all
purposes, including the payment of dividends and the right to vote with respect
thereto, regardless of any transfer, pledge or other disposition of such stock,
until the shares have been transferred on the books of the Corporation in
accordance with the requirements of these By-laws.

    It shall be the duty of each stockholder to notify the Corporation of his or
her postal address and any changes thereto.

    6.5 Record Date.  In order that the Corporation may determine the
        -----------                                                  
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the Board of Directors may fix a record date, which record
date shall not precede the date upon which the resolution fixing the record date
is adopted by the Board of Directors, and which record date: (a) in the case of
determination of stockholders entitled to vote at any meeting of stockholders,
shall, unless otherwise required by law, not be more than ninety nor less than
ten days before the date of such meeting and (b) in the case of any other
action, shall not be more than ninety days prior to such other action.  If no
record date is fixed: (i) the record date for determining stockholders entitled
to notice of or to vote at a meeting of stockholders shall be at the close of
business on the day next preceding the day on which notice is given, or, if
notice is waived, at the close of business on the day next preceding the day on
which the meeting is held and (ii) the record date for determining stockholders
for any other purpose shall be at the close of business on the day on which the
Board of Directors adopts the resolution relating thereto.

                                 ARTICLE VII 
                                 -----------

                                       13
<PAGE>
 
                                Indemnification
                                ---------------

    7.1 Indemnification.  To the maximum extent permitted by Maryland law in
        ---------------                                                     
effect from time to time, the Corporation (which, for the purpose of this
Article VII, shall include predecessor entities of the Corporation) shall
indemnify and, without requiring a preliminary determination of the ultimate
entitlement to indemnification, shall pay or reimburse reasonable expenses in
advance of final disposition of a proceeding to (a) any individual who is a
present or former Director, trustee or officer, employee, agent or shareholder
of the Corporation and who is made a party to the proceeding by reason of his
service in that capacity or (b) any individual who, while a Director of the
Corporation and at the request of the Corporation, serves or has served another
corporation, real estate investment trust, partnership, joint venture, trust,
employee benefit plan or any other enterprise as a director, officer, partner or
trustee of such corporation, real estate investment trust, partnership, joint
venture, trust, employee benefit plan or other enterprise and who is made a
party to the proceeding by reason of his service in that capacity.

    Neither the amendment nor repeal of this Article, nor the adoption or
amendment of any other provision of the By-laws or charter of the Corporation
inconsistent with this Article, shall apply to or affect in any respect any act
or failure to act which occurred prior to such amendment, repeal or adoption.

    7.2 Contractual Nature of Rights.  The foregoing provision of this Article
        ----------------------------                                          
VII shall be deemed to be a contract between the Corporation and each Director
and officer entitled to the benefits hereof at any time while this Article VII
is in effect, and any repeal or modification thereof shall not affect any rights
or obligations then existing with respect to any state of facts then or
theretofore existing or any proceeding theretofore or thereafter brought based
in whole or in part upon any such state of facts.  If a claim for
indemnification or advancement of expenses hereunder by a Director or officer is
not paid in full by the Corporation within (a) 60 days after the receipt by the
Corporation of a written claim for indemnification or (b) in the case of a
Director, 10 days after the receipt by the Corporation of documentation of
expenses and the required undertaking, such Director or officer may at any time
thereafter bring suit against the Corporation to recover the unpaid amount of
the claim, and if successful in whole or in part, such Director or officer shall
also be entitled to be paid the expenses of prosecuting such claim.  The failure
of the Corporation (including its Board of Directors or any committee thereof,
independent legal counsel, or stockholders) to make a determination concerning
the permissibility of such indemnification or, in the case of a Director,
advancement of expenses, under this Article VII shall not be a defense to the
action and shall not create a presumption that such indemnification or
advancement is not permissible.  It is the parties' intention that if the
Corporation contests any Director's, officer's or employee's right to
indemnification, the question of such Director's, officer's or employee's right
to indemnification shall be for the court to decide, and neither the failure of
the Corporation (including its Board of Directors, any committee or subgroup of
the Board of Directors, independent legal counsel, or its stockholders) to have
made a determination that indemnification of such Director, officer or employee
is proper in the circumstances because the Director, officer or employee has met
the applicable standard of conduct required by applicable law, nor an actual
determination by the Corporation (including its Board of Directors, any
committee or subgroup of the Board of Directors, independent legal counsel, or
its stockholders) that the Director, officer or employee has not met such
applicable standard of conduct, shall create a presumption that such Director,
officer or employee has or has not met the applicable standard of conduct.

    7.3 Non-Exclusivity of Rights.  The rights to indemnification and
        -------------------------                                    
advancement of expenses set forth in this Article VII shall not be exclusive of
any other right which any Director, officer or employee may have or hereafter
acquire under any statute, provision of the Articles or these By-laws,
agreement, vote of stockholders or disinterested Directors or otherwise. 

                                       14
<PAGE>
 
    7.4 Partial Indemnification.  If any Director, officer or employee is
        -----------------------                                          
entitled under any provision of these By-laws to indemnification by the
Corporation for some or a portion of the expenses, judgments, fines or penalties
actually or reasonably incurred by him in the investigation, defense, appeal or
settlement of any civil or criminal action or proceeding, but not, however, for
the total amount thereof, the Corporation shall nevertheless indemnify such
Director, officer or employee for the portion of such expenses, judgments, fines
or penalties to which such Director, officer or employee is entitled.

    7.5 Mutual Acknowledgment.  By accepting any potential benefits under this
        ---------------------                                                 
Article VII each Director, officer or employee acknowledges that in certain
instances, Federal law or applicable public policy may prohibit the Corporation
from indemnifying its Directors, officers and employees under these By-laws or
otherwise.  The Director, officer or employee understands and acknowledges that
the Corporation has undertaken and may be required in the future to undertake
with the Securities and Exchange Commission to submit the question of
indemnification to a court in certain circumstances for a determination of the
Corporation's right under public policy to indemnify Director, officer or
employee.

    7.6 Insurance.  The Corporation may maintain insurance, at its expense, to
        ---------                                                             
protect itself and any Director, officer or employee against any liability of
any character asserted against or incurred by the Corporation or any such
Director, officer or employee, or arising out of any such person's corporate
status, whether or not the Corporation would have the power to indemnify such
person against such liability under the MGCL or the provisions of this Article
VII.

                                 ARTICLE VIII
                                 ------------

                           Miscellaneous Provisions
                           ------------------------

    8.1 Seal.  The seal of the Corporation shall consist of a flat-faced
        ----                                                            
circular die, of which there may be any number of counterparts, on which there
shall be engraved the word "Seal" and the name of the Corporation.  The Board of
Directors shall have the power to adopt and alter the seal of the Corporation.

    8.2 Fiscal Year.  The fiscal year of the Corporation shall be a calendar
        -----------                                                         
year or as may otherwise be fixed by the Board of Directors.

    8.3 Checks, Notes and Drafts.  Checks, notes, drafts and other orders for
        ------------------------                                             
the payment of money shall be signed by such persons as the Board of Directors
from time to time may authorize.  When the Board of Directors so authorizes,
however, the signature of any such person may be a facsimile.

    8.4 Execution of Instruments.  All deeds, leases, transfers, contracts,
        ------------------------                                           
bonds, notes and other obligations to be entered into by the Corporation in the
ordinary course of its business without Director action may be executed on
behalf of the Corporation by the Chairman of the Board, if one is elected, the
President or the Treasurer or any other officer, employee or agent of the
Corporation as the Board of Directors or Executive Committee may authorize.

    8.5 Resident Agent.  The Board of Directors may appoint a resident agent
        --------------                                                      
upon whom legal process may be served in any action or proceeding against the
Corporation.

    8.6 Corporate Records.  The original or attested copies of the Articles, By-
        -----------------                                                      
laws and records of all meetings of the incorporators, stockholders and the
Board of Directors and the stock transfer books, which shall contain the names
of all stockholders, their record addresses and the amount of stock held by
each, may be kept outside the State of Maryland and shall be kept at the
principal office of the Corporation, at the

                                       15
<PAGE>
 
office of its counsel or at an office of its transfer agent or at such other
place or places as may be designated from time to time by the Board of
Directors.

    8.7 Amendment of By-laws.  Except as provided otherwise by law, these By-
        --------------------                                                
laws may be amended or repealed solely by the Board of Directors by the
affirmative vote of a majority of the Directors then in office.

    8.8 Voting of Stock Held.  Unless otherwise provided by resolution of the
        --------------------                                                 
Board of Directors or of the Executive Committee, if any, the Chairman of the
Board, if one is elected, the President or the Treasurer may from time to time
waive notice of and act on behalf of this Corporation, or appoint an attorney or
attorneys or agent or agents of the Corporation, in the name and on behalf of
the Corporation, to cast the vote that the Corporation may be entitled to cast
as a stockholder or otherwise in any other corporation, any of whose securities
may be held by the Corporation, at meetings of the holders of the shares or
other securities of such other corporation, or to consent in writing to any
action by any such other corporation; and the Chairman of the Board, if one is
elected, the President or the Treasurer shall instruct the person or persons so
appointed as to the manner of casting such votes or giving such consent and may
execute or cause to be executed on behalf of the Corporation, and under its
corporate seal or otherwise, such written proxies, consents, waivers or other
instruments as may be necessary or proper in the premises. In lieu of such
appointment, the Chairman of the Board, if one is elected, the President or the
Treasurer may himself or herself attend any meetings of the holders of shares or
other securities of any such other corporation and there vote or exercise any or
all power of the Corporation as the holder of such shares or other securities of
such other corporation.

Adopted and effective as of ____________, 1999.

                                       16