<PAGE>

THIS DOCUMENT IS A COPY OF THE FORM 10-K FILED ON MARCH 31, 1997 PURSUANT TO A 
                     RULE 201 TEMPORARY HARDSHIP EXEMPTION


 
                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, DC  20549
                                   FORM 10-K

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) 
             OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)

                  For the Fiscal Year Ended December 31, 1996
                                       OR
[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
            OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

                           COMMISSION FILE NO 0-1743

                               THE ROUSE COMPANY
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

              MARYLAND                                52-0735512
 ----------------------------------                -------------------  
  (STATE OR OTHER JURISDICTION OF                   (I.R.S. EMPLOYER
   INCORPORATION OR ORGANIZATION)                  IDENTIFICATION NO.)

      10275 LITTLE PATUXENT PARKWAY
          COLUMBIA, MARYLAND                            21044-3456
 ----------------------------------------               ----------
 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)               (ZIP CODE)

  Registrant's telephone number, including area code: (410) 992-6000
                                                      --------------

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

                                                         NAME OF EACH EXCHANGE
TITLE OF EACH CLASS                                       ON WHICH REGISTERED
-------------------                                      ---------------------

Common Stock (par value 1c per share)                    New York Stock Exchange
-------------------------------------                                 

9 1/4% Cumulative Quarterly Income Preferred Securities  New York Stock Exchange
-------------------------------------------------------                         

Series B Convertible Preferred Stock
------------------------------------
(par value 1c per share)                                 New York Stock Exchange
------------------------                                                      

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

                                      NONE
                                      ----

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

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

  As of March 17, 1997, there were outstanding 66,788,842 shares of the
registrant's common stock, par value 1c, which is the only class of common or
voting stock of the registrant.  As of that date, the aggregate market value of
the shares of common stock held by nonaffiliates of the registrant (based on the
closing price as reported in The Wall Street Journal, Eastern Edition) was
                             ----------------------------------------     
approximately $1,943,623,000.

                      Documents Incorporated by Reference

The specified portions of the Annual Report to Shareholders for the fiscal year
  ended December 31, 1996 are incorporated by reference into Parts I, II and IV.

Definitive Proxy Statement to be filed pursuant to Regulation 14A on or before
  April 4, 1997 is incorporated by reference into Part III.
<PAGE>
 
                                 PART I
                                 ------

Item 1.  Business.

Item 1(a).  General Development of Business.

  The Rouse Company (the "Company") was incorporated as a business corporation
    under the laws of the State of Maryland in 1956.  Its principal offices are
    located at The Rouse Company Building, Columbia, Maryland 21044.  Its
    telephone number is (410) 992-6000.  The Company, through its subsidiaries
    and affiliates, is engaged in (i) the ownership, management, acquisition and
    development of income-producing and other real estate in the United States,
    including retail centers, office buildings, mixed-use projects, community
    retail centers and two hotels, and the management of one retail center in
    Canada, and (ii) the development and sale of land to builders and other
    developers, primarily around Columbia, Maryland, and Las Vegas, Nevada, for
    residential, commercial and industrial uses.

DEVELOPMENTS IN 1996

  On June 12, 1996, the Company completed the acquisition, through merger, of
    The Hughes Corporation and Howard Hughes Properties, Limited Partnership
    (collectively "Hughes") from the heirs of the late Howard R. Hughes, Jr. and
    others (the "Hughes Owners").  The  Hughes assets include: four large-scale,
    master-planned business parks (three in Las Vegas and one in Los Angles); a
    75 percent partnership interest in an 840,000 square foot regional shopping
    center, Fashion Show Mall, located on the "Strip" in Las Vegas; a 22,500
    acre master-planned, new community development project, Summerlin, which
    extends from northwest Las Vegas west to the Spring Mountain Range; and a
    number of other land parcels and commercial buildings in both Nevada and the
    Los Angeles area.

  The purchase price was approximately $549 million, comprised of   $178 million
    of common stock of the Company (7,742,884 shares valued at $23 per share)
    and $371 million of debt and other liabilities (net of certain receivables
    and other current assets acquired) incurred or assumed by the Company.
    Additional shares of common stock, (or in certain circumstances, Increasing
    Rate Cumulative Preferred Stock) of the Company may be issued to the Hughes
    Owners based on the values of certain specified assets at various
    "termination" dates over a 14-year period and net cash flows generated from
    the development or sale of those assets prior to  the termination dates
    pursuant to terms of a Contingent Stock Agreement.
 

                                      I-1
<PAGE>
 
Item 1.  Business, continued.
 
Item 1(b).  Financial Information About Industry Segments.

  Information required by Item 1(b) is incorporated herein by reference to note
    11 of the notes to consolidated financial  statements included in the 1996
    Annual Report to Shareholders.

  As noted in Item 1(a), the Company is a real estate company engaged in most
    aspects of the real estate industry, including the management, acquisition
    and development of income-producing and other properties, both retail and
    commercial, community development and management, and land sales. These
    business segments are further described below.

                                      I-2
<PAGE>
 
Item 1.  Business, continued.

Item 1(c).  Narrative Description of Business.

  Operating Properties:
  -------------------- 

  As set forth in Item 2, at December 31, 1996, the 58 regional retail centers
    owned, in whole or in part, or operated by subsidiaries or affiliates of the
    Company, aggregated 43,721,000 square feet of leasable space, including
    25,166,000 square feet owned by or leased to department stores and 147,000
    square feet of office space. The activities involved in operating and
    managing retail centers include: negotiating lease terms with present and
    prospective tenants, identifying and attracting desirable new tenants,
    conducting local market and consumer research, developing and implementing
    short- and long-term merchandising and leasing programs, assisting tenants
    in the presentation of their merchandise and the layout of their stores and
    storefronts, and maintaining the buildings and common areas.

  In conjunction with other partners or investors, the Company acquires
    interests in completed retail centers, with the Company having management
    responsibility and earning incentive fees including, in some instances,
    equity interests in the centers. The Company also provides management
    services for centers developed and owned by others under management
    agreements that also provide for incentive fees and, in some instances,
    equity interests in the centers. As of December 31, 1996, the Company
    managed 17 such centers, which are included in the figures in the preceding
    paragraph and aggregated 12,646,000 square feet of leasable space, 7,117,000
    square feet of which was department store space.
   
  The Howard Research And Development Corporation ("HRD", a wholly-  owned
    subsidiary of the Company) and its subsidiaries own and/or manage 14 office
    and industrial buildings with 2,432,000 square feet of leasable space, 9
    community retail centers with 868,000 square feet of leasable retail space
    and other properties and additional commercial space, including the 289-room
    Columbia Inn in Columbia, Maryland.

  The Hughes Corporation ("Hughes", a wholly-owned subsidiary of the Company)
    and its subsidiaries and affiliates own and/or manage 53 office and 
    industrial buildings with 3,209,000 square feet of leasable space, a
    community retail center with 36,000 square feet of leasable space and other
    properties in and around Las Vegas, Nevada and Los Angeles, California.

  Other subsidiaries of the Company own and operate 5 mixed-use projects with a
    total of 1,301,000 square feet of leasable retail space, 1,858,000 square 
    feet of leasable office space and the 148-room Cross Keys Inn located at The
    Village of Cross

                                      I-3
<PAGE>
 
Item 1.  Business, continued.

  Keys in Baltimore, Maryland.  Other subsidiaries of the Company own, in whole
    or in part, 8 office buildings with a total of 1,098,000 square feet of
    leasable office space.  The Company also has a 5% interest in Rouse-Teachers
    Properties, Inc., which owns 29 office/industrial buildings with 4,608,000
    square feet of space and 303 acres of land.  A wholly-owned affiliate of the
    Company is responsible for the operation, management and development of all
    buildings and land owned by Rouse-Teachers Properties, Inc.

  Development:
  ----------- 

  The Company renovates and expands existing retail centers and develops 
    suburban and downtown retail centers, mixed-use projects and master-planned
    business parks, primarily for ownership. In addition, the Company is capable
    of serving as the master developer for certain mixed-use projects, with the
    Company generally owning at least the retail component of such projects. The
    activities involved in the development, renovation and expansion of retail
    centers, mixed-use projects and master-planned business parks include:
    initial market and consumer research, evaluating and acquiring land sites,
    obtaining necessary public approvals, engaging architectural and engineering
    firms to design the project, estimating development costs, developing and
    testing pro forma operating statements, selecting a general contractor,
    arranging construction and permanent financing, identifying and obtaining
    department stores and other tenants, negotiating lease terms, negotiating
    partnership and joint venture agreements and promoting new, renovated or
    expanded retail centers, mixed-use projects and master-planned business
    parks.

  The Company and certain subsidiaries or affiliates are in the construction or
    development stage of announced projects, primarily the construction of a new
    retail center in Orlando, Florida, expansions of existing retail centers and
    expansions of existing master-planned business parks in Las Vegas, Nevada.

  Land Sales:
  ---------- 

  HRD is the developing entity of Columbia, Maryland, which is located in the
    Baltimore-Washington corridor. HRD owns approximately 2,000 developable
    acres (1,741 saleable acres) of land in and around Columbia, and, through
    its subsidiaries and affiliates, develops and sells this land to builders
    and other developers for residential, commercial and industrial uses. Hughes
    is the developing entity of Summerlin, Nevada, which is located immediately
    north and west of Las Vegas. Hughes owns approximately 16,500 developable
    acres(11,500 saleable acres) of land in Summerlin, and develops and sells
    this land to builders and other developers for residential and commercial

                                      I-4
<PAGE>
 
Item 1.  Business, continued.

    uses.  The Company may also retain some of this land for its own development
    purposes.  The Company, through its subsidiaries and affiliates, also is
    presently involved in community development and related land sales elsewhere
    in Maryland, and is developing for sale parcels of land elsewhere in Nevada
    and California.

  In all aspects of the Company's business pertaining to the ownership,
    management, acquisition or development of income-producing and other real
    estate, the Company operates in highly competitive markets.  With respect to
    the leasing and operation or management of developed properties, each
    project faces market competition from existing and future developments in
    its geographical market area. The Company competes with developers and other
    buyers with respect to the acquisition of development sites or centers and
    for financing opportunities in the money markets. The Company also faces
    competition in and around Columbia, Maryland and Las Vegas, Nevada with
    respect to the development and sale of land for residential, commercial and
    industrial uses.

  Neither the Company's business, taken as a whole, nor any of its industry
    segments, is seasonal in nature.

  Federal, state and local statutes and regulations relating to the protection
    of the environment have previously had no material effect on the Company's
    business. Future development opportunities of the Company may involve
    additional capital and other expenditures in order to comply with such
    statutes and regulations.  It is impossible at this time to predict with any
    certainty the magnitude of any such expenditures or the long-range effect,
    if any, on the Company's operations. Compliance with such laws has had no
    material adverse effect on the operating results or competitive position of
    the Company in the past; the Company anticipates that they will have no
    material adverse effect on its future operating results or its competitive
    position in the industry.

  None of the Company's industry segments depends upon a single customer or a
    few customers, the loss of which would have a materially adverse effect on
    the segment. No customer accounts for 10 percent or more of the consolidated
    revenues of the Company.

  The Company and its subsidiaries had 4,287 full-time and part-time employees
    at December 31, 1996.

                                      I-5
<PAGE>
 
Item 2.  Properties.

  The Company leases its headquarters building (approximately 127,000 square
    feet) in Columbia, Maryland for an initial term of 30 years which expires in
    2003 with options for two 15-year renewal periods. The lease on the
    headquarters building is accounted for as a capital lease.

  Information respecting the Company's operating properties is incorporated
    herein by reference to the "Projects of The Rouse Company" table on pages 64
    through 67 of Exhibit 13 to this Form 10-K. The ownership of virtually all
    properties is subject to mortgage financing. The table of projects includes
    retail centers managed by the Company for a fee as identified in notes (c)
    and (d) to the table. Excluding such managed centers, certain of the
    remaining properties are subject to leases which provide an option to
    purchase (or repurchase) the property and/or to renew the leases for one or
    more renewal periods. The years of expiration indicated below assume all
    options to extend the terms of the leases are exercised. The properties
    subject to such leases in whole or in part are as follows:
<TABLE>
<CAPTION>
 
                                                             Year of
                                      Nature of            expiration
Property                               interest             of lease
--------                              ---------            -----------
<S>                           <C>                         <C>
 
 Arizona Center               Leasehold                   Various dates
                                                          from 2017 to
                                                                   2050
 
 Augusta Mall                 Leasehold                            2068
 
 Bayside Marketplace          Leasehold by joint venture           2062
 
 Columbia Mall, Inc. -
  American City Building      Leasehold and fee                    2000
 
 Columbia Mall, Inc. -
  Columbia Cinema             Leasehold and fee                    2003
 
 Columbia Mall, Inc. -
  Exhibit Building            Leasehold and fee                    2012
 
 Columbia Mall, Inc. -
  Oakland Building            Leasehold                            2062
 
 Echelon Mall                 Leasehold                            2008
 
 Faneuil Hall Marketplace     Leasehold                            2074
 
 First National Bank Plaza    Leasehold                            2013
</TABLE>

                                      I-6
<PAGE>
 
Item 2.  Properties, continued.

<TABLE> 
<CAPTION> 
                                                                Year of
                                  Nature of                   expiration
         Property                  interest                     of lease
         --------                  --------                    ----------
<S>                            <C>                            <C> 
 Franklin Park                 Leasehold and fee by
                               joint venture                      2024
                                                                  
 The Gallery at Market East    Leasehold                          2082
                                                                  
 Governor's Square             Leasehold by joint venture         2054
                                                                  
 Greengate Mall                Leasehold                          2070
                                                                  
 Harborplace                   Leasehold                          2054
                                                                  
 Harundale Mall                Leasehold and fee owned            
                               jointly with others                2059
                                                                  
 Highland Mall                 Leasehold and fee by               
                               joint venture                      2070
                                                                  
 The Jacksonville Landing      Leasehold                          2057
                                                                  
 Mall St. Matthews             Leasehold                          2053
                                                                  
 Midtown Square                Leasehold                          2055
                                                                  
 Pioneer Place                 Leasehold                          2076
                                                                  
 Plymouth Meeting              Leasehold and fee                  2063
                                                                  
 Riverwalk                     Leasehold by joint venture         2076
                                                                  
 St. Louis Union Station       Leasehold                          2060
                                                                  
 South Street Seaport          Leasehold                          2031
                                                                  
 Tampa Bay Center              Leasehold and fee                  2047
                                                                  
 Westlake Center               Leasehold by joint venture         2043
</TABLE>

                                      I-7
<PAGE>
 
Item 3.  Legal Proceedings.

  None.

                                      I-8
<PAGE>
 
Item 4.  Submission of Matters to a Vote of Security Holders.

  None.

                                      I-9
<PAGE>
 
Directors and Executive Officers.

The executive officers of the Company as of March 31, 1997 are:
<TABLE>
<CAPTION>
 
                               Present office and       Date of election      Business or professional
                                position with the       or appointment to    experience during the past
Executive Officer      Age           Company            present office               five years
---------------------  ---  -------------------------   -----------------  -----------------------------
<S>                    <C>  <C>                        <C>                 <C>
 
Anthony W. Deering      52  Chairman of the Board,            2/25/97      Chairman of the Board,
                            President and                     2/25/93      President and Chief Executive
                            Chief Executive Officer           2/23/95      Officer of the Company;
                                                                           formerly President and Chief
                                                                           Executive Officer of the
                                                                           Company; President and Chief
                                                                           Operating Officer of the
                                                                           Company; and Executive Vice
                                                                           President - Finance and
                                                                           Administration and Chief
                                                                           Financial Officer of the
                                                                           Company
  
Jeffrey H. Donahue      50  Senior Vice-President,            9/23/93      Senior Vice-President and
                            Chief Financial Officer           9/23/93      Chief Financial Officer of the
                            and Director of the               8/17/93      Company and Director of the
                            Finance Division                               Finance Division; formerly
                                                                           Vice-President and Treasurer
                                                                           of the Company
  
John L. Goolsby         55  President and Chief               9/1/88       President and Chief Executive
                            Executive Officer of                           Officer of The Howard Hughes
                            The Howard Hughes                              Corporation
                            Corporation, a wholly
                            owned subsidiary of the
                            Company

Duke S. Kassolis        45  Senior Vice-President             9/23/93      Senior Vice-President and
                            and Director of Office            8/17/93      Director of Office and Mixed-
                            and Mixed-Use Operations                       Use Operations of the Company;
                                                                           formerly Vice-President and
                                                                           Director of Office and
                                                                           Commercial Properties of the
                                                                           Company
</TABLE> 
 

                                      I-10
<PAGE>
 
<TABLE> 
<CAPTION>
 
                               Present office and       Date of election      Business or professional
                                position with the       or appointment to    experience during the past
Executive Officer      Age           Company            present office               five years
---------------------  ---  -------------------------   -----------------  -----------------------------
<S>                    <C>  <C>                        <C>                 <C>
Paul I. Latta, Jr.      53  Senior Vice-President             9/23/93      Senior Vice-President and
                            and Director of Retail            8/17/93      Director of Retail Operations
                            Operations                                     of the Company; formerly Vice-
                                                                           President and Associate
                                                                           Division Director, Operating
                                                                           Properties Division of the
                                                                           Company
  
Douglas A. McGregor     54  Executive Vice-President          8/17/93      Executive Vice-President for
                            for Development and                            Development and Operations of
                            Operations                                     the Company; formerly
                                                                           Executive Vice-President -
                                                                           Development and Director of
                                                                           the Office and Community
                                                                           Development Division of the
                                                                           Company
 
Robert Minutoli         46  Senior Vice-President             9/23/93      Senior Vice-President and
                            and Director of                   8/17/93      Director of Acquisitions of
                            Acquisitions                                   the Company; formerly Vice-
                                                                           President for Development of
                                                                           the Company
 
Robert D. Riedy         51  Senior Vice-President             9/23/93      Senior Vice-President and
                            and Director of Retail            8/17/93      Director of Retail Leasing of
                            Leasing                                        the Company; formerly Vice-
                                                                           President for Development of
                                                                           the Company 
</TABLE>

                                      I-11
<PAGE>
 
<TABLE>                                                                                                   
<CAPTION>                                                                                                 
                                                                                                          
                               Present office and       Date of election      Business or professional    
                                position with the       or appointment to    experience during the past   
Executive Officer      Age           Company            present office               five years           
---------------------  ---  -------------------------   -----------------  -----------------------------  
<S>                    <C>  <C>                        <C>                 <C>                             
Alton J. Scavo         50   Senior Vice-President,            9/23/93      Senior Vice-President and       
                            Director of the                   8/17/93      Director of the Community       
                            Community Development                          Development Division of the     
                            Division and General                           Company and General Manager of  
                            Manager of Columbia                            Columbia; formerly Vice-        
                                                                           President and Associate         
                                                                           Director of the Community       
                                                                           Development Division of the     
                                                                           Company                          

Jerome D. Smalley      47   Senior Vice-President             9/23/93      Senior Vice-President and       
                            and Director of the               8/17/93      Director of the Commercial and  
                            Commercial and Office                          Office Development Division of  
                            Development Division                           the Company; formerly Vice-     
                                                                           President for Development        

George L. Yungmann     54   Senior                            9/23/93      Senior Vice-President and     
                            Vice-President,                   7/26/72      Controller of the Company and 
                            Controller and                    7/26/72      Director of the Controller's  
                            Director of the                                Division; formerly Vice-      
                            Controller's Division                          President, Controller and     
                                                                           Director of the Controller's  
                                                                           Division                       
</TABLE>

The term of office of each officer is until election of a successor or otherwise
at the pleasure of the Board of Directors.

There is no arrangement or understanding between any of the above-listed
officers and any other person pursuant to which any such officer was elected as
an officer.

                                      I-12
<PAGE>
 
Directors and Executive Officers.

The executive officers of the Company as of March 31, 1997 are:
<TABLE>                                                                                                   
<CAPTION>                               
                               Present office and       Date of election      Business or professional    
                                position with the       or appointment to    experience during the past   
Executive Officer      Age           Company            present office               five years           
---------------------  ---  -------------------------   -----------------  -----------------------------  
<S>                    <C>  <C>                        <C>                 <C>                             

</TABLE> 
None of the above-listed officers has any family relationship with any director
or other executive officer.

                                      I-13
<PAGE>
 
                                Part II 
                                -------

Item 5. Market for the Registrant's Common Stock and Related
        Stockholder Matters.

        Information required by Item 5 is incorporated herein by reference to
        page 51 of Exhibit 13.

Item 6. Selected Financial Data.

        Information required by Item 6 is incorporated herein by reference to
        page 51 of Exhibit 13.

Item 7. Management's Discussion and Analysis of Financial Condition and Results
        of Operations.

        Information required by Item 7 is incorporated herein by reference to
        pages 52 through 59 of Exhibit 13.

Item 8. Financial Statements and Supplementary Data.

        Financial Statements required by Item 8 are set forth in the Index to
        Financial Statements and Schedules on page IV-2.

        Supplementary data required by Item 8 are incorporated herein by
        reference to page 51 of Exhibit 13.

Item 9. Changes in and Disagreements with Accountants on Accounting and
        Financial Disclosure.

        None.

                                      II-1
<PAGE>
 
                                   Part III
                                   --------

The information required by Items 10, 11, 12 and 13 (except that information
regarding executive officers called for by Item 10 that is contained in Part I)
is incorporated herein by reference from the definitive proxy statement that the
Company intends to file pursuant to Regulation 14A on or before April 4, 1997.

                                      III-1
<PAGE>
 
                                    PART IV
                                    -------


Item 14. Exhibits, Financial Statement Schedules and Reports on
         Form 8-K.

  (a) 1 and 2.  Financial Statements and Schedules:

         Reference is made to the Index to Financial Statements and 
           Schedules on page IV-2.

      3. Exhibits:  Reference is made to the Exhibit Index.

  (b)  Reports on Form 8-K:

       None.

                                      IV-1

<PAGE>
 
                       THE ROUSE COMPANY AND SUBSIDIARIES

                  Index to Financial Statements and Schedules
<TABLE>
<CAPTION> 
                                                                              Page
                                                                           ---------
<S>                              <C>                                       <C> 
  Independent Auditors' Report                                             IV-3
 
  Report of Independent Real Estate Consultants included on
  page 23 of Exhibit 13 incorporated herein by reference
 
  Financial Statements:
   The Rouse Company and Subsidiaries included on pages 24
   through 50 of Exhibit 13 incorporated herein by
   reference:
    Consolidated Cost Basis and Current Value Basis
     Balance Sheets at December 31, 1996 and 1995
    Consolidated Cost Basis Statements of Operations
     for the Years Ended December 31, 1996, 1995 and 1994
    Consolidated Cost Basis Statements of Shareholders'
     Equity for the Years Ended December 31, 1996, 1995
     and 1994
    Consolidated Cost Basis Statements of Cash Flows for
     the Years Ended December 31, 1996, 1995 and 1994
    Consolidated Current Value Basis Statements of
     Changes in Revaluation Equity for the Years Ended
     December 31, 1996, 1995 and 1994
    Notes to Consolidated Financial Statements
 
  Schedules:
 
   The Rouse Company and Subsidiaries as of December 31,
    1996 or for the years ended December 31, 1996, 1995
    and 1994:
 
   Schedule II    Valuation and Qualifying Accounts                        IV-4
   Schedule III   Real Estate and Accumulated Depreciation                 IV-5

  All other schedules have been omitted as not applicable
   or not required, or because the required information is 
   included in the consolidated financial statements or 
   notes thereto.


</TABLE> 

                                      IV-2
<PAGE>
 
                          INDEPENDENT AUDITORS' REPORT
                          ----------------------------


The Board of Directors and Shareholders
The Rouse Company:

We have audited the consolidated cost basis financial statements and the related
financial statement schedules of The Rouse Company and subsidiaries as listed in
the accompanying index.  We have also audited the supplemental consolidated
current value basis financial statements listed in the index.  These
consolidated financial statements and financial statement schedules are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated financial statements and financial statement
schedules based on our audits.

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

In our opinion, the consolidated cost basis financial statements referred to
above present fairly, in all material respects, the financial position of The
Rouse Company and subsidiaries as of December 31, 1996 and 1995, and the results
of their operations and their cash flows for each of the years in the three-year
period ended December 31, 1996, in conformity with generally accepted accounting
principles.  Also in our opinion, the related financial statement schedules,
when considered in relation to the basic consolidated cost basis financial
statements taken as a whole, present fairly, in all material respects, the
information set forth therein.

As more fully described in note 1 to the consolidated financial statements, the
supplemental consolidated current value basis financial statements referred to
above have been prepared by management to present relevant financial information
about The Rouse Company and its subsidiaries which is not provided by the cost
basis financial statements and are not intended to be a presentation in
conformity with generally accepted accounting principles.  In addition, as more
fully described in note 1, the supplemental consolidated current value basis
financial statements do not purport to present the net realizable, liquidation
or market value of the Company as a whole.  Furthermore, amounts ultimately
realized by the Company from the disposal of properties may vary from the
current values presented.

In our opinion, the supplemental consolidated current value basis financial
statements referred to above present fairly, in all material respects, the
information set forth therein on the basis of accounting described in note 1 to
the consolidated financial statements.



                                  KPMG PEAT MARWICK LLP

Baltimore, Maryland
February 25, 1997

                                      IV-3
<PAGE>
 
                                                                     Schedule II
                                                                     -----------
                       THE ROUSE COMPANY AND SUBSIDIARIES

                       Valuation and Qualifying Accounts
                  Years ended December 31, 1996, 1995 and 1994
<TABLE> 
<CAPTION>           
                                                                      Additions
                                                               ------------------------
                                                  Balance at   Charged to   Charged to                 Balance at 
                                                  beginning    costs and      other                      end of
        Descriptions                               of year      expenses    accounts     Deductions       year   
        ------------                             ----------    ----------   ----------   ----------    ----------   
                                                                      (in thousands)
<S>                                               <C>          <C>          <C>          <C>           <C>  
Year ended December 31, 1996:
Allowance for doubtful receivables                 $24,468     $ 3,688      $1,161        $1,164 (1)    $28,153
                                                   =======     =======      =======       ======        =======
 
Valuation allowance - properties held for sale     $15,589     $25,825      $             $5,743 (2)    $35,671
                                                   =======     =======      =======       ======        =======
 
Preconstruction reserve                            $15,379     $ 2,700      $    -        $1,762 (3)    $16,317
                                                   =======     =======      =======       ======        =======
 
Year ended December 31, 1995:
Allowance for doubtful receivables                 $25,124     $ 3,318      $    -        $3,974 (1)    $24,468
                                                   =======     =======      =======       ======        =======
 
Valuation allowance - properties held for sale     $     -     $15,589      $    -        $    -        $15,589
                                                   =======     =======      =======       ======        =======
 
 Preconstruction reserve                           $14,109     $ 3,800      $    -        $2,530 (3)    $15,379
                                                   =======     =======      =======       ======        =======
 
Year ended December 31, 1994:
Allowance for doubtful receivables                 $24,036     $ 5,185      $    -        $4,097 (1)    $25,124
                                                   =======     =======      =======       ======        =======
 
Valuation allowance - properties held for sale     $     -     $     -      $    -        $   -         $    -
                                                   =======     =======      =======       ======        =======
 
Preconstruction reserve                            $12,822     $ 3,400      $    -        $2,113 (3)    $14,109
                                                   =======     =======      =======       ======        =======
</TABLE>
Notes:

(1)  Balances written off as uncollectible.

(2)  Allowance related to properties sold.

(3)  Costs of unsuccessful projects written off.

                                      IV-4
<PAGE>
 
 
                                                                  Schedule III
                                                                  ------------
                       THE ROUSE COMPANY AND SUBSIDIARIES
               Real Estate and Accumulated Depreciation (note 1)

                               December 31, 1996
<TABLE>
<CAPTION>               
                                                               Cost capitalized
                                         Initial cost to         subsequent to
                                            Company               acquisition
                                       -------------------  ---------------------- 
                                                 Buildings                       
                                                   and                   Carrying        
                         Encumbrances            Improve-   Improve-      costs          
Description                (note 4)      Land     ments      ments       (note 2)   
-----------              ------------  --------  ---------  --------  -------------   
                                            (in thousands) 
<S>                      <C>           <C>       <C>        <C>       <C>   
Operating Properties:                                                        
                                                                             
Woodbridge Center          $135,835    $26,301   $    --    $117,092   $    --       
  Retail Center                                                              
  Woodbridge, NJ                                                             
                                                                             
South Street Seaport         52,000         --        --     141,248        --         
  Retail Center                                                              
  New York, NY                                                               
                                                                             
Arizona Center              112,464         97        --     138,871        --         
  Mixed-use project                                                          
  Phoenix, AZ                                                                
                                                                             
Fashion Show Mall            76,786     28,908    104,741        833        --       
  Retail Center                                                              
  Las Vegas, NV                                                              
                                                                             
Pioneer Place                97,140         --        --     122,423        --       
  Mixed-use project                                                                 
  Portland, OR                                                                      
                                                                                    
Westlake Center              94,678     10,582        --     101,758        --       
  Mixed-use project                                                                 
  Seattle, WA                                                                       
                                                                                    
The Gallery at              109,095      6,648        --     103,554        --       
  Harborplace                                                                       
  Mixed-use project                                                                 
  Baltimore, MD                                                                     
                                                                                    
Owings Mills                 61,000     13,408        --      86,841        --  
  Retail Center                                                                     
  Baltimore, MD                                                                     
                                                                                    
Bayside Marketplace          83,850         --        --      98,196        --  
  Retail Center                                                              
  Miami, FL                                                                  
 
</TABLE>

<TABLE> 
<CAPTION> 
                                                                                       Life on
                         Gross amount at which carried                                   which
                             at December 31, 1996         Accumu-                       depre-
                         ------------------------------   lated                         ciation
                                   Buildings              depre-   Date of             in latest
                                      and                ciation   comple-              income
                                    Improve-               and     tion of              state-
                                     ments               amorti-  construc-    Date     ment is
                           Land    (note 3)     Total    zation      tion    acquired   computed 
                         --------  ---------  --------  --------  ---------  --------  ----------        
                                                        (in thousands)
<S>                      <C>       <C>        <C>       <C>       <C>        <C>       <C> 
Operating Properties:  
                       
Woodbridge Center         $26,301   $117,092  $143,393  $21,676     03/71       N/A      Note 8            
  Retail Center                                                                              
  Woodbridge, NJ                                                                             
                                                                                             
South Street Seaport           --    141,248   141,248   24,641     07/83       N/A      Note 8         
  Retail Center                                                                              
  New York, NY                                                                               
                                                                                             
Arizona Center                 97    138,871   138,968   22,839     07/83       N/A      Note 8         
  Mixed-use project                                                                          
  Phoenix, AZ                                                                                
                                                                                             
Fashion Show Mall          28,908    105,574   134,482    1,313     03/81      06/96     Note 8            
  Retail Center                                                                              
  Las Vegas, NV                                                                              
                                                                                             
Pioneer Place                  --    122,423   122,423   20,104     03/90       N/A      Note 8            
  Mixed-use project                                                                          
  Portland, OR                                                                               
                                                                                             
Westlake Center            10,582    101,758   112,340   21,779     10/88       N/A      Note 8            
  Mixed-use project                                                                          
  Seattle, WA                                                                                
                                                                                             
The Gallery at              6,648    103,554   110,202   22,330     09/87       N/A      Note 8            
  Harborplace                                                                                
  Mixed-use project                                                                          
  Baltimore, MD                                                                              
                                                                                             
Owings Mills               13,408     86,841   100,249   10,213     07/86       N/A      Note 8   
  Retail Center                                                                              
  Baltimore, MD                                                                              
                                                                                             
Bayside Marketplace            --     98,196    98,196   16,382     04/87       N/A      Note 8    
  Retail Center        
  Miami, FL            

</TABLE> 

                                      IV-5
<PAGE>
 
                                                       Schedule III, continued
                                                       -----------------------
                       THE ROUSE COMPANY AND SUBSIDIARIES                     
               Real Estate and Accumulated Depreciation (note 1)              
                                                                              
                               December 31, 1996                              
<TABLE>                                                                       
<CAPTION>                                                                     
                                                                              
                                                             Cost capitalized               
                                         Initial cost to       subsequent to                
                                            Company             acquisition                 
                                       -------------------  ------------------              
                                                 Buildings                                  
                                                   and                Carrying              
                         Encumbrances            Improve-   Improve-    costs               
Description                (note 4)      Land     ments      ments    (note 2)              
-----------              ------------  --------  ---------  --------  --------              
                                                 (in thousands)        
<S>                      <C>            <C>       <C>        <C>       <C>                   
Mall St. Matthews              72,797        --         --    94,200        --                          
 Retail Center                                                                                        
 Louisville, KY                                                                                       
                                                                                                      
Paramus Park                   70,353    13,475         --    69,177        --                        
 Retail Center                                                                                        
 Paramus, NJ                                                                                          
                                                                                                      
White Marsh                    57,576     2,627         --    73,667        --                        
 Retail Center                                                                                        
 Baltimore, MD                                                                                        
                                                                                                      
Santa Monica Place                 --     5,088         --    68,079        --                        
 Retail Center                                                                                        
 Santa Monica, CA                                                                                     
                                                                                                      
Faneuil Hall Marketplace       54,412        --         --    72,170        --                        
 Retail Center                                                                                        
 Boston, MA                                                                                           
                                                                                                      
Cherry Hill Mall               79,780    14,767         --    56,729        --                        
 Retail Center                                                                                        
 Cherry Hill, NJ                                                                                      
                                                                                                      
Oakwood Center                 54,576    14,750         --    56,098        --                        
 Retail Center                                                                                        
 Gretna, LA                                                                                           
                                                                                                      
Hulen Mall                     65,458     5,064         --    64,712        --                        
 Retail Center                                                                                        
 Ft. Worth, TX                                                                                        
                                                                                                      
Riverwalk                      10,433        --         --    69,597        --                        
 Retail Center                                                          
 New Orleans, LA                                                        
 
</TABLE>
                                                                             
<TABLE>                                                                      
<CAPTION>                                                                    
                                                                                         Life on        
                          Gross amount at which carried                                   which         
                              at December 31, 1996         Accumu-                       depre-         
                          ------------------------------   lated                         ciation        
                                     Buildings              depre-   Date of             in latest      
                                        and                ciation   comple-              income        
                                      Improve-               and     tion of              state-        
                                       ments               amorti-  construc-    Date     ment is       
                             Land    (note 3)     Total    zation      tion    acquired   computed      
                           --------  ---------  --------  --------  ---------  --------  ----------        
                           (in thousands)                                                               
<S>                        <C>       <C>        <C>       <C>       <C>        <C>       <C>             
Mall St. Matthews                --     94,200    94,200    12,751      03/62     N/A       Note 8                         
 Retail Center                                                                             
 Louisville, KY                                                                            
                                                                                           
Paramus Park                 13,475     69,177    82,652     6,687      03/74     N/A       Note 8   
 Retail Center                                                                                       
 Paramus, NJ                                                                                         
                                                                                                     
White Marsh                   2,627     73,667    76,294    12,387      08/81     N/A       Note 8   
 Retail Center                                                                                       
 Baltimore, MD                                                                                       
                                                                                                     
Santa Monica Place            5,088     68,079    73,167     8,949      10/80     N/A       Note 8   
 Retail Center                                                                                       
 Santa Monica, CA                                                                                    
                                                                                                     
Faneuil Hall Marketplace         --     72,170    72,170    10,108      08/76     N/A       Note 8   
 Retail Center                                                                                       
 Boston, MA                                                                                          
                                                                                                     
Cherry Hill Mall             14,767     56,729    71,496    16,103      10/61     N/A       Note 8   
 Retail Center                                                                                       
 Cherry Hill, NJ                                                                                     
                                                                                                     
Oakwood Center               14,750     56,098    70,848     6,827      10/82     N/A       Note 8   
 Retail Center                                                                                       
 Gretna, LA                                                                                          
                                                                                                     
Hulen Mall                    5,064     64,712    69,776     9,179      08/77     N/A       Note 8   
 Retail Center                                                                                       
 Ft. Worth, TX                                                                                       
                                                                                                     
Riverwalk                        --     69,597    69,597     9,091      08/86     N/A       Note 8   
 Retail Center                                                                                    
 New Orleans, LA                                                                                  
</TABLE> 
         
                                      IV-6
<PAGE>
 

                                                         Schedule III, continued
                                                         -----------------------
                       THE ROUSE COMPANY AND SUBSIDIARIES
               Real Estate and Accumulated Depreciation (note 1) 
                                                                 
                               December 31, 1996                 
<TABLE>                                                          
<CAPTION>                                                        
                                                                 
                                                                Cost capitalized               
                                            Initial cost to       subsequent to                
                                               Company             acquisition                 
                                          -------------------  ------------------              
                                                    Buildings                                  
                                                      and                Carrying              
                            Encumbrances            Improve-   Improve-    costs               
Description                   (note 4)      Land     ments      ments    (note 2)              
-----------                 ------------  --------  ---------  --------  --------              
                                                    (in thousands)
<S>                         <C>            <C>       <C>        <C>       <C>                              
Augusta Mall                      55,366     5,390        --     63,065       --    
  Retail Center                                                                         
  Augusta, GA                                                                         
                                                                                      
St. Louis Union Station               --        --        --     66,987       --    
  Retail Center                                                                       
  St. Louis, MO                                                                       
                                                                                      
Echelon Mall                      61,181     6,160        --     54,234       --    
  Retail Center                                                                       
  Voorhees, NJ                                                                        
                                                                                      
The Mall in Columbia              24,308     4,788        --     46,856       --    
  Retail Center                                                                       
  Columbia, MD                                                                        
                                                                                      
Beachwood Place                   40,671     7,188        --     40,971       --    
  Retail Center                                                                       
  Beachwood, OH                                                                       
                                                                                      
3800 Howard                                                                           
Hughes Parkway                    40,514     4,109    43,604        427       --    
  Office Building                                                                     
  Las Vegas, NV                                                                       
                                                                                      
Village of Cross Keys                 --     1,100        --     44,619       --    
  Mixed-use project                                                                  
  Baltimore, MD                                                                       
                                                                                      
Blue Cross &                                                                          
Blue Shield Building I            35,437     1,000        --     44,713       --    
  Office Building                                                                     
  Baltimore, MD                                                                       
                                                                                      
Harborplace                       32,508        --        --     44,806       --    
  Retail Center                                                          
  Baltimore, MD                                                           

</TABLE> 
          
<TABLE>   
<CAPTION> 

                                                                                         Life on         
                          Gross amount at which carried                                   which          
                              at December 31, 1996         Accumu-                       depre-          
                          ------------------------------   lated                         ciation         
                                     Buildings              depre-   Date of             in latest       
                                        and                ciation   comple-              income         
                                      Improve-               and     tion of              state-         
                                       ments               amorti-  construc-    Date     ment is        
                             Land    (note 3)     Total    zation      tion    acquired   computed       
                           --------  ---------  --------- --------  ---------  --------  ----------      
                           (in thousands)                                                                
<S>                        <C>       <C>        <C>       <C>       <C>        <C>       <C>              
Augusta Mall                  5,390     63,065     68,455    5,739    08/78      N/A       Note 8              
  Retail Center                                                                                    
  Augusta, GA                                                                                    
                                                                                                 
St. Louis Union Station          --     66,987     66,987   16,454    08/85      N/A       Note 8
  Retail Center                                                                                  
  St. Louis, MO                                                                                  
                                                                                                 
Echelon Mall                  6,160     54,234     60,394   10,530    09/70      N/A       Note 8
  Retail Center                                                                                  
  Voorhees, NJ                                                                                   
                                                                                                 
The Mall in Columbia          4,788     46,856     51,644   10,505    08/71      N/A       Note 8
  Retail Center                                                                                  
  Columbia, MD                                                                                   
                                                                                                 
Beachwood Place               7,188     40,971     48,159    7,019    08/78      N/A       Note 8
  Retail Center                                                                                  
  Beachwood, OH                                                                                  
                                                                                                 
3800 Howard                                                                                      
Hughes Parkway                4,109     44,031     48,140      849    11/86     06/96      Note 8
  Office Building                                                                                
  Las Vegas, NV                                                                                  
                                                                                                 
Village of Cross Keys         1,100     44,619     45,719   15,501    09/65      N/A       Note 8
  Mixed-use project                                                                              
  Baltimore, MD                                                                                  
                                                                                                 
Blue Cross &                                                                                     
Blue Shield Building I        1,000     44,713     45,713    7,840    07/89      N/A       Note 8
  Office Building                                                                                
  Baltimore, MD                                                                                  

Harborplace                      --     44,806     44,806   10,713    07/80      N/A       Note 8 
  Retail Center          
  Baltimore, MD          
</TABLE> 
                                      IV-7



<PAGE>
 
                                                         Schedule III, continued
                                                         -----------------------
                       THE ROUSE COMPANY AND SUBSIDIARIES
               Real Estate and Accumulated Depreciation (note 1)
                                                                
                               December 31, 1996                
<TABLE>                                                         
<CAPTION>                                                       
                                                                
                                                                Cost capitalized               
                                            Initial cost to       subsequent to                
                                                Company            acquisition                 
                                          -------------------  ------------------              
                                                    Buildings                                  
                                                      and                Carrying              
                            Encumbrances            Improve-   Improve-    costs               
Description                   (note 4)      Land     ments      ments    (note 2)              
-----------                 ------------  --------- ---------  --------  --------              
                                                                         (in thousands)
<S>                         <C>            <C>       <C>        <C>       <C>                              

The Jacksonville Landing          15,211         --        --    34,444        -- 
  Retail Center                                                                   
  Jacksonville, FL                                                                
                                                                                  
Tampa Bay Center                  47,281        920        --    30,607        -- 
  Retail Center                                                                   
  Tampa, FL                                                                       
                                                                                  
Gateway Commerce Center #20           --      6,200        --    23,497        -- 
  Industrial Building                                                             
  Columbia, MD                                                                    
                                                                                  
North Star                            --        168        --    28,050        -- 
  Retail Center                                                                   
  San Antonio, TX                                                                 
                                                                                  
Plymouth Meeting                  14,352        702        --    27,312        -- 
  Retail Center                                                                   
  Montgomery County, PA                                                           
                                                                                  
Exton Square                       8,274      1,408        --    26,490        -- 
  Retail Center                                                                   
  Exton, PA                                                                       
                                                                                  
Governor's Square                 27,787         --        --    27,234        -- 
  Retail Center                                                                   
  Tallahassee, FL                                                                 
                                                                                  
Alexander &                                                                       
Alexander Building I              21,639      1,000        --    24,507        -- 
  Office Building                                                                 
  Baltimore, MD                                                                   
                                                                                  
Ryland Group Headquarters         21,000        856        --    24,280        -- 
  Office Building                                                         
  Columbia, MD                                                                 
  
</TABLE>
        
<TABLE> 
<CAPTION>                                                                                     Life on     
                               Gross amount at which carried                                   which      
                                   at December 31, 1996         Accumu-                       depre-      
                               ------------------------------   lated                         ciation     
                                          Buildings             depre-   Date of             in latest   
                                            and                ciation   comple-              income     
                                          Improve-               and     tion of              state-     
                                           ments               amorti-  construc-    Date     ment is    
                                 Land    (note 3)     Total    zation      tion    acquired   computed   
                              --------  ---------  --------  --------  ---------  --------  ----------   
                             (in thousands)                                                                
<S>                           <C>       <C>        <C>       <C>       <C>        <C>       <C>           
The Jacksonville Landing           --      34,444    34,444    10,127     06/87      N/A       Note 8            
  Retail Center                                                                                                        
  Jacksonville, FL                                                                                                     
                                                                                                                       
Tampa Bay Center                   920     30,607    31,527     9,279     08/79      N/A       Note 8            
  Retail Center                                                                                                        
  Tampa, FL                                                                                                            
                                                                                                                       
Gateway Commerce Center #20      6,200     23,497    29,697     4,509      N/A       08/93     Note 8            
  Industrial Building                                                                                                  
  Columbia, MD                                                                                                         
                                                                               
North Star                         168     28,050    28,218     7,282     09/60       N/A      Note 8            
  Retail Center                                                                                                    
  San Antonio, TX                                                                                                  
                                                                                                                   
Plymouth Meeting                   702     27,312    28,014    11,342     02/66       N/A      Note 8            
  Retail Center                                                                                                    
  Montgomery County, PA                                                                                            
                                                                                                                   
Exton Square                     1,408     26,490    27,898     8,423     03/73       N/A      Note 8            
  Retail Center                                                                                                    
  Exton, PA                                                                                                        
                                                                                                                   
Governor's Square                   --     27,234    27,234     4,489      08/79      N/A      Note 8            
  Retail Center                                                                                                    
  Tallahassee, FL                                                                                                  
                                                                                                                   
Alexander &                                                                                                        
Alexander Building I             1,000     24,507    25,507     5,137      09/87      N/A      Note 8            
  Office Building                                                                                                  
  Baltimore, MD                                                                                                    
                                                                                                                   
Ryland Group Headquarters          856     24,280    25,136     3,689      06/92      N/A      Note 8            
  Office Building                                                                                          
  Columbia, MD                                                                                                  
                                                                                                            
</TABLE> 
                                      IV-8



<PAGE>


                                                        Schedule III, continue
                                                        ----------------------
                       THE ROUSE COMPANY AND SUBSIDIARIES     
               Real Estate and Accumulated Depreciation (note 1)     

                               December 31, 1996      
<TABLE> 
<CAPTION>                                                                                   
                                                                                            
                                                                Cost capitalized               
                                            Initial cost to       subsequent to                
                                                Company            acquisition                 
                                          -------------------  ------------------              
                                                    Buildings                                  
                                                      and                Carrying              
                            Encumbrances            Improve-   Improve-    costs               
Description                   (note 4)      Land     ments      ments    (note 2)              
-----------                 ------------  --------  ---------  --------  --------              
                                                                         (in thousands)
<S>                         <C>            <C>       <C>        <C>       <C>                              
The Gallery at Market East            --         --        --    23,799        -- 
  Retail Center                                                                  
  Philadelphia, PA                                                               
                                                                                 
3773 Howard                                                                      
Hughes Parkway                    23,000      1,574    20,485     1,056        -- 
  Office Building                                                                
  Las Vegas, NV                                                                  
                                                                                 
Perimeter Mall                        --         --        --    21,880        -- 
  Retail Center                                                                  
  Atlanta, GA                                                                    
                                                                                 
Willowbrook                       33,750        853        --    20,943        -- 
  Retail Center                                                                  
  Wayne, NJ                                                                      
                                                                                 
Franklin Park                     24,500        653        --    20,728        -- 
  Retail Center                                                                  
  Toledo, OH                                                                     
                                                                                 
Columbia Inn                          --      1,384        --    19,187        -- 
  Hotel                                                                          
  Columbia, MD                                                                   
                                                                                 
The Grand Avenue                   8,542         --        --    20,556        -- 
  Retail Center                                                                  
  Milwaukee, WI                                                                  
                                                                                 
Mondawmin                          5,795      2,251        --    17,766        -- 
  Retail Center                                                                  
  Baltimore, MD                                                                  
                                                                                 
RWD Building                      11,456      2,596        --    16,385        -- 
  Office Building                                                        
  Columbia, MD                                                             
 
</TABLE> 

<TABLE> 
<CAPTION>                                                                                                
                                                                                              Life on     
                               Gross amount at which carried                                   which      
                                   at December 31, 1996         Accumu-                       depre-      
                               ------------------------------   lated                         ciation     
                                          Buildings             depre-   Date of             in latest   
                                            and                ciation   comple-              income     
                                          Improve-               and     tion of              state-     
                                           ments               amorti-  construc-    Date     ment is    
                                 Land    (note 3)     Total    zation      tion    acquired   computed   
                              --------  ---------  --------  --------  ---------  --------  ----------   
                             (in thousands)                                                                
<S>                           <C>       <C>        <C>       <C>       <C>        <C>       <C>           
The Gallery at Market East          --     23,799    23,799     6,579    08/77       N/A       Note 8
  Retail Center                                                               
  Philadelphia, PA                                                            
                                                                              
3773 Howard                                                                   
Hughes Parkway                   1,574     21,541    23,115       274    11/95      06/96      Note 8
  Office Building                                                             
  Las Vegas, NV                                                               
                                                                              
Perimeter Mall                      --     21,880    21,880     5,861    08/71       N/A       Note 8
  Retail Center                                                               
  Atlanta, GA                                                                 
                                                                              
Willowbrook                        853     20,943    21,796     7,800    09/69       N/A       Note 8
  Retail Center                                                               
  Wayne, NJ                                                                   
                                                                              
Franklin Park                      653     20,728    21,381     4,677    07/71       N/A       Note 8
  Retail Center                                                               
  Toledo, OH                                                                  
                                                                              
Columbia Inn                     1,384     19,187    20,571     6,799    06/72       N/A       Note 8
  Hotel                                                                       
  Columbia, MD                                                                
                                                                              
The Grand Avenue                    --     20,556    20,556     9,329    08/82       N/A       Note 8
  Retail Center                                                               
  Milwaukee, WI                                                               
                                                                              
Mondawmin                        2,251     17,766    20,017     6,121    01/78       N/A       Note 8
  Retail Center                                                               
  Baltimore, MD                                                               
                                                                              
RWD Building                     2,596     16,385    18,981     5,578    07/86       N/A       Note 8
  Office Building          
  Columbia, MD            
</TABLE> 
                                      IV-9
<PAGE>
 
                                                Schedule III, continued 
                                                -----------------------
            

                       THE ROUSE COMPANY AND SUBSIDIARIES
               Real Estate and Accumulated Depreciation (note 1)

                               December 31, 1996            
<TABLE>
<CAPTION>
                                                                                            
                                                                Cost capitalized               
                                            Initial cost to       subsequent to                
                                                Company            acquisition                 
                                          -------------------  ------------------              
                                                    Buildings                                  
                                                      and                Carrying              
                            Encumbrances            Improve-   Improve-    costs               
Description                   (note 4)      Land     ments      ments    (note 2)              
-----------                 ------------  --------  ---------  --------  --------              
                                                                         (in thousands)
<S>                         <C>            <C>       <C>        <C>       <C>                              
Blue Cross &                                                              
Blue Shield Building II           12,926      1,000        --    16,559        --    
  Office Building                                                                
  Baltimore, MD                                                                  
                                                                                 
Alexander &                                                                      
Alexander Building II             12,278        650        --    16,683        -- 
  Office Building                                                                
  Baltimore, MD                                                                  
                                                                                 
Highland Mall                      6,634         13        --    16,932        -- 
  Retail Center                                                                  
  Austin, TX                                                                     
                                                                                 
3753/3763 Howard                                                                 
Hughes Parkway                    11,431      4,064    12,707        25        -- 
  Office Building                                                                
  Las Vegas, NV                                                                  
                                                                                 
Parkside                          11,863        463        --    15,196        -- 
  Office Building                                                                
  Columbia, MD                                                                   
                                                                                 
Gateway Commerce Center #2            --      1,947        --    12,379        -- 
  Industrial Building                                                            
  Columbia, MD                                                                   
                                                                                 
Midtown Square                        --         --        --    14,226        -- 
  Retail Center                                                                  
  Charlotte, NC                                                                  
                                                                                 
3930 Howard                                                                      
Hughes Parkway                     7,950      2,809    10,192         4        -- 
  Office Building                                                         
  Las Vegas, NV                                                             
</TABLE>
 
<TABLE>
<CAPTION>
                                                                                              Life on     
                               Gross amount at which carried                                   which      
                                   at December 31, 1996         Accumu-                       depre-      
                               ------------------------------   lated                         ciation     
                                          Buildings             depre-   Date of             in latest   
                                            and                ciation   comple-              income     
                                          Improve-               and     tion of              state-     
                                           ments               amorti-  construc-    Date     ment is    
                                Land    (note 3)     Total    zation      tion    acquired   computed   
                              --------  ---------  --------  --------  ---------  --------  ----------   
                             (in thousands)                                                                
<S>                           <C>       <C>        <C>       <C>       <C>        <C>       <C>           
Blue Cross &                     1,000     16,559    17,559     2,517     08/90      N/A       Note 8
Blue Shield Building II                                                         
  Office Building                                                               
  Baltimore, MD                                                                 
                                                                                
Alexander &                        650     16,683    17,333     5,106     11/88      N/A       Note 8
Alexander Building II                                                           
  Office Building                                                               
  Baltimore, MD                                                                 
                                    13     16,932    16,945     5,096     08/71      N/A       Note 8
Highland Mall                                                                   
  Retail Center                                                                 
  Austin, TX                                                                    
                                                                                
3753/3763 Howard                 4,064     12,732    16,796       211     10/91      06/96     Note 8
Hughes Parkway                                                                  
  Office Building                                                               
  Las Vegas, NV                                                                 
                                   463     15,196    15,659     3,052     11/89      N/A       Note 8
Parkside                                                                        
  Office Building                                                               
  Columbia, MD                                                                  
                                 1,947     12,379    14,326     2,113     N/A        08/93     Note 8
Gateway Commerce Center #2                                                      
  Industrial Building                                                           
  Columbia, MD                                                                  
                                    --     14,226    14,226     9,658     10/59      N/A       Note 8
Midtown Square                                                                  
  Retail Center                                                                 
  Charlotte, NC                                                                 
                                                                                
3930 Howard                      2,809     10,196    13,005       261     12/94      06/96     Note 8
Hughes Parkway              
  Office Building          
  Las Vegas, NV            
</TABLE> 
                                       IV-10

<PAGE>
 

                                                       Schedule III, continued
                                                       -----------------------
                       THE ROUSE COMPANY AND SUBSIDIARIES                     
               Real Estate and Accumulated Depreciation (note 1)              
                                                                              
                               December 31, 1996                              
<TABLE>                                                                       
<CAPTION>                                                                     

                                                                              
                                                                Cost capitalized    
                                            Initial cost to       subsequent to     
                                                Company            acquisition      
                                          -------------------  ------------------   
                                                    Buildings                       
                                                      and                Carrying   
                            Encumbrances            Improve-   Improve-    costs    
Description                   (note 4)      Land     ments      ments    (note 2)   
-----------                 ------------  --------- ---------  --------  --------   
                                                                         (in thousand)
<S>                         <C>            <C>       <C>        <C>       <C>       
30 Corporate Center                8,592      1,160        --    11,578       --    
  Office Building                                                                  
  Columbia, MD                                                                     
                                                                                   
6601 Center Drive West            11,675        646    11,354        41       --    
  Office Building                                                                  
  Los Angeles, CA                                                                  
                                                                                   
Amdahl Building                    3,573        927        --    10,374       --    
  Office Building                                                                  
  Columbia, MD                                                                     
                                                                                   
Hickory Ridge                                                                      
Village Center                     9,341        907        --    10,200       --    
  Village Center                                                                   
  Columbia, MD                                                                     
                                                                                   
American City Building                --         --        --    10,858       --    
  Office Building                                                                  
  Columbia, MD                                                                     
                                                                                   
Dorsey Search                                                                      
Village Center                    10,230        911        --     9,893       --    
  Village Center                                                                   
  Columbia, MD                                                                     
                                                                                   
Montgomery Ward                    6,440        695     8,257        23       --    
  Office/Industrial                                                                
   Building                                                                        
  Las Vegas, NV                                                                    
                                                                                           
10 Corporate Center                   --        753        --     8,167       --            
  Office Building                                                                             
  Columbia, MD                                                                                  
           
    
</TABLE> 
<TABLE> 
<CAPTION>
                                                                                              Life on     
                               Gross amount at which carried                                   which      
                                   at December 31, 1996         Accumu-                       depre-      
                               ------------------------------   lated                         ciation     
                                          Buildings             depre-   Date of             in latest   
                                            and                ciation   comple-              income     
                                          Improve-               and     tion of              state-     
                                           ments               amorti-  construc-    Date     ment is    
                                 Land    (note 3)     Total    zation      tion    acquired   computed   
                              --------  ---------  --------  --------  ---------  --------  ----------   
                             (in thousands)                                                                
<S>                           <C>       <C>        <C>       <C>       <C>        <C>       <C>                                   
30 Corporate Center              1,160     11,578    12,738     4,089     04/86       N/A       Note 8
  Office Building                                                              
  Columbia, MD                                                                 
                                                                               
6601 Center Drive West             646     11,395    12,041       187     12/91      06/96      Note 8
  Office Building                                                              
  Los Angeles, CA                                                              
                                                                               
Amdahl Building                    927     10,374    11,301     4,171     06/81       N/A       Note 8
  Office Building                                                              
  Columbia, MD                                                                 
                                                                               
Hickory Ridge                                                                  
Village Center                     907     10,200    11,107     1,358     06/92       N/A       Note 8
  Village Center                                                               
  Columbia, MD                                                                 
                                                                               
American City Building              --     10,858    10,858     8,222     03/69       N/A       Note 8
  Office Building                                                              
  Columbia, MD                                                                 
                                                                               
Dorsey Search                                                                  
Village Center                     911      9,893    10,804     2,031     09/89       N/A       Note 8
  Village Center                                                               
  Columbia, MD                                                                 
                                                                               
Montgomery Ward                    695      8,280     8,975       123     10/95      06/96      Note 8
  Office/Industrial                                                            
   Building                                                                    
  Las Vegas, NV                                                                
                                                                               
10 Corporate Center                753      8,167     8,920     3,422     09/81       N/A       Note 8
  Office Building         
  Columbia, MD             
</TABLE> 
                                      IV-11
<PAGE>
 
                                                         Schedule III, continued
                                                         -----------------------

                       THE ROUSE COMPANY AND SUBSIDIARIES     
               Real Estate and Accumulated Depreciation (note 1)  

                               December 31, 1996
                                            
<TABLE>
<CAPTION>

                                                                Cost capitalized     
                                            Initial cost to       subsequent to      
                                                Company            acquisition       
                                          -------------------  ------------------    
                                                    Buildings                        
                                                      and                Carrying    
                            Encumbrances            Improve-   Improve-    costs     
Description                   (note 4)      Land     ments      ments    (note 2)    
-----------                 ------------  --------  ---------  --------  --------    
                                            (in thousands)
<S>                         <C>           <C>       <C>        <C>       <C>        
Crossing Business                                                                    
Center Phase I                   8,073    1,221      7,322         28        --       
  Office Building                                                                   
  Las Vegas, NV                                                                     
                                                                                    
King's Contrivance                                                                  
Village Center                      --    1,072         --      7,433        --       
  Village Center                                                                    
  Columbia, MD                                                                      
                                                                                    
3770 Howard                                                                         
Hughes Parkway                   5,750      659      7,633        147        --       
  Office Building                                                                   
  Las Vegas, NV                                                                     
                                                                                    
Metro Plaza                        920      202          -      8,014        --       
  Retail Center                                                                     
  Baltimore, MD                                                                     
                                                                                    
Wilde Lake                                                                          
Village Center                      --    1,486         --      6,116        --       
  Village Center                                                                    
  Columbia, MD                                                                      
                                                                                    
Plaza East                       4,990    1,040      6,053          1        --       
  Office Building                                                                   
  Las Vegas, NV                                                                     
                                                                                    
Crossing Business                                                                   
Center Phase II                  5,780      332      6,750       (186)       --       
  Office Building                                                                   
  Las Vegas, NV                                                                     
                                                                                    
First National Bank Plaza        5,410       --         --      6,330        --       
  Office Building                                                                  
  Mt. Prospect, IL                                                                         
          
  
</TABLE> 

<TABLE> 
<CAPTION> 

                                                                                              Life on     
                               Gross amount at which carried                                   which      
                                   at December 31, 1996         Accumu-                       depre-      
                               ------------------------------   lated                         ciation     
                                          Buildings             depre-   Date of             in latest   
                                            and                ciation   comple-              income     
                                          Improve-               and     tion of              state-     
                                           ments               amorti-  construc-    Date     ment is    
                                 Land    (note 3)     Total    zation      tion    acquired   computed   
                              --------  ---------  --------  --------  ---------  --------  ----------   
                                                         (in thousands)
<S>                           <C>       <C>        <C>       <C>       <C>        <C>       <C>                              
Crossing Business          
Center Phase I                   1,221      7,350     8,571       112    12/94      06/96    Note 8
  Office Building                                                                
  Las Vegas, NV                                                                  
                                                                                 
King's Contrivance                                                               
Village Center                   1,072      7,433     8,505     2,344    06/86       N/A     Note 8
  Village Center                                                                 
  Columbia, MD                                                                   
                                                                                 
3770 Howard                                                                      
Hughes Parkway                     659      7,780     8,439       173    10/90      06/96    Note 8
  Office Building                                                                
  Las Vegas, NV                                                                  
                                                                                 
Metro Plaza                        202      8,014     8,216     3,179      N/A      12/82    Note 8
  Retail Center                                                                  
  Baltimore, MD                                                                  
                                                                                 
Wilde Lake                                                                       
Village Center                   1,486      6,116     7,602     2,871    07/67        N/A    Note 8
  Village Center                                                                 
  Columbia, MD                                                                   
                                                                                 
Plaza East                       1,040      6,054     7,094        94    12/93      06/96    Note 8
  Office Building                                                                
  Las Vegas, NV                                                                  
                                                                                 
Crossing Business                                                                
Center Phase II                    332      6,564     6,896        98    12/95      06/96    Note 8
  Office Building                                                                
  Las Vegas, NV                                                                  
                                                                                 
First National Bank Plaza           --      6,330     6,330     1,594    07/81        N/A    Note 8
  Office Building                       
  Mt. Prospect, IL                      
  
</TABLE>

                                      IV-12
<PAGE>
 
                                                       Schedule III, continued
                                                       -----------------------
                       THE ROUSE COMPANY AND SUBSIDIARIES                     
               Real Estate and Accumulated Depreciation (note 1)              
                                                                              
                               December 31, 1996                              
<TABLE>                                                                       
<CAPTION>                                                                     
                                                                              
                                                                Cost capitalized               
                                            Initial cost to       subsequent to                
                                                Company            acquisition                 
                                          -------------------  ------------------              
                                                    Buildings                                  
                                                      and                Carrying              
                            Encumbrances            Improve-   Improve-    costs               
Description                   (note 4)      Land     ments      ments    (note 2)              
-----------                 ------------  --------  ---------  --------  --------              
                                                                         (in thousands)
<S>                         <C>            <C>       <C>        <C>       <C>                               
Crossing Business                                                                   
Center Phase III                   8,810    1,913       --        4,374       --  
  Office Building                                                               
  Las Vegas, NV                                                                 
                                                                                
980 Kelly Johnson Drive            3,483      874    5,120           --       --      
  Office/Industrial                                                             
   Building                                                                     
  Las Vegas, NV                                                                 
                                                                                
420 Pilot Road                        --    1,098       --        4,845       --     
  Office/Industrial                                                             
   Building                                                                     
  Las Vegas, NV                                                                 
                                                                                
Joseph Square                                                                   
Village Center                    4,878       546       --        5,345       --     
  Village Center                                                                
  Columbia, MD                                                                  
                                                                                
975 Kelly Johnson Drive           4,475       389    5,360           --       --     
  Office/Industrial                                                             
   Building                                                                     
  Las Vegas, NV                                                                 
                                                                                
6590 Bermuda Road                 2,583     1,562    3,970           --       --     
  Office/Industrial                                                             
   Building                                                                     
  Las Vegas, NV                                                                 
                                                                                
950 Pilot Road                    2,079       883    4,608           --       --     
  Office/Industrial                                                             
   Building                                                                     
  Las Vegas, NV                                                                 
                                                                                
Raytheon Building                    --       344    4,977           --       --     
  Office/Industrial                                                             
   Building                                                                     
  Las Vegas, NV                                                                 
                                                                                
Plaza West                        4,662       174    4,792           --       --     
  Office Building                                                               
  Las Vegas, NV                                                                  
</TABLE> 
<TABLE>  
<CAPTION>

                                                                                              Life on     
                               Gross amount at which carried                                   which      
                                   at December 31, 1996         Accumu-                       depre-      
                               ------------------------------   lated                         ciation     
                                          Buildings             depre-   Date of             in latest   
                                            and                ciation   comple-              income     
                                          Improve-               and     tion of              state-     
                                           ments               amorti-  construc-    Date     ment is    
                                 Land    (note 3)     Total    zation      tion    acquired   computed   
                              --------  ---------  --------  --------  ---------  --------  ----------   
                             (in thousands)                                                                
<S>                           <C>       <C>        <C>       <C>       <C>        <C>       <C>           
Crossing Business          
Center Phase III                 1,913      4,374     6,287        62     09/96     06/96      Note 8 
  Office Building                                           
  Las Vegas, NV            
                           
980 Kelly Johnson Drive            874      5,120     5,994        83     05/92     06/96      Note 8
  Office/Industrial Building                                                  
  Las Vegas, NV            
                           
420 Pilot Road             
  Office/Industrial Building     1,098      4,845     5,943        51     09/96     06/96      Note 8   
  Las Vegas, NV                                              
                           
Joseph Square              
Village Center                     546      5,345     5,891     2,320     09/71       N/A      Note 8   
  Village Center           
  Columbia, MD             
                                  
975 Kelly Johnson Drive                                       
  Office/Industrial Building       389      5,360     5,749        91    11/90       06/96     Note 8  
  Las Vegas, NV            
                                   
6590 Bermuda Road                1,562      3,970     5,532        68    08/90       06/96     Note 8                  
  Office/Industrial Building        
  Las Vegas, NV            
                           
950 Pilot Road                     883      4,608     5,491        79    09/90       06/96     Note 8   
  Office/Industrial                                           
   Building                
  Las Vegas, NV            
                           
Raytheon Building                  344      4,977     5,321        80    11/92       06/96     Note 8  
  Office/Industrial Building             
  Las Vegas, NV            
                           
Plaza West                         174      4,792     4,966        68    11/95       06/96     Note 8      
  Office Building          
  Las Vegas, NV                   
</TABLE> 

                                      IV-13
<PAGE>
 
                                                        Schedule III, continued
                                                        -----------------------
                       THE ROUSE COMPANY AND SUBSIDIARIES
               Real Estate and Accumulated Depreciation (note 1)

                               December 31, 1996
<TABLE>
<CAPTION>               
                                                             Cost capitalized
                                         Initial cost to       subsequent to
                                            Company             acquisition
                                       -------------------  ------------------ 
                                                 Buildings                       
                                                   and                Carrying        
                         Encumbrances            Improve-   Improve-    costs          
Description                (note 4)      Land     ments      ments    (note 2)   
-----------              -------------  -------- --------- --------- ---------   
                                                                      (in thousands) 
<S>                     <C>            <C>       <C>        <C>       <C>    
Investments in             
unconsolidated real        
estate ventures                 21,811       --   32,713     49,044        --
                                                                          
Receivables under                                                   
finance leases                   3,470       --       --     94,876        --
                                                                                                                                 
Other properties and                                                
related investments                                                 
less than 5% of total          162,254   21,488   57,379     82,567        --
                             ---------  -------  -------  ---------   -------
                                                                    
Total Operating                                                     
Properties                   2,203,166  244,243  358,017  2,772,716        --
                             ---------  -------  -------  ---------   -------

</TABLE>
<TABLE> 
<CAPTION> 
                                                                                       Life on
                         Gross amount at which carried                                   which
                             at December 31, 1996         Accumu-                       depre-
                         ------------------------------   lated                         ciation
                                   Buildings              depre-   Date of             in latest
                                      and                ciation   comple-              income
                                    Improve-               and     tion of              state-
                                     ments               amorti-  construc-    Date     ment is
                           Land    (note 3)     Total    zation      tion    acquired   computed 
                         --------  ---------  --------  --------  ---------  --------  ----------        
                    (in thousands)
<S>                      <C>       <C>        <C>       <C>       <C>        <C>       <C> 

Investments in                --     81,757     81,757       --     Various   Various      N/A
unconsolidated real                                                                        
estate ventures                                                                             
                                                                                     
Receivables under             --     94,876     94,876       --     Various   Various      N/A
finance leases   
                 
Other properties and      21,488    139,946    161,434   31,413                       
related investments      -------  ---------  ---------  -------                       
less than 5% of total                                                                       
                                                                                            
                         244,243  3,130,733  3,374,976  552,201                       
Total Operating          -------  ---------  ---------  -------                        
Properties                  

</TABLE> 


                                      IV-14                    
<PAGE>

                                                         Schedule III, continued
                                                         -----------------------

                       THE ROUSE COMPANY AND SUBSIDIARIES
               Real Estate and Accumulated Depreciation (note 1)

                               December 31, 1996
<TABLE>
<CAPTION>               
                                                                      Cost capitalized
                                                  Initial cost to       subsequent to
                                                     Company             acquisition
                                                -------------------  ------------------ 
                                                          Buildings                       
                                                            and                Carrying        
                                  Encumbrances            Improve-   Improve-    costs          
Description                         (note 4)      Land     ments      ments    (note 2)   
-----------                       ------------  --------  ---------  --------  --------   
                                                                      (in thousands) 
<S>                               <C>           <C>       <C>        <C>       <C>    
Properties in Development:               
                                         
Beachwood Place Expansion               35,002   1,149          --     41,545       -- 
  Expansion of retail center                                                           
  Beachwood, OH                                                                        
                                                                                       
Various Office Park Expansions              --  18,507          --     21,402       -- 
  Las Vegas, NV                                                                        
                                                                                       
Orlando                                     --   2,355          --     17,952       -- 
  Retail Center under development                                                      
  Orlando, FL                                                                          
                                                                                       
Arizona Center                              --      --          --     16,184       -- 
  Developed/developable land                                                           
  under master lease                                                                   
  Phoenix, AZ                                                                          
                                                                                       
Canyon Center                               --   2,104          --      7,296       -- 
  Office Building under development                                                    
  Las Vegas, NV                                                                        
                                                                                       
White Marsh Expansion                       --   3,373          --      5,519       -- 
  Repositioning of department stores                                                   
  Baltimore, MD                                                                        
                                                                                       
Willowbrook Expansion                       --      --          --      7,122       -- 
  Repositioning of department stores                                                   
  Wayne, NJ                                                                            
                                                                                       
Plymouth Meeting Mall Expansion             --      --          --      5,046       -- 
  Expansion of retail Center                                                           
  Montgomery County, PA                                                                
</TABLE> 
<TABLE>
<CAPTION>
                                                                                                         Life on
                                           Gross amount at which carried                                   which
                                               at December 31, 1996         Accumu-                       depre-
                                           ------------------------------   lated                         ciation
                                                     Buildings              depre-   Date of             in latest
                                                        and                ciation   comple-              income
                                                      Improve-               and     tion of              state-
                                                       ments               amorti-  construc-    Date     ment is
                                             Land    (note 3)     Total    zation      tion    acquired   computed 
                                           --------  ---------  --------  --------  ---------  --------  ----------        
                                      (in thousands)
<S>                                        <C>       <C>        <C>       <C>       <C>        <C>       <C> 



Properties in Development:                  
                                                                                                           
Beachwood Place Expansion                    1,149     41,545    42,694      --        N/A        N/A        N/A 
  Expansion of Retail Center                                                                               
  Beachwood, OH                             
                                                                                                           
Various Office Park Expansions              18,507     21,402    39,909      --        N/A       06/96       N/A 
  Las Vegas, NV                              
                                                                                                           
Orlando                                      2,355     17,952    20,307      --        N/A        N/A        N/A 
  Retail Center under development                                                                          
  Orlando, FL                                
                                                                                                           
Arizona Center                                  --     16,184    16,184      N/A       N/A        N/A        N/A 
  Developed/developable land                                                                               
  under master lease                                                                                       
  Phoenix, AZ                                
                                                                                                           
Canyon Center                                2,104      7,296     9,400      --        N/A       06/96       N/A
  Office Building under development                                                                        
  Las Vegas, NV                              
                                                                                                           
White Marsh Expansion                        3,373      5,519     8,892      --        N/A       08/95       N/A 
  Repositioning of department stores                                                                       
  Baltimore, MD                              
                                                                                                           
Willowbrook Expansion                           --      7,122     7,122      --        N/A        N/A        N/A 
  Repositioning of department stores                                                                       
  Wayne, NJ                                 
                                                                                                           
Plymouth Meeting Mall Expansion                 --      5,046     5,046      --        N/A        N/A        N/A 
  Expansion of Retail Center             
  Montgomery County, PA                         
</TABLE> 

                                              IV-15
<PAGE>
 
                                                        Schedule III, continued
                                                        -----------------------
                       THE ROUSE COMPANY AND SUBSIDIARIES
               Real Estate and Accumulated Depreciation (note 1)

                               December 31, 1996
<TABLE>
<CAPTION>               
                                                                     Cost capitalized
                                                 Initial cost to       subsequent to
                                                    Company             acquisition
                                               -------------------  ------------------ 
                                                         Buildings                       
                                                           and                Carrying        
                                 Encumbrances            Improve-   Improve-    costs          
Description                        (note 4)      Land     ments      ments    (note 2)   
-----------                      ------------  --------  ---------  --------  --------   
                                                                      (in thousands) 
<S>                              <C>           <C>       <C>        <C>       <C>    
Preconstruction costs -            
  Various projects                     --          --         --     22,158       --
                                                                                    
Preconstruction reserve                --          --         --    (16,317)      --
                                                                                    
Other projects,                                                                     
  less than 5% of total                --      13,544         --      7,121       --
                                   ------      ------     ------    -------    -----
                                                                                    
Total Properties                                                               
  in Development                   35,002      41,032         --    135,028       --
                                   ------      ------     ------    -------    -----
                                                                                    
Properties held for sale:                                                           
                                                                                    
Salem Mall                         36,097       1,285         --     20,617       --
  Retail Center                                                                     
  Dayton, OH                                                                        
                                                                                    
Northwest Mall                     22,839       6,649         --     12,339       --
  Retail Center                                                                     
  Houston, TX                                                                       
                                                                                    
Almeda Mall                            --       4,641         --     14,145       --
  Retail Center                                                                     
  Houston, TX                                                                       
                                                                                    
Other properties held for sale,                                                     
less than 5% of total               6,587       1,453         --     11,951       --
                                   ------      ------     ------    -------    -----
                                                                                    
Total properties held for sale     65,523      14,028         --     59,052       --
                                   ------      ------     ------    -------    -----
</TABLE>
<TABLE> 
<CAPTION> 
                                                                                                    Life on
                                      Gross amount at which carried                                   which
                                          at December 31, 1996         Accumu-                       depre-
                                      ------------------------------   lated                         ciation
                                                Buildings              depre-   Date of             in latest
                                                   and                ciation   comple-              income
                                                 Improve-               and     tion of              state-
                                                  ments               amorti-  construc-    Date     ment is
                                        Land    (note 3)     Total    zation      tion    acquired   computed 
                                      --------  ---------  --------  --------  ---------  --------  ----------        
                                (in thousands)
<S>                                   <C>       <C>        <C>       <C>       <C>        <C>       <C> 


Preconstruction costs -           
  Various projects                      --        22,158    22,158      N/A        N/A        N/A       N/A         
                                                                                              
Preconstruction reserve                 --       (16,317)  (16,317)     N/A        N/A        N/A       N/A         
                                                                                              
Other projects,                                                                                                                   
  less than 5% of total             13,544         7,121    20,665      N/A        N/A        N/A       N/A         
                                    ------       -------   -------                                  
                                                                                              
Total Properties                                                                         
  in Development                    41,032       135,028   176,060                                 
                                    ------       -------   -------                                  
                                                                                              
Properties held for sale:                                                                     
                                                                                              
Salem Mall                           1,285        20,617    21,902      --         10/66      N/A       Note 8      
  Retail Center                                                                               
  Dayton, OH                                                                                  
                                                                                              
Northwest Mall                       6,649        12,339    18,988      --         10/68      N/A       Note 8      
  Retail Center                                                                               
  Houston, TX                                                                                 
                                                                                              
Almeda Mall                          4,641        14,145    18,786      --         10/68      N/A       Note 8      
  Retail Center                                                                               
  Houston, TX                                                                                 
                                                                                              
Other properties held for sale,                                                               
less than 5% of total                1,453        11,951    13,404                                 
                                    ------       -------   -------                                  
                                                                                              
Total properties held for sale      14,028        59,052    73,080                                 
                                    ------       -------   -------                                   
</TABLE> 

                                     IV-16
<PAGE>
 
                                                         Schedule III, continued
                                                         -----------------------
                       THE ROUSE COMPANY AND SUBSIDIARIES
               Real Estate and Accumulated Depreciation (note 1)

                               December 31, 1996
<TABLE>
<CAPTION>               
                                                                       Cost capitalized
                                                   Initial cost to       subsequent to
                                                       Company            acquisition
                                                 -------------------  ------------------ 
                                                           Buildings                       
                                                             and                Carrying        
                                   Encumbrances            Improve-   Improve-    costs          
Description                          (note 4)      Land     ments      ments    (note 2)   
-----------                        ------------  --------  ---------  --------  --------   
                                                                                (in thousands)
<S>                                <C>            <C>       <C>        <C>       <C>   
Land held for development and sale:
                                  
Columbia                                12,550   53,000         --      56,449       --   
  Land in various stages                                                         
  of development                                                                 
  Columbia, MD                                                                   
                                                                                 
Summerlin                                   --   89,076         --          --       --   
  Land in various stages of                                                      
  development                                                                    
  Las Vegas, NV                                                                  
                                                                                 
Canyon Springs                              --   16,000         --       8,716       --   
  Land held for development                                                      
  Riverside County, CA                                                           
                                                                                 
Nevada Investment Land                      --   20,631         --          --       --   
                                                                                 
Other properties,                                                                
  less than 5% of total                     --      245         --          --       --   
                                    ---------- --------   --------  ----------  -------   
                                                                                 
Total land held for                                                               
  development and sale                  12,550  178,952         --      65,165       --   
                                    ---------- --------   --------  ----------  -------   
Total Property                      $2,316,241 $478,255   $358,017  $3,031,961  $    --  
                                    ========== ========   ========  ==========  =======
</TABLE> 
<TABLE> 
<CAPTION> 
                                                                                                     Life on
                                       Gross amount at which carried                                   which
                                           at December 31, 1996         Accumu-                       depre-
                                       ------------------------------   lated                         ciation
                                                 Buildings              depre-   Date of             in latest
                                                    and                ciation   comple-              income
                                                  Improve-               and     tion of              state-
                                                   ments               amorti-  construc-    Date     ment is
                                         Land    (note 3)     Total    zation      tion    acquired   computed 
                                       --------  ---------  --------  --------  ---------  --------  ----------        
                                (in thousands)
<S>                                    <C>       <C>        <C>       <C>       <C>        <C>       <C> 


Land held for development and sale:
                                   
Columbia                              109,449         --    109,449      N/A        N/A      09/85        N/A        
  Land in various stages                                                               
  of development                    
  Columbia, MD                                                                         
                                                                                       
Summerlin                              89,076         --     89,076      N/A        N/A      06/96        N/A 
  Land in various stages of                                                            
  development                       
  Las Vegas, NV                                                                        
                                                                                       
Canyon Springs                         24,716         --     24,716      N/A        N/A      07/89        N/A 
  Land held for development         
  Riverside County, CA                                                                 
                                                                                       
Nevada Investment Land                 20,631         --     20,631      N/A        N/A      06/96        N/A 

Other properties,                                                                      
  less than 5% of total                   245         --        245      N/A        N/A     Various       N/A
                                     -------- ---------- ---------- --------     
                                   
Total land held for                
  development and sale                244,177         --    244,117      N/A        
                                     -------- ---------- ---------- --------     
Total Property                       $543,420 $3,324,813 $3,868,233 $552,201            
                                     ======== ========== ========== ========             

</TABLE> 
                                    IV-17
 



<PAGE>
 
                                                         Schedule III, continued
                                                         -----------------------

                       THE ROUSE COMPANY AND SUBSIDIARIES
               Real Estate and Accumulated Depreciation (Note 1)

                               December 31, 1996

Notes:

  (1) Reference is made to notes 2, 3, 4, 5, 9, 12, 13 and 16 to the
consolidated financial statements.  Land was generally acquired one to three
years before completion of construction.

  (2) The determination of these amounts is not practicable and, accordingly,
they are included in improvements.

  (3) Buildings and improvements include deferred costs of $113,904,000 at
December 31, 1996.

  (4) Encumbrances on office buildings are included in operating property
encumbrances.

  (5) The changes in total cost of properties for the years ended December 31,
1996, 1995 and 1994 are as follows (in thousands):
<TABLE>
<CAPTION>
 
                                                  1996         1995          1994
                                               -----------  -----------  ------------
<S>                                            <C>          <C>          <C>
 Balance at beginning of year                  $3,219,277   $3,144,015    $3,010,195
 Additions, at cost                               158,205       73,155        88,259
 Cost of properties acquired                      613,100       78,605        93,705
 Additions to land held for
  development and sale                             48,474       16,091        16,270
 Cost of land sales                               (57,204)     (14,214)      (15,804)
 Retirements, sales and other
  dispositions                                    (85,167)     (75,787)      (30,049)
 Additions to preconstruction reserve              (2,700)      (3,800)       (3,400)
 Receivables under finance leases, net              3,088          224          (632)
 Investments in unconsolidated real
  estate ventures, net                             (3,015)      16,577       (12,317)
 Provision for loss on operating properties       (25,825)     (15,589)       (2,212)
                                               ----------   ----------    ----------
 Balance at end of year                        $3,868,233   $3,219,277    $3,144,015
                                               ==========   ==========    ==========
 
</TABLE>
In 1996, non-cash consideration of $34,610,000 in the form of purchase money
loans and debt assumed was given in acquisitions of properties.

                                     IV-18
<PAGE>
 
                                                         Schedule III, continued
                                                         -----------------------

                       THE ROUSE COMPANY AND SUBSIDIARIES
               Real Estate and Accumulated Depreciation (Note 1)

                               December 31, 1996


Notes, continued:


 (6) The changes in accumulated depreciation and amortization for the years
ended December 31, 1996, 1995 and 1994 are as follows (in thousands):
<TABLE>
<CAPTION>
 
                                        1996        1995        1994
                                     ----------  ----------  ----------
<S>                                  <C>         <C>         <C>
 
Balance at beginning of year          $519,319    $490,158    $429,070
Depreciation and amortization
 charged to operations                  79,990      73,062      74,186
Retirements, sales and other, net      (47,108)    (43,901)    (13,098)
                                      --------    --------    --------
Balance at end of year                $552,201    $519,319    $490,158
                                      ========    ========    ========
</TABLE>
 (7) The aggregate cost of properties for Federal income tax purposes is
approximately $3,834,130,000 at December 31, 1996.

 (8) Reference is made to note 2(c) to the consolidated financial statements for
information related to depreciation.

 (9) Reference is made to note 13 to the consolidated financial statements for
information related to provisions for losses on real estate assets.

                                      IV-19
<PAGE>
 
                                   SIGNATURES
                                   ----------


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

 The Rouse Company



 By:   /s/Anthony W. Deering
      -------------------------------------
     Anthony W. Deering                               March 31, 1997
     Chairman of the Board, President
       and Chief Executive Officer


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

 Principal Executive Officer:



   /s/Anthony W. Deering
  -------------------------------------
 Anthony W. Deering                                   March 31, 1997
 Chairman of the Board, President
   and Chief Executive Officer


 Principal Financial Officer:



     /s/Jeffrey H. Donahue
   -------------------------------------
 Jeffrey H. Donahue                                   March 31, 1997
 Senior Vice President and
  Chief Financial Officer


 Principal Accounting Officer:



     /s/George L. Yungmann
   -------------------------------------
 George L. Yungmann                                   March 31, 1997
 Senior Vice President and Controller

                                      IV-20
<PAGE>
 
 Board of Directors:

    David H. Benson, Jeremiah E. Casey, Anthony W. Deering, Rohit M. Desai,
 Mathias J. DeVito, Juanita T. James, William R. Lummis, Thomas J. McHugh, Hanne
 M. Merriman, Roger W. Schipke, Alexander B. Trowbridge and Gerard J. M. Vlak.


 By:    /s/Anthony W. Deering
      -------------------------------
      Anthony W. Deering                              March 31, 1997     
      For Himself and as
      Attorney-in-fact for
      the above-named persons

                                      IV-21
<PAGE>
 
              CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
              ---------------------------------------------------



The Board of Directors
The Rouse Company:


  We consent to the incorporation by reference in the Registration Statements of
The Rouse Company on Form S-8 (Registration Nos. 2-83612, 33-56231, 33-56233 and
33-56235), Form S-3 (Registration Nos. 2-78898, 2-95596, 33-52458, 33-57347, 33-
57707 and 333-20781) and Form S-4 (Registration No. 333-1693) of our report
dated February 25, 1997, relating to the consolidated financial statements and
related schedules of The Rouse Company and subsidiaries as of December 31, 1996
and 1995 and for each of the years in the three-year period ended December 31,
1996, which report appears in the Annual Report on Form 10-K of The Rouse
Company for the year ended December 31, 1996.



                                      KPMG PEAT MARWICK LLP



Baltimore, Maryland
March 31, 1997

                                      IV-22
<PAGE>
 
                 CONSENT OF INDEPENDENT REAL ESTATE CONSULTANTS
                 ----------------------------------------------



The Board of Directors
The Rouse Company:

         We consent to the incorporation by reference in the Registration
Statements of The Rouse Company (the "Company") on Form S-8 (Registration Nos.
2-83612, 33-56231, 33-56233 and 33-56235), Form S-3 (Registration Nos. 2-78898,
2-95596, 33-52458, 33-57347, 33-57707 and 333-20781) and Form S-4 (Registration
No. 333-1693) of our report dated February  25, 1997 on our concurrence with the
Company's estimates of the total current value of its equity and other interests
in certain real property owned and/or managed by the Company and its
subsidiaries as of December 31, 1996 and 1995, which report appears in the
Annual Report on Form 10-K of the Company for the year ended December 31, 1996.

                                      LANDAUER ASSOCIATES, INC.



                                      Deborah A. Jackson
                                      Senior Vice President
                                      Director of Retail Valuation



New York, New York
March 31, 1997

                                      IV-23
<PAGE>
 
                                 Exhibit Index



Exhibit No.
-----------

     3          Articles of Incorporation and Bylaws

    10          Material Contracts

    11          Statement re computation of per share earnings

    12.1        Ratio of earnings to fixed charges

    12.2        Ratio of earnings to combined fixed charges and
                Preferred stock dividend requirements

    13          Annual report to security holders

    21          Subsidiaries of the Registrant

    24          Power of Attorney

    27          Financial Data Schedule
 
    99          Additional Exhibits:

    99.1        Form 11-K Annual Report of The Rouse Company
                Savings Plan for the year ended December 31, 1996

    99.2        Factors affecting future operating results