<PAGE>



                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)
[X]   QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE
            SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2000
                                       OR

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

For the transition period from __________ to ___________________
Commission file number 333-57103

                             Mack-Cali Realty, L.P.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

        Delaware                                             22-3315804
--------------------------------                       -------------------------
(State or other jurisdiction of                           (I.R.S. Employer
 incorporation or organization)                           Identification Number)

               11 Commerce Drive, Cranford, New Jersey 07016-3501
--------------------------------------------------------------------------------
                     (Address or principal executive office)
                                   (Zip Code)

                                 (908) 272-8000
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

                                 Not Applicable
--------------------------------------------------------------------------------
   (Former name, former address and former fiscal year, if changed since last
                                     report)

    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 twelve (12) months (or such shorter period that the
Registrant was required to file such report) YES /X/ NO / / and (2) has been
subject to such filing requirements for the past ninety (90) days
YES /X/ NO / /.


<PAGE>



                             MACK-CALI REALTY, L.P.

                                    FORM 10-Q

                                      INDEX

PART I  FINANCIAL INFORMATION                                           PAGE

      Item 1.  Financial Statements:

               Consolidated Balance Sheets as of September 30, 2000
                  and December 31, 1999....................................  4

               Consolidated Statements of Operations for the three and
                  nine month periods ended September 30, 2000 and 1999.....  5

               Consolidated Statement of Changes in Partners' Capital
                  for the nine months ended September 30, 2000.............  6

               Consolidated Statements of Cash Flows for the nine months
                  ended September 30, 2000 and 1999........................  7

               Notes to Consolidated Financial Statements..................  8

      Item 2.  Management's Discussion and Analysis of Financial
                  Condition and Results of Operations...................... 34

      Item 3.  Quantitative and Qualitative Disclosures about Market Risk.. 62

PART II OTHER INFORMATION AND SIGNATURES

      Item 1.  Legal Proceedings........................................... 63

      Item 2.  Changes in Securities and Use of Proceeds................... 63

      Item 3.  Defaults Upon Senior Securities............................. 63

      Item 4.  Submission of Matters to a Vote of Security Holders......... 63

      Item 5.  Other Information........................................... 63

      Item 6.  Exhibits.................................................... 64

               Signatures.................................................. 67


                                       2
<PAGE>


                             MACK-CALI REALTY, L.P.

                         PART I - FINANCIAL INFORMATION


ITEM I. FINANCIAL STATEMENTS

        The accompanying unaudited consolidated balance sheets, statements of
        operations, of changes in partners' capital, and of cash flows and
        related notes, have been prepared in accordance with generally accepted
        accounting principles ("GAAP") for interim financial information and in
        conjunction with the rules and regulations of the Securities and
        Exchange Commission ("SEC"). Accordingly, they do not include all of the
        disclosures required by GAAP for complete financial statements. The
        financial statements reflect all adjustments consisting only of normal,
        recurring adjustments, which are in the opinion of management, necessary
        for a fair presentation for the interim periods.

        The aforementioned financial statements should be read in conjunction
        with the notes to the aforementioned financial statements and
        Management's Discussion and Analysis of Financial Condition and Results
        of Operations and the financial statements and notes thereto included in
        Mack-Cali Realty, L.P.'s Annual Report on Form 10-K and Form 10-K/A for
        the fiscal year ended December 31, 1999.

        The results of operations for the three and nine month periods ended
        September 30, 2000 are not necessarily indicative of the results to be
        expected for the entire fiscal year or any other period.



                                       3
<PAGE>

<TABLE>
<CAPTION>

MACK-CALI REALTY, L.P. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT UNIT AMOUNTS)
=============================================================================================================


                                                                             September 30,
                                                                                 2000          December 31,
                                                                             (UNAUDITED)          1999
-------------------------------------------------------------------------------------------------------------
<S>                                                                          <C>              <C>
ASSETS
Rental property
     Land and leasehold interests                                            $   562,104      $   549,096
     Buildings and improvements                                                3,008,135        3,014,532
     Tenant improvements                                                          97,466           85,057
     Furniture, fixtures and equipment                                             6,208            6,160
-------------------------------------------------------------------------------------------------------------
                                                                               3,673,913        3,654,845
Less - accumulated depreciation and amortization                                (288,976)        (256,629)
-------------------------------------------------------------------------------------------------------------
     Total rental property                                                     3,384,937        3,398,216
Cash and cash equivalents                                                         10,590            8,671
Investments in unconsolidated joint ventures                                      95,440           89,134
Unbilled rents receivable                                                         47,120           53,253
Deferred charges and other assets, net                                            93,858           66,436
Restricted cash                                                                    6,447            7,081
Accounts receivable, net of allowance for doubtful accounts
     of $532 and $672                                                              7,770            6,810
-------------------------------------------------------------------------------------------------------------

Total assets                                                                 $ 3,646,162      $ 3,629,601
=============================================================================================================


LIABILITIES AND PARTNERS' CAPITAL
Senior unsecured notes                                                       $   783,021      $   782,785
Revolving credit facilities                                                      264,483          177,000
Mortgages and loans payable                                                      486,823          530,390
Distributions payable                                                             44,610           42,499
Accounts payable and accrued expenses                                             74,461           63,394
Rents received in advance and security deposits                                   33,327           36,150
Accrued interest payable                                                           6,505           16,626
-------------------------------------------------------------------------------------------------------------
     Total liabilities                                                         1,693,230        1,648,844
-------------------------------------------------------------------------------------------------------------

Minority interest in consolidated partially-owned properties                       1,925           83,600

Commitments and contingencies

PARTNERS CAPITAL:
     Preferred units, 223,124 and 229,304 units outstanding                      228,861          235,200
     General partner, 58,698,648 and 58,446,552 common units outstanding       1,499,768        1,441,882
     Limited partners, 7,991,963 and 8,153,710 common units outstanding          213,854          211,551
     Unit warrants, 2,000,000 and 2,000,000 outstanding                            8,524            8,524
-------------------------------------------------------------------------------------------------------------
     Total partners' capital                                                   1,951,007        1,897,157
-------------------------------------------------------------------------------------------------------------

Total liabilities and partners' capital                                      $ 3,646,162      $ 3,629,601
=============================================================================================================
</TABLE>


THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.


                                       4
<PAGE>

<TABLE>
<CAPTION>

MACK-CALI REALTY, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER UNIT AMOUNTS) (UNAUDITED)
=======================================================================================================================

                                                                    Three Months Ended             Nine Months Ended
                                                                       September 30,                 September 30,
REVENUES                                                             2000         1999             2000          1999
-----------------------------------------------------------------------------------------------------------------------
<S>                                                              <C>            <C>            <C>            <C>
Base rents                                                       $ 123,600      $ 118,086      $ 367,270      $ 350,665
Escalations and recoveries from tenants                             13,763         14,829         45,058         46,055
Parking and other                                                    3,534          5,112         12,984         12,073
Equity in earnings of unconsolidated joint ventures                  2,194            834          4,401          1,462
Interest income                                                        291            159          2,537            629
-----------------------------------------------------------------------------------------------------------------------
     Total revenues                                                143,382        139,020        432,250        410,884
-----------------------------------------------------------------------------------------------------------------------

EXPENSES
Real estate taxes                                                   15,732         14,849         45,169         42,900
Utilities                                                           11,604         11,634         31,997         31,055
Operating services                                                  16,855         16,464         51,419         50,980
General and administrative                                           5,461          5,691         16,733         19,222
Depreciation and amortization                                       23,320         22,967         68,447         67,401
Interest expense                                                    25,862         26,474         79,123         75,793
Non-recurring charges                                               27,911             --         37,139         16,458
-----------------------------------------------------------------------------------------------------------------------
     Total expenses                                                126,745         98,079        330,027        303,809
-----------------------------------------------------------------------------------------------------------------------
Income before gain on sales of rental property
     and minority interest                                          16,637         40,941        102,223        107,075
Gain on sales of rental property                                    10,036             --         86,205             --
-----------------------------------------------------------------------------------------------------------------------
Income before minority interest                                     26,673         40,941        188,428        107,075
Minority interest in consolidated partially-owned properties            --             --          5,072             --
-----------------------------------------------------------------------------------------------------------------------
Net income                                                          26,673         40,941        183,356        107,075
Preferred unit distributions                                        (3,928)        (3,869)       (11,562)       (11,607)
-----------------------------------------------------------------------------------------------------------------------

Net income available to common unitholders                       $  22,745      $  37,072      $ 171,794      $  95,468
=======================================================================================================================

Basic earnings per unit                                          $    0.34      $    0.55      $    2.58      $    1.42

Diluted earnings per unit                                        $    0.34      $    0.55      $    2.50      $    1.42
-----------------------------------------------------------------------------------------------------------------------

Distributions declared per common unit                           $    0.61      $    0.58      $    1.77      $    1.68
-----------------------------------------------------------------------------------------------------------------------

Basic weighted average units outstanding                            66,729         66,893         66,595         67,025

Diluted weighted average units outstanding                          66,914         67,113         73,276         67,294
-----------------------------------------------------------------------------------------------------------------------
</TABLE>


THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.



                                       5
<PAGE>

<TABLE>
<CAPTION>

MACK-CALI REALTY, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (IN THOUSANDS) (UNAUDITED)
====================================================================================================================================

                                              General  Limited
                                   Preferred  Partner  Partner    Preferred        General       Limited       Unit
                                     Units     Units    Units    Unitholders       Partner       Partners     Warrants     Total
------------------------------------------------------------------------------------------------------------------------------------

<S>                                   <C>     <C>       <C>      <C>            <C>            <C>            <C>       <C>
Balance at January 1, 2000            229     58,447    8,154    $   235,200    $ 1,441,882    $   211,551    $  8,524  $ 1,897,157
  Net income                           --         --       --         11,562        150,935         20,859          --      183,356
  Distributions                        --         --       --        (11,562)      (103,825)       (14,267)         --     (129,654)
Conversion of preferred units
  to limited partner units             (6)        --      178         (6,339)            --          6,339          --           --
Redemption of limited partner
  units for shares of common stock     --        340     (340)            --         10,628        (10,628)         --           --
Contributions - proceeds from
  stock options exercised              --        104       --             --          2,155             --          --        2,155
Deferred compensation plan
  for directors                        --         --       --             --             82             --          --           82
Amortization of stock compensation     --         --       --             --          1,501             --          --        1,501
Adjustment to fair value
  of restricted stock                  --         --       --             --             97             --          --           97
Cancellation of Restricted
  Stock Awards                         --         (5)      --             --             --             --          --           --
Repurchase of general partner units    --       (187)      --             --         (5,237)            --          --       (5,237)
Stock options charge                   --         --       --             --          1,550             --          --        1,550
------------------------------------------------------------------------------------------------------------------------------------
Balance at September 30, 2000         223     58,699    7,992    $   228,861    $ 1,499,768    $   213,854    $  8,524  $ 1,951,007
====================================================================================================================================
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.



                                       6
<PAGE>

<TABLE>
<CAPTION>

MACK-CALI REALTY, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS) (UNAUDITED)
=============================================================================================================

                                                                              Nine Months Ended September 30,
CASH FLOWS FROM OPERATING ACTIVITIES                                               2000          1999
--------------------------------------------------------------------------------------------------------------
<S>                                                                             <C>            <C>
Net income                                                                      $ 183,356      $ 107,075
Adjustments to reconcile net income to net cash
   provided by operating activities:
     Depreciation and amortization                                                 68,447         67,401
     Amortization of stock compensation                                             1,598            389
     Amortization of deferred financing costs and debt discount                     2,857          2,413
     Stock options charge                                                           1,550             --
     Equity in earnings of unconsolidated joint ventures                           (4,401)        (1,462)
     Gain on sales of rental property                                             (86,205)            --
     Minority interest in consolidated partially-owned properties                   5,072             --
Changes in operating assets and liabilities:
     Increase in unbilled rents receivable                                         (9,056)       (10,318)
     Increase in deferred charges and other assets, net                           (33,840)       (17,682)
     Increase in accounts receivable, net                                            (960)        (1,400)
     Increase in accounts payable and accrued expenses                             11,067         13,106
     (Decrease) increase in rents received in advance and security deposits        (1,131)         1,858
     (Decrease) increase in accrued interest payable                              (10,121)           992
--------------------------------------------------------------------------------------------------------------

   Net cash provided by operating activities                                    $ 128,233      $ 162,372
==============================================================================================================

CASH FLOWS FROM INVESTING ACTIVITIES
Additions to rental property                                                    $(224,797)     $(143,198)
Investments in unconsolidated joint ventures                                      (12,687)       (39,626)
Distributions from unconsolidated joint ventures                                   10,782         12,008
Proceeds from sales of rental property                                            281,225             --
--------------------------------------------------------------------------------------------------------------
Decrease (increase) in restricted cash                                                634           (158)

   Net cash provided by (used in) investing activities                          $  55,157      $(170,974)
=============================================================================================================

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from senior unsecured notes                                            $      --      $ 782,535
Proceeds from revolving credit facilities                                         551,618        303,256
Proceeds from mortgages and loans payable                                              --         45,500
Repayments of revolving credit facilities                                        (464,135)      (724,900)
Repayments of mortgages and loans payable                                         (43,567)      (249,308)
Distributions to minority interest in partially-owned properties                  (88,672)            --
Repurchase of general partner units                                                (5,237)       (25,000)
Payment of financing costs                                                         (6,090)        (7,039)
Proceeds from stock options exercised                                               2,155          1,032
Proceeds from dividend reinvestment and stock purchase plan                            --             32
--------------------------------------------------------------------------------------------------------------
Payment of distributions                                                         (127,543)      (122,247)

   Net cash (used in) provided by financing activities                          $(181,471)     $   3,861
=============================================================================================================

Net increase (decrease) in cash and cash equivalents                            $   1,919      $  (4,741)
Cash and cash equivalents, beginning of period                                  $   8,671      $   5,809
--------------------------------------------------------------------------------------------------------------

Cash and cash equivalents, end of period                                        $  10,590      $   1,068
=============================================================================================================
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.



                                       7
<PAGE>


MACK-CALI REALTY, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (DOLLARS IN THOUSANDS, EXCEPT
PER UNIT AMOUNTS)
================================================================================

1.    ORGANIZATION AND BASIS OF PRESENTATION

ORGANIZATION
Mack-Cali Realty, L.P., a Delaware limited partnership, and its subsidiaries
(the "Operating Partnership") was formed on August 31, 1994 to conduct the
business of leasing, management, acquisition, development, construction and
tenant-related services for its sole general partner, Mack-Cali Realty
Corporation and its subsidiaries (the "Corporation" or "General Partner"). The
Operating Partnership, through its operating divisions and subsidiaries,
including the Mack-Cali property-owning partnerships and limited liability
companies, (collectively, the "Property Partnerships"), is the entity through
which all of the General Partner's operations are conducted.

The General Partner is a fully integrated, self-administered, self-managed real
estate investment trust ("REIT"). The General Partner controls the Operating
Partnership as its sole general partner, and owned an 88.0 percent and 87.8
percent common unit interest in the Operating Partnership as of September 30,
2000 and December 31, 1999, respectively.

The General Partner's business is the ownership of interests in and operation of
the Operating Partnership, and all of the General Partner's expenses are
incurred for the benefit of the Operating Partnership. The General Partner is
reimbursed by the Operating Partnership for all expenses it incurs relating to
the ownership and operation of the Operating Partnership. The Operating
Partnership earns a management fee of between three percent and five percent of
revenues, as defined, for its management of the Property Partnerships.

As of September 30, 2000, the Operating Partnership owned or had interests in
268 properties plus developable land (collectively, the "Properties"). The
Properties aggregate approximately 28.5 million square feet, and are comprised
of 164 office buildings and 91 office/flex buildings totaling approximately 28.1
million square feet (which includes eight office buildings and four office/flex
buildings, aggregating 1.5 million square feet, owned by unconsolidated joint
ventures in which the Operating Partnership has investment interests), six
industrial/warehouse buildings totaling approximately 387,400 square feet, two
multi-family residential complexes consisting of 451 units, two stand-alone
retail properties and three land leases. The Properties are located in 12
states, primarily in the Northeast, plus the District of Columbia.

BASIS OF PRESENTATION
The accompanying consolidated financial statements include all accounts of the
Operating Partnership and its controlled subsidiaries. See Investments in
Unconsolidated Joint Ventures in Note 2 for the Operating Partnership's
accounting treatment of unconsolidated joint venture interests. All significant
intercompany accounts and transactions have been eliminated.

The preparation of financial statements in conformity with generally accepted
accounting principles ("GAAP") requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

2.    SIGNIFICANT ACCOUNTING POLICIES

RENTAL
PROPERTY        Rental properties are stated at cost less accumulated
                depreciation and amortization. Costs directly related to the
                acquisition and development of rental properties are
                capitalized. Capitalized development costs include interest,
                property taxes, insurance and other project costs incurred
                during the period of development. Included in total rental
                property is construction-in-progress of $127,729 and $98,438 as
                of September 30, 2000 and December 31, 1999, respectively.
                Ordinary repairs and maintenance are expensed as incurred; major
                replacements and betterments, which improve or extend the life
                of the asset, are capitalized and depreciated over their
                estimated useful lives. Fully-depreciated assets are removed
                from the accounts.



                                       8
<PAGE>

                Properties are depreciated using the straight-line method over
                the estimated useful lives of the assets. The estimated useful
                lives are as follows:

<TABLE>
<S>                                                      <C>
                Leasehold interests                      Remaining lease term
                ----------------------------------------------------------------
                Buildings and improvements                      5 to 40 years
                ----------------------------------------------------------------
                Tenant improvements                The shorter of the term of
                                             the related lease or useful life
                ----------------------------------------------------------------
                Furniture, fixtures and equipment               5 to 10 years
                ----------------------------------------------------------------
</TABLE>

                On a periodic basis, management assesses whether there are any
                indicators that the value of the real estate properties may be
                impaired. A property's value is impaired only if management's
                estimate of the aggregate future cash flows (undiscounted and
                without interest charges) to be generated by the property are
                less than the carrying value of the property. To the extent
                impairment has occurred, the loss shall be measured as the
                excess of the carrying amount of the property over the fair
                value of the property. Management does not believe that the
                value of any of its rental properties is impaired.

                When assets are identified by management as held for sale, the
                Operating Partnership discontinues depreciating the assets and
                estimates the sales price, net of selling costs, of such assets.
                If, in management's opinion, the net sales price of the assets
                which have been identified for sale is less than the net book
                value of the assets, a valuation allowance is established. See
                Note 7.

INVESTMENTS IN
UNCONSOLIDATED
JOINT VENTURES  The Operating Partnership accounts for its investments in
                unconsolidated joint ventures under the equity method of
                accounting as the Operating Partnership exercises significant
                influence, but does not control these entities. These
                investments are recorded initially at cost, as Investments in
                Unconsolidated Joint Ventures, and subsequently adjusted for
                equity in earnings and cash contributions and distributions. Any
                difference between the carrying amount of these investments on
                the balance sheet of the Operating Partnership and the
                underlying equity in net assets is amortized as an adjustment to
                equity in earnings of unconsolidated joint ventures over 40
                years. See Note 4.

CASH AND CASH
EQUIVALENTS     All highly liquid investments with a maturity of three months or
                less when purchased are considered to be cash equivalents.

DEFERRED
FINANCING
COSTS           Costs incurred in obtaining financing are capitalized and
                amortized on a straight-line basis, which approximates the
                effective interest method, over the term of the related
                indebtedness. Amortization of such costs is included in interest
                expense and was $1,055 and $895 for the three months ended
                September 30, 2000 and 1999, respectively, and $2,857 and $2,413
                for the nine months ended September 30, 2000 and 1999,
                respectively.

DEFERRED
LEASING COSTS   Costs incurred in connection with leases are capitalized and
                amortized on a straight-line basis over the terms of the related
                leases and included in depreciation and amortization.
                Unamortized deferred leasing costs are charged to amortization
                expense upon early termination of the lease. Certain employees
                provide leasing services to the Properties and receive
                compensation based on space leased. The portion of such
                compensation, which is capitalized and amortized, approximated
                $794 and $690 for the three months ended September 30, 2000 and
                1999, respectively, and $2,383 and $2,091 for the nine months
                ended September 30, 2000 and 1999, respectively.



                                       9
<PAGE>

REVENUE
RECOGNITION     Base rental revenue is recognized on a straight-line basis over
                the terms of the respective leases. Unbilled rents receivable
                represents the amount by which straight-line rental revenue
                exceeds rents currently billed in accordance with the lease
                agreements. Parking revenue includes income from parking spaces
                leased to tenants. Rental income on residential property under
                operating leases having terms generally of one year or less is
                recognized when earned.

                Reimbursements are received from tenants for certain costs as
                provided in the lease agreements. These costs generally include
                real estate taxes, utilities, insurance, common area maintenance
                and other recoverable costs. See Note 16.

INCOME AND
OTHER TAXES     The Operating Partnership is a partnership and, as a
                result, all income and losses of the partnership are allocated
                to the partners for inclusion in their respective income tax
                returns. Accordingly, no provision or benefit for income taxes
                has been made in the accompanying financial statements.

INTEREST RATE
CONTRACTS       Interest rate contracts are utilized by the Operating
                Partnership to reduce interest rate risks. The Operating
                Partnership does not hold or issue derivative financial
                instruments for trading purposes. The differentials to be
                received or paid under contracts designated as hedges are
                recognized over the life of the contracts as adjustments to
                interest expense.

                In certain situations, the Operating Partnership uses forward
                treasury lock agreements to mitigate the potential effects of
                changes in interest rates for prospective transactions. Gains
                and losses are deferred and amortized as adjustments to interest
                expense over the remaining life of the associated debt to the
                extent that such debt remains outstanding.

EARNINGS
PER UNIT        In accordance with the Statement of Financial Accounting
                Standards No. 128 ("FASB No. 128"), the Operating Partnership
                presents both basic and diluted earnings per unit ("EPU"). Basic
                EPU excludes dilution and is computed by dividing net income
                available to common unitholders by the weighted average number
                of units outstanding for the period. Diluted EPU reflects the
                potential dilution that could occur if securities or other
                contracts to issue common units were exercised or converted into
                common units, where such exercise or conversion would result in
                a lower EPU amount.

DISTRIBUTIONS
PAYABLE         The distributions payable at September 30, 2000 represent
                distributions payable to common unitholders of record as of
                October 4, 2000 (66,692,311 common units), and preferred
                distributions payable to preferred unitholders (223,124
                preferred units) for the third quarter 2000. The third quarter
                2000 common unit distribution of $0.61 per common unit as well
                as the third quarter preferred unit distribution of $17.6046 per
                preferred unit, were approved by the Board of Directors of the
                General Partner on September 25, 2000 and paid on October 23,
                2000.

                The distributions payable at December 31, 1999 represent
                distributions payable to common unitholders of record as of
                January 4, 2000 (66,604,262 common units), and preferred
                distributions payable to preferred unitholders (229,304
                preferred units) for the fourth quarter 1999. The fourth quarter
                1999 common unit distribution of $0.58 per common unit
                (pro-rated for units issued during the quarter), as well as the
                fourth quarter preferred unit distribution of $16.875 per
                preferred unit, were approved by the Board of Directors of the
                General Partner on December 17, 1999 and paid on January 21,
                2000.



                                       10
<PAGE>

UNDERWRITING
COMMISSIONS
AND COSTS       Underwriting commissions and costs incurred in connection
                with the Corporation's stock offerings and subsequent
                reinvestment in general partner units are reflected as a
                reduction of these unit values.

STOCK OPTIONS   The Operating Partnership accounts for stock-based compensation
                using the intrinsic value method prescribed in Accounting
                Principles Board Opinion No. 25, "Accounting for Stock Issued to
                Employees," and related Interpretations ("APB No. 25"). Under
                APB No. 25, compensation cost is measured as the excess, if any,
                of the quoted market price of the Corporation's stock at the
                date of grant over the exercise price of the option granted.
                Compensation cost for stock options, if any, is recognized
                ratably over the vesting period. The Corporation's policy is to
                grant options with an exercise price equal to the quoted closing
                market price of the Corporation's stock on the business day
                preceding the grant date. Accordingly, no compensation cost has
                been recognized under the Corporation's stock option plans for
                the granting of stock options. See Note 11.

NON-RECURRING
CHARGES         The Operating Partnership considers non-recurring charges as
                costs incurred specific to significant non-recurring events that
                impact the comparative measurement of the Operating
                Partnership's performance.

RECLASSIFI-
CATION          Certain reclassifications have been made to prior period
                amounts in order to conform with current period presentation.


3.    ACQUISITIONS, DISPOSITIONS AND OTHER TRANSACTIONS

2000 TRANSACTIONS
OPERATING PROPERTY ACQUISITIONS
The Operating Partnership acquired the following operating properties during the
nine months ended September 30, 2000:

<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------------------------
                                                                                                           Investment by
Acquisition                                                                            # of    Rentable    Operating
   Date      Property/Portfolio Name           Location                               Bldgs.  Square Feet  Partnership (a)
--------------------------------------------------------------------------------------------------------------------------
<S>          <C>                               <C>                                    <C>        <C>        <C>
OFFICE
5/23/00      555 & 565 Taxter Road             Elmsford, Westchester County, NY          2       341,108    $ 42,980
6/14/00      Four Gatehall Drive               Parsippany, Morris County, NJ             1       248,480      42,381
--------------------------------------------------------------------------------------------------------------------------
TOTAL OFFICE PROPERTY ACQUISITIONS:                                                      3       589,588    $ 85,361
--------------------------------------------------------------------------------------------------------------------------

OFFICE/FLEX
3/24/00      Two Executive Drive (b)           Moorestown, Burlington County, NJ         1        60,800    $  4,007
7/14/00      915 North Lenola Road (b)         Moorestown, Burlington County, NJ         1        52,488       2,542
--------------------------------------------------------------------------------------------------------------------------
TOTAL OFFICE/FLEX PROPERTY ACQUISITION:                                                  2       113,288    $  6,549
--------------------------------------------------------------------------------------------------------------------------

TOTAL OPERATING PROPERTY ACQUISITIONS:                                                   5       702,876    $ 91,910
==========================================================================================================================
</TABLE>



SEE FOOTNOTES ON PAGE 14.



                                       11
<PAGE>


PROPERTIES PLACED IN SERVICE
The Operating Partnership placed in service the following properties through the
completion of development during the nine months ended September 30, 2000:

<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------------------------
                                                                                                          Investment by
Date Placed                                                                            # of    Rentable      Operating
 in Service  Property Name                     Location                               Bldgs.  Square Feet  Partnership (c)
--------------------------------------------------------------------------------------------------------------------------
<S>          <C>                               <C>                                      <C>      <C>        <C>
OFFICE
9/01/00      Harborside Plaza 4-A              Jersey City, Hudson County, NJ            1       207,670    $ 53,782
9/15/00      Liberty Corner Corp. Center       Bernards Township, Somerset County, NJ    1       132,010      16,387
--------------------------------------------------------------------------------------------------------------------------
TOTAL OFFICE PROPERTIES PLACED IN SERVICE:                                               2       339,680    $ 70,169
--------------------------------------------------------------------------------------------------------------------------

TOTAL PROPERTIES PLACED IN SERVICE:                                                      2       339,680    $ 70,169
==========================================================================================================================
</TABLE>


SEE FOOTNOTES ON PAGE 14.

LAND TRANSACTIONS
On January 13, 2000, the Operating Partnership acquired approximately 12.7 acres
of developable land located at the Operating Partnership's Airport Business
Center, Lester, Delaware County, Pennsylvania. The land was acquired for
approximately $2,069.

On August 24, 2000, the Operating Partnership entered into a joint venture with
SJP Properties Company ("SJP Properties") to form Morris V Realty L.L.C. and
Morris VI Realty L.L.C., which acquired approximately 47.5 acres of developable
land located adjacent to the Operating Partnership's Morris County Financial
Center, Parsippany, Morris County, New Jersey. The land was acquired for
approximately $16,193. The Operating Partnership accounts for the joint venture
on a consolidated basis.

OTHER TRANSACTIONS
On September 21, 2000, the Corporation and Prentiss Properties Trust, a Maryland
REIT ("Prentiss"), mutually agreed to terminate the agreement and plan of merger
("Merger Agreement") dated as of June 27, 2000 among the Corporation, the
Operating Partnership, Prentiss and Prentiss Properties Acquisition Partners,
L.P., a Delaware limited partnership of which Prentiss (through a wholly-owned
direct subsidiary) is the sole general partner ("Prentiss Partnership"). In
connection with such termination, the Operating Partnership deposited $25,000
into escrow for the benefit of Prentiss and Prentiss Partnership. All costs
associated with the termination of the Merger Agreement are included in
non-recurring charges for the three and nine month periods ended September 30,
2000.

The Operating Partnership and Prentiss also announced that they had
simultaneously consummated a purchase and sale transaction whereby the Operating
Partnership sold to Prentiss its 270,000 square-foot Cielo Center property
located in Austin, Travis County, Texas (see "2000 Transactions Dispositions").

On June 27, 2000, the Corporation announced that William L. Mack was appointed
Chairman of the Board of Directors and John J. Cali was named Chairman Emeritus
of the Board of Directors. Brant Cali resigned as Executive Vice President,
Chief Operating Officer and Assistant Secretary of the Corporation and as a
member of the Board of Directors, and John R. Cali resigned as Executive Vice
President, Development of the Corporation. John R. Cali was appointed to the
Board of Directors of the Corporation to take the seat previously held by Brant
Cali. (See Note 15).

DISPOSITIONS
On February 25, 2000, the Operating Partnership sold 39.1 acres of vacant land
located at the Operating Partnership's Horizon Center Business Park in Hamilton
Township, Mercer County, New Jersey, for net proceeds, after selling costs, of
approximately $4,179.

On April 17, 2000, the Operating Partnership sold 95 Christopher Columbus Drive
located in Jersey City, Hudson County, New Jersey, for net proceeds, after
selling costs, of approximately $148,222.

On April 20, 2000, the Operating Partnership sold Atrium at Coulter Ridge
located in Amarillo, Potter County, Texas, for net proceeds, after selling
costs, of approximately $1,467.


                                       12
<PAGE>

On June 9, 2000, the Operating Partnership sold 412 Mt. Kemble Avenue located in
Morris Township, Morris County, New Jersey, for net proceeds, after selling
costs, of approximately $81,981.

On September 21, 2000, the Operating Partnership sold Cielo Center located in
Austin, Travis County, Texas for net proceeds, after selling costs, of
approximately $45,785.

1999 TRANSACTIONS
OPERATING PROPERTY ACQUISITIONS
The Operating Partnership acquired the following operating properties during the
year ended December 31, 1999:

<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------------------------
                                                                                                            Investment by
Acquisition                                                                            # of    Rentable      Operating
  Date       Property/Portfolio Name            Location                               Bldgs.  Square Feet  Partnership (c)
--------------------------------------------------------------------------------------------------------------------------
<S>          <C>                                <C>                                       <C>    <C>        <C>
OFFICE
3/05/99      Pacifica Portfolio - Phase III(d)  Colorado Springs, El Paso County, CO      2        94,737    $  5,709
7/21/99      1201 Connecticut Avenue, NW        Washington, D.C.                          1       169,549      32,799
--------------------------------------------------------------------------------------------------------------------------
TOTAL OFFICE PROPERTY ACQUISITIONS:                                                       3       264,286    $ 38,508
--------------------------------------------------------------------------------------------------------------------------

OFFICE/FLEX
12/21/99     McGarvey Portfolio - Phase III(b)  Moorestown, Burlington County, NJ         3       138,600    $  8,012
--------------------------------------------------------------------------------------------------------------------------
TOTAL OFFICE/FLEX PROPERTY ACQUISITION:                                                   3       138,600    $  8,012
--------------------------------------------------------------------------------------------------------------------------

TOTAL OPERATING PROPERTY ACQUISITIONS:                                                    6       402,886    $ 46,520
==========================================================================================================================
</TABLE>

PROPERTIES PLACED IN SERVICE
The Operating Partnership placed in service the following properties through
the completion of development or redevelopment during the year ended
December 31, 1999:

<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------------------------
                                                                                                           Investment by
Date Placed                                                                            # of    Rentable      Operating
 in Service  Property Name                     Location                               Bldgs.  Square Feet  Partnership (c)
--------------------------------------------------------------------------------------------------------------------------
<S>          <C>                               <C>                                     <C>      <C>       <C>
OFFICE
8/09/99      2115 Linwood Avenue               Fort Lee, Bergen County, NJ               1        68,000    $  8,147
11/01/99     795 Folsom Street (e)             San Francisco, San Francisco County, CA   1       183,445      37,337
--------------------------------------------------------------------------------------------------------------------------
TOTAL OFFICE PROPERTIES PLACED IN SERVICE:                                               2       251,445    $ 45,484
--------------------------------------------------------------------------------------------------------------------------

OFFICE/FLEX
3/01/99      One Center Court                  Totowa, Passaic County, NJ                1        38,961    $  2,140
9/17/99      12 Skyline Drive                  Hawthorne, Westchester County, NY         1        46,850       5,023
12/10/99     600 West Avenue (f)               Stamford, Fairfield County, CT            1        66,000       5,429
--------------------------------------------------------------------------------------------------------------------------
TOTAL OFFICE/FLEX PROPERTIES PLACED IN SERVICE:                                          3       151,811    $ 12,592
--------------------------------------------------------------------------------------------------------------------------

LAND LEASE
2/01/99      Horizon Center Business Park (g)  Hamilton Township, Mercer County, NJ    N/A    27.7 acres    $  1,007
--------------------------------------------------------------------------------------------------------------------------
TOTAL LAND LEASE TRANSACTIONS:                                                                27.7 acres    $  1,007
--------------------------------------------------------------------------------------------------------------------------

TOTAL PROPERTIES PLACED IN SERVICE:                                                      5       403,256    $ 59,083
==========================================================================================================================
</TABLE>



SEE FOOTNOTES ON SUBSEQUENT PAGE.



                                       13
<PAGE>


(a)      Transactions were funded primarily from net proceeds received in the
         sale or sales of rental property.
(b)      The properties were acquired through the exercise of a purchase option
         obtained in the initial acquisition of the McGarvey portfolio in
         January 1998.
(c)      Unless otherwise noted, transactions were funded by the Operating
         Partnership with funds primarily made available through draws on the
         Operating Partnership's credit facilities.
(d)      William L. Mack, Chairman of the Board of Directors of the Corporation
         and an equity holder of the Operating Partnership, was an indirect
         owner of an interest in certain of the buildings contained in the
         Pacifica portfolio.
(e)      On June 1, 1999, the building was acquired for redevelopment for
         approximately $34,282.
(f)      On May 4, 1999, the Operating Partnership acquired, from an entity
         whose principals include Timothy M. Jones, Martin S. Berger and Robert
         F. Weinberg, each of whom are affiliated with the Operating Partnership
         as the President of the Corporation, a current member of the Board of
         Directors and a former member of the Board of Directors of the
         Corporation, respectively, approximately 2.5 acres of vacant land in
         the Stamford Executive Park, located in Stamford, Fairfield County,
         Connecticut. The Operating Partnership acquired the land for
         approximately $2,181.
(g)      On February 1, 1999, the Operating Partnership entered into a ground
         lease agreement to lease 27.7 acres of developable land located at the
         Operating Partnership's Horizon Center Business Park, located in
         Hamilton Township, Mercer County, New Jersey on which Home Depot
         constructed a 134,000 square-foot retail store.

LAND TRANSACTIONS
On February 26, 1999, the Operating Partnership acquired approximately 2.3 acres
of vacant land adjacent to one of the Operating Partnership's operating
properties located in San Antonio, Bexar County, Texas for approximately $1,524,
which was made available from the Operating Partnership's cash reserves.

On March 2, 1999, the Operating Partnership entered into a joint venture
agreement with SJP Vaughn Drive, L.L.C. Under the agreement, the Operating
Partnership has agreed to contribute its vacant land at Three Vaughn Drive,
Princeton, Mercer County, New Jersey, subject to satisfaction of certain
conditions, for an equity interest in the venture.

On March 15, 1999, the Operating Partnership entered into a joint venture with
SJP 106 Allen Road, L.L.C. to form MC-SJP Pinson Development, LLC, which
acquired vacant land located in Bernards Township, Somerset County, New Jersey.
The joint venture subsequently completed construction and placed in service a
132,010 square-foot office building on this site (see "2000 Transactions -
Properties Placed in Service"). The Operating Partnership accounts for the joint
venture on a consolidated basis.

On August 31, 1999, the Operating Partnership acquired, from an entity whose
principals include Brant Cali, a former Executive Vice President and Chief
Operating Officer of the Corporation and a former member of the Board of
Directors of the Corporation, and certain immediate family members of John J.
Cali, Chairman Emeritus of the Board of Directors of the Corporation,
approximately 28.1 acres of developable land adjacent to two of the Operating
Partnership's operating properties located in Roseland, Essex County, New Jersey
for approximately $6,097. The acquisition was funded with cash and the issuance
of 121,624 common units to the seller (see Note 12). The Operating Partnership
has commenced construction of a 220,000 square-foot office building on the
acquired land.

In August 1999, the Operating Partnership entered into an agreement with SJP
Properties which provides a cooperative effort in seeking approvals to develop
up to approximately 1.8 million square feet of office development on certain
vacant land owned or controlled, respectively, by the Operating Partnership and
SJP Properties, in Hanover and Parsippany, Morris County, New Jersey. The
agreement provides that the parties shall share equally in the costs associated
with seeking such requisite approvals. Subsequent to obtaining the requisite
approvals, upon mutual consent, the Operating Partnership and SJP Properties may
enter into one or more joint ventures to construct on the vacant land, or seek
to dispose of their respective vacant land parcels subject to the agreement.

DISPOSITIONS
On November 15, 1999, the Operating Partnership sold its 70,550 square-foot
office building located at 400 Alexander Road in Princeton, Mercer County, New
Jersey for net proceeds, after selling costs, of approximately $8,628.

On December 15, 1999, the Operating Partnership sold its 119,301 square-foot
office building located at 20002 North 19th Avenue in Phoenix, Maricopa County,
Arizona for net proceeds, after selling costs, of approximately $8,772.



                                       14
<PAGE>


4.    INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES

PRU-BETA 3 (NINE CAMPUS DRIVE)
On March 27, 1998, the Operating Partnership acquired a 50 percent interest in
an existing joint venture with The Prudential Insurance Company of America
("Prudential"), known as Pru-Beta 3, which owns and operates Nine Campus Drive,
a 156,495 square-foot office building, located in the Mack-Cali Business Campus
(formerly Prudential Business Campus) office complex in Parsippany, Morris
County, New Jersey. The Operating Partnership performs management and leasing
services for the property owned by the joint venture and recognized $112 and
$112 in fees for such services in the nine months ended September 30, 2000 and
1999, respectively.

HPMC
On April 23, 1998, the Operating Partnership entered into a joint venture
agreement with HCG Development, L.L.C. and Summit Partners I, L.L.C. to form
HPMC Development Partners, L.P. and, on July 21, 1998, entered into a second
joint venture, HPMC Development Partners II, L.P. (formerly known as HPMC Lava
Ridge Partners, L.P.), with these same parties. HPMC Development Partners,
L.P.'s efforts have focused on two development projects, commonly referred to as
Continental Grand II and Summit Ridge. HPMC Development Partners II, L.P.'s
efforts have focused on three development projects, commonly referred to as Lava
Ridge, Peninsula Gateway and Stadium Gateway. Among other things, the
partnership agreements provide for a preferred return on the Operating
Partnership's invested capital in each venture, in addition to 50 percent of
such venture's profit above the preferred returns, as defined in each agreement.

  CONTINENTAL GRAND II
  Continental Grand II is a 237,360 square-foot office building located in El
  Segundo, Los Angeles County, California, which was constructed and placed in
  service by the venture.

  SUMMIT RIDGE
  Summit Ridge is an office complex of three one-story buildings aggregating
  133,750 square feet located in San Diego, San Diego County, California, which
  was constructed and placed in service by the venture.

  LAVA RIDGE
  Lava Ridge is an office complex of three two-story buildings aggregating
  183,200 square feet located in Roseville, Placer County, California, which was
  constructed and placed in service by the venture.

  PENINSULA GATEWAY
  Peninsula Gateway is a parcel of land purchased from the City of Daly City,
  California, upon which the venture has commenced construction of an office
  building and theater and retail complex aggregating 471,379 square feet.

  STADIUM GATEWAY
  Stadium Gateway is a 1.5 acre site located in Anaheim, Orange County,
  California, acquired by the venture upon which it has commenced construction
  of a six-story 261,554 square-foot office building.

G&G MARTCO (CONVENTION PLAZA)
On April 30, 1998, the Operating Partnership acquired a 49.9 percent interest in
an existing joint venture, known as G&G Martco, which owns Convention Plaza, a
305,618 square-foot office building, located in San Francisco, San Francisco
County, California. A portion of its initial investment was financed through the
issuance of common units, as well as funds drawn from the Operating
Partnership's credit facilities. Subsequently, on June 4, 1999, the Operating
Partnership acquired an additional 0.1 percent interest in G&G Martco through
the issuance of common units (see Note 12). The Operating Partnership performs
management and leasing services for the property owned by the joint venture and
recognized $157 and $176 in fees for such services in the nine months ended
September 30, 2000 and 1999, respectively.



                                       15
<PAGE>

AMERICAN FINANCIAL EXCHANGE L.L.C.
On May 20, 1998, the Operating Partnership entered into a joint venture
agreement with Columbia Development Company, L.L.C. to form American Financial
Exchange L.L.C. The venture was initially formed to acquire land for future
development, located on the Hudson River waterfront in Jersey City, Hudson
County, New Jersey, adjacent to the Operating Partnership's Harborside Financial
Center office complex. The Operating Partnership holds a 50 percent interest in
the joint venture. Among other things, the partnership agreement provides for a
preferred return on the Operating Partnership's invested capital in the venture,
in addition to the Operating Partnership's proportionate share of the venture's
profit, as defined in the agreement. The joint venture acquired land on which it
constructed a parking facility, which is currently leased to a parking operator
under a 10-year agreement. Such parking facility serves a ferry service between
the Operating Partnership's Harborside property and Manhattan. In October 2000,
the Operating Partnership announced plans to construct a 575,000 square-foot
office building and terminate the parking agreement on certain of the land owned
by the venture. The total costs of the project are estimated to be approximately
$140,000. The project, which is currently 52 percent pre-leased, is anticipated
to be completed in early 2002.

RAMLAND REALTY ASSOCIATES L.L.C. (ONE RAMLAND ROAD)
On August 20, 1998, the Operating Partnership entered into a joint venture
agreement with S.B. New York Realty Corp. to form Ramland Realty Associates
L.L.C. The venture was formed to own, manage and operate One Ramland Road, a
232,000 square-foot office/flex building plus adjacent developable land, located
in Orangeburg, Rockland County, New York. In August 1999, the joint venture
completed redevelopment of the property and placed the office/flex building in
service. The Operating Partnership holds a 50 percent interest in the joint
venture. The Operating Partnership performs management, leasing and other
services for the property owned by the joint venture and recognized $170 and $7
in fees for such services in the nine months ended September 30, 2000 and 1999,
respectively.

ASHFORD LOOP ASSOCIATES L.P. (1001 SOUTH DAIRY ASHFORD/2100 WEST LOOP SOUTH) On
September 18, 1998, the Operating Partnership entered into a joint venture
agreement with Prudential to form Ashford Loop Associates L.P. The venture was
formed to own, manage and operate 1001 South Dairy Ashford, a 130,000
square-foot office building acquired on September 18, 1998 and 2100 West Loop
South, a 168,000 square-foot office building acquired on November 25, 1998, both
located in Houston, Harris County, Texas. The Operating Partnership holds a 20
percent interest in the joint venture. The joint venture may be required to pay
additional consideration due to earn-out provisions in the acquisition
contracts. Subsequently, through September 30, 2000, the venture paid $16,519
($3,304 representing the Operating Partnership's share) in accordance with the
earn-out provisions in the acquisition contracts. The Operating Partnership
performs management and leasing services for the properties owned by the joint
venture and recognized $89 and $96 in fees for such services in the nine months
ended September 30, 2000 and 1999, respectively.

ARCAP INVESTORS, L.L.C.
On March 18, 1999, the Operating Partnership invested in ARCap Investors,
L.L.C., a joint venture with several participants, which was formed to invest in
sub-investment grade tranches of commercial mortgage-backed securities ("CMBS").
The Operating Partnership has invested $20,000 in the venture. William L. Mack,
Chairman of the Board of Directors of the Corporation and an equity holder of
the Operating Partnership, is a principal of the managing member of the venture.
At September 30, 2000, the venture held approximately $423,499 face value of
CMBS bonds at an aggregate cost of $199,618.

SOUTH PIER AT HARBORSIDE HOTEL DEVELOPMENT
On November 17, 1999, the Operating Partnership entered into an agreement with
Hyatt Corporation to develop a 350-room luxury hotel on the Operating
Partnership's South Pier at Harborside Financial Center, Jersey City, Hudson
County, New Jersey. In July 2000, the joint venture began development of the
hotel project.

NORTH PIER AT HARBORSIDE RESIDENTIAL DEVELOPMENT
On August 5, 1999, the Operating Partnership entered into an agreement which,
upon satisfaction of certain conditions, provides for the contribution of its
North Pier at Harborside Financial Center, Jersey City, Hudson County, New
Jersey to a joint venture with Lincoln Property Company Southwest, Inc., in
exchange for cash and an equity interest in the venture. The venture intends to
develop residential housing on the property.



                                       16
<PAGE>

SUMMARIES OF UNCONSOLIDATED JOINT VENTURES
The following is a summary of the financial position of the unconsolidated joint
ventures in which the Operating Partnership had investment interests as of
September 30, 2000 and December 31, 1999:

<TABLE>
<CAPTION>

                                                                       September 30, 2000
                                  ------------------------------------------------------------------------------------------------
                                                                        American
                                                               G&G      Financial    Ramland      Ashford               Combined
                                  Pru-Beta 3      HPMC       Martco     Exchange     Realty        Loop       ARCap       Total
----------------------------------------------------------------------------------------------------------------------------------
<S>                                 <C>         <C>         <C>          <C>         <C>         <C>         <C>         <C>
ASSETS:
   Rental property, net             $ 21,059    $119,789    $ 10,890     $ 11,530    $ 19,169    $ 35,013    $     --    $217,450
   Other assets                        2,921      13,872       2,660          114       4,136         678     404,197     428,578
----------------------------------------------------------------------------------------------------------------------------------
   Total assets                     $ 23,980    $133,661    $ 13,550     $ 11,644    $ 23,305    $ 35,691    $404,197    $646,028
==================================================================================================================================

LIABILITIES AND PARTNERS'/
MEMBERS' CAPITAL:
   Mortgages and loans payable      $     --    $ 65,347    $ 50,000     $     --    $ 16,839    $     --    $211,955    $344,141
   Other liabilities                     255       9,976       1,379          386         238         678      67,477      80,389
   Partners'/members' capital         23,725      58,338     (37,829)      11,258       6,228      35,013     124,765     221,498
----------------------------------------------------------------------------------------------------------------------------------
   Total liabilities and
   partners'/members' capital       $ 23,980    $133,661    $ 13,550     $ 11,644    $ 23,305    $ 35,691    $404,197    $646,028
==================================================================================================================================
Operating Partnership's net
   investment in unconsolidated
   joint ventures                   $ 16,342    $ 33,500    $  4,399     $ 11,307    $  2,682    $  7,347    $ 19,863    $ 95,440
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>

                                                                        December 31, 1999
                                  ------------------------------------------------------------------------------------------------
                                                                        American
                                                             G&G        Financial    Ramland     Ashford                 Combined
                                  Pru-Beta 3      HPMC      Martco      Exchange      Realty      Loop        ARCap       Total
----------------------------------------------------------------------------------------------------------------------------------
<S>                                 <C>         <C>         <C>          <C>         <C>         <C>         <C>         <C>
ASSETS:
   Rental property, net             $ 21,817    $ 72,148    $ 11,552     $ 10,695    $ 19,549    $ 31,476    $     --    $167,237
   Other assets                        3,319       6,427       2,571          773       5,069         768     239,441     258,368
----------------------------------------------------------------------------------------------------------------------------------
   Total assets                     $ 25,136    $ 78,575    $ 14,123     $ 11,468    $ 24,618    $ 32,244    $239,441    $425,605
==================================================================================================================================

LIABILITIES AND PARTNERS'/
MEMBERS' CAPITAL:
   Mortgages and loans payable      $     --    $ 41,274    $ 43,081     $     --    $ 17,300    $     --    $108,407    $210,062
   Other liabilities                     186       7,254       1,383            2       1,263       3,536      36,109      49,733
   Partners'/members' capital         24,950      30,047     (30,341)      11,466       6,055      28,708      94,925     165,810
----------------------------------------------------------------------------------------------------------------------------------
   Total liabilities and
   partners'/members' capital       $ 25,136    $ 78,575    $ 14,123     $ 11,468    $ 24,618    $ 32,244    $239,441    $425,605
==================================================================================================================================
Operating Partnership's net
   investment in unconsolidated
   joint ventures                   $ 17,072    $ 23,337    $  8,352     $ 11,571    $  2,697    $  6,073    $ 20,032    $ 89,134
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>



                                       17
<PAGE>


The following is a summary of the results of operations of the unconsolidated
joint ventures for the period in which the Operating Partnership had investment
interests during the three and nine month periods ended September 30, 2000 and
1999:

<TABLE>
<CAPTION>

                                                              Three Months Ended September 30, 2000
                                     ---------------------------------------------------------------------------------------------
                                                                          American
                                                               G&G       Financial    Ramland     Ashford               Combined
                                     Pru-Beta 3    HPMC       Martco      Exchange    Realty       Loop       ARCap      Total
----------------------------------------------------------------------------------------------------------------------------------
<S>                                  <C>         <C>         <C>         <C>         <C>         <C>         <C>         <C>
   Total revenues                    $  1,253    $  2,631    $  2,783    $    275    $    983    $  1,436    $  5,357    $ 14,718
   Operating and other expenses          (391)        (78)       (890)        (41)       (280)       (658)       (876)     (3,214)
   Depreciation and amortization         (307)       (747)       (384)        (27)       (252)       (211)        (70)     (1,998)
   Interest expense                        --        (979)     (1,075)         --        (407)         --      (2,780)     (5,241)
----------------------------------------------------------------------------------------------------------------------------------
   Net income                        $    555    $    827    $    434    $    207    $     44    $    567    $  1,631    $  4,265
==================================================================================================================================
   Operating Partnership's equity
     in earnings of unconsolidated
     joint ventures                  $    239    $    627    $    286    $    207    $     22    $    113    $    700    $  2,194
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>

                                                              Three Months Ended September 30, 1999
                                     --------------------------------------------------------------------------------------------
                                                                         American
                                                               G&G       Financial    Ramland    Ashford                 Combined
                                     Pru-Beta 3    HPMC       Martco      Exchange    Realty       Loop       ARCap       Total
----------------------------------------------------------------------------------------------------------------------------------
<S>                                  <C>         <C>         <C>         <C>         <C>         <C>         <C>         <C>
   Total revenues                    $  1,227          --    $  2,422    $    250    $    580    $    971    $  3,223    $  8,673
   Operating and other expenses          (389)         --        (814)        (33)       (103)       (597)     (1,201)     (3,137)
   Depreciation and amortization         (304)         --        (233)        (24)       (178)       (163)         --        (902)
   Interest expense                        --          --        (813)         --          --          --      (1,014)     (1,827)
----------------------------------------------------------------------------------------------------------------------------------
   Net income                        $    534          --    $    562    $    193    $    299    $    211    $  1,008    $  2,807
==================================================================================================================================
Operating Partnership's equity
   in earnings of unconsolidated
   joint ventures                    $    228          --    $    124    $    193    $    150    $     42    $     97    $    834
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>

                                                              Nine Months Ended September 30, 2000
                                     --------------------------------------------------------------------------------------------
                                                                         American
                                                               G&G       Financial    Ramland    Ashford                 Combined
                                     Pru-Beta 3    HPMC       Martco      Exchange    Realty       Loop       ARCap       Total
----------------------------------------------------------------------------------------------------------------------------------
<S>                                  <C>         <C>         <C>         <C>         <C>         <C>         <C>         <C>
   Total revenues                    $  3,721    $  6,191    $  8,064    $    779    $  2,930    $  4,268    $ 16,507    $ 42,460
   Operating and other expenses        (1,210)     (1,087)     (2,443)       (123)       (870)     (1,929)     (2,168)     (9,830)
   Depreciation and amortization         (918)     (2,155)     (1,146)        (47)       (734)       (614)        (70)     (5,684)
   Interest expense                        --      (2,220)     (2,989)         --      (1,153)         --      (4,481)    (10,843)
----------------------------------------------------------------------------------------------------------------------------------
   Net income                        $  1,593    $    729    $  1,486    $    609    $    173    $  1,725    $  9,788    $ 16,103
==================================================================================================================================
Operating Partnership's equity
   in earnings unconsolidated
   joint ventures                    $    680    $    729    $    498    $    552    $     84    $    358    $  1,500    $  4,401
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>



                                       18
<PAGE>

<TABLE>
<CAPTION>

                                                              Nine Months Ended September 30, 1999
                                   -------------------------------------------------------------------------------------------------
                                                                      American
                                                            G&G       Financial     Ramland      Ashford                  Combined
                                   Pru-Beta 3   HPMC       Martco      Exchange      Realty        Loop         ARCap       Total
------------------------------------------------------------------------------------------------------------------------------------
<S>                                 <C>        <C>        <C>          <C>          <C>          <C>          <C>          <C>
   Total revenues                   $  3,697        --    $  6,572     $    667     $    580     $  2,959     $  5,998     $ 20,473
   Operating and other expenses       (1,134)       --      (2,204)        (163)        (103)      (1,645)      (3,213)      (8,462)
   Depreciation and amortization        (929)       --        (696)         (70)        (178)        (379)          --       (2,252)
   Interest expense                       --        --      (2,261)          --           --           --       (1,558)      (3,819)
------------------------------------------------------------------------------------------------------------------------------------
   Net income                       $  1,634        --    $  1,411     $    434     $    299     $    935     $  1,227     $  5,940
====================================================================================================================================
Operating Partnership's equity
   in earnings of unconsolidated
   joint ventures                   $    584        --    $   (153)    $    384     $    150     $    176     $    321     $  1,462
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


5.    DEFERRED CHARGES AND OTHER ASSETS

<TABLE>
<CAPTION>

                                               September 30,   December 31,
                                                   2000           1999
--------------------------------------------------------------------------------
<S>                                              <C>           <C>
  Deferred leasing costs                         $ 75,559      $ 62,076
  Deferred financing costs                         22,781        16,690
--------------------------------------------------------------------------------
                                                   98,340        78,766
  Accumulated amortization                        (24,937)      (20,197)
--------------------------------------------------------------------------------
  Deferred charges, net                            73,403        58,569
  Prepaid expenses and other assets                20,455         7,867
--------------------------------------------------------------------------------

  Total deferred charges and other assets, net   $ 93,858      $ 66,436
================================================================================
</TABLE>


6.    RESTRICTED CASH

Restricted cash includes security deposits for the Operating Partnership's
residential properties and certain commercial properties, and escrow and reserve
funds for debt service, real estate taxes, property insurance, capital
improvements, tenant improvements, and leasing costs established pursuant to
certain mortgage financing arrangements, and is comprised of the following:

<TABLE>
<CAPTION>

                                                September 30,   December 31,
                                                   2000             1999
--------------------------------------------------------------------------------
<S>                                              <C>            <C>
  Security deposits                              $  6,372       $  6,021
  Escrow and other reserve funds                       75          1,060
--------------------------------------------------------------------------------

  Total restricted cash                          $  6,447       $  7,081
================================================================================
</TABLE>


7.    RENTAL PROPERTY HELD FOR SALE

As of September 30, 2000, included in total rental property are 11 office
properties that the Operating Partnership has identified as held for sale. These
properties have an aggregate carrying value of $119,564 and $119,743 as of
September 30, 2000 and December 31, 1999, respectively, and are all located
in Omaha, Douglas County, Nebraska; San Antonio, Bexar County, Texas or
Houston, Harris County, Texas.

                                       19
<PAGE>


As of December 31, 1999, included in total rental property were three office
properties that the Operating Partnership had identified as held for sale. The
three office properties had an aggregate carrying value of $77,783 as of
December 31, 1999 and are all located in Omaha, Douglas County, Nebraska; Jersey
City, Hudson County, New Jersey or Amarillo, Potter County, Texas. The office
properties located in Jersey City, Hudson County, New Jersey and Amarillo,
Potter County, Texas were sold in April 2000 in two separate transactions (see
Note 3).

The following is a summary of the condensed results of operations of the rental
properties held for sale at September 30, 2000 for the nine months ended
September 30, 2000 and 1999:

<TABLE>
<CAPTION>

                                                       Nine Months
                                                   Ended September 30,
                                                    2000           1999
--------------------------------------------------------------------------------
<S>                                              <C>             <C>
Total revenues                                   $ 22,563        $ 20,743
Operating and other expenses                      (11,384)        (10,489)
Depreciation and amortization                      (2,370)         (2,313)
--------------------------------------------------------------------------------

Net income                                       $  8,809        $  7,941
================================================================================
</TABLE>

There can be no assurance if and when sales of the Operating Partnership's
rental properties held for sale will occur.


8.  SENIOR UNSECURED NOTES

On March 16, 1999, the Operating Partnership issued $600,000 face amount of
senior unsecured notes with interest payable semi-annually in arrears. The total
proceeds from the issuance (net of selling commissions and discount) of
approximately $593,500 were used to pay down outstanding borrowings under the
Unsecured Facility, as defined in Note 9, and to pay off certain mortgage loans.
The senior unsecured notes were issued at a discount of approximately $2,748,
which is being amortized over the terms of the respective tranches as an
adjustment to interest expense.

On August 2, 1999, the Operating Partnership issued an additional $185,283 of
senior unsecured notes with interest payable monthly. The Operating Partnership
used the proceeds to retire the TIAA Mortgage, as defined in Note 10.

The Operating Partnership's total senior unsecured notes (collectively, "Senior
Unsecured Notes") are redeemable at any time at the option of the Operating
Partnership, subject to certain conditions including yield maintenance.

A summary of the terms of the Senior Unsecured Notes outstanding as of September
30, 2000 and December 31, 1999 is as follows:

<TABLE>
<CAPTION>

                                                                      September 30,     December 31,     Effective
                                                                          2000             1999          Rate (1)
------------------------------------------------------------------------------------------------------------------
<S>                                                                     <C>              <C>             <C>
   7.18% Senior Unsecured Notes, due December 31, 2003                  $185,283         $185,283        7.23%
   7.00% Senior Unsecured Notes, due March 15, 2004                      299,724          299,665        7.27%
   7.25% Senior Unsecured Notes, due March 15, 2009                      298,014          297,837        7.49%
------------------------------------------------------------------------------------------------------------------

   Total Senior Unsecured Notes                                         $783,021         $782,785        7.34%
==================================================================================================================
</TABLE>


(1) Includes the cost of terminated treasury lock agreements (if any), offering
    and other transaction costs and the discount on the notes, as applicable.

The terms of the Senior Unsecured Notes include certain restrictions and
covenants which require compliance with financial ratios relating to the maximum
amount of debt leverage, the maximum amount of secured indebtedness, the minimum
amount of debt service coverage and the maximum amount of unsecured debt as a
percent of unsecured assets.



                                       20
<PAGE>


9.  REVOLVING CREDIT FACILITIES

2000 UNSECURED FACILITY
On June 22, 2000, the Operating Partnership obtained an unsecured revolving
credit facility ("2000 Unsecured Facility") with a current borrowing capacity of
$800,000 from a group of 24 lenders. The interest rate on outstanding borrowings
under the credit line is currently the London Inter-Bank Offered Rate ("LIBOR")
(6.62 percent at September 30, 2000) plus 80 basis points. The Operating
Partnership may instead elect an interest rate representing the higher of the
lender's prime rate or the Federal Funds rate plus 50 basis points. In the event
of a change in the Operating Partnership's unsecured debt rating, the interest
rate will be changed on a sliding scale. The 2000 Unsecured Facility also
requires a 20 basis point facility fee on the current borrowing capacity payable
quarterly in arrears. Subject to certain conditions, the Operating Partnership
has the ability to increase the borrowing capacity of the credit line up to
$1,000,000. The 2000 Unsecured Facility matures in June 2003, with an extension
option of one year, which would require a payment of 25 basis points of the then
borrowing capacity of the credit line upon exercise.

The terms of the 2000 Unsecured Facility include certain restrictions and
covenants which limit, among other things, the payment of dividends (as
discussed below), the incurrence of additional indebtedness, the incurrence
of liens and the disposition of assets, and which require compliance with
financial ratios relating to the maximum leverage ratio, the maximum amount
of secured indebtedness, the minimum amount of tangible net worth, the
minimum amount of debt service coverage, the minimum amount of fixed charge
coverage, the maximum amount of unsecured indebtedness, the minimum amount of
unencumbered property debt service coverage and certain investment
limitations. The dividend restriction referred to above provides that, except
to enable the Corporation to continue to qualify as a REIT under the Code,
the Corporation will not during any four consecutive fiscal quarters make
distributions with respect to common stock or other equity interests in an
aggregate amount in excess of 90 percent of funds from operations (as
defined) for such period, subject to certain other adjustments.

The lending group for the 2000 Unsecured Facility consists of: Chase Manhattan
Bank, as administrative agent; Fleet National Bank, as syndication agent; Bank
of America, N.A., as documentation agent; Bank One, NA, Commerzbank
Aktiengesellschaft and First Union National Bank, as senior managing agents; PNC
Bank, N.A., as managing agent; Bank Austria Creditanstalt Corporate Finance,
Inc., Bayerische Hypo-und Vereinsbank AG, Dresdner Bank AG, Societe Generale,
Summit Bank and Wells Fargo Bank, N.A., as co-agents; and Bayerische Landesbank
Girozentrale; Citizens Bank of Massachusetts; European American Bank; Chevy
Chase Bank; Citicorp Real Estate, Inc.; DG Bank Deutsche Genossenschaftsbank,
AG; Erste Bank; KBC Bank N.V.; SunTrust Bank; Bank Leumi USA and Israel Discount
Bank of New York.

In conjunction with obtaining the 2000 Unsecured Facility, the Operating
Partnership drew funds on the new facility to repay in full and terminate the
Unsecured Facility.

UNSECURED FACILITY
The Operating Partnership had an unsecured revolving credit facility ("Unsecured
Facility") with a borrowing capacity of $1,000,000 from a group of 28 lenders.
The interest rate was based on the Operating Partnership's achievement of
investment grade unsecured debt ratings and, at the Operating Partnership's
election, bore interest at either 90 basis points over LIBOR or the higher of
the lender's prime rate or the Federal Funds rate plus 50 basis points. In
conjunction with obtaining the 2000 Unsecured Facility, the Operating
Partnership repaid in full and terminated the Unsecured Facility on June 22,
2000.



                                       21
<PAGE>

PRUDENTIAL FACILITY
The Operating Partnership has a revolving credit facility ("Prudential
Facility") with Prudential Securities Corp. ("PSC") in the amount of $100,000,
which currently bears interest at 110 basis points over one-month LIBOR, with a
maturity date of June 29, 2001. The Prudential Facility is a recourse liability
of the Operating Partnership and is secured by the Operating Partnership's
equity interest in Harborside Plazas 2 and 3. The Prudential Facility limits the
ability of the Operating Partnership to make any distributions during any fiscal
quarter in an amount in excess of 100 percent of the Operating Partnership's
available funds from operations (as defined) for the immediately preceding
fiscal quarter (except to the extent such excess distributions or dividends are
attributable to gains from the sale of the Operating Partnership's assets or are
required for the Corporation to maintain its status as a REIT under the Code);
provided, however, that the Operating Partnership may make distributions and pay
dividends in excess of 100 percent of available funds from operations (as
defined) for the preceding fiscal quarter for not more than three consecutive
quarters. In addition to the foregoing, the Prudential Facility limits the liens
placed upon the subject property and certain collateral, the use of proceeds
from the Prudential Facility, and the maintenance of ownership of the subject
property and assets derived from said ownership.

SUMMARY
As of September 30, 2000 and December 31, 1999, the Operating Partnership had
outstanding borrowings of $264,483 and $177,000, respectively, under its
revolving credit facilities (with aggregate borrowing capacity of $900,000 and
$1,100,000, respectively). The total outstanding borrowings were from the 2000
Unsecured Facility at September 30, 2000 and from the Unsecured Facility at
December 31, 1999, with no outstanding borrowings under the Prudential Facility.


10.   MORTGAGES AND LOANS PAYABLE

<TABLE>
<CAPTION>

                                          September 30,     December 31,
                                              2000              1999
--------------------------------------------------------------------------------
<S>                                        <C>               <C>
Portfolio Mortgages                        $150,000          $150,000
Property Mortgages                          336,823           380,390
--------------------------------------------------------------------------------

Total mortgages and loans payable          $486,823          $530,390
================================================================================
</TABLE>

PORTFOLIO MORTGAGES
TIAA MORTGAGE
The Operating Partnership had an aggregate $185,283 non-recourse mortgage loan
with Teachers Insurance and Annuity Association of America, with interest only
payable monthly at a fixed annual rate of 7.18 percent ("TIAA Mortgage"). The
TIAA Mortgage was secured and cross collateralized by 43 properties. The TIAA
Mortgage was prepayable in whole or in part subject to certain provisions,
including yield maintenance.

Using the proceeds from the issuance of $185,283 of senior unsecured notes on
August 2, 1999 (see Note 8), the Operating Partnership repaid in full and
retired the TIAA Mortgage.

$150,000 PRUDENTIAL MORTGAGE LOAN
The Operating Partnership has a $150,000, interest-only, non-recourse mortgage
loan from Prudential ("$150,000 Prudential Mortgage Loan"). The loan, which is
secured by 11 properties, has an effective annual interest rate of 7.10 percent
and a seven-year term. The Operating Partnership has the option to convert the
mortgage loan to unsecured debt as a result of the achievement of an investment
grade credit rating. The mortgage loan is prepayable in whole or in part subject
to certain provisions, including yield maintenance.

PROPERTY MORTGAGES
The Operating Partnership's property mortgages ("Property Mortgages") are
comprised of various non-recourse loans which are collateralized by certain of
the Operating Partnership's rental properties. Payments on Property Mortgages
are generally due in monthly installments of principal and interest, or interest
only.



                                       22
<PAGE>

A summary of the Property Mortgages as of September 30, 2000 and December 31,
1999 is as follows:

<TABLE>
<CAPTION>

                                                                  EFFECTIVE      PRINCIPAL BALANCE AT
                                                                  INTEREST   SEPTEMBER 30,   DECEMBER 31,
PROPERTY NAME                    LENDER                             RATE         2000            1999       MATURITY
---------------------------------------------------------------------------------------------------------------------
<S>                            <C>                             <C>          <C>               <C>            <C>
201 Commerce Drive             Sun Life Assurance Co.               6.240%    $      --         $  1,059     09/01/00
3 & 5 Terri Lane               First Union National Bank            6.220%        4,404            4,434     10/31/00
101 & 225 Executive Drive      Sun Life Assurance Co.               6.270%        2,246            2,375     06/01/01
Mack-Cali Morris Plains        Corestates Bank                      7.510%        2,186            2,235     12/31/01
Mack-Cali Willowbrook          CIGNA                                8.670%        9,664           10,250     10/01/03
400 Chestnut Ridge             Prudential Insurance Co.             9.440%       13,810           14,446     07/01/04
Mack-Cali Centre VI            Principal Life Insurance Co.         6.865%       35,000           35,000     04/01/05
Mack-Cali Bridgewater I        New York Life Ins. Co.               7.000%       23,000           23,000     09/10/05
Mack-Cali Woodbridge II        New York Life Ins. Co.               7.500%       17,500           17,500     09/10/05
Mack-Cali Short Hills          Prudential Insurance Co.             7.740%       26,076           26,604     10/01/05
500 West Putnam Avenue         New York Life Ins. Co.               6.520%       10,259           10,784     10/10/05
Harborside - Plaza 1           U.S. West Pension Trust              5.610%       53,508           51,015     01/01/06
Harborside - Plaza 2 and 3     Northwestern Mutual Life Ins.        7.320%       96,492           98,985     01/01/06
Mack-Cali Airport              Allstate Life Insurance Co.          7.050%       10,500           10,500     04/01/07
Kemble Plaza II                Mitsubishi Tr & Bk Co.          LIBOR+0.65%           --           40,025     01/31/08
Kemble Plaza I                 Mitsubishi Tr & Bk Co.          LIBOR+0.65%       32,178           32,178     01/31/09
---------------------------------------------------------------------------------------------------------------------

Total Property Mortgages                                                       $336,823         $380,390
=====================================================================================================================
</TABLE>


INTEREST RATE CONTRACTS
On May 24, 1995, the Operating Partnership entered into an interest rate swap
agreement with a commercial bank. The swap agreement fixed the Operating
Partnership's one-month LIBOR base to 6.285 percent per annum on a notional
amount of $24,000. The swap agreement expired in August 1999.

On January 23, 1996, the Operating Partnership entered into an interest rate
swap agreement with a commercial bank. The swap agreement fixed the Operating
Partnership's one-month LIBOR base to 5.265 percent per annum on a notional
amount of $26,000. The swap agreement expired in January 1999.

On November 20, 1997, the Operating Partnership entered into a forward treasury
rate lock agreement with a commercial bank. The agreement locked an interest
rate of 5.88 percent per annum for the interpolated seven-year U.S. Treasury
Note effective March 1, 1998, on a notional amount of $150,000. The agreement
was used to fix the interest rate on the $150,000 Prudential Mortgage Loan. On
March 2, 1998, the Operating Partnership paid $2,035 in settlement of the
agreement, which is being amortized to interest expense over the term of the
$150,000 Prudential Mortgage Loan.

On October 1, 1998, the Operating Partnership entered into a forward treasury
rate lock agreement with a commercial bank. The agreement locked an interest
rate of 4.089 percent per annum for the three-year U.S. Treasury Note effective
November 4, 1999, on a notional amount of $50,000. The agreement was used to fix
the Index Rate on $50,000 of the Harborside-Plaza 1 mortgage, for which the
interest rate was re-set to the three-year U.S. Treasury Note (5.82 percent)
plus 110 basis points for the three years beginning November 4, 1999 (see
"Property Mortgages: Harborside-Plaza 1"). The Operating Partnership received
$2,208 in settlement of the agreement, which is being amortized to interest
expense over the three year-period.

In connection with the issuance of the $600,000 face amount of Senior Unsecured
Notes in March 1999, the Operating Partnership entered into and settled forward
treasury rate lock agreements. These agreements were settled at a cost of
approximately $517, which is being amortized to interest expense over the terms
of the respective tranches.



                                       23
<PAGE>

SCHEDULED PRINCIPAL PAYMENTS
Scheduled principal payments and related weighted average annual interest rates
for the Operating Partnership's Senior Unsecured Notes (Note 8), revolving
credit facilities (Note 9) and mortgages and loans payable as of September 30,
2000 are as follows:

<TABLE>
<CAPTION>

                                                                                               WEIGHTED AVG.
                                         SCHEDULED           PRINCIPAL                       INTEREST RATE OF
YEAR                                   AMORTIZATION         MATURITIES          TOTAL      FUTURE REPAYMENTS (A)
---------------------------------------------------------------------------------------------------------------
<S>                                       <C>               <C>             <C>                      <C>
October through December 2000             $  1,021          $     4,400     $     5,421              7.02%
2001                                         3,257                4,211           7,468              7.44%
2002                                         3,458                   --           3,458              8.20%
2003                                         3,518              456,577         460,095              7.37%
2004                                         2,332              309,863         312,195              7.34%
Thereafter                                     970              744,720         745,690              7.28%
===============================================================================================================

Totals/Weighted Average                   $ 14,556          $ 1,519,771     $ 1,534,327              7.32%
===============================================================================================================
</TABLE>



(a) Assumes weighted average LIBOR at September 30, 2000 of 6.62 percent
    in calculating revolving credit facility and other variable rate debt
    interest rates.

Scheduled principal payments during the nine months ended September 30, 2000 and
1999 amounted to $2,288 and $2,621, respectively.

CASH PAID FOR INTEREST AND INTEREST CAPITALIZED
Cash paid for interest for the nine months ended September 30, 2000 and 1999 was
$93,903 and $76,902, respectively. Interest capitalized by the Operating
Partnership for the nine months ended September 30, 2000 and 1999 was $7,482 and
$4,726, respectively.

SUMMARY OF INDEBTEDNESS
As of September 30, 2000, the Operating Partnership's total indebtedness of
$1,534,327 (weighted average interest rate of 7.32 percent) was comprised of
$296,661 of revolving credit facility borrowings and other variable rate
mortgage debt (weighted average rate of 7.41 percent) and fixed rate debt of
$1,237,666 (weighted average rate of 7.24 percent).

As of December 31, 1999, the Operating Partnership's total indebtedness of
$1,490,175 (weighted average interest rate of 7.27 percent) was comprised of
$249,204 of revolving credit facility borrowings and other variable rate
mortgage debt (weighted average rate of 7.42 percent) and fixed rate debt of
$1,240,971 (weighted average rate of 7.24 percent).


11.   PARTNERS' CAPITAL

Partners' capital in the accompanying financial statements of the Operating
Partnership relates to common units held by the Corporation in the Operating
Partnership, common units held by the limited partners, preferred units
("Preferred Units") held by the preferred unitholders of the Operating
Partnership, and warrants to purchase common units ("Units Warrants") in the
Operating Partnership issued in connection with the Operating Partnership's
December 1997 acquisition of 54 office properties ("Mack Properties") from the
Mack Company and Patriot American Office Group ("Mack Transaction").

Net income allocated to the preferred unitholders and limited partners reflects
their pro-rata share of net income and distributions.



                                       24
<PAGE>


COMMON STOCK
On August 6, 1998, the Board of Directors of the Corporation authorized a share
repurchase program under which the Corporation was permitted to purchase up to
$100,000 of the Corporation's outstanding common stock ("Repurchase Program").
Under the Repurchase Program, the Corporation purchased for constructive
retirement 1,869,200 shares of its outstanding common stock for an aggregate
cost of approximately $52,562 from August 1998 through December 1999.
Subsequently on September 13, 2000, the Board of Directors authorized an
increase to the Repurchase Program under which the Corporation is permitted to
purchase up to an additional $150,000 of the Corporation's outstanding common
stock above the $52,562 that had previously been purchased. Purchases could be
made from time to time in open market transactions at prevailing prices or
through privately negotiated transactions.

Since the increase of the Repurchase Program, the Corporation purchased for
constructive retirement 186,600 shares of its outstanding common stock for an
aggregate cost of approximately $5,237 from September 25, 2000 through September
30, 2000.

Through September 30, 2000, under the Repurchase Program, the Corporation
purchased for constructive retirement, a total of 2,055,800 shares of its
outstanding common stock for an aggregate cost of approximately $57,799.
Concurrent with these purchases, the Corporation sold to the Operating
Partnership 2,055,800 common units for approximately $57,799.

Subsequent to quarter end through November 1, 2000, the Corporation purchased
for constructive retirement 605,500 shares of its outstanding common stock for
an aggregate cost of approximately $16,451 under the Repurchase Program.

DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
The Corporation filed a registration statement with the SEC for the
Corporation's dividend reinvestment and stock purchase plan ("Plan") which was
declared effective in February 1999. The Plan commenced on March 1, 1999.

During the year ended December 31, 1999, 1,082 shares were issued and proceeds
of approximately $32 were received from stock purchases and/or dividend
reinvestments under the Plan. The proceeds of the shares issued were contributed
by the Corporation to the Operating Partnership in exchange for common units.
The Corporation did not issue any shares under the Plan during the nine months
ended September 30, 2000.

SHAREHOLDER RIGHTS PLAN
On June 10, 1999, the Board of Directors of the Corporation authorized a
dividend distribution of one preferred share purchase right ("Right") for each
outstanding share of common stock which were distributed to all holders of
record of the common stock on July 6, 1999. Each Right entitles the registered
holder to purchase from the Corporation one one-thousandth of a share of Series
A junior participating preferred stock, par value $0.01 per share ("Preferred
Shares"), at a price of $100.00 per one one-thousandth of a Preferred Share
("Purchase Price"), subject to adjustment as provided in the rights agreement.
The Rights expire on July 6, 2009, unless the expiration date is extended or the
Right is redeemed or exchanged earlier by the Corporation.

The Rights are attached to each share of common stock. The Rights are generally
exercisable only if a person or group becomes the beneficial owner of 15 percent
or more of the outstanding common stock or announces a tender offer for 15
percent or more of the outstanding common stock ("Acquiring Person"). In the
event that a person or group becomes an Acquiring Person, each holder of a Right
will have the right to receive, upon exercise, common stock having a market
value equal to two times the Purchase Price of the Right.

On June 27, 2000, the Corporation amended its shareholder rights plan to prevent
the triggering of such plan as a result of the Merger Agreement.

STOCK OPTION PLANS
In September 2000, the Corporation established the 2000 Employee Stock Option
Plan ("2000 Employee Plan") and the 2000 Director Stock Option Plan ("2000
Director Plan") under which a total of 2,700,000 shares (subject to adjustment)
of the Corporation's common stock have been reserved for issuance (2,500,000
shares under the 2000 Employee Plan and 200,000 shares under the 2000 Director
Plan. In 1994, and as subsequently amended, the Corporation established the
Mack-Cali Employee Stock Option Plan ("Employee Plan") and the Mack-Cali
Director Stock Option Plan ("Director Plan") under which a total of 5,380,188
shares (subject to adjustment) of the


                                       25
<PAGE>

Corporation's common stock have been reserved for issuance (4,980,188 shares
under the Employee Plan and 400,000 shares under the Director Plan). Stock
options granted under the Employee Plan in 1994 and 1995 have become exercisable
over a three-year period and those options granted under both the 2000
Employee Plan and Employee Plan in 1996, 1997, 1998, 1999 and 2000 become
exercisable over a five-year period. All stock options granted under both the
2000 Director Plan and Director Plan become exercisable in one year. All
options were granted at the fair market value at the dates of grant and have
terms of ten years. As of September 30, 2000 and December 31, 1999, the stock
options outstanding had a weighted average remaining contractual life of
approximately 7.3 and 7.4 years, respectively.

Information regarding the Corporation's stock option plans is summarized below:

<TABLE>
<CAPTION>

                                                                         Weighted
                                                        Shares            Average
                                                         Under           Exercise
                                                        Options            Price
-------------------------------------------------------------------------------------------
<S>                                                   <C>                 <C>
      Outstanding at January 1, 1999                  3,939,982           $33.22
      Granted                                           426,400           $25.23
      Exercised                                         (47,583)          $22.31
      Lapsed or canceled                               (591,648)          $36.92
-------------------------------------------------------------------------------------------
      Outstanding at December 31, 1999                3,727,151           $31.86
      Granted                                         1,003,900           $26.72
      Exercised                                        (104,693)          $20.93
      Lapsed or canceled                               (385,062)          $34.52
-------------------------------------------------------------------------------------------
      Outstanding at September 30, 2000               4,241,296           $30.67
===========================================================================================
      Options exercisable at December 31, 1999        1,724,920           $29.78
      Options exercisable at September 30, 2000       2,149,718           $31.24
-------------------------------------------------------------------------------------------
      Available for grant at December 31, 1999          662,878
      Available for grant at September 30, 2000       2,749,140
-------------------------------------------------------------------------------------------
</TABLE>


STOCK WARRANTS
The Corporation has outstanding 380,000 warrants to purchase an equal number of
shares of common stock ("Stock Warrants") at $33 per share (the market price at
date of grant). Such warrants are all currently exercisable and expire on
January 31, 2007.

The Corporation also has outstanding 389,976 Stock Warrants to purchase an equal
number of shares of common stock at $38.75 per share (the market price at date
of grant). Such warrants vest equally over a five-year period through December
31, 2001 and expire on December 12, 2007.

As of September 30, 2000 and December 31, 1999, there were a total of 769,976
and 914,976 Stock Warrants outstanding, respectively. As of September 30, 2000
and December 31, 1999, there were 613,985 and 585,989 Stock Warrants
exercisable, respectively. During the nine months ended September 30, 2000 and
1999, 145,000 and no Stock Warrants were canceled, respectively. No Stock
Warrants have been exercised through September 30, 2000.

STOCK COMPENSATION
In July 1999, the Corporation entered into amended and restated employment
contracts with six of its then key executive officers which provided for, among
other things, compensation in the form of stock awards and associated tax
obligation payments. In addition, in December 1999, the Corporation granted
stock awards to certain other officers of the Corporation. In connection with
the stock awards (collectively, "Restricted Stock Awards"), the executive
officers and certain other officers are to receive up to a total of 211,593
shares of the Corporation's common stock vesting over a five-year period
contingent upon the Corporation meeting certain performance and/or stock price
appreciation objectives. The Restricted Stock Awards provided to the executive
officers and certain other officers were granted under the Employee Plan.
Effective January 1, 2000, 31,737 shares of the Corporation's common stock were
issued to the executive officers and certain other officers upon meeting the
required objectives. Pursuant to the Cali Agreement, an aggregate of 38,649
shares of the Corporation's common stock were issued to Brant Cali and John R.
Cali upon vesting of their remaining Restricted Stock Awards. For the nine
months ended September 30, 2000, 5,100 unvested Restricted Stock Awards were
canceled.


                                       26
<PAGE>

DEFERRED STOCK COMPENSATION PLAN FOR DIRECTORS
The Deferred Compensation Plan for Directors ("Deferred Compensation Plan"),
which commenced January 1, 1999, is a plan which allows non-employee directors
of the Corporation to elect to defer up to 100 percent of their annual retainer
fee into deferred stock units. The deferred stock units are convertible into an
equal number of shares of common stock upon the directors' termination of
service from the Board of Directors or a change in control of the Corporation,
as defined in the plan. Deferred stock units are credited to each director
quarterly using the closing price of the Corporation's common stock on the
applicable dividend record date for the respective quarter. Each participating
director's account is also credited for an equivalent amount of deferred stock
units based on the dividend rate for each quarter.

During 1999, 3,319 deferred stock units were earned. During the nine months
ended September 30, 2000, 3,196 deferred stock units were earned.

EARNINGS PER UNIT
FASB No. 128 requires a dual presentation of basic and diluted EPU on the face
of the income statement for all companies with complex capital structures even
where the effect of such dilution is not material. Basic EPU excludes dilution
and is computed by dividing net income available to common unitholders by the
weighted average number of units outstanding for the period. Diluted EPU
reflects the potential dilution that could occur if securities or other
contracts to issue common units were exercised or converted into common units.

The following information presents the Operating Partnership's results for the
three and nine month periods ended September 30, 2000 and 1999 in accordance
with FASB No. 128:

<TABLE>
<CAPTION>

                                                                 Three Months Ended September 30,
                                                                2000                         1999
                                                       -------------------------------------------------------
                                                       Basic EPU    Diluted EPU     Basic EPU      Diluted EPU
--------------------------------------------------------------------------------------------------------------
<S>                                                     <C>            <C>            <C>            <C>
Net income available to common unitholders              $22,745        $22,745        $37,072        $37,072
Add: Net income attributable to
         Operating Partnership - preferred units             --             --             --             --
--------------------------------------------------------------------------------------------------------------
Adjusted net income                                     $22,745        $22,745        $37,072        $37,072
==============================================================================================================

Weighted average units                                   66,729         66,914         66,893         67,113
--------------------------------------------------------------------------------------------------------------
Per Unit                                                $  0.34        $  0.34        $  0.55        $  0.55
==============================================================================================================
</TABLE>

<TABLE>
<CAPTION>

                                                                   Nine Months Ended September 30,
                                                                 2000                          1999
                                                        -------------------------------------------------------
                                                        Basic EPU    Diluted EPU      Basic EPU      Diluted EPU
                                                        ---------    -----------      ---------      -----------
<S>                                                     <C>            <C>            <C>            <C>

Net income available to common unitholders              $171,794       $171,794       $ 95,468       $ 95,468
Add: Net income attributable to
          Operating Partnership - preferred units             --         11,562             --             --
--------------------------------------------------------------------------------------------------------------
Adjusted net income                                     $171,794       $183,356       $ 95,468       $ 95,468
==============================================================================================================

Weighted average units                                    66,595         73,276         67,025         67,294
--------------------------------------------------------------------------------------------------------------
Per Unit                                                $   2.58       $   2.50       $   1.42       $   1.42
==============================================================================================================
</TABLE>

The following schedule reconciles the units used in the basic EPU calculation to
the units used in the diluted EPU calculation:

<TABLE>
<CAPTION>

                                                            Three Months                 Nine Months
                                                         Ended September 30,        Ended September 30,
                                                         2000         1999           2000          1999
--------------------------------------------------------------------------------------------------------------
<S>                                                     <C>           <C>           <C>           <C>
Basic EPU Units:                                        66,729        66,893        66,595        67,025
     Add:   Operating Partnership - preferred units         --            --         6,504            --
            (after conversion to common units)
            Stock options                                  185           220           177           269
--------------------------------------------------------------------------------------------------------------
Diluted EPU Units:                                      66,914        67,113        73,276        67,294
==============================================================================================================
</TABLE>


                                       27
<PAGE>


Contingent Units and Restricted Stock Awards outstanding in 2000 and 1999, if
any, were not included in the computation of diluted EPU as such units were
anti-dilutive during each of the periods. Preferred Units outstanding in 1999
and three months ended September 30, 2000 were not included in the 1999 and
three months ended September 30, 2000 computation of diluted EPU as such units
were anti-dilutive during the periods.

Pursuant to the Repurchase Program, during 1999, the Corporation purchased for
constructive retirement 1,014,500 shares of its outstanding common stock for
approximately $27,500. Additionally, during the nine months ended September 30,
2000, the Corporation purchased for constructive retirement 186,600 shares of
its outstanding common stock for approximately $5,237. Concurrent with these
purchases, the Corporation sold an equivalent number of common units to the
Operating Partnership.


12.   REDEEMABLE PARTNERSHIP UNITS

PREFERRED UNITS
In connection with the Mack Transaction in December 1997, the Operating
Partnership issued 15,237 Series A Preferred Units and 215,325 Series B
Preferred Units, with an aggregate value of $236,491. The Preferred Units have a
stated value of $1,000 per unit and are preferred as to assets over any class of
common units or other class of preferred units of the Operating Partnership,
based on circumstances per the applicable unit certificates.

The quarterly distribution on each Preferred Unit is an amount equal to the
greater of (i) $16.875 (representing 6.75 percent of the Preferred Unit stated
value of $1,000 on an annualized basis) or (ii) the quarterly distribution
attributable to a Preferred Unit determined as if such unit had been converted
into common units, subject to adjustment for customary anti-dilution rights.
Each of the Series A Preferred Units may be converted at any time into common
units at a conversion price of $34.65 per unit, and, after the one year
anniversary of the date of the Series A Preferred Units' initial issuance,
common units received pursuant to such conversion may be redeemed into common
stock. Each of the Series B Preferred Units may be converted at any time into
common units at a conversion price of $34.65 per unit, and, after the three year
anniversary of the date of the Series B Preferred Units' initial issuance,
common units received pursuant to such conversion may be redeemed into common
stock. Each of the common units are redeemable for an equal number of shares of
common stock.

During 1999, 20,952 Series A Preferred Units were converted into 604,675 common
units. During the nine months ended September 30, 2000, 6,180 Series A Preferred
Units were converted into 178,355 common units.

As of September 30, 2000, there were 223,124 Series B Preferred Units
outstanding (convertible into 6,439,366 common units). There were no Series A
Preferred Units outstanding as of September 30, 2000.

COMMON UNITS
Certain individuals and entities own common units in the Operating Partnership.
A common unit and a share of common stock of the General Partner have
substantially the same economic characteristics in as much as they effectively
share equally in the net income or loss of the Operating Partnership.

Common units are redeemable by the common unitholders at their option, subject
to certain restrictions, on the basis of one common unit for either one share of
common stock or cash equal to the fair market value of a share at the time of
the redemption. The General Partner has the option to deliver shares of common
stock in exchange for all or any portion of the cash requested. When a
unitholder redeems a common unit for common stock of the Corporation, limited
partners' capital is reduced and the General Partner's capital is increased.
Effective August 21, 1998, the partnership agreement was amended to vest this
right in the Operating Partnership, rather than in the General Partnership.
Common units held by the General Partner are not redeemable.

On June 4, 1999, in connection with the acquisition of a 0.1 percent interest in
the G&G Martco joint venture (see Note 4), the Operating Partnership issued 437
common units, valued at approximately $17.

On August 31, 1999, in connection with the acquisition of 28.1 acres of
developable land located in Roseland, New Jersey, the Operating Partnership
issued 121,624 common units, valued at approximately $3,345.


                                       28
<PAGE>

During 1999, an aggregate of 1,934,657 common units were redeemed for an
equivalent number of shares of common stock in the Corporation.

During 1999, the Operating Partnership also issued 275,046 common units, valued
at approximately $8,141, in connection with the achievement of certain
performance goals at the Mack Properties in redemption of an equivalent number
of contingent common units.

During the nine months ended September 30, 2000, an aggregate of 340,103 common
units were redeemed for an equivalent number of shares of common stock in the
Corporation.

As of September 30, 2000, there were 7,991,963 common units outstanding.

CONTINGENT COMMON & PREFERRED UNITS
In connection with the Mack Transaction in December 1997, 2,006,432 contingent
common units, 11,895 Series A contingent Preferred Units and 7,799 Series B
contingent Preferred Units were issued as contingent non-participating units
("Contingent Units"). Redemption of such Contingent Units occurred upon the
achievement of certain performance goals relating to certain of the Mack
Properties, specifically the achievement of certain leasing activity. When
Contingent Units are redeemed for common and Preferred Units, an adjustment to
the purchase price of certain of the Mack Properties is recorded, based on the
value of the units issued.

On account of certain of the performance goals at the Mack Properties having
been achieved during 1999, the Operating Partnership redeemed 275,046 contingent
common units and issued an equivalent number of common units, as indicated
above. There were no Contingent Units outstanding as of December 31, 1999.

UNIT WARRANTS
The Operating Partnership has 2,000,000 Unit Warrants outstanding. The Unit
Warrants are exercisable at $37.80 per common unit and expire on December 11,
2002.


13.   MINORITY INTEREST IN CONSOLIDATED PARTIALLY-OWNED PROPERTIES

On December 28, 1999, the Operating Partnership sold an interest in six office
properties located in Parsippany, Morris County, New Jersey for $83,600. Amongst
other things, the operating agreements provide for a preferred return to the
joint venture members. On June 29, 2000, the Operating Partnership acquired a
100 percent interest in these properties and the Operating Partnership paid an
additional $836 to the minority interest member in excess of its investment.

On August 24,  2000,  Morris V Realty  L.L.C.  and  Morris VI Realty  L.L.C.
acquired land in which SJP Properties has a minority  interest  amounting to
$1,925.

The Operating Partnership controls these operations and has consolidated the
financial position and results of operations of partially-owned properties in
the financial statements of the Operating Partnership. The equity interests of
the other members are reflected as minority interests: partially-owned
properties in the consolidated financial statements of the Operating
Partnership.


14.   EMPLOYEE BENEFIT PLAN

All employees of the Corporation who meet certain minimum age and period of
service requirements are eligible to participate in a 401(k) defined
contribution plan (the "401(k) Plan"). The 401(k) Plan allows eligible employees
to defer up to 15 percent of their annual compensation, subject to certain
limitations imposed by federal law. The amounts contributed by employees are
immediately vested and non-forfeitable. The Corporation, at management's
discretion, may match employee contributions and/or make discretionary
contributions. Total expense recognized by the Operating Partnership for the
nine months ended September 30, 2000 and 1999 was $300 and $0, respectively.



                                       29
<PAGE>


15.   COMMITMENTS AND CONTINGENCIES

TAX ABATEMENT AGREEMENTS
  HARBORSIDE FINANCIAL CENTER
  Pursuant to an agreement with the City of Jersey City, New Jersey obtained by
  the former owner of the Harborside property in 1988 and assumed by the
  Operating Partnership as part of the acquisition of the property in November
  1996, the Operating Partnership is required to make payments in lieu of
  property taxes ("PILOT") on its Harborside Plaza 2 and 3 properties. The
  agreement, which commenced in 1990, is for a term of 15 years. Such PILOT is
  equal to two percent of Total Project Costs, as defined, in year one and
  increases by $75 per annum through year fifteen. Total Project Costs, as
  defined, are $145,644. The PILOT totaled $2,002 and $1,955 for the nine months
  ended September 30, 2000 and 1999, respectively. The Operating Partnership has
  entered into a similar agreement with the City of Jersey City, New Jersey on
  its Harborside Plaza 4-A property which was placed in service in September
  2000.

GROUND LEASE AGREEMENTS
Future minimum rental payments under the terms of all non-cancelable ground
leases under which the Operating Partnership is the lessee, as of September 30,
2000, are as follows:

<TABLE>
<CAPTION>
YEAR                                                                   AMOUNT
------------------------------------------------------------------------------
<S>                                                                   <C>
October through December 2000                                         $   133
2001                                                                      531
2002                                                                      531
2003                                                                      531
2004                                                                      534
Thereafter                                                             22,532
------------------------------------------------------------------------------
Total                                                                 $24,792
==============================================================================
</TABLE>

Ground lease expense incurred during the nine months ended September 30, 2000
and 1999 amounted to $427 and $392, respectively.

OTHER
On April 19, 1999, the Corporation announced the following changes in the
membership of its Board of Directors and the identities, titles and
responsibilities of its executive officers: (i) Thomas A. Rizk resigned from the
Board of Directors, the Executive Committee of the Board of Directors, his
position as Chief Executive Officer and as an employee of the Corporation; (ii)
Mitchell E. Hersh was appointed Chief Executive Officer of the Corporation
simultaneous with his resignation from his positions as President and Chief
Operating Officer of the Corporation; (iii) Timothy M. Jones was appointed
President of the Corporation simultaneous with his resignation from his
positions as Executive Vice President and Chief Investment Officer of the
Corporation; and (iv) Brant Cali was appointed to the Board of Directors of the
Corporation to fill the remainder of Thomas A. Rizk's term as a Class III
Director and was appointed Chief Operating Officer of the Corporation, also
remaining as an Executive Vice President and Assistant Secretary of the
Corporation.

Pursuant to the terms of Mr. Rizk's employment agreement entered into with the
Corporation in December 1997 and an agreement entered into simultaneous with his
resigning from the Corporation, Mr. Rizk received a payment of approximately
$14,490 in April 1999, $500 in April 2000 and $500 annually over the next two
years. All costs associated with Mr. Rizk's resignation are included in
non-recurring charges for the nine months ended September 30, 1999.

On June 27, 2000, pursuant to the Cali agreement, both Brant Cali and John R.
Cali resigned their positions as officers of the Corporation and Brant Cali
resigned as director of the Corporation ("Cali Agreement"). As required by Brant
Cali and John R. Cali's amended and restated employment agreements, under the
Cali Agreement: (i) the Corporation paid $2,820 and $2,806 (less applicable
withholding) to Brant Cali and John R. Cali, respectively; and (ii) all options
to acquire shares of the Corporation's common stock and Restricted Stock Awards
held by Brant Cali and John R. Cali became fully vested on the effective date of
their resignations from the Corporation. All costs associated with Brant Cali
and John R. Cali's resignations are included in non-recurring charges for the
nine months ended September 30, 2000.


                                       30
<PAGE>

The Operating Partnership is a defendant in certain litigation arising in the
normal course of business activities. Management does not believe that the
resolution of these matters will have a materially adverse effect upon the
Operating Partnership.


16.   TENANT LEASES

The Properties are leased to tenants under operating leases with various
expiration dates through 2016. Substantially all of the leases provide for
annual base rents plus recoveries and escalation charges based upon the tenant's
proportionate share of and/or increases in real estate taxes and certain
operating costs, as defined, and the pass through of charges for electrical
usage.


17.   SEGMENT REPORTING

The Operating Partnership operates in one business segment - real estate. The
Operating Partnership provides leasing, management, acquisition, development,
construction and tenant-related services for its portfolio. The Operating
Partnership does not have any foreign operations. The accounting policies of the
segments are the same as those described in Note 2, excluding straight-line rent
adjustments, depreciation and amortization and non-recurring charges.

The Operating Partnership evaluates performance based upon net operating income
from the combined properties in the segment.



                                       31
<PAGE>


Selected results of operations for the three and nine month periods ended
September 30, 2000 and 1999 and selected asset information as of September 30,
2000 and December 31, 1999 regarding the Operating Partnership's
operating segment are as follows:

<TABLE>
<CAPTION>

                                                          Total              Corporate &           Total
                                                         Segment              Other (e)    Operating Partnership
------------------------------------------------------------------------------------------------------------------
<S>                                                  <C>                     <C>               <C>
TOTAL CONTRACT REVENUES (A):
Three months ended:
     September 30, 2000                              $   137,920             $   1,978         $   139,898 (f)
     September 30, 1999                                  135,350                   594             135,944 (g)
Nine months ended:
     September 30, 2000                              $   418,178             $   4,998         $   423,176 (h)
     September 30, 1999                                  399,469                   961             400,430 (i)

TOTAL OPERATING AND INTEREST EXPENSES (B):
Three months ended:
     September 30, 2000                              $    48,365             $  27,149         $    75,514 (j)
     September 30, 1999                                   46,130                28,982              75,112 (k)
Nine months ended:
     September 30, 2000                              $   141,174             $  83,267         $   224,441 (l)
     September 30, 1999                                  133,853                86,097             219,950 (m)

NET OPERATING INCOME (C):
Three months ended:
     September 30, 2000                              $    89,555             $ (25,171)        $    64,384 (f) (j)
     September 30, 1999                                   89,220               (28,388)             60,832 (g) (k)
Nine months ended:
     September 30, 2000                              $   277,004             $ (78,269)        $   198,735 (h) (l)
     September 30, 1999                                  265,616               (85,136)            180,480 (i) (m)

TOTAL ASSETS:
     September 30, 2000                              $ 3,570,130             $  76,032         $ 3,646,162
     December 31, 1999                                 3,576,806                52,795           3,629,601

TOTAL LONG-LIVED ASSETS (D):
     September 30, 2000                              $ 3,480,555             $  46,942         $ 3,527,497
     December 31, 1999                                 3,510,285                30,318           3,540,603
===================================================================================================================
</TABLE>

(a)   Total contract revenues represent all revenues during the period
      (including the Operating Partnership's share of net income from
      unconsolidated joint ventures), excluding adjustments for straight-lining
      of rents and the Operating Partnership's share of straight-line rent
      adjustments from unconsolidated joint ventures. All interest income is
      excluded from segment amounts and is classified in Corporate & Other for
      all periods.
(b)   Total operating and interest expenses represent the sum of real estate
      taxes, utilities, operating services, general and administrative and
      interest expense. All interest expense (including for property-level
      mortgages) is excluded from segment amounts and is classified in Corporate
      & Other for all periods.
(c)   Net operating income represents total contract revenues [as defined in
      Note (a)] less total operating and interest expenses [as defined in Note
      (b)] for the period.
(d)   Long-lived assets are comprised of total rental property, unbilled rents
      receivable and investments in unconsolidated joint ventures.
(e)   Corporate & Other represents all corporate-level items (including interest
      and other investment income, interest expense and non-property general and
      administrative expense) as well as intercompany eliminations necessary to
      reconcile to consolidated Operating Partnership totals.
(f)   Excludes $3,520 of adjustments for straight-lining of rents and ($36) for
      the Operating Partnership's share of straight-line rent adjustments from
      unconsolidated joint ventures.
(g)   Excludes $2,921 of adjustments for straight-lining of rents and $155 for
      the Operating Partnership's share of straight-line rent adjustments from
      unconsolidated joint ventures.
(h)   Excludes $9,056 of adjustments for straight-lining of rents and $18 for
      the Operating Partnership's share of straight-line rent adjustments from
      unconsolidated joint ventures.
(i)   Excludes $10,343 of adjustments for straight-lining of rents and $111 for
      the Operating Partnership's share of straight-line rent adjustments from
      unconsolidated joint ventures.
(j)   Excludes $23,320 of depreciation and amortization and non-recurring
      charges of $27,911.
(k)   Excludes $22,967 of depreciation and amortization.
(l)   Excludes $68,447 of depreciation and amortization and non-recurring
      charges of $37,139.
(m)   Excludes $67,401 of depreciation and amortization and non-recurring
      charges of $16,458.


                                       32
<PAGE>

18.   IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

In June 1998, the FASB issued Statement of Financial Accounting Standards No.
133, Accounting for Derivative Instruments and Hedging Activities ("FASB No.
133"). FASB No. 133 is effective for all fiscal quarters of all fiscal years
beginning after June 15, 1999. In June 1999, the FASB delayed the implementation
date of FASB No. 133 by one year (January 1, 2001 for the Operating
Partnership). FASB No. 133 requires that all derivative instruments be recorded
on the balance sheet at their fair value. Changes in the fair value of
derivatives are recorded each period in current earnings or other comprehensive
income, depending on whether a derivative is designated as part of a hedge
transaction and, if it is, the type of hedge transaction. Management of the
Operating Partnership anticipates that, due to its limited use of derivative
instruments, the adoption of FASB No. 133 will not have a significant effect on
the Operating Partnership's results of operations or its financial position.



                                       33
<PAGE>


                     MACK-CALI REALTY, L.P. AND SUBSIDIARIES

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


The following discussion should be read in conjunction with the Consolidated
Financial Statements of Mack-Cali Realty, L.P. and the notes thereto. Certain
defined terms used herein have the meaning ascribed to them in the Consolidated
Financial Statements.

The following comparisons for the three and nine month periods ended September
30, 2000 ("2000"), as compared to the three and nine month periods ended
September 30, 1999 ("1999") make reference to the following: (i) the effect of
the "Same-Store Properties," which represents all in-service properties owned by
the Operating Partnership at June 30, 1999 (for the three-month period
comparisons), and which represents all in-service properties owned by the
Operating Partnership at December 31, 1998 (for the nine-month period
comparisons), all such properties being owned by the Operating Partnership for
the entirety of both periods being compared, (ii) the effect of the "Acquired
Properties," which represents all properties acquired or placed in service by
the Operating Partnership from July 1, 1999 through September 30, 2000 (for the
three-month period comparisons), and which represents all properties acquired or
placed in service by the Operating Partnership from January 1, 1999 through
September 30, 2000 (for the nine-month period comparisons), and (iii) the effect
of the "Dispositions," which represents the Operating Partnership's sales of
rental property during the respective periods.




                                       34
<PAGE>

      THREE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO THREE MONTHS ENDED
                               SEPTEMBER 30, 1999

<TABLE>
<CAPTION>

                                                  Quarter Ended
                                                   September 30,             Dollar       Percent
(IN THOUSANDS)                                 2000           1999           Change        Change
---------------------------------------------------------------------------------------------------
<S>                                         <C>            <C>            <C>                <C>
REVENUE FROM RENTAL OPERATIONS:
Base rents                                  $ 123,600      $ 118,086      $   5,514          4.7%
Escalations and recoveries from tenants        13,763         14,829         (1,066)        (7.2)
Parking and other                               3,534          5,112         (1,578)       (30.9)
---------------------------------------------------------------------------------------------------
   Sub-total                                  140,897        138,027          2,870          2.1

Equity in earnings of
   unconsolidated joint ventures                2,194            834          1,360        163.1
Interest income                                   291            159            132         83.0
---------------------------------------------------------------------------------------------------
   Total revenues                             143,382        139,020          4,362          3.1
---------------------------------------------------------------------------------------------------

PROPERTY EXPENSES:
Real estate taxes                              15,732         14,849            883          5.9
Utilities                                      11,604         11,634            (30)        (0.3)
Operating services                             16,855         16,464            391          2.4
---------------------------------------------------------------------------------------------------
   Sub-total                                   44,191         42,947          1,244          2.9

General and administrative                      5,461          5,691           (230)        (4.0)
Depreciation and amortization                  23,320         22,967            353          1.5
Interest expense                               25,862         26,474           (612)        (2.3)
Non-recurring charges                          27,911             --         27,911           --
---------------------------------------------------------------------------------------------------
   Total expenses                             126,745         98,079         28,666         29.2
---------------------------------------------------------------------------------------------------

Income before gain on sales of
rental property                                16,637         40,941        (24,304)       (59.4)
Gain on sales of rental property               10,036             --         10,036         --
---------------------------------------------------------------------------------------------------

Net income                                     26,673         40,941        (14,268)       (34.9)
Preferred unit distributions                   (3,928)        (3,869)           (59)        (1.5)
---------------------------------------------------------------------------------------------------

Net income available to
   common unitholders                       $  22,745      $  37,072      $ (14,327)       (38.6)%
===================================================================================================
</TABLE>



                                       35
<PAGE>


The following is a summary of the changes in revenue from rental operations and
property expenses divided into Same-Store Properties, Acquired Properties, and
Dispositions (in thousands):

<TABLE>
<CAPTION>

                                              Total              Same-Store             Acquired
                                      Operating Partnership      Properties            Properties           Dispositions
                                      ---------------------      ----------            ----------           ------------
                                      Dollar      Percent     Dollar    Percent     Dollar    Percent     Dollar    Percent
                                      Change       Change     Change     Change     Change     Change     Change     Change
----------------------------------------------------------------------------------------------------------------------------
<S>                                  <C>             <C>    <C>             <C>    <C>           <C>   <C>            <C>
REVENUE FROM RENTAL OPERATIONS:
Base rents                           $  5,514        4.7%   $  5,248        4.5%   $  5,941      5.0%  $ (5,675)      (4.8)%
Escalations and recoveries
   from tenants                        (1,066)      (7.2)        308        2.0         380      2.6     (1,754)     (11.8)
Parking and other                      (1,578)     (30.9)     (1,387)     (27.2)         54      1.1       (245)      (4.8)
----------------------------------------------------------------------------------------------------------------------------
   Totals                            $  2,870        2.1%   $  4,169        3.1%   $  6,375      4.6%  $ (7,674)      (5.6)%
============================================================================================================================

PROPERTY EXPENSES:
Real estate taxes                    $    883        5.9%   $    717        4.8%   $    678      4.5%  $   (512)      (3.4)%
Utilities                                 (30)      (0.3)         11        0.1         491      4.2       (532)      (4.6)
Operating services                        391        2.4         380        2.3         801      4.9       (790)      (4.8)
----------------------------------------------------------------------------------------------------------------------------
   Totals                            $  1,244        2.9%   $  1,108        2.6%   $  1,970      4.6%  $ (1,834)      (4.3)%
============================================================================================================================

OTHER DATA:
Number of Consolidated Properties         256                    243                     13                   6
Square feet (in thousands)             26,986                 25,523                  1,463               1,629
</TABLE>


Base rents for the Same-Store Properties increased $5.2 million, or 4.5 percent,
for 2000 as compared to 1999, due primarily to rental rate and portfolio
occupancy increases in 2000. Escalations and recoveries from tenants for the
Same-Store Properties increased $0.3 million, or 2.0 percent, for 2000 over
1999, due primarily to the recovery of an increased amount of total property
expenses, as well as additional settle-up billings during the same period in
2000. Parking and other income for the Same-Store Properties decreased $1.4
million, or 27.2 percent, due primarily to fewer lease termination fees in 2000.

Real estate taxes on the Same-Store Properties increased $0.7 million, or 4.8
percent, for 2000 as compared to 1999, due primarily to property tax rate
increases in certain municipalities in 2000. Utilities for the Same-Store
Properties were relatively unchanged in 2000 as compared to 1999. Operating
services for the Same-Store Properties increased $0.4 million, or 2.3 percent,
due primarily to increased maintenance costs.

Equity in earnings of unconsolidated joint ventures increased $1.4 million, or
163.1 percent, in 2000 as compared to 1999. This is due primarily to properties
developed by joint ventures being placed in service in 2000 (see Note 4 to the
Financial Statements).

Interest income increased $0.1 million, or 83.0 percent, for 2000 as compared to
1999, due primarily to income from a mortgage receivable in 2000.

General and administrative expense decreased by $0.2 million, or 4.0 percent,
for 2000 as compared to 1999. This decrease is due primarily to decreased
payroll and related costs in 2000.

Depreciation and amortization increased by $0.4 million, or 1.5 percent, for
2000 over 1999. Of this increase, $1.0 million or 4.2 percent, is attributable
to the Acquired Properties, and $0.6 million, or 2.4 percent, due to the
Same-Store Properties, partially offset by a decrease of $1.2 million, or 5.1
percent, due to the Dispositions.

Interest expense decreased $0.6 million, or 2.3 percent, for 2000 as compared to
1999. This decrease is due primarily to the retirement of a mortgage in
connection with the sale of 412 Mt. Kemble Avenue in June 2000.

Non-recurring charges of $27.9 million were incurred in 2000 as a result of
costs associated with the termination of the Prentiss merger agreement (see Note
3 to the Financial Statements).


                                       36
<PAGE>

Income before gain on sales of rental property decreased to $16.6 million in
2000 from $40.9 million in 1999. The decrease of approximately $24.3 million is
due to the factors discussed above.

Net income available to common unitholders decreased by $14.4 million, from
$37.1 million in 1999 to $22.7 million in 2000. This decrease was a result of a
decrease in income before gain on sales of rental property of $24.3 million and
an increase in preferred unit distributions of $0.1 million. This was partially
offset by gain on sales of rental property of $10.0 million in 2000.

       NINE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO NINE MONTHS ENDED
                               SEPTEMBER 30, 1999

<TABLE>
<CAPTION>

                                                    Nine Months Ended
                                                       September 30,              Dollar             Percent
(IN THOUSANDS)                                   2000              1999           Change             Change
---------------------------------------------------------------------------------------------------------------
<S>                                         <C>                <C>               <C>                   <C>
REVENUE FROM RENTAL OPERATIONS:
Base rents                                  $ 367,270          $350,665          $16,605               4.7%
Escalations and recoveries from tenants        45,058            46,055             (997)             (2.2)
Parking and other                              12,984            12,073              911               7.5
---------------------------------------------------------------------------------------------------------------
   Sub-total                                  425,312           408,793           16,519               4.0

Equity in earnings of
   unconsolidated joint ventures                4,401             1,462            2,939             201.0
Interest income                                 2,537               629            1,908             303.3
---------------------------------------------------------------------------------------------------------------
   Total revenues                             432,250           410,884           21,366               5.2
---------------------------------------------------------------------------------------------------------------

PROPERTY EXPENSES:
Real estate taxes                              45,169            42,900            2,269               5.3
Utilities                                      31,997            31,055              942               3.0
Operating services                             51,419            50,980              439               0.9
---------------------------------------------------------------------------------------------------------------
   Sub-total                                  128,585           124,935            3,650               2.9

General and administrative                     16,733            19,222           (2,489)            (12.9)
Depreciation and amortization                  68,447            67,401            1,046               1.6
Interest expense                               79,123            75,793            3,330               4.4
Non-recurring charges                          37,139            16,458           20,681             125.7
---------------------------------------------------------------------------------------------------------------
   Total expenses                             330,027           303,809           26,218               8.6
---------------------------------------------------------------------------------------------------------------

Income before gain on sales
of rental property
   and minority interest                      102,223           107,075           (4,852)             (4.5)
Gain on sales of rental property               86,205                --           86,205                --
---------------------------------------------------------------------------------------------------------------

Income before minority interest               188,428           107,075           81,353              76.0
Minority interest in consolidated
   partially-owned properties                   5,072                --            5,072                --
---------------------------------------------------------------------------------------------------------------

Net income                                    183,356           107,075           76,281              71.2
Preferred unit distributions                  (11,562)          (11,607)              45               0.4
---------------------------------------------------------------------------------------------------------------


Net income available to
   common unitholders                       $ 171,794         $  95,468          $76,326              79.9%
===============================================================================================================
</TABLE>



                                       37
<PAGE>

The following is a summary of the changes in revenue from rental operations and
property expenses divided into Same-Store Properties, Acquired Properties and
Dispositions (in thousands):

<TABLE>
<CAPTION>

                                              Total           Same-Store           Acquired
                                      Operating Partnership   Properties          Properties         Dispositions
                                      ---------------------   ----------          ----------         ------------
                                         Dollar Percent     Dollar  Percent     Dollar  Percent     Dollar  Percent
                                         Change  Change     Change   Change     Change   Change     Change   Change
--------------------------------------------------------------------------------------------------------------------
<S>                                    <C>         <C>     <C>         <C>    <C>          <C>   <C>        <C>
REVENUE FROM RENTAL OPERATIONS:
Base rents                             $ 16,605    4.7%    $11,728     3.3%   $ 14,577     4.2%  $ (9,700)  (2.8)%
Escalations and recoveries
   from tenants                            (997)  (2.2)        898     1.9         968     2.1     (2,863)  (6.2)
Parking and other                           911    7.5       1,253    10.3         116     1.0       (458)  (3.8)
------------------------------------------------------------------------------------------------------------------
   Totals                              $ 16,519    4.0%    $13,879     3.4%   $ 15,661     3.8%  $(13,021)  (3.2)%
==================================================================================================================

PROPERTY EXPENSES:
Real estate taxes                      $  2,269    5.3%    $ 1,601     3.7%   $  1,611     3.8%  $   (943)  (2.2)%
Utilities                                   942    3.0       1,044     3.3         957     3.1     (1,059)  (3.4)
Operating services                          439    0.9        (406)   (0.7)      2,313     4.5     (1,468)  (2.9)
------------------------------------------------------------------------------------------------------------------
   Totals                              $  3,650    2.9%    $ 2,239     1.8%   $  4,881     3.9%  $ (3,470)  (2.8)%
==================================================================================================================

OTHER DATA:
Number of Consolidated Properties           256                238                  18                  6
Square feet (in thousands)               26,986             25,205               1,781              1,629
</TABLE>

Base rents for the Same-Store Properties increased $11.7 million, or 3.3
percent, for 2000 as compared to 1999, due primarily to rental rate and
portfolio occupancy increases in 2000. Escalations and recoveries from tenants
for the Same-Store Properties increased $0.9 million, or 1.9 percent, for 2000
over 1999, due primarily to the recovery of an increased amount of total
property expenses, as well as additional settle-up billings in 2000. Parking and
other income for the Same-Store Properties increased $1.3 million, or 10.3
percent, due primarily to increased lease termination fees in 2000.

Real estate taxes on the Same-Store Properties increased $1.6 million, or 3.7
percent, for 2000 as compared to 1999, due primarily to property tax rate
increases in certain municipalities in 2000. Utilities for the Same-Store
Properties increased $1.0 million, or 3.3 percent, for 2000 as compared to 1999,
due primarily to increased usage in 2000. Operating services for the Same-Store
Properties decreased $0.4 million, or 0.7 percent, due primarily to decreased
property management payroll costs.

Equity in earnings of unconsolidated joint ventures increased $2.9 million, or
201.0 percent, in 2000 as compared to 1999. This is due primarily to properties
developed by joint ventures being placed in service in 2000 (see Note 4 to the
Financial Statements).

Interest income increased $1.9 million, or 303.3 percent, for 2000 as compared
to 1999, due primarily to the effect of proceeds from the Dispositions in 2000
being invested in cash and cash equivalents as well as income from a mortgage
receivable in 2000.

General and administrative expense decreased by $2.5 million, or 12.9 percent,
for 2000 as compared to 1999. This decrease is due primarily to decreased
payroll and related costs in 2000.

Depreciation and amortization increased by $1.0 million, or 1.6 percent, for
2000 over 1999. Of this increase, $2.5 million, or 3.8 percent, is attributable
to the Acquired Properties and $1.5 million, or 2.3 percent, due to the
Same-Store Properties, partially offset by a decrease of $3.0 million, or 4.5
percent, due to the Dispositions.

Interest expense increased $3.3 million, or 4.4 percent, for 2000 as compared to
1999. This increase is due primarily to the replacement in 1999 of short-term
credit facility borrowings with long-term fixed rate unsecured notes. This was
partially offset by the retirement of a mortgage in connection with the sale of
412 Kemble Avenue in June 2000.



                                       38
<PAGE>

Non-recurring charges of $37.1 million were incurred in 2000, as a result of
costs associated with the termination of the Prentiss merger agreement (see Note
3 to the Financial Statements) in September 2000 and costs associated with the
resignations of Brant Cali and John R. Cali (see Note 15 to the Financial
Statements) in June 2000. Non-recurring charges of $16.5 million were incurred
in 1999, as a result of the resignation of Thomas A. Rizk (see Note 15 to the
Financial Statements).

Income before gain on sales of rental property and minority interest decreased
to $102.2 million in 2000 from $107.1 million in 1999. The decrease of
approximately $4.9 million is due to the factors discussed above.

Net income available to common unitholders increased by $76.3 million, from
$95.5 million in 1999 to $171.8 million in 2000. This increase was a result of a
gain on sales of rental property of $86.2 million in 2000 and a decrease in
preferred unit distributions of $0.1 million. This was partially offset by a
decrease in 2000 in income before gain on sales of rental property and minority
interest of $4.9 million and an increase in 2000 in minority interests of $5.1
million.

LIQUIDITY AND CAPITAL RESOURCES

STATEMENT OF CASH FLOWS
During the nine months ended September 30, 2000, the Operating Partnership
generated $128.2 million in cash flows from operating activities, and together
with $551.6 million in borrowings from the Operating Partnership's revolving
credit facilities, $281.2 million in proceeds from sales of rental property,
$10.8 million in distributions received from unconsolidated joint ventures, $2.2
million in proceeds from stock options exercised and $0.6 million from
restricted cash, used an aggregate of approximately $974.6 million to acquire
properties and land parcels and pay for other tenant and building improvements
totaling $224.8 million, repay outstanding borrowings on its revolving credit
facilities and other mortgage debt of $507.7 million, pay quarterly dividends
and distributions of $127.5 million, invest $12.7 million in unconsolidated
joint ventures, distribute $88.7 million to minority interest in partially-owned
properties, pay financing costs of $6.1 million, repurchase 186,600 shares of
the Corporation's outstanding common stock for $5.2 million and increase the
Operating Partnership's cash and cash equivalents by $1.9 million.

CAPITALIZATION
In September 2000, the Operating Partnership announced plans to implement a
highly focused growth strategy geared to attractive opportunities in
high-barrier-to-entry markets, including locations such as California, but
primarily predicated on the Operating Partnership's strong presence in the
Northeast region. Consistent with this strategy, the Operating Partnership plans
to sell substantially all of its properties located in the Southwestern and
Western regions, using such proceeds to invest in property acquisitions and
development projects in its core Northeast markets, as well as fund stock
repurchases and repay debt.

Consistent with its growth strategy, in October 2000, the Operating Partnership
started construction of a 915,000 square-foot office property, to be known as
Plaza 5, at its Harborside Financial Center office complex in Jersey City,
Hudson County, New Jersey. The total cost of the project is estimated to be
approximately $260 million and is anticipated to be completed in third quarter
2002. Additionally, in November, the Operating Partnership, through a joint
venture with Columbia Development Corp., will start construction of a 575,000
square-foot office property, to be known as Plaza 10, on land owned by the joint
venture located adjacent to the Operating Partnership's Harborside complex. The
total cost of the project is estimated to be approximately $140 million and is
anticipated to be completed in third quarter 2002. Prior to commencement of
construction, the joint venture signed a 15-year lease with Charles Schwab for
300,000 square feet of Plaza 10, representing 52 percent of the project. The
lease agreement obligates the Operating Partnership, among other things, to
deliver space to the tenant by required timelines and offers expansion options,
at the tenant's election, to additional space in Plaza 10, or, if not available,
in any adjacent Harborside projects. Such options may obligate the Operating
Partnership to construct an additional building at Harborside if vacant space is
not available in any of its existing Harborside properties. Should the Operating
Partnership be unable to or choose not to provide such expansion space, the
Operating Partnership could be liable to Schwab for its actual damages, in no
event to exceed $15.0 million. The Operating Partnership expects to finance its
funding requirements under both Plazas 5 and 10 projects through drawing on its
revolving credit facilities, construction financing, or through joint venture
arrangements.



                                       39
<PAGE>

On August 6, 1998, the Board of Directors of the Corporation authorized a
Repurchase Program under which the Corporation was permitted to purchase up to
$100.0 million of the Corporation's outstanding common stock. Under the
Repurchase Program, the Corporation purchased for constructive retirement
1,869,200 shares of its outstanding common stock for an aggregate cost of
approximately $52.6 million from August 1998 through December 1999. Subsequently
on September 13, 2000, the Board of Directors authorized an increase to the
Repurchase Program under which the Corporation is permitted to purchase up to an
additional $150.0 million of the Corporation's outstanding common stock above
the $52.6 million that had previously been purchased. Purchases could be made
from time to time in open market transactions at prevailing prices or through
privately negotiated transactions.

Through November 1, 2000, the Corporation purchased for constructive retirement
2,661,300 shares of its outstanding common stock for an aggregate cost of
approximately $74.3 million under the Repurchase Program. The Corporation has
authorization to repurchase up to an additional $128.3 million of its
outstanding common stock under the Repurchase Program.

As of September 30, 2000, the Operating Partnership's total indebtedness of $1.5
billion (weighted average interest rate of 7.32 percent) was comprised of $296.7
million of revolving credit facility borrowings and other variable rate mortgage
debt (weighted average rate of 7.41 percent) and fixed rate debt of $1.2 billion
(weighted average rate of 7.24 percent).

As of September 30, 2000, the Operating Partnership had outstanding borrowings
of $264.5 million under its revolving credit facilities (with aggregate
borrowing capacity of $900.0 million). The total outstanding borrowings were
from the 2000 Unsecured Facility, with no outstanding borrowings under the
Prudential Facility. The interest rate on outstanding borrowings under the 2000
Unsecured Facility is currently LIBOR plus 80 basis points. The Operating
Partnership may instead elect an interest rate representing the higher of the
lender's prime rate or the Federal Funds rate plus 50 basis points. In the event
of a change in the Operating Partnership's unsecured debt rating, the interest
rate will be changed on a sliding scale. The 2000 Unsecured Facility also
requires a 20 basis point facility fee on the current borrowing capacity payable
quarterly in arrears. Subject to certain conditions, the Operating Partnership
has the ability to increase the borrowing capacity of the 2000 Unsecured
Facility up to $1.0 billion. The 2000 Unsecured Facility matures in June 2003,
with an extension option of one year, which would require a payment of 25 basis
points of the then borrowing capacity of the credit line upon exercise. The
Prudential Facility carries an interest rate of 110 basis points over LIBOR and
matures in June 2001.

The terms of the 2000 Unsecured Facility include certain restrictions and
covenants which limit, among other things, the payment of dividends (as
discussed below), the incurrence of additional indebtedness, the incurrence of
liens and the disposition of assets, and which require compliance with financial
ratios relating to the maximum leverage ratio, the maximum amount of secured
indebtedness, the minimum amount of tangible net worth, the minimum amount of
debt service coverage, the minimum amount of fixed charge coverage, the maximum
amount of unsecured indebtedness, the minimum amount of unencumbered property
debt service coverage and certain investment limitations. The dividend
restriction referred to above provides that, except to enable the Corporation to
continue to qualify as a REIT under the Code, the Corporation will not during
any four consecutive fiscal quarters make distributions with respect to common
stock or other equity interests in an aggregate amount in excess of 90 percent
of funds from operations (as defined) for such period, subject to certain other
adjustments.

The terms of the Operating Partnership's unsecured corporate debt include
certain restrictions and covenants which require compliance with financial
ratios relating to the maximum amount of debt leverage, the maximum amount of
secured indebtedness, the minimum amount of debt service coverage and the
maximum amount of unsecured debt as a percent of unsecured assets.

The Operating Partnership has three investment grade credit ratings. Standard &
Poor's Rating Services ("S&P") and Fitch IBCA ("Fitch") have each assigned their
BBB rating to existing and prospective senior unsecured debt of the Operating
Partnership. S&P and Fitch have also assigned their BBB- rating to prospective
preferred stock offerings of the Corporation. Moody's Investors Service has
assigned its Baa3 rating to the existing and prospective senior unsecured debt
of the Operating Partnership and its Ba1 rating to prospective preferred stock
offerings of the Corporation.

As of September 30, 2000, the Operating Partnership had 227 unencumbered
properties, totaling 20.4 million square feet, representing 76.0 percent of the
Operating Partnership's total portfolio on a square footage basis.


                                       40
<PAGE>

The Operating Partnership and Corporation have an effective shelf registration
statement with the SEC for an aggregate of $2.0 billion in debt securities,
preferred stock and preferred stock represented by depositary shares, under
which the Operating Partnership has issued an aggregate of $785.3 million of
unsecured corporate debt.

Historically, rental revenue has been the principal source of funds to pay
operating expenses, debt service and capital expenditures, excluding
non-recurring capital expenditures. Management believes that the Operating
Partnership will have access to the capital resources necessary to expand and
develop its business. To the extent that the Operating Partnership's cash flow
from operating activities is insufficient to finance its non-recurring capital
expenditures such as property acquisition and construction project costs and
other capital expenditures, the Operating Partnership expects to finance such
activities through borrowings under its revolving credit facilities and other
debt and equity financing.

The Operating Partnership expects to meet its short-term liquidity requirements
generally through its working capital and net cash provided by operating
activities, along with the 2000 Unsecured Facility and the Prudential Facility.
The Operating Partnership is frequently examining potential property
acquisitions and construction projects and, at any given time, one or more of
such acquisitions or construction projects may be under consideration.
Accordingly, the ability to fund property acquisitions and construction projects
is a major part of the Operating Partnership's financing requirements. The
Operating Partnership expects to meet its financing requirements through funds
generated from operating activities, proceeds from property sales, long-term or
short-term borrowings (including draws on the Operating Partnership's revolving
credit facilities) and the issuance of additional debt or equity securities.

As of September 30, 2000, the Operating Partnership's total debt had a weighted
average term to maturity of 4.7 years. The Operating Partnership does not intend
to reserve funds to retire the Operating Partnership's unsecured corporate debt,
Harborside mortgages, $150.0 Million Prudential Mortgage Loan, its other
property mortgages or other long-term mortgages and loans payable upon maturity.
Instead, the Operating Partnership will seek to refinance such debt at maturity
or retire such debt through the issuance of additional equity or debt
securities. The Operating Partnership is reviewing various refinancing options,
including the issuance of additional unsecured corporate debt, preferred stock,
and/or obtaining additional mortgage debt, some or all of which may be completed
during 2000. The Operating Partnership anticipates that its available cash and
cash equivalents and cash flows from operating activities, together with cash
available from borrowings and other sources, will be adequate to meet the
Operating Partnership's capital and liquidity needs both in the short and
long-term. However, if these sources of funds are insufficient or unavailable,
the Operating Partnership's ability to make the expected distributions discussed
below may be adversely affected.

To maintain its qualification as a REIT, the Corporation must make annual
distributions to its stockholders of at least 95 percent of its REIT taxable
income, determined without regard to the dividends paid deduction and by
excluding net capital gains. The Corporation currently relies on the
distributions it receives from the Operating Partnership to make distributions
to its stockholders. Moreover, the Operating Partnership intends to continue to
make regular quarterly distributions to its unitholders which, based upon
current policy, in the aggregate would equal approximately $161.4 million on an
annualized basis. However, any such distribution, would only be paid out of
available cash after meeting operating requirements, scheduled debt service on
mortgages and loans payable, and preferred unit distributions.



                                       41
<PAGE>

SIGNIFICANT TENANTS

The following table sets forth a schedule of the Operating Partnership's 20
largest tenants for the Consolidated Properties as of September 30, 2000, based
upon annualized base rents:

<TABLE>
<CAPTION>

                                                                     Percentage of                    Percentage of
                                                 Annualized      Operating Partnership   Square           Total            Year of
                                  Number of      Base Rental        Annualized Base       Feet    Operating Partnership     Lease
                                 Properties    Revenue ($)(1)      Rental Revenue(%)     Leased    Leased Sq. Ft. (%)    Expiration
------------------------------------------------------------------------------------------------------------------------------------
<S>                                  <C>           <C>                   <C>             <C>             <C>              <C>
Donaldson, Lufkin &
  Jenrette Securities Corp.          1             8,316,096             1.7             271,953         1.1              2011
AT&T Wireless Services               2             8,199,960             1.7             382,030         1.5              2007 (2)
AT&T Corporation                     3             8,030,828             1.7             516,546         2.0              2009 (3)
Keystone Mercy Health Plan           3             7,429,219             1.6             325,843         1.3              2015 (4)
IBM Corporation                      4             7,028,473             1.5             362,753         1.4              2007 (5)
Prentice-Hall Inc.                   1             6,744,495             1.4             474,801         1.9              2014
Allstate Insurance Company           9             5,863,006             1.2             270,154         1.0              2009 (6)
Nabisco Inc.                         3             5,694,073             1.2             310,243         1.2              2005 (7)
Toys 'R' Us - NJ, Inc.               1             5,342,672             1.1             242,518         0.9              2012
Waterhouse Securities, Inc.          1             5,253,555             1.1             184,222         0.7              2015
American Institute of Certified
  Public Accountants                 1             4,981,357             1.0             249,768         1.0              2012
Board of Gov./Federal Reserve        1             4,705,391             1.0             117,008         0.5              2009 (8)
Dean Witter Trust Company            1             4,319,507             0.9             221,019         0.9              2008
Winston & Strawn                     1             4,302,008             0.9             108,100         0.4              2003
CMP Media Inc.                       1             4,206,598             0.9             206,274         0.8              2014
KPMG Peat Marwick, LLP               2             3,824,080             0.8             161,760         0.6              2007 (9)
Move.com Operations, Inc.            1             3,701,763             0.8              94,917         0.4              2006
Bank of Tokyo - Mitsubishi Ltd.      1             3,378,924             0.7             137,076         0.5              2009
Bankers Trust Harborside Inc.        1             3,272,500             0.7             385,000         1.5              2003
Cendant Operations Inc.              1             3,117,051             0.7             148,431         0.6              2008
------------------------------------------------------------------------------------------------------------------------------------
Totals                                           107,711,556            22.6           5,170,416        20.2
====================================================================================================================================
</TABLE>

(1)   Annualized base rental revenue is based on actual September 2000 billings
      times 12. For leases whose rent commences after October 1, 2000,
      annualized base rental revenue is based on the first full month's billing
      times 12. As annualized base rental revenue is not derived from historical
      GAAP results, historical results may differ from those set forth above.
(2)   12,150 square feet expire September 2004; 345,799 square feet expire March
      2007; 24,081 square feet expire June 2007.
(3)   66,268 square feet expire December 2000; 63,278 square feet expire May
      2004; 387,000 square feet expire January 2009.
(4)   22,694 square feet expire January 2003; 303,149 square feet expire April
      2015.
(5)   1,065 square feet expire November 2000; 28,289 square feet expire January
      2002; 85,000 square feet expire December 2005; 248,399 square feet expire
      December 2007.
(6)   22,444 square feet expire July 2001; 47,364 square feet expire September
      2002; 18,882 square feet expire April 2003; 2,867 square feet expire
      January 2004; 36,305 square feet expire January 2005; 23,024 square feet
      expire October 2005; 6,108 square feet expire August 2006; 70,517 square
      feet expire June 2007; 31,143 square feet expire April 2008; 11,500 square
      feet expire April 2009.
(7)   9,865 square feet expire September 2001; 300,378 square feet expire
      December 2005.
(8)   94,719 square feet expire May 2005; 22,289 square feet expire July 2009.
(9)   104,556 square feet expire September 2002; 57,204 square feet expire July
      2007.



                                       42
<PAGE>

SCHEDULE OF LEASE EXPIRATIONS

The following table sets forth a schedule of the lease expirations for the total
of the Operating Partnership's office, office/flex, industrial/warehouse and
stand-alone retail properties, included in the Consolidated Properties,
beginning October 1, 2000, assuming that none of the tenants exercise renewal
options:

<TABLE>
<CAPTION>

                                                                                           Average Annual
                                                    Percentage Of                           Rent Per Net
                                 Net Rentable       Total Leased         Annualized           Rentable          Percentage Of
                                 Area Subject        Square Feet         Base Rental         Square Foot         Annual Base
                  Number Of       To Expiring      Represented By       Revenue Under        Represented         Rent Under
Year Of            Leases           Leases            Expiring            Expiring           By Expiring          Expiring
Expiration       Expiring(1)       (Sq. Ft.)       Leases (%)(2)       Leases ($)(3)         Leases($)           Leases(%)
------------------------------------------------------------------------------------------------------------------------------
<S>                   <C>           <C>                <C>                <C>                   <C>                  <C>
2000..........        148           894,766            3.5                15,187,953            16.97                3.2

2001..........        509         2,676,232           10.4                42,714,473            15.96                8.9

2002..........        526         3,476,104           13.6                60,234,599            17.33               12.6

2003..........        479         3,845,066           15.0                66,571,285            17.31               14.0

2004..........        338         2,344,632            9.1                44,880,367            19.14                9.4

2005..........        313         3,061,998           11.9                60,416,528            19.73               12.7

2006..........        124         1,562,751            6.1                32,853,037            21.02                6.9

2007..........         70         1,552,681            6.1                32,440,045            20.89                6.8

2008..........         42         1,100,853            4.3                18,528,030            16.83                3.9

2009..........         36         1,127,196            4.4                21,791,717            19.33                4.6

2010..........         71         1,080,376            4.2                21,925,633            20.29                4.6

2011 and thereafter    58         2,935,854           11.4                58,980,091            20.09               12.4
------------------------------------------------------------------------------------------------------------------------------
Totals/Weighted
  Average           2,714        25,658,509          100.0               476,523,758            18.57              100.0
==============================================================================================================================
</TABLE>

(1)  Includes office, office/flex, industrial/warehouse and stand-alone retail
     property tenants only. Excludes leases for amenity, retail, parking and
     month-to-month tenants. Some tenants have multiple leases.
(2)  Excludes all unleased space as of September 30, 2000.
(3)  Annualized base rental revenue is based on actual September 2000 billings
     times 12. For leases whose rent commences after October 1, 2000, annualized
     base rental revenue is based on the first full month's billing times 12. As
     annualized base rental revenue is not derived from historical GAAP results,
     historical results may differ from those set forth above.
(4)  Reconciliation to Operating Partnership's total net rentable square footage
     is as follows:

<TABLE>
<CAPTION>

                                                                           Square Feet       Percentage of Total
                                                                           -----------       -------------------

<S>                                                                         <C>                     <C>
Square footage leased to commercial tenants                                 25,658,509              95.1%
Square footage used for corporate offices, management offices,
  building use, retail tenants, food services, other ancillary
  service tenants and occupancy adjustments                                    427,751               1.6
Square footage unleased                                                        900,096               3.3
                                                                           -----------         ---------
Total net rentable square footage (does not include
  residential, land lease, retail or not-in-service properties)             26,986,356             100.0%
                                                                            ==========         ==========
</TABLE>



                                       43
<PAGE>


SCHEDULE OF LEASE EXPIRATIONS: OFFICE PROPERTIES

The following table sets forth a schedule of the lease expirations for the
office properties beginning October 1, 2000, assuming that none of the tenants
exercise renewal options:

<TABLE>
<CAPTION>

                                                                                           Average Annual
                                                  Percentage Of                             Rent Per Net
                                Net Rentable      Total Leased           Annualized           Rentable          Percentage Of
                               Area Subject        Square Feet           Base Rental         Square Foot         Annual Base
                  Number Of      To Expiring     Represented By         Revenue Under        Represented         Rent Under
Year Of            Leases          Leases           Expiring              Expiring           By Expiring          Expiring
Expiration       Expiring(1)      (Sq. Ft.)        Leases(%)(2)          Leases($)(3)         Leases($)           Leases(%)
-------------------------------------------------------------------------------------------------------------------------------
<S>                   <C>           <C>                  <C>              <C>                   <C>                 <C>
2000..........        115           666,211              3.2              12,422,310            18.65               2.9

2001..........        425         2,052,625              9.7              36,358,740            17.71               8.5

2002..........        420         2,597,727             12.3              51,074,486            19.66              12.0

2003..........        399         3,198,170             15.1              60,219,181            18.83              14.2

2004..........        286         1,815,421              8.6              38,790,477            21.37               9.1

2005..........        259         2,600,424             12.3              54,815,528            21.08              12.9

2006..........        105         1,285,488              6.1              28,350,841            22.05               6.7

2007..........         62         1,417,250              6.7              30,468,811            21.50               7.2

2008..........         37           933,806              4.4              17,378,500            18.61               4.1

2009..........         26           996,136              4.7              19,963,197            20.04               4.7

2010..........         53           855,944              4.1              18,703,411            21.85               4.4

2011 and thereafter    51         2,714,830             12.8              56,415,731            20.78              13.3
-------------------------------------------------------------------------------------------------------------------------------
Totals/Weighted
  Average           2,238        21,134,032            100.0             424,961,213            20.11             100.0
===============================================================================================================================
</TABLE>

(1)  Includes office tenants only. Excludes leases for amenity, retail, parking
     and month-to-month office tenants. Some tenants have multiple leases.
(2)  Excludes all unleased space as of September 30, 2000.
(3)  Annualized base rental revenue is based on actual September 2000 billings
     times 12. For leases whose rent commences after October 1, 2000, annualized
     base rental revenue is based on the first full month's billing times 12. As
     annualized base rental revenue is not derived from historical GAAP results,
     historical results may differ from those set forth above.




                                       44
<PAGE>


SCHEDULE OF LEASE EXPIRATIONS: OFFICE/FLEX PROPERTIES

The following table sets forth a schedule of the lease expirations for the
office/flex properties beginning October 1, 2000, assuming that none of the
tenants exercise renewal options:

<TABLE>
<CAPTION>


                                                                                           Average Annual
                                                    Percentage Of                           Rent Per Net
                                 Net Rentable       Total Leased         Annualized           Rentable          Percentage Of
                                 Area Subject        Square Feet         Base Rental         Square Foot         Annual Base
                  Number Of       To Expiring      Represented By       Revenue Under        Represented         Rent Under
Year Of            Leases           Leases            Expiring            Expiring           By Expiring          Expiring
Expiration       Expiring(1)      (Sq. Ft.)         Leases(%)(2)        Leases($)(3)          Leases($)           Leases(%)
------------------------------------------------------------------------------------------------------------------------------
<S>                    <C>          <C>                  <C>               <C>                  <C>                 <C>
2000..........         30           227,220              5.5               2,748,747            12.10               5.8

2001..........         81           614,160             14.9               6,263,456            10.20              13.2

2002..........        104           831,937             20.2               8,659,361            10.41              18.3

2003..........         76           548,922             13.3               5,850,986            10.66              12.3

2004..........         41           319,791              7.7               3,597,398            11.25               7.6

2005..........         51           448,420             10.9               5,419,124            12.08              11.4

2006..........         19           277,263              6.7               4,502,196            16.24               9.5

2007..........          8           135,431              3.3               1,971,234            14.56               4.2

2008..........          5           167,047              4.0               1,149,530             6.88               2.4

2009..........          9           119,260              2.9               1,722,320            14.44               3.6

2010..........         18           224,432              5.4               3,222,222            14.36               6.8

2011 and thereafter     6           213,024              5.2               2,299,360            10.79               4.9
------------------------------------------------------------------------------------------------------------------------------
Totals/Weighted
  Average             448         4,126,907            100.0              47,405,934            11.49             100.0
==============================================================================================================================
</TABLE>

(1)  Includes office/flex tenants only. Excludes leases for amenity, retail,
     parking and month-to-month office/flex tenants. Some tenants have multiple
     leases.
(2)  Excludes all unleased space as of September 30, 2000.
(3)  Annualized base rental revenue is based on actual September 2000 billings
     times 12. For leases whose rent commences after October 1, 2000, annualized
     base rental revenue is based on the first full month's billing times 12. As
     annualized base rental revenue is not derived from historical GAAP results,
     historical results may differ from those set forth above.



                                       45
<PAGE>

SCHEDULE OF LEASE EXPIRATIONS: INDUSTRIAL/WAREHOUSE PROPERTIES

The following table sets forth a schedule of the lease expirations for the
industrial/warehouse properties beginning October 1, 2000, assuming that none of
the tenants exercise renewal options:

<TABLE>
<CAPTION>


                                                                                           Average Annual
                                                    Percentage Of                           Rent Per Net
                                 Net Rentable       Total Leased         Annualized           Rentable        Percentage Of
                                 Area Subject        Square Feet         Base Rental         Square Foot       Annual Base
                  Number Of       To Expiring      Represented By       Revenue Under        Represented       Rent Under
Year Of            Leases           Leases            Expiring            Expiring           By Expiring        Expiring
Expiration        Expiring(1)      (Sq. Ft.)          Leases(%)(2)        Leases($)(3)         Leases($)         Leases(%)
----------------------------------------------------------------------------------------------------------------------------
<S>                     <C>           <C>                <C>                  <C>               <C>                 <C>
2000..........          3             1,335              0.3                  16,896            12.66               0.5

2001..........          3             9,447              2.5                  92,277             9.77               2.5

2002..........          2            46,440             12.2                 500,752            10.78              13.5

2003..........          4            97,974             25.8                 501,118             5.11              13.6

2004..........         10           200,120             52.6               2,297,492            11.48              62.1

2005..........          3            13,154              3.5                 181,876            13.83               4.9

2009..........          1            11,800              3.1                 106,200             9.00               2.9
----------------------------------------------------------------------------------------------------------------------------
Totals/Weighted
  Average              26           380,270            100.0               3,696,611             9.72             100.0
============================================================================================================================
</TABLE>

(1)  Includes industrial/warehouse tenants only. Excludes leases for amenity,
     retail, parking and month-to-month industrial/warehouse tenants. Some
     tenants have multiple leases.
(2)  Excludes all unleased space as of September 30, 2000.
(3)  Annualized base rental revenue is based on actual September 2000 billings
     times 12. For leases whose rent commences after October 1, 2000, annualized
     base rental revenue is based on the first full month's billing times 12. As
     annualized base rental revenue is not derived from historical GAAP results,
     the historical results may differ from those set forth above.

SCHEDULE OF LEASE EXPIRATIONS: STAND-ALONE RETAIL PROPERTIES

The following table sets forth a schedule of the lease expirations for the
stand-alone retail properties beginning October 1, 2000, assuming that none of
the tenants exercise renewal options:

<TABLE>
<CAPTION>

                                                                                           Average Annual
                                                    Percentage Of                           Rent Per Net
                                 Net Rentable       Total Leased         Annualized           Rentable        Percentage Of
                                 Area Subject        Square Feet         Base Rental         Square Foot       Annual Base
                  Number Of       To Expiring      Represented By       Revenue Under        Represented       Rent Under
Year Of            Leases           Leases            Expiring            Expiring           By Expiring        Expiring
Expiration        Expiring(1)      (Sq. Ft.)          Leases(%)           Leases($)(2)         Leases($)        Leases(%)
-----------------------------------------------------------------------------------------------------------------------------
<S>                     <C>           <C>               <C>                  <C>                <C>                <C>
2004..........          1             9,300             53.8                 195,000            20.97              42.4

2012 .........          1             8,000             46.2                 265,000            33.12              57.6
-----------------------------------------------------------------------------------------------------------------------------
Totals/Weighted
  Average               2            17,300            100.0                 460,000            26.59             100.0
=============================================================================================================================
</TABLE>

(1)  Includes stand-alone retail property tenants only.
(2)  Annualized base rental revenue is based on actual September 2000 billings
     times 12. For leases whose rent commences after October 1, 2000, annualized
     base rental revenue is based on the first full month's billing times 12. As
     annualized base rental revenue is not derived from historical GAAP results,
     historical results may differ from those set forth above.


                                       46
<PAGE>


INDUSTRY DIVERSIFICATION

The following table lists the Operating Partnership's 30 largest industry
classifications based on annualized contractual base rent of the Consolidated
Properties:

<TABLE>
<CAPTION>

                                                                                                                     Percentage of
                                                           Annualized         Percentage of                         Total Operating
                                                           Base Rental    Operating Partnership      Square           Partnership
                                                             Revenue         Annualized Base          Feet              Leased
Industry Classification(3)                                 ($)(1)(2)        Rental Revenue(%)        Leased            Sq. Ft.(%)
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                         <C>                   <C>               <C>                   <C>
Securities, Commodity Contracts & Other Financial           55,729,695            11.7              2,432,166             9.5
Manufacturing                                               45,708,719             9.6              2,783,481            10.8
Computer System Design Svcs.                                33,084,068             6.9              1,741,300             6.8
Telecommunications                                          33,039,867             6.9              1,916,338             7.5
Insurance Carriers & Related Activities                     32,862,919             6.9              1,691,347             6.6
Legal Services                                              28,284,033             5.9              1,290,600             5.0
Credit Intermediation & Related Activities                  22,207,798             4.7              1,292,770             5.0
Health Care & Social Assistance                             21,182,902             4.4              1,092,651             4.3
Wholesale Trade                                             17,242,929             3.6              1,258,651             4.9
Accounting/Tax Prep.                                        16,003,515             3.4                756,209             2.9
Other Professional                                          14,220,519             3.0                854,137             3.3
Retail Trade                                                14,065,403             3.0                835,520             3.3
Information Services                                        13,351,863             2.8                620,886             2.4
Publishing Industries                                       12,477,476             2.6                554,908             2.2
Arts, Entertainment & Recreation                            11,127,747             2.3                762,687             3.0
Public Administration                                       10,342,969             2.2                364,158             1.4
Transportation                                               8,942,683             1.9                681,303             2.7
Other Services (except Public Administration)                8,884,731             1.9                692,497             2.7
Advertising/Related Services                                 8,834,682             1.8                416,075             1.6
Real Estate & Rental & Leasing                               8,071,699             1.7                406,442             1.6
Management/Scientific                                        7,619,815             1.6                383,322             1.5
Management of Companies & Finance                            7,004,618             1.5                358,259             1.4
Architectural/Engineering                                    6,719,221             1.4                350,015             1.4
Scientific Research/Development                              6,314,351             1.3                361,423             1.4
Data Processing Services                                     6,089,948             1.3                279,577             1.1
Construction                                                 4,673,760             1.0                261,426             1.0
Educational Services                                         3,738,237             0.8                210,296             0.8
Utilities                                                    3,709,825             0.8                181,388             0.7
Specialized Design Services                                  3,444,366             0.7                163,686             0.6
Admin. & Support, Waste Mgt. & Remediation Svc.              3,423,484             0.7                226,448             0.9
Other                                                        8,119,916             1.7                438,543             1.7
------------------------------------------------------------------------------------------------------------------------------------
Totals                                                     476,523,758           100.0             25,658,509           100.0
====================================================================================================================================
</TABLE>

(1)    Annualized base rental revenue is based on actual September 2000 billings
       times 12. For leases whose rent commences after October 1, 2000,
       annualized base rental revenue is based on the first full month's billing
       times 12. As annualized base rental revenue is not derived from
       historical GAAP results, historical results may differ from those set
       forth above.
(2)    Includes office, office/flex, industrial/warehouse and stand-alone retail
       tenants only. Excludes leases for amenity, retail, parking and
       month-to-month office tenants. Some tenants have multiple leases.
(3)    The Operating Partnership's tenants are classified according to the U.S.
       Government's new North American Industrial Classification System (NAICS)
       which has replaced the Standard Industrial Code (SIC) system.



                                       47
<PAGE>

MARKET DIVERSIFICATION

The following table lists the Operating Partnership's 25 largest markets (MSAs),
based on annualized contractual base rent of the Consolidated Properties:

<TABLE>
<CAPTION>

                                                           Annualized         Percentage of
                                                           Base Rental    Operating Partnership       Total
                                                             Revenue         Annualized Base      Property Size      Percentage of
Market (MSA)                                               ($)(1)(2)        Rental Revenue(%)     Rentable Area     Rentable Area(%)
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                         <C>                   <C>               <C>                  <C>
Bergen-Passaic, NJ                                          82,647,106            17.4              4,530,091            16.8
New York, NY (Westchester-Rockland Counties)                79,852,486            16.8              4,696,178            17.4
Newark, NJ (Essex-Morris-Union Counties)                    72,472,482            15.2              3,444,598            12.8
Jersey City, NJ                                             42,369,281             8.9              2,094,470             7.8
Philadelphia, PA-NJ                                         38,159,668             8.0              2,710,346            10.0
Washington, DC-MD-VA                                        18,961,873             4.0                616,549             2.3
Denver, CO                                                  17,158,536             3.6              1,007,931             3.7
Middlesex-Somerset-Hunterdon, NJ                            14,943,187             3.1                791,051             2.9
Dallas, TX                                                  14,887,035             3.1                959,463             3.6
Trenton, NJ (Mercer County)                                 12,175,360             2.6                672,365             2.5
San Francisco, CA                                           12,137,821             2.5                450,891             1.7
San Antonio, TX                                             11,882,673             2.5                940,302             3.5
Stamford-Norwalk, CT                                         9,254,783             1.9                527,250             1.9
Houston, TX                                                  8,761,211             1.8                700,008             2.6
Monmouth-Ocean, NJ                                           7,272,457             1.5                577,423             2.1
Nassau-Suffolk, NY                                           5,762,698             1.2                261,849             1.0
Phoenix-Mesa, AZ                                             5,535,201             1.2                416,967             1.5
Tampa-St. Petersburg-Clearwater, FL                          3,645,220             0.8                297,429             1.1
Boulder-Longmont, CO                                         3,600,741             0.8                270,421             1.0
Bridgeport, CT                                               3,260,251             0.7                145,487             0.5
Omaha, NE-IA                                                 3,050,207             0.6                319,535             1.2
Colorado Springs, CO                                         2,810,124             0.6                209,987             0.8
Dutchess County, NY                                          2,217,687             0.5                118,727             0.4
Atlantic-Cape May, NJ                                        1,464,090             0.3                 80,344             0.3
Fort Worth-Arlington, TX                                     1,102,116             0.2                 74,429             0.3
Other                                                        1,139,464             0.2                 72,265             0.3
------------------------------------------------------------------------------------------------------------------------------------
Totals                                                     476,523,758           100.0             26,986,356           100.0
====================================================================================================================================
</TABLE>

(1)  Annualized base rental revenue is based on actual September 2000 billings
     times 12. For leases whose rent commences after October 1, 2000, annualized
     base rental revenue is based on the first full month's billing times 12. As
     annualized base rental revenue is not derived from historical GAAP results,
     historical results may differ from those set forth above.
(2)  Includes office, office/flex, industrial/warehouse and stand-alone retail
     tenants only. Excludes leases for amenity, retail, parking and
     month-to-month office tenants. Some tenants have multiple leases.



                                       48
<PAGE>

                                PROPERTY LISTING

                                OFFICE PROPERTIES

<TABLE>
<CAPTION>

                                                                                            PERCENTAGE OF
                                                                  PERCENTAGE                 TOTAL OFFICE,
                                                         NET       LEASED      ANNUAL        OFFICE/FLEX,          AVERAGE
                                                       RENTABLE    AS OF       BASE         AND INDUSTRIAL/       BASE RENT
PROPERTY                                      YEAR      AREA       9/30/00      RENT          WAREHOUSE          PER SQ. FT.
LOCATION                                      BUILT    (SQ. FT.)   (%)(1)    ($000'S)(2)     BASE RENT(%)         ($)(3)(5)
------------------------------------------------------------------------------------------------------------------------------
<S>                                            <C>      <C>         <C>           <C>          <C>                <C>
ATLANTIC COUNTY, NEW JERSEY
EGG HARBOR
100 Decadon Drive...........................   1987     40,422      100.0         784          0.16               19.40
200 Decadon Drive...........................   1991     39,922       95.3         732          0.15               19.24

BERGEN COUNTY, NEW JERSEY
FAIR LAWN
17-17 Route 208 North.......................   1987    143,000       96.0       3,476          0.70               25.32

FORT LEE
One Bridge Plaza............................   1981    200,000       92.9       4,711          0.95               25.36
2115 Linwood Avenue.........................   1981     68,000       99.7         947          0.19               13.97

LITTLE FERRY
200 Riser Road..............................   1974    286,628      100.0       1,885          0.38                6.58

MONTVALE
95 Chestnut Ridge Road......................   1975     47,700      100.0         570          0.12               11.95
135 Chestnut Ridge Road.....................   1981     66,150       99.7         801          0.16               12.15

PARAMUS
15 East Midland Avenue......................   1988    259,823      100.0       6,636          1.34               25.54
461 From Road...............................   1988    253,554       99.8       6,028          1.22               23.82
650 From Road...............................   1978    348,510      100.0       7,485          1.52               21.48
140 Ridgewood Avenue........................   1981    239,680      100.0       5,212          1.06               21.75
61 South Paramus Avenue.....................   1985    269,191      100.0       5,953          1.21               22.11

ROCHELLE PARK
120 Passaic Street..........................   1972     52,000       99.6         750          0.15               14.48
365 West Passaic Street.....................   1976    212,578       92.4       3,802          0.77               19.36

UPPER SADDLE RIVER
1 Lake Street...............................1973/94    474,801      100.0       7,466          1.51               15.72
10 Mountainview Road........................   1986    192,000      100.0       3,877          0.78               20.19

WOODCLIFF LAKE
400 Chestnut Ridge Road.....................   1982     89,200      100.0       2,130          0.43               23.88
470 Chestnut Ridge Road.....................   1987     52,500      100.0       1,192          0.24               22.70
530 Chestnut Ridge Road.....................   1986     57,204      100.0       1,166          0.24               20.38
50 Tice Boulevard...........................   1984    235,000      100.0       4,744          0.96               20.19
300 Tice Boulevard..........................   1991    230,000      100.0       5,014          1.02               21.80

BURLINGTON COUNTY, NEW JERSEY
MOORESTOWN
224 Strawbridge Drive.......................   1984     74,000       98.1       1,261          0.26               17.37
228 Strawbridge Drive.......................   1984     74,000      100.0       1,434          0.29               19.38

ESSEX COUNTY, NEW JERSEY
MILLBURN
150 J.F. Kennedy Parkway....................   1980    247,476      100.0       5,860          1.19               23.68

ROSELAND
101 Eisenhower Parkway......................   1980    237,000       95.1       4,158          0.84               18.45
103 Eisenhower Parkway......................   1985    151,545      100.0       3,295          0.67               21.74

HUDSON COUNTY, NEW JERSEY
JERSEY CITY
95 Christopher Columbus Drive (7)...........   1989        n/a        n/a       7,000          1.42                n/a
Harborside Financial Center Plaza 1.........   1983    400,000       99.0       3,311          0.67                8.36
Harborside Financial Center Plaza 2.........   1990    761,200      100.0      18,228          3.69               23.95
Harborside Financial Center Plaza 3.........   1990    725,600      100.0      17,375          3.52               23.95
Harborside Financial Center Plaza 4-A (4)...   2000    207,670       88.7       3,306          0.67               31.49(8)
</TABLE>

SEE FOOTNOTES ON PAGE 59.



                                       49
<PAGE>

                                PROPERTY LISTING

                                OFFICE PROPERTIES
                                   (CONTINUED)

<TABLE>
<CAPTION>

                                                                                PERCENTAGE OF
                                                       PERCENTAGE               TOTAL OFFICE,
                                             NET        LEASED     ANNUAL        OFFICE/FLEX,          AVERAGE
                                            RENTABLE     AS OF      BASE        AND INDUSTRIAL/       BASE RENT
PROPERTY                          YEAR       AREA       9/30/00     RENT         WAREHOUSE          PER SQ. FT.
LOCATION                          BUILT    (SQ. FT.)    (%)(1)   ($000'S)(2)    BASE RENT(%)         ($)(3)(5)
-----------------------------------------------------------------------------------------------------------------
<S>                                <C>      <C>         <C>         <C>          <C>                <C>
MERCER COUNTY, NEW JERSEY
PRINCETON
400 Alexander Road (6)...........   1987        n/a        n/a         148          0.03                 n/a
103 Carnegie Center..............   1984     96,000      100.0       2,286          0.46               23.81
100 Overlook Center .............   1988    149,600       68.6       3,659          0.74               35.65
5 Vaughn Drive...................   1987     98,500      100.0       2,297          0.47               23.32

MIDDLESEX COUNTY, NEW JERSEY
EAST BRUNSWICK
377 Summerhill Road..............   1977     40,000      100.0         374          0.08                9.33

PLAINSBORO
500 College Road East............   1984    158,235      100.0       3,402          0.69               21.50

SOUTH BRUNSWICK
3 Independence Way...............   1983    111,300      100.0       2,186          0.44               19.64

WOODBRIDGE
581 Main Street..................   1991    200,000      100.0       4,645          0.94               23.23

MONMOUTH COUNTY, NEW JERSEY
NEPTUNE
3600 Route 66....................   1989    180,000      100.0       2,413          0.49               13.41

WALL TOWNSHIP
1305 Campus Parkway..............   1988     23,350       76.1         486          0.10               27.35
1350 Campus Parkway..............   1990     79,747       99.9       1,358          0.27               17.05

MORRIS COUNTY, NEW JERSEY
FLORHAM PARK
325 Columbia Turnpike............   1987    168,144      100.0       4,119          0.83               24.50

MORRIS PLAINS
201 Littleton Road...............   1979     88,369      100.0       1,831          0.37               20.72
250 Johnson Road.................   1977     75,000      100.0       1,174          0.24               15.65

MORRIS TOWNSHIP
340 Mt. Kemble Avenue............   1985    387,000      100.0       5,529          1.12               14.29
412 Mt. Kemble Avenue (7)........   1986        n/a        n/a       4,755          0.96                 n/a

PARSIPPANY
7 Campus Drive...................   1982    154,395      100.0       2,553          0.52               16.54
8 Campus Drive ..................   1987    215,265      100.0       5,365          1.09               24.92
2 Dryden Way.....................   1990      6,216      100.0          68          0.01               10.94
4 Gatehall Drive (4).............   1988    248,480       92.3       5,819          1.18               25.37
2 Hilton Court...................   1991    181,592       99.7       4,633          0.94               25.59
600 Parsippany Road..............   1978     96,000      100.0       1,446          0.29               15.06
1 Sylvan Way.....................   1989    150,557      100.0       3,519          0.71               23.37
5 Sylvan Way.....................   1989    151,383      100.0       3,448          0.70               22.78
7 Sylvan Way.....................   1987    145,983      100.0       2,920          0.59               20.00

PASSAIC COUNTY, NEW JERSEY
CLIFTON
777 Passaic Avenue...............   1983     75,000       70.1         966          0.21               18.37

TOTOWA
999 Riverview Drive..............   1988     56,066      100.0         948          0.19               16.91

WAYNE
201 Willowbrook Boulevard........   1970    178,329       99.0       2,422          0.49               13.72
</TABLE>

SEE FOOTNOTES ON PAGE 59.



                                       50
<PAGE>

                                PROPERTY LISTING

                                OFFICE PROPERTIES
                                   (CONTINUED)

<TABLE>
<CAPTION>

                                                                                PERCENTAGE OF
                                                       PERCENTAGE               TOTAL OFFICE,
                                             NET        LEASED     ANNUAL        OFFICE/FLEX,          AVERAGE
                                            RENTABLE     AS OF      BASE        AND INDUSTRIAL/       BASE RENT
PROPERTY                          YEAR       AREA       9/30/00     RENT         WAREHOUSE          PER SQ. FT.
LOCATION                          BUILT    (SQ. FT.)    (%)(1)   ($000'S)(2)    BASE RENT(%)         ($)(3)(5)
-----------------------------------------------------------------------------------------------------------------
<S>                                <C>      <C>         <C>         <C>          <C>                <C>
SOMERSET COUNTY, NEW JERSEY
BASKING RIDGE
222 Mt. Airy Road................   1986     49,000      100.0         744          0.15               15.18
233 Mt. Airy Road................   1987     66,000      100.0         762          0.15               11.55

BERNARDS TOWNSHIP
106 Allen Road (4)...............   2000    132,010       72.5         960          0.19               25.31(8)

BRIDGEWATER
721 Route 202/206................   1989    192,741      100.0       4,152          0.84               21.54

UNION COUNTY, NEW JERSEY
CLARK
100 Walnut Avenue................   1985    182,555      100.0       4,617          0.93               25.29

CRANFORD
6 Commerce Drive.................   1973     56,000       90.3         954          0.19               18.87
11 Commerce Drive................   1981     90,000       91.2       1,031          0.21               12.56
12 Commerce Drive................   1967     72,260       96.3         610          0.12                8.77
20 Commerce Drive................   1990    176,600       98.8       3,962          0.80               22.71
65 Jackson Drive.................   1984     82,778      100.0       1,571          0.32               18.98

NEW PROVIDENCE
890 Mountain Road................   1977     80,000      100.0       2,054          0.42               25.68

---------------------------------------------------------------------------------------------------------------
TOTAL NEW JERSEY OFFICE                  11,430,809       98.0     236,775         47.95               21.14
---------------------------------------------------------------------------------------------------------------

DUTCHESS COUNTY, NEW YORK
FISHKILL
300 South Lake Drive.............   1987    118,727       98.3       2,176          0.44               18.64

NASSAU COUNTY, NEW YORK
NORTH HEMPSTEAD
111 East Shore Road..............   1980     55,575      100.0       1,516          0.31               27.28
600 Community Drive..............   1983    206,274      100.0       4,820          0.98               23.37

ROCKLAND COUNTY, NEW YORK
SUFFERN
400 Rella Boulevard..............   1988    180,000      100.0       3,616          0.73               20.09

WESTCHESTER COUNTY, NEW YORK
ELMSFORD
100 Clearbrook Road..............   1975     60,000      100.0         960          0.19               16.00
101 Executive Boulevard..........   1971     50,000       79.5         806          0.16               20.28
555 Taxter Road (4)..............   1986    170,554      100.0       4,029          0.82               23.62
565 Taxter Road (4)..............   1988    170,554       85.4       3,235          0.66               22.21
570 Taxter Road..................   1972     75,000       95.0       1,405          0.28               19.72

HAWTHORNE
30 Saw Mill River Road...........   1982    248,400      100.0       5,216          1.06               21.00
1 Skyline Drive..................   1980     20,400       99.0         261          0.05               12.92
2 Skyline Drive..................   1987     30,000       98.9         510          0.10               17.19
17 Skyline Drive.................   1989     85,000      100.0       1,234          0.25               14.52
7 Skyline Drive..................   1987    109,000      100.0       2,157          0.44               19.79

TARRYTOWN
200 White Plains Road............   1982     89,000       88.1       1,718          0.35               21.91
220 White Plains Road............   1984     89,000       99.4       2,049          0.41               23.16

WHITE PLAINS
1 Barker Avenue..................   1975     68,000       96.3       1,604          0.32               24.49
3 Barker Avenue..................   1983     65,300       93.3       1,265          0.26               20.76
50 Main Street...................   1985    309,000      100.0       7,710          1.56               24.95
11 Martine Avenue................   1987    180,000      100.0       4,520          0.92               25.11
1 Water Street...................   1979     45,700       99.8       1,020          0.21               22.36
</TABLE>


SEE FOOTNOTES ON PAGE 59.



                                       51
<PAGE>


                                PROPERTY LISTING

                                OFFICE PROPERTIES
                                   (CONTINUED)

<TABLE>
<CAPTION>

                                                                                PERCENTAGE OF
                                                       PERCENTAGE               TOTAL OFFICE,
                                             NET        LEASED     ANNUAL        OFFICE/FLEX,          AVERAGE
                                            RENTABLE     AS OF      BASE        AND INDUSTRIAL/       BASE RENT
PROPERTY                          YEAR       AREA       9/30/00     RENT         WAREHOUSE          PER SQ. FT.
LOCATION                          BUILT    (SQ. FT.)    (%)(1)   ($000'S)(2)    BASE RENT(%)         ($)(3)(5)
-----------------------------------------------------------------------------------------------------------------
<S>                                <C>      <C>         <C>         <C>          <C>                <C>
YONKERS
1 Executive Boulevard............   1982    112,000      100.0       2,379          0.48               21.24
3 Executive Plaza................   1987     58,000      100.0       1,403          0.28               24.19

---------------------------------------------------------------------------------------------------------------
TOTAL NEW YORK OFFICE                     2,595,484       97.7      55,609         11.26               21.93
---------------------------------------------------------------------------------------------------------------

CHESTER COUNTY, PENNSYLVANIA
BERWYN
1000 Westlakes Drive.............   1989     60,696       93.0       1,481          0.30               26.24
1055 Westlakes Drive.............   1990    118,487      100.0       2,298          0.47               19.39
1205 Westlakes Drive.............   1988    130,265       99.8       2,880          0.58               22.15
1235 Westlakes Drive.............   1986    134,902       99.7       3,155          0.64               23.46

DELAWARE COUNTY, PENNSYLVANIA
LESTER
100 Stevens Drive................   1986     95,000      100.0       1,161          0.24               12.22
200 Stevens Drive................   1987    208,000      100.0       3,900          0.79               18.75
300 Stevens Drive................   1992     68,000       93.3       1,282          0.26               20.21

MEDIA
1400 Providence Road - Center I..   1986    100,000       81.3       1,780          0.36               21.89
1400 Providence Road - Center II.   1990    160,000       80.3       3,026          0.61               23.55

MONTGOMERY COUNTY, PENNSYLVANIA
LOWER PROVIDENCE
1000 Madison Avenue..............   1990    100,700      100.0       1,890          0.38               18.77

PLYMOUTH MEETING
1150 Plymouth Meeting Mall.......   1970    167,748       89.4       2,746          0.56               18.31
Five Sentry Parkway East.........   1984     91,600      100.0       1,499          0.30               16.36
Five Sentry Parkway West.........   1984     38,400      100.0         676          0.14               17.60

---------------------------------------------------------------------------------------------------------------
TOTAL PENNSYLVANIA OFFICE                 1,473,798       94.7      27,774          5.63               19.89
---------------------------------------------------------------------------------------------------------------

FAIRFIELD COUNTY, CONNECTICUT
GREENWICH
500 West Putnam..................   1973    121,250       98.3       2,865          0.58               24.04

NORWALK
40 Richards Avenue...............   1985    145,487       99.2       2,885          0.58               19.99

SHELTON
1000 Bridgeport Avenue...........   1986    133,000       94.9       2,243          0.45               17.77

---------------------------------------------------------------------------------------------------------------
TOTAL CONNECTICUT OFFICE                    399,737       97.5       7,993          1.61               20.51
---------------------------------------------------------------------------------------------------------------

DISTRICT OF COLUMBIA
WASHINGTON
1201 Connecticut Avenue, NW......   1940    169,549       96.6       4,864          0.98               29.70
1400 L Street, NW................   1987    159,000       98.7       5,871          1.19               37.41
1709 New York Avenue, NW.........   1972    166,000      100.0       7,209          1.46               43.43

---------------------------------------------------------------------------------------------------------------
TOTAL DISTRICT OF COLUMBIA OFFICE           494,549       98.4      17,944          3.63               36.87
---------------------------------------------------------------------------------------------------------------
</TABLE>

SEE FOOTNOTES ON PAGE 59.



                                       52
<PAGE>

                                PROPERTY LISTING

                                OFFICE PROPERTIES
                                   (CONTINUED)

<TABLE>
<CAPTION>

                                                                                PERCENTAGE OF
                                                       PERCENTAGE               TOTAL OFFICE,
                                             NET        LEASED     ANNUAL        OFFICE/FLEX,          AVERAGE
                                            RENTABLE     AS OF      BASE        AND INDUSTRIAL/       BASE RENT
PROPERTY                          YEAR       AREA       9/30/00     RENT         WAREHOUSE          PER SQ. FT.
LOCATION                          BUILT    (SQ. FT.)    (%)(1)   ($000'S)(2)    BASE RENT(%)         ($)(3)(5)
-----------------------------------------------------------------------------------------------------------------
<S>                                <C>      <C>         <C>         <C>          <C>                <C>
PRINCE GEORGE'S COUNTY, MARYLAND
LANHAM
4200 Parliament Place............   1989    122,000       92.9       2,443          0.49               21.55

---------------------------------------------------------------------------------------------------------------
TOTAL MARYLAND OFFICE                       122,000       92.9       2,443          0.49               21.55
---------------------------------------------------------------------------------------------------------------

BEXAR COUNTY, TEXAS
SAN ANTONIO
200 Concord Plaza Drive..........   1986    248,700       94.8       4,339          0.88               18.40
1777 N.E. Loop 410...............   1986    256,137       91.1       3,728          0.75               15.98
84 N.E. Loop 410.................   1971    187,312       89.9       2,530          0.51               15.02
111 Soledad......................   1918    248,153       93.0       2,519          0.51               10.92

COLLIN COUNTY, TEXAS
PLANO
555 Republic Place...............   1986     97,889       80.8       1,464          0.30               18.51

DALLAS COUNTY,TEXAS
DALLAS
3030 LBJ Freeway.................   1984    367,018       95.4       6,438          1.30               18.39
3100 Monticello..................   1984    173,837       93.8       2,723          0.55               16.70
8214 Westchester.................   1983     95,509       81.3       1,292          0.26               16.64

IRVING
2300 Valley View.................   1985    142,634       88.6       2,057          0.42               16.28

RICHARDSON
1122 Alma Road...................   1977     82,576      100.0         607          0.12                7.35

HARRIS COUNTY, TEXAS
HOUSTON
14511 Falling Creek..............   1982     70,999       98.8         891          0.18               12.70
5225 Katy Freeway................   1983    112,213       93.3       1,494          0.30               14.27
5300 Memorial....................   1982    155,099       99.3       2,219          0.45               14.41
1717 St. James Place.............   1975    109,574       91.7       1,349          0.27               13.43
1770 St. James Place.............   1973    103,689       89.3       1,398          0.28               15.10
10497 Town & Country Way.........   1981    148,434       77.6       1,824          0.37               15.84

POTTER COUNTY, TEXAS
AMARILLO
6900 IH - 40 West (7)............   1986        n/a        n/a         320          0.06                 n/a

TARRANT COUNTY, TEXAS
EULESS
150 West Parkway.................   1984     74,429       95.9       1,044          0.21               14.63

TRAVIS COUNTY, TEXAS
AUSTIN
1250 Capital of Texas Hwy.
  South (7)......................   1985        n/a        n/a       5,682          1.15                 n/a

---------------------------------------------------------------------------------------------------------------
TOTAL TEXAS OFFICE                        2,674,202       91.8      43,918          8.87               17.88
---------------------------------------------------------------------------------------------------------------
</TABLE>

SEE FOOTNOTES ON PAGE 59.



                                       53
<PAGE>

                                PROPERTY LISTING

                                OFFICE PROPERTIES
                                   (CONTINUED)

<TABLE>
<CAPTION>

                                                                                PERCENTAGE OF
                                                       PERCENTAGE               TOTAL OFFICE,
                                             NET        LEASED     ANNUAL        OFFICE/FLEX,          AVERAGE
                                            RENTABLE     AS OF      BASE        AND INDUSTRIAL/       BASE RENT
PROPERTY                          YEAR       AREA       9/30/00     RENT         WAREHOUSE          PER SQ. FT.
LOCATION                          BUILT    (SQ. FT.)    (%)(1)   ($000'S)(2)    BASE RENT(%)         ($)(3)(5)
-----------------------------------------------------------------------------------------------------------------
<S>                                <C>      <C>         <C>         <C>          <C>                <C>
MARICOPA COUNTY, ARIZONA
GLENDALE
5551 West Talavi Boulevard.......   1991    181,596      100.0       1,613          0.33                8.88

PHOENIX
19640 North 31st Street..........   1990    124,171      100.0       1,192          0.24                9.60
20002 North 19th Avenue (6)......   1986        n/a        n/a         137          0.04                 n/a

SCOTTSDALE
9060 E. Via Linda Boulevard......   1984    111,200      100.0       2,408          0.49               21.65

---------------------------------------------------------------------------------------------------------------
TOTAL ARIZONA OFFICE                        416,967      100.0       5,350          1.10               12.83
---------------------------------------------------------------------------------------------------------------

ARAPAHOE COUNTY, COLORADO
AURORA
750 South Richfield Street.......   1997    108,240      100.0       2,911          0.59               26.89

DENVER
400 South Colorado Boulevard.....   1983    125,415       97.8       2,134          0.43               17.40

ENGLEWOOD
9359 East Nichols Avenue.........   1997     72,610      100.0         903          0.18               12.44
5350 South Roslyn Street.........   1982     63,754       96.2       1,068          0.22               17.41

BOULDER COUNTY, COLORADO
BROOMFIELD
105 South Technology Court.......   1997     37,574      100.0         547          0.11               14.56
303 South Technology Court-A.....   1997     34,454      100.0         427          0.09               12.39
303 South Technology Court-B.....   1997     40,416      100.0         427          0.09               10.57

LOUISVILLE
1172 Century Drive...............   1996     49,566      100.0         568          0.12               11.46
248 Centennial Parkway...........   1996     39,266      100.0         567          0.11               14.44
285 Century Place................   1997     69,145      100.0       1,115          0.23               16.13

DENVER COUNTY, COLORADO
DENVER
3600 South Yosemite..............   1974    133,743      100.0       1,291          0.26                9.65

DOUGLAS COUNTY, COLORADO
ENGLEWOOD
384 Inverness Drive South........   1985     51,523      100.0         820          0.17               15.92
400 Inverness Drive..............   1997    111,608       99.9       2,759          0.56               24.75
67 Inverness Drive East..........   1996     54,280      100.0         674          0.14               12.42
5975 South Quebec Street.........   1996    102,877       99.8       2,374          0.48               23.12

PARKER
9777 Pyramid Court...............   1995    120,281      100.0       1,323          0.27               11.00

EL PASO COUNTY, COLORADO
COLORADO SPRINGS
8415 Explorer....................   1998     47,368      100.0         602          0.12               12.71
1975 Research Parkway............   1997    115,250      100.0       1,680          0.34               14.58
2375 Telstar Drive...............   1998     47,369      100.0         602          0.12               12.71
</TABLE>

SEE FOOTNOTES ON PAGE 59.



                                       54
<PAGE>

                                PROPERTY LISTING

                                OFFICE PROPERTIES
                                   (CONTINUED)

<TABLE>
<CAPTION>

                                                                                PERCENTAGE OF
                                                       PERCENTAGE               TOTAL OFFICE,
                                             NET        LEASED     ANNUAL        OFFICE/FLEX,          AVERAGE
                                            RENTABLE     AS OF      BASE        AND INDUSTRIAL/       BASE RENT
PROPERTY                          YEAR       AREA       9/30/00     RENT         WAREHOUSE          PER SQ. FT.
LOCATION                          BUILT    (SQ. FT.)    (%)(1)   ($000'S)(2)    BASE RENT(%)         ($)(3)(5)
-----------------------------------------------------------------------------------------------------------------
<S>                                <C>      <C>         <C>         <C>          <C>                <C>
JEFFERSON COUNTY, COLORADO
LAKEWOOD
141 Union Boulevard..............   1985     63,600       98.9       1,087          0.22               17.28

---------------------------------------------------------------------------------------------------------------
TOTAL COLORADO OFFICE                     1,488,339       99.6      23,879          4.85               16.11
---------------------------------------------------------------------------------------------------------------

SAN FRANCISCO COUNTY, CALIFORNIA
SAN FRANCISCO
795 Folsom Street (4)............   1977    183,445      100.0       5,468          1.11               29.81
760 Market Street................   1908    267,446       96.8       8,148          1.65               31.47

---------------------------------------------------------------------------------------------------------------
TOTAL CALIFORNIA OFFICE                     450,891       98.1      13,616          2.76               30.78
---------------------------------------------------------------------------------------------------------------

HILLSBOROUGH COUNTY, FLORIDA
TAMPA
501 Kennedy Boulevard............   1982    297,429       91.4       3,861          0.78               14.20

---------------------------------------------------------------------------------------------------------------
TOTAL FLORIDA OFFICE                        297,429       91.4       3,861          0.78               14.20
---------------------------------------------------------------------------------------------------------------


POLK COUNTY, IOWA
WEST DES MOINES
2600 Westown Parkway.............   1988     72,265      100.0       1,127          0.23               15.60

---------------------------------------------------------------------------------------------------------------
TOTAL IOWA OFFICE                            72,265      100.0       1,127          0.23               15.60
---------------------------------------------------------------------------------------------------------------

DOUGLAS COUNTY, NEBRASKA
OMAHA
210 South 16th Street............   1894    319,535       93.4       3,291          0.67               11.03

---------------------------------------------------------------------------------------------------------------
TOTAL NEBRASKA OFFICE                       319,535       93.4       3,291          0.67               11.03
---------------------------------------------------------------------------------------------------------------


TOTAL OFFICE PROPERTIES                  22,236,005       97.0     443,580         89.83               20.57
===============================================================================================================
</TABLE>

SEE FOOTNOTES ON PAGE 59.



                                       55
<PAGE>

                                PROPERTY LISTING

                             OFFICE/FLEX PROPERTIES

<TABLE>
<CAPTION>

                                                                                PERCENTAGE OF
                                                       PERCENTAGE               TOTAL OFFICE,
                                             NET        LEASED     ANNUAL        OFFICE/FLEX,          AVERAGE
                                            RENTABLE     AS OF      BASE        AND INDUSTRIAL/       BASE RENT
PROPERTY                          YEAR       AREA       9/30/00     RENT         WAREHOUSE          PER SQ. FT.
LOCATION                          BUILT    (SQ. FT.)    (%)(1)   ($000'S)(2)    BASE RENT(%)         ($)(3)(5)
-----------------------------------------------------------------------------------------------------------------
<S>                                <C>      <C>         <C>         <C>          <C>                <C>
BURLINGTON COUNTY, NEW JERSEY
BURLINGTON
3 Terri Lane.....................   1991     64,500       61.4         370          0.07                9.34
5 Terri Lane.....................   1992     74,555       83.9         362          0.07                5.79

MOORESTOWN
2 Commerce Drive (4).............   1986     49,000      100.0         363          0.07                7.42
101 Commerce Drive...............   1988     64,700      100.0         336          0.07                5.19
102 Commerce Drive (4)...........   1987     38,400       87.5         182          0.04                5.43
201 Commerce Drive...............   1986     38,400      100.0         196          0.04                5.10
202 Commerce Drive (4)...........   1988     51,200      100.0         268          0.05                5.24
1 Executive Drive................   1989     20,570      100.0         138          0.03                6.71
2 Executive Drive (4)............   1988     60,800      100.0         475          0.10                5.43
101 Executive Drive..............   1990     29,355       70.5         124          0.03                5.99
102 Executive Drive..............   1990     64,000       80.0         406          0.08                7.93
225 Executive Drive..............   1990     50,600      100.0         336          0.07                6.64
97 Foster Road...................   1982     43,200      100.0         187          0.04                4.33
1507 Lancer Drive................   1995     32,700      100.0         139          0.03                4.25
1510 Lancer Drive................   1998     88,000      100.0         370          0.07                4.20
1256 North Church................   1984     63,495       68.9         262          0.05                8.27
840 North Lenola Road............   1995     38,300      100.0         271          0.05               10.27
844 North Lenola Road............   1995     28,670      100.0         213          0.04                7.43
915 North Lenola Road (4)........   1998     52,488      100.0         283          0.06                5.38
30 Twosome Drive.................   1997     39,675      100.0         224          0.05                5.65
40 Twosome Drive.................   1996     40,265       63.1         172          0.03                6.77
50 Twosome Drive.................   1997     34,075      100.0         268          0.05                7.87

WEST DEPTFORD
1451 Metropolitan Drive..........   1996     21,600      100.0         148          0.03                6.85

MERCER COUNTY, NEW JERSEY
HAMILTON TOWNSHIP
100 Horizon Drive................   1989     13,275         --          --            --                  --
200 Horizon Drive................   1991     45,770      100.0         447          0.09                9.77
300 Horizon Drive................   1989     69,780       73.8         752          0.15               14.60
500 Horizon Drive................   1990     41,205       57.8         276          0.06               11.59

MONMOUTH COUNTY, NEW JERSEY
WALL TOWNSHIP
1325 Campus Parkway..............   1988     35,000      100.0         310          0.06                8.86
1340 Campus Parkway..............   1992     72,502      100.0         802          0.16               11.06
1345 Campus Parkway..............   1995     76,300      100.0         709          0.14                9.29
1433 Highway 34..................   1985     69,020       89.5         490          0.10                7.93
1320 Wyckoff Avenue..............   1986     20,336      100.0          88          0.02                4.33
1324 Wyckoff Avenue..............   1987     21,168      100.0         183          0.04                8.65

PASSAIC COUNTY, NEW JERSEY
TOTOWA
1 Center Court...................   1999     38,961       37.8         141          0.03                9.57
2 Center Court...................   1998     30,600       99.3         351          0.07               11.55
11 Commerce Way..................   1989     47,025      100.0         510          0.10               10.85
20 Commerce Way..................   1992     42,540      100.0         433          0.09               10.18
29 Commerce Way..................   1990     48,930      100.0         493          0.10               10.08
40 Commerce Way..................   1987     50,576      100.0         559          0.11               11.05
45 Commerce Way..................   1992     51,207      100.0         498          0.10                9.73
60 Commerce Way..................   1988     50,333      100.0         396          0.08                7.87
80 Commerce Way..................   1996     22,500      100.0         282          0.06               12.53
</TABLE>

SEE FOOTNOTES ON PAGE 59.



                                       56
<PAGE>

                                PROPERTY LISTING

                             OFFICE/FLEX PROPERTIES
                                   (CONTINUED)

<TABLE>
<CAPTION>

                                                                                PERCENTAGE OF
                                                       PERCENTAGE               TOTAL OFFICE,
                                             NET        LEASED     ANNUAL        OFFICE/FLEX,          AVERAGE
                                            RENTABLE     AS OF      BASE        AND INDUSTRIAL/       BASE RENT
PROPERTY                          YEAR       AREA       9/30/00     RENT         WAREHOUSE          PER SQ. FT.
LOCATION                          BUILT    (SQ. FT.)    (%)(1)   ($000'S)(2)    BASE RENT(%)         ($)(3)(5)
-----------------------------------------------------------------------------------------------------------------
<S>                                <C>      <C>         <C>         <C>          <C>                <C>
100 Commerce Way.................   1996     24,600      100.0         299          0.06               11.79
120 Commerce Way.................   1994      9,024      100.0          95          0.04               21.05
140 Commerce Way.................   1994     26,881       99.5         286          0.04                7.10

---------------------------------------------------------------------------------------------------------------
TOTAL NEW JERSEY OFFICE/FLEX              1,996,081       90.5      14,493          2.92                8.02
---------------------------------------------------------------------------------------------------------------

WESTCHESTER COUNTY, NEW YORK
ELMSFORD
11 Clearbrook Road...............   1974     31,800      100.0         321          0.06               10.09
75 Clearbrook Road...............   1990     32,720      100.0         816          0.17               24.94
150 Clearbrook Road..............   1975     74,900       93.8       1,041          0.21               14.82
175 Clearbrook Road..............   1973     98,900       98.5       1,439          0.29               14.77
200 Clearbrook Road..............   1974     94,000       99.8       1,198          0.24               12.77
250 Clearbrook Road..............   1973    155,000       94.5       1,315          0.27                8.98
50 Executive Boulevard...........   1969     45,200       97.2         384          0.08                8.74
77 Executive Boulevard...........   1977     13,000       55.4         137          0.03               19.02
85 Executive Boulevard...........   1968     31,000       99.4         446          0.09               14.47
300 Executive Boulevard..........   1970     60,000       99.7         589          0.12                9.85
350 Executive Boulevard..........   1970     15,400       98.8         243          0.05               15.97
399 Executive Boulevard..........   1962     80,000      100.0         968          0.20               12.10
400 Executive Boulevard..........   1970     42,200      100.0         610          0.12               14.45
500 Executive Boulevard..........   1970     41,600      100.0         594          0.12               14.28
525 Executive Boulevard..........   1972     61,700      100.0         874          0.18               14.17
1 Westchester Plaza..............   1967     25,000      100.0         298          0.06               11.92
2 Westchester Plaza..............   1968     25,000      100.0         421          0.09               16.84
3 Westchester Plaza..............   1969     93,500       98.5       1,123          0.23               12.19
4 Westchester Plaza..............   1969     44,700       99.8         629          0.13               14.10
5 Westchester Plaza..............   1969     20,000      100.0         298          0.06               14.90
6 Westchester Plaza..............   1968     20,000      100.0         302          0.06               15.10
7 Westchester Plaza..............   1972     46,200      100.0         650          0.13               14.07
8 Westchester Plaza..............   1971     67,200      100.0         872          0.18               12.98

HAWTHORNE
200 Saw Mill River Road..........   1965     51,100      100.0         616          0.12               12.05
4 Skyline Drive..................   1987     80,600      100.0       1,255          0.25               15.57
8 Skyline Drive..................   1985     50,000       98.9         828          0.17               16.74
10 Skyline Drive.................   1985     20,000      100.0         283          0.06               14.15
11 Skyline Drive.................   1989     45,000      100.0         689          0.14               15.31
12 Skyline Drive.................   1999     46,850      100.0         760          0.15               16.22
15 Skyline Drive.................   1989     55,000      100.0         952          0.19               17.31

YONKERS
100 Corporate Boulevard..........   1987     78,000       98.2       1,342          0.27               17.52
200 Corporate Boulevard South....   1990     84,000       99.8       1,387          0.28               16.54
4 Executive Plaza................   1986     80,000       99.9       1,039          0.21               13.00
6 Executive Plaza................   1987     80,000      100.0       1,069          0.22               13.36
1 Odell Plaza....................   1980    106,000      100.0       1,269          0.26               11.97
5 Odell Plaza....................   1983     38,400       99.6         519          0.11               13.57
7 Odell Plaza....................   1984     42,600       99.6         665          0.13               15.67

---------------------------------------------------------------------------------------------------------------
TOTAL NEW YORK OFFICE/FLEX                2,076,570       98.7      28,241          5.73               13.78
---------------------------------------------------------------------------------------------------------------
</TABLE>

SEE FOOTNOTES ON PAGE 59.



                                       57
<PAGE>

                                PROPERTY LISTING

                             OFFICE/FLEX PROPERTIES
                                   (CONTINUED)

<TABLE>
<CAPTION>

                                                                                PERCENTAGE OF
                                                       PERCENTAGE               TOTAL OFFICE,
                                             NET        LEASED     ANNUAL        OFFICE/FLEX,          AVERAGE
                                            RENTABLE     AS OF      BASE        AND INDUSTRIAL/       BASE RENT
PROPERTY                          YEAR       AREA       9/30/00     RENT         WAREHOUSE          PER SQ. FT.
LOCATION                          BUILT    (SQ. FT.)    (%)(1)   ($000'S)(2)    BASE RENT(%)         ($)(3)(5)
-----------------------------------------------------------------------------------------------------------------
<S>                                <C>      <C>         <C>         <C>          <C>                <C>
FAIRFIELD COUNTY, CONNECTICUT
STAMFORD
419 West Avenue..................   1986     88,000       96.8       1,426          0.29               16.74
500 West Avenue..................   1988     25,000      100.0         384          0.08               15.36
550 West Avenue..................   1990     54,000      100.0         779          0.16               14.43
600 West Avenue (4)..............   1999     66,000      100.0         684          0.14               10.36
650 West Avenue..................   1998     40,000      100.0         631          0.13               15.78

---------------------------------------------------------------------------------------------------------------
TOTAL CONNECTICUT OFFICE/FLEX               273,000       99.0       3,904          0.80               14.45
---------------------------------------------------------------------------------------------------------------


TOTAL OFFICE/FLEX PROPERTIES.....         4,345,651       95.0      46,638          9.45               11.30
===============================================================================================================
</TABLE>

SEE FOOTNOTES ON PAGE 59.



                                       58
<PAGE>

                                PROPERTY LISTING

                         INDUSTRIAL/WAREHOUSE PROPERTIES

<TABLE>
<CAPTION>

                                                                                PERCENTAGE OF
                                                       PERCENTAGE               TOTAL OFFICE,
                                             NET        LEASED     ANNUAL        OFFICE/FLEX,          AVERAGE
                                            RENTABLE     AS OF      BASE        AND INDUSTRIAL/       BASE RENT
PROPERTY                          YEAR       AREA       9/30/00     RENT         WAREHOUSE          PER SQ. FT.
LOCATION                          BUILT    (SQ. FT.)    (%)(1)   ($000'S)(2)    BASE RENT(%)         ($)(3)(5)
-----------------------------------------------------------------------------------------------------------------
<S>                                <C>      <C>         <C>         <C>          <C>                <C>
WESTCHESTER COUNTY, NEW YORK
ELMSFORD
1 Warehouse Lane.................   1957      6,600      100.0          57          0.01                8.64
2 Warehouse Lane.................   1957     10,900      100.0         118          0.02               10.83
3 Warehouse Lane.................   1957     77,200      100.0         290          0.06                3.76
4 Warehouse Lane.................   1957    195,500       97.4       1,943          0.39               10.20
5 Warehouse Lane.................   1957     75,100       97.1         753          0.15               10.33
6 Warehouse Lane.................   1982     22,100      100.0         514          0.09               23.26

---------------------------------------------------------------------------------------------------------------
TOTAL INDUSTRIAL/WAREHOUSE PROPERTIES       387,400       98.1       3,675          0.72                9.67
---------------------------------------------------------------------------------------------------------------


TOTAL OFFICE, OFFICE/FLEX,
  AND INDUSTRIAL/WAREHOUSE
  PROPERTIES                             26,969,056       96.7     493,893         100.0               18.95
===============================================================================================================
</TABLE>



(1)  Based on all leases in effect as of September 30, 2000.
(2)  Total base rent for 12 months ended September 30, 2000, determined in
     accordance with GAAP. Substantially all of the leases provide for annual
     base rents plus recoveries and escalation charges based upon the tenant's
     proportionate share of and/or increases in real estate taxes and certain
     operating costs, as defined, and the pass through of charges for electrical
     usage. For those properties acquired or placed in service during the 12
     months ended September 30, 2000, amounts are annualized, as per Note 4.
(3)  Base rent for the 12 months ended September 30, 2000 divided by net
     rentable square feet leased at September 30, 2000. For those properties
     acquired or placed in service during 12 months ended September 30, 2000,
     amounts are annualized, as per Note 4.
(4)  As this property was acquired or placed in service during the 12 months
     ended September 30, 2000, the amounts represented for base rent are
     annualized. These annualized amounts may not be indicative of the
     property's results had the Operating Partnership owned or placed such
     property in service for the entire 12 months ended September 30, 2000.
(5)  Excludes office space leased by the Operating Partnership.
(6)  The property was sold by the Operating Partnership in 1999.
(7)  The property was sold by the Operating Partnership in 2000.
(8)  Calculation based on square feet in service as of September 30, 2000.




                                       59
<PAGE>

FUNDS FROM OPERATIONS

The Operating Partnership considers funds from operations ("FFO"), after
adjustment for straight-lining of rents and non-recurring charges, one measure
of REIT performance. Funds from operations is defined as net income (loss)
before distributions to preferred unitholders, computed in accordance with GAAP,
excluding gains (or losses) from debt restructuring, other extraordinary items,
and sales of depreciable rental property, plus real estate-related depreciation
and amortization. Funds from operations should not be considered as an
alternative to net income as an indication of the Operating Partnership's
performance or to cash flows as a measure of liquidity. Funds from operations
presented herein is not necessarily comparable to funds from operations
presented by other real estate companies due to the fact that not all real
estate companies use the same definition. However, the Operating Partnership's
funds from operations is comparable to the funds from operations of real estate
companies that use the current definition of the National Association of Real
Estate Investment Trusts ("NAREIT"), after the adjustment for straight-lining of
rents and non-recurring charges.

Funds from operations for the three and nine month periods ended September 30,
2000 and 1999 as calculated in accordance with NAREIT's definition as published
in October 1999, after adjustment for straight-lining of rents and non-recurring
charges, are summarized in the following table (IN THOUSANDS):

<TABLE>
<CAPTION>

                                                                 Three Months                  Nine Months
                                                              Ended September 30,          Ended September 30,
                                                                2000        1999            2000          1999
-----------------------------------------------------------------------------------------------------------------
<S>                                                          <C>          <C>           <C>             <C>
     Income before gain on sales of rental property
         and minority interest                               $ 16,637     $ 40,941      $  102,223      $107,075
     Add: Real estate-related depreciation and
           amortization (1)                                    23,920       23,419          70,072        69,139
          Gain on sale of land                                     --           --           2,248            --
          Non-recurring charges                                27,911           --          37,139        16,458
     Deduct: Rental income adjustment for
               straight-lining of rents (2)                    (3,484)      (3,076)         (9,074)      (10,454)
              Minority interest in consolidated
               partially-owned properties                          --           --          (5,072)           --
-----------------------------------------------------------------------------------------------------------------
     Funds from operations, after adjustment
         for straight-lining of rents and
         non-recurring charges                               $ 64,984     $ 61,284      $  197,536      $182,218
     Deduct: Distributions to preferred unitholders            (3,928)      (3,869)        (11,562)      (11,607)
-----------------------------------------------------------------------------------------------------------------
     Funds from operations, after adjustment for
         straight-lining of rents and non-recurring
         charges, after distributions to
         preferred unitholders                               $ 61,056     $ 57,415      $  185,974     $ 170,611
=================================================================================================================
     Cash flows provided by operating activities                                        $  128,233     $ 162,372
     Cash flows provided by (used in)
         investing activities                                                           $   55,157     $(170,974)
     Cash flows (used in) provided by financing activities                              $ (181,471)    $   3,861
-----------------------------------------------------------------------------------------------------------------
     Basic weighted average units outstanding (3)              66,729       66,893          66,595        67,025
-----------------------------------------------------------------------------------------------------------------
     Diluted weighted average units outstanding (3)            73,353       73,731          73,276        73,936
-----------------------------------------------------------------------------------------------------------------
</TABLE>

(1)  Includes the Operating Partnership's share from unconsolidated joint
     ventures of $784 and $611 for the three months ended September 30, 2000 and
     1999, respectively, and $2,204 and $2,221 for the nine months ended
     September 30, 2000 and 1999, respectively.
(2)  Includes the Operating Partnership's share from unconsolidated joint
     ventures of ($36) and $155 for the three months ended September 30, 2000
     and 1999, respectively, and $18 and $111 for the nine months ended
     September 30, 2000 and 1999, respectively.
(3)  See calculations for the amounts presented in the following reconciliation.



                                       60
<PAGE>


The following schedule reconciles the Operating Partnership's basic weighted
average units to the diluted weighted average units presented above:

<TABLE>
<CAPTION>

                                                                 Three Months                  Nine Months
                                                              Ended September 30,          Ended September 30,
                                                              2000          1999            2000          1999
-----------------------------------------------------------------------------------------------------------------
<S>                                                         <C>             <C>            <C>            <C>
Basic weighted average units:                               66,729          66,893         66,595         67,075
Add: Weighted average preferred units                        6,439           6,618          6,504          6,642
         (after conversion to common units)
Stock options                                                  185             220            177            269
-----------------------------------------------------------------------------------------------------------------
Diluted weighted average units:                             73,353          73,731         73,276         73,936
=================================================================================================================
</TABLE>


INFLATION

The Operating Partnership's leases with the majority of its tenants provide for
recoveries and escalation charges based upon the tenant's proportionate share
of, and/or increases in, real estate taxes and certain operating costs, which
reduce the Operating Partnership's exposure to increases in operating costs
resulting from inflation.





                                       61
<PAGE>

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Approximately $1.2 billion of the Operating Partnership's long-term debt bears
interest at fixed rates, and therefore the fair value of these instruments is
affected by changes in the market interest rates. The following table presents
principal cash flows (in thousands) based upon maturity dates of the debt
obligations and the related weighted-average interest rates by expected maturity
dates for the fixed rate debt. The interest rate on the variable rate debt as of
September 30, 2000 ranged from LIBOR plus 65 basis points to LIBOR plus 80 basis
points.

<TABLE>
<CAPTION>

SEPTEMBER 30, 2000

LONG-TERM
DEBT, INCLUDING      10/1/00-                                                                               FAIR
CURRENT PORTION      12/31/00     2001       2002       2003       2004      THEREAFTER        TOTAL        VALUE
----------------     --------     ----       ----       ----       ----      ----------        -----        -----

<S>                   <C>       <C>        <C>      <C>        <C>            <C>          <C>           <C>
Fixed Rate.......     $5,421    $7,468     $3,458   $195,612   $312,195       $713,512     $1,237,666    $1,193,295
Average Interest
    Rate.........      7.02%     7.44%      8.20%      7.30%      7.34%          7.34%          7.33%

Variable Rate....                                   $264,483                  $ 32,178     $  296,661    $  296,661
</TABLE>



                                       62
<PAGE>

                             MACK-CALI REALTY, L.P.

                           PART II - OTHER INFORMATION


Item 1.  LEGAL PROCEEDINGS

         Reference is made to "Other" in Note 15 (Commitments and Contingencies)
         to the Consolidated Financial Statements, which is specifically
         incorporated by reference herein.

Item 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

         Not Applicable.

Item 3.  DEFAULTS UPON SENIOR SECURITIES

         Not Applicable.

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

         Not Applicable.

Item 5.  OTHER INFORMATION

         Not Applicable.



                                       63
<PAGE>

                             MACK-CALI REALTY, L.P.

                     PART II - OTHER INFORMATION (CONTINUED)

                                ITEM 6 - EXHIBITS


(a)   Exhibits

      The following exhibits are filed herewith or are incorporated by reference
      to exhibits previously filed:

<TABLE>
<CAPTION>

EXHIBIT
NUMBER      EXHIBIT TITLE
------      -------------

<S>         <C>
3.1         Restated Charter of Mack-Cali Realty Corporation dated June 2, 1999,
            together with Articles Supplementary thereto (filed as Exhibit 3.1
            to the General Partner's Form 8-K dated June 10, 1999 and as Exhibit
            4.2 to the Operating Partnership's Form 8-K dated July 6, 1999 and
            each incorporated herein by reference).

3.2         Amended and Restated Bylaws of Mack-Cali Realty Corporation dated
            June 10, 1999 (filed as Exhibit 3.2 to the General Partner's Form
            8-K dated June 10, 1999 and incorporated herein by reference).

3.3         Second Amended and Restated Agreement of Limited Partnership dated
            December 11, 1997, for Mack-Cali Realty, L.P. (filed as Exhibit
            10.110 to the General Partner's Form 8-K dated December 11, 1997 and
            incorporated herein by reference).

3.4         Amendment No. 1 to the Second Amended and Restated Agreement of
            Limited Partnership of Mack-Cali Realty, L.P. (filed as Exhibit 3.1
            to the General Partner's and the Operating Partnership's
            Registration Statement on Form S-3, Registration No. 333-57103, and
            incorporated herein by reference).

3.5         Second Amendment to the Second Amended and Restated Agreement of
            Limited Partnership of Mack-Cali Realty, L.P. (filed as Exhibit 10.2
            to the Operating Partnership's Form 8-K dated July 6, 1999 and
            incorporated herein by reference).

4.1         Amended and Restated Shareholder Rights Agreement, dated as of March
            7, 2000, between Mack-Cali Realty Corporation and Equiserve Trust
            Company, N.A., as Rights Agent (filed as Exhibit 4.1 to the
            Operating Partnership's Form 8-K dated March 7, 2000 and
            incorporated herein by reference).

4.2         Amendment No. 1 to the Amended and Restated Shareholder Rights
            Agreement, dated as of June 27, 2000, by and among Mack-Cali Realty
            Corporation and Equiserve Trust Company, N.A. (filed as Exhibit 4.1
            to the Operating Partnership's Form 8-K dated June 27, 2000).

4.3         Indenture dated as of March 16, 1999, by and among Mack-Cali Realty,
            L.P., as issuer, Mack-Cali Realty Corporation, as guarantor, and
            Wilmington Trust Company, as trustee (filed as Exhibit 4.1 to the
            Operating Partnership's Form 8-K dated March 16, 1999 and
            incorporated herein by reference).

4.4         Supplemental Indenture No. 1 dated as of March 16, 1999, by and
            among Mack-Cali Realty, L.P., as issuer, and Wilmington Trust
            Company, as trustee (filed as Exhibit 4.2 to the Operating
            Partnership's Form 8-K dated March 16, 1999 and incorporated herein
            by reference).
</TABLE>



                                       64
<PAGE>

<TABLE>
<CAPTION>

EXHIBIT
NUMBER      EXHIBIT TITLE
------      -------------
<S>         <C>
4.5         Supplemental Indenture No. 2 dated as of August 2, 1999, by and
            among Mack-Cali Realty, L.P., as issuer, and Wilmington Trust
            Company, as trustee (filed as Exhibit 4.4 to the Operating
            Partnership's Form 10-Q dated September 30, 1999 and incorporated
            herein by reference).

10.1        Amended and Restated Employment Agreement dated as of July 1, 1999
            between Mitchell E. Hersh and Mack-Cali Realty Corporation (filed as
            Exhibit 10.2 to the Operating Partnership's Form 10-Q dated
            September 30, 1999 and incorporated herein by reference).

10.2        Second Amended and Restated Employment Agreement dated as of July 1,
            1999 between Timothy M. Jones and Mack-Cali Realty Corporation
            (filed as Exhibit 10.3 to the Operating Partnership's Form 10-Q
            dated September 30, 1999 and incorporated herein by reference).

10.3        Amended and Restated Employment Agreement dated as of July 1, 1999
            between John R. Cali and Mack-Cali Realty Corporation (filed as
            Exhibit 10.4 to the Operating Partnership's Form 10-Q dated
            September 30, 1999 and incorporated herein by reference).

10.4        Amended and Restated Employment Agreement dated as of July 1, 1999
            between Brant Cali and Mack-Cali Realty Corporation (filed as
            Exhibit 10.5 to the Operating Partnership's Form 10-Q dated
            September 30, 1999 and incorporated herein by reference).

10.5        Second Amended and Restated Employment Agreement dated as of July 1,
            1999 between Barry Lefkowitz and Mack-Cali Realty Corporation (filed
            as Exhibit 10.6 to the Operating Partnership's Form 10-Q dated
            September 30, 1999 and incorporated herein by reference).

10.6        Second Amended and Restated Employment Agreement dated as of July 1,
            1999 between Roger W. Thomas and Mack-Cali Realty Corporation (filed
            as Exhibit 10.7 to the Operating Partnership's Form 10-Q dated
            September 30, 1999 and incorporated herein by reference).

10.7        Restricted Share Award Agreement dated as of July 1, 1999 between
            Mitchell E. Hersh and Mack-Cali Realty Corporation (filed as Exhibit
            10.8 to the Operating Partnership's Form 10-Q dated September 30,
            1999 and incorporated herein by reference).

10.8        Restricted Share Award Agreement dated as of July 1, 1999 between
            Timothy M. Jones and Mack-Cali Realty Corporation (filed as Exhibit
            10.9 to the Operating Partnership's Form 10-Q dated September 30,
            1999 and incorporated herein by reference).

10.9        Restricted Share Award Agreement dated as of July 1, 1999 between
            John R. Cali and Mack-Cali Realty Corporation (filed as Exhibit
            10.10 to the Operating Partnership's Form 10-Q dated September 30,
            1999 and incorporated herein by reference).

10.10       Restricted Share Award Agreement dated as of July 1, 1999 between
            Brant Cali and Mack-Cali Realty Corporation (filed as Exhibit 10.11
            to the Operating Partnership's Form 10-Q dated September 30, 1999
            and incorporated herein by reference).

10.11       Restricted Share Award Agreement dated as of July 1, 1999 between
            Barry Lefkowitz and Mack-Cali Realty Corporation (filed as Exhibit
            10.12 to the Operating Partnership's Form 10-Q dated September 30,
            1999 and incorporated herein by reference).

10.12       Restricted Share Award Agreement dated as of July 1, 1999 between
            Roger W. Thomas and Mack-Cali Realty Corporation (filed as Exhibit
            10.13 to the Operating Partnership's Form 10-Q dated September 30,
            1999 and incorporated herein by reference).
</TABLE>



                                       65
<PAGE>

<TABLE>
<CAPTION>

EXHIBIT
NUMBER      EXHIBIT TITLE
------      -------------
<S>         <C>
10.13       Credit Agreement, dated as of December 10, 1997, by and among Cali
            Realty, L.P. and the other signatories thereto (filed as Exhibit
            10.122 to the General Partner's Form 8-K dated December 11, 1997 and
            incorporated herein by reference).

10.14       Amendment No. 1 to Revolving Credit Agreement dated July 20, 1998,
            by and among Mack-Cali Realty, L.P. and The Chase Manhattan Bank,
            Fleet National Bank and Other Lenders Which May Become Parties
            Thereto (filed as Exhibit 10.5 to the Operating Partnership's Form
            10-K dated December 31, 1998 and incorporated herein by reference).

10.15       Amendment No. 2 to Revolving Credit Agreement dated December 30,
            1998, by and among Mack-Cali Realty, L.P. and The Chase Manhattan
            Bank, Fleet National Bank and Other Lenders Which May Become Parties
            Thereto (filed as Exhibit 10.6 to the Operating Partnership's Form
            10-K dated December 31, 1998 and incorporated herein by reference).

10.16       Contribution and Exchange Agreement among The MK Contributors, The
            MK Entities, The Patriot Contributors, The Patriot Entities, Patriot
            American Management and Leasing Corp., Cali Realty, L.P. and Cali
            Realty Corporation, dated September 18, 1997 (filed as Exhibit 10.98
            to the General Partner's Form 8-K dated September 19, 1997 and
            incorporated herein by reference).

10.17       First Amendment to Contribution and Exchange Agreement, dated as of
            December 11, 1997, by and among Mack-Cali Realty Corporation and the
            Mack Group (filed as Exhibit 10.99 to the General Partner's Form 8-K
            dated December 11, 1997 and incorporated herein by reference).

10.18       Termination and Release Agreement, dated September 21, 2000, by and
            among Mack-Cali Realty Corporation, Mack-Cali Realty, L.P., Prentiss
            Properties Trust and Prentiss Properties Acquisition Partners, L.P.
            (filed as Exhibit 10.1 to the Operating Partnership's Form 8-K dated
            September 21, 2000 and incorporated herein by reference).

10.19       Escrow Agreement, dated September 21, 2000, by and among
            Mack-Cali Realty Corporation, Mack-Cali Realty, L.P., Prentiss
            Properties Trust, Prentiss Properties Acquisition Partners, L.P.
            and Chicago Title Insurance Company, as escrow agent (filed as
            Exhibit 10.2 to the Operating Partnership's Form 8-K dated
            September 21, 2000 and incorporated herein by reference).

10.20       Purchase and Sale Contract, dated September 21, 2000, by and between
            Mack-Cali Texas Property L.P. and Prentiss Properties Acquisition
            Partners, L.P. (filed as Exhibit 10.3 to the Operating Partnership's
            Form 8-K dated September 21, 2000 and
            incorporated herein by reference).

*27         Financial Data Schedule
</TABLE>

(b)   Reports on Form 8-K

      On July 10, 2000, the Operating Partnership filed with the SEC a
Current Report on Form 8-K dated June 27, 2000, announcing under Item 5 that
the Corporation, Operating Partnership, Prentiss Properties Trust, a Maryland
real estate investment trust and Prentiss Properties Acquisition Partners,
L.P. ("Prentiss") had entered into a definitive Agreement and Plan of Merger
(the "Merger Agreement").

      On July 17, 2000, the Operating Partnership filed with the SEC a Current
Report on Form 8-K dated June 27, 2000, filing under Item 5 the Merger Agreement
and related exhibits.

      On September 22, 2000, the Operating Partnership filed with the SEC a
Current Report on Form 8-K dated September 21, 2000, reporting under Item 5
that (1) the Operating Partnership and Prentiss terminated the Merger
Agreement and (2) the Operating Partnership and Prentiss consummated a
purchase and sale transaction whereby the Operating Partnership sold to
Prentiss a property located in Austin, Texas.

----------
*filed herewith



                                       66
<PAGE>

                             MACK-CALI REALTY, L.P.

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                          MACK-CALI REALTY, L.P.
                                          --------------------------------------
                                          (Registrant)
                                          By:Mack-Cali Realty Corporation,
                                             as its General Partner

Date:  November 13, 2000                  /s/ Mitchell E. Hersh
                                          --------------------------------------
                                          Mitchell E. Hersh
                                          Chief Executive Officer


Date:  November 13, 2000                  /s/ Barry Lefkowitz
                                          --------------------------------------
                                          Barry Lefkowitz
                                          Executive Vice President &
                                           Chief Financial Officer




                                       67