<PAGE>
 
                                                                     EXHIBIT 3.6

                          SIXTH ARTICLES OF AMENDMENT
                                      OF
                         RESTATED DECLARATION OF TRUST
                                      OF
                        SECURITY CAPITAL PACIFIC TRUST
                                        

     The undersigned, being the President and Chief Executive Officer of
Security Capital Pacific Trust, a Maryland real estate investment trust (the
"Trust"), does hereby certify pursuant to the provisions of Article 6, Section 2
------                                                                          
of the Trust's Restated Declaration of Trust, dated as of June 18, 1991, as
amended and supplemented (the "Declaration of Trust"), and Section 8-501 of the
                               --------------------                            
Corporations and Associations Article of the Annotated Code of Maryland, that
the Board of Trustees of the Trust has adopted a resolution declaring this
amendment to the Declaration of Trust as hereinafter set forth to be advisable
and that the shareholders of the Trust have approved such amendment by the
affirmative vote of at least two-thirds of all the votes entitled to be cast on
the matter.

     Therefore, the Declaration of Trust is hereby amended by adding the
following new Article 10:

                   ARTICLE 10.  SECURITY CAPITAL TRANSACTION

          Notwithstanding anything to the contrary contained herein, including,
     without limitation, the provisions of Article 1 and Article 4 of this
     Declaration of Trust, the Trust shall be authorized to perform all of its
     obligations and exercise all of its rights under the terms of that certain
     Merger and Issuance Agreement, dated as of March 24, 1997, as amended (the
     "Merger Agreement"), between the Trust and Security Capital Group
     Incorporated and each of the other agreements and transactions contemplated
     thereby, including, without limitation, the following agreements (as each
     of such agreements are defined in the Merger Agreement) and the
     transactions contemplated by such agreements: (i) Agreement and Plan of
     Merger; (ii) Third Amended and Restated Investor Agreement; (iii)
     Administrative Services Agreement; (iv) Protection of Business Agreement;
     and (v) License Agreement.

     The undersigned President and Chief Executive Officer acknowledges these
Sixth Articles of Amendment to be the act of the Trust and, as to all other
matters or facts required to be verified under oath, that, to the best of his
knowledge, information and belief, these matters and facts are true in all
material respects, and that this statement is made under the penalties for
perjury.
<PAGE>
 
     IN WITNESS WHEREOF, the undersigned has executed these Sixth Articles of
Amendment as of this 9th day of September, 1997.

                                   SECURITY CAPITAL PACIFIC TRUST

                                   By:  /s/ R. Scot Sellers
                                        ---------------------------------------
                                        R. Scot Sellers
                                        President and Chief Executive Officer

ATTEST:


By:  /s/ Jeffrey A. Klopf
     -------------------------
     Jeffrey A. Klopf
     Secretary
<PAGE>
 
[THE REST OF THIS EXHIBIT RESTATES THE REGISTRANT'S CHARTER IN ELECTRONIC FORMAT
AS REQUIRED BY RULE 102(c) OF REGULATION S-T.)

                          FIFTH ARTICLES OF AMENDMENT
                                      OF
                         RESTATED DECLARATION OF TRUST
                                      OF
                        SECURITY CAPITAL PACIFIC TRUST

     The undersigned, being all the Trustees of Security Capital Pacific Trust,
a Maryland real estate investment trust (the "Trust"), do hereby certify
                                              -----                     
pursuant to the provisions of Article 6, Section 2 of the Trust's Restated
Declaration of Trust, dated as of June 18, 1991, as amended and supplemented
(the "Declaration of Trust"), and Section 8-501 of the Corporations and
      --------------------                                             
Associations Article of the Annotated Code of Maryland, that the Board of
Trustees of the Trust has adopted a resolution declaring this amendment to the
Declaration of Trust as hereinafter set forth to be advisable and that the
shareholders of the Trust have approved such amendment by the affirmative vote
of at least two-thirds of all the votes entitled to be cast on the matter.

     Therefore, the Declaration of Trust is hereby amended by adding the
following new Article 9:

                       ARTICLE 9.  HOMESTEAD TRANSACTION

          Notwithstanding anything to the contrary contained herein, including,
     without limitation, the provisions of Article 1 and Article 4 of this
     Declaration of Trust, the Trust shall be authorized to perform all of its
     obligations and exercise all of its rights under the terms of that certain
     Merger and Distribution Agreement, dated as of May 21, 1996 (as such
     agreement may be amended or supplemented from time to time, the "Merger
     Agreement"), among the Trust, Security Capital Atlantic Incorporated,
     Security Capital Group Incorporated and Homestead Village Properties
     Incorporated and each of the other agreements and transactions contemplated
     thereby, including, without limitation, the following agreements (as each
     of such agreements are defined in the Merger Agreement) and the
     transactions contemplated by such agreements: (i) Articles of Merger; (ii)
     Warrant Purchase Agreement; (iii) one or more Funding Commitment Agreements
     (including, without limitation, any notes and mortgages or deeds of trust
     in connection therewith); (iv) Investor and Registration Rights Agreement;
     (v) Protection of Business Agreement; and (vi) Distribution Agency
     Agreement.

     Each undersigned Trustee acknowledges these Fifth Articles of Amendment to
be the act of the Trust and, as to all other matters or facts required to be
verified under oath, that, to the best of his knowledge, information and belief,
these matters and facts are true in all material respects, and that this
statement is made under the penalties for perjury.
<PAGE>
 
     IN WITNESS WHEREOF, the undersigned have executed these Fifth Articles of
Amendment as of this 1st day of October, 1996.


                                         /s/ C. Ronald Blankenship
                                        --------------------------------
                                        C. Ronald Blankenship

                                         /s/ James A. Cardwell
                                        --------------------------------
                                        James A. Cardwell

                                         /s/ John T. Kelley, III
                                        --------------------------------
                                        John T. Kelley, III

                                         /s/ Calvin K. Kessler
                                        --------------------------------
                                        Calvin K. Kessler

                                         /s/ William G. Myers
                                        --------------------------------
                                        William G. Myers

                                         /s/ James H. Polk, III
                                        --------------------------------
                                        James H. Polk, III

                                         /s/ John C. Schweitzer
                                        --------------------------------
                                        John C. Schweitzer

                                      S-1
<PAGE>
 
STATE OF NEW MEXICO      )
                         )  SS.
COUNTY OF SANTA FE       )


     On the 3rd day of October, 1996, before me, the undersigned notary public,
personally appeared C. Ronald Blankenship, known to me to be the person who
signed the foregoing instrument, and acknowledged that he executed the same for
the purposes contained therein.

     IN WITNESS WHEREOF, I have hereunto signed my name and affixed my official
seal.

     (NOTARY SEAL)                                /s/ Kim L. Hamilton
                                                  -------------------------
                                                  Notary Public

My commission expires:  March 30, 2000
                      ----------------
<PAGE>
 
STATE OF TEXAS           )
                         )    SS.
COUNTY OF EL PASO        )

     On the 2nd day of October, 1996, before me, the undersigned notary public,
personally appeared J.A. Cardwell, known to me to be the person who signed the
foregoing instrument, and acknowledged that he executed the same for the
purposes contained therein.

     IN WITNESS WHEREOF, I have hereunto signed my name and affixed my official
seal.

     (NOTARY SEAL)                      /s/ Barbara Evans
                                        ----------------------------------
                                        Notary Public

My commission expires: 11-15-96
                      ---------
<PAGE>
 
STATE OF TEXAS         )
                       )      SS.
COUNTY OF EL PASO      )

     On the 1st day of October, 1996, before me, the undersigned notary public,
personally appeared John T. Kelley, III, known to me to be the person who signed
the foregoing instrument, and acknowledged that he executed the same for the
purposes contained therein.

     IN WITNESS WHEREOF, I have hereunto signed my name and affixed my official
seal.

     (NOTARY SEAL)                           /s/ Tammy Rena Espinosa
                                             ---------------------------------
                                             Notary Public

My commission expires:  5-13-2000
                      -----------
<PAGE>
 
STATE OF TEXAS        )
                      )       SS.
COUNTY OF EL PASO     )

     On the 1st day of October, 1996, before me, the undersigned notary public,
personally appeared Calvin K. Kessler, known to me to be the person who signed
the foregoing instrument, and acknowledged that he executed the same for the
purposes contained therein.

     IN WITNESS WHEREOF, I have hereunto signed my name and affixed my official
seal.


     (NOTARY SEAL)                           /s/ Anita Galvan
                                             ------------------------------
                                             Notary Public

My commission expires: 07-03-99
                      ---------
<PAGE>
 
STATE OF CALIFORNIA         )
                            )    SS.
COUNTY OF SANTA BARBARA     )

     On October 2, 1996, before me, Gail A. Crivello, Notary Public, personally
appeared William G. Myers, personally known to me to be the person whose name is
subscribed to the instrument and acknowledged to me that he executed the same in
his authorized capacity and that by his signature on the instrument the person,
or the entity upon behalf of which the person acted, executed the instrument.

     WITNESS my hand and official seal.


     (NOTARY SEAL)                           /s/ Gail A. Crivello
                                             -------------------------------
                                             Notary Public

My commission expires: 7-15-2000
                      ---------------
<PAGE>
 
STATE OF NEW MEXICO     )
                        )    SS.
COUNTY OF SANTA FE      )

     On the 1st day of October, 1996, before me, the undersigned notary public,
personally appeared James H. Polk, III, known to me to be the person who signed
the foregoing instrument, and acknowledged that he executed the same for the
purposes contained therein.

     IN WITNESS WHEREOF, I have hereunto signed my name and affixed my official
seal.


     (NOTARY SEAL)                           /s/ Nancy Ann Cortera
                                             ------------------------------
                                             Notary Public

My commission expires: 7/26/2000
                      -------------
<PAGE>
 
STATE OF TEXAS        )
                      )  SS.
COUNTY OF TRAVIS      )

     On the 1st day of October, 1996, before me, the undersigned notary public,
personally appeared John C. Schweitzer, known to me to be the person who signed
the foregoing instrument, and acknowledged that he executed the same for the
purposes contained therein.

     IN WITNESS WHEREOF, I have hereunto signed my name and affixed my official
seal.


     (NOTARY SEAL)                           /s/ Brenda Ewers
                                             ------------------------------
                                             Notary Public

My commission expires: 2-6-2000
                      -------------
<PAGE>
 
                          FIRST ARTICLES OF AMENDMENT
                                      to
                   Articles Supplementary dated May 17, 1995
                                      of
                        SECURITY CAPITAL PACIFIC TRUST

     The undersigned, being all of the members of the Board of Trustees of
Security Capital Pacific Trust, a Maryland real estate investment trust (the
"Trust"), do hereby certify pursuant to the provisions of Section 1 of the
Articles Supplementary dated as of May 17, 1995 (the "Articles Supplementary"),
and Title 8 of the Corporations and Associations Article of the Annotated Code
of Maryland, that the Board of Trustees of the Trust has adopted a resolution to
amend the Articles Supplementary as hereafter set forth and that the Trustees
have approved such amendments by unanimous written consent.

     Therefore, the Articles Supplementary are hereby amended by amending and
restating Section 1 thereof in its entirety as follows:

          Section 1.  Number of Shares and Designation.  This class of Preferred
                      --------------------------------                          
     Shares shall be designated as Series B Cumulative Redeemable Preferred
     Shares of Beneficial Interest (the "Series B Preferred Shares") and the
     number of shares which shall constitute such series shall not be more than
     4,200,000 shares, par value $1.00 per share, which number may be decreased
     (but not below the number thereof then outstanding plus the number required
     to fulfill the Trust's obligations under options, warrants or similar
     rights issued by the Trust) from time to time by the Board of Trustees.

     Each undersigned Trustee acknowledges these First Articles of Amendment to
be the act of the Trust and further, as to all matters or facts required to be
verified under oath, each such Trustee acknowledges that to the best of his
knowledge, information and belief, these matters and facts are true in all
material respects and that this statement is made under the penalties of
perjury.
<PAGE>
 
     IN WITNESS WHEREOF, the undersigned, being all of the members of the Board
of Trustees of the Trust, have hereunto set their hand as of this 31st day of
July, 1995.
                                                                         
                                      /s/ C. Ronald Blankenship          
                                      ------------------------------          
                                      C. Ronald Blankenship, Trustee     
                                                                         
                                                                         
                                      /s/ Calvin K. Kessler              
                                      ------------------------------
                                      Calvin K. Kessler, Trustee         
                                                                         
                                                                         
                                      /s/ James H. Polk, III             
                                      ------------------------------
                                      James H. Polk, III, Trustee        
                                                                         
                                                                         
                                      /s/ John C. Schweitzer             
                                      ------------------------------
                                      John C. Schweitzer, Trustee        
                                                                         
                                                                         
                                      /s/ William G. Myers               
                                      ------------------------------
                                      William G. Myers, Trustee          
                                                                         
                                                                         
                                      /s/ John T. Kelley, III            
                                      ------------------------------            
                                      John T. Kelley, III, Trustee       
                                                                         
                                                                         
                                      /s/ James A. Cardwell              
                                      ------------------------------
                                      James A. Cardwell, Trustee          
<PAGE>
 
                        Series B Cumulative Redeemable
                    Preferred Shares of Beneficial Interest

                            ARTICLES SUPPLEMENTARY

                        SECURITY CAPITAL PACIFIC TRUST


                         ==============================

            Articles Supplementary of Board of Trustees Classifying
                and Designating a Series of Preferred Shares as
                   Series B Cumulative Redeemable Preferred
           Shares of Beneficial Interest and Fixing Distribution and
                  Other Preferences and Rights of Such Series

                        ==============================

                           Dated as of May 17, 1995
<PAGE>
 
                        SECURITY CAPITAL PACIFIC TRUST


                        ==============================

            Articles Supplementary of Board of Trustees Classifying
                and Designating a Series of Preferred Shares as
                   Series B Cumulative Redeemable Preferred
           Shares of Beneficial Interest and Fixing Distribution and
                  Other Preferences and Rights of Such Series

                        ==============================

     The undersigned, being all of the Trustees of Security Capital Pacific
Trust, a Maryland real estate investment trust (the "Trust"), hereby certify to
the State Department of Assessments and Taxation of Maryland pursuant to section
8-203(b) of the Annotated Code of Maryland that:

     FIRST:  The Board of Trustees has classified 4,600,000 unissued shares of
the Trust as Series B Cumulative Redeemable Preferred Shares of Beneficial
Interest (the "Series B Preferred Shares").

     SECOND:  The following is a description of the Series B Preferred Shares,
including the preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications, and terms and
conditions of redemption thereof:

     Section 1.  Number of Shares and Designation.  This class of Preferred
                 --------------------------------                          
Shares shall be designated as Series B Cumulative Redeemable Preferred Shares of
Beneficial Interest (the "Series B Preferred Shares") and the number of shares
which shall constitute such series shall not be more than 4,600,000 shares, par
value $1.00 per share, which number may be decreased (but not below the number
thereof then outstanding plus the number required to fulfill the Trust's
obligations under options, warrants or similar rights issued by the Trust) from
time to time by the Board of Trustees.

     Section 2.  Definitions.  For purposes of the Series B Preferred Shares,
                 -----------                                                 
the following terms shall have the meanings indicated:

          "Board of Trustees" shall mean the Board of Trustees of the Trust or
           -----------------
     any committee authorized by such Board of Trustees to perform any of its
     responsibilities with respect to the Series B Preferred Shares.
<PAGE>
 
          "Business Day" shall mean any day other than a Saturday, Sunday or a
           ------------
     day on which state or federally chartered banking institutions in New York
     City, New York are not required to be open.

          "Call Date" shall mean the date specified in the notice to holders
           ---------
     required under subparagraph (e) of Section 5 as the Call Date.

          "Common Shares" shall mean the common Shares of Beneficial Interest of
           -------------    
     the Trust, par value $1.00 per share.

          "Dividend Payment Date" shall mean the last calendar day of March,
           --------------------- 
     June, September and December in each year, commencing on June 30, 1995;
     provided, however, that if any Dividend Payment Date falls on any day other
     than a Business Day, the dividend payment due on such Dividend Payment Date
     shall be paid on the Business Day immediately following such Dividend
     Payment Date.

          "Dividend Periods" shall mean quarterly dividend periods commencing on
           ----------------                                                     
     April 1, July 1, October 1, and January 1 of each year and ending on and
     including the day preceding the first day of the next succeeding Dividend
     Period (other than the initial Dividend Period, which shall commence on the
     Issue Date and end on and include June 30, 1995).

          "Fully Junior Shares" shall mean the Common Shares and any other class
           -------------------
     or series of shares of the Trust now or hereafter issued and outstanding
     over which the Series B Preferred Shares have preference or priority in
     both (i) the payment of dividends and (ii) the distribution of assets on
     any liquidation, dissolution or winding up of the Trust.

          "Issue Date" shall mean the first date on which the Series B Preferred
           ----------                                                           
     Shares are issued and sold.

          "Junior Shares" shall mean the Common Shares and any other class or
           -------------
     series of shares of the Trust now or hereafter issued and outstanding over
     which the Series B Preferred Shares have preference or priority in the
     payment of dividends or in the distribution of assets on any liquidation,
     dissolution or winding up of the Trust.

          "Parity Shares" shall have the meaning set forth in paragraph (b) of
           -------------                                                      
     Section 7.

          "Person" shall mean any individual, firm, partnership, corporation or
           ------
     other entity, and shall include any successor (by merger or otherwise) of
     such entity.

          "Series B Preferred Shares" shall have the meaning set forth in
           -------------------------
Section 1 hereof.
<PAGE>
 
          "set apart for payment" shall be deemed to include, without any action
           ---------------------                                                
     other than the following, the recording by the Trust in its accounting
     ledgers of any accounting or bookkeeping entry which indicates, pursuant to
     a declaration of dividends or other distribution by the Board of Trustees,
     the allocation of funds to be so paid on any series or class of capital
     stock of the Trust; provided, however, that if any funds for any class or
                         --------  -------                                    
     series of Junior Shares or any class or series of stock ranking on a parity
     with the Series B Preferred Shares as to the payment of dividends are
     placed in a separate account of the Trust or delivered to a disbursing,
     paying or other similar agent, then "set apart for payment" with respect to
     the Series B Preferred Shares shall mean placing such funds in a separate
     account or delivering such funds to a disbursing, paying or other similar
     agent.

          "Transfer Agent" means Chemical Bank, New York City, New York, or such
           --------------                                                       
     other agent or agents of the Trust as may be designated by the Board of
     Trustees or their designee as the transfer agent for the Series B Preferred
     Shares.

          "Voting Preferred Shares" shall have the meaning set forth in Section
           -----------------------
     8 hereof.

     Section 3.  Dividends.
                 --------- 

          (a)  The holders of Series B Preferred Shares shall be entitled to
     receive, when, as and if declared by the Board of Trustees out of funds
     legally available for that purpose, dividends payable in cash in an amount
     per share equal to $2.25. Such dividends shall begin to accrue and shall be
     fully cumulative from the Issue Date, whether or not in any Dividend Period
     or Periods there shall be funds of the Trust legally available for the
     payment of such dividends, and shall be payable quarterly, when, as and if
     declared by the Board of Trustees, in arrears on Dividend Payment Dates,
     commencing on the first Dividend Payment Date after the Issue Date. Each
     such dividend shall be payable in arrears to the holders of record of
     Series B Preferred Shares, as they appear on the stock records of the Trust
     at the close of business on such record dates, not less than 10 nor more
     than 50 days preceding such Dividend Payment Dates thereof, as shall be
     fixed by the Board of Trustees. Accrued and unpaid dividends for any past
     Dividend Periods may be declared and paid at any time and for such interim
     periods, without reference to any regular Dividend Payment Date, to holders
     of record on such date, not less than 10 nor more than 50 days preceding
     the payment date thereof, as may be fixed by the Board of Trustees.

          (b)  The amount of dividends payable for each full Dividend Period for
     the Series B Preferred Shares shall be computed by dividing the annual
     dividend rate by four. The amount of dividends payable for the initial
     Dividend Period, or any other period shorter or longer than a full Dividend
     Period, on the Series B Preferred Shares shall be computed on the basis of
     twelve 30-day months and a 360-day year. Holders of Series B Preferred
     Shares shall not be entitled to any dividends, whether payable in cash,
     property or stock, in excess of cumulative dividends, as herein provided,
     on the
<PAGE>
 
     Series B Preferred Shares. No interest, or sum of money in lieu of
     interest, shall be payable in respect of any dividend payment or payments
     on the Series B Preferred Shares that may be in arrears.

          (c)  So long as any Series B Preferred Shares are outstanding, no
     dividends, except as described in the immediately following sentence, shall
     be declared or paid or set apart for payment on any class or series of
     Parity Shares for any period unless full cumulative dividends have been or
     contemporaneously are declared and paid or declared and a sum sufficient
     for the payment thereof set apart for such payment on the Series B
     Preferred Shares for all Dividend Periods terminating on or prior to the
     Dividend Payment Date on such class or series of Parity Shares. When
     dividends are not paid in full or a sum sufficient for such payment is not
     set apart, as aforesaid, all dividends declared upon Series B Preferred
     Shares and all dividends declared upon any other class or series of Parity
     Shares shall be declared ratably in proportion to the respective amounts of
     dividends accumulated and unpaid on the Series B Preferred Shares and
     accumulated and unpaid on such Parity Shares.

          (d)  So long as any Series B Preferred Shares are outstanding, no
     dividends (other than dividends or distributions paid solely in shares of,
     or options, warrants or rights to subscribe for or purchase shares of,
     Fully Junior Shares) shall be declared or paid or set apart for payment or
     other distribution declared or made upon Junior Shares, nor shall any
     Junior Shares be redeemed, purchased or otherwise acquired (other than a
     redemption, purchase or other acquisition of Common Shares made for
     purposes of an employee incentive or benefit plan of the Trust or any
     subsidiary) for any consideration (or any moneys be paid to or made
     available for a sinking fund for the redemption of any shares of any such
     stock) by the Trust, directly or indirectly (except by conversion into or
     exchange for Fully Junior Shares), unless in each case (i) the full
     cumulative dividends on all outstanding Series B Preferred Shares and any
     other Parity Shares of the Trust shall have been paid or declared and set
     apart for payment for all past Dividend Periods with respect to the Series
     B Preferred Shares and all past dividend periods with respect to such
     Parity Shares and (ii) sufficient funds shall have been paid or declared
     and set apart for the payment of the dividend for the current Dividend
     Period with respect to the Series B Preferred Shares and the current
     dividend period with respect to such Parity Shares.

          (e)  No distributions on Series B Preferred Shares shall be declared
     by the Board of Trustees of the Trust or paid or set apart for payment by
     the Trust at such time as the terms and provisions of any agreement of the
     Trust, including any agreement relating to its indebtedness, prohibits such
     declaration, payment or setting apart for payment or provides that such
     declaration, payment or setting apart for payment would constitute a breach
     thereof or a default thereunder, or if such declaration or payment shall be
     restricted or prohibited by law.

     
<PAGE>
 
     Section 4.  Liquidation Preference.
                 ---------------------- 

          (a)    In the event of any liquidation, dissolution or winding up of
     the Trust, whether voluntary or involuntary, before any payment or
     distribution of the assets of the Trust (whether capital or surplus) shall
     be made to or set apart for the holders of Junior Shares, the holders of
     the Series B Preferred Shares shall be entitled to receive Twenty-Five
     Dollars ($25.00) per Series B Preferred Share plus an amount equal to all
     dividends (whether or not earned or declared) accrued and unpaid thereon to
     the date of final distribution to such holders; but such holders shall not
     be entitled to any further payment. If, upon any liquidation, dissolution
     or winding up of the Trust, the assets of the Trust, or proceeds thereof,
     distributable among the holders of the Series B Preferred Shares shall be
     insufficient to pay in full the preferential amount aforesaid and
     liquidating payments on any other shares of any class or series of Parity
     Shares, then such assets, or the proceeds thereof, shall be distributed
     among the holders of Series B Preferred Shares and any such other Parity
     Shares ratably in accordance with the respective amounts that would be
     payable on such Series B Preferred Shares and any such other Parity Shares
     if all amounts payable thereon were paid in full. For the purposes of this
     Section 4, (i) a consolidation or merger of the Trust with one or more
     corporations, (ii) a sale or transfer of all or substantially all of the
     Trust's assets or (iii) a statutory share exchange shall not be deemed to
     be a liquidation, dissolution or winding up, voluntary or involuntary, of
     the Trust.

          (b)    Subject to the rights of the holders of shares of any series or
     class or classes of stock ranking on a parity with or prior to the Series B
     Preferred Shares upon liquidation, dissolution or winding up, upon any
     liquidation, dissolution or winding up of the Trust, after payment shall
     have been made in full to the holders of the Series B Preferred Shares, as
     provided in this Section 4, any other series or class or classes of Junior
     Shares shall, subject to the respective terms and provisions (if any)
     applying thereto, be entitled to receive any and all assets remaining to be
     paid or distributed, and the holders of the Series B Preferred Shares shall
     not be entitled to share therein.

     Section 5.  Redemption at the Option of the Trust.
                 ------------------------------------- 

          (a)    Subject to Section 9 hereof, the Series B Preferred Shares
     shall not be redeemable by the Trust prior to the fifth anniversary of the
     Issue Date. On and after the fifth anniversary of the Issue Date, the
     Trust, at its option, may redeem the Series B Preferred Shares, in whole at
     any time or from time to time in part at the option of the Trust at a
     redemption price of Twenty-Five Dollars ($25.00) per Series B Preferred
     Share, plus the amounts indicated in Section 5(b).

          (b)    Upon any redemption of Series B Preferred Shares pursuant to
     this Section 5, the Trust shall pay any accrued and unpaid dividends in
     arrears for any Dividend Period ending on or prior to the Call Date. If the
     Call Date falls after a dividend payment record date and prior to the
     corresponding Dividend Payment Date,
<PAGE>
 
     then each holder of Series B Preferred Shares at the close of business on
     such dividend payment record date shall be entitled to the dividend payable
     on such shares on the corresponding Dividend Payment Date notwithstanding
     the redemption of such shares before such Dividend Payment Date. Except as
     provided above, the Trust shall make no payment or allowance for unpaid
     dividends, whether or not in arrears, on Series B Preferred Shares called
     for redemption.

          (c)  If full cumulative dividends on the Series B Preferred Shares and
     any other class or series of Parity Shares of the Trust have not been paid
     or declared and set apart for payment, the Series B Preferred Shares may
     not be redeemed under this Section 5 in part and the Trust may not purchase
     or acquire Series B Preferred Shares, otherwise than pursuant to a purchase
     or exchange offer made on the same terms to all holders of Series B
     Preferred Shares or pursuant to Section 9 hereof.

          (d)  The redemption price to be paid upon any redemption of the Series
     B Preferred Shares (other than any amounts indicated in Section 5(b) and
     other than a redemption pursuant to Section 9) shall be payable solely out
     of the sale proceeds of other capital shares of the Trust and from no other
     source.

          (e)  Notice of the redemption of any Series B Preferred Shares under
     this Section 5 shall be mailed by first-class mail to each holder of record
     of Series B Preferred Shares to be redeemed at the address of each such
     holder as shown on the Trust's record, not less than 30 nor more than 90
     days prior to the Call Date. Neither the failure to mail any notice
     required by this paragraph (e), nor any defect therein or in the mailing
     thereof, to any particular holder, shall affect the sufficiency of the
     notice or the validity of the proceedings for redemption with respect to
     the other holders. Any notice which was mailed in the manner herein
     provided shall be conclusively presumed to have been duly given on the date
     mailed whether or not the holder receives the notice. Each such mailed
     notice shall state, as appropriate: (1) the Call Date; (2) the number of
     Series B Preferred Shares to be redeemed and, if fewer than all the shares
     held by such holder are to be redeemed, the number of such shares to be
     redeemed from such holder; (3) the place or places at which certificates
     for such shares are to be surrendered; and (4) that dividends on the shares
     to be redeemed shall cease to accrue on such Call Date except as otherwise
     provided herein. Notice having been mailed as aforesaid, from and after the
     Call Date (unless the Trust shall fail to make available an amount of cash
     necessary to effect such redemption), (i) except as otherwise provided
     herein, dividends on the Series B Preferred Shares so called for redemption
     shall cease to accrue, (ii) said shares shall no longer be deemed to be
     outstanding, and (iii) all rights of the holders thereof as holders of
     Series B Preferred Shares of the Trust shall cease (except the right to
     receive cash payable upon such redemption, without interest thereon, upon
     surrender and endorsement of their certificates if so required and to
     receive any dividends payable thereon). The Trust's obligation to provide
     cash in accordance with the preceding sentence shall be deemed fulfilled
     if, on or before the Call Date, the Trust shall deposit with a bank or
     trust company (which may be an affiliate of the Trust) that has an office
<PAGE>
 
     in the Borough of Manhattan, City of New York, and that has, or is an
     affiliate of a bank or trust company that has, capital and surplus of at
     least $50,000,000, necessary for such redemption, in trust, with
     irrevocable instructions that such cash be applied to the redemption of the
     Series B Preferred Shares so called for redemption. No interest shall
     accrue for the benefit of the holders of Series B Preferred Shares to be
     redeemed on any cash so set aside by the Trust. Subject to applicable
     escheat laws, any such cash unclaimed at the end of two years from the Call
     Date shall revert to the general funds of the Trust, after which reversion
     the holders of such shares so called for redemption shall look only to the
     general funds of the Trust for the payment of such cash.

          As promptly as practicable after the surrender in accordance with said
     notice of the certificates for any such shares so redeemed (properly
     endorsed or assigned for transfer, if the Trust shall so require and if the
     notice shall so state), such shares shall be exchanged for any cash
     (without interest thereon) for which such shares have been redeemed.  If
     fewer than all the outstanding Series B Preferred Shares are to redeemed,
     shares to be redeemed shall be selected by the Trust from outstanding
     Series B Preferred Shares not previously called for redemption by lot or
     pro rata (as nearly as may be) or by any other method determined by the
     Trust in its sole discretion to be equitable.  If fewer than all the Series
     B Preferred Shares represented by any certificate are redeemed, then new
     certificates representing the unredeemed shares shall be issued without
     cost to the holder thereof.

     Section 6.  Shares To Be Retired.  All Series B Preferred Shares which
                 --------------------                                      
shall have been issued and reacquired in any manner by the Trust shall be
restored to the status of authorized but unissued Shares of Beneficial Interest
of the Trust, without designation as to class or series.

     Section 7.  Ranking.  Any class or series of stock of the Trust shall be
                 -------                                                     
deemed to rank:

          (a)    prior to the Series B Preferred Shares, as to the payment of
     dividends and as to distribution of assets upon liquidation, dissolution or
     winding up, if the holders of such class or series shall be entitled to the
     receipt of dividends or of amounts distributable upon liquidation,
     dissolution or winding up, as the case may be, in preference or priority to
     the holders of Series B Preferred Shares;

          (b)    on a parity with the Series B Preferred Shares, as to the
     payment of dividends and as to distribution of assets upon liquidation,
     dissolution or winding up, whether or not the dividend rates, dividend
     payment dates or redemption or liquidation prices per share thereof be
     different from those of the Series B Preferred Shares, if the holders of
     such class of stock or series and the Series B Preferred Shares shall be
     entitled to the receipt of dividends and of amounts distributable upon
     liquidation, dissolution or winding up in proportion to their respective
     amounts of accrued and unpaid dividends per
<PAGE>
 
     share or liquidation preferences, without preference or priority one over
     the other ("Parity Shares");
                 -------------   

          (c)    junior to the Series B Preferred Shares, as to the payment of
     dividends or as to the distribution of assets upon liquidation, dissolution
     or winding up, if such stock or series shall be Junior Shares; and

          (d)    junior to the Series B Preferred Shares, as to the payment of
     dividends and as to the distribution of assets upon liquidation,
     dissolution or winding up, if such stock or series shall be Fully Junior
     Shares.

     Section 8.  Voting. If and whenever six quarterly dividends (whether or not
                 ------                                                         
consecutive) payable on the Series B Preferred Shares or any series or class of
Parity Shares shall be in arrears (which shall, with respect to any such
quarterly dividend, mean that any such dividend has not been paid in full),
whether or not earned or declared, the number of trustees then constituting the
Board of Trustees shall be increased by two and the holders of Series B
Preferred Shares, together with the holders of shares of every other series of
Parity Shares (any such other series, the "Voting Preferred Shares"), voting as
                                           -----------------------             
a single class regardless of series, shall be entitled to elect two additional
trustees to serve on the Board of Trustees at any annual meeting of shareholders
or special meeting held in place thereof, or at a special meeting of the holders
of the Series B Preferred Shares and the Voting Preferred Shares called as
hereinafter provided.  Whenever all arrears in dividends on the Series B
Preferred Shares and the Voting Preferred Shares then outstanding shall have
been paid and dividends thereon for the current quarterly dividend period shall
have been paid or declared and set apart for payment, then the right of the
holders of the Series B Preferred Shares and the Voting Preferred Shares to
elect such additional two trustees shall cease (but subject always to the same
provision for the vesting of such voting rights in the case of any similar
future arrearages in six quarterly dividends), and the terms of office of all
persons elected as trustees by the holders of the Series B Preferred Shares and
the Voting Preferred Shares shall forthwith terminate and the number of the
Board of Trustees shall be reduced accordingly.  At any time after such voting
power shall have been so vested in the holders of Series B Preferred Shares and
the Voting Preferred Shares, the secretary of the Trust may, and upon the
written request of any holder of Series B Preferred Shares (addressed to the
secretary at the principal office of the Trust) shall, call a special meeting of
the holders of the Series B Preferred Shares and of the Voting Preferred Shares
for the election of the two trustees to be elected by them as herein provided,
such call to be made by notice similar to that provided in the Bylaws of the
Trust for a special meeting of the shareholders or as required by law. If any
such special meeting required to be called as above provided shall not be called
by the secretary within 20 days after receipt of any such request, then any
holder of Series B Preferred Shares may call such meeting, upon the notice above
provided, and for that purpose shall have access to the stock records of the
Trust.  The trustees elected at any such special meeting shall hold office until
the next annual meeting of the shareholders or special meeting held in lieu
thereof if such office shall not have previously terminated as above provided.
If any vacancy shall occur among the trustees elected by the holders of the
Series B Preferred Shares and the Voting Preferred Shares, a successor shall be
<PAGE>
 
elected by the Board of Trustees, upon the nomination of the then-remaining
trustee elected by the holders of the Series B Preferred Shares and the Voting
Preferred Shares or the successor of such remaining trustee, to serve until the
next annual meeting of the shareholders or special meeting held in place thereof
if such office shall not have previously terminated as provided above.
Notwithstanding any other provisions of this paragraph, in any vote for the
election of additional trustees hereunder, the Series B Preferred Shares and
Voting Preferred Shares beneficially owned by Security Capital Group
Incorporated, a Maryland corporation, any of its direct or indirect subsidiaries
and any of their respective directors, officers or controlling stockholders
(together, the "Restricted Parties"), shall be voted in the same respective
                ------------------                                         
percentages as the Series B Preferred Shares and Voting Preferred Shares that
are not beneficially owned by the Restricted Parties.  The provisions in the
preceding sentence shall cease and be of no further force and effect from and
after such time, but only as long as, the Restricted Parties together no longer
beneficially own in excess of 10% of the Trust's outstanding Common Shares.

     So long as any Series B Preferred Shares are outstanding, in addition to
any other vote or consent of shareholders required by law or by the Restated
Declaration of Trust, as amended, the affirmative vote of at least 66 2/3% of
the votes entitled to be cast by the holders of the Series B Preferred Shares
and the Voting Preferred Shares, at the time outstanding, acting as a single
class regardless of series, given in person or by proxy, either in writing
without a meeting or by vote at any meeting called for the purpose, shall be
necessary for effecting or validating:

          (a)  Any amendment, alteration or repeal of any of the provisions of
     the Restated Declaration of Trust or these Articles Supplementary that
     materially and adversely affects the voting powers, rights or preferences
     of the holders of the Series B Preferred Shares or the Voting Preferred
     Shares; provided, however, that the amendment of the provisions of the
             --------  -------
     Restated Declaration of Trust so as to authorize or create or to increase
     the authorized amount of, any Fully Junior Shares, Junior Shares that are
     not senior in any respect to the Series B Preferred Shares, or any shares
     of any class ranking on a parity with the Series B Preferred Shares or the
     Voting Preferred Shares shall not be deemed to materially adversely affect
     the voting powers, rights or preferences of the holders of Series B
     Preferred Shares, and provided, further, that if any such amendment,
                           --------  -------
     alteration or repeal would materially and adversely affect any voting
     powers, rights or preferences of the Series B Preferred Shares or another
     series of Voting Preferred Shares that are not enjoyed by some or all of
     the other series otherwise entitled to vote in accordance herewith, the
     affirmative vote of at least 66 2/3% of the votes entitled to be cast by
     the holders of all series similarly affected, similarly given, shall be
     required in lieu of the affirmative vote of at least 66 2/3% of the votes
     entitled to be cast by the holders of the Series B Preferred Shares and the
     Voting Preferred Shares otherwise entitled to vote in accordance herewith;
     or

          (b)  A share exchange that affects the Series B Preferred Shares, a
     consolidation with or merger of the Trust into another entity, or a
     consolidation with or merger of another entity into the Trust, unless in
     each such case each Series B Preferred 
<PAGE>
 
     Share (i) shall remain outstanding without a material and adverse change to
     its terms and rights or (ii) shall be converted into or exchanged for
     convertible preferred stock of the surviving entity having preferences,
     conversion or other rights, voting powers, restrictions, limitations as to
     dividends, qualifications and terms or conditions of redemption thereof
     identical to that of a Series B Preferred Share (except for changes that do
     not materially and adversely affect the holders of the Series B Preferred
     Shares); or

          (c)    The authorization or creation of, or the increase in the
     authorized amount of, any shares of any class or any security convertible
     into shares of any class ranking prior to the Series B Preferred Shares in
     the distribution of assets on any liquidation, dissolution or winding up of
     the Trust or in the payment of dividends;

provided, however, that no such vote of the holders of Series B Preferred Shares
--------  -------                                                               
shall be required if, at or prior to the time when such amendment, alteration or
repeal is to take effect, or when the issuance of any such prior shares or
convertible security is to be made, as the case may be, provision is made for
the redemption of all Series B Preferred Shares at the time outstanding.

     For purposes of the foregoing provisions of this Section 8, each Series B
Preferred Share shall have one (1) vote per share, except that when any other
series of Preferred Shares shall have the right to vote with the Series B
Preferred Shares as a single class on any matter, then the Series B Preferred
Shares and such other series shall have with respect to such matters one (1)
vote per $25.00 of stated liquidation preference.  Except as otherwise required
by applicable law or as set forth herein, the Series B Preferred Shares shall
not have any relative, participating, optional or other special voting rights
and powers other than as set forth herein, and the consent of the holders
thereof shall not be required for the taking of any trust action.

     Section 9.  Limitation on Ownership.
                 ----------------------- 

          (a)    Limitation. Notwithstanding any other provision of the terms of
                 ----------
     the Series B Preferred Shares, except as provided in the next sentence and
     in Section 9(b), no Person, or Persons acting as a group, shall at any time
     directly or indirectly acquire ownership of more than 25% of the
     outstanding Series B Preferred Shares. Any Series B Preferred Shares owned
     by a Person or Persons acting as a group in excess of such 25% shall be
     deemed "Excess Preferred Shares," except that any such shares in excess of
     25% will not be considered Excess Preferred Shares if the 25% limitation is
                                -----------------------
     exceeded solely as a result of the Trust's redemption of Series B Preferred
     Shares, provided that thereafter any additional Series B Preferred Shares
     acquired by such Person or Persons acting as a group shall be considered
     Excess Preferred Shares. Within 10 days of becoming aware of the existence
     of Excess Preferred Shares (whether by notice on Schedule 13D or
     otherwise), the Trust shall redeem any and all Excess Preferred Shares by
     giving notice of redemption to the holder or holders thereof, unless, prior
     to the giving of such notice the holder shall have disposed of its
     ownership in the Excess Preferred Shares. Such notice shall set forth the
     number of Series B Preferred Shares
<PAGE>
 
     constituting Excess Preferred shares, the redemption price and the place or
     places at which the certificates representing such Excess Preferred Shares
     are to be surrendered and such notice shall set forth the matters described
     in the following sentence. From and after the date of giving such notice of
     redemption, the Series B Preferred Shares called for redemption shall cease
     to be outstanding and the holder thereof shall cease to be entitled to
     dividends (other than dividends declared but unpaid prior to the notice of
     redemption), voting rights and other benefits with respect to such shares
     excepting the rights to payment of the redemption price determined and
     payable as set forth in the next two sentences. Subject to the limitation
     on payment set forth in the following sentence, the redemption price of
     each Excess Preferred Share called for redemption shall be the average
     daily per Series B Preferred Share closing sales price, if the Series B
     Preferred Shares are listed on a national securities exchange or, if not,
     are reported on the NASDAQ National Market System, and if the Series B
     Preferred Shares are not so listed or reported, shall be the mean between
     the average per Series B Preferred Share closing bid prices and the average
     per Series B Preferred Share closing asked prices, in each case during the
     30 day period ending on the business day prior to the redemption date, or
     if there have been no sales on a national securities exchange or the NASDAQ
     National Market System and no published bid quotations and no published
     asked quotations with respect to Series B Preferred Shares during such 30
     day period, the redemption price shall be the price determined by the
     Trustees in good faith. Unless the Trustees determine that it is in the
     interest of the Trust to make earlier payment of all of the amount
     determined as the redemption price per Series B Preferred Share in
     accordance with the preceding sentence, the redemption price may be
     payable, at the option of the Trustees, at any time or times up to, but not
     later than the earlier of (i) five years after the redemption date, or (ii)
     the liquidation of the Trust, in which latter event the redemption price
     shall not exceed an amount which is the sum of the per Series B Preferred
     Share distributions designated as liquidating distributions and return of
     capital distributions declared with respect to unredeemed Series B
     Preferred Shares of the Trust of record subsequent to the redemption date;
     and in any event, no interest shall accrue with respect to the period
     subsequent to the redemption date to the date of such payment. Nothing in
     this Section 9(a) shall preclude the settlement of any transaction entered
     into through the facilities of the New York Stock Exchange.

          (b)  Exemptions.  The limitation on ownership set forth in Section
               ----------
     9(a) shall not apply to the acquisition of Series B Preferred Shares by an
     underwriter in a public offering of Series B Preferred Shares and shall not
     apply to the ownership of Series B Preferred Shares by a managing
     underwriter in the initial public offering of Series B Preferred Shares.
     The Trustees, in their sole and absolute discretion, may exempt from the
     ownership limitation set forth in Section 9(a) certain designated Series B
     Preferred Shares owned by a person (other than any of the Restricted
     Parties) who has provided the Trustees with evidence and assurances
     acceptable to the Trustees that the qualification of the Trust as a real
     estate investment trust would not be jeopardized thereby.
<PAGE>
 
     Section 10.  Record Holders.  The Trust and the Transfer Agent may deem and
                  --------------                                                
treat the record holder of any Series B Preferred Shares as the true and lawful
owner thereof for all purposes, and neither the Trust nor the Transfer Agent
shall be affected by any notice to the contrary.

     Section 11.  Sinking Fund.  The Series B Preferred Shares shall not be
                  ------------                                             
entitled to the benefits of any retirement or sinking fund.

     THIRD:   The Series B Preferred Shares have been classified by the Board of
Trustees under the authority contained in Article 2, Section 1, of the Restated
Declaration of Trust dated June 18, 1991, as amended.

     FOURTH:  Each undersigned Trustee acknowledges these Articles Supplementary
to be the act of the Trust and further, as to all matters or facts required to
be verified under oath, each such Trustee acknowledges that to the best of his
knowledge, information and belief, these matters and facts are true in all
material respects and that this statement is made under the penalties of
perjury.
<PAGE>
 
     IN WITNESS WHEREOF, these Articles Supplementary have been duly executed by
the undersigned Trustees this 17th day of May, 1995.

                                           SECURITY CAPITAL PACIFIC TRUST
                                     
                                     
                                     
                                           By:   /s/ C. Ronald Blankenship
                                                --------------------------------
                                                C. Ronald Blankenship, Trustee
                                     
                                     
                                           By:   /s/ Calvin K. Kessler
                                                --------------------------------
                                                Calvin K. Kessler, Trustee
                                     
                                     
                                           By:   /s/ James H. Polk, III
                                                --------------------------------
                                                James H. Polk III, Trustee
                                     
                                     
                                           By:   /s/ John C. Schweitzer
                                                --------------------------------
                                                John C. Schweitzer, Trustee
                                     
                                     
                                           By:   /s/ William G. Myers
                                                --------------------------------
                                                William G. Myers, Trustee
                                     
                                     
                                           By:   /s/ John T. Kelley, III
                                                --------------------------------
                                                John T. Kelley, III, Trustee
                                     
                                     
                                           By:   /s/ James A. Cardwell
                                                --------------------------------
                                                James A. Cardwell, Trustee
                                                           
<PAGE>
 
                              ARTICLES OF MERGER

                                    MERGING
                                        
                     SECURITY CAPITAL PACIFIC INCORPORATED
                   (A CORPORATION OF THE STATE OF MARYLAND)
                                        
                                     INTO
                                        
                           PROPERTY TRUST OF AMERICA
           (A REAL ESTATE INVESTMENT TRUST OF THE STATE OF MARYLAND)


     Security Capital Pacific Incorporated, a corporation organized and existing
under the laws of the State of Maryland ("PACIFIC"), and Property Trust of
America, a real estate investment trust organized and existing under the laws of
the State of Maryland ("PTR"), agree that PACIFIC shall be merged with and into
PTR.  The terms and conditions of the merger and the mode of carrying the same
into effect are as herein set forth in these Articles of Merger.

     FIRST:    The parties to these Articles of Merger are Property Trust of
America, a real estate investment trust organized and existing under the laws of
the State of Maryland, and Security Capital Pacific Incorporated, a corporation
organized and existing under the laws of the State of Maryland.

     SECOND:   PACIFIC shall be merged with and into PTR in accordance with the
Corporations and Associations Article of the Annotated Code of Maryland (the
"Maryland Code"), and PTR shall survive the merger and continue under the name
"Security Capital Pacific Trust" (the "Surviving Entity").  At the effective
time of the merger (the "Effective Time"), the separate existence of PACIFIC
shall cease in accordance with the provisions of the Maryland Code.  From and
after the Effective Time, the Surviving Entity shall continue its existence
under the name "Security Capital Pacific Trust," shall succeed to all of the
properties, liabilities and other assets and shall be subject to all of the
liabilities and obligations of PACIFIC without further action by either of the
parties hereto, and will continue to be governed by the laws of the State of
Maryland, including the Maryland Code.  At the Effective Time, the bylaws of PTR
in effect immediately prior to the Effective Time shall become the bylaws of the
Surviving Entity and the trustees and officers in office of PTR immediately
prior to the Effective Time shall be the trustees and officers of the Surviving
Entity, all of whom shall hold their trusteeships and offices until the election
and qualification of their respective successors or until their tenure is
otherwise terminated in accordance with the declaration of trust and bylaws of
the Surviving Entity.

     THIRD:    The resident agent and office of each of PACIFIC and PTR is
located at 11 East Chase Street, Baltimore, State of Maryland 21202. The
principal office of each of PACIFIC and PTR is located at 7777 Market Center
Avenue, City of El Paso, State of Texas
<PAGE>
 
79912. Neither PACIFIC nor PTR owns any interest in land in any county in the
State of Maryland.

     FOURTH:   The terms and conditions of the transaction set forth in these
Articles of Merger were advised, authorized and approved by each party to these
Articles of Merger in the manner and by the vote required by PACIFIC's articles
of incorporation or PTR's declaration of trust, as the case may be, and the laws
of the State of Maryland.

     FIFTH:    The merger was duly (a) advised by the board of directors of
PACIFIC by the adoption of a resolution declaring that the merger set forth in
these Articles of Merger was advisable on substantially the terms and conditions
set forth or referred to in the resolution and directing that the proposed
merger be submitted for consideration at a special meeting of the shareholders
of PACIFIC and (b) approved by the shareholders of PACIFIC by the vote required
by its articles of incorporation and the Maryland Code.

     SIXTH:    The merger was duly (a) advised by the board of trustees of PTR
by the adoption of a resolution declaring that the merger set forth in these
Articles of Merger was advisable on substantially the terms and conditions set
forth or referred to in the resolution and directing that the proposed merger be
submitted for consideration at a special meeting of the shareholders of PTR and
(b) approved by the shareholders of PTR by the vote required by its declaration
of trust and the Maryland Code.

     SEVENTH:  At the Effective Time, Article 1, Section 1 of the declaration of
trust of PTR shall be amended to read in its entirety as follows and such
declaration of trust, as so amended, shall become the declaration of trust of
the Surviving Entity:

     "    Section 1.  Name.  The Trust created by this Declaration of Trust is
     herein referred to as the "Trust" and shall be known by the name "Security
     Capital Pacific Trust."  So far as may be practicable, legal and
     convenient, the affairs of the Trust shall be conducted and transacted
     under that name, which name shall not refer to the Trustees individually or
     personally or to the beneficiaries or Shareholders of the Trust, or to any
     officers, employees or agents of the Trust.

          Under circumstances in which the Trustees determine that the use of
     the name "Security Capital Pacific Trust" is not practicable, legal or
     convenient, they may as appropriate use their names with suitable reference
     to their trustee status, or some other suitable designation, or they may
     adopt another name under which the Trust may hold property or operate in
     any jurisdiction which name shall not, to the knowledge of the Trustees,
     refer to beneficiaries or Shareholders of the Trust. Legal title to all the
     properties subject from time to time to this Declaration of Trust shall be
     transferred to, vested in, and held by the Trust in its own name or by the
     Trustees as joint tenants with right of survivorship as Trustees of this
     Trust, except that the Trustees shall have the power to cause legal title
     to any property of this Trust to be held by and/or in the name of one or
     more of the Trustees, or any other person as nominee, on such terms, in
     such
<PAGE>
 
     manner, and with such powers as the Trustees may determine, provided that
     the interest of the Trust therein is appropriately protected.

          The Trust shall have the authority to operate under an assumed name or
     names in such state or states or any political subdivision thereof where it
     would be legal, practical or convenient to operate in the name of the
     Trust.  The Trust shall have the authority to file such assumed name
     certificates or other instruments in such places as may be required by
     applicable law to operate under such assumed name or names.

          If for any reason neither Security Capital (Southwest) Incorporated, a
     Delaware corporation, nor any affiliate thereof, nor any other affiliate of
     Security Capital Realty Incorporated, a Maryland corporation, shall any
     longer be rendering to the Trust the services of Advisor, as defined in
     Article 4, Section 7, hereof, to be rendered pursuant to the contract
     referred to in Article 4, Section 7 hereof, and any renewal or extension of
     such contract, then, if requested in writing by Security Capital Realty
     Incorporated or its successor to do so, the Trustees shall forthwith and
     are hereby required and authorized, without further vote or consent of the
     Shareholders, to (a) cease to use the name "Security Capital") or any name
     or names similar thereto, (b) amend this Article 1, Section 1 to change the
     name of the Trust to one which does not include the name "Security Capital"
     or any name or names similar thereto, and (c) cause to be executed and
     delivered al instruments necessary to evidence such change of name in each
     public registry where the name of the Trust shall have been registered and
     to disclaim any right, title or interest in or to the name "Security
     Capital.""

     These amendments do not increase the authorized capital of PTR.

     EIGHTH:   The total number of shares of beneficial interest of all classes
which PTR has authority to issue is one hundred fifty million (150,000,000)
shares of beneficial interest, of the par value of one dollar ($1.00) each, all
such shares having an aggregate par value of one hundred fifty million dollars
($150,000,000).  Of such one hundred fifty million shares of beneficial
interest, nine million two hundred thousand have been classified as Cumulative
Convertible Series A Preferred Shares of Beneficial Interest.

     The total number of shares of stock of all classes which PACIFIC has
authority to issue is two hundred fifty million (250,000,000) shares of common
stock, of the par value of one cent ($0.01) each, all such shares having an
aggregate par value of two million five hundred thousand dollars ($2,500,000).

     NINTH:    At the Effective Time, each issued share common stock of PACIFIC
shall automatically and without further action by either of the parties hereto
be converted into 0.611 common shares of beneficial interest of PTR.  At the
Effective Time, each right, option or warrant to acquire a share of common stock
of PACIFIC shall automatically be converted into a right, option or warrant to
acquire 0.611 common shares of beneficial interest of PTR.  At the 
<PAGE>
 
Effective Time, each issued share of beneficial interest of PTR issued
immediately prior to the Effective Time shall not be converted or exchanged in
any manner by shall remain issued.

     TENTH:    The parties hereto intend that the execution of these Articles of
Merger constitutes the adoption of a "plan of reorganization" within the meaning
of Treasury Regulations (S) 1.368-1(c).
<PAGE>
 
     IN WITNESS WHEREOF, Security Capital Pacific Incorporated, a Maryland
corporation, and Property Trust of America, a Maryland real estate investment
trust, the entities parties to the merger, have caused these Articles of Merger
to be signed in their respective names and on their behalf and witnessed or
attested all as of the 23rd day of March 1995.  Each of the individuals signing
these Articles of Merger on behalf of Security Capital Pacific Incorporated or
Property Trust of America acknowledges these Articles of Merger to be the act of
such respective entity and, as to all other matters or facts required to be
verified under oath, that to the best of his or her knowledge, information and
belief, these matters are true in all material respects, and that this statement
is made under the penalties of perjury.

                                    SECURITY CAPITAL PACIFIC INCORPORATED,
                                    a Maryland corporation
                                    
                                    By:   /s/ David C. Dressler, Jr.
                                         --------------------------------
                                         David C. Dressler, Jr.
                                         Senior Vice President
Attest:

 /s/ Leanne L. Gallagher
------------------------------
Leanne L. Gallagher
Assistant Secretary

                                    PROPERTY TRUST OF AMERICA,
                                        a Maryland real estate investment trust
                                    
                                    By:   /s/ C. Ronald Blankenship
                                         --------------------------------
                                         C. Ronald Blankenship, Trustee
                                    
                                    By:   /s/ Calvin K. Kessler
                                         --------------------------------
                                         Calvin K. Kessler, Trustee
                                    
                                    By:   /s/ James H. Polk, III
                                         --------------------------------
                                         James H. Polk, III, Trustee
                                    
                                    By:   /s/ John C. Schweitzer
                                         --------------------------------
                                         John C. Schweitzer, Trustee
                                    
                                    By:   /s/ William G. Myers
                                         --------------------------------
                                         William G. Myers, Trustee
                                    
                                    By:   /s/ John T. Kelley
                                         --------------------------------
                                         John T. Kelley, III, Trustee
                                    
                                    By:   /s/ James A. Cardwell
                                         --------------------------------
                                         James A. Cardwell, Trustee
                              
<PAGE>
 
                          THIRD ARTICLES OF AMENDMENT
                                      OF
                         RESTATED DECLARATION OF TRUST
                                      OF
                           PROPERTY TRUST OF AMERICA


     The undersigned, being all the Trustees of Property Trust of America, a
Maryland real estate investment trust (the "Trust"), do hereby certify pursuant
to the provisions of Article 6, Section 2 of the Trust's Restated Declaration of
Trust, as amended and supplemented (the "Declaration of Trust"), and Section 8-
501(b) of the Maryland Corporations and Associations Article, that the Board of
Trustees of the Trust has adopted a resolution to amend the Declaration of Trust
as hereinafter set forth and that the Trustees have approved such amendment by
at least a two-thirds vote.

     Therefore, the Declaration of Trust is hereby amended by amending and
restating Article 7, Section 10 thereof in its entirety as follows:

          SECTION 10.  NAMES AND ADDRESSES OF TRUSTEES. The name and address of
     each current Trustee is set forth below:

          Name                          Address
          ----                          -------
                                  
          C. Ronald Blankenship         125 Lincoln Avenue
                                        Santa Fe, New Mexico  87501
                                  
          James A. Cardwell             6080 Surety Drive
                                        El Paso, Texas  79905
                                  
          John T. Kelley, III           7777 Market Center Avenue
                                        El Paso, Texas  79912
                                  
          Calvin K. Kessler             8600 Gateway Boulevard East
                                        El Paso, Texas  79907
                                  
          William G. Myers              1114 State Street, Suite 232
                                        Santa Barbara, California  93101
                                  
          James H. Polk, III            125 Lincoln Avenue
                                        Santa Fe, New Mexico  87501
                                  
          John C. Schweitzer            100 Congress
                                        Austin, Texas  78701
<PAGE>
 
     Each undersigned Trustee acknowledges these Third Articles of Amendment to
be the act of the Trust and, as to all other matters or facts required to be
verified under oath, that, to the best of his knowledge, information and belief,
these matters and facts are true in all material respects, and that this
statement is made under the penalties for perjury.

     IN WITNESS WHEREOF, the undersigned have executed these Third Articles of
Amendment as of this 28th day of October, 1994.


                                                 /s/ C. Ronald Blankenship
                                                 ------------------------------
                                                 C. Ronald Blankenship
                                  
                                  
                                                 /s/ James A. Cardwell
                                                 ------------------------------
                                                 James A. Cardwell
                                  
                                  
                                                 /s/ John T. Kelley, III
                                                 ------------------------------
                                                 John T. Kelley, III
                                  
                                  
                                                 /s/ Calvin K. Kessler
                                                 ------------------------------
                                                 Calvin K. Kessler
                                  
                                  
                                                 /s/ William G. Myers
                                                 ------------------------------
                                                 William G. Myers
                                  
                                  
                                                 /s/ James H. Polk, III
                                                 ------------------------------
                                                 James H. Polk, III
                                  
                                  
                                                 /s/ John C. Schweitzer
                                                 ------------------------------
                                                 John C. Schweitzer
<PAGE>
 
STATE OF NEW MEXICO           )
                              )     SS.
COUNTY OF SANTE FE            )


     On the 28th day of October, 1994, before me, the undersigned notary public,
personally appeared C. Ronald Blankenship, known to me to be the person who
signed the foregoing instrument, and acknowledged that he executed the same for
the purposes contained therein.

     IN WITNESS WHEREOF, I have hereunto signed my name and affixed my official
seal.



     (NOTARY SEAL)                           /s/ Teresa K. Rosen
                                             ----------------------------------
                                             Notary Public


My commission expires: 3-1-97
                      ---------
<PAGE>
 
STATE OF TEXAS                 )
                               )       SS.
COUNTY OF EL PASO              )


     On the 28th day of October, 1994, before me, the undersigned notary public,
personally appeared J.A. Cardwell, known to me to be the person who signed the
foregoing instrument, and acknowledged that he executed the same for the
purposes contained therein.

     IN WITNESS WHEREOF, I have hereunto signed my name and affixed my official
seal.



     (NOTARY SEAL)                          /s/ Barbara Evans
                                            -----------------------------------
                                            Notary Public


My commission expires: 11-15-96
                      -----------
                       
<PAGE>
 
STATE OF TEXAS                  )
                                )       SS.
COUNTY OF EL PASO               )
                             
                             
     On the 28th day of October, 1994, before me, the undersigned notary public,
personally appeared John T. Kelley, III, known to me to be the person who signed
the foregoing instrument, and acknowledged that he executed the same for the
purposes contained therein.

     IN WITNESS WHEREOF, I have hereunto signed my name and affixed my official
seal.



     (NOTARY SEAL)                          /s/ Karen D. Smith
                                            ------------------------------------
                                            Notary Public


My commission expires: 5-21-98
                      ---------
<PAGE>
 
STATE OF TEXAS                 )
                               )       SS.
COUNTY OF EL PASO              )


     On the 28th day of October, 1994, before me, the undersigned notary public,
personally appeared Calvin K. Kessler, known to me to be the person who signed
the foregoing instrument, and acknowledged that he executed the same for the
purposes contained therein.

     IN WITNESS WHEREOF, I have hereunto signed my name and affixed my official
seal.



     (NOTARY SEAL)                          /s/ Virginia Gonzalez
                                            ------------------------------------
                                            Notary Public


My commission expires: 1-08-96
                      --------
<PAGE>
 
STATE OF CALIFORNIA       )
                          )  SS.
COUNTY OF SANTA BARBARA   ) 


     On the 31st day of October, 1994, before me, the undersigned notary public,
personally appeared William G. Myers, known to me to be the person who signed
the foregoing instrument, and acknowledged that he executed the same for the
purposes contained therein.

     IN WITNESS WHEREOF, I have hereunto signed my name and affixed my official
seal.



     (NOTARY SEAL)                          /s/ Gail A. Crivello
                                            ------------------------------------
                                            Notary Public


My commission expires: 7-15-96
                      --------
<PAGE>
 
STATE OF NEW MEXICO     )
                        )  SS.
COUNTY OF SANTE FE      )


     On the 28th day of October, 1994, before me, the undersigned notary public,
personally appeared James H. Polk, III, known to me to be the person who signed
the foregoing instrument, and acknowledged that he executed the same for the
purposes contained therein.

     IN WITNESS WHEREOF, I have hereunto signed my name and affixed my official
seal.



     (NOTARY SEAL)                                /s/ Teresa K. Rosen
                                                  ------------------------------
                                                  Notary Public


My commission expires:  3-1-97
                       --------
<PAGE>
 
STATE OF TEXAS          )
                        )  SS.
COUNTY OF TRAVIS        )


     On the 4th day of November, 1994, before me, the undersigned notary public,
personally appeared John C. Schweitzer, known to me to be the person who signed
the foregoing instrument, and acknowledged that he executed the same for the
purposes contained therein.

     IN WITNESS WHEREOF, I have hereunto signed my name and affixed my official
seal.



     (NOTARY SEAL)                                /s/ Brenda Ewers
                                                  ------------------------------
                                                  Notary Public


My commission expires: 2-16-96
                      ---------
<PAGE>
 
                           PROPERTY TRUST OF AMERICA

                        Second Certificate of Amendment
                       of Restated Declaration of Trust


     The undersigned, being all of the Trustees of Property Trust of America, a
Maryland real estate investment trust (the "Trust"), do hereby certify pursuant
to the provisions of Article 6 of the Trust's Restated Declaration of Trust, as
amended (the "Restated Declaration of Trust"), and in accordance with the
applicable provisions of Maryland law:

     1.   That the Board of Trustees has adopted a resolution to amend the
Restated Declaration of Trust as hereinafter set forth and has declared that
such amendment is advisable.

     2.   That the amendment to the Declaration of Trust has been presented to
the shareholders of the Trust.

     3.   That the amendment has been approved by the shareholders of the Trust
by the affirmative vote of at least two-thirds of the shares entitled to notice
of, and to vote at, the annual meeting of shareholders of the Trust held on May
3, 1994.

     Therefore, the Restated Declaration of Trust is hereby amended as follows:

               1.   Article 2, Section 7(c) is hereby amended by deleting the
          words "Section 7(e)" appearing in the first sentence thereof and
          substituting the words "Sections 7(e) and 7(k)".

               2.   Article 2, Section 7(f) is hereby amended by inserting the
          phrase "and subject to Section 7(k)" immediately after the phrase
          "Restated Declaration of Trust to the contrary" and immediately before
          the comma.

               3.   Article 2, Section 7(g) is hereby amended by deleting the
          word "Nothing" appearing as the first word thereof and inserting the
          following "Subject to Section 7(k), nothing".

               4.   Article 2, Section 7 is hereby amended by adding the
          following as new Section 7(k):

                    "(k) NEW YORK STOCK EXCHANGE TRANSACTIONS. Nothing in this
               Section 7 shall preclude the settlement of any transaction
               entered into through the facilities of the New York Stock
               Exchange."
<PAGE>
 
     4.   Each undersigned Trustee acknowledges this Second Certificate of
Amendment to the be act of the Trust and further, as to all matters or facts
required to be verified under oath, each such Trustee acknowledges that, to the
best of his knowledge, information and belief, these matters and facts are true
in all material respects and that this statement is made under the penalties of
perjury.

     IN WITNESS WHEREOF, the undersigned, constituting all of the members of the
Board of Trustees of the Trust, have hereunto set their hands as of this 10th
day of May, 1994.


                                             /s/ Calvin K. Kessler
                                             -----------------------------------
                                             Calvin K. Kessler



                                             /s/ James H. Polk, III
                                             -----------------------------------
                                             James H. Polk, III



                                             /s/ John C. Schweitzer
                                             -----------------------------------
                                             John C. Schweitzer



                                             /s/ James A. Cardwell
                                             -----------------------------------
                                             James A. Cardwell



                                             /s/ John T. Kelley, III
                                             -----------------------------------
                                             John T. Kelley, III



                                             /s/ C. Ronald Blankenship
                                             -----------------------------------
                                             C. Ronald Blankenship



                                             /s/ William G. Myers
                                             -----------------------------------
                                             William G. Myers
<PAGE>
 
STATE OF TEXAS      )
                    )    SS:
COUNTY OF EL PASO   )

     On the 10th day of May, 1994, before me, the undersigned, a notary public
in and for El Paso County, Texas, personally appeared Calvin K. Kessler, known
to me to be the persons whose names are subscribed to the foregoing instrument
and acknowledged that they executed the same for the purposes therein contained.

     IN WITNESS WHEREOF, I have hereunto set my hand and official seal.



                                    /s/ Virginia Gonzalez
                                    --------------------------------------------
                                    Notary Public in and For
                                    The State of Texas, County of El Paso

My commission expires:

1-8-98
------------------------
<PAGE>
 
STATE OF TEXAS      )
                    )    SS:
COUNTY OF EL PASO   )

     On the 9th day of May, 1994, before me, the undersigned, a notary public in
and for El Paso County, Texas, personally appeared James H. Polk known to me to
be the persons whose names are subscribed to the foregoing instrument and
acknowledged that they executed the same for the purposes therein contained.

     IN WITNESS WHEREOF, I have hereunto set my hand and official seal.



                                    /s/ Leanne Gallagher
                                    --------------------------------------------
                                    Notary Public in and For
                                    The State of Texas, County of El Paso

My commission expires:

       8-5-96
------------------------
<PAGE>
 
STATE OF TEXAS      )
                    )    SS:
COUNTY OF EL PASO   )

     On the 9th day of May, 1994, before me, the undersigned, a notary public in
and for El Paso County, Texas, personally appeared John C. Schweitzer known to
me to be the persons whose names are subscribed to the foregoing instrument and
acknowledged that they executed the same for the purposes therein contained.

     IN WITNESS WHEREOF, I have hereunto set my hand and official seal.



                                    /s/ Brenda Ewers
                                    --------------------------------------------
                                    Notary Public in and For
                                    The State of Texas, County of El Paso

My commission expires:

       2-6-96
--------------------------
<PAGE>
 
STATE OF TEXAS      )
                    )    SS:
COUNTY OF EL PASO   )

     On the 12th day of May, 1994, before me, the undersigned, a notary public
in and for El Paso County, Texas, personally appeared James A. Cardwell known to
me to be the persons whose names are subscribed to the foregoing instrument and
acknowledged that they executed the same for the purposes therein contained.

     IN WITNESS WHEREOF, I have hereunto set my hand and official seal.



                                    /s/ Barbara Evans
                                    --------------------------------------------
                                    Notary Public in and For
                                    The State of Texas, County of El Paso

My commission expires:

       11-15-96
------------------------
<PAGE>
 
STATE OF TEXAS      )
                    )    SS:
COUNTY OF EL PASO   )

     On the 10th day of May, 1994, before me, the undersigned, a notary public
in and for El Paso County, Texas, personally appeared John T. Kelley, III, known
to me to be the persons whose names are subscribed to the foregoing instrument
and acknowledged that they executed the same for the purposes therein contained.

     IN WITNESS WHEREOF, I have hereunto set my hand and official seal.



                                    /s/ Kim Westbrook
                                    --------------------------------------------
                                    Notary Public in and For
                                    The State of Texas, County of El Paso

My commission expires:

       2-19-97
------------------------
<PAGE>
 
STATE OF TEXAS      )
                    )    SS:
COUNTY OF EL PASO   )

     On the 10th day of May, 1994, before me, the undersigned, a notary public
in and for El Paso County, Texas, personally appeared C. Ronald Blankenship,
known to me to be the persons whose names are subscribed to the foregoing
instrument and acknowledged that they executed the same for the purposes therein
contained.

     IN WITNESS WHEREOF, I have hereunto set my hand and official seal.



                                    /s/ Amy Ferguson
                                    --------------------------------------------
                                    Notary Public in and For
                                    The State of Texas, County of El Paso

My commission expires:

       8-23-95
-------------------------
<PAGE>
 
STATE OF TEXAS      )
                    )    SS:
COUNTY OF EL PASO   )

     On the 16th day of May, 1994, before me, the undersigned, a notary public
in and for El Paso County, Texas, personally appeared William G. Myers, known to
me to be the persons whose names are subscribed to the foregoing instrument and
acknowledged that they executed the same for the purposes therein contained.

     IN WITNESS WHEREOF, I have hereunto set my hand and official seal.



                                    /s/ Gail A. Crivello
                                    --------------------------------------------
                                    Notary Public in and For
                                    The State of Texas, County of El Paso

My commission expires:

       7-15-96
-------------------------
<PAGE>
 
                        Cumulative Convertible Series A
                    Preferred Shares of Beneficial Interest


                            ARTICLES SUPPLEMENTARY


                           PROPERTY TRUST OF AMERICA



                        ==============================

            Articles Supplementary of Board of Trustees Classifying
                and Designating a Series of Preferred Shares as
                   Cumulative Convertible Series A Preferred
           Shares of Beneficial Interest and Fixing Distribution and
                  Other Preferences and Rights of Such Series
                        ==============================


                         Dated as of November 22, 1993

     
<PAGE>
 
                           PROPERTY TRUST OF AMERICA



                        ==============================

            Articles Supplementary of Board of Trustees Classifying
                and Designating a Series of Preferred Shares as
                   Cumulative Convertible Series A Preferred
           Shares of Beneficial Interest and Fixing Distribution and
                  Other Preferences and Rights of Such Series

                        ==============================


     The undersigned, being all of the Trustees of Property Trust of America, a
Maryland real estate investment trust (the "Trust"), hereby certify to the State
Department of Assessments and Taxation of Maryland pursuant to section 8-203(b)
of the Annotated Code of Maryland that:

     FIRST:  The Board of Trustees has classified 9,200,000 unissued shares of
the Trust as Cumulative Convertible Series A Preferred Shares of Beneficial
Interest (the "Series A Preferred Shares").

     SECOND:  The following is a description of the Series A Preferred Shares,
including the preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications, and terms and
conditions of redemption thereof:

     Section 1.  Number of Shares and Designation. This class of Preferred
                 --------------------------------
Shares shall be designated as Cumulative Convertible Series A Preferred Shares
of Beneficial Interest (the "Series A Preferred Shares") and the number of
shares which shall constitute such series shall not be more than 9,200,000
shares, par value $1.00 per share, which number may be decreased (but not below
the number thereof then outstanding plus the number required to fulfill the
Trust's obligations under options, warrants or similar rights issued by the
Trust) from time to time by the Board of Trustees.

     Section 2.  Definitions. For purposes of the Series A Preferred Shares, the
                 -----------
following terms shall have the meanings indicated:

          "Board of Trustees" shall mean the Board of Trustees of the Trust or
           -----------------                                                  
     any committee authorized by such Board of Trustees to perform any of its
     responsibilities with respect to the Series A Preferred Shares.
<PAGE>
 
          "Business Day" shall mean any day other than a Saturday, Sunday or a
           ------------                                                       
     day on which state or federally chartered banking institutions in New York
     City, New York are not required to be open.

          "Call Date" shall mean the date of the notice to holders required
           ---------                                                       
     under subparagraph (d) of Section 5.

          "Common Shares" shall mean the common Shares of Beneficial Interest of
           -------------                                                        
     the Trust, par value $1.00 per share.

          "Constituent Person" shall have the meaning set forth in paragraph (e)
           ------------------                                                   
     of Section 6 hereof.

          "Conversion Price" shall mean the conversion price per Common Share
           ----------------                                                  
     for which the Series A Preferred Shares are convertible, as such Conversion
     Price may be adjusted pursuant to Section 6.  The initial conversion price
     shall be $20.556 (equivalent to a conversion rate of 1.2162 Common Shares
     for each Series A Preferred Share).

          "Current Market Price" of publicly traded common shares or any other
           --------------------                                               
     class of capital stock or other security of the Trust or any other issuer
     for any day shall mean the last reported sales price, regular way on such
     day, or, if no sale takes place on such day, the average of the reported
     closing bid and asked prices on such day, regular way, in either case as
     reported on the New York Stock Exchange ("NYSE") or, if such security is
                                               ----                          
     not listed or admitted for trading on the New York Stock Exchange, on the
     principal national securities exchange on which such security is listed or
     admitted for trading or, if not listed or admitted for trading on any
     national securities exchange, on the National Market System of the National
     Association of Securities Dealers, Inc. Automated Quotations System
     ("NASDAQ") or, if such security is not quoted on such National Market
      -------                                                             
     System, the average of the closing bid and asked prices on such day in the
     over-the-counter market as reported by NASDAQ or, if bid and asked prices
     for such security on such day shall not have been reported through NASDAQ,
     the average of the bid and asked prices on such day as furnished by any
     NYSE member firm regularly making a market in such security selected for
     such purpose by the Chairman of the Board or the Board of Trustees.

          "Dividend Payment Date" shall mean the last calendar day of March,
           ---------------------                                            
     June, September and December, in each year, commencing on December 31,
     1993; provided, however, that if any Dividend Payment Date falls on any day
           --------  -------                                                    
     other than a Business Day, the dividend payment due on such Dividend
     Payment Date shall be paid on the Business Day immediately following such
     Dividend Payment Date.

          "Dividend Periods" shall mean quarterly dividend periods commencing on
           ----------------                                                     
     April 1, July 1, October 1 and January 1 of each year and ending on and
     including 
<PAGE>
 
     the day preceding the first day of the next succeeding Dividend Period
     (other than the initial Dividend Period, which shall commence on the Issue
     Date and end on and include December 31, 1994).

          "Fair Market Value" shall mean the average of the daily Current Market
           -----------------                                                    
     Prices of a Common Share during the five (5) consecutive Trading Days
     selected by the Trust commencing not more than 20 Trading Days before, and
     ending not later than, the earlier of the day in question and the day
     before the "ex date" with respect to the issuance or distribution requiring
     such computation. The term "ex date," when used with respect to any
     issuance or distribution, means the first day on which the Common Shares
     trades regular way, without the right to receive such issuance or
     distribution, on the exchange or in the market, as the case may be, used to
     determine that day's Current Market Price.

          "Fully Junior Shares" shall mean the Common Shares and any other class
           -------------------                                                  
     or series of shares of the Trust now or hereafter issued and outstanding
     over which the Series A Preferred Shares have preference or priority in
     both (i) the payment of dividends and (ii) the distribution of assets on
     any liquidation, dissolution or winding up of the Trust.

          "Issue Date" shall mean the first date on which the Series A Preferred
           ----------                                                           
     Shares are issued and sold.

          "Junior Shares" shall mean the Common Shares and any other class or
           -------------                                                     
     series of shares of the Trust now or hereafter issued and outstanding over
     which the Series A Preferred Shares have preference or priority in the
     payment of dividends or in the distribution of assets on any liquidation,
     dissolution or winding up of the Trust.

          "Non-Electing Share" shall have the meaning set forth in paragraph (e)
           ------------------                                                   
     of Section 6 hereof.

          "Parity Shares" shall have the meaning set forth in paragraph (b) of
           -------------                                                      
     Section 8.

          "Person" shall mean any individual, firm, partnership, corporation or
           ------                                                              
     other entity, and shall include any successor (by merger or otherwise) of
     such entity.

          "Securities" and "Security" shall have the meanings set forth in
           ----------       --------                                      
     paragraph (d)(iii) of Section 6 hereof.

          "Series A Preferred Shares" shall have the meaning set forth in
           -------------------------                                     
     Section 1 hereof.

          "set apart for payment" shall be deemed to include, without any action
           ---------------------                                                
     other than the following, the recording by the Trust in its accounting
     ledgers of any 
<PAGE>
 
     accounting or bookkeeping entry which indicates, pursuant to a declaration
     of dividends or other distribution by the Board of Trustees, the allocation
     of funds to be so paid on any series or class of capital stock of the
     Trust; provided, however, that if any funds for any class or series of
            --------  -------
     Junior Shares or any class or series of stock ranking on a parity with the
     Series A Preferred Shares as to the payment of dividends are placed in a
     separate account of the Trust or delivered to a disbursing, paying or other
     similar agent, then "set apart for payment" with respect to the Series A
     Preferred Shares shall mean placing such funds in a separate account or
     delivering such funds to a disbursing, paying or other similar agent.

          "Trading Day" shall mean any day on which the securities in question
           -----------                                                        
     are traded on the NYSE, or if such securities are not listed or admitted
     for trading on the NYSE, on the principal national securities exchange on
     which such securities are listed or admitted, or if not listed or admitted
     for trading on any national securities exchange, on the National Market
     System of NASDAQ, or if such securities are not quoted on such National
     Market System, in the applicable securities market in which the securities
     are traded.

          "Transaction" shall have the meaning set forth in paragraph (e) of
           -----------                                                      
     Section 6 hereof.

          "Transfer Agent" means Chemical Bank, New York City, New York, or such
           --------------                                                       
     other agent or agents of the Trust as may be designated by the Board of
     Trustees or their designee as the transfer agent for the Series A Preferred
     Shares.

          "Voting Preferred Shares" shall have the meaning set forth in Section
           -----------------------                                             
     9 hereof.

     Section 3.  Dividends.
                 --------- 

            (a)  The holders of Series A Preferred Shares shall be entitled to
     receive, when, as and if declared by the Board of Trustees out of funds
     legally available for that purpose, dividends payable in cash in an amount
     per share equal to the greater of (i) $1.75 per annum or (ii) the dividends
     (determined on each Dividend Payment Date) on the Common Shares, or portion
     thereof, into which a Series A Preferred Share is convertible.  Such
     dividends shall equal the number of Common Shares, or portion thereof, into
     which a Series A Preferred Share is convertible, multiplied by the most
     current quarterly dividend on a Common Share on or before the applicable
     Dividend Payment Date.  Such dividends shall begin to accrue and shall be
     fully cumulative from the Issue Date, whether or not in any Dividend Period
     or Periods there shall be funds of the Trust legally available for the
     payment of such dividends, and shall be payable quarterly, when, as and if
     declared by the Board of Trustees, in arrears on Dividend Payment Dates,
     commencing on the first Dividend Payment Date after the Issue Date.  Each
     such dividend shall be payable in arrears to the holders of 
<PAGE>
 
     record of Series A Preferred Shares, as they appear on the stock records of
     the Trust at the close of business on such record dates, not more than 50
     days preceding such Dividend Payment Dates thereof, as shall be fixed by
     the Board of Trustees. Accrued and unpaid dividends for any past Dividend
     Periods may be declared and paid at any time and for such interim periods,
     without reference to any regular Dividend Payment Date, to holders of
     record on such date, not exceeding 50 days preceding the payment date
     thereof, as may be fixed by the Board of Trustees.

            (b)  The amount of dividends payable for each full Dividend Period
     for the Series A Preferred Shares shall be computed by dividing the annual
     dividend rate by four. The amount of dividends payable for the initial
     Dividend Period, or any other period shorter or longer than a full Dividend
     Period, on the Series A Preferred Shares shall be computed on the basis of
     twelve 30-day months and a 360-day year. Holders of Series A Preferred
     Shares shall not be entitled to any dividends, whether payable in cash,
     property or stock, in excess of cumulative dividends, as herein provided,
     on the Series A Preferred Shares. No interest, or sum of money in lieu of
     interest, shall be payable in respect of any dividend payment or payments
     on the Series A Preferred Shares that may be in arrears.

            (c)  So long as any Series A Preferred Shares are outstanding, no
     dividends, except as described in the immediately following sentence, shall
     be declared or paid or set apart for payment on any class or series of
     Parity Shares for any period unless full cumulative dividends have been or
     contemporaneously are declared and paid or declared and a sum sufficient
     for the payment thereof set apart for such payment on the Series A
     Preferred Shares for all Dividend Periods terminating on or prior to the
     Dividend Payment Date on such class or series of Parity Shares.  When
     dividends are not paid in full or a sum sufficient for such payment is not
     set apart, as aforesaid, all dividends declared upon Series A Preferred
     Shares and all dividends declared upon any other class or series of Parity
     Shares shall be declared ratably in proportion to the respective amounts of
     dividends accumulated and unpaid on the Series A Preferred Shares and
     accumulated and unpaid on such Parity Shares.

            (d)  So long as any Series A Preferred Shares are outstanding, no
     dividends (other than dividends or distributions paid solely in shares of,
     or options, warrants or rights to subscribe for or purchase shares of,
     Fully Junior Shares) shall be declared or paid or set apart for payment or
     other distribution declared or made upon Junior Shares, nor shall any
     Junior Shares be redeemed, purchased or otherwise acquired (other than a
     redemption, purchase or other acquisition of Common Shares made for
     purposes of an employee incentive or benefit plan of the Trust or any
     subsidiary) for any consideration (or any moneys be paid to or made
     available for a sinking fund for the redemption of any shares of any such
     stock) by the Trust, directly or indirectly (except by conversion into or
     exchange for Fully Junior Shares), unless in each case (i) the full
     cumulative dividends on all outstanding Series A Preferred Shares and any
<PAGE>
 
     other Parity Shares of the Trust shall have been paid or declared and set
     apart for payment for all past Dividend Periods with respect to the Series
     A Preferred Shares and all past dividend periods with respect to such
     Parity Shares and (ii) sufficient funds shall have been paid or declared
     and set apart for the payment of the dividend for the current Dividend
     Period with respect to the Series A Preferred Shares and the current
     dividend period with respect to such Parity Shares.

     Section 4.  Liquidation Preference.
                 ---------------------- 

            (a)  In the event of any liquidation, dissolution or winding up of
     the Trust, whether voluntary or involuntary, before any payment or
     distribution of the assets of the Trust (whether capital or surplus) shall
     be made to or set apart for the holders of Junior Shares, the holders of
     the Series A Preferred Shares shall be entitled to receive Twenty-Five
     Dollars ($25.00) per Series A Preferred Share plus an amount equal to all
     dividends (whether or not earned or declared) accrued and unpaid thereon to
     the date of final distribution to such holders; but such holders shall not
     be entitled to any further payment. If, upon any liquidation, dissolution
     or winding up of the Trust, the assets of the Trust, or proceeds thereof,
     distributable among the holders of the Series A Preferred Shares shall be
     insufficient to pay in full the preferential amount aforesaid and
     liquidating payments on any other shares of any class or series of Parity
     Shares, then such assets, or the proceeds thereof, shall be distributed
     among the holders of Series A Preferred Shares and any such other Parity
     Shares ratably in accordance with the respective amounts that would be
     payable on such Series A Preferred Shares and any such other Parity Shares
     if all amounts payable thereon were paid in full. For the purposes of this
     Section 4, (i) a consolidation or merger of the Trust with one or more
     corporations, (ii) a sale or transfer of all or substantially all of the
     Trust's assets, or (iii) a statutory share exchange shall not be deemed to
     be a liquidation, dissolution or winding up, voluntary or involuntary, of
     the Trust.

            (b)  Subject to the rights of the holders of shares of any series or
     class or classes of stock ranking on a parity with or prior to the Series A
     Preferred Shares upon liquidation, dissolution or winding up, upon any
     liquidation, dissolution or winding up of the Trust, after payment shall
     have been made in full to the holders of the Series A Preferred Shares, as
     provided in this Section 4, any other series or class or classes of Junior
     Shares shall, subject to the respective terms and provisions (if any)
     applying thereto, be entitled to receive any and all assets remaining to be
     paid or distributed, and the holders of the Series A Preferred Shares shall
     not be entitled to share therein.

     Section 5.  Redemption at the Option of the Trust.
                 ------------------------------------- 

            (a)  Subject to Section 10 hereof, the Series A Preferred Shares
     shall not be redeemable by the Trust prior to the tenth anniversary of the
     Issue Date. On and after the tenth anniversary of the Issue Date, the
     Trust, at its option, may redeem the
<PAGE>
 
     Series A Preferred Shares, in whole at any time or from time to time in
     part at the option of the Trust at a redemption price of Twenty-Five
     Dollars ($25.00) per Series A Preferred Share, plus the amounts indicated
     in Section 5(b).

            (b)  Upon any redemption of Series A Preferred Shares pursuant to
     this Section 5, the Trust shall pay any accrued and unpaid dividends in
     arrears for any Dividend Period ending on or prior to the Call Date. If the
     Call Date falls after a dividend payment record date and prior to the
     corresponding Dividend Payment Date, then each holder of Series A Preferred
     Shares at the close of business on such dividend payment record date shall
     be entitled to the dividend payable on such shares on the corresponding
     dividend payment date notwithstanding the redemption of such shares before
     such Dividend Payment Date. Except as provided above, the Trust shall make
     no payment or allowance for unpaid dividends, whether or not in arrears, on
     Series A Preferred Shares called for redemption.

            (c)  If full cumulative dividends on the Series A Preferred Shares
     and any other class or series of Parity Shares of the Trust have not been
     paid or declared and set apart for payment, the Series A Preferred Shares
     may not be redeemed under this Section 5 in part and the Trust may not
     purchase or acquire Series A Preferred Shares, otherwise than pursuant to a
     purchase or exchange offer made on the same terms to all holders of Series
     A Preferred Shares or pursuant to Section 10 hereof.

            (d)  Notice of the redemption of any Series A Preferred Shares under
     this Section 5 shall be mailed by first-class mail to each holder of record
     of Series A Preferred Shares to be redeemed at the address of each such
     holder as shown on the Trust's record, not less than 30 nor more than 90
     days prior to the Call Date.  Neither the failure to mail any notice
     required by this paragraph (d), nor any defect therein or in the mailing
     thereof, to any particular holder, shall affect the sufficiency of the
     notice or the validity of the proceedings for redemption with respect to
     the other holders.  Any notice which was mailed in the manner herein
     provided shall be conclusively presumed to have been duly given on the date
     mailed whether or not the holder receives the notice.  Each such mailed
     notice shall state, as appropriate:  (1) the Call Date; (2) the number of
     Series A Preferred Shares to be redeemed and, if fewer than all the shares
     held by such holder are to be redeemed, the number of such shares to be
     redeemed from such holder; (3) the place or places at which certificates
     for such shares are to be surrendered; (4) the then-current Conversion
     Price; and (5) that dividends on the shares to be redeemed shall cease to
     accrue on such Call Date except as otherwise provided herein.  Notice
     having been mailed as aforesaid, from and after the Call Date (unless the
     Trust shall fail to make available an amount of cash necessary to effect
     such redemption), (i) except as otherwise provided herein, dividends on the
     Series A Preferred Shares so called for redemption shall cease to accrue,
     (ii) said shares shall no longer be deemed to be outstanding, and (iii) all
     rights of the holders thereof as holders of Series A Preferred Shares of
     the Trust shall cease (except the rights to convert and to receive cash
     payable upon such redemption, 
<PAGE>
 
     without interest thereon, upon surrender and endorsement of their
     certificates if so required and to receive any dividends payable thereon).
     The Trust's obligation to provide cash in accordance with the preceding
     sentence shall be deemed fulfilled if, on or before the Call Date, the
     Trust shall deposit with a bank or trust company (which may be an affiliate
     of the Trust) that has an office in the Borough of Manhattan, City of New
     York, and that has, or is an affiliate of a bank or trust company that has,
     capital and surplus of at least $50,000,000, necessary for such redemption,
     in trust, with irrevocable instructions that such cash be applied to the
     redemption of the Series A Preferred Shares so called for redemption. No
     interest shall accrue for the benefit of the holders of Series A Preferred
     Shares to be redeemed on any cash so set aside by the Trust. Subject to
     applicable escheat laws, any such cash unclaimed at the end of two years
     from the Call Date shall revert to the general funds of the Trust, after
     which reversion the holders of such shares so called for redemption shall
     look only to the general funds of the Trust for the payment of such cash.

          As promptly as practicable after the surrender in accordance with said
     notice of the certificates for any such shares so redeemed (properly
     endorsed or assigned for transfer, if the Trust shall so require and if the
     notice shall so state), such shares shall be exchanged for any cash
     (without interest thereon) for which such shares have been redeemed.  If
     fewer than all the outstanding Series A Preferred Shares are to redeemed,
     shares to be redeemed shall be selected by the Trust from outstanding
     Series A Preferred Shares not previously called for redemption by lot or
     pro rata (as nearly as may be) or by any other method determined by the
     Trust in its sole discretion to be equitable.  If fewer than all the Series
     A Preferred Shares represented by any certificate are redeemed, then new
     certificates representing the unredeemed shares shall be issued without
     cost to the holder thereof.

     Section 6.  Conversion. Holders of Series A Preferred Shares shall have the
                 ----------   
right to convert all or a portion of such shares into Common Shares, as follows:

            (a)  Subject to and upon compliance with the provisions of this
     Section 6, a holder of Series A Preferred Shares shall have the right, at
     his or her option, at any time to convert such shares into the number of
     fully paid and non-assessable Common Shares obtained by dividing the
     aggregate liquidation preference of such shares by the Conversion Price (as
     in effect at the time and on the date provided for in the last paragraph of
     paragraph (b) of this Section 6) by surrendering such shares to be
     converted, such surrender to be made in the manner provided in paragraph
     (b) of this Section 6; provided, however, that the right to convert shares
                            --------  -------                                  
     called for redemption pursuant to Section 5 shall terminate at the close of
     business on the fifth Business Day prior to the Call Date fixed for such
     redemption, unless the Trust shall default in making payment of the cash
     payable upon such redemption under Section 5 hereof.
<PAGE>
 
          (b)  In order to exercise the conversion right, the holder of each
     Series A Preferred Share to be converted shall surrender the certificate
     representing such share, duly endorsed or assigned to the Trust or in
     blank, at the office of the Transfer Agent, accompanied by written notice
     to the Trust that the holder thereof elects to convert such Series A
     Preferred Shares.  Unless the shares issuable on conversion are to be
     issued in the same name as the name in which such Series A Preferred Share
     is registered, each share surrendered for conversion shall be accompanied
     by instruments of transfer, in form satisfactory to the Trust, duly
     executed by the holder or such holder's duly authorized attorney and an
     amount sufficient to pay any transfer or similar tax (or evidence
     reasonably satisfactory to the Trust demonstrating that such taxes have
     been paid).

          Holders of Series A Preferred Shares at the close of business on a
     dividend payment record date shall be entitled to receive the dividend
     payable on such shares on the corresponding Dividend Payment Date
     notwithstanding the conversion thereof following such dividend payment
     record date and prior to such Dividend Payment Date.  However, Series A
     Preferred Shares surrendered for conversion during the period between the
     close of business on any dividend payment record date and the opening of
     business on the corresponding Dividend Payment Date (except shares
     converted after the issuance of notice of redemption with respect to a Call
     Date during such period, such Series A Preferred Shares being entitled to
     such dividend on the Dividend Payment Date) must be accompanied by payment
     of an amount equal to the dividend payable on such shares on such Dividend
     Payment Date.  A holder of Series A Preferred Shares on a dividend payment
     record date who (or whose transferee) tenders any such shares for
     conversion into Common Shares on the corresponding Dividend Payment Date
     will receive the dividend payable by the Trust on such Series A Preferred
     Shares on such date, and the converting holder need not include payment of
     the amount of such dividend upon surrender of Series A Preferred Shares for
     conversion. Except as provided above, the Trust shall make no payment or
     allowance for unpaid dividends, whether or not in arrears, on converted
     shares or for dividends on the Common Shares issued upon such conversion.

          As promptly as practicable after the surrender of certificates for
     Series A Preferred Shares as aforesaid, the Trust shall issue and shall
     deliver at such office to such holder, or on his or her written order, a
     certificate or certificates for the number of full Common Shares issuable
     upon the conversion of such shares in accordance with provisions of this
     Section 6, and any fractional interest in respect of a Common Share arising
     upon such conversion shall be settled as provided in paragraph (c) of this
     Section 6.

          Each conversion shall be deemed to have been effected immediately
     prior to the close of business on the date on which the certificates for
     Series A Preferred Shares shall have been surrendered and such notice (and
     if applicable, payment of an amount equal to the dividend payable on such
     shares) received by the Trust as 
<PAGE>
 
     aforesaid, and the person or persons in whose name or names any certificate
     or certificates for Common Shares shall be issuable upon such conversion
     shall be deemed to have become the holder or holders of record of the
     shares represented thereby at such time on such date and such conversion
     shall be at the Conversion Price in effect at such time on such date unless
     the stock transfer books of the Trust shall be closed on that date, in
     which event such person or persons shall be deemed to have become such
     holder or holders of record at the close of business on the next succeeding
     day on which such stock transfer books are open, but such conversion shall
     be at the Conversion Price in effect on the date on which such shares shall
     have been surrendered and such notice received by the Trust.

          (c)  No fractional shares or scrip representing fractions of Common
     Shares shall be issued upon conversion of the Series A Preferred Shares.
     Instead of any fractional interest in a Common Share that would otherwise
     be deliverable upon the conversion of a Series A Preferred Share, the Trust
     shall pay to the holder of such share an amount in cash based upon the
     Current Market Price of Common Shares on the Trading Day immediately
     preceding the date of conversion.  If more than one share shall be
     surrendered for conversion at one time by the same holder, the number of
     full Common Shares issuable upon conversion thereof shall be computed on
     the basis of the aggregate number of Series A Preferred Shares so
     surrendered.

          (d)  The Conversion Price shall be adjusted from time to time as
     follows:

               (i)    If the Trust shall after the Issue Date (A) pay a dividend
          or make a distribution on its capital shares in Common Shares, (B)
          subdivide its outstanding Common Shares into a greater number of
          shares, (C) combine its outstanding Common Shares into a smaller
          number of shares or (D) issue any shares of capital shares by
          reclassification of its Common Shares, the Conversion Price in effect
          at the opening of business on the day following the date fixed for the
          determination of shareholders entitled to receive such dividend or
          distribution or at the opening of business on the Business Day next
          following the day on which such subdivision, combination or
          reclassification becomes effective, as the case may be, shall be
          adjusted so that the holder of any Series A Preferred Share thereafter
          surrendered for conversion shall be entitled to receive the number of
          Common Shares that such holder would have owned or have been entitled
          to receive after the happening of any of the events described above as
          if such Series A Preferred Shares had been converted immediately prior
          to the record date in the case of a dividend or distribution or the
          effective date in the case of a subdivision, combination or
          reclassification.  An adjustment made pursuant to this subparagraph
          (i) shall become effective immediately after the opening of business
          on the Business Day next following the record date (except as provided
          in paragraph (h) below) in the case of a dividend or distribution and
          shall become effective immediately after the 
<PAGE>
 
          opening of business on the Business Day next following the effective
          date in the case of a subdivision, combination or reclassification.

               (ii)   If the Trust shall issue after the Issue Date rights,
          options or warrants to all holders of Common Shares entitling them
          (for a period expiring within 45 days after the record date mentioned
          below) to subscribe for or purchase Common Shares at a price per share
          less than 94% (100% if a stand-by underwriter is used and charges the
          Trust a commission) of the Fair Market Value per Common Share on the
          record date for the determination of shareholders entitled to receive
          such rights, option or warrants, then the Conversion Price in effect
          at the opening of business on the Business Day next following such
          record date shall be adjusted to equal the price determined by
          multiplying (I) the Conversion Price in effect immediately prior to
          the opening of business on the Business Day next following the date
          fixed for such determination by (II) a fraction, the numerator of
          which shall be the sum of (A) the number of Common Shares outstanding
          on the close of business on the date fixed for such determination and
          (B) the number of shares that the aggregate proceeds to the Trust from
          the exercise of such rights, option or warrants for Common Shares
          would purchase at 94% of such Fair Market Value (or 100% in the case
          of a stand-by underwriting), and the denominator of which shall be the
          sum of (A) the number of Common Shares outstanding on the close of
          business on the date fixed for such determination and (B) the number
          of additional Common Shares offered for subscription or purchase
          pursuant to such rights, options or warrants.  Such adjustment shall
          become effective immediately after the opening of business on the day
          next following such record date (except as provided in paragraph (h)
          below).  In determining whether any rights, options or warrants
          entitle the holders of Common Shares to subscribe for or purchase
          Common Shares at less than 94% of such Fair Market Value (or 100% in
          the case of a stand-by underwriting), there shall be taken into
          account any consideration received by the Trust upon issuance and upon
          exercise of such rights, options or warrants, the value of such
          consideration, if other than cash, to be determined by the Chairman of
          the Board or the Board of Trustees.

               (iii)  If the Trust shall distribute to all holders of its Common
          Shares any shares of capital stock of the Trust (other than Common
          Shares) or evidence of its indebtedness or assets (excluding
          cumulative cash dividends or distributions paid with respect to the
          Common Shares after September 30, 1993 which are not in excess of the
          following:  the sum of (A) the Trust's cumulative undistributed funds
          from operations at September 30, 1993, plus (B) the cumulative amount
          of funds from operations, as determined by the Board of Trustees,
          after September 30, 1993, minus (C) the cumulative amount of dividends
          accrued or paid in respect of the Series A Preferred Shares or any
          other class or series of Preferred Shares of the Trust after the 
<PAGE>
 
          Issue Date) or rights, options or warrants to subscribe for or
          purchase any of its securities (excluding those rights, options and
          warrants issued to all holders of Common Shares entitling them for a
          period expiring within 45 days after the record date referred to in
          subparagraph (ii) above to subscribe for or purchase Common Shares,
          which rights and warrants are referred to in and treated under
          subparagraph (ii) above) (any of the foregoing being hereinafter in
          this subparagraph (iii) collectively called the "Securities" and
                                                           ---------- 
          individually a "Security"), then in each such case the Conversion
                          --------
          Price shall be adjusted so that it shall equal the price determined by
          multiplying (I) the Conversion Price in effect immediately prior to
          the close of business on the date fixed for the determination of
          shareholders entitled to receive such distribution by (II) a fraction,
          the numerator of which shall be the Fair Market Value per Common Share
          on the record date mentioned below less the then fair market value (as
          determined by the Chairman of the Board or the Board of Trustees,
          whose determination shall be conclusive), of the portion of the
          capital shares or assets or evidences of indebtedness so distributed
          or of such rights or warrants applicable to one Common Share, and the
          denominator of which shall be the Fair Market Value per Common Share
          on the record date mentioned below. Such adjustment shall become
          effective immediately at the opening of business on the Business Day
          next following (except as provided in paragraph (h) below) the record
          date for the determination of shareholders entitled to receive such
          distribution. For the purposes of this clause (iii), the distribution
          of a Security, which is distributed not only to the holders of the
          Common Shares on the date fixed for the determination of shareholders
          entitled to such distribution of such Security, but also is
          distributed with each Common Share delivered to a Person converting a
          Series A Preferred Share after such determination date, shall not
          require an adjustment of the Conversion Price pursuant to this clause
          (iii); provided that on the date, if any, on which a person converting
                 --------
          a Series A Preferred Share would no longer be entitled to receive such
          Security with a Common Share (other than as a result of the
          termination of all such Securities), a distribution of such Securities
          shall be deemed to have occurred and the Conversion Price shall be
          adjusted as provided in this clause (iii) (and such day shall be
          deemed to be "the date fixed for the determination of the shareholders
          entitled to receive such distribution" and "the record date" within
          the meaning of the two preceding sentences).

               (iv)   In case a tender or exchange offer made by the Trust or
          any subsidiary of the Trust for all or any portion of the Common
          Shares shall expire and such tender or exchange offer shall involve
          the payment by the Trust or such subsidiary of consideration per
          Common Share having a fair market value (as determined in good faith
          by the Board of Trustees, whose determination shall be conclusive and
          described in a resolution of the Board of Trustees), at the last time
          (the "Expiration Time") tenders or exchanges may
                ---------------
<PAGE>
 
          be made pursuant to such tender or exchange offer, that exceeds the
          Current Market Price per Common Share on the Trading Day next
          succeeding the Expiration Time, the Conversion Price shall be reduced
          so that the same shall equal the price determined by multiplying the
          Conversion Price in effect immediately prior to the effectiveness of
          the Conversion Price reduction contemplated by this subparagraph, by a
          fraction of which the numerator shall be the number of Common Shares
          outstanding (including any tendered or exchanged shares) at the
          Expiration Time, multiplied by the Current Market Price per Common
          Share on the Trading Day next succeeding the Expiration Time, and the
          denominator shall be the sum of (A) the fair market value (determined
          as aforesaid) of the aggregate consideration payable to shareholders
          based upon the acceptance (up to any maximum specified in the terms of
          the tender or exchange offer) of all shares validly tendered or
          exchanged and not withdrawn as of the Expiration Time (the shares
          deemed so accepted, up to any maximum, being referred to as the
          "Purchased Shares") and (B) the product of the number of Common Shares
           ----------------
          outstanding (less any Purchased Shares) at the Expiration Time and the
          Current Market Price per Common Share on the Trading Day next
          succeeding the Expiration Time, such reduction to become effective
          immediately prior to the opening of business on the day following the
          Expiration Time.

               (v)    No adjustment in the Conversion Price shall be required
          unless such adjustment would require a cumulative increase or decrease
          of at least 1% in such price; provided, however, that any adjustments
                                        --------  -------                      
          that by reason of this subparagraph (v) are not required to be made
          shall be carried forward and taken into account in any subsequent
          adjustment until made; and provided, further, that any adjustment
                                     --------  -------                     
          shall be required and made in accordance with the provisions of this
          Section 6 (other than this subparagraph (v)) not later than such time
          as may be required in order to preserve the tax-free nature of a
          distribution to the holders of Common Shares.  Notwithstanding any
          other provisions of this Section 6, the Trust shall not be required to
          make any adjustment of the Conversion Price for the issuance of any
          Common Shares pursuant to any plan providing for the reinvestment of
          dividends or interest payable on securities of the Trust and the
          investment of additional optional amounts in Common Shares under such
          plan.  All calculations under this Section 6 shall be made to the
          nearest cent (with $.005 being rounded upward) or to the nearest one-
          tenth of a share (with .05 of a share being rounded upward), as the
          case may be.  Anything in this paragraph (d) to the contrary
          notwithstanding, the Trust shall be entitled, to the extent permitted
          by law, to make such reductions in the Conversion Price, in addition
          to those required by this paragraph (d), as it in its discretion shall
          determine to be advisable in order that any stock dividends,
          subdivision of shares, reclassification or combination of shares,
          distribution of rights or warrants to purchase stock or 
<PAGE>
 
          securities, or a distribution of other assets (other than cash
          dividends) hereafter made by the Trust to its shareholders shall not
          be taxable.

          (e)  If the Trust shall be a party to any transaction (including
     without limitation a merger, consolidation, statutory share exchange, self
     tender offer for all or substantially all Common Shares, sale of all or
     substantially all of the Trust's assets or recapitalization of the Common
     Shares and excluding any transaction as to which subparagraph (d)(i) of
     this Section 6 applies) (each of the foregoing being referred to herein as
     a "Transaction"), in each case as a result of which all or substantially
        -----------                                                          
     all Common Shares are converted into the right to receive stock, securities
     or other property (including cash or any combination thereof), each Series
     A Preferred Share, which is not redeemed or converted into the right to
     receive stock, securities or other property prior to such Transaction,
     shall thereafter be convertible into the kind and amount of shares of
     stock, securities and other property (including cash or any combination
     thereof) receivable upon the consummation of such Transaction by a holder
     of that number of Common Shares into which one Series A Preferred Share was
     convertible immediately prior to such Transaction, assuming such holder of
     Common Shares (i) is not a Person with which the Trust consolidated or into
     which the Trust merged or which merged into the Trust or to which such sale
     or transfer was made, as the case may be ("Constituent Person"), or an
                                                ------------------         
     affiliate of a Constituent Person and (ii) failed to exercise his rights of
     election, if any, as to the kind or amount of stock, securities and other
     property (including cash) receivable upon such Transaction (provided that
     if the kind or amount of stock, securities and other property (including
     cash) receivable upon such Transaction is not the same for each Common
     Share held immediately prior to such Transaction by other than a
     Constituent Person or an affiliate thereof and in respect of which such
     rights of election shall not have been exercised ("Non-Electing Share"),
                                                        ------------------   
     then for the purpose of this paragraph (e) the kind and amount of stock,
     securities and other property (including cash) receivable upon such
     Transaction by each Non-Electing Share shall be deemed to be the kind and
     amount so receivable per share by a plurality of the non-electing shares).
     The Trust shall not be a party to any Transaction unless the terms of such
     Transaction are consistent with the provisions of this paragraph (e), and
     it shall not consent or agree to the occurrence of any Transaction until
     the Trust has entered into an agreement with the successor or purchasing
     entity, as the case may be, for the benefit of the holders of the Series A
     Preferred Shares that will contain provisions enabling the holders of the
     Series A Preferred Shares that remain outstanding after such Transaction to
     convert into the consideration received by holders of Common Shares at the
     Conversion Price in effect immediately prior to such Transaction.  The
     provisions of this paragraph (e) shall similarly apply to successive
     Transactions.

          (f)  If:
<PAGE>
 
               (i)    the Trust shall declare a dividend (or any other
          distribution) on the Common Shares (other than cash dividends or
          distributions paid with respect to the Common Shares after September
          30, 1993 not in excess of the sum of the Trust's cumulative
          undistributed funds from operations at September 30, 1993, plus the
          cumulative amount of funds from operations, as determined by the Board
          of Trustees, after September 30, 1993, minus the cumulative amount of
          dividends accrued or paid in respect of the Series A Preferred Shares
          or any other class or series of Preferred Shares of the Trust after
          the Issue Date); or

               (ii)   the Trust shall authorize the granting to the holders of
          Common Shares of rights, options or warrants to subscribe for or
          purchase any shares of any class or any other rights, options or
          warrants; or

               (iii)  there shall be any reclassification of the Common Shares
          (other than an event to which subparagraph (d)(i) of this Section 6
          applies) or any consolidation or merger to which the Trust is a party
          and for which approval of any shareholders of the Trust is required,
          or a statutory share exchange, or a self tender offer by the Company
          for all or substantially all of its outstanding Common Shares or the
          sale or transfer of all or substantially all of the assets of the
          Trust as an entirety; or

               (iv)   there shall occur the voluntary or involuntary
          liquidation, dissolution or winding up of the Trust,

     then the Trust shall cause to be filed with the Transfer Agent and shall
     cause to be mailed to the holders of Series A Preferred Shares at their
     addresses as shown on the stock records of the Trust, as promptly as
     possible, but at least 10 days prior to the applicable date hereinafter
     specified, a notice stating (A) the date on which a record is to be taken
     for the purpose of such dividend, distribution or granting of rights,
     options or warrants, or, if a record is not to be taken, the date as of
     which the holders of Common Shares of record to be entitled to such
     dividend, distribution or rights, options or warrants are to be determined
     or (B) the date on which such reclassification, consolidation, merger,
     statutory share exchange, sale, transfer, liquidation, dissolution or
     winding up is expected to become effective, and the date as of which it is
     expected that holders of Common Shares of record shall be entitled to
     exchange their Common Shares for securities or other property, if any,
     deliverable upon such reclassification, consolidation, merger, statutory
     share exchange, sale, transfer, liquidation, dissolution or winding up.
     Failure to give or receive such notice or any defect therein shall not
     affect the legality or validity of the proceedings described in this
     Section 6.

          (g)  Whenever the Conversion Price is adjusted as herein provided, the
     Trust shall promptly file with the Transfer Agent an officer's certificate
     setting forth 
<PAGE>
 
     the Conversion Price after such adjustment and setting forth a brief
     statement of the facts requiring such adjustment which certificate shall be
     conclusive evidence of the correctness of such adjustment absent manifest
     error. Promptly after delivery of such certificate, the Trust shall prepare
     a notice of such adjustment of the Conversion Price setting forth the
     adjusted Conversion Price and the effective date of such adjustment becomes
     effective and shall mail such notice of such adjustment of the Conversion
     Price to the holder of each Series A Preferred Share at such holder's last
     address as shown on the stock records of the Trust.

          (h)  In any case in which paragraph (d) of this Section 6 provides
     that an adjustment shall become effective on the day next following the
     record date for an event, the Trust may defer until the occurrence of such
     event (A) issuing to the holder of any Series A Preferred Share converted
     after such record date and before the occurrence of such event the
     additional Common Shares issuable upon such conversion by reason of the
     adjustment required by such event over and above the Common Shares issuable
     upon such conversion before giving effect to such adjustment and (B) paying
     to such holder any amount of cash in lieu of any fraction pursuant to
     paragraph (c) of this Section 6.

          (i)  There shall be no adjustment of the Conversion Price in case of
     the issuance of any stock of the Trust in a reorganization, acquisition or
     other similar transaction except as specifically set forth in this Section
     6.  If any action or transaction would require adjustment of the Conversion
     Price pursuant to more than one paragraph of this Section 6, only one
     adjustment shall be made and such adjustment shall be the amount of
     adjustment that has the highest absolute value.

          (j)  If the Trust shall take any action affecting the Common Shares,
     other than action described in this Section 6, that in the opinion of the
     Board of Trustees would materially and adversely affect the conversion
     rights of the holders of the Series A Preferred Shares, the Conversion
     Price for the Series A Preferred Shares may be adjusted, to the extent
     permitted by law, in such manner, if any, and at such time, as the Board of
     Trustees, in its sole discretion, may determine to be equitable in the
     circumstances.

          (k)  The Trust covenants that it will at all times reserve and keep
     available, free from preemptive rights, out of the aggregate of its
     authorized but unissued Common Shares, for the purpose of effecting
     conversion of the Series A Preferred Shares, the full number of Common
     Shares deliverable upon the conversion of all outstanding Series A
     Preferred Shares not theretofore converted.  For purposes of this paragraph
     (k), the number of Common Shares that shall be deliverable upon the
     conversion of all outstanding Series A Preferred Shares shall be computed
     as if at the time of computation all such outstanding shares were held by a
     single holder.
<PAGE>
 
          The Trust covenants that any Common Shares issued upon conversion of
     the Series A Preferred Shares shall be validly issued, fully paid and non-
     assessable.  Before taking any action that would cause an adjustment
     reducing the Conversion Price below the then-par value of the Common Shares
     deliverable upon conversion of the Series A Preferred Shares, the Trust
     will take any trust action that, in the opinion of its counsel, may be
     necessary in order that the Trust may validly and legally issue fully paid
     and (subject to any customary qualification based upon the nature of a
     business trust) non-assessable Common Shares at such adjusted Conversion
     Price.

          The Trust shall endeavor to list the Common Shares required to be
     delivered upon conversion of the Series A Preferred Shares, prior to such
     delivery, upon each national securities exchange, if any, upon which the
     outstanding Common Shares are listed at the time of such delivery.

          Prior to the delivery of any securities that the Trust shall be
     obligated to deliver upon conversion of the Series A Preferred Shares, the
     Trust shall endeavor to comply with all federal and state laws and
     regulations thereunder requiring the registration of such securities with,
     or any approval of or consent to the delivery thereof by, any governmental
     authority.

          (l)  The Trust will pay any and all documentary stamp or similar issue
     or transfer taxes payable in respect of the issue or delivery of Common
     Shares or other securities or property on conversion of the Series A
     Preferred Shares pursuant hereto; provided, however, that the Trust shall
                                       --------  -------                      
     not be required to pay any tax that may be payable in respect of any
     transfer involved in the issue or delivery of Common Shares or other
     securities or property in a name other than that of the holder of the
     Series A Preferred Shares to be converted, and no such issue or delivery
     shall be made unless and until the person requesting such issue or delivery
     has paid to the Trust the amount of any such tax or established, to the
     reasonable satisfaction of the Trust, that such tax has been paid.

     Section 7.  Shares To Be Retired.  All Series A Preferred Shares which
                 --------------------
shall have been issued and reacquired in any manner by the Trust shall be
restored to the status of authorized but unissued Shares of Beneficial Interest
of the Trust, without designation as to class or series.

     Section 8.  Ranking.  Any class or series of stock of the Trust shall be
                 -------                                                     
deemed to rank:

          (a)  prior to the Series A Preferred Shares, as to the payment of
     dividends and as to distribution of assets upon liquidation, dissolution or
     winding up, if the holders of such class or series shall be entitled to the
     receipt of dividends or of amounts distributable upon liquidation,
     dissolution or winding up, as the case may be, in preference or priority to
     the holders of Series A Preferred Shares;
<PAGE>
 
          (b)  on a parity with the Series A Preferred Shares, as to the payment
     of dividends and as to distribution of assets upon liquidation, dissolution
     or winding up, whether or not the dividend rates, dividend payment dates or
     redemption or liquidation prices per share thereof be different from those
     of the Series A Preferred Shares, if the holders of such class of stock or
     series and the Series A Preferred Shares shall be entitled to the receipt
     of dividends and of amounts distributable upon liquidation, dissolution or
     winding up in proportion to their respective amounts of accrued and unpaid
     dividends per share or liquidation preferences, without preference or
     priority one over the other ("Parity Shares"); and
                                   -------------       

          (c)  junior to the Series A Preferred Shares, as to the payment of
     dividends or as to the distribution of assets upon liquidation, dissolution
     or winding up, if such stock or series shall be Junior Shares.

          (d)  junior to the Series A Preferred Shares, as to the payment of
     dividends and as to the distribution of assets upon liquidation,
     dissolution or winding up, if such stock or series shall be Fully Junior
     Shares.

     Section 9.  Voting. If and whenever six quarterly dividends (whether or not
                 ------                                                         
consecutive) payable on the Series A Preferred Shares or any series or class of
Parity Shares shall be in arrears (which shall, with respect to any such
quarterly dividend, mean that any such dividend has not been paid in full),
whether or not earned or declared, the number of trustees then constituting the
Board of Trustees shall be increased by two and the holders of Series A
Preferred Shares, together with the holders of shares of every other series of
Parity Shares (any such other series, the "Voting Preferred Shares"), voting as
                                           -----------------------             
a single class regardless of series, shall be entitled to elect the two
additional trustees to serve on the Board of Trustees at any annual meeting of
shareholders or special meeting held in place thereof, or at a special meeting
of the holders of the Series A Preferred Shares and the Voting Preferred Shares
called as hereinafter provided.  Whenever all arrears in dividends on the Series
A Preferred Shares and the Voting Preferred Shares then outstanding shall have
been paid and dividends thereon for the current quarterly dividend period shall
have been paid or declared and set apart for payment, then the right of the
holders of the Series A Preferred Shares and the Voting Preferred Shares to
elect such additional two trustees shall cease (but subject always to the same
provision for the vesting of such voting rights in the case of any similar
future arrearages in six quarterly dividends), and the terms of office of all
persons elected as trustees by the holders of the Series A Preferred Shares and
the Voting Preferred Shares shall forthwith terminate and the number of the
Board of Trustees shall be reduced accordingly.  At any time after such voting
power shall have been so vested in the holders of Series A Preferred Shares and
the Voting Preferred Shares, the secretary of the Trust may, and upon the
written request of any holder of Series A Preferred Shares (addressed to the
secretary at the principal office of the Trust) shall, call a special meeting of
the holders of the Series A Preferred Shares and of the Voting Preferred Shares
for the election of the two trustees to be elected by them as herein provided,
such call to be made by notice similar to that provided in the Bylaws of the
Trust for a special meeting of the shareholders or as 
<PAGE>
 
required by law. If any such special meeting required to be called as above
provided shall not be called by the secretary within 20 days after receipt of
any such request, then any holder of Series A Preferred Shares may call such
meeting, upon the notice above provided, and for that purpose shall have access
to the stock records of the Trust. The trustees elected at any such special
meeting shall hold office until the next annual meeting of the shareholders or
special meeting held in lieu thereof if such office shall not have previously
terminated as above provided. If any vacancy shall occur among the trustees
elected by the holders of the Series A Preferred Shares and the Voting Preferred
Shares, a successor shall be elected by the Board of Trustees, upon the
nomination of the then-remaining trustee elected by the holders of the Series A
Preferred Shares and the Voting Preferred Shares or the successor of such
remaining trustee, to serve until the next annual meeting of the shareholders or
special meeting held in place thereof if such office shall not have previously
terminated as provided above. Notwithstanding any other provisions of this
paragraph, in any vote for the election of additional trustees hereunder, the
Series A Preferred Shares and Voting Preferred Shares beneficially owned by
Security Capital Group Incorporated, a Delaware corporation, Security Capital
Realty Incorporated, a Delaware corporation, any of their respective direct or
indirect subsidiaries and any of their respective directors, officers or
controlling stockholders (together, the "Restricted Parties"), shall be voted in
                                         ------------------
the same respective percentages as the Series A Preferred Shares and Voting
Preferred Shares that are not beneficially owned by the Restricted Parties. The
provisions in the preceding sentence shall cease and be of no further force and
effect from and after such time, but only as long as, the Restricted Parties
together no longer beneficially own in excess of 10% of the Trust's outstanding
Common Shares.

     So long as any Series A Preferred Shares are outstanding, in addition to
any other vote or consent of shareholders required by law or by the Restated
Declaration of Trust, as amended, the affirmative vote of at least 66 2/3% of
the votes entitled to be cast by the holders of the Series A Preferred Shares
and the Voting Preferred Shares, at the time outstanding, acting as a single
class regardless of series, given in person or by proxy, either in writing
without a meeting or by vote at any meeting called for the purpose, shall be
necessary for effecting or validating:

          (a)  Any amendment, alteration or repeal of any of the provisions of
     the Restated Declaration of Trust or these Articles Supplementary that
     materially and adversely affects the voting powers, rights or preferences
     of the holders of the Series A Preferred Shares or the Voting Preferred
     Shares; provided, however, that the amendment of the provisions of the
             --------  -------                                             
     Restated Declaration of Trust so as to authorize or create or to increase
     the authorized amount of, any Fully Junior Shares, Junior Shares that are
     not senior in any respect to the Series A Preferred Shares, or any shares
     of any class ranking on a parity with the Series A Preferred Shares or the
     Voting Preferred Shares shall not be deemed to materially adversely affect
     the voting powers, rights or preferences of the holders of Series A
     Preferred Shares, and provided, further, that if any such amendment,
                           --------  -------                             
     alteration or repeal would materially and adversely affect any voting
     powers, rights or preferences of the Series A Preferred Shares or another
     series of Voting Preferred Shares that are not enjoyed by 
<PAGE>
 
     some or all of the other series otherwise entitled to vote in accordance
     herewith, the affirmative vote of at least 66 2/3% of the votes entitled to
     be cast by the holders of all series similarly affected, similarly given,
     shall be required in lieu of the affirmative vote of at least 66 2/3% of
     the votes entitled to be cast by the holders of the Series A Preferred
     Shares and the Voting Preferred Shares otherwise entitled to vote in
     accordance herewith; or

          (b)  A share exchange that affects the Series A Preferred Shares, a
     consolidation with or merger of the Trust into another entity, or a
     consolidation with or merger of another entity into the Trust, unless in
     each such case each Series A Preferred Share (i) shall remain outstanding
     without a material and adverse change to its terms and rights or (ii) shall
     be converted into or exchanged for convertible preferred stock of the
     surviving entity having preferences, conversion or other rights, voting
     powers, restrictions, limitations as to dividends, qualifications and terms
     or conditions of redemption thereof identical to that of a Series A
     Preferred Share (except for changes that do not materially and adversely
     affect the holders of the Series A Preferred Shares); or

          (c)  The authorization or creation of, or the increase in the
     authorized amount of, any shares of any class or any security convertible
     into shares of any class ranking prior to the Series A Preferred Shares in
     the distribution of assets on any liquidation, dissolution or winding up of
     the Trust or in the payment of dividends;

provided, however, that no such vote of the holders of Series A Preferred Shares
--------  -------                                                               
shall be required if, at or prior to the time when such amendment, alteration or
repeal is to take effect, or when the issuance of any such prior shares or
convertible security is to be made, as the case may be, provision is made for
the redemption of all Series A Preferred Shares at the time outstanding.

     For purposes of the foregoing provisions of this Section 9, each Series A
Preferred Share shall have one (1) vote per share, except that when any other
series of Preferred Shares shall have the right to vote with the Series A
Preferred Shares as a single class on any matter, then the Series A Preferred
Shares and such other series shall have with respect to such matters one (1)
vote per $25.00 of stated liquidation preference.  Except as otherwise required
by applicable law or as set forth herein, the Series A Preferred Shares shall
not have any relative, participating, optional or other special voting rights
and powers other than as set forth herein, and the consent of the holders
thereof shall not be required for the taking of any trust action.

     Section 10.  Limitation on Ownership.
                  ----------------------- 

          (a)     Limitation.  Notwithstanding any other provision of the terms
                  ---------- 
     of the Series A Preferred Shares, except as provided in the next sentence
     and in Section 10(b), no Person, or Persons acting as a group, shall at any
     time directly or indirectly 
<PAGE>
 
     acquire ownership of more than 25% of the outstanding Series A Preferred
     Shares. Any Series A Preferred Shares owned by a Person or Persons acting
     as a group in excess of such 25% shall be deemed "Excess Preferred Shares,"
                                                       -----------------------
     except that any such shares in excess of 25% will not be considered Excess
     Preferred Shares if the 25% limitation is exceeded solely as a result of
     the Trust's redemption of Series A Preferred Shares, provided that
     thereafter any additional Series A Preferred Shares acquired by such Person
     or Persons acting as a group shall be considered Excess Preferred Shares.
     Within 10 days of becoming aware of the existence of Excess Preferred
     Shares (whether by notice on Schedule 13D or otherwise), the Trust shall
     redeem any and all Excess Preferred Shares by giving notice of redemption
     to the holder or holders thereof, unless, prior to the giving of such
     notice the holder shall have disposed of its ownership in the Excess
     Preferred Shares. Such notice shall set forth the number of Series A
     Preferred Shares constituting Excess Preferred shares, the redemption price
     and the place or places at which the certificates representing such Excess
     Preferred Shares are to be surrendered and such notice shall set forth the
     matters described in the following sentence. From and after the date of
     giving such notice of redemption, the Series A Preferred Shares called for
     redemption shall cease to be outstanding and the holder thereof shall cease
     to be entitled to dividends (other than dividends declared but unpaid prior
     to the notice of redemption), voting rights and other benefits with respect
     to such shares excepting the rights to payment of the redemption price
     determined and payable as set forth in the next two sentences. Subject to
     the limitation on payment set forth in the following sentence, the
     redemption price of each Excess Preferred Share called for redemption shall
     be the average daily per Series A Preferred Share closing sales price, if
     the Series A Preferred Shares are listed on a national securities exchange
     or, if not, are reported on the NASDAQ National Market System, and if the
     Series A Preferred Shares are not so listed or reported, shall be the mean
     between the average per Series A Preferred Share closing bid prices and the
     average per Series A Preferred Share closing asked prices, in each case
     during the 30 day period ending on the business day prior to the redemption
     date, or if there have been no sales on a national securities exchange or
     the NASDAQ National Market System and no published bid quotations and no
     published asked quotations with respect to Series A Preferred Shares during
     such 30 day period, the redemption price shall be the price determined by
     the Trustees in good faith. Unless the Trustees determine that it is in the
     interest of the Trust to make earlier payment of all of the amount
     determined as the redemption price per Series A Preferred Share in
     accordance with the preceding sentence, the redemption price may be
     payable, at the option of the Trustees, at any time or times up to, but not
     later than the earlier of (i) five years after the redemption date, or (ii)
     the liquidation of the Trust, in which latter event the redemption price
     shall not exceed an amount which is the sum of the per Series A Preferred
     Share distributions designated as liquidating distributions and return of
     capital distributions declared with respect to unredeemed Series A
     Preferred Shares of the Trust of record subsequent to the redemption date;
     and in any event, no interest shall accrue with respect to the period
     subsequent to the redemption date to the date of such payment. 
<PAGE>
 
     Nothing in this Section 10(a) shall preclude the settlement of any
     transaction entered into through the facilities of the New York Stock
     Exchange.

          (b)  Exemptions.  The limitation on ownership set forth in Section
               ----------                                                   
     10(a) shall not apply to the acquisition of Series A Preferred Shares by an
     underwriter in a public offering of Series A Preferred Shares.  The
     Trustees, in their sole and absolute discretion, may exempt from the
     ownership limitation set forth in Section 10(a) certain designated Series A
     Preferred Shares owned by a person (other than any of the Restricted
     Parties) who has provided the Trustees with evidence and assurances
     acceptable to the Trustees that the qualification of the Trust as a real
     estate investment trust would not be jeopardized thereby.

     Section 11.  Record Holders.  The Trust and the Transfer Agent may deem and
                  --------------                                                
treat the record holder of any Series A Preferred Shares as the true and lawful
owner thereof for all purposes, and neither the Trust nor the Transfer Agent
shall be affected by any notice to the contrary.

     Section 12.  Sinking Fund.  The Series A Preferred Shares shall not be
                  ------------                                             
entitled to the benefits of any retirement or sinking fund.

     THIRD:  The Series A Preferred Shares have been classified by the Board of
Trustees under the authority contained in Article 2, Section 1, of the Restated
Declaration of Trust dated June 19, 1991, as amended.

     FOURTH:  Each undersigned Trustee acknowledges these Articles Supplementary
to be the act of the Trust and further, as to all matters or facts required to
be verified under oath, each such Trustee acknowledges that to the best of his
knowledge, information and belief, these matters and facts are true in all
material respects and that this statement is made under the penalties of
perjury.
<PAGE>
 
     IN WITNESS WHEREOF, these Articles Supplementary have been duly executed by
the undersigned Trustees this 22nd day of November, 1993.

                                    PROPERTY TRUST OF AMERICA



                                    By:  /s/ C. Ronald Blankenship
                                         -------------------------
                                         C. Ronald Blankenship, Trustee


                                    By:  /s/ Calvin K. Kessler
                                         ---------------------
                                         Calvin K. Kessler, Trustee


                                    By:  /s/ James H. Polk, III
                                         ----------------------
                                         James H. Polk, III, Trustee


                                    By:  /s/ John C. Schweitzer
                                         ----------------------
                                         John C. Schweitzer, Trustee


                                    By:  /s/ Alfredo Martinez-Urdal
                                         --------------------------
                                         Alfredo Martinez-Urdal, Trustee


                                    By:  /s/ John T. Kelley, III
                                         -----------------------
                                         John T. Kelley, III, Trustee


                                    By:  /s/ James A. Cardwell
                                         ---------------------
                                         James A. Cardwell, Trustee
<PAGE>
 
                           PROPERTY TRUST OF AMERICA
                                        
                         First Certificate of Amendment
                        of Restated Declaration of Trust


     Calvin K. Kessler, James H. Polk, III, John C. Schweitzer, James A
Cardwell, John T. Kelley, III, C. Ronald Blankenship and Alfredo Martinez-Urdal,
being all the present Trust of Property Trust of America, a Maryland real estate
investment trust (the "Trust"), do hereby certify pursuant to the provisions of
Article 6 of the Trust's Restated Declaration of Trust dated June 18, 1991, (the
"Restated Declaration of Trust"), and in accordance with the applicable
provisions of the General Corporation Law of Maryland:

     FIRST: That the Board of Trustees unanimously recommended that Article 2,
Section 1 of the Restated Declaration of Trust be amended to increase the
authorized number of Shares of Beneficial Interest, $1.00 par value ("Shares"),
issuable by the Trust from 25,000,000 to 150,000,000; that only one class of
Shares is issued and outstanding; that the following amendment will increase the
aggregate par value of all Shares issuable by the Trust from $25,000,000 to
$150,000,000; that the following amendment was duly adopted by the affirmative
vote of more than two-thirds of the outstanding Shares entitled to vote at the
Annual Meeting of Shareholders of the Trust duly called and held on June 2,
1992; that as of the record date for determination of Shareholders entitled to
notice of, and to vote at, such meeting, 13,271,375 Shares were outstanding;
that 8,847,584 Shares constitute the requisite two-thirds vote necessary to
adopt such amendment; and that the number of Shares voted FOR such amendment was
10,220,917 and AGAINST such amendment was 2,017,443.

     Therefore, the first paragraph of Article 2, Section 1 of the Restated
Declaration of Trust is amended to read as follows:

               "The units into which the beneficial interests in the
               Trust shall be divided shall be designated as Shares,
               with a par value of $1.00 per Share. Ownership of
               Shares shall be evidenced by certificates in such form
               as shall be determined by the Trustees from time to
               time in accordance with the laws of the State of
               Maryland. The owners of such Shares, who are the
               beneficiaries of the Trust, shall be designated as
               Shareholders. The certificates shall be negotiable and
               title thereto shall be transferred by assignment or
               delivery in all respects as a stock certificate of a
               Maryland corporation. The Trust shall have authority to
               issue an aggregate of 150,000,000 Shares. The
               consideration paid for the issuance of Shares shall be
               determined by the 
<PAGE>
 
               Trustees and shall consist of money paid or property
               actually received. The Trustees shall hold the money or
               property received for the issuance of Shares for the
               benefit of the owners of such Shares. Shares shall be
               issued until the full amount of the consideration has
               been received by the trust. The Trustees may authorize
               Share dividends or Share splits. All Shares issued
               hereunder shall be, when issued, fully paid, and no
               assessment shall ever be made upon the Shareholders."

     SECOND: That the Board of Trustees of the Trust have duly adopted the
following amendment to the Restated Declaration of Trust pursuant to Section 8-
501 of the General Corporation Law of Maryland and Article 6, Section 2, of the
Restated Declaration of Trust.

     Article 7, Section 10 of the restated Declaration of Trust shall be amended
by (i) deleting the address set forth for John T. Kelley, III and inserting in
its place 1790 Commerce Park Drive, El Paso, Texas 79912 and (ii) by deleting
the name and address of Charles F. Jordan, III, 310 North Mesa, Suite 220, El
Paso, Texas 79901 and inserting in its place the name and address of Alfredo
Martinez-Urdal, 111 South Oregon, Suite 200, El Paso, Texas 79901.
<PAGE>
 
          IN WITNESS WHEREOF, the undersigned, constituting all of the Trustees
of the Trust, have executed this First Certificate of Amendment this 2nd day of
June, 1992.


                                    /s/ Calvin K. Kessler
                                    ---------------------
                                    Calvin K. Kessler


                                    /s/ James E. Polk, III
                                    ----------------------
                                    James E. Polk, III


                                    /s/ John C. Schweitzer
                                    ----------------------
                                    John C. Schweitzer


                                    /s/ James A. Cardwell
                                    ---------------------
                                    James A. Cardwell


                                    /s/ John T. Kelley, III
                                    -----------------------
                                    John T. Kelley, III


                                    /s/ C. Ronald Blankenship
                                    -------------------------
                                    C. Ronald Blankenship


                                    /s/ Alfredo Martinez-Urdal
                                    --------------------------
                                    Alfredo Martinez-Urdal
<PAGE>
 
STATE OF TEXAS      )
                    )
COUNTY OF EL PASO   )

     On the 2nd day of June 1992, before me, the undersigned, a notary public in
and for El Paso County, Texas, personally appeared Calvin K. Kessler, James H.
Polk, III, John C. Schweitzer, James A. Cardwell, John T. Kelley, III, C. Ronald
Blankenship and Alfredo Martinez-Urdal, all known to me to be the persons whose
names are subscribed to the within instrument and acknowledged that they
executed the same for the purpose therein contained.

     IN WITNESS WHEREOF, I hereunto set my hand and official seal.



                                           /s/ Joyce Mowad
                                           ---------------------------
                                              Notary Public In and For
                                              The State of Texas

My commission expires:

9-27-93
----------
<PAGE>
 
                           PROPERTY TRUST OF AMERICA

                         RESTATED DECLARATION OF TRUST

                                 June 18, 1991
<PAGE>
 
                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                    PAGE
                                                                                                    ----
<S>                                                                                                 <C>

RECITALS.............................................................................................  1

DECLARATION..........................................................................................  1

ARTICLE 1.  THE TRUST................................................................................  1
     Section 1.    Name..............................................................................  1
     Section 2.    Resident Agent....................................................................  2
     Section 3.    Nature of Trust...................................................................  2
     Section 4.    Purpose of the Trust..............................................................  2
     Section 5.    Prohibited Activities.............................................................  3
     Section 6.    Conflicts of Interest.............................................................  6

ARTICLE 2.  SHARES...................................................................................  6
     Section 1.    Shares, Certificates of Beneficial Interest.......................................  6
     Section 2.    Sale of Shares....................................................................  8
     Section 3.    Offering of Shares................................................................  8
     Section 4.    Treasury Shares...................................................................  9
     Section 5.    Transferability of Shares.........................................................  9
     Section 6.    Effect of Transfer of Shares or Death, Insolvency or Incapacity of
                   Shareholders......................................................................  9
     Section 7.    Shareholders' Disclosure; Trustees' Right to Refuse to Transfer
                   Shares; Limitation on Holdings; Redemption of Shares..............................  9

ARTICLE 3.  SHAREHOLDERS............................................................................. 12
     Section 1.    Shareholders' Meetings............................................................ 12
     Section 2.    Voting............................................................................ 12
     Section 3.    Distributions..................................................................... 13
     Section 4.    Report to Shareholders............................................................ 13
     Section 5.    Inspection of Trust Books......................................................... 14
     Section 6.    Nonliability and Indemnification of Shareholders.................................. 14
     Section 7.    Notice of Nonliability............................................................ 15

ARTICLE 4.  THE TRUSTEES............................................................................. 15
     Section 1.    Number, Terms of Office, Qualification and Compensation of the Trustees........... 15
     Section 2.    Resignation, Removal and Death.................................................... 15
     Section 3.    Vacancies......................................................................... 16
     Section 4.    Successor Trustees................................................................ 16
     Section 5.    Actions by and Meetings of Trustees............................................... 16
</TABLE> 
<PAGE>
 
<TABLE> 
<CAPTION> 
                                                                                                    Page    
                                                                                                    ----
<S>                                                                                                 <C> 
     Section 6.    Title and Authority of Trustees................................................... 17
     Section 7.    The Advisor....................................................................... 17
     Section 8.    Powers of Trustees................................................................ 18
     Section 9.    Trustees' Right to Own Shares in Trust............................................ 20
     Section 10.   Transactions between Trustees and their Affiliates and the Trust.................. 20
     Section 11.   Non-liability of Trustees......................................................... 21
     Section 12.   Indemnification of Trustees....................................................... 21
     Section 13.   Persons Dealing with Trustees..................................................... 21
     Section 14.   Administrative Powers of Trustees................................................. 22
     Section 15.   Election of Officers.............................................................. 22
     Section 16.   (Omitted)......................................................................... 22
     Section 17.   Committees of Trustees, Delegation of Powers and Duties to Committees,
                   Trustees, Officers and Employees.................................................. 22

ARTICLE 5.  DURATION AND TERMINATION OF TRUST........................................................ 23
     Section 1.    Termination of Trust.............................................................. 23
     Section 2.    Organization as a Corporation..................................................... 23
     Section 3.    Merger............................................................................ 24
     Section 4.    Duration of Trust................................................................. 24

ARTICLE 6.  AMENDMENTS............................................................................... 24
     Section 1.    Amendment by Shareholders......................................................... 24
     Section 2.    Amendment by Trustees............................................................. 24
     Section 3.    Requirements of Maryland Law...................................................... 24

ARTICLE 7.  MISCELLANEOUS............................................................................ 24
     Section 1.    Construction...................................................................... 24
     Section 2.    Headings for Reference Only....................................................... 24
     Section 3.    Filing and Recording.............................................................. 24
     Section 4.    Applicable Law.................................................................... 24
     Section 5.    Execution and Effect of Restated Declaration of Trust............................. 25
     Section 6.    Certifications.................................................................... 25
     Section 7.    (Omitted)......................................................................... 25
     Section 8.    Severability...................................................................... 25
     Section 9.    (Omitted)......................................................................... 26
     Section 10.   Names and Addresses of Trustees................................................... 26
     Section 11.   Bylaws............................................................................ 26
     Section 12.   Recordation....................................................................... 26
</TABLE>
<PAGE>
 
<TABLE>
<CAPTION>
                                                                                                    Page
                                                                                                    ----
<S>                                                                                                 <C>
ARTICLE 8.  LIMITATION OF LIABILITY FOR TRUSTEES AND OFFICERS;
              INDEMNIFICATION........................................................................ 26
     Section 1....................................................................................... 26
     Section 2....................................................................................... 27
     Section 3....................................................................................... 27
     Section 4....................................................................................... 27
     Section 5....................................................................................... 27
     Section 6....................................................................................... 27
</TABLE>
<PAGE>
 
                           PROPERTY TRUST OF AMERICA
                                        
                         RESTATED DECLARATION OF TRUST



     The Declaration of Trust of Property Trust of America made in El Paso,
Texas, January 18, 1963, as amended and restated June 10, 1974, and as
subsequently amended June 2, 1981, June 29, 1982, September 6, 1983, July 2,
1984, June 12, 1987, May 6, 1988 and May 5, 1989, is hereby amended and restated
in its entirety as of June 18, 1991, as follows:

                                   RECITALS

     1.   This real estate investment trust was created under the name of El
Paso Real Estate Investment Trust by an original Declaration of Trust dated
January 18, 1963, as amended and restated from time to time thereafter.  The
name of the Trust was changed to Property Trust of America on April 1, 1970.

     2.   The Trustees desire that this Trust qualify as a "real estate
investment trust" under the provisions of the Internal Revenue Code of 1954 so
long as such qualification, in the opinion of the Trustees, is advantageous to
the shareholders.

     3.   This Trust is a real estate investment trust under the laws of the
State of Maryland.

                                  DECLARATION

     NOW, THEREFORE, the Trustees hereby declare that they assume the duties of
Trustees hereunder and hold all assets of the Trust presently existing and
hereafter to be received, and all rents, income, profits and gains therefrom,
from whatever source derived, in trust, for the Shareholders in accordance with
the terms and conditions hereinafter provided.

                             ARTICLE 1. THE TRUST

     SECTION 1.  NAME.  The Trust created by this Declaration of Trust is herein
referred to as the "Trust" and shall be known by the name "PROPERTY TRUST OF
AMERICA."  So far as may be practicable, legal and convenient, the affairs of
the Trust shall be conducted and transacted under that name, which name shall
not refer to the Trustees individually or personally or to the beneficiaries or
Shareholders of the Trust, or to any officers, employees or agents of the Trust.
An assumed name certificate setting forth such name has been filed in the manner
prescribed by law.
<PAGE>
 
     Under circumstances in which the Trustees determine that the use of the
name "Property Trust of America" is not practicable, legal or convenient, they
may as appropriate use their names with suitable reference to their trustee
status, or some other suitable designation, or they may adopt another name under
which the Trust may hold property or operate in any jurisdiction which name
shall not, to the knowledge of the Trustees, refer to beneficiaries or
Shareholders of the Trust.  Legal title to all the properties subject from time
to time to this Declaration of Trust shall be transferred to, vested, and held
by the Trustees as joint tenants with right of survivorship as Trustees of this
Trust, except that the Trustees shall have the power to cause legal title to any
property of this Trust to be held by and/or in the name of one or more of the
Trustees, or any other person as nominee, on such terms, in such manner, and
with such powers as the Trustees may determine, provided that the interest of
the Trust therein is appropriately protected.

     The Trust shall have the authority to operate under an assumed name or
names in such state or states or any political subdivision thereof where it
would be legal, practical or convenient to operate in the name of the Trust.
The Trust shall have the authority to file such assumed name certificates or
other instruments in such places as may be required by applicable law to operate
under such assumed name or names.

     SECTION 2.  RESIDENT AGENT.  The name and address of the Resident Agent of
the Trust in the State of Maryland is The Corporation Trust Incorporated, First
Maryland Building, 25 South Charles Street, Baltimore, Maryland 21201.  The
Trust may have such other offices or places of business within or without the
State of Maryland as the Trustees may from time to time determine.

     SECTION 3.  NATURE OF TRUST.  The Trust is a real estate investment trust
under the laws of the State of Maryland.  The Trust is not intended to be, shall
not be deemed to be, and shall not be treated as, a general partnership, limited
partnership, joint stock association or corporation.  The Shareholders shall be
beneficiaries in that capacity in accordance with the rights conferred upon them
hereunder.

     SECTION 4.  PURPOSE OF THE TRUST.

     (a)  The Trust is formed pursuant to the provisions of, and shall have all
the powers provided in, Title 8, General Corporation Law of Maryland, as same
may be amended from time to time.  Its purpose is to invest in notes, bonds and
other obligations secured by mortgages on real property and to purchase, hold,
lease, manage, sell, exchange, develop, subdivide and improve real property and
interests in real property, and in general, to carry on any other acts in
connection with the foregoing and to have and exercise all powers conferred by
the laws of the State of Maryland upon real estate investment trusts formed
under the laws of the State of Maryland, and to do any or all of the things
herein set forth to the same extent as natural persons might or could do.  In
addition, it is intended that the business of the Trust will be conducted so
that the Trust will qualify (so long as such qualification, in the opinion of
the Trustees, is advantageous to the Shareholders) as a "real 
<PAGE>
 
estate investment trust" as defined in Part II, Subchapter M of Chapter 1 of the
Internal Revenue Code of 1954, as now enacted and as it may be hereafter
amended.

     (b)  The Trust shall not be primarily engaged in investing, reinvesting, or
trading in securities.  In addition, the Trust will not engage in margin
transactions or short sales; invest in puts, calls, straddles, spreads or any
combination thereof; invest or trade in commodities or commodity contracts.  The
Trust shall invest primarily in nonspeculative, high quality, easily tradeable
securities consistent with prudent investment standards and only upon the advice
and recommendation of its investment advisor.

     SECTION 5.  PROHIBITED ACTIVITIES.  The Trust shall also conform to the
following restrictions and prohibitions in its operations:

          (a)  The Trust shall not invest more than ten (10%) percent of its
     total assets in unimproved real property, excluding property which is being
     developed or will be developed within a reasonable period.

          (b)  The Trust shall not invest in junior mortgage loans unless, by
     appraisal or other method that the Independent Trustees determine, (a) the
     capital invested in such mortgage loan is adequately secured on the basis
     of the equity of the borrower in the property underlining such investment
     and the ability of the borrower to repay the mortgage loan, or (b) such
     mortgage loan of the Trust is a financing device entered into by the Trust
     to establish the priority of its capital investment over the capital
     invested by others investing with the Trust in a real estate project.  The
     Independent Trustees shall determine that any such junior mortgage loan is
     not and may not be made subordinate to a mortgage held by the Advisor, an
     affiliate of the Advisor, or a Trustee of the Trust. "Independent Trustee"
     means a trustee who (i) is not affiliated, directly or indirectly, with an
     Advisor of the Trust, whether by ownership of, ownership interest in,
     employment by, any material business or professional relationship with, or
     service as an officer, or director of, such Advisor or a business entity
     which is an affiliate of such Advisor, (ii) is not serving as a Trustee or
     director for more than three real estate investment trusts organized by a
     sponsor of the Trust, and (iii) performs no other services for the Trust,
     except as Trustee.  An indirect relationship shall include circumstances in
     which a member of the immediate family of a Trustee has one of the
     foregoing relationships with the Trust or with an Advisor of the Trust.

          (c)  The aggregate borrowing of the Trust, secured or unsecured, shall
     not be unreasonable in relation to the net assets of the Trust and shall be
     reviewed by the Trustees at least quarterly.  The maximum amount of such
     borrowing in relation to the net assets shall, in the absence of a
     satisfactory showing that a higher level of borrowing is appropriate, not
     exceed 300%.  
<PAGE>
 
     Any excess in borrowing over such 300% level shall be approved by a
     majority of the Independent Trustees and disclosed to Shareholders in the
     next quarterly report of the Trust, along with justification for such
     excess. The term "net assets" means the total assets (other than
     intangibles) at cost, before deducting depreciation or other non-cash
     reserves, less total liabilities, calculated at least quarterly on a basis
     consistently applied.

          (d)  The Trust shall issue no warrants or options to purchase its
     securities to the advisor of the Trust or any person affiliated with the
     advisor, or to any other persons at exercise prices less than the fair
     market value of such securities on the date of the grant.

          (e)  The Trust shall not compensate any Independent Contractor
     employed by the Trust at a rate higher than the going rate, if any, for
     like services in the community or locale in which such services are
     performed, nor shall any such Independent Contractor in any event be
     compensated at a rate higher than a reasonable rate for services performed
     for the Trust.

          (f)  The Trust shall not issue debt securities unless the historical
     debt service coverage (in the most recently completed fiscal year) as
     adjusted for known changes is sufficient to properly service that higher
     level of debt.

          (g)  The Trust may not invest in or make mortgage loans unless an
     appraisal is obtained concerning the underlying property. In cases in which
     a majority of the Independent Trustees so determine, and in all cases in
     which the transaction is with the Advisor, Trustee, sponsor or affiliates
     thereof, such an appraisal must be obtained from an independent, qualified
     appraiser concerning the underlying property.  This appraisal shall be
     maintained in the Trust's records for at least five years, and shall be
     available for inspection and duplication by any shareholder.  In addition
     to the appraisal, a mortgagee's or owner's title insurance policy or
     commitment as to the priority of the mortgage or the condition of the title
     must be obtained.  Further, the Advisor and Trustees shall observe the
     following policies in connection with investing in or making mortgage
     loans:

               (1)  the Trust shall not make or invest in mortgage
          loans, including construction loans, on any one property if
          the aggregate amount of all mortgage loans outstanding on
          the property, including the loans of the Trust, would exceed
          an amount equal to 85% of the appraised value of the
          property as determined by appraisal unless substantial
          justification exists because of the presence of other
          underwriting criteria; and
<PAGE>
 
               (2)  the Trust shall not make or invest in any mortgage
          loans that are subordinate to any mortgage or equity
          interest of the Advisor, Trustees, sponsors or affiliates of
          the Trust.

          (h)  Total Operating Expenses of the Trust shall not exceed in any
     fiscal year of the greater of:

               (1)  two percent (2%) of the average of the aggregate
          book value of the assets of the Trust invested, directly or
          indirectly, in equity interests in and loans secured by real
          estate, before reserves for depreciation or bad debts or
          other similar non-cash reserves, computed by taking the
          average of such values at the end of each month during such
          period; or

               (2)  twenty-five percent (25%) of the Net Income of the
          Trust for such year. "Net Income" shall mean total revenues
          applicable to such year, less the expenses applicable to
          such year other than additions to reserves for depreciation
          or bad debts or other similar non-cash reserves. For the
          purposes of this section, Net Income shall exclude the gain
          from the sale of the Trust's assets.

          "Total Operating Expenses" shall mean all operating, general, and
     administrative expenses of the Trust as determined under generally accepted
     accounting principles, except the expenses of raising capital, interest
     payments, taxes, non-cash expenditures, incentive fees paid to the Advisor
     and costs related directly to asset acquisition, operation and disposition.

          The Independent Trustees shall have the fiduciary responsibility of
     limiting such expenses to amounts that do not exceed such limitations
     unless such Independent Trustees shall have made a finding that, based on
     such unusual and non-recurring factors which they deem sufficient, a higher
     level of expenses is justified for such year.  Any such findings and the
     reasons in support thereof shall be reflected in the minutes of the meeting
     of the Trustees.

          Within sixty (60) days after the day of any fiscal quarter of the
     Trust for which Total Operating Expenses (for the twelve (12) months then
     ended) exceeded 2% of average invested assets (as calculated in Article 1,
     Section 5(h)(1) above) or twenty-five percent of Net Income, whichever is
     greater, there shall be sent to the shareholders of the Trust a written
     disclosure of such fact, together with an explanation of the facts the
     Independent Trustees considered in arriving at the conclusion that such
     higher operating expenses were justified.  In the event that the
     Independent Trustees do not determine 
<PAGE>
 
     such excess expenses are justified, the Advisor shall reimburse the Trust
     for the amount by which the aggregate annual expenses paid or incurred by
     the Trust exceeded the limitations herein provided.

          (i)  The Trust shall not invest in real estate contracts of
     sale, otherwise known as land sale contracts, unless such
     contracts of sale are in recordable form and are appropriately
     recorded in the chain of title.

     SECTION 6.  CONFLICTS OF INTEREST.  The Trust shall not purchase property
from a sponsor, Advisor, Trustee, or affiliates thereof, unless a majority of
the Trustees, including a majority of the Independent Trustees not otherwise
interested in such transaction, approve the transaction as being fair and
reasonable to the Trust and at a price to the Trust no greater than the cost of
the asset to such sponsor, Advisor, Trustee or affiliates thereof, or, if the
price to the Trust is in excess of such cost, that substantial justification for
such excess exists and such excess is not unreasonable.  In no event shall the
cost of such asset to the Trust exceed its current appraised value.

          (a)  The Trust shall not sell property to a sponsor,
     Advisor, Trustee or affiliates thereof.

          (b)  The Trust may not make loans to or borrow money from
     the sponsor, Advisor, Trustee or affiliates thereof, unless a
     majority of the Trustees (including a majority of the Independent
     Trustees) not otherwise interested in such transaction approve
     the transaction as being fair, competitive, and commercially
     reasonable and no less favorable to the Trust than loans between
     unaffiliated lenders and borrowers under the same circumstances.

          (c)  The Trust shall not invest in joint ventures with the
     sponsor, Advisor, Trustee or affiliates thereof, unless a
     majority of Trustees (including a majority of the Independent
     Trustees) not otherwise interested in such transactions, approve
     the transaction as being fair and reasonable to the Trust and
     shall be on substantially the same terms and conditions as though
     received by the other joint venturers.

          (d)  All other transactions between the Trust and the
     sponsor, Advisor, Trustee or affiliates thereof, shall require
     approval by a majority of the Trustees (including a majority of
     the Independent Trustees) not otherwise interested in such
     transactions as being fair and reasonable to the Trust and on
     terms and conditions not less favorable to the Trust than those
     available from unaffiliated third parties.
<PAGE>
 
                               ARTICLE 2. SHARES

     SECTION 1.  SHARES, CERTIFICATES OF BENEFICIAL INTEREST.  The units into
which the beneficial interests in the Trust shall be divided shall be designated
as Shares, with a par value of $1.00 per Share.  Ownership of Shares shall be
evidenced by certificates in such form as shall be determined by the Trustees
from time to time in accordance with the laws of the State of Maryland.  The
owners of such Shares, who are the beneficiaries of the Trust, shall be
designated as Shareholders.  The certificates shall be negotiable and title
thereto shall be transferred by assignment or delivery in all respects as a
stock certificate of a Maryland corporation.  The Trust shall have authority to
issue an aggregate of 25,000,000 Shares.  The consideration paid for the
issuance of Shares shall be determined by the Trustees and shall consist of
money paid or property actually received.  The Trustees shall hold the money or
property received for the issuance of Shares for the benefit of the owners of
such Shares. Shares shall not be issued until the full amount of the
consideration has been received by the Trust.  The Trustees may authorize Share
dividends or Share splits.  All Shares issued hereunder shall be, when issued,
fully paid, and no assessment shall ever be made upon the Shareholders.

     The Shareholders shall have no legal title or interest in the property of
the Trust and no right to a partition thereof or to an accounting during the
continuance of the Trust but only to the rights expressly provided in the
Declaration of Trust.

     The Board of Trustees may classify or reclassify any unissued Shares from
time to time by setting or changing the preferences, conversion or other rights,
voting powers, restrictions, limitations as to dividends, qualifications, or
terms or conditions of redemption of the Shares by filing articles supplementary
pursuant to the applicable laws of the State of Maryland.  The Board of Trustees
is authorized to issue from the authorized but unissued Shares of the Trust
Preferred Shares in series and to establish from time to time the number of
Preferred Shares to be included in each such series and to fix the designation
and any preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and conditions of
redemption of the shares of each series.  Except for Shares so classified or
reclassified and any Preferred Shares issued hereunder, all other Shares shall
be designated as Common Shares, each of which Common Shares shall be equal in
all respects to every other Common Share.

     The authority of the Board with respect to each unissued series shall
include, but not be limited to, determination of the following:

          (a)  The number of Shares constituting that series and the
     distinctive designation of that series;

          (b)  The dividend rate on the Shares of that series, whether
     dividends shall be cumulative, and, if so, from which date or
     dates, and the relative rights of priority, if any, of payment of
     dividends on Shares of that series;
<PAGE>
 
          (c)  Whether that series shall have voting rights, in
     addition to the voting rights provided by law, if any, and, if
     so, the terms of such voting rights;

          (d)  Whether that series shall have conversion privileges,
     and, if so, the terms and conditions of such conversion,
     including provisions for adjustment of the conversion rate in
     such events as the Board of Trustees shall determine;

          (e)  Whether or not the Shares of that series shall be
     redeemable, and, if so, the terms and conditions of such
     redemption, including the date or dates upon or after which they
     shall be redeemable, and the amount per share payable in case of
     redemption which amount may vary under different conditions and
     at different redemption rates; provided however, that any
     proposed issuance of Shares which are redeemable at the option of
     the holder shall be approved by Shareholders holding a majority
     of the Trust's outstanding Shares of all classes;

          (f)  Whether that series shall have a sinking fund for the
     redemption or purchase of Shares of that series, and, if so, the
     terms and amount of such sinking fund;

          (g)  The rights of the Shares of that series in the event of
     voluntary or involuntary liquidation, dissolution or winding up
     of the Trust, and the relative rights of priority, if any, of
     payment of Shares of that series;

          (h)  Any other relative rights, preferences and limitations
     of that series.

     SECTION 2.  SALE OF SHARES.  The Trustees, in their discretion, may from
time to time issue or sell or contract to issue or sell, Shares, including
Shares held in the treasury, to such party or parties and for money or property
actually received, as allowed by the laws of the State of Maryland, at such time
or times, and on such terms as the Trustees may deem appropriate.  In connection
with any issuance of Shares, the Trustees, in their discretion, may provide for
the issuance of fractional Shares or may provide for the issuance of scrip for
fractions of Shares and determine the terms of such scrip including, without
limiting the generality of the foregoing, the time within which any such scrip
must be surrendered in exchange for Shares and the right, if any, of holders of
scrip upon the expiration of the time so fixed, the right, if any, to receive
proportional distributions, and the right, if any, to redeem scrip for cash, or
the Trustees may, in their discretion, or if they see fit at the option of each
holder, provide in lieu of scrip for the adjustment of fractions in cash.  The
Shareholders shall have no preemptive rights of any kind whatsoever (preemptive
rights hereby defined as including, but not limited to, the right to purchase or
subscribe for or otherwise acquire any Shares of the Trust of any class, whether
now or hereafter authorized, 
<PAGE>
 
or any securities or obligations convertible into or exchangeable for, or any
right, warrant or option to purchase such Shares whether or not such Shares are
issued and/or disposed of for cash, property, or other consideration of any
kind). Options or warrants issued by the Trust to purchase Shares shall not be
exercisable later than five (5) years from the date of issuance thereof."

     SECTION 3.  OFFERING OF SHARES.  The Trustees are authorized to cause to be
made from time to time offerings of the Shares of the Trust to the public at
public offering prices deemed appropriate.  For this purpose, the Trustees are
authorized to enter into a contract with an underwriter or distributing company
(hereinafter referred to as the Distributor), which shall be granted such
commissions for its services as may be agreed upon by the parties.  Any such
contract shall be for an initial term of not more than two years, and thereafter
terminable at will by the Trustees upon 60 days written notice to the
Distributor.  Such contract shall not be assignable by the Distributor, without
the written consent of the Trust.

     SECTION 4.  TREASURY SHARES.  The Trust may repurchase or otherwise acquire
its own shares at the prevailing market price and for this purpose the Trust may
create and maintain such reserves as are deemed necessary and proper.

     Shares issued hereunder and purchased or otherwise acquired for the account
of the Trust shall not, so long as they belong to the Trust, either receive
distributions (except that they shall be entitled to receive distributions
payable in Shares of the Trust) or be voted at any meeting of the Shareholders.
Such Shares may, in the discretion of the Trustees, be held in the treasury and
be disposed of by the Trustees at such time or times, to such party or parties,
and for such consideration, as the Trustees may deem appropriate.

     SECTION 5.  TRANSFERABILITY OF SHARES.  Shares in the Trust shall be
transferable in accordance with the procedure prescribed from time to time in
the Trust Bylaws.  The persons in whose name the Shares are registered on the
books of the Trust shall be deemed the absolute owners thereof and, until a
transfer is effected on the books of the Trust, the Trustees shall not be
affected by any notice, actual or constructive, of any transfer.

     Any issuance, redemption or transfer of Trust Shares which would operate to
disqualify the Trust as a real estate investment trust for purposes of Federal
income tax, is null and void, and such transaction will be canceled when so
determined in good faith by the Trustees.

     SECTION 6.  EFFECT OF TRANSFER OF SHARES OR DEATH, INSOLVENCY OR INCAPACITY
OF SHAREHOLDERS.  Neither the transfer of Shares nor the death, insolvency or
incapacity of any Shareholder shall operate to dissolve or terminate the Trust,
nor shall it entitle any transferee, legal representative or other person to a
partition of the property of the Trust or to an accounting.
<PAGE>
 
     SECTION 7.  SHAREHOLDERS' DISCLOSURE; TRUSTEES' RIGHT TO REFUSE TO TRANSFER
SHARES; LIMITATION ON HOLDINGS; REDEMPTION OF SHARES.

     (A)  SHAREHOLDERS' DISCLOSURE.  The shareholders shall upon demand disclose
to the Trustees in writing such information with respect to direct and indirect
ownership of the Shares as the Trustees deem necessary to comply with the real
estate investment trust provisions of the Internal Revenue Code (the "REIT Tax
Provisions") or to comply with the requirements of any taxing authority or
governmental agency.  The REIT Tax Provisions shall mean Parts II and III of
Subchapter M of Chapter I of Subtitle A of the Internal Revenue Code of 1954, as
now enacted or hereafter amended, and other provisions of the Code referred to
or incorporated in, or referring to or incorporating any other provisions of
said Parts II or III, or similar provisions of successor statutes, and
applicable regulations under and rulings with respect to the aforesaid
provisions of said Code.

     (B)  RIGHT TO REFUSE TO TRANSFER SHARES.  Whenever it is deemed by them to
be reasonably necessary to protect the tax status of the Trust as a real estate
investment trust, the Trustees may require a statement or affidavit from each
proposed transferee of Shares setting forth the number of Shares already owned
by him and any related person specified in the form prescribed by the Trustees
for that purpose.  If, in the opinion of the Trustees, the proposed transfer may
jeopardize the qualification of the Trust as a real estate investment trust, the
Trustees shall have the right, but not a duty, to refuse to transfer the Shares
to the proposed transferee.  All contracts for the sale or other transfer of
Shares shall be subject to this provision.

     (C)  LIMITATION ON HOLDINGS.  Notwithstanding any other provisions of this
Restated Declaration of Trust to the contrary and subject to the provisions of
Section 7(e), no person, or persons acting as a group, shall at any time
directly or indirectly acquire ownership in the aggregate of more than 9.8% of
the outstanding Shares of the Trust (the "Limit"). Shares owned by a person or
group of persons in excess of the Limit at any time shall be deemed "Excess
Shares." For the purpose of this Section 7, the term "ownership" shall be
defined in accordance with or by reference to the qualification requirements of
the REIT Tax Provisions and shall also mean ownership as defined under Rule
13(d) promulgated by the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934 (the "1934 Act"), and the term "group" shall
have the same meaning as that term has for purposes of such Rule 13(d).  All
Shares which any person has the right to acquire upon exercise of outstanding
rights, options and warrants, and upon conversion of any securities convertible
into Shares, if any, shall be considered outstanding for purposes of the Limit
if such inclusion will cause such person to own more than the Limit.  The term
"securities" shall mean any stock, shares, voting trust certificates, bonds,
debentures, notes or other evidences of indebtedness or ownership or in general
any instruments commonly known as "securities" or any certificates of interest,
shares or participations in temporary or interim certificates for, receipts for,
guarantees of, or warrants, options or rights to subscribe to, purchase or
acquire any of the foregoing.  The term "person" shall mean and include
individuals, corporations, limited partnerships, general partnerships, joint
stock companies or 
<PAGE>
 
associations, joint ventures, associations, consortia, companies, trusts, banks,
trust companies, land trusts, common law trusts, business trusts, or other
entities and governments and agencies and political subdivisions thereof.

     (D)  REDEMPTION OF EXCESS SHARES.  The Trustees, upon 30 days prior written
notice to the holder thereof of its intention to do so, may at any time or times
thereafter redeem any or all Shares that are Excess Shares (including Shares
that remain or become Excess Shares because of the decrease in outstanding
Shares resulting from such redemption) by giving written notice of redemption to
the holder thereof, unless, prior to the giving of such written notice of
redemption, the holder thereof shall have disposed of its ownership in the
Shares that are Excess Shares; and from and after the date of giving of such
notice of redemption ("redemption date"), the Shares called for redemption shall
cease to be outstanding and the holder thereof shall cease to be entitled to
dividends, voting rights and other benefits with respect to such Shares
excepting only the right to payment by the Trust of the redemption price
determined and payable as set forth in the following two sentences.  Subject to
the limitation on payment set forth in the following sentence, the redemption
price of each Excess Share called for redemption shall be the average daily per
Share closing sales price, if the Shares of the Trust are listed on a national
securities exchange or, if not, are reported on the NASDAQ National Market
System, and if the Shares are not so listed or reported, shall be the mean
between the average per Share closing bid prices and the average per Share
closing asked prices, in each case during the 30 day period ending on the
business day prior to the redemption date, or if there have been no sales on a
national securities exchange or the NASDAQ National Market System and no
published bid quotations and no published asked quotations with respect to
Shares of the Trust during such 30 day period, the redemption price shall be the
price determined by the Trustees in good faith.  Unless the Trustees determine
that it is in the interest of the Trust to make earlier payment of all of the
amount determined as the redemption price per Share in accordance with the
preceding sentence, the redemption price may be payable, at the option of the
Trustees, at any time or times up to, but not later than, the earlier of (i)
five years after the redemption date, or (ii) the liquidation of the Trust, in
which latter event the redemption price shall not exceed an amount which is the
sum of the per Share distributions designated as liquidating distributions and
return of capital distributions declared with respect to unredeemed Shares of
the Trust of record subsequent to the redemption date; and in any event, no
interest shall accrue with respect to the period subsequent to the redemption
date to the date of such payment.

     (E)  EXEMPTIONS.  The Limit set forth in Section 7(c) shall not apply to
the acquisition of Shares or rights, options or warrants for or securities
convertible into Shares by an underwriter in a public offering or in any
transaction involving the issuance by the Trust of Shares or rights, options or
warrants for or securities convertible into Shares, in which a majority of the
Trustees determine that the underwriter or other person or party initially
acquiring same will make a timely distribution thereof to or among other holders
such that, following such distribution, none of such Shares will be Excess
Shares.  The Trustees in their discretion may exempt from the Limit ownership of
certain designated Shares while owned by a person who has provided the Trustees
with evidence and assurances 
<PAGE>
 
acceptable to the Trustees that the qualification of the Trust as a real estate
investment trust would not be jeopardized thereby.

     (F)  DISQUALIFYING ACQUISITION.  Notwithstanding any other provision of
this Restated Declaration of Trust to the contrary, any purported acquisition of
Shares of the Trust which would result in the disqualification of the Trust as a
real estate investment trust shall be null and void, unless the Trustees, prior
to such acquisition, shall have determined that the disqualification of the
Trust is advantageous to shareholders.

     (G)  OTHER ACTION.  Nothing contained in this Section 7 or in any other
provision of this Restated Declaration of Trust shall limit the authority of the
Trustees to take such other action as they deem necessary or advisable to
protect the Trust and the interests of the shareholders by preservation of the
Trust's qualification as a real estate investment trust under the REIT Tax
Provisions (so long as such qualification, in the opinion of the Trustees, is
advantageous to the shareholders).  The Trustees may in their discretion place a
statement in such form as they may deem appropriate on the face or back of
certificates for Trust Shares referring to the provisions of this Section 7.

     (H)  SEVERABILITY.  If any provision of this Section 7 or any application
of any such provision is determined to be invalid by any Federal or state court
having jurisdiction over the issues, the validity of the remaining provisions
shall not be affected and other applications of such provision shall be affected
only to the extent necessary to comply with the determination of such court.  To
the extent this Section 7 may be inconsistent with any other provision of this
Restated Declaration of Trust, this Section 7 shall be controlling.

     (I)  ENFORCEMENT.  The Board of Trustees is specifically authorized to seek
equitable relief, including an injunction, to enforce the provisions of this
Section 7.

     (J)  NON-WAIVER.  No delay or failure on the part of the Trust or the Board
of Trustees in exercising any rights hereunder shall operate as a waiver of any
rights of the Trust, except to the extent especially waived in writing by the
Trust.

                            ARTICLE 3. SHAREHOLDERS

     SECTION 1.  SHAREHOLDERS' MEETINGS.  There shall be an annual meeting of
the Shareholders at such time and place, either within or without the State of
Maryland, as the Trustees shall prescribe, at which all Trustees shall be
elected or re-elected and any other proper business may be conducted. The annual
meeting of Shareholders shall be held upon reasonable notice and within a
reasonable period (not less than 30 days) following delivery of the annual
report, but in any event such meeting must be held within six months after the
end of each full fiscal year. Special meetings of Shareholders may be called by
a majority of the Trustees, a majority of the Independent Trustees, or by any
officer of the Trust, and shall be called upon the written request of
Shareholders holding in the aggregate not less than ten percent (10%) of the
outstanding Shares of the Trust entitled to vote in the manner provided
<PAGE>
 
in the Bylaws. If there shall be no Trustees, the officers of the Trust shall
promptly call a special meeting of the Shareholders for the election of
successor Trustees. Written or printed notice stating the place, date and hour
of the Shareholders' meeting and, in the case of a special meeting, the purpose
or purposes for which the meeting is called, shall be delivered not less than 10
nor more than 50 days before the day of the meeting either personally or by
mail, by or at the direction of the Trustees or any officer or person calling
the meeting, to each Shareholder of record entitled to vote in such meeting. No
other business than that which is stated in the call for a special meeting shall
be considered at such meeting.

     A majority of the outstanding Shares entitled to vote at any meeting
represented in person or by proxy shall constitute a quorum at any such meeting.
Whenever any action is to be taken by the Shareholders, it shall, except as
otherwise authorized by law or this Declaration of Trust or the Bylaws, be
authorized by a majority of the votes cast at a meeting of Shareholders by
holders of Shares entitled to vote thereon.

     SECTION 2.  VOTING.  At each meeting of the Shareholders, each Shareholder
entitled to vote shall have the right to vote, in person or by proxy, the number
of shares of the Trust owned by him upon each matter upon which the vote of the
Shareholders is taken.  In any election in which more than one vacancy is to be
filled, each Shareholder may vote the number of shares of the Trust owned by him
for each vacancy to be filled.  There shall be no right of cumulative voting.

     Each outstanding Share, regardless of class, shall be entitled to one vote
on each matter submitted to a vote at a meeting of Shareholders, except (a) to
the extent that the Declaration of Trust or articles supplementary (to the
extent permitted by Maryland law) limit or deny voting rights to the holders of
the Shares of any class or series, or (b) as otherwise provided by Maryland law.

     SECTION 3  DISTRIBUTIONS.  The Trustees shall (and may more frequently)
declare and pay within thirty (30) days after the end of each fiscal year period
in each calendar year after the calendar year in which the Trust is created, to
the Shareholders as near to all of the net income of the Trust, including
capital gains, as the Trustees shall deem prudent but in any event, shall, from
time to time, declare and pay to the Shareholders such distributions as may be
necessary to continue to qualify the Trust as a Real Estate Investment Trust, as
defined in Part II, Subchapter M of Chapter 1 of the Internal Revenue Code of
1954, as now enacted, and as subsequently amended, (so long as such
qualification, in the opinion of the Trustees, is in the best interest of the
Shareholders) as well as such additional distributions as the Trustees may in
their discretion declare. Each distribution when made shall be accompanied by a
written statement indicating, to the fullest extent practicable, the sources of
the distribution. The Trustees may declare and pay dividends or other
distributions to those who are Shareholders as of a specified record date or,
alternatively, to those who are or were Shareholders at any time during any
quarter or year or other applicable period on the basis that each Shareholder
shall receive, with respect to each Share, that proportion of such dividend or
distribution per Share that the number of days each Share is owned of record by
<PAGE>
 
such Shareholder during such quarter, year, or other applicable period, bears to
the total number of days in such quarter, year, or other applicable period.

     SECTION 4.  REPORT TO SHAREHOLDERS.  The Trust shall prepare, file and
deliver to its Shareholders an annual report concerning its operations for the
preceding fiscal year containing financial statements prepared in accordance
with generally accepted accounting principles which are audited and reported on
by independent certified public accountants.  The Trust shall include in its
annual report to Shareholders (i) the ratio of the costs of raising capital
during the period to the capital raised, and (ii) the aggregate amount of
advisory fees and the aggregate amount of other fees paid to the Advisor and all
affiliates of the Advisor by the Trust and including fees or charges paid to the
Advisor and all affiliates of the Advisor by third parties doing business with
the Trust.

     The Trust shall also include in its annual report, separately stated, full
disclosure of all material terms, factors, and circumstances surrounding any and
all transactions involving the Trust, and the Trustees, Advisors, sponsors
and/or affiliates thereof occurring in the year for which the annual report is
made. Independent Trustees are specifically charged with a duty to examine and
comment in the report on the fairness of such transactions.

     Annual reports shall be mailed or delivered to each Shareholder as of a
record date after the end of such fiscal year and each holder of other publicly
held securities of the Trust within 90 days after the end of the fiscal year to
which it relates.

     SECTION 5.  INSPECTION OF TRUST BOOKS.  The books and records of the Trust
shall be open to inspection upon the written demand of a Shareholder at any
reasonable time for a purpose reasonably related to his interests as a
Shareholder and shall be exhibited at any time when required by the demand at
any Shareholders' meeting of 10 percent of the Shares represented at the
meeting.

     Such inspection by a Shareholder may be made in person or by agent or
attorney and the right of inspection includes the right to make extracts.

     Demand of inspection other than at a Shareholders' meeting shall be made in
writing upon the President, or the Secretary, of the Trust.

     The duly authorized officials of any state shall have the same right of
inspection as a Shareholder.

     SECTION 6.  NONLIABILITY AND INDEMNIFICATION OF SHAREHOLDERS.  Shareholders
shall not be personally or individually liable in any manner whatsoever for any
debt, act, omission or obligation incurred by the Trust or the Trustees and
shall be under no obligation to the Trust or its creditors with respect to such
Shares other than the obligation to pay to the Trust the full amount of the
consideration for which the Shares were issued or to be issued. The Shareholders
shall not be liable to assessment and the Trustees shall have no power to bind
<PAGE>
 
the Shareholders personally. The Trust shall indemnify and hold each Shareholder
harmless from and against all claims and liabilities, whether they proceed to
judgment or are settled or otherwise brought to a conclusion, to which such
Shareholder may become subject by reason of his being or having been a
Shareholder, and shall reimburse such Shareholder for all legal and other
expenses reasonably incurred by him in connection with any such claim or
liability.  Provided, however, that no such Shareholder shall be indemnified or
reimbursed if such claim, obligation or liability is finally adjudged by a
competent court of law to have arisen out of the Shareholder's bad faith,
willful misconduct or gross negligence, and provided further, that such
Shareholder must give prompt notice as to any such claims or liabilities or
suits and must take such action as will permit the Trust to conduct the defense
thereof.  The rights accruing to a Shareholder under this Section 6 shall not
exclude any other right to which such Shareholder may be lawfully entitled, nor
shall anything herein contained restrict the right of the Trust to indemnify or
reimburse a Shareholder in any appropriate situation even though not
specifically provided herein; provided, however, that the Trust shall have no
liability to reimburse Shareholders for taxes assessed against them by reason of
their ownership of Shares, nor for any losses suffered by reason of changes in
the market value of securities of the Trust.  No amendment to the Declaration of
Trust increasing or enlarging the liability of the Shareholders shall be made
without the unanimous written consent of all of the Shareholders.

     SECTION 7.  NOTICE OF NONLIABILITY.  The Trustees shall use every
reasonable means to assure that all persons having dealings with the Trust shall
be informed that the private property of the Shareholders and the Trustees shall
not be subject to claims against and obligations of the Trust to any extent
whatever. The Trustee shall cause to be inserted in every written agreement,
undertaking or obligation made or issued on behalf of the Trust, an appropriate
provision to the effect that the Shareholders and the Trustees shall not be
personally liable thereunder, and that all parties concerned shall look solely
to the Trust Property for the satisfaction of any claim thereunder, and
appropriate reference shall be made to this Declaration of Trust. The omission
of such a provision from any such agreement, undertaking or obligation, or the
failure to use any other means of giving such notice, shall not, however, render
the Shareholders or the Trustees personally liable.

                            ARTICLE 4. THE TRUSTEES

     SECTION 1.  NUMBER, TERMS OF OFFICE, QUALIFICATION AND COMPENSATION OF THE
TRUSTEES.  There shall be not less than three nor more than fifteen Trustees
(referred to as the "Trustees" or the "Board of Trustees").  The number of
Trustees shall be determined from time to time by resolution of the Trustees.
The term of office of each Trustee shall be one year and until the election and
qualification of his successor.  Trustees may succeed themselves in office.
Trustees shall be individuals who are at least 21 years old and not under legal
disability.  No person shall qualify as a Trustee until he shall have agreed in
writing to be bound by this Declaration.  No Trustee shall be required to give
bond, surety or securities to secure the performance of his duties or
obligations hereunder.  No reduction in the number of Trustees shall have the
effect of removing any Trustee from office prior to 
<PAGE>
 
the expiration of his term. Whenever a vacancy in the number of Trustees shall
occur, until such vacancy is filled as provided in Article 4, Section 3, the
Trustees or Trustee continuing in office, regardless of their number, shall have
all the powers granted to the Trustees and shall discharge all the duties
imposed upon the Trustees by this Declaration of Trust. The Trustees shall
receive such fees for their services and expenses as they shall deem reasonable
and proper, subject, however, to the fees and expenses limitations of Article 1,
Section 5(h). A majority of the Trustees shall not be affiliated with the
Advisor of the Trust or with any organization affiliated with the Advisor of the
Trust.

     EXPERIENCE OF TRUSTEES.  A Trustee shall have at least three years of
relevant experience demonstrating the knowledge and experience required to
successfully acquire and manage the type of assets being acquired by the Trust.
At least one of the Independent Trustees shall have three years of relevant real
estate experience.

     SECTION 2.  RESIGNATION, REMOVAL AND DEATH.  A Trustee may resign at any
time by giving written notice thereof in recordable form to the other Trustees
at the principal office of the Trust.  The acceptance of a resignation shall not
be necessary to make it effective.  A Trustee may be removed with or without
cause by the vote of the holders of two-thirds of the outstanding Shares or by
vote of two-thirds of the Trustees then in office (which action shall be taken
only by vote at a meeting and not by authorization without a meeting, anything
in Article 4, Section 5, to the contrary notwithstanding).  Upon the resignation
or removal of any Trustee, he shall execute and deliver such documents and
render such accounting as the remaining Trustees shall require and shall
thereupon be discharged as Trustee.  Upon the incapacity or death of any
Trustee, his status as a Trustee shall immediately terminate at such incapacity
or death, and his legal representatives shall perform the acts set forth in the
preceding sentence.

     SECTION 3.  VACANCIES.  The resignation, removal, incompetency or death of
any or all of the Trustees shall not terminate the Trust or affect its
continuity.  During a vacancy, the remaining Trustee or Trustees may exercise
the powers of the Trustees hereunder. Whenever there shall be a vacancy or
vacancies among the Trustees (including vacancies resulting from an increase in
the number of Trustees) such vacancy or vacancies shall be filled either at a
special meeting of Shareholders called for that purpose or at the next annual
meeting of Shareholders.  Trustees elected at special meetings of Shareholders
to fill vacancies shall hold office until the next annual meeting of
Shareholders. Independent Trustees shall nominate replacements for vacancies
amongst the Independent Trustees' positions.

     SECTION 4.  SUCCESSOR TRUSTEES.  The right, title and interest of the
Trustees in and to the Trust property shall vest automatically in all persons
who may hereafter become Trustees upon their due election and qualification
without any further act, and thereupon they shall have the same rights,
privileges, powers, duties and immunities as though originally named as Trustees
in this Declaration of Trust.  Appropriate written evidence of the election and
qualification of Successor Trustees shall be filed with the records of the Trust
and in such 
<PAGE>
 
other offices or places as the Trustees may deem necessary, appropriate or
desirable. Upon the resignation, removal or death of a Trustee, he (and in the
event of his death, his estate) shall automatically cease to have any right,
title or interest in or to any of the Trust property, and the right, title and
interest in such Trustee in and to the Trust property shall vest automatically
in the remaining Trustees without any further act.

     SECTION 5.  ACTIONS BY AND MEETINGS OF TRUSTEES.  The Trustees may act with
or without a meeting.  Except as otherwise provided herein, any action of a
majority of Trustees present at a duly convened meeting of the Trustees shall be
conclusive and binding as an action of the Trustees.  A quorum for meetings of
the Trustees shall be a majority of all of the Trustees in office.  Action may
be taken without a meeting only by unanimous consent of all of the Trustees in
office and shall be evidenced by a written certificate or instrument signed by
all of the Trustees in office.  Any action taken by Trustees in accordance with
the provisions of this Section 5 shall be conclusive and binding upon the Trust,
upon the Trustees, and upon the Shareholders, as an action of all the Trustees,
collectively, and of the Trust.  Any deed, mortgage, evidence of indebtedness or
other instrument, agreement or document of any character, whether similar or
dissimilar, executed by one or more of the Trustees, when authorized at a
meeting or by written authorization without a meeting in accordance with the
provisions of this Section 5, shall be valid and binding upon the Trustees, the
Trust and the Shareholders.

     SECTION 6.  TITLE AND AUTHORITY OF TRUSTEES.  The Trustees shall hold the
legal title to all property belonging to the Trust.  They shall have absolute
and exclusive control, management and disposition thereof, and absolute and
exclusive control over the management and conduct of the business affairs of the
Trust, free from any power or control on the part of the Shareholders, in the
same manner as if they were the absolute owners thereof, subject only to the
express limitations in the Declaration.

     SECTION 7.  THE ADVISOR.  "Advisor" means the person or entity responsible
for directing or performing the day-to-day business affairs of the Trust,
including a person or entity to which an Advisor subcontracts substantially all
such functions.  In their exercise of the absolute control and management of all
of the assets of the Trust, the Trustees may contract with an Advisor to advise
them in respect of investing and reinvesting the funds of the Trust in real
property assets, interests in real property, mortgages secured by real property,
leasehold interests in real property, interests in mortgages, or other assets.

     ADVISORY CONTRACT.  It shall be the duty of the Trustees to evaluate the
performance of the Advisor before entering into or renewing any advisory
contract. The criteria used in such evaluation shall be reflected in the minutes
of such meeting.  Each contract for the services of an Advisor entered into by
the Trustees shall have a term of no more than one year.  Each advisory contract
shall be terminable by a majority of the Independent Trustees or the Advisor on
sixty days written notice without cause.  The Trustees shall determine that any
Advisor possesses sufficient qualifications to perform the advisory function for
the Trust and to justify the compensation provided for it in its contract with
the Trust.
<PAGE>
 
     ADVISORY COMPENSATION.  The Independent Trustees shall determine from time-
to-time and at least annually that the compensation which the Trust contracts to
pay to the Advisor is reasonable in relation to the nature and quality of the
services performed and that such compensation is within the limits prescribed by
Article 1, Section 5(h) of this Declaration of Trust.  The Independent Trustees
shall also supervise the performance of the Advisor and the compensation paid to
it by the Trust to determine that the provisions of such contract are being
carried out.  Each such determination shall be based on the factors set forth
below and all other factors such Independent Trustees may deem relevant, and the
findings of such Trustees on each of such factors shall be recorded in the
minutes of the Trustees:

          (a)  the size of the advisory fee in relation to the size,
     composition and profitability of the portfolio of the Trust;

          (b)  the success of the Advisor in generating opportunities
     that meet the investment objectives of the Trust;

          (c)  the rates charged to other real estate investment
     trusts and to investors other than real estate investment trusts
     by advisors performing similar services;

          (d)  additional revenues realized by the Advisor and its
     affiliates through the relationship with the Trust, including
     loan administration, underwriting or broker commissions,
     servicing, engineering, inspection and other fees, whether paid
     by the Trust or by others with whom the Trust does business;

          (e)  the quality and extent of service and advice furnished
     by the Advisor;

          (f)  the performance of the investment portfolio of the
     Trust, including income, conservation or appreciation of capital,
     frequency of problem investments and competence in dealing with
     distress situations; and

          (g)  the quality of the portfolio of the Trust in
     relationship to the investments generated by the Advisor for its
     own account.

     SECTION 8.  POWERS OF TRUSTEES.  The Trustees shall have all the powers
necessary, convenient or appropriate to effectuate the purposes of the Trust and
may take any action which they deem necessary or desirable and proper to carry
out such purposes.  Any determination of the purposes of the Trust made by the
Trustees in good faith shall be conclusive.  In construing the provisions of the
Declaration, the presumption shall be in favor of the grant of powers to the
Trustees.
<PAGE>
 
     Subject to the limitations contained in Article 1 hereof, the Trustees'
powers shall include the following:

          (1)  To purchase, acquire through the issuance of Shares in the Trust,
     obligations of the Trust or otherwise, and to mortgage, sell, acquire on
     lease, hold, manage, improve, lease to others, option, exchange, release
     and partition real estate interests of every nature, including freehold,
     leasehold, mortgage, ground rent and other interests therein, and to erect,
     construct, alter, repair, demolish or otherwise change buildings and
     structures of every nature.

          (2)  To purchase, acquire through the issuance of Shares in the Trust,
     obligations of the Trust or otherwise, option, sell and exchange stocks,
     bonds, notes, certificates of indebtedness and securities of every nature.

          (3)  To purchase, acquire through the issuance of Shares in the Trust,
     obligations of the Trust or otherwise, mortgage, sell, acquire on lease,
     hold, manage, improve, lease to others, option and exchange personal
     property of every nature.

          (4)  To hold legal title to property of the Trust in the name of the
     Trust, or in the name of one or more of the Trustees for the Trust, or of
     any other person for the Trust, without disclosure of the interest of the
     Trust therein.

          (5)  To borrow money for the purposes of the Trust and to give notes
     or other negotiable or nonnegotiable instruments of the Trust therefor; to
     enter into other obligations or guarantee the obligations of others on
     behalf of and for the purposes of the Trust; and to mortgage or pledge or
     cause to be mortgaged or pledged real and personal property of the Trust to
     secure such notes, debentures, bonds, instruments or other obligations.

          (6)  To lend money on behalf of the Trust and to invest the funds of
     the Trust.

          (7)  To create reserve funds for such purposes as they deem advisable.

          (8)  To deposit funds of the Trust in banks and other depositories
     without regard to whether such accounts will draw interest.

          (9)  To pay taxes and assessments imposed upon or chargeable against
     the Trust or the Trustees by virtue of or arising out of the existence,
     property, business or activities of the Trust.
<PAGE>
 
          (10)   To purchase, issue, sell or exchange Shares of the Trust as
     provided in Article 2 hereof.

          (11)   To exercise with respect to property of the Trust, all options,
     privileges and rights, whether to vote, assent, subscribe or convert, or of
     any other nature; to grant proxies; and to participate in and accept
     securities issued under any voting trust agreement.

          (12)   To participate in any reorganization, readjustment,
     consolidation, merger, dissolution, sale or purchase of assets, lease, or
     similar proceedings of any corporation, partnership or other organization
     in which the Trust shall have an interest and in connection therewith to
     delegate discretionary powers to any reorganization, protective or similar
     committee and to pay assessments and other expenses in connection
     therewith.

          (13)   To engage or employ agents, representatives and employees of
     any nature, or independent contractors, including, without limiting the
     generality of the foregoing, Transfer Agents for the transfer of Shares in
     the Trust, Registrars, underwriters for the sale of Shares in the Trust,
     independent certified public accountants, attorneys at law, appraisers, and
     real estate agents and brokers; and to delegate to one or more Trustees,
     agents, representatives, employees, independent contractor or other persons
     such powers and duties as the Trustees deem appropriate.

          (14)   To determine conclusively the allocation between capital and
     income of the receipts, holdings, expenses and disbursements of the Trust,
     regardless of the allocation which might be considered appropriate in the
     absence of this provision.

          (15)   To determine conclusively the value from time to time and to
     revalue the real estate, securities and other property of the Trust by
     means of independent appraisals.

          (16)   To compromise or settle claims, questions, disputes and
     controversies by, against or affecting the Trust.

          (17)   To solicit proxies of the Shareholders.

          (18)   To adopt a fiscal year for the Trust and to change such fiscal
     year.

          (19)   To adopt and use a seal.
<PAGE>
 
          (20)   To merge the Trust with or into any other trust or corporation
     in accordance with the laws of the State of Maryland.

          (21)   To deal with the Trust property in every way, including joint
     ventures, partnerships and any other combinations or associations, that it
     would be lawful for an individual to deal with the same, whether similar to
     or different from the ways herein and hereinabove specified.

          (22)   To determine whether or not, at any time or from time to time,
     to attempt to cause the Trust to qualify for taxation as a "real estate
     investment trust," as that term is defined in the Internal Revenue Code of
     1954.

     SECTION 9.   TRUSTEES' RIGHT TO OWN SHARES IN TRUST. A Trustee may
acquire, hold and dispose of Shares in the Trust for his individual account and
may exercise all rights of a Shareholder to the same extent and in the same
manner as if he were not a Trustee. After the commencement of any public
offering of the Shares of the Trust, the Trustees may purchase Shares only at
the current offering price then prevailing in connection with such public
offering, less all or any part of the selling or other commission as may be
agreed with the Distributor.

     SECTION 10.  TRANSACTIONS BETWEEN TRUSTEES AND THEIR AFFILIATES AND THE
TRUST.  No Trustee, officer, or advisor of the Trust, or any person affiliated
with any such persons, shall sell any property or assets to the Trust or
purchase any property or assets from the Trust, directly or indirectly, nor
shall any person receive any commission or other remuneration, directly or
indirectly, in connection with the purchase or sale of Trust assets, except as
permitted under the provisions of Article 1, Section 5(i) of this Declaration.
Nothing herein, however, shall prohibit any Trustee or any affiliate of a
Trustee or Trustees, acting as agent or counsel, from executing transactions or
performing legal or other services for the Trust and receiving the prevailing
rate of commission or other compensation for his or its services, or if there
are no prevailing rates for such services, then at such rates and on such terms
as can be agreed upon between the Trustee or his affiliate and the Trust as fair
and reasonable and such transactions are hereby expressly permitted.

     SECTION 11.  NON-LIABILITY OF TRUSTEES. The Trustees shall have no rights
of indemnity or exoneration against any Shareholder individually with respect to
any liability or obligation of the Trust; but, as hereinafter provided the
Trustees may satisfy any claims they have against the Trust out of the Trust
assets. No Trustee shall be liable for any act or neglect of any person or firm
with respect to the performance of any duty, service or act which has been
delegated to such person or firm by the Trustees pursuant to authority contained
in these Trust Articles; the Trustees shall, however, use good faith in
selecting and appointing agents or representatives to whom authority to act on
behalf of the Trust is delegated. No Trustee shall be individually liable for
any obligation or liability incurred by or on behalf of the Trust or by the
Trustees for the benefit and on behalf of the Trust.
<PAGE>
 
     SECTION 12.  INDEMNIFICATION OF TRUSTEES. The Trust shall indemnify and
hold harmless each Trustee from and against all claims and liabilities, whether
they proceed to judgment or are settled, to which such Trustee may become
subject by reason of his being or having been a Trustee, or by reason of any
action alleged to have been taken or omitted by him as Trustee, and shall
reimburse him for all legal and other expenses reasonably incurred by him in
connection with any such claim or liability, including any claim or liability
arising under the provisions of federal or state securities laws; provided,
however, that no Trustee shall be indemnified or reimbursed under the foregoing
provisions in relation to any matter unless it shall have been adjudicated that
his action or omission did not constitute willful misfeasance, bad faith or
gross negligence in the conduct of his duties, or, unless, in the absence of
such an adjudication, the Trust shall have received a written opinion from
independent counsel, approved by the Trustees, to the effect that if the matter
of willful misfeasance, bad faith or gross negligence in the conduct of duties
had been adjudicated, it would have been adjudicated in favor of such Trustee.
The rights accruing to a Trustee under these provisions shall not exclude any
other right to which he may be lawfully entitled, nor shall anything herein
contained restrict the right of the Trust to indemnify or reimburse such Trustee
in any proper cause even though not specifically provided for herein.

     SECTION 13.  PERSONS DEALING WITH TRUSTEES. No corporation, person,
transfer agent or other party shall be required to examine or investigate the
trusts, terms or conditions contained in this Declaration or otherwise
applicable to the Trust, and every such corporation, person, transfer agent or
other party may deal with Trust property and assets as if the Trustees were the
sole and exclusive owners thereof free of all trusts; and no such corporation,
person, transfer agent or other party dealing with the Trustees or with the
Trust or Trust property and assets shall be required to see to the application
of any money or property paid or delivered to any Trustee, or nominee, agent or
representative of the Trust or the Trustees. A certificate executed by or on
behalf of the Trustees or by any other duly authorized representative of the
Trust, delivered to any person or party dealing with the Trust or Trust property
and assets, or, if relating to real property, recorded in the deed records for
the county or district in which such real property lies, certifying as to the
identity and authority of the Trustees, agents, or representatives of the Trust
for the time being, or as to any action of the Trustees or of the Trust, or of
the Shareholders, or as to any other fact affecting or relating to the Trust or
these Trust Articles, may be treated as conclusive evidence thereof by all
persons dealing with the Trust. No provision of these Trust Articles shall
diminish or affect the obligation of the Trustees and every other representative
or agent of the Trust to deal fairly and act in good faith with respect to the
Trust and the Shareholders insofar as the relationship and accounting among the
parties to the Trust is concerned; but no third party dealing with the Trust or
with any Trustee, agent or representative of the Trust shall be obliged or
required to inquire into, investigate or be responsible for the discharge and
performance of such fiduciary obligation.

     SECTION 14.  ADMINISTRATIVE POWERS OF TRUSTEES.  The Trustees shall have
power to pay the expenses of organization and administration of the Trust,
including all legal and other expenses in connection with the preparation and
carrying out of the plan for the formation of 
<PAGE>
 
the Trust, the acquisition of properties thereunder and the issuance of Shares
thereunder; and to employ such officers, experts, counsel, managers, salesmen,
agents, workmen, clerks and other persons as they think best.

     SECTION 15.  ELECTION OF OFFICERS.  The Trustees may annually elect a
Chairman of the Board and a President of the Trust.  The Trustees may also
annually elect one or more Vice Presidents, a Secretary, a Treasurer, Assistant
Secretaries, Assistant Treasurers, and such other officers as the Trustees shall
deem proper.  Except as required by law, the officers of the Trust need not be
Trustees.  All officers and agents of the Trust shall have such authority and
perform such duties in the management of the Trust as may be provided in the
Bylaws or as may be determined by the Trustees not inconsistent with the Bylaws.
Any officer or agent elected or appointed by the Trustees may be removed by the
Trustees whenever in their judgment the best interest of the Trust will be
served thereby, but such removal shall be without prejudice to the contract
rights, if any, of the person so removed.  Election or appointment of any
officer or agent shall not of itself create contract rights.  The Trustees shall
fix the compensation of all of officers.

     SECTION 16.  (OMITTED).

     SECTION 17.  COMMITTEES OF TRUSTEES, DELEGATION OF POWERS AND DUTIES TO
COMMITTEES, TRUSTEES, OFFICERS AND EMPLOYEES .  The Trustees may, in their
discretion, by resolution passed by a majority of the Trustees, designate from
among their members one or more committees which shall consist of one or more
Trustees.  The Trustees may designate one or more Trustees as alternate members
of any such committee, who may replace any absent or disqualified member at any
meeting of the committee.  Such committees shall have and may exercise such
powers as shall be conferred or authorized by the resolution appointing them. A
majority of any such committee may determine its action and fix the time and
place of its meetings, unless the Trustees shall otherwise provide.  The
Trustees, by resolution passed by a majority of the Trustees, may at any time
change the membership of any such committee, fill vacancies in it, or dissolve
it.  The Bylaws, or a majority of the Trustees, may authorize any one or more of
the Trustees, or any one or more of the officers or employees or agents of the
Trust, on behalf of the Trust, to exercise and perform any and all powers
granted to the Trustees, and to discharge any and all duties imposed upon the
Trustees, and to do any acts and to execute any instruments deemed by such
person or persons to be necessary or appropriate to exercise such power or to
discharge such duties, and to exercise his own sound judgment in so doing.  The
authority to act upon any transaction which under the terms of this Declaration
of Trust requires the vote of a majority of the disinterested Trustees may not
be delegated to any committee.

                 ARTICLE 5. DURATION AND TERMINATION OF TRUST

     SECTION 1.   TERMINATION OF TRUST. The Trust may be terminated at any time
by a vote or written consent of the holders of a majority of the outstanding
Trust Shares of all classes.
<PAGE>
 
     In connection with any termination of the Trust, the Trustees, upon receipt
of such releases or indemnity as they deem necessary for their protection, may

          (1)    Sell and convert into cash the property of the Trust and
     distribute the net proceeds among the Shareholders ratably; or

          (2)    Convey the property of the Trust to one or more persons,
     entities, trusts or corporations for consideration consisting in whole or
     in part of cash, shares of stock, or other property of any kind, and
     distribute the net proceeds among the Shareholders ratably, at valuations
     fixed by the Trustees, in cash or in kind, or partly in cash and partly in
     kind; provided that the proposal to proceed as described in this clause (2)
     shall have been set forth in the written approval of the Shareholders
     holding a two-thirds majority of the Shares issued and outstanding.

     Upon termination of the Trust and distribution to the Shareholders as
herein provided, a majority of the Trustees shall execute and lodge among the
records of the Trust an instrument in writing setting forth the fact of such
termination, and the Trustees shall thereupon be discharged from all further
liabilities and duties hereunder, and the right, title and interest of all
Shareholders shall cease and be canceled and discharged.

     SECTION 2.  ORGANIZATION AS A CORPORATION.  Whenever the Trustees deem it
for the best interests of the Shareholders that the Trust be organized as a
corporation, the Trustees shall have full power to organize such corporation,
under the laws of such state as they may consider appropriate, in the place and
stead of this Trust without procuring the consent of any of the Shareholders, in
which event the capital stock of such corporation shall be and remain the same
as fixed under this Agreement and Declaration and the Shareholders shall receive
and accept stock in such corporation on the same basis as they hold Shares in
this Trust.

     SECTION 3.  MERGER.  This Trust may merge into a Maryland or foreign
business trust or into a Maryland or foreign corporation having capital stock or
one or more such business trusts or such corporations may merge into it in
accordance with the provisions of Maryland law.

     SECTION 4.  DURATION OF TRUST.  Subject to possible earlier termination in
accordance with the provisions of Article 5 hereof, the duration of the Trust
shall be perpetual or, in any jurisdiction in which such duration is not
permitted, then the Trust shall terminate on the latest date permitted by the
law of such jurisdiction.

                             ARTICLE 6. AMENDMENTS
<PAGE>
 
     SECTION 1.  AMENDMENT BY SHAREHOLDERS.  Except as provided in Section 2 of
this Article 6, the Declaration of Trust may be amended only by the affirmative
vote or written consent of the holders of at least two-thirds of the shares
entitled to vote thereon.

     SECTION 2.  AMENDMENT BY TRUSTEES.  The Trustees by a two-thirds vote may
amend provisions of the Declaration of Trust from time to time to qualify as a
real estate investment trust under the Internal Revenue Code of 1954 or under
Title 8, General Corporation Law of Maryland.

     SECTION 3.  REQUIREMENTS OF MARYLAND LAW. The Declaration of Trust may not
be amended except as provided in Section 8-501, General Corporation Law of
Maryland.

                           ARTICLE 7. MISCELLANEOUS

     SECTION 1.  CONSTRUCTION.  This Declaration shall be construed in such a
manner as to give effect to the intent and purposes of the Trust and the
Declaration.  If any provisions hereof appear to be in conflict, more specific
provisions shall control over general provisions. This Declaration shall govern
all of the relationships among the Trustees and Shareholders of the Trust; and
each provision hereof should be effective for all purposes and to all persons
dealing with the Trust to the fullest extent possible under applicable law in
each jurisdiction in which the Trust shall engage in business.

     SECTION 2.  HEADINGS FOR REFERENCE ONLY.  Headings preceding the text,
articles and sections hereof have been inserted solely for convenience and
reference, and shall not be construed to affect the meaning, construction or
effect of this Declaration of Trust.

     SECTION 3.  FILING AND RECORDING. This Declaration of Trust shall be filed
in the manner prescribed for real estate investment trusts under Maryland law
and shall be filed for record in any county where real property is owned by the
Trust.

     SECTION 4.  APPLICABLE LAW.  This Declaration of Trust has been executed
with reference to and its construction and interpretation shall be governed by
the laws of Maryland, and the rights of all parties and the construction and
effect of every provision hereof shall be subject to and construed according to
the laws of Maryland.

     SECTION 5.  EXECUTION AND EFFECT OF RESTATED DECLARATION OF TRUST.  A
restated Declaration of Trust containing the original Declaration of Trust dated
January 18, 1963, as amended and/or restated to the time of execution of the
Restated Declaration of Trust, may be executed at any time or from time to time
by a majority of the Trustees and filed with the State Department of Assessments
and Taxation of Maryland, and such Restated Declaration of Trust shall
thereafter be effective and may thereafter be referred to in lieu of the
original Declaration of Trust and/or amendments or restatements thereof.
<PAGE>
 
     SECTION 6.  CERTIFICATIONS.  Any certificates signed by a person who,
according to the records of the State Department of Assessments and Taxation of
Maryland appears to be a Trustee hereunder, shall be conclusive evidence as to
the matters so certified in favor of any person dealing with the Trust or the
Trustees or any one or more of them, and the successors or assigns of such
persons, which certificate may certify to any matter relating to the affairs of
the Trust, including but not limited to any of the following: A vacancy among
the Trustees; the number and identity of Trustees; this Declaration of Trust and
any Amendments thereto, or any Restated Declaration of Trust and any Amendments
thereto, or that there are no Amendments to the Declaration of Trust or any
Restated Declaration of Trust; a copy of the Bylaws of the Trust or any
Amendment thereto; the due authorization of the execution of any instrument or
writing; the vote at any meeting of Trustees or a committee thereof or
Shareholders; the fact that the number of Trustees present at any meeting or
executing any written instrument satisfies the requirements of the Declaration
of Trust; a copy of any Bylaw adopted by the Shareholders or the identity of any
officer elected by the Trustees; or the existence or nonexistence of any fact or
facts which in any manner relate to the affairs of the Trust.  If the
Declaration of Trust or any Restated Declaration of Trust is filed or recorded
in any recording office other than the State Department of Assessments and
Taxation of Maryland, any one dealing with real estate so located that
instruments affecting the same should be filed or recorded in such recording
office may rely conclusively upon any certificate of the kind described above
which is signed by a person who according to the records of such recording
office appears to be a Trustee hereunder.  In addition, the Secretary or any
Assistant Secretary of the Trust or any other officer of the Trust designated by
the Bylaws or by action of the Trustees may sign any certificate of the kind
described in this Section 6, and such certificate shall be conclusive evidence
as to the matters so certified in favor of any person dealing with the Trust,
and the successors and assigns of such person.

     SECTION 7.  (OMITTED).

     SECTION 8.  SEVERABILITY.  If any provision of the Declaration of Trust
shall be invalid or unenforceable, such invalidity or unenforceability shall
attach only to such provision and shall not in any manner affect or render
invalid or unenforceable any other provision of the Declaration of Trust, and
the Declaration of Trust shall be carried out, if possible, as if such invalid
or unenforceable provision were not contained therein.

     SECTION 9.  (OMITTED).

     SECTION 10. NAMES AND ADDRESSES OF TRUSTEES. The name and address of each
of the Trustees is set forth below.

              Name          Address
              ----          -------
 
          Calvin K. Kessler        8600 Gateway East
                                   El Paso, Texas 79907
<PAGE>
 
          James H. Polk, III        141 E. Palace Avenue
                                    Santa Fe, New Mexico 87501

          John T. Kelley, III       600 Sunland Park Drive
                                    Building #5, Suite 100
                                    El Paso, Texas 79912

          John C. Schweitzer        100 Congress, Suite 930
                                    Austin, Texas 78701

          Charles F. Jordan, III    310 North Mesa, Suite 220
                                    El Paso, Texas   79901

          James A. Cardwell         6080 Surety Drive
                                    El Paso, Texas 79905

          C. Ronald Blankenship     141 E. Palace Avenue
                                    Santa Fe, New Mexico 87501

     SECTION 11.  BYLAWS.  The Bylaws of the Trust may be altered, amended or
repealed, and new Bylaws may be adopted, at any meeting of the Board of Trustees
of the Trust by a majority vote of the Trustees, subject to repeal or change by
action of the Shareholders of the Trust entitled to vote thereon.

     SECTION 12.  RECORDATION.  The Declaration of Trust shall be filed in the
manner prescribed for real estate investment trusts under Maryland law.

                ARTICLE 8. LIMITATION OF LIABILITY FOR TRUSTEES
                         AND OFFICERS; INDEMNIFICATION

     SECTION 1.   A Trustee or officer of the Trust shall not be liable for
monetary damages to the Trust or its shareholders for any act or omission in the
performance of his duties unless:

          (1)     The Trustee or officer actually received an improper benefit
     in money, property or services (in which case, such liability shall be for
     the amount of the benefit in money, property or services actually
     received);

          (2)     The Trustee's or officer's action or failure to act was the
     result of active and deliberate dishonesty and was material to the cause of
     action being adjudicated;

          (3)     The Trustee's or officer's action or failure to act
     constitutes willful misconduct or deliberate recklessness; or
<PAGE>
 
          (4)    Such liability to the Trust is specifically imposed upon
     Trustees or officers by statute.

     SECTION 2.  In the event that any provision or portion of a provision of
this Article 8 is determined to be in conflict with any applicable statute, such
provision or portion thereof shall be inapplicable to the extent of such
conflict.

     SECTION 3.  In the event that any provision or portion of a provision of
this Article 8 is determined to be invalid, void, illegal or unenforceable, the
remainder of the provisions of this Article 8 shall continue to be valid and
enforceable and shall in no way be affected, impaired or invalidated.

     SECTION 4.  Nothing in this Article 8 shall be construed to diminish, limit
or impair any rights or defenses afforded to officers or Trustees by common law,
statute, other provisions of this Restated Declaration of Trust, the Bylaws of
the Trust or otherwise, and the provisions of this Article 8 shall be deemed to
be cumulative thereto.

     SECTION 5.  References in this Article 8 to Trustees or officers shall be
deemed to refer to any person who is or was a Trustee or officer of the Trust
and any person who, while a Trustee or officer of the Trust, is or was serving
at the request of the Trust as a director, officer, partner, venturer,
proprietor, trustee, employee, agent, or similar functionary of another
corporation, partnership, joint venture, sole proprietorship, trust, employee
benefit plan or other enterprise.

     SECTION 6.  Notwithstanding any other provisions of this Restated
Declaration of Trust, the Trust, for the purpose of providing indemnification
for its Trustees and officers, shall have the authority, without specific
shareholder approval, to enter into insurance or other arrangements, with
persons or entities which are not regularly engaged in the business of providing
insurance coverage, to indemnify all Trustees and officers of the Trust against
any and all liabilities and expenses incurred by them by reason of their being
Trustees or officers of the Trust, whether or not the Trust would otherwise have
the power under this Restated Declaration of Trust or under Maryland law to
indemnify such persons against such liability.  Without limiting the power of
the Trust to procure or maintain any kind of insurance or other arrangement, the
Trust may, for the benefit of persons indemnified by it, (i) create a trust
fund, (ii) establish any form of self-insurance, (iii) secure its indemnity
obligation by grant of any security interest or other lien on the assets of the
corporation, or (iv) establish a letter of credit, guaranty or surety
arrangement.  Any such insurance or other arrangement may be procured,
maintained or established within the Trust or with any insurer or other person
deemed appropriate by the Board of Trustees regardless of whether all or part of
the stock or other securities thereof are owned in whole or in part by the
Trust.  In the absence of fraud, the judgment of the Board of Trustees as to the
terms and conditions of insurance or other arrangement and the identity of the
insurer or other person participating in any arrangement shall be conclusive,
and such insurance or other arrangement shall not be subject to voidability, nor
subject, the Trustees approving such insurance or other 
<PAGE>
 
arrangement to liability, on any ground, regardless of whether Trustees
participating and approving such insurance or other arrangement shall be
beneficiaries thereof.
<PAGE>
 
     IN WITNESS WHEREOF, the undersigned, constituting all of the present
Trustees of Property Trust of America, have each executed this Restated
Declaration of Trust as Trustees.

                                        /s/ Calvin K. Kessler
                                        ----------------------------------------
                                        Calvin K. Kessler


                                        /s/ James H. Polk, III
                                        ----------------------------------------
                                        James H. Polk, III


                                        /s/ John T. Kelley, III
                                        ----------------------------------------
                                        John T. Kelley, III


                                        /s/ John C. Schweitzer
                                        ----------------------------------------
                                        John C. Schweitzer


                                        /s/ Charles F. Jordan, III    
                                        ----------------------------------------
                                        Charles F. Jordan, III        
                                                                      
                                                                      
                                        /s/ James A. Cardwell         
                                        ----------------------------------------
                                        James A. Cardwell             
                                                                      
                                                                      
                                        /s/ C. Ronald Blankenship     
                                        ----------------------------------------
                                        C. Ronald Blankenship          
<PAGE>
 
STATE OF TEXAS           )
                         )
COUNTY OF EL PASO        )

     On the 5th day of July 1991, before me, the undersigned, a notary public in
and for Santa Fe County, New Mexico, personally appeared Calvin K. Kessler known
to me to be the person whose name is subscribed to the within instrument and
acknowledged that he executed the same for the purposes therein contained.

     IN WITNESS WHEREOF, I hereunto set my hand and official seal.



                                        /s/ Virginia Gonzalez
                                        ----------------------------------------
                                               Notary Public In and For
                                               The State of New Mexico

My commission expires:

       01-08-92
--------------------------



STATE OF TEXAS           )
                         )
COUNTY OF EL PASO        )

     On the ______ of July 1991, before me, the undersigned, a notary public in
and for Santa Fe County, New Mexico, personally appeared John T. Kelley, III
known to me to be the person whose name is subscribed to the within instrument
and acknowledged that he executed the same for the purposes therein contained.

     IN WITNESS WHEREOF, I hereunto set my hand and official seal.



                                        ________________________________________
                                               Notary Public In and For
                                               The State of New Mexico

My commission expires:

-------------------------- 
<PAGE>
 
STATE OF TEXAS           )
                         )
COUNTY OF EL PASO        )

     On the _____ day of July 1991, before me, the undersigned, a notary public
in and for Santa Fe County, New Mexico, personally appeared Calvin K. Kessler
known to me to be the person whose name is subscribed to the within instrument
and acknowledged that he executed the same for the purposes therein contained.

     IN WITNESS WHEREOF, I hereunto set my hand and official seal.



                                        ________________________________________
                                               Notary Public In and For
                                               The State of New Mexico

My commission expires:

 
__________________________


STATE OF TEXAS           )
                         )
COUNTY OF EL PASO        )

     On the 5th day of July 1991, before me, the undersigned, a notary public in
and for Santa Fe County, New Mexico, personally appeared John T. Kelley, III
known to me to be the person whose name is subscribed to the within instrument
and acknowledged that he executed the same for the purposes therein contained.

     IN WITNESS WHEREOF, I hereunto set my hand and official seal.



                                        /s/ Joyce Mowad
                                        ----------------------------------------
                                               Notary Public In and For
                                               The State of New Mexico

My commission expires:

       9-27-93
--------------------------
<PAGE>
 
STATE OF TEXAS           )
                         )
COUNTY OF EL PASO        )

     On the 3rd day of July 1991, before me, the undersigned, a notary public in
and for Santa Fe County, New Mexico, personally appeared Charles F. Jordan, III
known to me to be the person whose name is subscribed to the within instrument
and acknowledged that he executed the same for the purposes therein contained.

     IN WITNESS WHEREOF, I hereunto set my hand and official seal.



                                        /s/ Joyce Mowad
                                        ----------------------------------------
                                               Notary Public In and For
                                               The State of New Mexico

My commission expires:

       9-27-93
--------------------------



STATE OF TEXAS           )
                         )
COUNTY OF EL PASO        )

     On the ______ of July 1991, before me, the undersigned, a notary public in
and for Santa Fe County, New Mexico, personally appeared James A. Cardwell known
to me to be the person whose name is subscribed to the within instrument and
acknowledged that he executed the same for the purposes therein contained.

     IN WITNESS WHEREOF, I hereunto set my hand and official seal.



                                        ________________________________________
                                               Notary Public In and For
                                               The State of New Mexico

My commission expires:


__________________________ 
<PAGE>
 
STATE OF TEXAS           )
                         )
COUNTY OF EL PASO        )

     On the 3rd day of July 1991, before me, the undersigned, a notary public in
and for Santa Fe County, New Mexico, personally appeared Charles F. Jordan, III
known to me to be the person whose name is subscribed to the within instrument
and acknowledged that he executed the same for the purposes therein contained.

     IN WITNESS WHEREOF, I hereunto set my hand and official seal.



                                        ________________________________________
                                               Notary Public In and For
                                               The State of New Mexico

My commission expires:

 
__________________________


STATE OF TEXAS           )
                         )
COUNTY OF EL PASO        )

     On the 3rd of July 1991, before me, the undersigned, a notary public in and
for Santa Fe County, New Mexico, personally appeared James A. Cardwell known to
me to be the person whose name is subscribed to the within instrument and
acknowledged that he executed the same for the purposes therein contained.

     IN WITNESS WHEREOF, I hereunto set my hand and official seal.



                                        /s/ Barbara Evans
                                        ----------------------------------------
                                               Notary Public In and For
                                               The State of New Mexico

My commission expires:

       11-15-92
--------------------------
<PAGE>
 
STATE OF NEW MEXICO      )
                         )
COUNTY OF SANTA FE       )

     On the 9th day of July 1991, before me, the undersigned, a notary public in
and for Santa Fe County, New Mexico, personally appeared James H. Polk, III
known to me to be the person whose name is subscribed to the within instrument
and acknowledged that he executed the same for the purposes therein contained.

     IN WITNESS WHEREOF, I hereunto set my hand and official seal.



                                        /s/ Christine Y. Canoose
                                        ----------------------------------------
                                               Notary Public In and For
                                               The State of New Mexico

My commission expires:

       3-7-93
--------------------------



STATE OF NEW MEXICO      )
                         )
COUNTY OF SANTA FE       )

     On the 9th day of July 1991, before me, the undersigned, a notary public in
and for Santa Fe County, New Mexico, personally appeared C. Ronald Blankenship
known to me to be the person whose name is subscribed to the within instrument
and acknowledged that he executed the same for the purposes therein contained.

     IN WITNESS WHEREOF, I hereunto set my hand and official seal.



                                        /s/ Christine Y. Canoose
                                        ----------------------------------------
                                               Notary Public In and For
                                               The State of New Mexico

My commission expires:

3-7-93
--------------------------
<PAGE>
 
STATE OF TEXAS           )
                         )
COUNTY OF TRAVIS         )

     On the 3rd day of July 1991, before me, the undersigned, a notary public in
and for Travis County, Texas, personally appeared John C. Schweitzer known to me
to be the person whose name is subscribed to the within instrument and
acknowledged that he executed the same for the purposes therein contained.

     IN WITNESS WHEREOF, I hereunto set my hand and official seal.



                                        /s/ Jeanne Welch
                                        ----------------------------------------
                                               Notary Public In and For
                                               The State of Texas

My commission expires:

2-14-93
--------------------------