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                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

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

                                   FORM 10-K

(MARK ONE)

  /X/    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
         AND EXCHANGE ACT OF 1934

                FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997, OR

  / /    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
         SECURITIES EXCHANGE ACT OF 1934

        FOR THE TRANSITION PERIOD FROM ______________ TO ______________

                         COMMISSION FILE NUMBER 1-13531

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

                             TRAMMELL CROW COMPANY

             (Exact name of registrant as specified in its charter)

                DELAWARE                               75-2721454
    (State or other jurisdiction of                  (IRS Employer
     Incorporation or organization)              Identification Number)
            2001 ROSS AVENUE
               SUITE 3400
             DALLAS, TEXAS                               75201
(Address of principal executive offices)                (Zip Code)

                                 (214) 863-3000
              (Registrant's Telephone Number, Including Area Code)

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

<TABLE>
<S>                                 <C>
                                      NAME OF EACH EXCHANGE ON
       TITLE OF EACH CLASS                WHICH REGISTERED
----------------------------------  -----------------------------
   Common Stock, $.01 par value        New York Stock Exchange
</TABLE>

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

                                      NONE

                                (Title of Class)

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

    Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. / /

    At March 24, 1998, there were 33,911,416 shares of Common Stock outstanding
with an aggregate market value on that date of $965,413,929, based upon the
average of the low bid and high asked price of Common Stock on the New York
Stock Exchange on such date. As of the same date 20,163,235 shares of Common
Stock were held by non-affiliates of the Company, having an aggregate market
value on that date of $574,021,088.

                      DOCUMENTS INCORPORATED BY REFERENCE

    Portions of the registrant's Proxy Statement to be furnished to stockholders
in connection with its 1998 Annual Meeting of Stockholders are incorporated by
reference in Part III of this Report.

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                                     PART I

ITEM 1.  BUSINESS

COMPANY OVERVIEW

    Trammell Crow Company (the "Company") is one of the largest diversified
commercial real estate services companies in the United States. Through the
Company's 140 offices in the United States and Canada, the Company is organized
to deliver a comprehensive range of service offerings to clients which include
leading multinational corporations, institutional investors and other users of
real estate services. In addition, the Company has a strategic alliance with
Trammell Crow International, which has eight offices in Europe, Asia and South
America. The Company has established itself as a market leader in each of its
primary businesses. The Company, which is headquartered in Dallas, Texas, was
founded in 1948 by Mr. Trammell Crow. From its founding through the 1980's, the
Company's primary business was the development and management of industrial,
office and retail projects. In 1991 the Company was reconstituted as a real
estate services company. This reconstitution entailed the separation of the
Company's commercial real estate asset base and related operations from its real
estate services business. The Company continued to operate the real estate
services business while ownership of the commercial real estate asset base was
segregated into a large number of separate entities distinct from the Company,
with independent management and operations. Many of these entities are managed
by subsidiaries of Crow Realty Investors, L.P., which is wholly owned by certain
affiliates and descendants of Mr. Trammell Crow.

    As a means of addressing the comprehensive real estate service requirements
of its diverse group of clients, the Company is organized into five principal
lines of business. The Company's property management services business provides
services relating to all aspects of building operations, tenant relations and
oversight of building improvement processes, primarily for building owners who
do not occupy the properties managed by the Company. The brokerage services
business advises buyers, sellers, landlords and tenants in connection with the
sale and leasing of office, industrial and retail space and land. Infrastructure
management entails providing comprehensive day-to-day occupancy related
services, principally to large corporations which occupy commercial facilities
in multiple locations. Specific infrastructure management services include
administration, day-to-day maintenance and repair of client occupied facilities
and strategic functions such as space planning, relocation coordination,
facilities management and portfolio management. The development and construction
services provided by the Company include financial planning, site acquisition,
procurement of approvals and permits, design and engineering coordination,
construction bidding and management and tenant finish coordination, project
close-out and user move coordination, general contracting and project finance
advisory services. The Company's retail services business provides tenant
representation, disposition, development and financial services to national and
global retail customers, and the Company believes that its August 22, 1997
acquisition of the business of Doppelt & Company ("Doppelt") significantly
increases the scale and improves the quality of the Company's existing retail
services business.

RECENT DEVELOPMENTS

    In February, 1998, the Company entered into a memorandum of understanding
(the "AMB MOU") with AMB Property L.P. ("AMB") relating to the formation of a
strategic alliance to develop and manage industrial properties in targeted
distribution markets. Particular emphasis will be placed on multi-tenant freight
forwarding facilities adjacent to major airports and industrial submarkets of
targeted metropolitan areas such as Chicago, Seattle and Northern New Jersey.
The AMB MOU contemplates that all of the Company's management contracts with
AMB, covering approximately 13.8 million square feet of industrial space as of
February 1998, will be converted from industry standard contracts terminable
upon 30 days notice to five-year term contracts terminable only for cause.

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    On March 16, 1998, the Company purchased all of the issued and outstanding
capital stock of Tooley & Company, Inc., a California real estate services
company primarily engaged in office management and leasing ("Tooley").
Management of the Company believes that the acquisition of Tooley will allow the
Company to diversify from its perceived strength in the Los Angeles industrial
real estate market into the office market through the acquisition of one of the
leading office-focused real estate services companies in California. According
to the March 16, 1998 edition of the Los Angeles Business Journal, as of March
9, 1998, Tooley had more square feet of office space under management than any
other real estate services firm operating in Los Angeles County. In exchange for
the stock of Tooley, the Company paid a cash purchase price of approximately
$23.1 million to BCB Holdings, LLC, a Delaware limited liability company
("Seller") whose members are William L. Tooley, Craig Ruth and Robert N. Ruth.
The purchase price for Tooley's capital stock was derived through negotiation
between the Company and Seller. The Company has also agreed to pay to Seller up
to $3.0 million of additional purchase price if Tooley achieves certain
performance standards in the future. In addition, the Company has agreed to make
certain payments to Seller based upon the future performance of certain of
Tooley's projects. A copy of the Stock Purchase Agreement dated as of March 16,
1998 by and among the Company, Tooley, Seller, William L. Tooley and Craig Ruth
has been filed as an exhibit to this Annual Report on Form 10-K. See "ITEM 14.
EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K". In connection
with the acquisition, each of Messrs. Tooley, Ruth and Ruth entered into
Employment Agreements with the Company. Each of such employment agreements,
subject to earlier termination in accordance with such agreements, has a term
equal to three years. Pursuant to the terms of their respective employment
agreements, William L. Tooley and Craig Ruth received an aggregate of $1.0
million at closing in exchange for certain covenants to not compete. The Company
borrowed all funds used to make the cash payments at the closing from
NationsBank under the Company's master line of credit. See "ITEM 7. MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS--LIQUIDITY AND CAPITAL RESOURCES."

COMPETITIVE ADVANTAGES

    The Company believes that it holds several important competitive advantages
in the real estate services industry.

    COMPREHENSIVE SERVICE OFFERINGS.  The Company offers a comprehensive menu of
services designed to provide its clients with single-point solutions to all of
their commercial real estate services needs. The Company believes that its broad
service offerings give it a critical advantage in an industry where many
competitors offer fewer services. By offering a full array of services, the
Company is able to maximize the effect it has on its clients' businesses while
becoming highly integrated into its clients' operations. Further, the Company's
comprehensive service offerings decrease the Company's economic exposure to a
downturn in any one of its primary businesses.

    CLIENT FOCUS.  The Company is organized to meet all of its clients' real
estate services needs. This orientation has commonly allowed the Company to
commence client relationships by offering a single service and later expand
these relationships through an understanding of the client's business and its
highly specific service requirements. Moreover, the Company has carefully
selected the criteria--such as industry, geographic location and property
type--which it applies in actively seeking new client engagements in each of its
core businesses, thereby concentrating its efforts in areas where it can provide
maximum value-added services.

    GEOGRAPHIC SCOPE.  The Company's 140 offices in the United States and Canada
have allowed the Company to develop and maintain extensive knowledge of local
real estate markets across the United States and Canada. Approximately 85% of
the Company's employees are based in markets other than Dallas, Texas, where the
Company's executive offices are located. In addition, the Company has a
strategic alliance with Trammell Crow International, which has eight offices in
Europe, Asia and South America. The broad geographic scope provided by this
local office network allows the Company to serve as a single-

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source, full service provider to multinational corporations and institutional
investors with real estate interests that span regional and national boundaries.
The broad geographic service area covered by the Company also tends to limit its
exposure to an economic downturn in any single market, which provides it with a
competitive advantage over regional firms that operate in a more limited number
of geographic areas.

    TECHNOLOGY.  The Company is developing extensive technology applications to
better meet customer needs, principally through enhanced sharing of vital market
information and through proprietary applications designed to provide
significantly enhanced control over clients' real estate related expenses. In
addition, the Company has developed a centralized call center strategy designed
to provide responses to customer needs 24 hours a day. This service will
leverage human assets and technology to deliver required support and coverage to
properties that were previously managed from several distinct service locations.
The Company expects to begin call center operations in mid-April of 1998. The
Company has also developed the architecture for a proprietary total occupancy
cost management system using applications that are connected and distributed
across the Company's local area and wide area networks. This system is designed
to provide centralized and comprehensive cost studies and analyses on building
portfolios to customers.

    MANAGEMENT/PERSONNEL.  The Company believes that a key component of its
success is the experience and quality of its management team and the employees
that comprise the network through which the Company serves its clients. The
Company's seven-member executive committee has an average of approximately 14
years of experience with the Company. Moreover, the Company has experienced very
low turnover among this senior management group. The Company believes this low
turnover is linked to its collegial internal culture and a long-standing effort
to promote talented individuals from within the organization. The Company also
believes that its growth strategy, incentive-based compensation and the high
level of ownership by Company insiders provide further motivation to achieve a
high level of performance. At December 31, 1997, the members of the Company's
executive committee owned approximately 11.4% of the outstanding Common Stock,
and the total employee ownership of outstanding Common Stock was in excess of
59%.

COMPETITIVE ENVIRONMENT

    In recent years, the real estate industry has experienced a steady recovery
from the severe downturn of the early 1990's which had caused a sharp reduction
in commercial and industrial property values, the withdrawal of credit, a
related reduction in new development and pressure on fee income derived from
servicing and maintaining all classes of property. The Company believes that the
recovery now underway has provided the industry with improved prospects for
growth across all of the Company's traditional service lines. Moreover,
important new trends in the real estate services business--especially among
corporations and institutional investors affected by consolidation within their
own industries--now present the Company with new opportunities to capitalize
upon the recovery in these markets.

    GROWTH IN THE MARKET FOR REAL ESTATE SERVICES.  The commercial real estate
services industry is large and growing. According to the U.S. Statistical
Abstract for 1996, the total US commercial real estate asset base is
approximately 68 billion square feet, with 33 billion square feet representing
industrial, office and retail properties which serve as the target market for
commercial real estate service providers. In 1996, The Outsourcing Institute
estimated that this asset base produced roughly $15 billion annually in service-
related revenues which, since 1993, have grown at 260% of the rate of growth for
the overall economy. Despite this size and growth, the commercial real estate
services industry remains a highly fragmented sector. For example, less than 20%
of the market for property management services is now serviced by outside firms,
and the Company believes that other market segments are also significantly under
served and represent a sizeable growth opportunity.

                                       3
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    The ongoing recovery in the real estate industry has also stimulated a
revival of activity in the more traditional development and construction
business. This sector was relatively inactive in recent years, principally due
to the sharp decline in property values and the overabundant supply of new
product in the market. As property values have rebounded in many of the nation's
principal markets, new construction starts have increased. This trend provides
an opportunity for the Company to earn fees associated with new development and
to participate in development projects as both an advisor and as principal.

    OUTSOURCING.  Outsourcing is a rapidly growing trend in the United States.
Through outsourcing, organizations seek to reduce costs, improve profitability
and refocus management and other resources on core competencies. This trend has
resulted in the development of well established providers offering an expanding
range of outsourced services, including information processing, teleservicing
and flexible staffing. Increasingly, organizations are also seeking outside
providers for efficient and expert delivery of real estate management services.
For example, the Company believes that the total potential revenues associated
with outsourcing of infrastructure management services may be in excess of $50
billion per year. In addition to corporations and institutional investors,
potential new clients include governmental entities, which now collectively own
in excess of 15 billion square feet of commercial real estate in the United
States.

    CONSOLIDATION.  The traditionally fragmented real estate services industry
is witnessing rapid consolidation in customers' selection of service providers
and in alliances and combinations among providers themselves. When outsourcing
real estate services, corporations and institutions have increasingly sought to
consolidate the number of providers used and engage firms that can offer a full
range of services across a wide geographic area. As the industry becomes more
sophisticated, customers require the flexibility, multi-market perspective and
technological and physical resources that large firms possess.

    As the real estate services industry has grown, it has been accompanied by
downward pressure on fees and the increased use of fee structures which reflect
shared risk and emphasize the achievement of performance targets. These trends
benefit firms with significant scale and the ability to spread fixed costs over
a larger revenue base, and have accelerated consolidation among real estate
service providers.

    The Company believes that few real estate services providers can meet the
demands of large corporate and institutional customers and that many companies
are facing pressure to combine with others to remain competitive. In the
Company's view, the competitive imperatives presented by this consolidation
trend include the need to maintain comprehensive service offerings, serve an
expansive geographic area and operate the business with sufficient scale to
achieve significant cost efficiencies.

GROWTH STRATEGY

    The Company intends to pursue growth opportunities by capitalizing upon its
existing areas of expertise, its long-standing client relationships and the
broad industry trends now affecting the market. Key elements of its growth
strategy are as follows:

    EXPAND CLIENT RELATIONSHIPS.  Many of the Company's existing clients have
substantial real estate and occupancy costs in numerous locations, and therefore
represent the most immediate opportunity to increase revenues through
cross-selling the services offered by the Company. The Company has made numerous
successful efforts to capitalize on this opportunity, including the
establishment of a national customer initiative which targets additional client
engagements.

    EXPAND THE BREADTH OF SERVICE OFFERINGS.  Since its reconstitution as a real
estate services company in 1991, the Company has continuously sought to expand
and enhance its breadth of service offerings, principally through internal
measures such as the creation of new service businesses. For example, based on
its long-standing position as a premier property management company, the Company
was well positioned to take advantage of the trend toward outsourcing of real
estate services. This led to the

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creation of the Company's infrastructure management services business, which
provided 21.9% of the Company's total revenues in 1997, up from 9.4% in 1993.

    CO-INVESTMENT.  The Company will also focus on expansion of its efforts to
make selective co-investments of capital alongside corporate and institutional
clients. Through this effort, the Company intends to leverage its relationships
with these clients and to use its extensive knowledge of the real estate
industry to create new opportunities to invest capital. The Company believes
that its knowledge of local real estate markets and its experience in each of
its primary service businesses provide it with an advantage in identifying and
evaluating investment opportunities. The Company will seek co-investments that
generate investment returns while still allowing the Company to earn fees in
exchange for services provided in the development, operation and management of
the project. The Company has the additional financial flexibility to pursue a
controlled and highly disciplined approach to investment and co-investment.

    ACQUISITIONS AND JOINT VENTURES.  In addition to pursuing internal growth,
the Company is committed to a strategy of selective acquisitions of
complementary businesses. For example, in August 1997 the Company acquired the
business of Doppelt, which the Company considers to be one of the premier
national retail tenant representation firms in the country. Through this
acquisition, the Company has elevated itself to a leadership position in both
the tenant representation and disposition businesses, and anticipates expanding
its presence in these businesses through its recruiting activities at a local
level. In addition, the Company recently acquired Tooley, a Los Angeles based
real estate services company primarily engaged in office management and leasing.
Management of the Company believes that the acquisition of Tooley will allow the
Company to diversify from its perceived strength in the Los Angeles industrial
real estate market into the office market through the acquisition of one of the
leading office-focused real estate services companies in Los Angeles and Orange
Counties. The Company continuously surveys the marketplace for other potential
acquisitions which might further enhance the quality or the breadth of services
it can offer clients.

PROPERTY MANAGEMENT SERVICES

    The Company is the largest commercial property manager in the United States
and has held that position for the past nine years (based upon information
contained in National Real Estate Investor's annual "Top Property Managers
Survey"). The Company's property management service business currently serves
approximately 500 clients and 13,700 tenants nationwide through its locally
based property management teams present in 70 markets. The Company managed 215
million, 207 million, 212 million, 210 million and 204 million square feet of
commercial property at the end of 1993, 1994, 1995, 1996 and 1997, respectively,
and its 1997 property management revenues were $87.8 million, down from $91.0
million in 1993. This decline in revenues over the past five years has been
outpaced by the increase in revenues from the Company's other primary
businesses. In 1993, revenues from property management constituted 52% of the
Company's total revenue, but by 1997 they represented 28% of the Company's total
revenues.

    The objective of the Company's property management business is to enhance
its clients' investment values by maintaining high levels of occupancy and
lowering property operating costs by offering a wide range of property
management services. The property management services offered by the Company
consist of (i) building management services such as maintenance, landscaping,
security, energy management, owner's insurance, life safety, environmental risk
management and capital repairs; (ii) tenant relations services such as
promotional activities, processing tenant work orders and lease administration
services; (iii) interfacing with the Company's development and construction
services personnel in coordinating tenant finish; and (iv) financial management
services including financial reporting and analysis utilizing software systems
supported by the Company's in-house design and development capability for
customized requirements.

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    The Company expects that most of its new property management engagements
will result from property transfers and projects that the Company develops for
institutional investors. To the extent that institutional investors continue to
make direct investments in real estate, the Company believes that it will be in
an advantageous position to win new property management engagements due to its
existing relationships with large institutional investors and its ability to
provide single-source solutions for their multi-market and multi-functional
requirements.

    The properties managed by the Company are typically served by locally based
teams of property managers and maintenance personnel supported by various
corporate level service functions, including technology support and purchasing.
Client accounts are typically managed at the Company's national office to assure
consistency of quality and to promote greater cross-selling of the Company's
services.

    The Company typically receives monthly management fees for the property
management services it provides, based upon a specified percentage of the
monthly gross income generated from the property under management. In certain
cases, the Company's property management agreements entitle it to receive a
minimum fee based on the net rentable square footage or a percentage of the
expected full occupancy fee of the property. The amount of the management fee
varies depending upon local market conditions, the leasing engagement,
arrangements for expense reimbursements and specific services required.
Incentive fees are sometimes negotiated in turnaround or other unusual
circumstances. The Company also may be reimbursed for a portion of its
administrative and payroll costs directly attributed to the properties under
management.

    A typical property management agreement of the Company provides for an
indefinite term, but permits the property owner or the Company to terminate the
agreement upon thirty days prior written notice. The Company believes that these
are customary termination provisions in the industry. The Company historically
has been successful in retaining property management agreements, but has lost
agreements in circumstances where a property has been sold and the new property
owner assumes direct responsibility for managing the property or retains one of
the Company's competitors to manage the property.

    As part of its strategic alliance with AMB, the Company expects (subject to
the negotiation of mutually satisfactory definitive documentation regarding the
alliance) to convert all of its property management contracts with AMB from
industry standard contracts terminable upon 30 days notice to contracts with
five year terms terminable only for cause. See "--Recent Developments."

BROKERAGE SERVICES

    The Company has historically been an active provider of commercial brokerage
services, and in recent years its brokerage business has expanded significantly
from an already substantial base. Over the past five years the Company's
revenues from brokerage services have increased by over 93%, and in 1997
totalled $91.1 million, or 29.0% of the Company's total revenues. In 1997, the
Company facilitated approximately 6,000 sales and lease transactions. As of
December 31, 1997, the Company employed 335 brokers, having added approximately
100 brokerage professionals during the year. The Company employed approximately
150, 146, 195 and 235 brokers at the end of 1993, 1994, 1995 and 1996,
respectively.

    The Company has historically provided project leasing services (leasing
space in real estate owned by clients and managed by the Company) for the
properties in its property management portfolio. In 1993 the Company began to
expand its brokerage services beyond project leasing to include tenant
representation (representing clients seeking to acquire real estate through
lease or purchase), investment sales (representing clients buying or selling
income producing real estate), listings (representing clients disposing of
surplus space) and land sales (representing clients buying or selling unimproved
land).

    The Company typically receives fees for brokerage services based on a
percentage of the value of the lease or sale transaction. Some transactions may
stipulate a fixed fee or include an incentive bonus

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component based on the performance of the brokerage professional or client
satisfaction. Although transaction volume can be subject to economic conditions,
brokerage fee structures remain relatively constant through both economic
upswings and downturns.

    Project leasing revenues are derived from the turnover of tenants in the
Company's property management and leasing portfolio of approximately 240 million
square feet. Lease terms for these properties average four years, resulting in
approximately 60 million square feet of space "rolling" each year, providing the
Company a commission paid by the owner of the property for renewing the existing
tenant's lease or releasing the space to a new tenant. The Company's tenant
representation revenues are derived from the other side of the transaction,
representing the tenants whose leases are expiring. Listing revenues generally
increase in economic downswings as companies dispose of surplus space, while
investment sales and land revenues generally increase in economic upswings as
available capital drives the trading of income producing properties and
corporate demand for additional space drives the purchase of land for new
development.

    The Company regards its brokerage force as an integral part of its delivery
system for the broad services the Company provides to its client base. Access to
a large network of experienced brokers is often a valuable asset when seeking
new property management, infrastructure management, development and construction
and retail services business. The presence of its brokers in on-site project
leasing offices can provide the Company with insights into its customers'
non-brokerage real estate needs and early opportunities to capture the client's
real estate services business. The sheer number of transactions in which its
brokers are involved can also be a source of information from which the Company
can seek to identify business opportunities in specific local or regional
markets.

    The Company actively engages its brokerage force in the execution of its
marketing strategy. Brokerage personnel often work in close concert with the
Company's "city leaders," who are the professionals with overall responsibility
for operations in major national markets. Through this arrangement, key
personnel are kept abreast of national trends and of the full range of services
provided to customers in other areas in the United States and around the world.
The ongoing dialogue among these professionals serves to increase their level of
expertise, and is supplemented by other more formal education such as that
provided at "Trammell Crow University," which offers sales and motivational
training as well as direct exposure to personnel from the Company's other lines
of business. Moreover, the brokerage force is financially rewarded for
cross-selling efforts which result in new engagements for the Company, such as a
development project, the acquisition of a new infrastructure management account,
or assistance across geographic service lines which enables the Company to
acquire additional brokerage business. Brokerage personnel also earn commissions
and are eligible for profit sharing programs, participations and other forms of
incentive compensation. These incentives are designed to underscore the
Company's belief that the brokerage business is often a key point of entry for
new clients, and is thus integral to firm-wide efforts to cross-sell a full
range of services.

    The Company intends to more aggressively recruit and hire (either
individually or through acquisitions) additional brokerage professionals
experienced primarily in the areas of investment sales and tenant
representation. The Company believes that the quality brand identification of
its name, the platform of a full range of services to offer clients, the ability
to learn and execute additional real estate services and the Company's
incentive-based compensation system create an environment conducive to
attracting the most experienced and capable brokerage professionals.

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INFRASTRUCTURE MANAGEMENT SERVICES

    The Company is a leading provider of infrastructure management services to
major corporations in the United States and Canada. The Company has established
multi-year relationships with its infrastructure management services clients,
often providing dedicated personnel on-site and integrating its accounting and
management information systems with those of its clients. The Company's
infrastructure management revenues have grown from $16.4 million in 1993 to
$68.7 million in 1997, representing 21.9% of the Company's total 1997 revenues.

    The goal of the Company's infrastructure management services business is to
align the facilities and support services of its clients with their operational
and strategic business objectives. Occupancy-related costs frequently represent
the largest corporate expense item after compensation and benefits. The Company
believes that organizations are increasingly outsourcing their infrastructure
management functions to reduce costs, improve profitability, and refocus
management and other resources on core competencies.

    The Company administers infrastructure management services through its
wholly-owned subsidiary, Trammell Crow Corporate Services, Inc., which combines
a centralized administrative, marketing and leadership organization with
client-based delivery systems. The infrastructure management services offered by
the Company consist of (i) strategic services, such as consulting, development,
properties portfolio management, real estate asset management, management of
accounting and information systems, and organizational and process strategies;
(ii) facility management (the day-to-day maintenance and repair of facilities);
(iii) facility planning and project management (such as construction, space
planning, site consolidations, facilities design, moves, adds, and changes, and
furniture, signage, and cabling); (iv) transaction services (such as
acquisitions, dispositions, project leasing, and subleasing, where, rather than
providing services on a transaction-by-transaction basis according to the
industry's traditional model, the Company seeks to manage a client's entire
firm-wide property acquisition and divestiture program); and (v) office services
(such as security, reprographics, mail, cafeteria, shipping and receiving, and
reception services, most often provided through a subcontractor).

    The Company offers the following infrastructure management service delivery
options: (i) dedicated Company employees located at a client site; (ii) a team
of Company employees dedicated to a client but located off the client's site at
Company offices; and (iii) a flexible, nationwide network of Company personnel
providing the full menu of the Company's real estate services from the Company's
city offices. Most of the Company's infrastructure management engagements
provide for on-site presence of Company employees, which the Company believes
enhances client communication, provides focused personal service, protects the
proprietary information of the client and enables the Company to monitor client
satisfaction on an ongoing basis.

    The Company has developed expertise in providing infrastructure management
services to clients in the financial services, healthcare, oil and gas and
technology/communications industries. The growth, consolidation and regulatory
changes taking place in these industries have increased the importance of
infrastructure management to these corporations and have caused them to seek to
improve productivity by rationalizing facilities organization and eliminating
redundant assets. The Company believes that there is opportunity to grow by
targeting clients within these industries. For example, within the financial
services industry, the Company has grown from one client in 1993 to 14 clients
as of December 31, 1997, and from 3 million square feet under management in 1993
to approximately 45 million square feet as of December 31, 1997.

    The Company also believes that it has an opportunity to achieve growth in
its infrastructure management services business by developing expertise in
additional industries. In an effort to expand into the higher education
industry, in February 1998, the Company entered into an agreement (the "UPenn
Contract") with the University of Pennsylvania ("UPenn") pursuant to which the
Company will become the exclusive provider of certain infrastructure management
services with respect to designated properties

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and grounds of UPenn that are expected to encompass at least 9.4 million square
feet. The Company will provide management of operations, maintenance, utilities,
facilities planning and design, small renovation work, grounds-keeping, owner
representation for construction, and accounting and financial reporting services
to UPenn. The Company will also provide real estate portfolio and transaction
management services, such as property acquisitions and dispositions and
construction management services. The UPenn Contract has a one-year term with an
automatic nine-year extension subject to UPenn's receipt of a favorable tax
ruling from the Internal Revenue Service. In conjunction with the extension, the
Company will make a payment to UPenn of $26.0 million and, subject to certain
conditions, six additional payments of $1.0 million per year beginning in June
2002.

    The Company seeks to enter into multi-year infrastructure management
contracts with its clients. Most contracts are structured so the Company
receives a monthly base fee and annual incentives if certain agreed-upon
performance targets are satisfied. Most contracts also provide for the
reimbursement of client-related personnel costs and associated overhead
expenses. In many cases, these revenue sources are augmented by variable
commission-based revenues from brokerage, facility planning and project
management activities.

DEVELOPMENT AND CONSTRUCTION SERVICES

    Since 1991, the Company has focused its efforts in the commercial real
estate development business on providing development and construction services
to third party build-to-suit customers and investors in office, industrial and
retail projects. While the Company has decreased its economic exposure to the
cyclical nature of the real estate investment markets by shifting to a service
oriented approach, it has retained the capability to implement active and
sizeable development programs, primarily on behalf of its clients, but also for
its own account. In 1997, revenues from the Company's development and
construction business were $50.8 million (consisting of $40.1 million in service
revenues, $0.5 million in income from investments in unconsolidated subsidiaries
and $10.2 million in gain on disposition of real estate), representing 16.2% of
the total revenues for the Company. Since 1992, the Company has developed and
redeveloped approximately 42.7 million square feet of projects with aggregate
project costs of approximately $2.6 billion. In 1997, the Company started
approximately 12.3 million square feet of development projects with an estimated
aggregate cost of $858.4 million. In 1993, 1994, 1995 and 1996, the Company
started approximately 2.8 million, 5.1 million, 10.0 million and 12.4 million
square feet, respectively, of development projects.

    The Company provides its clients with services that are vital in all stages
of the development and construction process, including: (i) evaluating project
feasibility, budgeting, scheduling and cash flow analysis; (ii) site
identification, due diligence and acquisition; (iii) procurement of approvals
and permits, including zoning and other entitlements; (iv) coordination of
project design and engineering, (v) construction bidding and management and
tenant finish coordination; (vi) project close-out and user move coordination;
(vii) general contracting; and (viii) project finance advisory services.

    The Company's development and construction services engagements are
typically staffed with a local/ regional team which includes a senior company
executive in the role of project general manager and one or more specialists in
the areas of physical project development and construction. The Company
currently employs approximately 25 senior executives with an average of 13 years
experience in all aspects of sourcing development projects and providing general
management and project finance advisory capabilities for those projects. The
Company also employs approximately 55 other individuals with an average of more
than 10 years experience who are responsible for various aspects of the
development process, including the execution of physical development and
construction management responsibilities. The Company intends to dedicate
approximately 10 of these full-time employees to promote and oversee its
development and construction services business on a national basis while
continuing to leverage the expertise and contacts of the Company's local and
regional development professionals. This national team will focus on enhancing
the value of large scale development projects, mitigating development and

                                       9
<PAGE>
construction risk in the Company's portfolio of business and accessing the
capital markets to arrange for development programs/funds with institutional
investors.

    The Company typically receives a fee for its development services that is
based on a negotiated percentage of a project's cost. Incentive bonuses may be
received for completing a project under budget and within certain critical time
deadlines. The Company has also been flexible in negotiating other incentive
compensation arrangements that allow the Company to participate in the
investment returns on projects it develops for its clients. The Company may make
a co-investment with its clients (typically no more than 5% of a project's full
construction and development cost), receive its pro rata return on its
investment in the project and also receive an incentive participation in the
project because of the Company's role in sourcing the development project and/or
executing a variety of services in the development process. The Company's
investments or co-investments in real estate projects may result in an ownership
interest substantially greater than the general 5% ownership guideline. To
facilitate this activity and to further mitigate risk, the Company established
two discretionary development and investment funds which have raised $24.0
million, of which, as of December 31, 1997, $21.8 million had been invested in
projects with an aggregate construction cost of approximately $220.3 million.

    In October 1997, the Company executed a non-binding memorandum of
understanding (the "Kennedy MOU") with Kennedy Associates Real Estate Counsel,
Inc. ("Kennedy") regarding a development program for multi-tenant office and
business park development projects (the "Kennedy Development Program"). Under
the arrangement described in the Kennedy MOU, subject to certain conditions, the
Company and Kennedy would enter into a series of agreements pursuant to which
Kennedy would obtain a 100% ownership interest in the project and the Company
would agree to develop, market and manage the project in exchange for
development, marketing and management fees and development incentive fees. The
Kennedy MOU contemplates that the markets in which this development program
would initially focus would be suburban Philadelphia, northern Virginia,
Washington, DC, Baltimore, northern New Jersey, Pittsburgh, Chicago, Milwaukee,
Kansas City, Denver, Los Angeles, San Francisco, Seattle and Portland. The
Company has also executed a non-binding memorandum of understanding (the "TriNet
MOU") with TriNet Corporate Realty Trust, Inc. ("TriNet") regarding a
development program for office, research and development and industrial pre-sale
build-to-suit projects (the "TriNet Development Program"). Under the arrangement
described in the TriNet MOU, subject to certain conditions, a joint venture
entity owned by the Company and TriNet would enter into a land purchase
agreement for the project site and a lease agreement with the tenant who would
occupy the project site. The Company, TriNet and the joint venture entity would
then enter into a series of definitive agreements pursuant to which the joint
venture entity would take ownership of the project during construction and
obtain construction financing, and the Company would receive certain fees in
exchange for development services it renders in connection with the project and
would receive profits on the sale of the project by the joint venture entity to
TriNet.

    In February, 1998, the Company entered into a memorandum of understanding
(the "AMB MOU") with AMB Property L.P. ("AMB") relating to the formation of a
strategic alliance to develop and manage industrial properties in targeted
distribution markets. Particular emphasis will be placed on multi-tenant freight
forwarding facilities adjacent to major airports and industrial submarkets of
targeted metropolitan areas such as Chicago, Seattle and Northern New Jersey.
The AMB MOU contemplates that all of the Company's management contracts with
AMB, covering approximately 13.8 million square feet of industrial space as of
February 1998, will be converted from industry standard contracts terminable
upon 30 days notice to five-year term contracts terminable only for cause.

    The market for development and construction services is cyclical and is
driven by various economic conditions. The Company believes that current market
conditions should increase the short and medium term demand for development
services offered by the Company. The demand for commercial real estate
properties in the suburban office, downtown office and industrial markets has
increased over the last several years, driven mainly by the acquisition
activities of buyers, including real estate investment trusts

                                       10
<PAGE>
and other investors. Finally, the current values of development properties are
often meeting and exceeding the replacement costs for those properties, while
construction costs remain relatively stable.

    The Company's development activities generate business opportunities for the
Company's other service lines which will support the Company's earnings when
development and construction revenues decrease as a result of market conditions.
Because the Company provides development and construction services to third
parties, including clients who invest in build-to-suit projects, the Company
believes that the adverse effect on its revenues when speculative development
activities are curtailed in a market down cycle should be mitigated. When
development activity reaches a down cycle in the future, the Company intends to
use professionals from its development and construction services business to
pursue opportunistic property acquisitions with its established capital
partners.

RETAIL SERVICES

    The Company's retail services business focuses on providing comprehensive
real estate services to major retailers and retail real estate owners. In 1996,
the Company formed a subsidiary, Trammell Crow Retail Services, Inc. ("TCRS"),
to consolidate the focus of the Company's retail services management group and
to take better advantage of market growth opportunities. The Company believes
that by providing its full array of real estate services through TCRS, it is
able to better serve its national retail customers (who demand specialized
property and market knowledge) and compete with other service providers whose
sole focus is a retail customer base. The Company's revenues from retail
services in 1997 were $5.3 million, representing 1.7% of the Company's total
revenues for 1997. After giving pro forma effect to the Doppelt Acquisition (as
described below) as of January 1, 1997, the Company's revenues from its retail
service business in 1997 would have been $10.4 million.

    The primary services provided to the Company's retail clients include
brokerage services, such as tenant representation for site acquisition and
surplus space dispositions, and development services, such as predevelopment
activities, project finance advisory services and construction oversight. The
Company also acquires, rehabilitates and sells certain retail properties which
the Company believes to be undervalued. In the future, the Company will seek to
combine the expertise of its retail business leaders with that of its
development services personnel to formulate programs for developing retail
assets, both for the Company's account and for the account of third parties,
including third parties in which the Company may own an equity interest.

    The Company delivers tenant representation services and disposition services
through TCRS utilizing a network of the Company's local brokers (including those
formerly employed by Doppelt & Company) and third-party providers. The Company
generates commission revenue from these services which are shared with brokers
in the local markets. The Company believes that the Doppelt Acquisition will
enhance its ability to recruit brokerage professionals, build its local retail
brokerage capabilities and capture a greater portion of these commission
revenues.

    Development services are delivered through BTS, Inc., the Company's national
retail build-to-suit subsidiary. BTS, Inc. specializes in predevelopment
activities, including land acquisition and procurement of entitlements. For its
development services to third parties, the Company typically earns a base fee
plus an incentive fee that is paid out of the sale proceeds upon project
completion.

    The Company intends to establish a fund to acquire freestanding retail
properties and resell those properties within an anticipated hold period of no
more than six months after their acquisition. The Company's goal will be to
generate revenue through this activity by collecting rental income during the
period that the asset is owned and by capturing a spread on the purchase and
sale of the properties. The Company also intends to make selective investments
in retail real estate projects for its own account. The Company believes that,
by providing real estate services to its national retail customers, it has
developed a proficiency in identifying retail investment opportunities and
formulating and implementing retail development programs.

                                       11
<PAGE>
    In furtherance of its goal to be the leading national retail real estate
company, in August 1997 the Company acquired substantially all of the assets of
Doppelt pursuant to an Acquisition Agreement (the "Acquisition Agreement"). As
consideration for these assets, TCRS delivered to Doppelt (i) approximately
$20.7 million in cash, (ii) a subordinated promissory note of Trammell Crow
Company, a Texas close corporation and predecessor to the Company (the
"Predecessor Company"), payable to Doppelt in the principal amount of $6.0
million, and (iii) the right to receive up to $2.0 million of additional
purchase price if future commissions collected by TCRS from any source exceed
$7.0 million, subject to reduction based on the amount of certain of Doppelt's
uncollected accounts receivable and certain leases executed by Doppelt as of
August 22, 1997, for which a commission is not collected by TCRS prior to August
22, 1999. The Predecessor Company also paid Mr. Doppelt $2.0 million upon the
execution of an employment agreement. Pursuant to the Acquisition Agreement, the
Predecessor Company delivered to Doppelt a promissory note in the principal
amount of $6.0 million. In November 1997, the Company issued to Doppelt &
Company 342,857 shares of Common Stock (the "Doppelt Shares") in payment of the
note. Doppelt has been in operation since 1981 and has specialized in
supplementing or, in some cases, replacing the real estate departments of retail
companies by providing tenant representation and lease disposition services to
its clients.

COMPETITION

    The Company competes in several business lines within the commercial real
estate industry, each of which is highly competitive on a national and a local
level. Depending on the business line, the Company faces competition from other
real estate services providers, consulting firms and in-house corporate real
estate and infrastructure management departments. Some of the Company's
principal competitors in certain of these business lines have capabilities and
financial resources equal to or greater than those of the Company and a broader
global presence. Many of the Company's competitors are local or regional firms
which are smaller than the Company on an overall basis, but may be substantially
larger than the Company on a local or regional basis. While the Company does not
believe that any of its competitors are dominant in the business lines in which
the Company operates, the providers of real estate services that compete with
the Company on a national level include LaSalle Partners Incorporated, CB
Commercial/Koll Management Services, Cushman & Wakefield, Inc. and Insignia
Financial Group. The Company has faced increased competition in recent years
which has, in some cases, resulted in lower service fees, or compensation
arrangements more closely aligned with the Company's performance in rendering
services to its clients. In recent years, there has also been a significant
increase in the number of REITs which self-manage their real estate assets.
Continuation of this trend could decrease the demand for services offered by the
Company, and thereby increase competition. In general, the Company expects the
industry to become increasingly competitive in the future. There can be no
assurance that such competition will not have a material adverse effect on the
Company's business, financial condition or results of operations.

EMPLOYEES

    As of December 31, 1997, the Company had approximately 3,400 employees.
Employees of the Company at certain properties located in the San Francisco,
California metropolitan market are currently represented by a labor union.
Management believes that its ongoing labor relations are good. The collective
bargaining agreement with employees with Tri-State Center I, Inc. and Tri-State
Center II, Inc., both affiliates of the Company, will expire on May 31, 1998,
and the collective bargaining agreement with employees of Itasca Center III,
L.P. and Urban Center XI, L.P., both affiliates of the Company, will expire on
May 31, 1998.

INSURANCE

    The Company has the types of insurance coverage, including comprehensive
general liability and excess umbrella liability insurance, that it believes are
appropriate for a company in the lines of business in which it operates. The
Company's management will use its discretion in determining the amounts,
coverage limits and deductibility provisions of appropriate insurance coverage
on the Company's properties and operations at a reasonable cost and on suitable
terms. This might result in insurance coverage that,

                                       12
<PAGE>
in the event of a substantial loss, would not be sufficient to pay the full
value of the damages suffered by the Company.

TRADEMARKS

    The trade name "Trammell Crow" is material to the Company's business. The
Company has entered into a License Agreement with CFH Trade-Names, L.P. ("CFH"),
an affiliate of Crow Family Partnership, L.P. ("Crow Family"), with respect to
such business and trade names (the "License Agreement"). See "ITEM 13. CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS."

ENVIRONMENTAL LIABILITY

    Various federal, state and local laws and regulations impose liability on
current or previous real property owners or operators for the cost of
investigating, cleaning up or removing contamination caused by hazardous or
toxic substances at the property. In the Company's role as a property manager,
it could be held liable as an operator for such costs. Such liability may be
imposed without regard to the legality of the original actions and without
regard to whether the Company knew of, or was responsible for, the presence of
such hazardous or toxic substances, and such liability may be joint and several
with other parties. If the liability is joint and several, the Company could be
responsible for payment of the full amount of the liability, whether or not any
other responsible party is also liable. Further, any failure by the Company to
disclose environmental issues could subject the Company to liability to a buyer
or lessee of the property. In addition, some environmental laws create a lien on
the contaminated site in favor of the government for damages and costs it incurs
in connection with the contamination. The operator of a site also may be liable
under common law to third parties for damages and injuries resulting from
hazardous substances or environmental contamination at a site, including
liabilities relating to the presence of asbestos-containing materials. There can
be no assurance that any of such liabilities to which the Company or any of its
affiliates may become subject will not have a material adverse effect on the
Company's business and results of operations.

    Some of the properties owned, operated, or managed by the Company are on,
adjacent to or near properties that have contained in the past, or currently
contain, underground and/or above-ground storage tanks used to store regulated
substances such as petroleum products or other hazardous or toxic substances.
Some of the properties owned, operated or managed by the Company are in the
vicinity of properties which are currently, or have been, subject to releases of
regulated substances and remediation activity, and the Company is currently
aware of several properties owned, operated or managed by the Company which may
be impacted by regulated substances which may have migrated from adjacent or
nearby properties or which may be within the borders of areas suspected to be
impacted by regional groundwater contamination. In addition, the Company is
aware of the presence or the potential presence of regulated substances at
several properties owned, operated or managed by it which may have resulted from
historical or ongoing soil or groundwater activities on those properties. Based
on the information available to date, the Company believes that the
environmental issues described above are being or have been appropriately
managed and will not have a material adverse effect on the Company.

    There can be no assurance that environmental liabilities or claims will not
adversely affect the Company in the future.

GOVERNMENT REGULATION

    The Company and its brokers, salespersons and, in some instances, property
managers are regulated by the states in which they do business. These
regulations include licensing procedures, prescribed fiduciary responsibilities
and anti-fraud prohibitions. The Company's activities are also subject to
various federal and state fair advertising, trade, housing and real estate
settlement laws and regulations and are affected by laws and regulations
relating to real estate and real estate finance and development. In particular,
a number of states and localities have imposed environmental controls and zoning
restrictions on the development of real estate.

                                       13
<PAGE>
    The Company is subject to laws governing its relationship with employees,
including minimum wage requirements, overtime, working conditions and work
permit requirements. The Company believes that it has the necessary permits and
approvals to operate each of its properties and their respective businesses.

    Under the Americans with Disabilities Act of 1990, all public accommodations
are required to meet certain federal requirements related to access and use by
disabled persons. While the Company believes that its properties in which it
holds an equity interest are substantially in compliance with these
requirements, a determination that the Company is not in compliance with the ADA
could result in the imposition of fines or an award of damages to private
litigants.

ITEM 2.  PROPERTIES

    The Company's executive offices are located at 2001 Ross Avenue, 3400
Trammell Crow Center, Dallas, Texas 75201 and consist of approximately 25,000
square feet of leased office space. The Company's telephone number at such
address is (214) 863-3000. The Company's lease at its executive offices will
expire on December 31, 1999.

ITEM 3.  LEGAL PROCEEDINGS

    From time to time, the Company is involved in litigation incidental to its
business. In the Company's opinion, no litigation to which the Company is
currently a party, if decided adversely to the Company, is likely to have a
material adverse effect on the Company's results of operation or financial
condition.

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

    No matters were submitted to a vote of stockholders, through the
solicitation of proxies or otherwise, during the fourth quarter ended December
31, 1997.

                                       14
<PAGE>
                                    PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

    The Common Stock was listed on the New York Stock Exchange ("NYSE") on
November 25, 1997 under the symbol "TCW." At March 24, 1998, 33,911,416 shares
were held by approximately 212 stockholders of record. The following table sets
forth the high and low sales prices as reported on the NYSE Composite
Transaction Tape on a quarterly basis for the periods indicated.

<TABLE>
<CAPTION>
                                                           HIGH        LOW
                                                         ---------  ---------
<S>                                                      <C>        <C>
1997
  Fourth Quarter.......................................  $   25.75  $   20.25
</TABLE>

    The Board of Directors intends to retain earnings to finance its growth and
for general corporate purposes and, therefore, does not anticipate paying any
dividends in the foreseeable future. Any future payment of dividends will be at
the discretion of the Board of Directors and will depend upon the Company's
results of operations, financial condition, cash requirements and other factors
deemed relevant by the Board of Directors, including the terms of the Company's
indebtedness. See "ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS--LIQUIDITY AND CAPITAL RESOURCES."

    From 1994 through 1997, the Predecessor Company declared annual cash
dividends which were paid during the first six months of each year and were
based upon the Predecessor Company's earnings in the prior year. The aggregate
amount of dividends paid to the Predecessor Company's shareholders during the
years ended December 31, 1994, 1995 and 1996 were $1,672,000, $2,475,000 and
$2,890,000, respectively. In April 1997, the Predecessor Company paid dividends
based on 1996 earnings in the aggregate amount of approximately $8,200,000. In
October 1997, the Predecessor Company declared and paid dividends in an
aggregate amount of approximately $6,826,000 based on earnings through September
30, 1997. See "ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS-- REINCORPORATION TRANSACTIONS."

RECENT SALES OF UNREGISTERED SECURITIES

    On August 21, 1997, the Company was incorporated in Delaware and 1,000
shares of Common Stock were issued to Crow Family Partnership, L.P. ("Crow
Family") for $1,000 in cash. Such shares were issued without registration under
the Securities Act, in reliance on Section 4(2) of the Securities Act.

    On August 22, 1997, TCRS acquired the business of Doppelt and the Company
issued a convertible subordinated note to Doppelt which was converted
immediately prior to the consummation of the Offering (as defined herein) into
342,857 shares of Common Stock. The note represents a portion of the
consideration paid in connection with the Doppelt Acquisition. The shares of
Common Stock issued to Doppelt upon conversion of the note were issued without
registration under the Securities Act, in reliance on Section 4(2) of the
Securities Act. See "ITEM 1. BUSINESS--RETAIL SERVICES."

    Immediately prior to the closing of the Offering, in connection with the
Reincorporation Merger, the Company issued to the shareholders of the
Predecessor Company 25,502,964 shares of Common Stock. Such shares were issued
without registration under the Securities Act, in reliance on Section 4(2) of
the Securities Act and Rule 506 promulgated thereunder. See "ITEM 7.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS--REINCORPORATION TRANSACTIONS."

    Immediately prior to the closing of the Offering, the Company issued to CFH
2,295,217 shares of Common Stock. The shares were issued in consideration of the
execution of the License Agreement. Such shares were issued without registration
under the Securities Act, in reliance on Section 4(2) of the Securities Act and
Rule 506 promulgated thereunder. See "ITEM 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS."

                                       15
<PAGE>
APPLICATION OF OFFERING PROCEEDS

    As of March 27, 1998, the net proceeds to the Company from the initial
public offering of shares of the Company's Common Stock completed in 1997 (the
"Offering") (File No. 333-34859, declared effective November 24, 1997) of
approximately $90.2 million have been used as follows: (i) approximately $31.0
million was used to repay all outstanding indebtedness under a credit facility
that was terminated upon the closing of the Offering, (ii) approximately $1.6
million was paid to J. McDonald Williams in connection with the termination of
the Company's consulting arrangements with Mr. Williams, (iii) approximately
$8.4 million was used to repay other indebtedness of the Company, as described
below and (iv) approximately $26.3 million was used for development purchases.
The remaining proceeds were used for working capital. See "ITEM 7. MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS--
LIQUIDITY AND CAPITAL RESOURCES" and "ITEM 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS." Pending the use of proceeds, the Company invested the net
proceeds in investment grade short-term, interest bearing securities.

    Approximately $31.0 million of the net proceeds from the Offering were used
to repay indebtedness owed by the Company under a credit facility that was
terminated upon the closing of the Offering. Approximately $30.0 million of such
indebtedness was incurred on August 22, 1997, bore interest at a rate of 6.625%
per year and had a maturity date of February 22, 1998. Approximately $7.0
million of such indebtedness was incurred in order to refinance certain
indebtedness of the Predecessor Company and approximately $22.7 million of such
indebtedness was incurred in connection with the Doppelt Acquisition. An
additional $1.0 million was incurred in October 1997 for working capital
purposes. See "ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS--LIQUIDITY AND CAPITAL RESOURCES."

    Approximately $8.4 million of the net proceeds from the Offering were used
to reduce certain indebtedness of the Company. Of the $8.4 million of
indebtedness, approximately $4.4 million represented deferred compensation
payables owed to former employees of the Company which accrued interest at an
annual rate of 8.25% and had no stated maturity. The remaining indebtedness
included approximately $2.4 million owed under various lines of credit (which
accrued interest at annual rates ranging from 8.0% to 8.5% and had stated
maturities extending from March 1998 to April 2000), approximately $0.9 million
owed to former shareholders (which accrued interest at an annual rate of 6.1%
and had stated maturities extending from January 2000 to February 2000) and
approximately $0.7 million of indebtedness owed to Mr. Williams (which accrued
interest at an annual rate of 10.5% and had a stated maturity of October 1,
2006). See "ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS."

                                       16
<PAGE>
ITEM 6.  SELECTED CONSOLIDATED FINANCIAL DATA

    The selected financial data set forth below have been derived from the
consolidated financial statements of the Company. The consolidated financial
statements of the Company as of December 31, 1996 and 1997 and for each of the
three years in the period ended December 31, 1997 have been audited by Ernst &
Young LLP, independent auditors, whose report thereon appears elsewhere in this
report.

    The selected financial data should be read in conjunction with "ITEM 7.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS," and the financial statements and notes thereto of the Company
contained elsewhere in this report.

<TABLE>
<CAPTION>
                                                                         YEAR ENDED DECEMBER 31,
                                                          -----------------------------------------------------
                                                            1993       1994       1995       1996       1997
                                                          ---------  ---------  ---------  ---------  ---------
                                                             (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<S>                                                       <C>        <C>        <C>        <C>        <C>
STATEMENT OF OPERATIONS DATA:
Property management services............................  $  90,954  $  99,609  $  92,970  $  90,179  $  87,756
Brokerage services......................................     47,299     48,652     61,960     72,095     91,053
Infrastructure management services......................     16,401     27,063     38,681     50,836     68,719
Development and construction services...................     14,377     12,792     20,382     22,732     40,054
Retail services.........................................      1,306      1,966      1,510      2,393      5,318
Income from unconsolidated subsidiaries.................        465      3,141        114        594        512
Gain on disposition of real estate......................     --          4,646      5,026      6,630     10,241
Other...................................................      3,759      3,039      6,559      9,996      9,986
                                                          ---------  ---------  ---------  ---------  ---------
Total revenues..........................................    174,561    200,908    227,202    255,455    313,639
Salaries, wages and benefits............................    106,606    115,330    130,248    137,794    161,425
Non-recurring compensation costs........................     --         --         --         --         33,085
Commissions.............................................     15,856     20,788     23,730     27,119     39,121
General and administrative..............................     35,365     35,282     40,671     41,421     55,884
Profit sharing..........................................      8,292     16,562     15,893     20,094     23,514
Other...................................................      4,255      7,284      8,526      9,087     17,997
                                                          ---------  ---------  ---------  ---------  ---------
Operating costs and expenses............................    170,374    195,246    219,068    235,515    331,026
                                                          ---------  ---------  ---------  ---------  ---------
Income (loss) before income taxes.......................      4,187      5,662      8,134     19,940    (17,387)
Income tax provision (benefit)..........................      1,854      2,636      3,793      7,826     (3,367)
                                                          ---------  ---------  ---------  ---------  ---------
Income (loss) before extraordinary gain.................      2,333      3,026      4,341     12,114    (14,020)
Extraordinary gain......................................        188        782     --         --         --
                                                          ---------  ---------  ---------  ---------  ---------
Net income (loss).......................................  $   2,521  $   3,808  $   4,341  $  12,114  $ (14,020)
                                                          ---------  ---------  ---------  ---------  ---------
                                                          ---------  ---------  ---------  ---------  ---------
Pro forma loss per share (basic and diluted)(1).........                                              $    (.42)
                                                                                                      ---------
                                                                                                      ---------
OTHER DATA:
EBITDA, as adjusted(2)..................................  $  16,969  $  29,686  $  32,033  $  48,915  $  59,522
Cash provided by (used in) operating activities.........      7,556     15,907     10,648     25,148     (4,978)
Cash used in investing activities.......................     (1,974)    (2,748)      (646)    (5,019)   (21,322)
Cash provided by (used in) financing activities.........     (4,412)        93     (5,457)    (1,779)    64,542

BALANCE SHEET DATA:
Cash and cash equivalents...............................  $  22,358  $  35,610  $  40,155  $  58,505  $  96,747
Total assets............................................     55,774     99,867    114,315    194,314    326,236
Long-term debt..........................................      8,425      9,762      7,065     12,361      2,430
Notes payable on real estate held for sale..............     --         22,914     13,182     67,810     76,623
Deferred compensation...................................     14,661     21,468     25,883     20,963      8,391
Total liabilities.......................................     43,767     85,516     95,090    160,018    169,305
Minority interest.......................................         27        278      3,932      3,294     19,859
Stockholders' equity....................................     11,980     14,074     15,293     31,002    137,072
</TABLE>

                                       17
<PAGE>
    Summarized operating data by business line for the year ended December 31,
1997 (in thousands):

<TABLE>
<CAPTION>
                                                                                DEVELOPMENT
                                        PROPERTY                 INFRASTRUCTURE     AND
                                       MANAGEMENT    BROKERAGE    MANAGEMENT    CONSTRUCTION   RETAIL      TOTAL
                                      ------------  -----------  -------------  ------------  ---------  ---------

<S>                                   <C>           <C>          <C>            <C>           <C>        <C>
Service revenues....................   $   87,756    $  91,053     $  68,719     $   40,054   $   5,318  $ 292,900
Income from unconsolidated
  subsidiaries......................       --           --            --                512      --            512
Gain on disposition of real
  estate............................       --           --            --             10,241      --         10,241
Other...............................        6,678          189           193          1,678       1,248      9,986
                                      ------------  -----------  -------------  ------------  ---------  ---------
Total revenues......................       94,434       91,242        68,912         52,485       6,566    313,639
Operating costs and expenses(3).....      104,070      100,041        70,800         48,797       7,318    331,026
                                      ------------  -----------  -------------  ------------  ---------  ---------
Income (loss) before income taxes...   $   (9,636)   $  (8,799)    $  (1,888)    $    3,688   $    (752) $ (17,387)
                                      ------------  -----------  -------------  ------------  ---------  ---------
                                      ------------  -----------  -------------  ------------  ---------  ---------
EBITDA, as adjusted(2)..............   $   16,421    $  10,639     $   8,471     $   22,520   $   1,471  $  59,522
</TABLE>

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

(1) Based on 33,583,467 pro forma weighted average shares outstanding, which
    includes the shares issued in connection with the Company's initial public
    offering and related transactions as outstanding for the full year. Prior
    years' earnings per share is not relevant due to the change in capital
    structure effected in connection with the Reincorporation Transactions in
    1997.

(2) EBITDA, as adjusted, represents earnings before interest, income taxes,
    depreciation and amortization, royalty and consulting fees, profit sharing,
    the non-cash, non-recurring charge to income related to the stock options
    granted under the Predecessor Company's 1997 Stock Option Plan assumed by
    the Company in connection with the Reincorporation Transactions (the
    "Assumed Option Plan") and the non-recurring charge to income resulting from
    the settlement of claims by certain former employees arising out of a
    terminated stock appreciation rights plan. Management believes that EBITDA,
    as adjusted, can be a meaningful measure of the Company's operating
    performance, cash generation and ability to service debt. However, EBITDA,
    as adjusted, should not be considered as an alternative to: (i) net earnings
    (determined in accordance with generally accepted accounting principles
    ("GAAP")); (ii) operating cash flow (determined in accordance with GAAP); or
    (iii) liquidity. There can be no assurance that the Company's calculation of
    EBITDA, as adjusted, is comparable to similarly titled items reported by
    other companies.

(3) Includes a non-cash, non-recurring charge to compensation expense of
    $33,085,000 related to options granted under the Assumed Option Plan as
    follows: Property Management--$13,554,000; Brokerage--$10,431,000;
    Infrastructure Management-- $4,095,000; Development and
    Construction--$3,815,000; and Retail--$1,190,000.

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

    The following discussion should be read in conjunction with the Company's
Consolidated Financial Statements and the notes thereto and the other
information included in Item 14(a)(1) and (2) of this Annual Report on Form
10-K.

REINCORPORATION TRANSACTIONS

    The Company is a Delaware corporation that was formed in August 1997 to
become the successor to Trammell Crow Company, a Texas close corporation (the
"Predecessor Company"). In connection with the Offering, the Company and TCC
Merger Sub, Inc., a wholly owned subsidiary of the Company ("Merger Sub"),
entered into a series of transactions (the "Reincorporation Transactions") to
convert the legal form in which the Predecessor Company's business and
operations were held from a Texas close corporation to a Delaware corporation.

    As part of the Reincorporation Transactions, immediately prior to the
closing of the Offering, CFH, an affiliate of Crow Family (which was then the
Company's sole stockholder), entered into the License Agreement with the
Company, pursuant to which CFH transferred to the Company, subject to certain
quality standards, the perpetual right (the "Trade Name License") to use the
name "Trammell Crow Company," and variations thereof, throughout the world. See
"ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS." In exchange for the
grant of the Trade Name License, the Company issued to CFH 2,295,217 shares of
Common Stock. See "ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS--RECENT SALES OF UNREGISTERED SECURITIES."

                                       18
<PAGE>
    Following the grant of the Trade Name License, Merger Sub was merged (the
"Reincorporation Merger") with and into the Predecessor Company. As a result of
the Reincorporation Merger, the Predecessor Company survived as a wholly-owned
subsidiary of the Company and all of the shares of the Predecessor Company's
common stock issued and outstanding immediately prior to the effective time of
the Reincorporation Merger were converted into, in the aggregate, 25,502,964
shares of Common Stock. Upon completion of the Reincorporation Merger, the
Company and certain of its stockholders entered into a Stockholders' Agreement.
See "ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS."

OVERVIEW

    Trammell Crow Company is one of the largest diversified commercial real
estate service firms in the United States. As a means of addressing the
comprehensive real estate service requirements of its diverse group of clients,
the Company is organized into five principal lines of business. Property
management services include serving the clients' needs with respect to all
aspects of building operations, tenant relations and oversight of building
improvement processes, primarily for building owners who do not occupy the
properties managed by the Company. Brokerage services include advising buyers,
sellers, landlords and tenants in connection with the sale and leasing of
office, industrial and retail space and land. Infrastructure management entails
providing comprehensive day-to-day occupancy related services, principally to
large corporations which occupy commercial facilities in multiple locations.
Specific infrastructure management services include administration, day-to-day
maintenance and repair of client occupied facilities and strategic functions
such as space planning, relocation coordination, facilities management and
portfolio management. The development and construction services provided by the
Company include financial planning, site acquisition, procurement of approvals
and permits, design and engineering coordination, construction bidding and
management and tenant finish coordination, project close-out and user move
coordination, general contracting and project finance advisory services. The
Company's retail services business provides tenant representation, disposition,
development and financial services to national and global retail customers.

    The Company has benefited from the recovery of the real estate market in the
early 1990's. The Company's annual revenues increased to $313.6 million in 1997
from $227.2 million in 1995. This revenue growth was achieved during a period
when the composition of the Company's revenues shifted significantly as the
Company increased the role which brokerage, infrastructure management,
development and construction and retail services play in its overall strategy.
Rising rental and occupancy rates have largely mitigated the adverse effects
that a decrease in square footage under the Company's management might otherwise
have had on the Company's property management services revenues, and have had
the residual effect of increasing revenues from the Company's other business
lines. The steady cash flows produced by the Company's property management
services business have allowed the Company to expand its presence in these
complementary service businesses to meet the needs of its client base. From 1995
to 1997, revenues from property management services decreased by approximately
5.6%, and as a percentage of the Company's total revenues, they declined from
40.9% to 28.0%. Over this same period, revenues from brokerage, infrastructure
management, development and construction (including gain on disposition of real
estate and income from unconsolidated subsidiaries) and retail services
increased from a combined 56.3% of total revenues to 68.9% of total revenues.

    The Company's revenue streams consist primarily of recurring payments made
pursuant to service contracts and variable transaction-oriented payments. The
Company typically receives base monthly fees from clients for services provided
in its property management business. A majority of the fees generated by the
Company's infrastructure management business are contractual and recurring in
nature. The fees generated in the Company's brokerage and retail service
businesses are typically paid in connection with the consummation of a
transaction such as the purchase or sale of commercial property or the execution
of a lease. The Company typically earns fees for development and construction
services which are based upon a negotiated percentage of a project's cost, and
the Company may receive incentive bonuses for completing

                                       19
<PAGE>
a development project under budget and within certain critical time deadlines.
Although the fees generated by the Company's brokerage service and development
and construction service businesses are not typically recurring in nature, a
majority of the aggregate revenues generated by these businesses in 1997 was
earned in the performance of services relating to properties included in the
Company's approximately 240 million square feet property management and leasing
portfolio. In 1997, the percentage of the Company's total revenues generated by
each of its property management, brokerage, infrastructure management,
development and construction and retail service businesses was 28.0%, 29.0%,
21.9%, 16.2% and 1.7%, respectively.

    A majority of the Company's revenues that are not generated by its primary
businesses are generated by an insurance agency subsidiary and are based upon
commissions on insurance written on properties included in the Company's
property management and leasing portfolio and on workmen's compensation
insurance for the Company's employees. Despite a reduction in square feet under
the Company's management over the last five years, these other revenues have
increased significantly because of more favorable commission rates with
insurance carriers. In 1997, this subsidiary generated revenues of $4.2 million.

    The Company's operating expenses in 1997 consisted of salaries, wages and
benefits, commissions, general and administrative expenses, rent, depreciation
and amortization expense, interest, profit sharing, royalty and consulting fees
and minority interest. Excluding the non-recurring charge to compensation for
certain stock options granted under the Assumed Option Plan in 1997, salaries,
wages and benefits and commissions, which constitute a majority of the Company's
total operating costs and expenses, tend to be relatively constant as a
percentage of revenues on an annual basis.

    Since 1991 the Company has maintained a profit sharing plan for key
employees (the "Profit Sharing Plan"). Each participant in the Profit Sharing
Plan has an account that is adjusted annually to reflect the participant's
percentage of the earnings of a profit sharing unit or a designated project,
cash distributions and other matters. Distributions to participants may only be
made from available cash (as defined in the Profit Sharing Plan), and any
difference between the amount expended and the amount paid to the participants
is recorded as deferred compensation. The Company's Board of Directors approves
the amount of earnings before profit sharing which will be available to profit
sharing participants. In September and October 1997, the Company made
distributions of approximately $11.3 million in the aggregate in partial payment
of deferred compensation balances. In connection with the Offering, the Company
terminated any future profits participation under the Profit Sharing Plan and
partially terminated ongoing participation in existing projects. Of the
approximately $21.3 million balance that was accrued as deferred compensation
under the Profit Sharing Plan as of the time of the Offering, approximately $4.4
million was paid in January 1998 to retired Profit Sharing Plan participants
from the proceeds of the Offering, and the remaining $16.9 million will be paid,
without interest, in roughly equal quarterly installments in 1998 and 1999.
Profit sharing expense attributable to projects, to the extent profit
participation in projects was not terminated prior to the closing of the
Offering, will continue to accrue until the projects are sold by the Company.
Management believes that the termination of any future profits participation
under the Profit Sharing Plan should have a positive effect on the Company's net
income. Payment of deferred compensation balances during 1998 and 1999 should
decrease the Company's net cash flow.

    Prior to consummation of the Reincorporation Transactions, two significant
stockholders of the Company received royalty and consulting fees under certain
agreements totalling approximately 12% of earnings before profit sharing.
Expense under these arrangements aggregated $6.2 million, $4.0 million and $2.4
million in 1997, 1996 and 1995, respectively. The royalty agreement and
consulting arrangements were terminated in connection with the Offering. In
January 1998, the Company paid approximately $1.6 million to J. McDonald
Williams as a result of the termination of the consulting arrangements.
Management expects that the termination of the royalty agreement and consulting
arrangements should

                                       20
<PAGE>
have a positive effect on the Company's net income. See "ITEM 13. CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS."

    Over the last three years, an average of 32.6% of the Company's income
before income taxes (adjusted in 1997 to add back the non-cash charge related to
the options granted under the Assumed Option Plan and the expense related to the
settlement of claims by certain former employees arising out of the termination
of a Stock Appreciation Rights Plan) has been generated in the fourth quarter,
due primarily to a calendar year-end focus by the commercial real estate
industry on the completion of transactions. In addition, an increasing
percentage of the Company's property management and infrastructure management
contracts provide for bonus payments if the Company achieves certain performance
targets. Such incentive payments are generally earned in the fourth quarter. In
contrast, the Company's non-variable operating expenses, which are treated as
expenses when incurred during the year, are relatively constant on a quarterly
basis. See "--QUARTERLY RESULTS OF OPERATIONS AND SEASONALITY."

    While the Company has primarily used internally generated funds to achieve
growth, it intends to continue to pursue an aggressive growth strategy by
expanding client relationships, expanding the breadth of its service offerings,
making selective co-investments with its clients and pursuing selective
strategic acquisitions. The Company believes that its ability to pursue
acquisitions will be greatly enhanced by its ability to use external sources of
capital, including the public capital markets and the commercial banking
industry, to finance such acquisitions.

RESULTS OF OPERATIONS

    The following table sets forth items from the Company's Consolidated
Statements of Operations for each of the three years in the period ended
December 31, 1997, as a percent of revenue for the periods indicated.

<TABLE>
<CAPTION>
                                                                                YEAR ENDED DECEMBER 31
                                                                         -------------------------------------
                                                                            1995         1996         1997
                                                                         -----------  -----------  -----------
<S>                                                                      <C>          <C>          <C>
REVENUES:
Property management services...........................................       40.9%        35.3%        28.0%
Brokerage services.....................................................       27.3%        28.2%        29.0%
Infrastructure management services.....................................       17.0%        19.9%        21.9%
Development and construction services..................................        9.0%         8.9%        12.8%
Retail services........................................................        0.7%         0.9%         1.7%
Income from unconsolidated subsidiaries................................        0.1%         0.2%         0.2%
Gain on sale of real estate............................................        2.2%         2.6%         3.3%
Other..................................................................        2.8%         4.0%         3.1%
                                                                             -----        -----    -----------
  Total revenues.......................................................      100.0%       100.0%       100.0%
Salaries, wages & benefits.............................................       57.3%        53.9%        62.0%
Commissions............................................................       10.4%        10.6%        12.5%
General and administrative.............................................       17.9%        16.2%        17.8%
Profit sharing.........................................................        7.0%         7.9%         7.5%
Other..................................................................        3.8%         3.6%         5.7%
                                                                             -----        -----    -----------
  Total operating costs and expenses...................................       96.4%        92.2%       105.5%
                                                                             -----        -----    -----------
Income (loss) before income taxes......................................        3.6%         7.8%       (5.5)%
Income tax expense (benefit)...........................................        1.7%         3.1%       (1.1)%
                                                                             -----        -----    -----------
Net income (loss)......................................................        1.9%         4.7%       (4.4)%
                                                                             -----        -----    -----------
                                                                             -----        -----    -----------
</TABLE>

                                       21
<PAGE>
YEAR ENDED DECEMBER 31, 1997 COMPARED TO YEAR ENDED DECEMBER 31, 1996

    CONSOLIDATED RESULTS

    TOTAL REVENUE.  The Company's total revenues grew $58.1 million, or 22.7%,
to $313.6 million in 1997 from $255.5 million in 1996.

    Property management services revenue, which represented 28.0% of the
Company's total revenue in 1997, decreased $2.4 million, or 2.7%, to $87.8
million in 1997 from $90.2 million in 1996. This decrease was primarily due to
an overall decrease in the number of square feet under management, and a
relative increase in the number of square feet under management constituted by
industrial properties, which typically generate lower property management
revenues per square foot than office, retail and other commercial property
types.

    Brokerage services revenue, which represented 29.0% of the Company's 1997
total revenue, increased $19.0 million, or 26.4%, to $91.1 million in 1997 from
$72.1 million in 1996. The revenue growth resulted from the increase in tenant
representation fees and in investment sales revenue resulting from
implementation of the Company's strategy to aggressively pursue these business
lines. The Company added approximately 100 brokers in 1997 to support this
growth.

    Infrastructure management services revenues, which represented 21.9% of the
Company's 1997 total revenues, increased $17.9 million, or 35.2%, to $68.7
million in 1997 from $50.8 million in 1996. The revenue growth resulted
primarily from the addition of new customers. Additionally, the Company was able
to expand project management and facility management services provided to
existing customers.

    On a combined basis, development and construction service fees, gain on
disposition of real estate and income from unconsolidated subsidiaries totalled
$50.8 million in 1997, which represented 16.2% of the Company's 1997 total
revenue. These combined revenues increased $20.8 million, or 69.3%, from $30.0
million in 1996. This revenue growth was primarily due to a $7.4 million
increase in development fees from $9.3 million in 1996 to $16.7 million in 1997
and an increase in construction management services fees of $2.5 million to
$11.0 million in 1997 from $8.5 million in 1996. Additionally, gain on sale of
real estate increased $3.6 million, or 54.5%, from $6.6 million in 1996 to $10.2
million in 1997.

    Retail services revenue, which represented 1.7% of the Company's 1997 total
revenue, increased $2.9 million, or 121%, to $5.3 million in 1997 from $2.4
million in 1996, primarily as a result of the acquisition of Doppelt in August
1997.

    OPERATING COSTS AND EXPENSES.  The Company's operating costs and expenses
increased by $95.5 million, or 40.6%, to $331.0 million in 1997 from $235.5
million in 1996. The increase in operating costs is primarily due to the
non-recurring charges as a result of the completion of the Offering in December
1997. The 41.2% increase in salaries and benefits is primarily due to the $33.1
million non-cash charge related to the options granted under the Assumed Option
Plan. The remaining increase in salaries is due to the increased staffing
required for the infrastructure management services business. The increase in
commissions is due to the growth in the Company's brokerage services and retail
services businesses. Approximately $4.4 million of the increase in general and
administrative expense relates to the non-recurring charge to income resulting
from the settlement of claims by certain former employees arising out of a
terminated Stock Appreciation Rights Plan. The remaining increase in general and
administrative expenses represents approximately $2.3 million in operating
expenses relating to rental properties which were not operational in 1996 and
the increased expenditures associated with the Company's technological support
systems. The Company's profit sharing expense increased by $3.4 million, or
16.9%, to $23.5 million in 1997 from $20.1 million in 1996 due to the increase
in earnings available for profit sharing. Other operating costs increased due to
$3.1 million of interest expense on real estate held for sale that became
operational in 1997, the $1.6 million accrued in connection with the termination
of the consulting agreement with Mr. Williams and increased amortization as a
result of the Doppelt acquisition.

                                       22
<PAGE>
    In 1998, the Company anticipates that the decrease in operating expenses
attributable to the termination of future profits participation under the Profit
Sharing Plan and royalty and consulting agreements will be partially offset by
an increase in compensation expense due to the impact of the new compensation
structure adopted in connection with the Offering.

    INCOME (LOSS) BEFORE INCOME TAXES.  The Company's income before income taxes
decreased $37.3 million, to a loss of $17.4 million in 1997 from a profit of
$19.9 million in 1996.

    NET INCOME (LOSS).  Net income decreased $26.1 million, to a loss of $14.0
million in 1997 from a profit of $12.1 million in 1996.

YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995

    CONSOLIDATED RESULTS

    TOTAL REVENUE.  The Company's total revenue grew $28.3 million, or 12.4%, to
$255.5 million in 1996 from $227.2 million in 1995.

    Property management services revenue, which represented 35.3% of the
Company's total revenue in 1996, decreased $2.8 million, or 3.0%, to $90.2
million in 1996 from $93.0 million in 1995. This decrease was primarily due to
the net reduction in square footage of property management assignments and a
relative increase in the number of square feet under management constituted by
industrial properties, which typically generate lower property management
revenues per square foot than office, retail and other commercial property
types. Recognizing a trend toward a consolidation of service providers utilized
by large institutional owners and investors, the Company implemented a national
marketing program focused on its large customers. The implementation of this
strategic initiative increased square footage under management for these
customers by 11.3 million square feet, or 12.9%, to 99.1 million square feet in
1996 from 87.8 million square feet in 1995.

    Brokerage services revenue, which represented 28.2% of 1996 total revenues,
increased $10.1 million, or 16.4%, to $72.1 million in 1996 from $62.0 million
in 1995. This revenue growth resulted primarily from an increase in tenant
representation fees of $3.6 million, or 29.0%, to $16.0 million in 1996 from
$12.4 million in 1995 and the increase in investment sales revenue of $4.0
million, or 56.5%, to $11.1 million in 1996 from $7.1 million in 1995. The
Company believes that this revenue growth is attributable to the continuation of
a strategic initiative to expand its marketing services beyond project leasing
to include tenant representation, investment sales and land sales. This strategy
resulted in an increase in the aggregate number of brokers by 40, or 20.5%, to
235 in 1996 from 195 in 1995.

    Infrastructure management services revenue, which represented 19.9% of the
Company's total revenues in 1996 increased $12.1 million, or 31.4%, to $50.8
million in 1996 from $38.7 million in 1995. The revenue growth resulted
primarily from the addition of new customers and the expansion of services
provided to existing customers. In addition, in September 1996, the Company
acquired the remaining outstanding stock of Primaris Corporate Services, Ltd., a
Canadian provider of infrastructure management services. This acquisition,
accounted for under the purchase method, increased revenues by approximately
$0.9 million in 1996.

    Development and construction revenues include development and construction
service fees, gain on disposition of real estate and income from unconsolidated
subsidiaries. Development and construction revenue, which represented 11.7% of
1996 total revenue, increased $4.5 million or 17.4%, to $30.0 million in 1996
from $25.5 million in 1995. The revenue growth was primarily due to increases in
gross profit on general contracting services of $1.0 million, or 34.8%, to $3.9
million in 1996 from $2.9 million in 1995, a decrease in development fees of
$0.5 million, or 5.8%, to $8.5 million in 1996 from $9.0 million in 1995 and an
increase in gain on sale of real estate of $1.6 million, or 31.9%, to $6.6
million in 1996 from $5.0 million in 1995. Income from unconsolidated
subsidiaries increased $0.5 million or 421%, to $0.6 million in 1996

                                       23
<PAGE>
from $0.1 million in 1995. In general, these service revenues are affected by
the timing of development transactions.

    OPERATING COSTS AND EXPENSES.  The Company's operating costs and expenses
increased by $16.4 million, or 7.5%, to $235.5 million in 1996 from $219.1
million in 1995. The increase in operating costs and expenses is primarily due
to increased salaries, wages and benefits (associated with the increased
staffing required for the infrastructure management service business) and
increased commissions (associated with increased brokerage services revenues).
The Company's profit sharing increased by $4.2 million, or 26.4%, to $20.1
million in 1996 from $15.9 million in 1995 due to the increase in profitability.
As a percentage of total revenue, operating costs and expenses declined to 92.2%
in 1996 from 96.4% in 1995, primarily as a result of the Company's ability to
spread its fixed costs over a greater revenue base.

    INCOME BEFORE INCOME TAXES.  The Company's income before income taxes
increased $11.8 million, or 145.1%, to $19.9 million in 1996 from $8.1 million
in 1995 due to the factors described above.

    NET INCOME.  Net income increased $7.8 million, or 179.1%, to $12.1 million
in 1996 from $4.3 million in 1995. As a percent of total revenue, net income
increased to 4.7% in 1996 from 1.9% in 1995.

QUARTERLY RESULTS OF OPERATIONS AND SEASONALITY

    The following table presents unaudited quarterly results of operations data
for the Company for each of the four quarters of 1997, 1996 and 1995. This
quarterly information is unaudited but, in the opinion of management, reflects
all adjustments (consisting only of normal recurring adjustments) necessary for
a fair presentation of the information for the periods presented. The results of
operations for any quarter are not necessarily indicative of results for any
future period. Revenues and income before income taxes during the fourth fiscal
quarter historically have been somewhat greater than in the first three fiscal
quarters, primarily because the Company's clients have a demonstrated tendency
to close transactions toward the end of the fiscal year. The timing and
introduction of new contracts and other factors may also cause quarterly
fluctuations in the Company's results of operations. The fourth quarter of 1997
includes a non-cash, non-recurring charge to income of $33.1 million related to
options granted under the Assumed Option Plan and a $4.4 million non-recurring
charge to income resulting from the settlement of claims by certain former
employees arising out of a terminated Stock Appreciation Rights Plan.

<TABLE>
<CAPTION>
                                                                       THREE MONTHS ENDED
                                                       --------------------------------------------------
                                                        MARCH 31     JUNE 30   SEPTEMBER 30  DECEMBER 31
                                                       -----------  ---------  ------------  ------------
                                                                         (IN THOUSANDS)
<S>                                                    <C>          <C>        <C>           <C>
1997:
Revenues.............................................   $  62,098   $  69,344   $   81,797    $  100,400
Income (loss) before income taxes....................       2,624       4,402        7,575       (31,988)
Net income (loss)....................................   $   1,601   $   2,685   $    4,568    $  (22,874)
1996:
Revenues.............................................   $  56,397   $  54,299   $   65,515    $   79,244
Income before income taxes...........................       3,025       3,507        5,934         7,474
Net income...........................................   $   1,876   $   2,093   $    3,673    $    4,472
1995:
Revenues.............................................   $  47,415   $  53,692   $   54,530    $   71,565
Income before income taxes...........................         663       2,693        2,028         2,750
Net income...........................................   $     420   $   1,371   $    1,082    $    1,468
</TABLE>

LIQUIDITY AND CAPITAL RESOURCES

    The Company's liquidity and capital resources requirements include
expenditures for real estate held for sale and payments on notes payable
associated with its development and construction activities; the

                                       24
<PAGE>
funding of working capital needs, primarily accounts receivable from its clients
and affiliates; and the funding of capital investments. Historically, the
Company has financed its operations, investments and acquisitions with
internally generated funds, and additional liquidity has been available to the
Company through deferred compensation arrangements under its Profit Sharing
Plan. The Company terminated future profits participation under the Profit
Sharing Plan in connection with the Offering, and the Company expects that its
cash flow from operations in future periods will be greater as a result of this
change. In addition, the Company has historically financed its development and
construction services activities with construction loans secured by underlying
real estate.

    Net cash flow used in operating activities totaled $5.0 million for the year
ended December 31, 1997, compared to net cash provided by operating activities
of $25.1 million in 1996. The primary reasons for this change are a decrease in
debt proceeds for real estate held for sale as the Company used internal sources
for funding these transactions. In addition, the Company made mid-year royalty,
consulting and profit sharing cash distributions for 1997 activity which are
typically paid during the first quarter of the following year. The Company also
paid more federal taxes during the year due to a higher net income (before the
effect of the non-cash charge related to the options granted under the Assumed
Option Plan). Net cash flows provided by operating activities totaled $25.1
million and $10.6 million for the years ended December 31, 1996 and 1995,
respectively. The changes in these cash flows for these periods can be
attributed primarily to increases in net income, fluctuations in the net
proceeds from real estate development and construction and variations in
accounts receivable, accounts payable and accrued expenses.

    Net cash flow used in investing activities totaled $21.3 million for the
year ended December 31, 1997 compared to $5.0 million for the same period in
1996. This change is primarily attributable to the acquisition of Doppelt in
August 1997, investments in unconsolidated subsidiaries and distributions to
minority interest. These decreases were offset by distributions from
unconsolidated subsidiaries and contributions from minority interest. Net cash
flows used in investing activities totaled $5.0 million and $0.6 million for the
years ended December 31, 1996 and 1995, respectively. The changes in these cash
flows for these periods can be attributed primarily to an increase in technology
related fixed asset expenditures and decrease in contributions from minority
interest.

    Net cash flow provided by financing activities totaled $64.5 million for the
year ended December 31, 1997 compared to the net cash flow used in financing
activities of $1.8 million for the same period in 1996. The reasons for this
change are due to an increase of debt proceeds, the repayment of stock loans and
the net Offering proceeds received of $90.2 million. These increases were offset
by increased debt repayments and dividends paid during the year. Net cash flows
used in financing activities totaled $1.8 million and $5.5 million for the years
ended December 31, 1996 and 1995, respectively. The changes in these cash flows
for these periods can be attributed primarily to an increase in debt proceeds
offset by repurchasing common stock into treasury.

    In August 1996, the Company offered stock to certain employees and directors
in a private offering. In connection with the private offering, the Company
utilized a credit facility in the amount of $7.75 million from First Tennessee
Bank, N.A. A portion of the funds borrowed under this credit facility were used
to finance the repurchase of common stock and the remainder was loaned to
certain stockholders to allow such stockholders to pay certain tax liabilities.
This credit facility was a fully amortizing 5-year obligation which bore
interest at the base rate as announced by First Tennessee Bank, NA from time to
time plus 0.5% per annum. All amounts outstanding under this credit facility
were repaid at August 22, 1997.

    On August 22, 1997, the Predecessor Company established a $35 million credit
facility with Bankers Trust Company and certain other lenders (the "BT Credit
Facility"). Under the terms of the BT Credit Facility, the Company was able to
obtain loans which were Base Rate Loans or Eurodollar Rate Loans. Base Rate
Loans bore interest at a base rate (which was the higher of the prime rate
announced from time to time by Bankers Trust Company or an average federal funds
rate plus .5%) plus a margin which ranged from 0.0% to 0.75% depending upon the
Predecessor Company's leverage ratio at the date the margin was

                                       25
<PAGE>
determined. Eurodollar Rate Loans bore interest at an adjusted Eurodollar rate
plus a margin which ranged from 0.625% to 1.75% depending upon the Predecessor
Company's leverage ratio at the date the margin was determined. During 1997, the
Company borrowed $31.0 million under the BT Credit Facility. Approximately $7.0
million of this amount was used to refinance the debt incurred with First
Tennessee in connection with the private placement in 1996, approximately $22.7
million was used to make certain cash payments in connection with the Doppelt
Acquisition and approximately $1.0 million was used for working capital
purposes. The Company used approximately $31.0 million of the net proceeds from
the Offering to repay all amounts outstanding under the BT Credit Facility.

    On December 1, 1997, the Company obtained a $150 million master line of
credit from NationsBank of Texas, N.A., a national banking association (the
"NationsBank Facility"). The Company expects to borrow under the NationsBank
Facility to finance future strategic acquisitions, fund its co-investment
activities and provide the Company with an additional source of working capital.
The NationsBank Facility contains various covenants such as the maintenance of
minimum equity and liquidity and covenants relating to certain key financial
data. The NationsBank facility also includes limitations on payment of cash
dividends or other distributions of assets and certain restrictions on
investments and acquisitions that can be made by the Company. The covenants
contained in the NationsBank Facility and the amount of the Company's other
borrowings and contingent liabilities may have the effect of limiting the credit
available to the Company under the NationsBank Facility to an amount less than
the $150 million commitment. As of December 31, 1997, the Company had not
borrowed against the credit facility and the amount available thereunder was
approximately $92.5 million. As of March 27, 1998, the Company had borrowed
$33.0 million under the NationsBank Facility, including $10.0 million to fund
its co-investment activities and $23.0 million for the acquisition of Tooley.
The shares of certain wholly-owned subsidiaries having 5% or more of the
consolidated assets, revenues or earnings of the Company, and subsidiaries which
are engaged primarily in the business of real estate development and ownership,
whose assets are not subject to any financing, having more than 5% of the
consolidated assets, revenues or earnings of the Company, are pledged as
security for this credit facility.

    The Company intends to retain earnings to finance its growth and, therefore,
does not anticipate paying any dividends in the foreseeable future. The Company
believes that funds generated from operations, together with existing cash and
available credit under the NationsBank Facility will be sufficient to finance
its current operations, planned capital expenditure requirements, payment
obligations for development purchases and internal growth for the foreseeable
future. The Company's need, if any, to raise additional funds to meet its
working capital and capital requirements will depend upon numerous factors,
including the success and pace of its implementation of its growth strategy. The
Company regularly monitors capital raising alternatives to be able to take
advantage of available avenues to supplement its working capital, including
strategic corporate partnerships or other alliances, bank borrowings and the
sale of equity and/or debt securities.

IMPACT OF YEAR 2000

    The Company has begun to assess the impact of the Year 2000 issue on its
operations, including the processing of its own transactions and the processing
of transactions for customers under both property management contracts and
infrastructure management services contracts.

    Based on preliminary assessments, commenced in 1997, of the systems and
software used to process its own transactions, the Company believes that such
systems and software are Year 2000 compliant, or can be modified or replaced on
a timely basis to be compliant, without material cost to the Company. The
Company has recently begun assessments of the systems and software used to
process certain of its customers' transactions. Until the Company completes a
thorough assessment of its systems and software (including systems and software
used to process its customers' transactions), the Company cannot estimate the
costs and time period that will be required for any indicated modifications or
replacements of such systems and software. The Company expects to finish such
assessment, design an action plan (which will

                                       26
<PAGE>
include specific remediation steps and timetables, expected costs, and
identification of the resources required for implementation) and begin
implementation of such action plan during 1998.

    The Company also recognizes that Year 2000 issues could have an extensive
impact on the physical operation of buildings managed by the Company, such as
operation of elevators and energy management and security access systems.
Included in the Company's plans for addressing Year 2000 issues is a program to
assist the Company's customers with the identification and remediation of Year
2000 issues associated with critical systems at the customers' properties.

    In addition, the Company has begun discussions with its vendors regarding
the need to be Year 2000 compliant. Although the Company has no reason to
believe that its vendors are not Year 2000 compliant (or will not be compliant
on a timely basis), the Company is unable to determine at this time the effect
that non-compliance by vendors would have on the Company's operations.

EFFECTS OF INFLATION

    The Company does not believe that inflation has had a significant impact on
its results of operations in recent years. However, there can be no assurance
that the Company's business will not be affected by inflation in the future.

FORWARD-LOOKING STATEMENTS

    Certain statements contained or incorporated by reference in this Annual
Report on Form 10-K, including without limitation statements containing the
words "believes" "anticipates," "expects" and words of similar import, are
forward-looking statements. Such forward-looking statements involve known and
unknown risks, uncertainties and other matters which may cause the actual
results, performance or achievements of the Company or industry results to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such risks,
uncertainties and other matters include, but are not limited to, (i) the fact
that a significant portion of the Company's historic revenues have been derived
from significant business activities with certain entities which are affiliated
with Crow Family, (ii) the conduct of investment or development activities by
affiliates of Crow Family that are directly competitive with the Company's
activities, (iii) confusion that may be created in the market place between the
Company and affiliates of Crow Family, (iv) the control over the affairs and
policies of the Company that could be exercised by the Company's directors,
officers, employees and affiliates due to their significant stock ownership, (v)
the Company's ability to continue to pursue an aggressive growth strategy
(including through acquisitions), (vi) the ability of the Company to manage
fluctuations in the Company's net earnings and cash flow which could result from
the Company's increased participation as a principal in real estate investments,
(vii) the Company's ability to compete in highly competitive national and local
business lines and (viii) the Company's ability to attract and retain qualified
personnel in all areas of its business (particularly management). In addition,
the Company's ability to achieve certain anticipated results will be subject to
other factors affecting the Company's business that are beyond the Company's
control, including but not limited to general economic conditions and the effect
of government regulation on the conduct of the Company's business. Given these
uncertainties, readers are cautioned not to place undue reliance on such
forward-looking statements. The Company disclaims any obligation to update any
such statements or publicly announce any updates or revisions to any of the
forward-looking statements contained herein to reflect any change in the
Company's expectation with regard thereto or any change in events, conditions,
circumstances or assumptions underlying such statements.

                                       27
<PAGE>
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

    Reference is made to the List of Financial Statements and Financial
Statement Schedule on page F-2 for a listing of the Company's financial
statements and notes thereto and for the financial statement schedule contained
herein.

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

    There have been no changes in accountants and no disagreements with
accountants on any matter of accounting principles or practices or financial
statement disclosures during the twenty-four months ended December 31, 1997.

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

    The information set forth under the headings "ELECTION OF DIRECTORS,"
"DIRECTORS," "EXECUTIVE OFFICERS" and "COMPLIANCE WITH SECTION 16(A) OF THE
EXCHANGE ACT" contained in the Company's definitive Proxy Statement to be filed
pursuant to Regulation 14A of the Exchange Act in connection with the Company's
1998 Annual Meeting of Stockholders is incorporated herein by reference.

ITEM 11.  EXECUTIVE COMPENSATION

    The information set forth under the heading "Executive Compensation"
contained in the Company's definitive Proxy Statement to be filed pursuant to
Regulation 14A of the Exchange Act in connection with the Company's 1998 Annual
Meeting of Stockholders is incorporated herein by reference.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

    The information set forth under the headings "SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS, DIRECTORS AND MANAGEMENT" contained in the Company's
definitive Proxy Statement to be filed pursuant to Regulation 14A of the
Exchange Act in connection with the Company's 1998 Annual Meeting of
Stockholders is incorporated herein by reference.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

    The information set forth under the headings "ELECTION OF DIRECTORS,"
"EXECUTIVE COMPENSATION" and "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS"
contained in the Company's definitive Proxy Statement to be filed pursuant to
Regulation 14A of the Exchange Act in connection with the Company's 1998 Annual
Meeting of Stockholders is incorporated herein by reference.

                                       28
<PAGE>
                                    PART IV

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

  (a)(1) The financial statements filed as part of this Report at Item 8 are
         listed in the List of Financial Statements and Financial Statement
         Schedule on page F-2 of this Report.

  (a)(2) The financial statement schedule filed as part of this Report at Item 8
         is listed in the List of Financial Statements and Financial Statement
         Schedule on page F-2 of this Report.

  (a)(3) The following documents are filed or incorporated by reference as
         exhibits to this Report:

<TABLE>
<C>        <S>
   2.1*    Agreement and Plan of Merger dated August 22, 1997, among the
           Company, the Predecessor Company, TCC Merger Sub, Inc. and certain
           other parties thereto

   2.2*    First Amendment to Agreement and Plan of Merger dated as of
           November 22, 1997

   3.1*    Certificate of Incorporation of the Company

   3.2*    Bylaws of the Company

   4.1*    Form of certificate for shares of Common Stock of the Company

  10.1*    Credit Agreement dated August 18, 1997, among the Company, Bankers
           Trust Company and the lenders listed therein

  10.2*    Form of License Agreement among the Company and CFH

  10.3*    Form of Indemnification Agreement, with schedule of signatures

  10.4*    Predecessor Company's 1997 Stock Option Plan

  10.5*    Company's Long-Term Incentive Plan

  10.6*    Company's 1995 Profit Sharing Plan

  10.7*    Acquisition Agreement dated August 15, 1997, among the Company,
           TCRS, Doppelt and Jeffrey J. Doppelt

  10.8*    Subordinated Promissory Note dated August 22, 1997, between the
           Company and Doppelt

  10.9*    Stockholders' Agreement dated August 22, 1997, among TCRS, the
           Company, Doppelt and Jeffrey J. Doppelt

  10.10*   Form of Stockholders' Agreement among the Company, Crow Family
           Partnership L.P., CFH Trade-Names, L.P., J. McDonald Williams and
           certain other signatories thereto

  10.11    Stock Purchase Agreement dated as of March 16, 1998 by and among
           the Company, BCB Holdings, LLC, Tooley & Company, Inc., William L.
           Tooley and Craig Ruth

  21.1*    Subsidiaries of the Company

  24.1     Power of Attorney for J. McDonald Williams

  24.2     Power of Attorney for William F. Concannon

  24.3     Power of Attorney for James D. Carreker

  24.4     Power of Attorney for James R. Erwin

  24.5     Power of Attorney for Jeffrey M. Heller
</TABLE>

                                       29
<PAGE>
<TABLE>
<C>        <S>
  24.6     Power of Attorney for Rowland T. Moriarity

  24.7     Power of Attorney for Robert E. Sulentic

  27.1     Financial Data Schedule
</TABLE>

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

*   Previously filed as an exhibit to the Company's Registration Statement on
    Form S-1 (File Number 333-34859) filed with the Securities and Exchange
    Commission on September 3, 1997 and incorporated herein by reference.

    (b) Reports on Form 8-K

    During the last quarter of the Company's fiscal year ended December 31,
    1997, no reports on Form 8-K were filed with the Securities and Exchange
    Commission by the Company.

    (c) The exhibits required by Item 601 of Regulation S-K are filed as part of
this Report.

    (d) The required financial statements and financial schedule are filed as
part of this Report.

                                       30
<PAGE>
                                   SIGNATURE

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

<TABLE>
<S>                             <C>  <C>
                                TRAMMELL CROW COMPANY

                                By:             /s/ GEORGE L. LIPPE
                                     -----------------------------------------
                                                  George L. Lippe
                                       PRESIDENT AND CHIEF EXECUTIVE OFFICER
</TABLE>

Date: March 31, 1998

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

             NAME                         TITLE                    DATE
------------------------------  --------------------------  -------------------

                                President and Chief
       GEORGE L. LIPPE            Executive Officer
------------------------------    (Principal Executive        March 31, 1998
       George L. Lippe            Officer); Director

                                Executive Vice President
        ASUKA NAKAHARA            and Chief Financial
------------------------------    Officer (Principal          March 31, 1998
        Asuka Nakahara            Financial Officer)

      WILLIAM P. LEISER         Executive Vice President
------------------------------    and Treasurer (Principal    March 31, 1998
      William P. Leiser           Accounting Officer)

    J. MCDONALD WILLIAMS*
------------------------------  Chairman of the Board and     March 31, 1998
     J. McDonald Williams         Director

        HARLAN R. CROW
------------------------------  Director                      March 31, 1998
        Harlan R. Crow

    WILLIAM F. CONCANNON*
------------------------------  Director                      March 31, 1998
     William F. Concannon

      JAMES D. CARREKER*
------------------------------  Director                      March 31, 1998
      James D. Carreker

       JAMES R. ERWIN*
------------------------------  Director                      March 31, 1998
        James R. Erwin

      JEFFREY M. HELLER*
------------------------------  Director                    March 31, 1998
      Jeffrey M. Heller

<PAGE>

             NAME                         TITLE                    DATE
------------------------------  --------------------------  -------------------

    ROWLAND T. MORIARITY*
------------------------------  Director                      March 31, 1998
     Rowland T. Moriarity

     ROBERT E. SULENTIC*
------------------------------  Director                      March 31, 1998
      Robert E. Sulentic

    Asuka Nakahara, by signing his name hereto, does hereby sign this Annual
Report Form 10-K on behalf of each of the above-named directors of the Company
on the date indicated below, pursuant to powers of attorney executed by each of
such directors and contemporaneously filed herewith with the Commission.

        ASUKA NAKAHARA
------------------------------
       *Asuka Nakahara                                        March 31, 1998
       ATTORNEY-IN-FACT
<PAGE>
                           ANNUAL REPORT ON FORM 10-K
                   ITEM 8, ITEM 14(a)(1) AND (2), (c) AND (d)
         LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE
                  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
                                CERTAIN EXHIBITS
                          FINANCIAL STATEMENT SCHEDULE
                          YEAR ENDED DECEMBER 31, 1997
                     TRAMMELL CROW COMPANY AND SUBSIDIARIES
                                 DALLAS, TEXAS

                                      F-1
<PAGE>
                        FORM 10-K--ITEM 14(a)(1) AND (2)
                     TRAMMELL CROW COMPANY AND SUBSIDIARIES
         LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE

    The following consolidated financial statements of Trammell Crow Company and
Subsidiaries, for the year ended December 31, 1997, are included in Item 8:

<TABLE>
<S>                                                                                    <C>
Report of Independent Auditors.......................................................        F-3

Consolidated Balance Sheets as of December 31, 1997 and 1996.........................        F-4

Consolidated Statements of Operations for the Years Ended December 31, 1997, 1996 and
  1995...............................................................................        F-5

Consolidated Statements of Stockholders' Equity for the Years Ended December 31,
  1997, 1996 and 1995................................................................        F-6

Consolidated Statements of Cash Flows for the Years Ended December 31, 1997, 1996 and
  1995...............................................................................        F-7

Notes to Consolidated Financial Statements...........................................        F-8

    The following consolidated financial statement schedule of Trammell Crow Company and
Subsidiaries is included in Item 14(d):

Schedule III--Real Estate Investments and Accumulated Depreciation...................       F-22

Notes to Schedule III--Real Estate Investments and Accumulated Depreciation..........       F-23
</TABLE>

    All other schedules for which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission are not required under the
related instructions or are inapplicable and therefore have been omitted.

                                      F-2
<PAGE>
                         REPORT OF INDEPENDENT AUDITORS

Board of Directors and Stockholders
Trammell Crow Company

    We have audited the accompanying consolidated balance sheets of Trammell
Crow Company (a Delaware corporation; formerly a Texas close corporation) and
Subsidiaries as of December 31, 1997 and 1996, and the related consolidated
statements of operations, stockholders' equity, and cash flows for each of the
three years in the period ended December 31, 1997. Our audits also included the
financial statement schedule listed in the Index at Item 14(a). These financial
statements and schedule are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
schedule based on our audits.

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

    In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
Trammell Crow Company and Subsidiaries at December 31, 1997 and 1996, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1997, in conformity with generally
accepted accounting principles. Also, in our opinion, the related financial
statement schedule, when considered in relation to the basic financial
statements taken as a whole, presents fairly in all material respects the
information set forth therein.

                                          ERNST & YOUNG LLP

Dallas, Texas
March 4, 1998

                                      F-3
<PAGE>
                     TRAMMELL CROW COMPANY AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                              DECEMBER 31
                                                                                          --------------------
                                        ASSETS                                              1997       1996
                                                                                          ---------  ---------
                                                                                             (IN THOUSANDS,
                                                                                          EXCEPT SHARE AND PER
                                                                                              SHARE DATA)
<S>                                                                                       <C>        <C>
Current assets
  Cash and cash equivalents.............................................................  $  96,747  $  58,505
  Accounts receivable, net of allowance for doubtful accounts of $955 in 1997 and $947
    in 1996.............................................................................     40,602     32,980
  Receivables from affiliates...........................................................        926      2,275
  Notes and other receivables...........................................................      4,007      4,936
  Income taxes recoverable..............................................................      4,939     --
  Deferred income taxes.................................................................      3,870         88
  Real estate held for sale.............................................................     98,567     71,122
  Other current assets..................................................................      9,220      2,932
                                                                                          ---------  ---------
    Total current assets................................................................    258,878    172,838
Furniture and equipment, net............................................................      6,309      6,323
Deferred income taxes...................................................................     14,397      7,796
Investments in unconsolidated subsidiaries..............................................     11,244      3,831
Goodwill, net...........................................................................     27,111     --
Other assets............................................................................      8,297      3,526
                                                                                          ---------  ---------
                                                                                          $ 326,236  $ 194,314
                                                                                          ---------  ---------
                                                                                          ---------  ---------
                                     LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
  Accounts payable......................................................................  $  18,523  $  12,426
  Accrued expenses......................................................................     56,270     36,128
  Payables to affiliates................................................................      4,466      5,649
  Income taxes payable..................................................................     --          3,253
  Current portion of long-term debt.....................................................        875      3,409
  Notes payable on real estate held for sale............................................     76,623     67,810
  Other current liabilities.............................................................      2,185      1,023
                                                                                          ---------  ---------
    Total current liabilities...........................................................    158,942    129,698
Long-term debt, less current portion....................................................      1,555      8,952
Deferred compensation...................................................................      8,391     20,963
Other liabilities.......................................................................        417        405
                                                                                          ---------  ---------
    Total liabilities...................................................................    169,305    160,018
Minority interest.......................................................................     19,859      3,294
Stockholders' equity
  Preferred stock; $0.01 par value; 30,000,000 shares authorized; none issued or
    outstanding.........................................................................     --         --
  Common stock; $0.01 par value; 100,000,000 shares authorized; 33,892,038 shares issued
    and outstanding in 1997.............................................................        339     --
  Paid-in capital.......................................................................    150,647     24,084
  Retained earnings (deficit)...........................................................    (12,734)    16,312
  Less: Stockholder loans...............................................................     (1,180)    (9,394)
                                                                                          ---------  ---------
Total stockholders' equity..............................................................    137,072     31,002
                                                                                          ---------  ---------
                                                                                          $ 326,236  $ 194,314
                                                                                          ---------  ---------
                                                                                          ---------  ---------
</TABLE>

                            See accompanying notes.

                                      F-4
<PAGE>
                     TRAMMELL CROW COMPANY AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                                   YEARS ENDED DECEMBER 31
                                                                            -------------------------------------
                                                                                1997          1996        1995
                                                                            -------------  ----------  ----------
                                                                               (IN THOUSANDS, EXCEPT SHARE AND
                                                                                       PER SHARE DATA)
<S>                                                                         <C>            <C>         <C>
REVENUES
  Property management services............................................  $      87,756  $   90,179  $   92,970
  Brokerage services......................................................         91,053      72,095      61,960
  Infrastructure management services......................................         68,719      50,836      38,681
  Development and construction services...................................         40,054      22,732      20,382
  Retail services.........................................................          5,318       2,393       1,510
                                                                            -------------  ----------  ----------
                                                                                  292,900     238,235     215,503
  Income from investments in unconsolidated subsidiaries..................            512         594         114
  Gain on disposition of real estate......................................         10,241       6,630       5,026
  Other income............................................................          9,986       9,996       6,559
                                                                            -------------  ----------  ----------
                                                                                  313,639     255,455     227,202

COSTS AND EXPENSES
  Salaries, wages, and benefits...........................................        161,425     137,794     130,248
  Non-recurring compensation costs........................................         33,085      --          --
  Commissions.............................................................         39,121      27,119      23,730
  General and administrative..............................................         55,884      41,421      40,671
  Profit sharing..........................................................         23,514      20,094      15,893
  Depreciation............................................................          3,514       3,196       3,841
  Amortization............................................................            714      --          --
  Interest................................................................          5,515       1,726       1,722
  Royalty and consulting fees.............................................          6,212       3,959       2,443
  Minority interest.......................................................          2,042         206         520
                                                                            -------------  ----------  ----------
                                                                                  331,026     235,515     219,068
                                                                            -------------  ----------  ----------
Income (loss) before income taxes.........................................        (17,387)     19,940       8,134
Income tax expense (benefit)..............................................         (3,367)      7,826       3,793
                                                                            -------------  ----------  ----------
Net income (loss).........................................................  $     (14,020) $   12,114  $    4,341
                                                                            -------------  ----------  ----------
                                                                            -------------  ----------  ----------
Pro forma loss per share (basic and diluted)..............................  $        (.42)          *           *
                                                                            -------------  ----------  ----------
                                                                            -------------  ----------  ----------
Pro forma weighted average common shares outstanding......................     33,583,467
                                                                            -------------
                                                                            -------------
</TABLE>

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

* Information is not relevant due to change in capital structure.

                            See accompanying notes.

                                      F-5
<PAGE>
                     TRAMMELL CROW COMPANY AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                  YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
                       (IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                 COMMON SHARES         COMMON      COMMON               RETAINED
                              --------------------     STOCK      STOCK PAR   PAID-IN   EARNINGS  TREASURY   STOCKHOLDER
                                ISSUED    TREASURY   SUBSCRIBED   VALUE (1)   CAPITAL   (DEFICIT)  STOCK        LOANS       TOTAL
                              ----------  --------   ----------   ---------   --------  --------  --------   -----------   --------
<S>                           <C>         <C>        <C>          <C>         <C>       <C>       <C>        <C>           <C>
Balance at January 1,
  1995......................       9,350      675      $ 361        $--       $  9,293  $ 5,333   $  (914)     $--         $ 14,073
  Net income................      --        --         --           --           --       4,341     --          --            4,341
  Dividends.................      --        --         --           --           --      (2,475 )   --          --           (2,475)
  Sale of common stock
    previously subscribed...         390    --          (361)       --             361    --        --          --            --
  Purchase of common
    stock...................      --          774      --           --           --       --       (1,337)      --           (1,337)
  Sale of common stock......      --         (400)     --           --           --       --          691       --              691
                              ----------  --------     -----      ---------   --------  --------  --------   -----------   --------
Balance at December 31,
  1995......................       9,740    1,049      --           --           9,654    7,199    (1,560)      --           15,293
  Net income................      --        --         --           --           --      12,114     --          --           12,114
  Dividends.................      --        --         --           --           --      (2,890 )   --          --           (2,890)
  Purchase of common
    stock...................      --        2,481      --           --           --       --       (3,943)      --           (3,943)
  Sale of common stock......       9,634   (3,530)     --           --          14,430     (111 )   5,503       (9,394)      10,428
                              ----------  --------     -----      ---------   --------  --------  --------   -----------   --------
Balance at December 31,
  1996......................      19,374    --         --           --          24,084   16,312     --          (9,394)      31,002
  Net loss..................      --        --         --           --           --     (14,020 )   --          --          (14,020)
  Dividends.................      --        --         --           --           --     (15,026 )   --          --          (15,026)
  Purchase of stock.........      --          963      --           --           --       --       (2,388)      --           (2,388)
  Repayment of stockholder
    loans...................      --        --         --           --           --       --        --           8,214        8,214
  Sale of stock in public
    offering................   5,750,000    --         --             58       100,567    --        --          --          100,625
  Offering costs............      --        --         --           --         (10,420)   --        --          --          (10,420)
  Non-cash charge for August
    1997 options............      --        --         --           --          33,085    --        --          --           33,085
  Issuance and exchange of
    shares in
    reincorporation
    transactions............  27,779,807    --         --            278          (278)   --        --          --            --
  Conversion of note payable
    into common stock.......     342,857    --         --              3         5,997    --        --          --            6,000
  Retirement of treasury
    shares..................      --         (963)     --           --          (2,388)   --        2,388       --            --
                              ----------  --------     -----      ---------   --------  --------  --------   -----------   --------
Balance at December 31,
  1997......................  33,892,038    --         $--          $339      $150,647  $(12,734) $ --         $(1,180)    $137,072
                              ----------  --------     -----      ---------   --------  --------  --------   -----------   --------
                              ----------  --------     -----      ---------   --------  --------  --------   -----------   --------
</TABLE>

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

(1) Common stock par value for 1995 and 1996 rounds to less than $1.

                            See accompanying notes.

                                      F-6
<PAGE>
                     TRAMMELL CROW COMPANY AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                      YEARS ENDED DECEMBER 31
                                                                                  --------------------------------
                                                                                     1997       1996       1995
                                                                                  ----------  ---------  ---------
                                                                                           (IN THOUSANDS)
<S>                                                                               <C>         <C>        <C>
OPERATING ACTIVITIES
Net income (loss)...............................................................  $  (14,020) $  12,114  $   4,341
Adjustments to reconcile net income (loss) to net cash provided by (used in)
  operating activities
    Depreciation................................................................       3,514      3,196      3,841
    Amortization................................................................         714     --         --
    Minority interest...........................................................       2,042        206        520
    Deferred income tax provision (benefit).....................................      (5,462)     1,602     (2,040)
    Income from investments in unconsolidated subsidiaries......................        (512)      (594)      (114)
    Gain on disposition of real estate..........................................     (10,241)    (6,630)    (5,026)
    Non-cash charge for August 1997 options.....................................      33,085     --         --
    Changes in operating assets and liabilities
      Accounts receivable.......................................................      (6,007)    (6,757)    (8,214)
      Receivables from affiliates...............................................       3,083     (1,585)     1,466
      Notes and other assets....................................................      (7,509)    (2,286)    (2,228)
      Expenditures for real estate held for sale................................    (109,068)   (92,975)   (37,641)
      Proceeds from sale of real estate.........................................      51,542     48,555     43,472
      Proceeds from real estate notes payable...................................      89,763     91,428     21,705
      Payments on real estate notes payable.....................................     (45,550)   (36,800)   (31,438)
      Accounts payable and accrued expenses.....................................      20,159      4,558     17,277
      Payables to affiliates....................................................      (1,275)     1,850      1,203
      Income taxes recoverable/payable..........................................      (8,192)     2,775       (454)
      Deferred compensation.....................................................        (234)     5,750      4,416
      Other liabilities.........................................................        (810)       741       (438)
                                                                                  ----------  ---------  ---------
Net cash provided by (used in) operating activities.............................      (4,978)    25,148     10,648
                                                                                  ----------  ---------  ---------
INVESTING ACTIVITIES
Expenditures for furniture and equipment........................................      (3,469)    (3,277)    (2,077)
Acquisition of Doppelt and Company..............................................     (22,658)    --         --
Investments in unconsolidated subsidiaries......................................      (7,404)    (2,305)    (1,873)
Distributions from unconsolidated subsidiaries..................................       6,912      1,408        170
Contributions from minority interest............................................      10,350         11      3,631
Distributions to minority interest..............................................      (5,053)      (856)      (497)
                                                                                  ----------  ---------  ---------
Net cash used in investing activities...........................................     (21,322)    (5,019)      (646)
                                                                                  ----------  ---------  ---------
FINANCING ACTIVITIES
Principal payments on debt......................................................     (47,467)    (4,538)    (5,688)
Proceeds from debt..............................................................      36,146      9,834      2,664
Payment of deferred financing fees..............................................      (1,031)    --         --
Purchase of common stock........................................................        (730)    (3,943)    (1,010)
Proceeds from sale of common stock..............................................     100,625         15      1,052
Stock offering costs............................................................     (10,420)      (257)    --
Collections of stockholder loans................................................       2,445     --         --
Dividends paid..................................................................     (15,026)    (2,890)    (2,475)
                                                                                  ----------  ---------  ---------
Net cash provided by (used in) financing activities.............................      64,542     (1,779)    (5,457)
                                                                                  ----------  ---------  ---------
Net increase in cash and cash equivalents.......................................      38,242     18,350      4,545
Cash and cash equivalents, beginning of year....................................      58,505     40,155     35,610
                                                                                  ----------  ---------  ---------
Cash and cash equivalents, end of year..........................................  $   96,747  $  58,505  $  40,155
                                                                                  ----------  ---------  ---------
                                                                                  ----------  ---------  ---------
</TABLE>

                            See accompanying notes.

                                      F-7
<PAGE>
                     TRAMMELL CROW COMPANY AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               DECEMBER 31, 1997
                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION

    Trammell Crow Company, a Delaware corporation (the Company), was
incorporated on August 21, 1997 to become the successor to Trammell Crow
Company, a Texas close corporation (the Predecessor Company). In connection with
the Company's initial public offering, a wholly-owned subsidiary of the Company
was merged with and into the Predecessor Company (the Reincorporation Merger)
with the Predecessor Company surviving the merger as a wholly-owned subsidiary
of the Company. The Company provides commercial real estate services primarily
in the United States. Its principal lines of business include property
management, brokerage, infrastructure management, development and construction,
and retail services.

USE OF ESTIMATES

    The preparation of the financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

CONSOLIDATION

    The accompanying consolidated financial statements include the accounts of
the Company, its wholly-owned subsidiaries, and other subsidiaries over which
the Company has control. Intercompany accounts and transactions have been
eliminated. The Company's investments in subsidiaries in which it has the
ability to exercise significant influence over operating and financial policies,
but does not have control are accounted for on the equity method. Accordingly,
the Company's share of the earnings of these subsidiaries is included in
consolidated net income. Investments in other subsidiaries are carried at cost.
These unconsolidated subsidiaries primarily own real estate development
projects.

REVENUE RECOGNITION

    The Company recognizes fees from property management services and
infrastructure management services over the terms of the respective management
contracts. Most of the property management contracts are cancelable at will or
with 30 days' notice. The infrastructure management contracts generally range
from three to five years. Brokerage service revenue relating to leasing services
and the related expense are generally recognized half upon the execution of a
lease contract and the remainder upon tenant occupancy. Sales brokerage revenue
is recognized upon closing. Development and construction services includes fees
from development and construction management projects and net construction
revenues, which are gross construction revenues net of subcontract costs. For
projects exceeding three months, fees are recognized using the
percentage-of-completion method. For contracts under three months, fees are
recognized upon completion of the contract. Gross construction revenues totaled
$61,837, $46,034 and $22,335 and subcontract costs totaled $52,853, $41,123 and
$19,397 in 1997, 1996 and 1995, respectively.

CASH AND CASH EQUIVALENTS

    Cash and cash equivalents consist of cash and short-term, highly liquid
investments with maturities of 90 days or less when purchased.

                                      F-8
<PAGE>
                     TRAMMELL CROW COMPANY AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
FURNITURE AND EQUIPMENT

    Furniture and equipment are stated at cost. Depreciation is computed using
the straight-line method over useful lives ranging from three to 10 years.

INCOME TAXES

    The Company accounts for income taxes using the liability method. Deferred
income taxes result from temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes and the amounts used for
federal income tax purposes, and are measured using the enacted tax rates and
laws that will be in effect when the differences reverse.

PRO FORMA EARNINGS PER SHARE

    In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, EARNINGS PER SHARE. SFAS 128 replaced
primary and fully diluted earnings per share with basic and diluted earnings per
share.

    In accordance with the requirements of the Securities and Exchange
Commission, the weighted average shares outstanding used to calculate basic and
diluted earnings per share included the shares issued in connection with the
Company's initial public offering and related transactions for the full year.
Options to purchase 4,788,046 shares of common stock were outstanding during a
portion of 1997 (see Note 8) but were not included in the computation of diluted
earnings per share because the Company incurred a net loss for the year and
therefore, the effect would be antidilutive.

CONCENTRATION OF CREDIT RISK

    The Company provides services to owners of real estate assets primarily in
the United States. The Company performs credit evaluations of its customers and
generally does not require collateral. The risk associated with this
concentration is limited because of the large number of customers and their
geographic dispersion.

LONG-LIVED ASSETS

    Long-lived assets, including goodwill, are evaluated when indicators of
impairment are present and provisions for possible losses are recorded when
undiscounted cash flows estimated to be generated by those assets are less than
the assets' carrying amount.

GOODWILL

    Goodwill reflects the excess of purchase price over the fair value of net
assets purchased. Goodwill is amortized on a straight-line basis over 30 years.
Accumulated amortization of goodwill was $384 and $23 at December 31, 1997 and
1996, respectively.

NEW ACCOUNTING PRONOUNCEMENTS

    In June 1997, the Financial Accounting Standards Board issued SFAS No. 131,
"Disclosure about Segments of an Enterprise and Related Information" ("SFAS
131"), which establishes standards for the way in which public business
enterprises report information about operating segments in annual financial
statements and requires that those enterprises report selected information about
operating segments in

                                      F-9
<PAGE>
                     TRAMMELL CROW COMPANY AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
interim financial reports issued to shareholders. It also establishes standards
for related disclosure about products and services, and major customers. This
statement is effective for financial statements for periods beginning after
December 15, 1997. The Company is currently evaluating the impact SFAS 131 will
have on its financial statement disclosures.

RECLASSIFICATIONS

    Certain reclassifications have been made to the prior years' financial
statements to conform to the current year presentation.

2. REAL ESTATE HELD FOR SALE

    The Company provides build-to-suit services for its customers and also
develops or purchases projects for investment purposes. Therefore, the Company
has ownership of real estate until such projects are sold. Real estate held for
sale is carried at the lower of cost or fair value less selling expenses. At
December 31, real estate held for sale consists of the following:

<TABLE>
<CAPTION>
                                                                            1997       1996
                                                                          ---------  ---------
<S>                                                                       <C>        <C>
Land....................................................................  $  40,269  $  26,635
Buildings and improvements..............................................     58,298     44,487
                                                                          ---------  ---------
                                                                          $  98,567  $  71,122
                                                                          ---------  ---------
                                                                          ---------  ---------
</TABLE>

    The estimated costs to complete the 17 projects under construction at
December 31, 1997, total $54,837. Projects are expected to be sold within one
year of completion. At December 31, 1997, the Company had commitments for the
sale of ten of the projects. Gains are recognized upon sale of the project.

    In 1997, rental revenues, which are included in development and construction
services revenue, and net income relating to real estate held for sale was
$6,086 and $658, respectively. Operations from real estate held for sale were
insignificant in 1996 and 1995.

3. FURNITURE AND EQUIPMENT

    Furniture and equipment consist of the following at December 31:

<TABLE>
<CAPTION>
                                                                           1997        1996
                                                                        ----------  ----------
<S>                                                                     <C>         <C>
Furniture and equipment, at cost......................................  $   19,875  $   18,097
Less: Accumulated depreciation........................................     (13,566)    (11,774)
                                                                        ----------  ----------
Furniture and equipment, net..........................................  $    6,309  $    6,323
                                                                        ----------  ----------
                                                                        ----------  ----------
</TABLE>

                                      F-10
<PAGE>
                     TRAMMELL CROW COMPANY AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

4. INVESTMENTS IN UNCONSOLIDATED SUBSIDIARIES

    Summarized financial information for unconsolidated subsidiaries in which
the Company has an investment is as follows:
<TABLE>
<CAPTION>
                                                                             DECEMBER 31, 1997
                                                                             -----------------
<S>                                                                          <C>
BALANCE SHEET:
Real estate held for sale..................................................     $   179,973
Other assets...............................................................          52,687
                                                                                   --------
  Total assets.............................................................     $   232,660
                                                                                   --------
                                                                                   --------

Notes payable on real estate held for sale.................................     $   122,267
Other liabilities..........................................................          28,573
Equity.....................................................................          81,820
                                                                                   --------
  Total liabilities and equity.............................................     $   232,660
                                                                                   --------
                                                                                   --------

<CAPTION>

                                                                                YEAR ENDED
                                                                             DECEMBER 31, 1997
                                                                             -----------------
<S>                                                                          <C>
STATEMENT OF OPERATIONS:
Total revenues.............................................................     $    47,277
Total expenses.............................................................         (44,154)
                                                                                   --------
  Net income...............................................................     $     3,123
                                                                                   --------
                                                                                   --------
</TABLE>

5. ACCRUED EXPENSES

    Accrued expenses consist of the following at December 31:

<TABLE>
<CAPTION>
                                                                            1997       1996
                                                                          ---------  ---------
<S>                                                                       <C>        <C>
Profit sharing..........................................................  $  12,752  $  10,931
Payroll and bonuses.....................................................     14,825     10,191
Commissions.............................................................     11,132      7,808
Stock Appreciation Rights Plan settlement...............................      4,228     --
Deferred income.........................................................      3,288     --
Insurance accrual.......................................................      1,128        901
Interest................................................................         55        473
Other...................................................................      8,862      5,824
                                                                          ---------  ---------
                                                                          $  56,270  $  36,128
                                                                          ---------  ---------
                                                                          ---------  ---------
</TABLE>

                                      F-11
<PAGE>
                     TRAMMELL CROW COMPANY AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

6. LONG-TERM DEBT

    Long-term debt consists of the following at December 31:

<TABLE>
<CAPTION>
                                                                               1997       1996
                                                                             ---------  ---------
<S>                                                                          <C>        <C>
Borrowings under a $150,000 line of credit with a bank; due December 1999,
  with two 1-year extension options; bearing interest at 1) the greater of
  prime or the Federal Funds Effective Rate plus 1/2% or 2) the
  Eurocurrency rate plus a margin ranging from 1 1/4 to 1 3/4%; interest
  payable monthly..........................................................  $  --      $  --
Borrowings under a $7,750 line of credit with a bank; bearing interest at
  8.75%; terminated in 1997................................................     --          7,750
Borrowings under revolving lines of credit with banks; totaling $3,300 and
  $2,800 in 1997 and 1996, respectively; expiring in 1998; bearing interest
  at rates ranging from prime plus .5% to prime plus 1%; secured by certain
  assets...................................................................     --            514
Note payable under a loan agreement with the majority stockholders; bearing
  interest at 10.5%; paid in full in December 1997.........................     --          1,378
Capital lease obligations primarily for furniture and equipment; with
  maturity dates ranging from 1998 to 2002; bearing interest at various
  rates ranging from 3.3% to 14% per annum in 1997; secured by the
  underlying assets and certain accounts receivable........................      1,579      2,719
Notes payable to former stockholders; due in 2000; bearing interest at
  6.1%; principal and interest payable upon maturity.......................        851     --
                                                                             ---------  ---------
Total long-term debt.......................................................      2,430     12,361
Less current portion of long-term debt.....................................        875      3,409
                                                                             ---------  ---------
                                                                             $   1,555  $   8,952
                                                                             ---------  ---------
                                                                             ---------  ---------
</TABLE>

    The shares of certain wholly-owned subsidiaries having 5% or more of the
consolidated assets, revenues or earnings of the Company, and subsidiaries which
are engaged primarily in the business of real estate development and ownership,
whose assets are not subject to any financing, having more than 5% of the
consolidated assets, revenues or earnings of the Company, are pledged as
security for the $150,000 line of credit.

    The Company is subject to various covenants associated with the $150,000
line of credit such as maintenance of minimum equity and liquidity and certain
key financial data. In addition, the Company may not pay dividends exceeding 50%
of the previous year's net income before depreciation and amortization, and
there are certain restrictions on investments and acquisitions that can be made
by the Company. If certain financial ratios fall below a specified level, the
Company will be required to make payments equal to cash flow until such time as
the ratios reach the pre-established levels. At December 31, 1997, the Company
is in compliance with all debt covenants.

    The covenants associated with the $150,000 line of credit and the amount of
the Company's other borrowings and contingent liabilities may have the effect of
limiting the credit available to the Company

                                      F-12
<PAGE>
                     TRAMMELL CROW COMPANY AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

6. LONG-TERM DEBT (CONTINUED)
under the line of credit to an amount less than the $150,000 commitment. At
December 31, 1997, the Company has $92,461 available under its $150,000 line of
credit. Beginning March 1998, the Company must pay a quarterly fee equal to .25%
of the unused commitments under the line.

    The Company also has other revolving lines of credits with banks totaling
$3,300 at December 31, 1997, of which $2,876 is available.

    Principal maturities of long-term debt are as follows:

<TABLE>
<S>                                                                   <C>
1998................................................................  $     875
1999................................................................        459
2000................................................................      1,006
2001................................................................         85
2002................................................................          5
                                                                      ---------
                                                                      $   2,430
                                                                      ---------
                                                                      ---------
</TABLE>

    Based on current rates available to the Company for debt with similar terms,
there is not a significant difference between the carrying amounts of the
long-term debt and their fair values.

7. NOTES PAYABLE ON REAL ESTATE HELD FOR SALE

    The Company has loans secured by real estate held for sale (the majority of
which are construction loans) totaling $76,623 and $67,810 as of December 31,
1997 and 1996, respectively. Interest rates range from 8.25% to 12.0%.
Generally, interest only is payable on the real estate loans, with all unpaid
principal and interest due at maturity. The unused commitments on real estate
loans total $33,684 at December 31, 1997. All real estate loans have been
classified as current liabilities on the balance sheet since the loans are
expected to be repaid as the related projects are sold (see Note 2).

    Capitalized interest in 1997 and 1996 totaled $1,642 and $539, respectively.
At December 31, 1997, $18,000 of the $76,623 real estate loans are recourse to
the Company.

    Based on current rates available to the Company for debt with similar terms,
there is not a significant difference between the carrying amounts of the notes
payable on real estate held for sale and their fair values.

8. STOCKHOLDERS' EQUITY

    Prior to the reincorporation transactions, the Predecessor Company had five
classes of common stock, all of which held the same voting rights, except for
voting rights with respect to certain specific actions.

    In August 1996, the Predecessor Company completed a private offering to
Company employees and directors of 9,634 shares of Class E Common Stock. In
connection with the offering, the Company provided financing of $9,394 to
stockholders, which is reflected as a reduction of stockholders' equity. These
stockholder loans are to be repaid at prime plus .5% interest (9.0% at December
31, 1997). Principal and interest are payable annually and the notes mature in
March 2001. Principal and interest payments of $8,214 and $649, respectively,
were received in 1997.

    The Company was capitalized with the issuance of 1,000 common shares to a
Predecessor Company stockholder. As a result of the Reincorporation Merger, the
outstanding shares of common stock of the

                                      F-13
<PAGE>
                     TRAMMELL CROW COMPANY AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

8. STOCKHOLDERS' EQUITY (CONTINUED)
Predecessor Company were exchanged for 25,502,964 shares of common stock of the
Company. The Company also issued 2,295,217 shares of common stock to a
Predecessor Company stockholder in exchange for a trade name license.

    On November 24, 1997, the Company's registration statement was declared
effective for its initial public offering of 5,750,000 shares of its common
stock (including exercise of the over-allotment option of 750,000 shares) at a
public offering price of $17.50 per share (the Offering). The proceeds to the
Company from the Offering were $90,205, net of offering expenses.

    The holders of shares of the Company's common stock are entitled to one vote
for each share held on all matters submitted to a vote of common stockholders.
Each share of common stock is entitled to participate equally in dividends, when
and if declared, and in the distribution of assets in the event of liquidation,
dissolution or winding up of the Company, subject in all cases to any rights of
outstanding shares of preferred stock.

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

    In connection with the reincorporation transactions, the Company assumed the
Trammell Crow Company 1997 Option Plan (the Assumed Option Plan), which provided
for the issuance of up to 1,626 shares of the Predecessor Company's Class E
common stock. On August 1, 1997, the Predecessor Company granted to certain
employees options to acquire 1,626 shares of Class E common stock. In connection
with the reincorporation transactions, these options were converted into options
to purchase 2,423,769 shares of the Company's common stock at an exercise price
of $3.85 per share. The options vested at the closing of the Offering and became
exercisable 30 days after that date. The options expire 10 years from the date
of grant. The Company recognized a non-cash, non-recurring charge to
compensation of $33,085 for these options.

    In connection with the Offering, the Company established the Trammell Crow
Company Long-Term Incentive Plan (the Long-Term Plan). The Long-Term Plan
provides for the issuance of up to 5,334,878 shares of common stock. In
connection with the Offering, the Company granted to certain employees options
to acquire 2,348,455 shares of common stock at an exercise price of $17.50 per
share. The options vest over a three-year period, with one-third vesting on each
of the three anniversaries of the grant date, and expire 10 years from the date
of grant. In December 1997, the Company granted to non-employee directors of the
Company options to acquire 15,822 shares of common stock at an exercise price of
$22.75 per share. The options vested immediately upon granting and expire 10
years from the date of grant.

    The Long-Term Plan also provides for the awards of Stock Appreciation
Rights, Restricted Stock and Performance Units. No such awards have been made as
of December 31, 1997.

    At December 31, 1997, common shares reserved for future issuance under the
Assumed Option Plan and the Long-Term Plan total 7,758,647 shares.

    Pro forma information regarding net income and earnings per share is
required by FAS No. 123, and has been determined as if the Company had accounted
for its employee stock options under the fair value

                                      F-14
<PAGE>
                     TRAMMELL CROW COMPANY AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

8. STOCKHOLDERS' EQUITY (CONTINUED)
method. The fair value for these options was estimated at the date of grant
using a Black-Scholes option pricing model with the following assumptions:
risk-free interest rates ranging from 5.76% to 6.40%; a dividend yield of 0%;
volatility factors of the expected market price of the Company's common stock of
0.318; and a weighted-average expected life of the options of 8 years.

    The Black-Scholes option valuation model was developed for use in estimating
the fair value of traded options which have no vesting restrictions and are
fully transferable. In addition, option valuation models require the input of
highly subjective assumptions including the expected stock price volatility.
Because the Company's employee stock options have characteristics significantly
differently than those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion, the existing models do not necessarily provide a reliable single
measure of the fair value of its employee stock options.

    For the purpose of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options' vesting period. For the year
ended December 31, 1997, the Company's pro forma net loss is $18,473 and pro
forma loss per share (basic and diluted) is $.55. These pro forma disclosures
are not likely to be representative of the effects on reported net income for
future years since few options have vested at December 31, 1997.

    A summary of the Company's stock option activity, and related information,
for the year ended December 31, 1997 is as follows:

<TABLE>
<CAPTION>
                                                                 EXERCISE PRICE
                                                EXERCISE PRICE    OF $17.50 TO
                                                OF $3.85 (BELOW    $22.75 (AT
                                                MARKET PRICE AT  MARKET PRICE AT
                                                  GRANT DATE)      GRANT DATE)      TOTAL
                                                ---------------  ---------------  ----------
<S>                                             <C>              <C>              <C>
OPTIONS OUTSTANDING:
Number of options at January 1, 1997..........        --               --             --
Granted.......................................      2,423,769        2,364,277     4,788,046
Exercised.....................................        --               --             --
Forfeited.....................................        --               --             --
Expired.......................................        --               --             --
                                                ---------------  ---------------  ----------
Number of options at December 31, 1997........      2,423,769        2,364,277     4,788,046
                                                ---------------  ---------------  ----------
                                                ---------------  ---------------  ----------
Weighted-average exercise price...............    $      3.85      $     17.54
Weighted-average fair value of options
  granted.....................................    $     15.18      $      8.79
Weighted-average remaining contractual life...      9.6 years        9.9 years

OPTIONS EXERCISABLE:
Number of options.............................      2,423,769           15,822     2,439,591
Weighted-average exercise price...............    $      3.85      $     22.75
</TABLE>

                                      F-15
<PAGE>
                     TRAMMELL CROW COMPANY AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

9. INCOME TAXES

    Components of deferred income taxes are as follows at December 31:

<TABLE>
<CAPTION>
                                                                             1997       1996
                                                                           ---------  ---------
<S>                                                                        <C>        <C>
Assets...................................................................  $  18,946  $   8,047
Liabilities..............................................................       (679)      (163)
                                                                           ---------  ---------
                                                                           $  18,267  $   7,884
                                                                           ---------  ---------
                                                                           ---------  ---------
Current..................................................................  $   3,870  $      88
Noncurrent...............................................................     14,397      7,796
                                                                           ---------  ---------
                                                                           $  18,267  $   7,884
                                                                           ---------  ---------
                                                                           ---------  ---------
</TABLE>

    The components of the net deferred tax asset are summarized below as of
December 31:

<TABLE>
<CAPTION>
                                                                             1997       1996
                                                                           ---------  ---------
<S>                                                                        <C>        <C>
Deferred tax assets
  Deferred compensation..................................................  $   4,395  $   6,856
  Bad debts..............................................................        316        313
  Depreciation...........................................................        507        546
  Basis difference on real estate held for sale..........................      2,012     --
  Compensation expense relating to stock options.........................     12,559     --
  Stock Appreciation Rights Plan Settlement..............................      1,605     --
  Other..................................................................         64        332
                                                                           ---------  ---------
                                                                              21,458      8,047
  Less: Valuation allowance..............................................     (2,512)    --
                                                                           ---------  ---------
  Total deferred tax assets..............................................     18,946      8,047
Deferred tax liabilities
  State taxes............................................................       (523)    --
  Goodwill amortization..................................................       (115)    --
  Other..................................................................        (41)      (163)
                                                                           ---------  ---------
  Total deferred tax liabilities.........................................       (679)      (163)
                                                                           ---------  ---------
Net deferred tax asset...................................................  $  18,267  $   7,884
                                                                           ---------  ---------
                                                                           ---------  ---------
</TABLE>

                                      F-16
<PAGE>
                     TRAMMELL CROW COMPANY AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

9. INCOME TAXES (CONTINUED)
    The provision (benefit) for income taxes consists of the following for the
years ended December 31:

<TABLE>
<CAPTION>
                                                                   1997       1996       1995
                                                                 ---------  ---------  ---------
<S>                                                              <C>        <C>        <C>
Current
  Federal......................................................  $   1,646  $   5,202  $   4,893
  State........................................................        449      1,022        940
                                                                 ---------  ---------  ---------
                                                                     2,095      6,224      5,833
Deferred
  Federal......................................................     (4,862)     1,602     (2,040)
  State........................................................       (600)    --         --
                                                                 ---------  ---------  ---------
                                                                    (5,462)     1,602     (2,040)
                                                                 ---------  ---------  ---------
                                                                 $  (3,367) $   7,826  $   3,793
                                                                 ---------  ---------  ---------
                                                                 ---------  ---------  ---------
</TABLE>

    The differences between the provisions for income taxes and the amounts
computed by applying the statutory federal income tax rates to income (loss)
before income taxes for the years ended December 31 are:

<TABLE>
<CAPTION>
                                                                    1997       1996       1995
                                                                  ---------  ---------  ---------
<S>                                                               <C>        <C>        <C>
Tax at statutory rate applied to income (loss) before income
  taxes.........................................................  $  (5,912) $   6,780  $   2,766
State income taxes, net of federal tax benefit..................       (611)       674        589
Increase in taxes resulting from non-deductible meals,
  entertainment and other.......................................        644        372        438
Valuation allowance.............................................      2,512     --         --
                                                                  ---------  ---------  ---------
                                                                  $  (3,367) $   7,826  $   3,793
                                                                  ---------  ---------  ---------
                                                                  ---------  ---------  ---------
</TABLE>

10. OPERATING LEASES

    The Company has commitments under operating leases for office space and
office equipment. During the years ended December 31, 1997, 1996 and 1995, rent
expense was $6,906, $7,814 and $7,255, including $1,770, $3,037 and $2,987,
respectively, paid to affiliates of the Company.

                                      F-17
<PAGE>
                     TRAMMELL CROW COMPANY AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

10. OPERATING LEASES (CONTINUED)
    Minimum future rentals under noncancelable operating lease commitments in
effect at December 31, 1997, are as follows:

<TABLE>
<CAPTION>
                                                               AFFILIATE   NONAFFILIATE   TOTAL
                                                              -----------  -----------  ---------
<S>                                                           <C>          <C>          <C>
1998........................................................   $     936    $   4,494   $   5,430
1999........................................................         935        2,971       3,906
2000........................................................         882        1,994       2,876
2001........................................................         759        1,401       2,160
2002........................................................         696        1,145       1,841
Thereafter..................................................      --              236         236
                                                              -----------  -----------  ---------
                                                               $   4,208    $  12,241   $  16,449
                                                              -----------  -----------  ---------
                                                              -----------  -----------  ---------
</TABLE>

    Rental amounts include fixed operating expense payments but do not include
increases for rate escalations.

11. EMPLOYEE BENEFIT PLANS

    The Company's employees participate in a defined contribution savings plan,
which provides the opportunity for pretax contributions by employees. The
Company matches 50% of the employee's contributions up to 6% of the employee's
annual earnings or a maximum of $4.5 per annum. The Company's contribution
expense for 1997, 1996, and 1995 was $2,122, $1,741, and $2,154, respectively.

    The Company has a profit sharing plan for key employees (the Profit Sharing
Plan). Each participant has a profit sharing account that is adjusted annually
for the participant's percentage of the earnings for a profit sharing unit, cash
distributions, tax rate changes, and other adjustments. Distributions to
participants are limited to Available Cash, as defined. Any difference between
the amount expensed and the amount paid to the participants is recorded as
deferred compensation. The Company's management board approved the percentage of
earnings available to profit sharing participants. Such percentages were
approximately 58%, 58% and 73% of earnings before profit sharing, as defined, in
1997, 1996, and 1995, respectively. In connection with the Offering, the Company
terminated any future awards under the Profit Sharing Plan.

    Effective January 1, 1993, the Company initiated the All Employee Cash
Profit Sharing Program whereby 3% of earnings, as defined, was paid as bonuses
to employees not participating in the key employee profit sharing plan. Expense
related to the program, which is included in salaries, wages and benefits, was
$1,577, $1,205, and $818 in 1997, 1996, and 1995, respectively. In connection
with the Offering, the Company terminated this program.

    Effective March 1, 1998, the Company established the Trammell Crow Company
Employee Stock Purchase Plan (the ESPP), subject to stockholder approval.
Employees may elect to have monthly payroll deductions of 1% to 10%, which is
used to purchase, on a semi-annual basis, stock of the Company at a 15% discount
from market value. The ESPP is available to all employees. The Company has
reserved 1,000,000 shares of common stock for issuance under the ESPP. Shares
may also be issued from treasury, if available.

                                      F-18
<PAGE>
                     TRAMMELL CROW COMPANY AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

12.  GAIN ON DISPOSITION OF REAL ESTATE

    During 1997, the Company sold thirteen real estate projects for an aggregate
sale price of $51,542, resulting in a gain on sale of $10,241. During 1996, the
Company sold sixteen real estate projects for an aggregate sale price of
$48,555, resulting in a gain on sale of $6,630. During 1995, the Company sold
nine real estate projects for an aggregate sale price of $43,472, resulting in a
gain on sale of $5,026.

    In March 1997, the Company contributed real estate held for sale of $35,400
and the related $35,400 note payable to a partnership and received a 16% limited
partner interest. No gain was recognized.

13.  ACQUISITIONS

    In August 1997, the Company acquired substantially all of the assets of
Doppelt & Company (Doppelt), a Cleveland, Ohio-based company that specializes in
new store roll out strategies and problem real estate disposition services. The
Company paid $20,658 in cash, issued a promissory note of $6,000, which was
prepaid by the Company in November 1997 with 342,857 shares of common stock, and
granted the seller the right to receive an additional $2,000 of purchase price
if future commissions collected by the Company exceed $7,000, subject to certain
reductions. The Company also paid Mr. Doppelt $2,000 as consideration for an
employment agreement, which includes non-compete provisions. In connection with
the acquisition, which was accounted for using the purchase method of
accounting, the Company recorded goodwill of $27,416. The operations of Doppelt
are included in the Company's operations from the date of acquisition.

14.  RELATED PARTY TRANSACTIONS

    In 1997, 1996 and 1995, the Company derived 7%, 9%, and 11%, respectively,
of its total revenues from services provided principally to the stockholders of
the Company. The fees received are comparable to those charged to unaffiliated
customers.

    Under certain agreements, two significant stockholders were entitled to
receive royalty and consulting fees totaling approximately 12% of Earnings
Before Profit Sharing, as defined. Accrued royalties and consulting fees at
December 31, 1997 and 1996, are included in payables to affiliates. These
agreements were terminated in connection with the Offering. The Company paid
$1,556 to one of the stockholders in January 1998 and has agreed to pay all
remaining unpaid amounts by April 15, 1998.

    In conjunction with the issuance of stock in 1996, the Company issued tax
loans to the stockholders totaling $4,734 in order for the stockholders to pay
the incremental taxes related to the stock purchased. As of December 31, 1997
and 1996, $43 and $1,620, respectively, is outstanding and included in notes and
other receivables. These notes bear interest at 5.9% and are due in August 1999;
however, these loans may be repaid earlier based on cash available for profit
sharing distributions.

    In January 1997, the Company formed a joint venture with an affiliate of one
of the stockholders to provide management information services. Both parties
share equally in any distributions from the joint venture (none through December
31, 1997). The Company entered into a 5-year management information system
agreement with the joint venture for related services and, in 1997, paid fees
totaling $4,135 for such services.

15.  COMMITMENTS AND CONTINGENCIES

    At December 31, 1997, the Company has guaranteed $37,250 of real estate
notes payable of others. These notes are collateralized by the underlying real
estate. The Company has outstanding letters of credit

                                      F-19
<PAGE>
                     TRAMMELL CROW COMPANY AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

15.  COMMITMENTS AND CONTINGENCIES (CONTINUED)
totaling $13,163 at December 31, 1997, of which $4,663 was released through
February 1998. The remaining letter of credit expires in July 1999.

    In addition, at December 31, 1997, the Company has several completion and
budget guarantees relating to development projects. Management does not expect
to incur any material losses under these guarantees.

    On November 2, 1997 the Company settled claims asserted by certain former
employees arising out of the termination of the Company's Stock Appreciation
Rights Plan. In connection with the settlement, the Company paid $127 in 1997
and accrued $4,228 for additional payments which are due by May 1998.

    The Company and its subsidiaries are defendants in other lawsuits that arose
in the normal course of business. In management's judgment, the ultimate
liability, if any, from such legal proceedings will not have a material effect
on the Company's financial position.

16.  SUPPLEMENTAL CASH FLOW INFORMATION

    Supplemental cash flow information is summarized below for the three years
ended December 31:

<TABLE>
<CAPTION>
                                                                            1997       1996       1995
                                                                          ---------  ---------  ---------
<S>                                                                       <C>        <C>        <C>
Interest paid...........................................................  $   7,575  $   1,520  $   2,833
Income taxes paid.......................................................     10,454      3,288      6,320
Profit sharing distributions paid.......................................     21,927     12,021      7,722
Non cash activities for the three years ended December 31:
  Assumption of stockholder loan........................................     --         --            327
  Write-off of pursuit costs and intangibles............................     --         --            361
  Conversion of deferred compensation balances to stock.................     --         10,670     --
  Stockholder loans.....................................................     --          9,394     --
  Payment of stockholder and tax loans with deferred compensation
    balances............................................................     12,338     --         --
  Conversion of Doppelt note payable to stock...........................      6,000     --         --
</TABLE>

17.  UNAUDITED INTERIM FINANCIAL INFORMATION

    Unaudited summarized financial information by quarter is as follows:
<TABLE>
<CAPTION>
                                                                         QUARTER ENDED
                                                       --------------------------------------------------
1997:                                                   MARCH 31     JUNE 30   SEPTEMBER 30  DECEMBER 31
-----------------------------------------------------  -----------  ---------  ------------  ------------
<S>                                                    <C>          <C>        <C>           <C>
Total revenues.......................................   $  62,098   $  69,344   $   81,797    $  100,400
Net income (loss)....................................       1,601       2,685        4,568       (22,874)

<CAPTION>

                                                                         QUARTER ENDED
                                                       --------------------------------------------------
1996:                                                   MARCH 31     JUNE 30   SEPTEMBER 30  DECEMBER 31
-----------------------------------------------------  -----------  ---------  ------------  ------------
<S>                                                    <C>          <C>        <C>           <C>
Total revenues.......................................   $  56,397   $  54,299   $   65,515       $79,244
Net income...........................................       1,876       2,093        3,673         4,472
</TABLE>

                                      F-20
<PAGE>
                     TRAMMELL CROW COMPANY AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

17.  UNAUDITED INTERIM FINANCIAL INFORMATION (CONTINUED)
    In the fourth quarter of 1997, the Company recognized a non-cash,
non-recurring charge to compensation of $33,085 for options granted prior to the
Offering at an exercise price substantially less than the fair value (see Note
8). The Company also expensed $4,355 in the fourth quarter relating to
settlement of litigation with participants under the Stock Appreciation Rights
Plan (see Note 15).

                                      F-21
<PAGE>
                     TRAMMELL CROW COMPANY AND SUBSIDIARIES

       SCHEDULE III--REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION

                               DECEMBER 31, 1997

                                 (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                         INITIAL COST                                   12/31/97 BALANCE
                                               ---------------------------------                ---------------------------------
                                                                       FURNITURE,    COSTS                              FURNITURE,
                                                         BUILDINGS     FIXTURES    SUBSEQUENT             BUILDINGS     FIXTURES
                                  RELATED                   AND            &           TO                    AND            &
DESCRIPTION                     ENCUMBRANCES    LAND    IMPROVEMENTS   EQUIPMENT   ACQUISITION   LAND    IMPROVEMENTS   EQUIPMENT
------------------------------  ------------   -------  ------------   ---------   ----------   -------  ------------   ---------
<S>                             <C>            <C>      <C>            <C>         <C>          <C>      <C>            <C>
RETAIL:
Diamond Bar--Diamond Bar,
  CA..........................    $ 5,650      $ 1,475    $ 4,290        $ --       $    --     $ 1,475    $ 4,290        $ --
Dry-Wadsworth--Arvada, CO.....         --          473        495          --            76         473        571          --
Petsmart--Edmond, OK..........      1,434          900         --          --           587         900        587          --
Fairbanks--Fairbanks, AK......      2,136           --(A)        --        --         2,557          --      2,557          --
Gateway Plaza--Aurora, CO.....      6,574        1,018      5,793          --            62       1,018      5,855          --
Lost Pines--Bastrop, TX.......      1,407          521         40          --         1,214         521      1,254          --
Village Green--Yorba Linda,
  CA..........................      2,750        1,890      2,316          --            --       1,890      2,316          --
Walgreen's--Houston, TX.......      2,440        2,525         35          --            --       2,525         35          --
OFFICE:
Bowie--Austin, TX.............      1,785          442      1,767          --            78         442      1,845          --
Kelley Clarke--Portland, OR...      1,955          530         --          --         1,501         530      1,501          --
INDUSTRIAL:
349 Oyster Point--San
  Francisco, CA...............      3,806        1,577         --          --         2,670       1,754      2,493          --
Bolingbrook--Bolingbrook,
  IL..........................      6,239        1,406         --          --         7,061       1,406      7,061          --
Centrepoint--Chino, CA........      5,313        4,588         --          --           692       4,588        692          --
CH-NW Place II--Houston, TX...      5,174          698        176          --         4,292         698      4,468          --
Cooper--Reno, NV..............      4,074        1,513      2,537          --            23       1,513      2,560          --
Dunsirn BTS--Reno, NV.........        451          401         --          --            38         401         38          --
McCormick--Irving, TX.........         --          496         --          --           445         761        180          --
OCP II--Orlando, FL...........      2,478          499      1,751          --         1,444         499      3,195          --
Peerless--Allen, TX...........      2,424        1,496        102          --         1,761       1,508      1,851          --
TC Longmont--Longmont, CO.....      8,300        1,155      6,708          --           136       1,155      6,844          --
Wooddale--Wooddale, IL........     11,694        4,034        301          --         7,804       4,034      8,105          --
LAND:
56th & Warner--Phoenix, AZ....         --        1,578         --          --            76       1,654         --          --
AEW #10--Mt. Laurel Township,
  NJ..........................         --          327         --          --            --         327         --          --
Andover--Andover, MA..........         --          291         --          --           291          --         --          --
Chapel Hills--Colorado
  Springs, CO.................        430          770         --          --            35         805         --          --
Cleveland--Cleveland, OH......         --          260         --          --            --         260         --          --
Freeport I--Irving, TX........         --        2,746         --          --            --       2,746         --          --
Oxnard--Oxnard, CA............         --          280         --          --            --         280         --          --
Quarry Crossing--San Antonio,
  TX..........................         --        2,557         --          --            --       2,557         --          --
Sadler--Memphis, TN...........         --          123         --          --            --         123         --          --
Silver Lake Pond--Charlotte,
  NC..........................        109          109         --          --            --         109         --          --
Summitt Plaza--Orlando, FL....         --          572         --          --            --         572         --          --
TC Riverside--Belcamp, MD.....         --          919         --          --            --         919         --          --
Westridge at Gateway--Dallas,
  TX..........................         --        1,535         --          --            --       1,535         --          --
                                ------------   -------  ------------   ---------   ----------   -------  ------------   ---------
  Total.......................    $76,623      $39,704    $26,311        $ --       $32,552     $40,269    $58,298        $ --
                                ------------   -------  ------------   ---------   ----------   -------  ------------   ---------
                                ------------   -------  ------------   ---------   ----------   -------  ------------   ---------

<CAPTION>

                                 TOTAL     DATE OF        DATE     DEPRECIABLE
DESCRIPTION                       (B)    CONSTRUCTION   ACQUIRED    LIVES (C)
------------------------------  -------  ------------   --------   -----------
<S>                             <C>      <C>            <C>        <C>
RETAIL:
Diamond Bar--Diamond Bar,
  CA..........................  $5,765         1981       1997
Dry-Wadsworth--Arvada, CO.....   1,044         1995       1995
Petsmart--Edmond, OK..........   1,487         1997       1997
Fairbanks--Fairbanks, AK......   2,557         1997        n/a
Gateway Plaza--Aurora, CO.....   6,873         1984       1996
Lost Pines--Bastrop, TX.......   1,775         1997       1997
Village Green--Yorba Linda,
  CA..........................   4,206         1986       1997
Walgreen's--Houston, TX.......   2,560         1997       1997
OFFICE:
Bowie--Austin, TX.............   2,287         1986       1997
Kelley Clarke--Portland, OR...   2,031         1997       1997
INDUSTRIAL:
349 Oyster Point--San
  Francisco, CA...............   4,247         1997       1997
Bolingbrook--Bolingbrook,
  IL..........................   8,467         1995       1995
Centrepoint--Chino, CA........   5,280    1997/1998       1997
CH-NW Place II--Houston, TX...   5,166         1997       1997
Cooper--Reno, NV..............   4,073         1992       1997
Dunsirn BTS--Reno, NV.........     439         1997       1997
McCormick--Irving, TX.........     941         1997       1997
OCP II--Orlando, FL...........   3,694         1982       1997
Peerless--Allen, TX...........   3,359         1997       1997
TC Longmont--Longmont, CO.....   7,999    1979/1988       1997
Wooddale--Wooddale, IL........  12,139    1996/1997       1996
LAND:
56th & Warner--Phoenix, AZ....   1,654          n/a       1997
AEW #10--Mt. Laurel Township,
  NJ..........................     327          n/a       1997
Andover--Andover, MA..........     291          n/a       1995
Chapel Hills--Colorado
  Springs, CO.................     805          n/a       1997
Cleveland--Cleveland, OH......     260          n/a       1996
Freeport I--Irving, TX........   2,746          n/a       1997
Oxnard--Oxnard, CA............     280          n/a       1996
Quarry Crossing--San Antonio,
  TX..........................   2,557          n/a       1997
Sadler--Memphis, TN...........     123          n/a       1997
Silver Lake Pond--Charlotte,
  NC..........................     109          n/a       1997
Summitt Plaza--Orlando, FL....     572          n/a       1997
TC Riverside--Belcamp, MD.....     919          n/a       1997
Westridge at Gateway--Dallas,
  TX..........................   1,535          n/a       1997
                                -------
  Total.......................  $98,567
                                -------
                                -------
</TABLE>

----------------------------------
(A) Property is subject to a ground lease.

(B) The aggregate cost for Federal income tax purposes is approximately $103
    million.

(C) All real estate investments have been held for sale since acquisition and
    are therefore not depreciated.

                                      F-22
<PAGE>
                     TRAMMELL CROW COMPANY AND SUBSIDIARIES
               NOTES TO SCHEDULE III--REAL ESTATE INVESTMENTS AND
                            ACCUMULATED DEPRECIATION

      Changes in real estate investments and accumulated depreciation for the
       three years ended December 31, 1997 are as follows (in thousands):

<TABLE>
<CAPTION>
                                                        1997             1996          1995
                                                    ------------       --------      --------
<S>                                                 <C>                <C>           <C>
Real estate investments:
  Balance at beginning of year....................  $     71,122       $ 20,274      $ 20,215
    Additions and improvements....................       104,147         92,975        38,549
    Sales and transfers...........................       (76,702)(A)    (42,127)      (38,490)
                                                    ------------       --------      --------
  Balance at end of year..........................  $     98,567       $ 71,122      $ 20,274
                                                    ------------       --------      --------
                                                    ------------       --------      --------
</TABLE>

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

(A) Includes $35,400 contributed to a partnership in March 1997.

                                      F-23