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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
 
                                   FORM 10-K
 
[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934
 
For fiscal year ended DECEMBER 31, 1998
 
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 0-22741
 
                            CARRAMERICA REALTY, L.P.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)
 
<TABLE>
<S>                                                  <C>
                     DELAWARE                                          52-1976308
          -------------------------------                 ------------------------------------
          (State or other Jurisdiction or                 (I.R.S. Employer Identification No.)
          Incorporation or Organization)
 
                1850 K STREET, N.W.                                      20006
                 WASHINGTON, D.C.                                      ----------
     ----------------------------------------                          (Zip Code)
     (Address of principal executive offices)
</TABLE>
 
Registrant's telephone number, including area code: (202) 729-7500
 
Securities registered pursuant to Section 12(b) of the Act: None
 
Securities registered pursuant to Section 12(g) of the Act: Units of Partnership
Interest
 
     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
 
     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
 
     As of March 15, 1999, assuming that each unit of partnership interest has
the same value as a share of common stock of CarrAmerica Realty Corporation
(into which such units may be redeemed) the aggregate market value of the
1,777,587 units of partnership interest held by non-affiliates of the registrant
was approximately $39.0 million, based upon the closing price of a share of
common stock of CarrAmerica Realty Corporation of $21.9375 on the New York Stock
Exchange composite tape on such date.
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<PAGE>
                                     PART I
 
ITEM 1. BUSINESS
 
  General
 
     CarrAmerica Realty, L.P., a Delaware limited partnership (the
'Partnership'), was organized in March 1996 and its activities include the
acquisition, development, ownership and operation of office properties primarily
in select growth markets across the United States. The Partnership's portfolio,
as of March 15, 1999, consisted of (i) 59 operating properties containing
approximately 5.4 million rentable square feet of office space located in
Austin, Denver, Dallas, Salt Lake City, Chicago, Phoenix, San Diego, Seattle,
San Francisco Bay area and Orange County/Los Angeles (the 'Properties'), (ii)
twelve properties under construction that will contain approximately 1.1 million
square feet of office space, and (iii) land that is expected to support the
future development of up to 1.1 million square feet of office space. The
Properties owned as of December 31, 1998 were 96.8% leased as of that date. Each
of the Properties is wholly owned by the Partnership.
 
     The Partnership is managed indirectly by CarrAmerica Realty Corporation, a
Maryland corporation (together with its subsidiaries, including the Partnership,
'CarrAmerica'). CarrAmerica indirectly serves as the sole general partner of the
Partnership and indirectly owned approximately 88% of the units of partnership
interest ('Units') in the Partnership as of March 15, 1999. CarrAmerica is a
real estate investment trust (a 'REIT') for federal income tax purposes and its
shares of common stock, $.01 par value per share ('Common Stock'), are listed on
the New York Stock Exchange under the symbol 'CRE.'
 
     CarrAmerica is a fully integrated, self-administered and self-managed REIT
that focuses primarily on the acquisition, development, ownership and operation
of office properties in select growth markets across the United States. As of
March 15, 1999, CarrAmerica owned a greater than 50% interest in a portfolio of
286 operating office properties and 45 properties under construction. These 286
operating properties contain an aggregate of approximately 22.0 million square
feet of net rentable area and the 45 properties under construction will contain
approximately 3.8 million square feet. The operating properties as of December
31, 1998 were 96.7% leased as of that date, with approximately 2,400 tenants.
 
     CarrAmerica and its predecessor, The Oliver Carr Company ('OCCO'), have
developed, owned and operated office buildings in the Washington, D.C.
metropolitan area for more than 36 years. In November 1995, CarrAmerica
announced a strategic alliance with a wholly-owned subsidiary of Security
Capital U.S. Realty (together with Security Capital U.S. Realty, 'SC-USREALTY'),
a European real estate operating Company which owns strategic positions in
selected real estate companies in the United States. As of March 15, 1999,
SC-USREALTY owned approximately 39.9% of the outstanding common stock of
CarrAmerica (36.2% on a fully diluted basis).
 
     CarrAmerica organized and administers the Partnership as a means of
acquiring, developing, owning and operating certain properties within its
portfolio. All of the Partnership's properties, as well as its financial
condition and results of operations, are reported as part of the consolidated
properties, financial condition and results of operations of CarrAmerica. The
Partnership is required to report separately by means of this Annual Report on
Form 10-K and other periodic reports filed with the Securities and Exchange
Commission because it is the guarantor of certain publicly held debt of
CarrAmerica. As of December 31, 1998, approximately 20% of the total assets of
CarrAmerica were owned by the Partnership or its subsidiaries.
 
     The Partnership is capitalized through the issuance of Units. CarrAmerica,
through its wholly-owned subsidiary, CarrAmerica Realty GP Holdings, Inc., a
Delaware corporation ('GP Holdings'), serves as the sole general partner of the
Partnership and owned a 1.0% general partner interest (in the form of Units) in
the Partnership as of March 15, 1999. In addition, CarrAmerica, through its
wholly-owned subsidiary, CarrAmerica Realty LP Holdings, Inc., a Delaware
corporation ('LP Holdings'), owned an approximate 87% limited partnership
interest (in the form of Units) in the Partnership as of March 15, 1999. The
remaining Units are owned by persons who received such Units in connection with
the contribution to the Partnership of interests in certain Properties. The
Partnership has approximately 115 employees, including approximately 85 on-site
employees.
 
                                       1
<PAGE>
BUSINESS STRATEGY
 
     The Partnership is an integral part of CarrAmerica, and its operations and
strategic direction are defined by CarrAmerica. CarrAmerica's primary business
objectives are to achieve long-term sustainable per share cash flow growth and
to maximize stockholder value through a strategy of (i) acquiring, developing,
owning and operating office properties primarily in markets throughout the
United States that exhibit strong, long-term growth characteristics and (ii)
maintaining and enhancing a national operating system that provides corporate
users of office space with a mix of products and services to meet their
workplace needs at both the national and local level.
 
     The Partnership's major segments of operations include real estate property
operations and development operations. Real estate property operations include
the ownership of commercial real estate. Such operations comprise approximately
97% of the Partnership's revenues and approximately 86% of the Partnership's
assets. Development operations include the development of office space and the
buildout of tenant space. The Partnership's investment in development operations
represents approximately 12% of the Partnership's assets.
 
REAL ESTATE PROPERTY OPERATIONS
 
     Core Markets.  CarrAmerica has focused its acquisition and development
activity in markets of the United States, which generally possess strong
long-term growth characteristics. Within these markets, CarrAmerica is targeting
specific submarkets in which (i) operating costs for businesses are relatively
low, (ii) long-term population and job growth generally are expected to exceed
the national average, (iii) large, well-educated employment pools exist, and
(iv) barriers to entry exist for new supplies of office space. CarrAmerica has
established a local presence in each of its existing target markets through its
investment activity and through relationships established by its experienced
market officers. CarrAmerica's target markets include the following: Atlanta,
Austin, Chicago, Dallas, Denver, Boca Raton, Florida, Orange County/Los Angeles,
Phoenix, Portland, Oregon, Sacramento, Salt Lake City, San Diego, San Francisco
Bay area, Seattle and metropolitan Washington, D.C.
 
     For each identified core market, CarrAmerica has established a set of
general guidelines and physical characteristics to evaluate investment
opportunities. All investment decisions are driven by real estate research,
focusing on variables such as composition of economic base rate, and composition
of job growth and office space supply and demand fundamentals.
 
     As of December 31, 1998, the distribution of the Partnership's real estate
property operations (on a net rentable square foot basis) was as follows: 45% in
its Central region, primarily in Austin, Dallas and Chicago; 40% in its Mountain
region, primarily in Denver, Salt Lake City and Phoenix; and 15% in its Pacific
region, primarily in Seattle, and the California markets of San Mateo, Orange
County, Los Angeles and San Diego.
 
     Operating Property Acquisitions.  In November 1995, CarrAmerica implemented
a major initiative to acquire operating office properties in order to establish
the operating platform for its national business strategy. Between January 1,
1996 and October 31, 1998, CarrAmerica acquired 302 operating properties
containing approximately 20.3 million square feet of net rentable area,
resulting in an approximate 550% increase in the total square footage of
operating properties in which CarrAmerica has a majority interest. These
properties were acquired for an aggregate purchase price of approximately $2.5
billion. Since October 1998, CarrAmerica has not been focused on acquisitions as
a catalyst for growth.
 
     National Operating System.  As part of its business strategy, CarrAmerica
has developed and will continue to enhance a national operating system to
provide nationally coordinated customer service, marketing and development.
CarrAmerica's national operating system consists of three components: (i) a
Market Officer Group, currently consisting of 11 market officers focused on
developing and maintaining strong local relationships with CarrAmerica's
customers and the brokerage community and identifying investment opportunities
for CarrAmerica; (ii) a National Services Group, which is dedicated to marketing
CarrAmerica's office space to a targeted list of companies; and (iii) a National
Development Group, which is responsible for developing office properties,
build-to-suit facilities and business parks. CarrAmerica's national operating
system is designed to provide corporate users of office space with a mix of
products and services to meet their workplace needs at both the national and
local levels. CarrAmerica believes that through its existing portfolio of
operating properties,
 
                                       2
<PAGE>
property development opportunities and land acquired and currently held for
future development, CarrAmerica can generate incremental demand through the
relocation and expansion needs of many of its customers, both within a single
core market and in multiple core markets.
 
           Market Officer Group.  The Market Officer Group currently consists of
11 market officers who cover the 15 core markets in which CarrAmerica currently
owns properties. These market officers are responsible for maximizing the
performance of CarrAmerica's properties in their markets and ensuring that the
needs of CarrAmerica's customers are consistently being met. Because they meet
with CarrAmerica's customers on a regular basis, market officers are cognizant
of and responsive to customers' relocation or expansion needs. The market
officers have extensive knowledge of local conditions in their respective
markets and, therefore, are invaluable in identifying attractive investment
opportunities in their markets. In addition, through their contact with
customers, market officers are well positioned to help the National Services
Group identify customers with new build-to-suit and multi-market requirements.
 
          National Services Group.  CarrAmerica established the National
Services Group in 1997. This group is responsible for marketing CarrAmerica's
properties, build-to-suit capabilities and the national scope of CarrAmerica's
operations to a targeted list of major corporate users. The National Services
Group acts as a primary point of contact for national customers, coordinating
all of the office space CarrAmerica offers and giving corporate customers the
opportunity to address their national space requirements efficiently and
economically.
 
          National Development Group.  The National Development Group is
responsible for developing office properties, build-to-suit facilities and
business parks. CarrAmerica's development team currently has over 70
professionals consisting of architects, engineers and construction professionals
across the United States who have an average of over 15 years of experience
developing office properties. This team of development professionals oversees
every aspect of CarrAmerica's land planning, building design, construction and
development of office properties, ensuring that all projects meet the same high
standards and uniform specifications in building design and systems. CarrAmerica
believes that the National Development Group's expertise has given CarrAmerica a
competitive edge in marketing its facilities and services to customers.
 
     Asset Optimization.  As a component of its business strategy, CarrAmerica
may dispose of assets that become inconsistent with its long-term strategic or
return objectives or where market conditions for disposition are favorable.
CarrAmerica then redeploys the proceeds of dispositions into other office
properties (utilizing tax-deferred exchanges where possible). Consistent with
this strategy, CarrAmerica disposed of 13 properties during 1998, containing
approximately 1.2 million square feet for approximately $180 million in value.
CarrAmerica recognized a gain of $38.2 million in conjunction with these
transactions. In addition, from January 1, 1999 through March 15, 1999,
CarrAmerica disposed of an additional 11 properties containing 795,000 square
feet for approximately $130 million in value, resulting in a gain of $11
million. CarrAmerica may consider disposing of additional properties or
interests in properties, some of which may be significant. CarrAmerica, however,
has agreed with SC-USREALTY to use its reasonable efforts to dispose of
properties only through tax-deferred exchanges (and CarrAmerica also is subject
to other similar restrictions with respect to certain properties acquired by the
Partnership and Carr Realty, L.P.), which may limit its flexibility in effecting
dispositions. In addition, tax laws applicable to REITs restrict CarrAmerica's
ability to dispose of certain properties.
 
DEVELOPMENT OPERATIONS
 
     Development of office properties is an important component of CarrAmerica's
growth strategy as attractive acquisition opportunities diminish due to the
influx of capital into the office property market. CarrAmerica believes that
long-term investment returns resulting from properties it develops generally
will exceed those from properties it acquires, without the assumption of
significantly increased investment risks. CarrAmerica minimizes its development
risk by employing extensively trained and experienced development personnel, by
avoiding the assumption of entitlement risk in conjunction with land
acquisitions and by entering into guaranteed maximum price (GMP) construction
contracts with seasoned and credible contractors. Most importantly, CarrAmerica
carefully analyzes the supply and demand characteristics of a core market before
commencing inventory development in the market. In general, CarrAmerica will
only undertake inventory development (which excludes properties under
construction that have been substantially pre-leased) in markets with strong
real estate
 
                                       3
<PAGE>
fundamentals, and then CarrAmerica generally will construct office buildings
attractive to a wide range of office users. CarrAmerica's research-driven
development program enables it to tailor its development activities in each core
market, from inventory development, to build-to-suit projects, to holding land
for future development. From January 1, 1997 to March 15, 1999, CarrAmerica
placed in service approximately 3.1 million square feet of office properties.
The total cost of these development properties was $436.5 million and
CarrAmerica expects that the first year stabilized unleveraged return of these
properties will be 11.6%. In addition, as of March 15, 1999, CarrAmerica had 45
properties under construction that will contain approximately 3.8 million square
feet of which 473,000 square feet had already been placed in service.
 
     CarrAmerica believes that having a significant land inventory to support
future development provides it with a competitive advantage in responding to
customers' needs for office space in markets with low vacancy rates, barriers to
entry for new supplies of office space and increasing rental rates. In addition
to its portfolio of operating properties and projects currently under
development, CarrAmerica owned or controlled, as of March 15, 1999, land in 11
of its core markets that is expected to support future development of up to 5.6
million square feet.
 
RECENT DEVELOPMENTS
 
  Acquisitions and Development
 
     From January 1, 1998 to March 15, 1999, the Partnership invested
approximately $113.3 million ($73.7 million in cash and the assumption of $20.5
million of debt) in three operating properties containing approximately .4
million square feet and land which was expected to support the future
development of approximately 1.6 million square feet. During this period, the
Partnership had developed and placed into service six properties containing an
aggregate of approximately 649,000 square feet and placed under construction
nine properties which will contain an aggregate of approximately 888,000 square
feet. The table below provides certain information by market regarding the
operating properties acquired between January 1, 1998 and March 15, 1999:
 
<TABLE>
<CAPTION>
                                                                       PURCHASE
                                                                         PRICE        NUMBER OF      RENTABLE
REGION/MARKET                                                        (IN MILLIONS)    PROPERTIES    SQUARE FEET
------------------------------------------------------------------   -------------    ----------    -----------
<S>                                                                  <C>              <C>           <C>
PACIFIC REGION
  San Diego.......................................................      $  16.9            1           105,000
CENTRAL REGION
  Dallas..........................................................         17.4            1           160,000
MOUNTAIN REGION
  Phoenix.........................................................         20.0            1           133,000
                                                                                          --
                                                                     -------------                  -----------
     Total........................................................      $  54.3            3           398,000
                                                                                          --
                                                                                          --
                                                                     -------------                  -----------
                                                                     -------------                  -----------
</TABLE>
 
     The following table provides certain information regarding the development
activity on the Partnership's land, all of which was acquired between January 1,
1998 and March 15, 1999:
 
<TABLE>
<CAPTION>
                                                                             SQUARE FEET         FUTURE
                                                                                UNDER          BUILDABLE
MARKET                                                                       CONSTRUCTION    SQUARE FOOTAGE
--------------------------------------------------------------------------   ------------    --------------
<S>                                                                          <C>             <C>
  Downtown Washington, D.C................................................           --(1)            --
  Austin..................................................................      258,000          173,000
  Dallas..................................................................      337,000          608,000
                                                                             ------------    --------------
     Total................................................................      595,000          781,000
                                                                             ------------    --------------
                                                                             ------------    --------------
</TABLE>
 
------------------
(1) Excludes 229,000 square feet which was purchased in 1998, placed under
    construction and subsequently contributed to a joint venture in which the
    Partnership currently holds a 35% interest.
 
                                       4
<PAGE>
FINANCING ACTIVITY
 
     In December 1998, the Partnership entered into a joint venture with J.P.
Morgan & Co. to purchase and develop 1201 F Street in downtown Washington, D.C.
J.P. Morgan & Co. has become a 65% joint venture partner in the partnership that
owns the property and has committed to provide its pro-rata share of the
required expected capital of $71.8 million. In addition, Bank of America and
Mass Mutual have agreed to provide construction financing and permanent
financing for this project.
 
     Also, during the fourth quarter, the 2600 West Olive property in Burbank,
California was refinanced for 10 years at a fixed rate of 6.75%.
 
     In 1998, CarrAmerica raised $350 million through debt offerings which were
guaranteed by the Partnership.
 
RISK FACTORS
 
     For a discussion of certain risks associated with an investment in
CarrAmerica and the Partnership, see 'Item 1--Business--The Company--Risk
Factors' in the 1998 CarrAmerica 10-K, which inforamtion is hereby incorporated
by reference.
 
FORWARD-LOOKING STATEMENTS
 
     Certain statements contained herein constitute 'forward-looking statements'
within the meaning of the Private Securities Litigation Reform Act of 1995 (the
'Reform Act'). Such forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause the actual results, performance
or achievements of CarrAmerica and the Partnership or industry results to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such factors include,
among others, the following: national and local economic, business and real
estate conditions that will, among other things, affect demand for office
properties, availability and creditworthiness of tenants, the level of lease
rents and the availability of financing for both tenants and CarrAmerica and the
Partnership, adverse changes in the real estate markets, including, among other
things, competition with other companies, risks of real estate acquisition and
development (including the failure of pending acquisitions to close and pending
developments to be completed on time and within budget), governmental actions
and initiatives, and environmental/safety requirements.
 
ITEM 2. PROPERTIES
 
     General.  As of December 31, 1998, the Partnership owned 59 operating
office properties ranging from two to 12 stories each, located in ten target
markets across the United States. As of December 31, 1998, the Partnership also
owned 12 office properties under development. Except as disclosed in 'Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources,' the Partnership has no immediate
plans to renovate its operating office properties other than for routine capital
maintenance. The Partnership believes its properties are adequately covered by
insurance. The Partnership believes that, as a result of CarrAmerica's national
operating system, market research capabilities, access to capital, and
experience as an owner, operator and developer of office properties, the
Partnership will continue to be able to identify and consummate acquisition and
development opportunities and to operate its portfolio more effectively than
competitors without such capabilities. The Partnership, however, competes in
many of its core markets with other real estate operators, some of which may
have been active in such markets for a longer period than the Partnership.
 
                                       5
<PAGE>
     The following table sets forth certain information about each operating
property owned by the Partnership as of December 31, 1998:
<TABLE>
<CAPTION>
                                                        NET                                    AVERAGE BASE
                                             COMPANY'S  RENTABLE                  TOTAL          RENT PER
                                     # OF    EFFECTIVE    AREA                  ANNUALIZED        LEASED
                                    BUILD-   PROPERTY  (SQUARE     PERCENT     BASE RENT(3)       SQUARE
PROPERTY                             INGS    OWNERSHIP  FEET)(1)  LEASED(2)   (IN THOUSANDS)     FOOT(4)
----------------------------------- ------   -----   ----------   ---------   --------------   ------------
 
<S>                                 <C>      <C>     <C>          <C>         <C>              <C>
CONSOLIDATED PROPERTIES
SOUTHERN CALIFORNIA,
ORANGE COUNTY/LOS ANGELES:
  South Coast Executive Center.....     2    100.0%     161,310      90.7%       $  3,058         $20.90
  2600 W. Olive....................     1    100.0      145,474      95.7           3,543          25.46
  Bay Technology Center............     2    100.0      107,481     100.0           1,606          14.94
 
SOUTHERN CALIFORNIA,
SAN DIEGO:
  Jaycor...........................     1    100.0      105,358     100.0           1,719          16.32
 
NORTHERN CALIFORNIA,
SAN FRANCISCO BAY AREA:
  San Mateo I......................     1    100.0       70,000     100.0           2,478          35.40
  San Mateo II and III.............     2    100.0      141,404      97.2           3,778          27.51
 
SEATTLE:
  Canyon Park Commons..............     1    100.0       95,290     100.0           1,358          14.25
 
AUSTIN, TEXAS:
  Great Hills Plaza................     1    100.0      135,333     100.0           2,532          18.71
  Balcones Center..................     1    100.0       74,978      78.4             950          16.16
  Park North.......................     2    100.0      132,744      95.3           2,101          16.62
  City View Centre.................     3    100.0      136,183     100.0           2,237          16.42
  Riata 4, 5, 8....................     3    100.0      274,118      89.7           3,506          14.26
  Tower of the Hills...............     2    100.0      166,099      98.1           2,476          15.19
  City View Center.................     1    100.0      128,716     100.0           2,073          16.10
 
CHICAGO:
  Bannockburn I & II...............     2    100.0      210,860     100.0           3,400          16.13
  Bannockburn IV...................     1    100.0      108,469     100.0           1,707          15.74
 
DALLAS, TEXAS:
  Quorum North.....................     1    100.0      115,845      88.6           1,860          18.12
  Quorum Place.....................     1    100.0      179,303      92.4           2,706          16.34
  Cedar Maple Plaza................     3    100.0      113,011      96.1           2,144          19.73
  Tollhill East & West.............     2    100.0      241,487      91.1           3,550          16.14
 
<CAPTION>
 
PROPERTY                             SIGNIFICANT TENANTS(5)
 
-----------------------------------  ------------------------------------------------------------------
 
<S>                                  <C>
CONSOLIDATED PROPERTIES
SOUTHERN CALIFORNIA,
ORANGE COUNTY/LOS ANGELES:
  South Coast Executive Center.....  State Compensation Insurance Fund (33%)
 
  2600 W. Olive....................  The Walt Disney Company (89%)
 
  Bay Technology Center............  AMRESCO (100%)
 
SOUTHERN CALIFORNIA,
SAN DIEGO:
  Jaycor...........................  Jaycor, Inc. (100%)
 
NORTHERN CALIFORNIA,
SAN FRANCISCO BAY AREA:
  San Mateo I......................  Franklin Resources (100%)
 
  San Mateo II and III.............  Franklin Resources, Inc. (37%), Peoplesoft/Red Pepper (20%)
 
SEATTLE:
  Canyon Park Commons..............  Microsoft (100%)
 
AUSTIN, TEXAS:
  Great Hills Plaza................  Empire Funding (48%), Blue Cross (24%), Skjerven Morrill,
 
                                     Machpherson (13%), Businesssuites (12%)
 
  Balcones Center..................  Medianet (29%), Austin Diagnostic Clinic (15%)
 
  Park North.......................  CSC Continuum Inc. (36%)
 
  City View Centre.................  Holt, Rinehart & Winston (76%), Money Star Communications (16%)
 
  Riata 4, 5, 8....................  Netsolve, Inc. (25%), Pervasive Software (25%), Alcatel USA, Inc.
 
                                     (25%)
 
  Tower of the Hills...............  Texas Guaranteed Student (65%)
 
  City View Center.................  IXC Communications, Inc. (100%)
 
CHICAGO:
  Bannockburn I & II...............  IMC Global (38%), Deutsche Credit Corporation (36%)
 
  Bannockburn IV...................  Open Text (35%), Abbott Laboratories (12%), NY Life Insurance
 
                                     (10%)
 
DALLAS, TEXAS:
  Quorum North.....................  Digital Matrix Systems (20%), HQ Dallas Quorum North (17%)
 
  Quorum Place.....................  VHASouthwest, Inc. (22%), Objectspace (16%)
 
  Cedar Maple Plaza................  No Tenant Occupies More Than 10%
 
  Tollhill East & West.............  Digital Equipment Corporation (22%)
 
</TABLE>
 
                                       6
<PAGE>
<TABLE>
<CAPTION>
                                                        NET                                    AVERAGE BASE
                                             COMPANY'S  RENTABLE                  TOTAL          RENT PER
                                     # OF    EFFECTIVE    AREA                  ANNUALIZED        LEASED
                                    BUILD-   PROPERTY  (SQUARE     PERCENT     BASE RENT(3)       SQUARE
PROPERTY                             INGS    OWNERSHIP  FEET)(1)  LEASED(2)   (IN THOUSANDS)     FOOT(4)
----------------------------------- ------   -----   ----------   ---------   --------------   ------------
  Two Mission Park.................     1    100.0%      77,731      89.1%       $    985         $14.21
<S>                                 <C>      <C>     <C>          <C>         <C>              <C>
  5000 Quorum......................     1    100.0      160,222      92.2           2,361          15.99
  Royal Ridge A....................     1    100.0      144,835     100.0           2,571          17.75
 
SOUTHEAST DENVER:
  Harlequin Plaza..................     2    100.0      329,070      98.6           5,173          15.94
  Quebec Court I & II..............     2    100.0      287,294     100.0           4,021          14.00
  Greenwood Center.................     1    100.0       75,866     100.0           1,456          19.19
  Quebec Center....................     3    100.0      106,865      92.1           1,470          14.95
  Panorama Corporate Center I......     1    100.0      100,881     100.0           2,062          20.44
  Panorama II......................     1    100.0      100,916      96.7           2,151          22.04
 
PHOENIX, ARIZONA:
  US West..........................     4    100.0      532,506     100.0           8,580          16.11
  Concord Place....................     1    100.0      133,287     100.0           2,463          18.70
 
SALT LAKE CITY, UTAH:
  Sorenson Research Park...........     5    100.0      285,144      99.7           3,381          11.89
  Wasatch Corporate Center.........     3    100.0      178,098     100.0           2,084          11.70
                                    ------           ----------   ---------   --------------   ------------
 
TOTAL CONSOLIDATED PROPERTIES:.....    59             5,356,178                  $ 87,540
                                    ------           ----------               --------------
                                                     ----------               --------------
WEIGHTED AVERAGE...................                                  96.8%                        $16.89
                                                                  ---------                    ------------
                                                                  ---------                    ------------
 
<CAPTION>
PROPERTY                             SIGNIFICANT TENANTS(5)
-----------------------------------  ------------------------------------------------------------------
  Two Mission Park.................  Macromedia, Inc. (26%), Bland Garvey and Taylor (16%)
<S>                                 <<C>
  5000 Quorum......................  No Tenant Occupies More Than 10%
  Royal Ridge A....................  GTE North, Inc. (100%)
SOUTHEAST DENVER:
  Harlequin Plaza..................  Travelers Insurance (17%), Bellco First Federal Credit Union
                                     (13%), National Mortgage Corporation. (11%), Regis University
                                     (10%)
  Quebec Court I & II..............  Prime Star, Inc. (55%), Time Warner Communications (45%)
  Greenwood Center.................  General Motors Corporation (30%), Talisman Partners, Ltd (11%),
                                     FDIC (11%)
  Quebec Center....................  Gordon Gumeeson & Associates (12%), Walberg & Dagner (11%)
  Panorama Corporate Center I......  Teleport Communications Group (70%), Sprint Spectrum, LP (11%)
  Panorama II......................  Hartford Fire Insurance Company (38%), 3COM Corporation (18%),
                                     Toyota Motor Credit Corporation (13%), Archstone Communities (11%)
PHOENIX, ARIZONA:
  US West..........................  US West Business Resources (100%)
  Concord Place....................  Peacock, Hislop, Staley & Given (16%), Horizon Real Estate Group
                                     (11%)
SALT LAKE CITY, UTAH:
  Sorenson Research Park...........  Foundation Health Corporation (12%), Matrix Marketing, Inc. (34%),
                                     Datachem Laboratories, Inc. (20%), Intel Corporation (14%), ITT
                                     Educational Services (12%)
  Wasatch Corporate Center.........  Advanta Financial Corporation (28%), Achieve Global, Inc. (23%),
                                     Fonix Corporation (14%), Tenfold Corporation (14%), Musicians
                                     Friand, Inc. (12%)
TOTAL CONSOLIDATED PROPERTIES:.....
WEIGHTED AVERAGE...................
</TABLE>
 
------------------
(1) Includes office and retail space but excludes storage space.
(2) Includes space for leases that have been executed and have commenced as of
    December 31, 1998.
(3) Total annualized base rent equals total original base rent, including
    historical contractual increases and excluding (i) percentage rents, (ii)
    additional rent payable by tenants such as common area maintenance, real
    estate taxes and other expense reimbursements, (iii) future contractual or
    contingent rent escalations, and (iv) parking rents.
(4) Calculated as total annualized base rent divided by net rentable area
    leased.
(5) Includes tenants leasing 10% or more of rentable square footage (with the
    percentage of rentable square footage in parentheses).
 
                                       7
<PAGE>
     Occupancy, Average Rentals and Lease Expirations.  As of December 31, 1998,
96.8% of the aggregate net rentable square footage in the Partnership's 59
operating office properties was leased. The following table sets forth the
percent leased and average annualized rent per leased square foot (excluding
storage space) for office and retail space combined for the past three years at
each of the dates indicated:
 
<TABLE>
<CAPTION>
                                     AVERAGE
                   PERCENT       ANNUALIZED RENT       NUMBER OF
                  LEASED AT        PER LEASED         CONSOLIDATED
DECEMBER 31,      YEAR END       SQUARE FOOT(1)        PROPERTIES
------------      ---------      ---------------      ------------
<S>               <C>            <C>                  <C>
   1998              96.8%           $ 19.33               59
   1997              96.4              17.10               53
   1996              89.7              13.93               25
</TABLE>
 
------------------
(1) Calculated as total annualized building operating revenue, including tenant
    reimbursements for operating expenses and excluding parking and storage
    revenue, divided by the total square feet, excluding storage, in the
    building under lease at year end.
 
     The following table sets forth a schedule of the lease expirations for
leases in place as of December 31, 1998 in each of the next ten years beginning
with 1999 and thereafter for the Partnership's 59 operating office properties,
assuming that no tenants exercise renewal options:
 
<TABLE>
<CAPTION>
                                                                                        PERCENT OF
                                                          NET             ANNUAL           TOTAL
                                        NUMBER OF    RENTABLE AREA      BASE RENT         ANNUAL
                                         TENANTS      SUBJECT TO          UNDER          BASE RENT
                YEAR                      WITH         EXPIRING          EXPIRING       REPRESENTED
              OF LEASE                  EXPIRING       LEASES(1)          LEASES        BY EXPIRING
             EXPIRATION                  LEASES      (SQUARE FEET)    (IN THOUSANDS)      LEASES
-------------------------------------   ---------    -------------    --------------    -----------
<S>                                     <C>          <C>              <C>               <C>
1999.................................      158          716,000          $ 11,356           13.0%
2000.................................      106          453,000             8,568            9.8
2001.................................      134          859,000            14,657           16.7
2002.................................       68          614,000            11,961           13.7
2003.................................       95          649,000            10,670           12.2
2004.................................       30          549,000             9,484           10.8
2005.................................        2           23,000               510             .6
2006.................................       10          180,000             2,759            3.2
2007.................................        8          618,000             9,698           11.1
2008.................................       15          442,000             6,740            7.7
2009 and thereafter..................        6           81,000             1,137            1.2
</TABLE>
 
------------------
(1) Excludes 172,000 square feet of space that was vacant as of December 31,
    1998.
 
     US West.  Because the aggregate gross revenues of the four properties that
constitute US West were in excess of 10% of the Partnership's total gross
revenues for 1998, additional information regarding US West is provided below.
 
     US West was developed in 1988. The complex includes four buildings, three
of which are located in Phoenix and one in Tucson. The Partnership has no
immediate plans to renovate US West (other than for routine capital maintenance)
and believes that US West is adequately covered by insurance.
 
     As of December 31, 1998 and 1997, 100.0% of the rentable square footage in
the four buildings constituting US West was leased. The percent leased and
average annualized rent per leased square foot (excluding storage space) for the
prior three years for US West is not available because US West was purchased by
the Partnership in December 1997. At December 31, 1998 and 1997, U.S. West
Business Resources occupied 100% of the space (or approximately 532,500 square
feet) pursuant to a lease which expires in 2007. U.S. West has two five-year
options to extend their lease at the then prevailing market rates, provided
notice is given no later than July 1,
 
                                       8
<PAGE>
2006 on the first option and July 1, 2011 on the second option. The current
annual base rent under this lease, excluding operating recoveries, is
approximately $8,580,000.
 
     The aggregate tax basis of depreciable real property of the office
properties constituting US West for federal income tax purposes was
approximately $66.8 million as of December 31, 1998. Depreciation is computed on
the Modified Accelerated Cost Recovery System (MACRS) over the estimated useful
lives of the real property over 31.5 or 39 years. No personal property was
purchased with these office properties.
 
     The current realty tax rate for the four buildings that constitute US West
range from $4.6965 to $10.4561 per $100 assessed value. The annual tax for the
four buildings range from approximately $247,000 to $786,000 based on assessed
values ranging from $3,516,000 to $9,908,000.
 
     Mortgage Financing.  As of December 31, 1998, certain of the Partnership's
59 operating office properties were subject to fixed rate mortgage indebtedness
in an aggregate principal amount of $188.2 million. The Partnership's fixed rate
mortgage debt bears an effective weighted average interest rate of 8.2% and a
weighted average maturity of 7.0 years (assuming loans callable before maturity
are called as early as possible). Certain information regarding fixed rate
mortgage indebtedness is set forth in the table below as of December 31, 1998:
 
<TABLE>
<CAPTION>
                                                                                                             ESTIMATED
                                                                                          ANNUAL DEBT      BALANCE DUE AT
                                                 INTEREST       PRINCIPAL    MATURITY       SERVICE           MATURITY
PROPERTY                                           RATE          BALANCE       DATE      (IN THOUSANDS)    (IN THOUSANDS)
--------------------------------------------   -------------    ---------    --------    --------------    --------------
<S>                                            <C>              <C>          <C>         <C>               <C>
South Coast Executive Center................        9.01%       $  10,127    5/31/99        $  1,015          $ 10,103(1)
Quorum Place................................        6.99            7,578    11/15/00            665             7,327(1)
Bannockburn I & II..........................        9.52           19,554    8/31/01           2,801            16,912(1)
Quorum North................................        8.27            6,566    12/10/01            640             6,258(1)
Jaycor......................................        8.96           12,781     2/1/03           1,657            10,332(1)
Canyon Park Commons.........................        9.13            5,615    12/1/04             714             4,071(1)
US West.....................................        7.92           53,263    12/1/05           8,836                  (2)
Concord Place...............................        7.75            7,646     1/1/06             725             6,438(1)
Wasatch Corporate Center....................        8.15           12,654     1/2/07           1,220            10,569(1)
2600 West Olive.............................        6.75           19,152     1/1/09           1,293            19,152(1)
Harlequin Plaza and Quebec Court I & II(3)..        8.50           28,996    5/31/11           2,899            19,586(1)
Sorenson Research Park......................        7.75            2,617     7/1/11             328                  (2)
Sorenson Research Park......................        8.88            1,646     5/1/17             182                  (2)
                                                   -----        ---------                --------------
Total.......................................        8.21%       $ 188,195                   $ 22,975
                                                   -----        ---------                --------------
                                                   -----        ---------                --------------
</TABLE>
 
------------------
(1) Currently prepayable at the rates stated in the loan documents.
(2) Note will be fully repaid at maturity.
(3) Payable to CarrAmerica.
 
     For additional information regarding the Company's office properties and
their operation, see 'Item 1, Business.'
 
ITEM 3.  LEGAL PROCEEDINGS
 
     The Partnership is party to a variety of legal proceedings arising in the
ordinary course of its business. All of these matters, taken together, are not
expected to have a material adverse impact on the Partnership.
 
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
     None.
 
                                       9
<PAGE>
                                    PART II
 
ITEM 5:  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
 
     There is no established public trading market for the Units. As of December
31, 1998, there were 23 holders of record of Units. As of December 31, 1998,
there were no options or warrants to purchase Units outstanding. In addition, as
of December 31, 1998, there were no Units that were being, or have been publicly
proposed to be, publicly offered by the Partnership.
 
     Each Unit held by persons other than GP Holdings or LP Holdings is (subject
to certain holding period limitations) redeemable for cash equal to the value of
a share of common stock of CarrAmerica or, at the option of GP Holdings, common
stock of CarrAmerica on a one-for-one basis. For a presentation of the high and
low trading prices of CarrAmerica's common stock for the last two years, see
'Item 5--Market for Registrant's Common Equity & Related Stockholder Matters' in
CarrAmerica's Annual Report on Form 10-K for the year ended December 31, 1998
(the '1998 CarrAmerica 10-K'), which information is hereby incorporated by
reference.
 
     The Partnership has made regular quarterly distributions of $0.4625 per
Class A Unit from the first quarter of 1998 and $0.4375 per Class A Unit from
the second quarter of 1996 through the fouth quarter of 1997. The distributions
are prorated where appropriate to reflect ownership of Units for less than the
full period to which such distribution relates. A distribution of $0.4375 per
Class B Unit also was made for each of the second and third quarters of 1996.
The Partnership's ability to make distributions depends on a number of factors,
including its net cash provided by operating activities, capital commitments and
debt repayment schedules. Holders of Units are entitled to receive distributions
when, as and if declared by the Board of Directors of GP Holdings, its sole
general partner, out of any funds legally available for that purpose.
 
                                       10
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
 
     The following table sets forth selected financial and operating information
for the Partnership as of and for the years ended December 31, 1998 and 1997, as
of December 31, 1996 and for the period from March 6, 1996 (date of inception)
to December 31, 1996.
 
     The following selected financial and operating information should be read
in conjunction with 'Management's Discussion and Analysis of Financial Condition
and Results of Operations' included in this Form 10-K and the financial
statements and notes thereto included in this Form 10-K.
 
<TABLE>
<CAPTION>
                                                                                                            March 6,
                                                                                                              1996
                                                                                                            (date of
                                                                                                           inception)
                                                                                                            through
                                                                   YEAR ENDED           Year Ended        December 31,
                                                                DECEMBER 31, 1998    December 31, 1997        1996
                                                                -----------------    -----------------    ------------
                                                                       (amounts in thousands except Other Data)
<S>                                                             <C>                  <C>                  <C>
OPERATING DATA:
  Real estate operating revenue..............................      $   104,614          $    60,469        $   13,376
  Real estate operating expenses:
     Property operating expenses.............................           34,167               25,804             6,546
     Interest expense........................................           16,508                6,792             1,475
     General and administrative expenses.....................            6,365                3,473               680
     Depreciation and amortization...........................           23,877               13,146             3,148
  Real estate operating income...............................           23,697               11,254             1,527
  Net income.................................................           32,869               16,693             1,556
  Cash distributions paid to Unit holders....................            2,277                1,124             2,050
BALANCE SHEET DATA (AT PERIOD END):
  Real estate, before accumulated depreciation...............          762,580              624,085           238,073
  Total assets...............................................          775,059              636,568           241,217
  Mortgages and notes payable................................          328,945              241,715            51,744
  Total Unit holders' (partners') capital....................          426,807              377,632           180,933
OTHER DATA (AT PERIOD END):
  Number of properties.......................................               59                   53                25
  Square footage.............................................        5,356,000            4,730,000         2,295,000
</TABLE>
 
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
 
     The following discussion is based primarily on the Consolidated Financial
Statements of the Partnership as of December 31, 1998 and 1997, and for the
years ended December 31, 1998 and 1997 and the period from March 6, 1996 (Date
of Inception) to December 31, 1996. The comparability of the periods is
significantly impacted by acquisitions and dispositions made during 1998, 1997
and 1996 and the Partnership not having a full 12 months of operations for the
period ended December 31, 1996, since the Partnership did not acquire any assets
until May 1996, with which to compare the 12 months ended December 31, 1997. As
of December 31, 1996 the Partnership owned 25 properties. This number grew to 53
properties by December 31, 1997 and 59 properties by December 31, 1998
respectively. This information should be read in conjunction with the
accompanying consolidated financial statements and notes thereto.
 
     The Partnership's reportable operating segments are real estate property
operations and development operations. Other business activities and operating
segments that are not reportable are included in other operations.
 
                                       11
<PAGE>
RESULTS OF OPERATIONS--1998 TO 1997
 
REAL ESTATE PROPERTY OPERATIONS
 
     Operating Revenue.  Total real estate property operating revenue increased
$43.2 million, or 74.7%, to $101.0 million for 1998 as compared to $57.8 million
for 1997. The Partnership experienced net growth in its rental revenue as a
result of its acquisitions, and development properties placed in service, which
together contributed approximately $39.1 million of additional rental revenue in
1998. Rental revenue from properties that were fully operational throughout both
periods increased by approximately $4.1 million primarily due to increased
occupancy in these properties.
 
     Segment Expense.  Real estate property operating expenses increased $8.4
million to $34.2 million in 1998 from $25.8 million in 1997. The Partnership
experienced net growth in its segment expense primarily as a result of property
acquisitions, and development properties placed in service, which together
contributed approximately $7.7 million of additional expense in 1998. The
Partnership also experienced an increase in property operating expenses from
properties that were fully operational in both periods of approximately $.7
million.
 
     Interest Expense.  Interest expense increased $7.1 million due to the
acquisition of properties which were subject to existing mortgage debt.
 
     Other Income.  Other revenue generated by real estate property operations
increased $.1 million primarily due to increased interest income.
 
     Total Assets.  The increase of $75.0 million or 12.7% from 1997 to 1998 is
primarily as a result of acquisitions of real estate and development properties
placed in service.
 
DEVELOPMENT OPERATIONS
 
     Interest Expense. Interest capitalization related to construction in
progress increased $2.0 million to $4.9 million in 1998 from $2.9 million in
1997 primarily as a result of the increase in construction dollars expended.
 
     Total Assets.  Total assets increased $54.4 million to $90.0 million in
1998 from $35.6 million in 1997, primarily as a result of an increase in
construction starts from 1997 to 1998.
 
OTHER OPERATIONS
 
     Operating Revenue.  Operating revenue increased $.9 million to $3.6 million
for 1998 as compared to $2.7 million for 1997, primarily as a result of an
increase in reimbursements from an affiliate related to certain services
provided to the affiliates by Partnership personnel.
 
     Segment Expenses.  Segment expenses increased $2.9 million, to $6.4 million
for 1998 as compared to $3.5 million for 1997, primarily as a result of the
addition of staff necessary to implement the Partnership's business strategy.
 
     Interest Expense.  The $4.6 million increase in the Partnership's interest
expense is primarily related to borrowings on the Company's line of credit
necessary to fund acquisitions and development commitments.
 
     Other Income.  Other income increased $.6 million to $.8 million in 1998
from $.2 million in 1997 primarily as a result of interest income earned on a
note receivable from an affiliate.
 
     Total Assets.  Total assets increased $9.1 million, or 103.4%, to $17.9
million for 1998 as compared to $8.8 million for 1997, primarily as a result of
an $8.6 million investment in an unconsolidated partnership.
 
CONSOLIDATED CASH FLOWS
 
     Net cash provided by operating activities increased $33.1 million, or
163.1%, to $53.3 million for 1998 as compared to $20.2 million for 1997,
primarily as a result of the acquisitions of operating properties. Net cash used
by investing activities decreased $79.3 million, to $136.2 million for 1998 as
compared to $215.5 million for 1997, primarily as a result of a reduction of
capital deployed by the Partnership for acquisitions of office
 
                                       12
<PAGE>
properties. Net cash provided by financing activities decreased $113.8 million,
to $82.6 million for 1998 as compared to $196.4 million for 1997, primarily as a
result of a reduction of capital contributions.
 
RESULTS OF OPERATIONS--1997 TO 1996
 
REAL ESTATE PROPERTY OPERATIONS
 
     Operating Revenue.  Total real estate property operating revenue increased
$44.4 million to $57.8 million for 1997 as compared to $13.4 million for 1996.
This increase is due to a full 12 months of activity in 1997 as opposed to 8
months in 1996. In addition, the Partnership experienced net growth in its
rental revenue as a result of its acquisitions and development properties placed
in service, which together contributed the additional real estate operating
revenue in 1997.
 
     Segment Expenses.  Real estate property operating expenses increased $19.3
million to $25.8 million for 1997 as compared to $6.5 million for 1996. This
increase is due to a full 12 months of activity in 1997 as opposed to 8 months
in 1996. In addition, the Partnership experienced increases in operating
expenses as a result of its acquisitions and development properties placed in
service, which together contributed the additional real estate operating
expenses in 1997.
 
     Interest Expense.  Interest expense increased $6.9 million to $8.8 million
in 1997 from $1.9 million primarily as a result of properties acquired subject
to existing mortgage debt.
 
     Other Income.  Other income increased $.1 million primarily due to an
increase in interest income.
 
     Total Assets.  The increase of $374.5 million to $592.2 million in 1997
from $217.7 million in 1996 is primarily as a result of the Company's real
estate acquisitions.
 
DEVELOPMENT OPERATIONS
 
     Interest Expense.  Interest capitalization increased $2.5 million to $2.9
million in 1997 from $.4 million in 1996 primarily as a result of the increase
in construction dollars expended.
 
     Total Assets.  The increase of $13.9 million to $35.6 million in 1997 from
$21.7 million in 1996 is primarily as a result of an increase in construction
starts from 1996 to 1997.
 
OTHER OPERATIONS
 
     Operating Revenue.  Operating revenue increased $2.7 million for 1997,
primarily as a result of an increase in reimbursements from an affiliate related
to certain services the Partnership personnel provide to the affiliate.
 
     Segment Expenses.  Segment expenses increased $2.8 million, or 400.0%, to
$3.5 million for 1998 as compared to $.7 million for 1997, primarily as a result
of the addition of staff to implement the Partnership's business strategy.
 
     Interest Expense.  The increase of $.9 million in the Partnership's
interest expense is primarily as a result of the establishment of the
Partnership's line of credit which was used to fund acquisition and development
activity.
 
     Other Income.  The increase of $.2 million in other income in 1997 is
primarily as a result of increased interest income.
 
     Total Assets.  Increased $7.0 million to $8.8 million in 1997 from $1.8
million in 1996 primarily as a result of the issuance of a $5.9 million note
receivable.
 
CONSOLIDATED CASH FLOWS
 
     Net cash provided by operating activities increased $10.8 million, or
114.7%, to $20.2 million for 1997 as compared to $9.4 million for 1996,
primarily as a result of the acquisitions of operating properties. Net cash used
by investing activities increased $15.4 million, to $215.5 million for 1997 as
compared to $200.1 million for 1996, primarily as a result of capital deployed
by the Partnership for acquisitions of office properties, land held
 
                                       13
<PAGE>
for future development and construction in progress. Net cash provided by
financing activities increased $3.3 million, to $196.4 million for 1997 as
compared to $193.1 million for 1996, primarily as a result of net borrowings on
the unsecured credit facility.
 
LIQUIDITY AND CAPITAL RESOURCES
 
     The Partnership's total indebtedness at December 31, 1998 was $328.9
million, of which $140.8 million, or 42.8%, bore a LIBOR-based floating interest
rate or Federal Funds rate. The Partnership's mortgage payable fixed rate
indebtedness bore an effective weighted average interest rate of 8.2% at
December 31, 1998 and had a weighted average term to maturity of 7.0 years. At
December 31, 1998, the total book value of the Partnership's assets was $775.1
million. The Partnership's debt as a percentage of total book value of its
assets was 40.6% at December 31, 1998. CarrAmerica has a $450.0 million
unsecured credit facility with a current borrowing capacity of $360.0 million
under which the Partnership is jointly and severally liable. The weighted
average interest rate under the unsecured credit facility for 1998 was 6.3%.
Currently, the unsecured credit facility bears interest at 90 basis points over
LIBOR.
 
     The Partnership will require capital to invest in its existing portfolio of
operating assets for major capital projects such as large-scale renovations,
routine capital expenditures and deferred maintenance on certain properties
recently acquired and tenant related capital expenditures, such as tenant
improvements and allowances and leasing commissions. The Partnership's capital
requirements for tenant related capital expenditures are dependent upon a number
of factors, including square feet of expiring leases, tenant retention ratios
and whether the expiring leases are in central business district properties or
suburban properties. During 1999, the Partnership had 716,000 square feet of
leases expiring, representing 13.0% of total leased space. The Partnership
expects expenditures for deferred maintenance on recently acquired properties to
decrease in subsequent years as the emphasis of the Partnership's growth shifts
from acquiring existing office properties to developing new properties. The
Partnership anticipates that this shift from acquiring properties to developing
properties will increase its need for short-term borrowings.
 
     The Partnership will require a substantial amount of capital for
development projects currently underway and planned for the future. As of
December 31, 1998, the Partnership had 12 development projects underway, which
are expected to require a total investment by the Partnership of $152.5 million.
As of December 31, 1998, the Partnership had expended $82.2 million of these
costs.
 
     The Partnership expects to meet these anticipated capital needs through the
use of its unsecured line of credit (as described above), through advances from
CarrAmerica, prudent refinancing of certain properties, targeted use of joint
ventures, and from the disposition of certain properties. As of March 15, 1999,
the Partnership had three properties under letter of intent and commencing due
diligence located in Dallas. These properties are expected to produce net
proceeds of approximately $35 million. Due to the uncertainty in the disposition
and related due diligence process, there can be no assurance that these sales
will close or that they will achieve the expected net proceeds.
 
     The Partnership intends to use cash flow from operations, its unsecured
revolving line of credit facility and the proceeds from the disposition of
assets to meet its working capital needs for its existing portfolio of operating
assets. The Partnership anticipates that adequate cash will be available to fund
its operating and administrative expenses, continuing debt service obligations
and the payment of distributions in both the short term and long term. However,
the Partnership's ability to access additional capital necessary to support the
current development program is largely dependent on CarrAmerica's ability to
access capital. Current market conditions make CarrAmerica's traditional sources
of such capital, the equity and public debt markets, currently unattractive.
CarrAmerica believes that the alternative sources which it is currently
pursuing, namely refinancings, joint ventures and asset dispositions, will
provide it with the necessary capital until such time as the equity and public
debt markets improve. However, there can be no assurance that such an
improvement will occur in the near term. If CarrAmerica is not able to access
capital at attractive rates and the Partnership is not able to meet its cash
requirements through its traditional means, it may have to rely on working
capital advances from CarrAmerica at a time when CarrAmerica's cost of capital
causes such advances to be made at unattractive rates. As of December 31, 1998,
the Partnership had cash of $4.5 million, of which $1.2 million was restricted.
 
                                       14
<PAGE>
     Net cash provided by operating activities was $53.3 million during 1998,
compared to $20.2 million during 1997. The increase in net cash provided by
operating activities was primarily a result of acquisitions made by the
Partnership. The Partnership's investing activities used approximately $136.2
million and $215.5 million during 1998 and 1997, respectively. The Partnership's
investment activities included the acquisitions of office buildings and land
held for future development and additions to construction in process of
approximately $183.2 million during 1998, as compared to $263.1 million in
acquisitions during 1997. Additionally, the Partnership invested approximately
$19.3 million and $9.9 million in its existing real estate assets during 1998
and 1997, respectively. Net of distributions to the Partnership's partners, the
Partnership's financing activities provided net cash of $84.9 million and $197.5
million during 1998 and 1997, respectively. During 1998, the Partnership's
partners contributed $18.6 million to fund acquisitions. The Partnership also
drew amounts from its unsecured credit facility during 1998 to finance its
acquisitions and other investing activities. During 1998, the Partnership's net
borrowings of its unsecured credit facility were approximately $85.3 million.
 
     The Partnership's distributions are paid quarterly. Amounts accumulated for
distribution are primarily invested by the Partnership in short-term investments
that are collateralized by securities of the United States Government or certain
of its agencies.
 
     Management believes that the Partnership will have access to the capital
resources necessary to expand and develop its business. The Partnership may seek
to obtain funds through contributions from CarrAmerica through its ability to
raise funds through contributions from CarrAmerica through its ability to raise
funds through equity offerings or debt offerings, in a manner consistent with
its intention to operate with a conservative borrowing policy. The Partnership
anticipates that adequate cash will be available to fund its operating and
administrative expenses, continuing debt service obligations, the payment of
dividends in accordance with REIT requirements in both the short term and long
term, and future acquisitions of office properties.
 
YEAR 2000 COMPLIANCE
 
     The Year 2000 issue results from a programming convention in which computer
programs use two digits rather than four to define the applicable year. Software
and hardware may recognize a date using '00' as the year 1900, rather than the
year 2000. Such an inability of computer programs to recognize a year that
begins with '20' could result in business or building system failures,
miscalculations or errors causing disruptions of operations or other business
problems, including, among other things, a temporary inability to process
transactions, send invoices or engage in other normal business activities.
 
     CarrAmerica has undertaken a comprehensive program to address the Year 2000
issue. In the second quarter of 1998, CarrAmerica expanded its program and
appointed a Year 2000 Steering Committee to manage centrally its Year 2000
compliance program (known internally as 'Project 2000'). The Steering Committee
includes representatives of senior level management representing a wide array of
the organization and is charged with overseeing CarrAmerica's comprehensive
action plan designed to address Year 2000 issues.
 
     During the second quarter of 1998, CarrAmerica's Steering Committee engaged
the independent consulting firm of Computer Technology Associates, Inc. ('CTA')
to serve as the Project Manager for Project 2000. During the first quarter of
1999 and after completion of the assessment phase, CTA's role as Project Manager
was modified and CarrAmerica designated two full-time employees as the Project
Managers to oversee the remainder of Project 2000. CarrAmerica expects CTA will
continue to assist the Project Managers, as needed, during the remainder of
Project 2000.
 
     Project 2000 is organized into two areas of concentration: (i) Property
Operations Embedded Systems and (ii) Internal Business Operations Technology.
The Property Operations segment of the program focuses primarily on equipment
and systems present in CarrAmerica's operating properties that may contain
embedded microcontroller technology (such as elevators and HVAC systems). The
Internal Business Operations segment focuses primarily on CarrAmerica's
information technology, operating systems (such as billing, accounting and
financial reporting systems) and certain systems of CarrAmerica's major vendors
and material service providers. As described below, Project 2000 involves (i)
the assessment of the Year 2000 problems that may affect CarrAmercia, (ii) the
development of remedies to address the problems discovered in the assessment
phase, (iii) the selective testing of such remedies and (iv) the preparation of
contingency plans to deal with the potential failure of important and critical
systems.
 
                                       15
<PAGE>
     ASSESSMENT.  During the course of its assessment phase, CarrAmerica
continued to identify substantially all of the major components of its property
and business operations systems which may be vulnerable to the Year 2000 issue.
In terms of Property Operations, CarrAmerica conducted a comprehensive inventory
of all of its buildings' systems and equipment. Systems were risk ranked (1-3)
based upon each system's importance to the properties' operations. Those systems
classified as level 2 or 3 (the highest levels of importance) were compared to
CTA's existing embedded systems database to determine the status of Year 2000
compliance if it was not already known by CarrAmerica. If relevant information
was not contained in the existing database, the system was then identified for
processing through vendor management coordinated by CTA. Vendor management
involved concentrated communication with the vendor in an attempt to determine
the status of a system's Year 2000 compliance and any available remedies. As of
the fourth quarter of 1998, inventory of CarrAmerica's operating properties was
complete. Assessment of property operations was substantially complete as of
January 1999.
 
     In terms of Internal Business Operations Technology, team leaders were
selected from each business unit and market office to assist in identifying
software, hardware and external interfaces which may be vulnerable to Year 2000
issues. Inventorying of both core business units and all market offices was
substantially completed by the end of the fourth quarter of 1998. CarrAmerica's
primary billing and accounting software is currently undergoing a routine
application upgrade expected to be complete by the end of the first quarter of
1999. The vendor of the software has received the Information Technology
Association of America (ITAA) 2000 Certification and represents that the system
is generally Year 2000 ready, and CarrAmerica expects to test the system during
the second quarter of 1999. In addition, during the fourth quarter of 1998 and
the first quarter of 1999, CarrAmerica continued communicating with other
significant hardware, software and other material services providers, requesting
them to provide CarrAmerica with detailed, written information concerning
existing or anticipated Year 2000 compliance of their systems in so far as the
systems relate to such parties' business activities with CarrAmerica.
CarrAmerica expects to continue to communicate with these vendors throughout
1999.
 
     REMEDIATION AND TESTING PHASE.  Based upon the results of its assessment
efforts, CarrAmerica has initiated remediation and testing activities.
CarrAmerica intends to complete remediation on important and critical systems by
the end of the second quarter of 1999. Selective validation testing of these
systems is scheduled to be completed during the third and fourth quarters of
1999. The activities conducted during the remediation and testing phase are
intended to provide assurance from both the Property Operation and the Internal
Business perspectives that critical and important applications, systems and
equipment will be substantially Year 2000 compliant on a timely basis. In this
phase, CarrAmerica will first evaluate applications, systems and equipment. If a
potential Year 2000 problem is identified, CarrAmerica will take steps to
attempt to remediate the problem and, where applicable, test to confirm that the
remediating changes are effective and have not adversely affected the
functionality of that application. After the various applications, system
components and equipment have undergone remediation and testing phases,
CarrAmerica, where applicable, will conduct integrated testing for the purpose
of demonstrating functional integrated systems operations.
 
     CONTINGENCY PLANS.  CarrAmerica has started updating contingency plans to
handle its most reasonably likely worst case Year 2000 scenarios, which it is in
the process of identifying. CarrAmerica intends to complete its determination of
worst case scenarios after it has received and analyzed responses to
substantially all of the inquiries it has made of third parties. CarrAmerica
expects to complete contingency plans by the end of the third quarter of 1999.
 
     COSTS RELATED TO THE YEAR 2000 ISSUE.  As of December 31, 1998, CarrAmerica
has incurred approximately $.5 million in costs for its Year 2000 program.
CarrAmerica currently estimates that it will incur additional costs, which are
not expected to exceed approximately $4.5 million, to complete its Year 2000
compliance work. Of such additional costs, approximately $3.3 million are
expected to be incurred during 1999. CarrAmerica believes that a portion of
these costs may be recoverable from tenants but has not determined at this time
the extent to which such recovery can be realized. CarrAmerica also has not yet
determined the portion of these expenditures that will be allocated to the
Partnership.
 
                                       16
<PAGE>
ACQUISITION AND DEVELOPMENT ACTIVITY
 
     The following is a discussion of the Partnership's acquisition and
development activity during 1998. A more detailed discussion can be found in
'Item 1. Business--Recent Developments'.
 
     During 1998, the Partnership acquired the following properties: in its
Pacific region, one property containing a total of approximately .1 million
square feet, for an aggregate purchase price of approximately $16.9 million; in
its Mountain region, one property containing a total of approximately .1 million
square feet, for an aggregate purchase price of approximately $20.0 million; and
in its Central region, one property containing a total of approximately .2
million square feet for an aggregate purchase price of approximately $17.4
million. The Partnership also acquired land for an aggregate purchase price of
$20.1 million that is expected to support the development of up to 1.4 million
square feet. In addition, the Partnership also acquired land for an aggregate
purchase price of $19.7 million that has been subsequently contributed to a
joint venture of which the Partnership currently holds a 35% interest. This land
is expected to support the development of up to .2 milion square feet of office
space.
 
     As of December 31, 1998, the Partnership had 12 office properties under
construction: 164,000 square feet in its Mountain region and 966,000 square feet
in its Central region. Costs incurred during 1998 for properties under
construction were $127.2 million. An additional $70.3 million is expected to be
expended for completion of projects already under construction as of December
31, 1998.
 
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
     Increases in interest rates would increase our interest expense, which
would adversely affect cash flow. As of December 31, 1998, the Partnership has
$140.8 million outstanding under its line of credit that bears interest at a
floating rate and $159.2 of additional fixed rate mortgage debt. These mortgage
loans mature at various times through 2017. The Partnership also has a $29.0
million unsecured note due to CarrAmerica which matures in 2011.
 
     The Partnership's future earnings, cash flow and fair values relevant to
financial instruments are dependent upon prevailing market rates. Market risk is
the risk of loss from adverse changes in market prices and interest rates. The
Partnership manages its market risk by matching projected cash inflows from
operating activities, financing activities and investing activities with
projected cash outflows to fund debt payments, acquisitions, capital
expenditures, distributions, and other cash requirements. The Partnership does
not enter into derivative financial instruments to manage its market risk or for
trading purposes.
 
     If the market rates of interest on the Partnership's variable rate debt
change by 10% (or approximately 56 basis points) the Partnership's interest
expense would change by approximately $0.8 million, assuming the amount
outstanding under the variable rate facility remains at $140.8 million, the
balance at December 31, 1998. Furthermore book value of this variable interest
credit facility approximates market value at December 31, 1998.
 
     A change in interest rates generally does not impact future earnings and
cash flows for fixed rate debt instruments, but as fixed rate debt matures and
if additional debt is acquired to fund the repayments under maturing facilities,
future earnings and cash flows may be impacted by changes in interest rates.
This impact would be realized in the periods subsequent to debt maturities. The
following is a summary of the fixed rate debt maturities (in thousands):
 
<TABLE>
<S>                                            <C>
1999.........................................  $   17,843
2000.........................................      16,229
2001.........................................      32,535
2002.........................................       9,660
2003.........................................      20,468
2004 & thereafter............................      91,460
                                               ----------
                                               $  188,195
                                               ----------
                                               ----------
</TABLE>
 
                                       17
<PAGE>
     Assuming the repayments of fixed rate mortgages and the note to CarrAmerica
are made in accordance with the terms and conditions of the respective mortgages
and the note, a 10 percent change in the market interest rate for the respective
fixed rate debt instruments would change the fair value of the Partnership's
fixed rate debt by approximately $5.9 million. The fair market value of the
fixed rate debt instruments at December 31, 1998 was $195.4 million.
 
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
     The financial statements and supplementary data included in this Annual
Report on Form 10-K are listed in Part IV, Item 14(a).
 
ITEM 9. CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
        DISCLOSURE
 
     None.
 
                                    PART III
 
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
 
     The Partnership has no directors or executive officers. The Partnership is
managed by GP Holdings, as the sole general partner of the Partnership. The
following table sets forth certain information with respect to the directors and
executive officers of GP Holdings:
 
<TABLE>
<CAPTION>
NAME                                                    AGE   POSITIONS AND OFFICES HELD
-----------------------------------------------------   ---   -----------------------------------------------------
<S>                                                     <C>   <C>
Thomas A. Carr.......................................   40    President and Director
Philip L. Hawkins....................................   43    Managing Director, Vice President, and Director
</TABLE>
 
     CarrAmerica is the sole stockholder of GP Holdings. The additional
information required by this item with respect to directors and executive
officers of CarrAmerica and GP Holdings is hereby incorporated by reference to
the material appearing under the heading 'Election of Directors (Proposal 1),'
in CarrAmerica's definitive proxy statement for the annual meeting of its
stockholders to be held on May 6, 1999 (the '1998 CarrAmerica Proxy Statement')
and under the headings 'Item 1. Business--The Company-- Directors of the
Company' and '--Executive Officers and Certain Key Employees of the Company,' in
the 1998 CarrAmerica 10-K, which information is hereby incorporated by
reference.
 
ITEM 11. EXECUTIVE COMPENSATION
 
     The Partnership has no directors or executive officers. The Partnership is
managed by GP Holdings, as the sole general partner of the Partnership. GP
Holdings has not paid any compensation to its directors or officers. CarrAmerica
is the sole stockholder of GP Holdings. The information required by this item
with respect to CarrAmerica's executive officers is hereby incorporated by
reference to the material appearing in the 1998 CarrAmerica Proxy Statement
under the headings 'Executive Compensation,' which information is hereby by
reference.
 
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
     The following table sets forth information, as of December 31, 1998,
regarding the beneficial ownership of Units by each person known by the
Partnership to be the beneficial owner of more than five percent of the
Partnership's outstanding Units. As of December 31, 1998, no director or
executive officer of GP Holdings or CarrAmerica beneficially owned any Units.
Each person named in the table has sole voting and investment power
 
                                       18
<PAGE>
with respect to all Units shown as beneficially owned by such person, except as
otherwise set forth in the notes to the table.
 
<TABLE>
<CAPTION>
                                                                                       NUMBER OF        PERCENT OF
NAME AND BUSINESS ADDRESS OF BENEFICIAL OWNER                                            UNITS           UNITS(1)
------------------------------------------------------------------------------------   ----------       ----------
<S>                                                                                    <C>              <C>
CarrAmerica Realty Corporation......................................................   12,584,630(2)       87.6%
CarrAmerica Realty LP Holdings, Inc.................................................   12,441,008          86.6%
  1850 K Street, N.W.
  Washington, D.C. 20006
</TABLE>
 
------------------
(1) Based on 14,362,217 Units outstanding as of December 31, 1998.
(2) Includes 12,441,008 Units held by LP Holdings and 143,622 Units held by GP
    Holdings, each of which is a wholly owned subsidiary of CarrAmerica.
 
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
     CarrAmerica Realty Services, Inc. ('CARSI'), a wholly owned subsidiary of
CarrAmerica, provides management and leasing services to all of the office
properties owned by the Partnership. During 1998, 1997 and 1996, the Partnership
incurred management fees of $3.0 million, $1.9 million and $.4 million,
respectively, for services performed by CARSI. Additionally, CARSI reimburses
the Partnership for certain services the Partnership's personnel provide to
CARSI. These reimbursements amounted to $2.9 million and $2.0 million in 1998
and 1997, respectively. In addition, CarrAmerica Development, Inc. ('CADI'),
also reimbursed the Partnership for certain services the Partnership personnel
provided to CADI. These reimbursements amounted to $.3 million and $.7 million
in 1998 and 1997, respectivley.
 
     CarrAmerica pays on behalf of the Partnership certain administrative costs
and certain costs related to the acquisitions of properties which are billed to
the Partnership, and makes working capital advances to the Partnership. Amounts
due to CarrAmerica and its subsidiaries were $1.4 million at December 31, 1997
and $2.8 million at December 31, 1996.
 
     During 1997, the Partnership sold land to CADI that will support the future
development of approximately four office properties for $5.9 million, which is
payable by a note between the Partnership and CADI.
 
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
 
     (a)(1) Financial Statements
 
          Reference is made to the Index to Financial Statements and Schedule on
     page F-1 of this Form 10-K.
 
     (a)(2) Financial Statement Schedules
 
          Reference is made to the Index to Financial Statements and Schedule on
     page F-1 of this Form 10-K.
 
     (a)(3) Exhibits
 
<TABLE>
<C>        <S>
   4.1     Second Amended and Restated Agreement of Limited Partnership of the Partnership, dated May 9, 1997
           (incorporated by reference to Exhibit 10.1 to CarrAmerica's Quarterly Report on Form 10-Q for the
           quarter ended March 31, 1997).
   4.2     First Amendment to Second Amended and Restated Agreement of Limited Partnership, dated October 6, 1997
           (incorporated by reference to Exhibit 10.2 to CarrAmerica's Annual Report on Form 10-K for the year
           ended December 31, 1997).
   4.3     Second Amendment to Second Amended and Restated Agreement of Limited Partnership, dated October 6,
           1997 (incorporated by reference to Exhibit 10.3 to CarrAmerica's Annual Report on Form 10-K for the
           year ended December 31, 1997).
   4.4     Third Amendment to Second Amended and Restated Agreement of Limited Partnership, dated October 6, 1997
           (incorporated by reference to Exhibit 10.3 to CarrAmerica's Annual Report on Form 10-K for the year
           ended December 31, 1997).
</TABLE>
 
                                       19
<PAGE>
<TABLE>
<C>        <S>
   4.5     Fourth Amendment to Second Amended and Restated Agreement of Limited Partnership, dated December 31,
           1998 (incorporated by reference to Exhibit 10.5 to CarrAmerica's Annual Report on Form 10-K for the
           year ended December 31, 1998).
   4.6     Indenture, dated as of July 1, 1997, by and among CarrAmerica, as Issuer, the Partnership, as
           Guarantor, and Bankers Trust Company, as Trustee, relating to CarrAmerica's 7.20% Notes due 2004 and
           7.375% Notes due 2007 (incorporated by reference to Exhibit 4.1 to CarrAmerica's Quarterly Report on
           Form 10-Q for the quarter ended June 30, 1997).
   4.7     Indenture, dated as of February 23, 1998, by and among CarrAmerica, as Issuer, the Partnership, as
           Guarantor, and Bankers Trust Company, as Trustee, relating to CarrAmerica's 6.625% Notes due 2005 and
           6.875% Notes due 2008 (incorporated by reference to Exhibit 4.2 to CarrAmerica's Annual Report on Form
           10-K for the year ended December 31, 1997).
   4.8     Indenture, dated as of October 1, 1998, by and among CarrAmerica, as Issuer, the Partnership, as
           Guarantor, and Bankers Trust Company, as Trustee (incorporated by reference to Exhibit 4.1 to the
           CarrAmerica's Current Report on Form 8-K filed on October 2, 1998).
  10.1     Stockholders Agreement, dated April 30, 1996, by and among CarrAmerica, Carr Realty, L.P., Security
           Capital Holdings, S.A. and Security Capital U.S. Realty (incorporated by reference to Exhibit 2.2 of
           Security Capital U.S. Realty's Schedule 13D dated April 30, 1996).
  10.2     Fourth Amended and Restated Credit Agreement, dated August 27, 1998, by and among CarrAmerica, Carr
           Realty, L.P., the Partnership, Morgan Guaranty Trust Company of New York, Commerzbank
           Aktiengesellschaft, New York Branch, NationsBank, N.A., Wells Fargo Bank, National Association, Bank
           of America National Trust and Savings Association, and the other banks listed therein (incorporated by
           reference to Exhibit 10.1 to CarrAmerica's Annual Report on Form 10-Q for the quarter ended September
           30, 1998.
  10.3     Agreements of Purchase and Sale and Contribution Agreement dated September 30, 1997 by and among the
           Partnership, Phoenixwest Associates, Ltd., Versailles Associates Limited Partnership, Lakeview 436
           Associates Ltd., Pines Realty Associates, Ltd., and certain other parties thereto (incorporated by
           reference to Exhibit 10.3 to the CarrAmerica's Annual Report on Form 10-K for the year ended December
           31, 1998).
  21.1     List of Subsidiaries.
  23.1     Consent of KPMG LLP, dated March 31, 1999.
   27      Financial Data Schedule.
  99.1     Certificate of Incorporation of CarrAmerica GP Holdings, Inc. (incorporated by reference to Exhibit
           99.1 to the Partnership's Registration Statement on Form 10/A, filed on October 1, 1997 (File No.
           0-22741)).
  99.2     Bylaws of CarrAmerica GP Holdings, Inc. (incorporated by reference to Exhibit 99.2 to the
           Partnership's Registration Statement on Form 10/A, filed on October 1, 1997 (File No. 0-22741)).
  99.3     'Item 1--Business--The Company--Risk Factors,' from CarrAmerica's Annual Report on Form 10-K for the
           year ended December 31, 1998.
  99.4     'Item 5--Market for Registrant's Common Equity & Related Stockholder Matters,' from CarrAmerica's
           Annual Report on Form 10-K for the year ended December 31, 1998.
  99.5     'Election of Directors (Proposal 1),' from CarrAmerica's Proxy Statement to be delivered to
           CarrAmerica's stockholders in connection with CarrAmerica's 1999 Annual Meeting of Stockholders.
  99.6     'Item 1--Business--The Company--Directors of the Company,' from CarrAmerica's Annual Report on Form
           10-K for the year ended December 31, 1998.
  99.7     'Item 1--Business--The Company--Executive Officers and Certain Key Employees of the Company,' from
           CarrAmerica's Annual Report on Form 10-K for the fiscal year ended December 31, 1998.
</TABLE>
 
                                       20
<PAGE>
<TABLE>
<C>        <S>
  99.8     'Executive Compensation,' from CarrAmerica's Proxy Statement to be delivered to CarrAmerica's
           stockholders in connection with CarrAmerica's 1999Annual Meeting of Stockholders.*
</TABLE>
 
(b) Reports on Form 8-K
 
     None
 
(c) Exhibits
 
     The list of exhibits filed with this report is set forth in response to
Item 14(a)(3). The required exhibit index has been filed with the exhibits.
 
(d) Financial Statements
 
     None.

----------------
* To be filed by amendment.
 
                                       21
<PAGE>
                                   SIGNATURES
 
     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registration has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
District of Columbia on March 31, 1999.
 
                                          CARRAMERICA REALTY, L.P.
                                          a Delaware limited partnership
 
                                          By: CarrAmerica Realty GP Holdings,
                                          Inc.
                                          General Partner
 
                                          By: ________/s/ THOMAS A. CARR________
                                                       Thomas A. Carr
                                                         President
 
     PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED, THIS REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSON ON BEHALF OF
THE REGISTRANT AND IN THE CAPACITIES INDICATED ON MARCH 31, 1999.
 
<TABLE>
<CAPTION>
                   SIGNATURE                                         TITLE
------------------------------------------------    ---------------------------------------
 
<C>                                                 <S>
               /s/ THOMAS A. CARR                   President and Director
------------------------------------------------
                 Thomas A. Carr
 
             /s/ PHILIP L. HAWKINS                  Managing Director, Vice President and
------------------------------------------------    Director
               Philip L. Hawkins
</TABLE>
 
                                       22
<PAGE>
                    CARRAMERICA REALTY, L.P. AND SUBSIDIARY
                   INDEX TO FINANCIAL STATEMENTS AND SCHEDULE
 
     The following Consolidated Financial Statements and Schedule of CarrAmerica
Realty, L.P. and Subsidiary and the Independent Auditors' Reports thereon are
attached hereto:
 
CARRAMERICA REALTY, L.P. AND SUBSIDIARY
 
<TABLE>
<S>                                                                                       <C>
Consolidated Balance Sheets as of December 31, 1998 and 1997...........................    F-2
Consolidated Statements of Operations for the Years Ended December 31, 1998, 1997 and
  the Period from March 6, 1996 (Date of Inception) to December 31, 1996...............    F-3
Consolidated Statements of Partners' Capital for the Years Ended December 31, 1998,
  1997 and the Period from March 6, 1996 (Date of Inception) to December 31, 1996......    F-4
Consolidated Statements of Cash Flows for the Years Ended December 31, 1998, 1997 and
  the Period from March 6, 1996 (Date of Inception) to December 31, 1996...............    F-5
Notes to Consolidated Financial Statements.............................................    F-6
Independent Auditors' Report...........................................................   F-16
</TABLE>
 
FINANCIAL STATEMENT SCHEDULE
 
<TABLE>
<S>                                                                                       <C>
Independent Auditors' Report...........................................................    S-1
Schedule III: Consolidated Real Estate and Accumulated Depreciation as of December 31,
  1998 for CarrAmerica Realty, L.P. and Subsidiary.....................................    S-2
</TABLE>
 
     All other schedules are omitted because they are not applicable, or because
the required information is included in the financial statements or notes
thereto.
 
                                      F-1
<PAGE>
                    CARRAMERICA REALTY, L.P. AND SUBSIDIARY
          CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 1998 AND 1997
--------------------------------------------------------------------------------
(In thousands)
 
<TABLE>
<CAPTION>
                                                                                            1998            1997
                                                                                        ------------    ------------
<S>                                                                                     <C>             <C>
                                       ASSETS
Rental property (notes 2 and 9):
  Land...............................................................................     $107,596          91,347
  Buildings..........................................................................      529,127         465,276
  Tenant improvements................................................................       35,209          12,496
  Furniture, fixtures, and equipment.................................................          665              96
                                                                                        ------------    ------------
                                                                                           672,597         569,215
  Less--accumulated depreciation.....................................................      (32,546)        (13,360)
                                                                                        ------------    ------------
     Total rental property...........................................................      640,051         555,855
Land held for development (note 9)...................................................       19,044          10,526
Construction in progress (note 9)....................................................       70,939          44,344
Restricted and unrestricted cash and cash equivalents (note 2).......................        4,504           5,085
Accounts and notes receivable (note 6)...............................................       10,536          11,757
Investments (note 12)................................................................        8,621              --
Accrued straight-line rents..........................................................        8,180           3,317
Tenant leasing costs, net of accumulated amortization of $1,924 in 1998 and $406 in
  1997...............................................................................       11,092           3,439
Deferred financing costs, net of accumulated amortization of $14 in 1998.............          337              --
Prepaid expenses and other assets, net of accumulated depreciation and amortization
  of $211 in 1998 and $46 in 1997....................................................        1,755           2,245
                                                                                        ------------    ------------
                                                                                          $775,059         636,568
                                                                                        ------------    ------------
                                                                                        ------------    ------------
                          LIABILITIES AND PARTNERS' CAPITAL
Mortgages and notes payable (note 2).................................................     $299,949         212,304
Note payable to affiliate (note 2)...................................................       28,996          29,411
Accounts payable and accrued expenses................................................       13,920          12,591
Due to affiliates (note 6)...........................................................           --           1,386
Rent received in advance and security deposits.......................................        5,387           3,244
                                                                                        ------------    ------------
     Total liabilities...............................................................      348,252         258,936
Partners' capital (note 3):
  General partner....................................................................        4,302           3,787
  Limited partners...................................................................      422,505         373,845
                                                                                        ------------    ------------
     Total partners' capital.........................................................      426,807         377,632
                                                                                        ------------    ------------
Commitments and Contingencies (notes 4 and 8)
                                                                                          $775,059         636,568
                                                                                        ------------    ------------
                                                                                        ------------    ------------
</TABLE>
 
          See accompanying notes to consolidated financial statements
 
                                      F-2
<PAGE>
                    CARRAMERICA REALTY, L.P. AND SUBSIDIARY
  CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 1998,
1997, AND FOR THE PERIOD FROM MARCH 6, 1996 (DATE OF INCEPTION) TO DECEMBER 31,
                                      1996
--------------------------------------------------------------------------------
 
(In thousands)
 
<TABLE>
<CAPTION>
                                                                                                           MARCH 6,
                                                                                                             1996
                                                                                                           (DATE OF
                                                                                                          INCEPTION)
                                                                                                         1997 THROUGH
                                                                                                       DECEMBER 31,
                                                                             1998            1997            1996
                                                                         ------------    ------------    ------------
<S>                                                                      <C>             <C>             <C>
Real estate operating revenue:
  Rental revenue (note 4):
     Minimum base rent................................................     $ 86,800         48,487          11,220
     Recoveries from tenants..........................................       12,670          8,043           1,790
     Other tenant charges.............................................        1,518          1,232             366
                                                                         ------------    ------------    ------------
       Total rental revenue...........................................      100,988         57,762          13,376
                                                                         ------------    ------------    ------------
  Real estate service revenue.........................................          160             --              --
  Cost reimbursements (note 6)........................................        3,466          2,707              --
                                                                         ------------    ------------    ------------
       Total revenue..................................................      104,614         60,469          13,376
                                                                         ------------    ------------    ------------
Real estate operating expenses:
  Property operating expenses:
     Operating expenses...............................................       24,972         19,102           4,873
     Real estate taxes................................................        9,195          6,702           1,673
  Interest expense....................................................       16,508          6,792           1,475
  General and administrative..........................................        6,365          3,473             680
  Depreciation and amortization.......................................       23,877         13,146           3,148
                                                                         ------------    ------------    ------------
       Total operating expenses.......................................       80,917         49,215          11,849
                                                                         ------------    ------------    ------------
       Real estate operating income...................................       23,697         11,254           1,527
Other operating income:
  Interest income.....................................................          982            372              29
  Gain on sales of assets (note 7)....................................        8,190          5,067              --
                                                                         ------------    ------------    ------------
     Net income.......................................................     $ 32,869         16,693           1,556
                                                                         ------------    ------------    ------------
                                                                         ------------    ------------    ------------
     Net income attributable to general partner.......................     $    329            167              15
                                                                         ------------    ------------    ------------
     Net income attributable to limited partners......................     $ 32,540         16,526           1,541
                                                                         ------------    ------------    ------------
                                                                         ------------    ------------    ------------
</TABLE>
 
          See accompanying notes to consolidated financial statements
 
                                      F-3
<PAGE>
                    CARRAMERICA REALTY, L.P. AND SUBSIDIARY
 CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL FOR THE YEARS ENDED DECEMBER 31,
                                  1998, 1997,
   AND THE PERIOD FROM MARCH 6, 1996 (DATE OF INCEPTION) TO DECEMBER 31, 1996
--------------------------------------------------------------------------------
 
(In thousands)
 
<TABLE>
<CAPTION>
                                                              GENERAL
                                                              PARTNER             LIMITED PARTNERS
                                                            ------------    ----------------------------
                                                            CARRAMERICA     CARRAMERICA
                                                             REALTY GP       REALTY LP
                                                             HOLDINGS,       HOLDINGS,     OTHER LIMITED
                                                                INC.           INC.          PARTNERS        TOTAL
                                                            ------------    -----------    -------------    --------
<S>                                                         <C>             <C>            <C>              <C>
Capital contributions....................................      $1,814         161,620          17,993        181,427
Capital distributions....................................         (20)         (1,924)           (106)        (2,050)
Net income...............................................          15           1,318             223          1,556
                                                            ------------    -----------    -------------    --------
Partners' capital at December 31, 1996...................       1,809         161,014          18,110        180,933
 
Capital contributions....................................       1,811         153,351          25,968        181,130
Capital distributions....................................          --              --          (1,124)        (1,124)
Net income...............................................         167          14,312           2,214         16,693
                                                            ------------    -----------    -------------    --------
Partners' capital at December 31, 1997...................       3,787         328,677          45,168        377,632
Capital contributions....................................         186          18,397              --         18,583
Capital distributions....................................          --              --          (2,277)        (2,277)
Net income...............................................         329          28,426           4,114         32,869
                                                            ------------    -----------    -------------    --------
Partners' capital at December 31, 1998...................      $4,302         375,500          47,005        426,807
                                                            ------------    -----------    -------------    --------
                                                            ------------    -----------    -------------    --------
</TABLE>
 
          See accompanying notes to consolidated financial statements
 
                                      F-4
<PAGE>
                    CARRAMERICA REALTY, L.P. AND SUBSIDIARY
  CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 1998,
                                      1997
   AND THE PERIOD FROM MARCH 6, 1996 (DATE OF INCEPTION) TO DECEMBER 31, 1996
--------------------------------------------------------------------------------
(In thousands)
 
<TABLE>
<CAPTION>
                                                                                                      MARCH 6, 1996
                                                                                                        (DATE OF
                                                                                                       INCEPTION)
                                                                                                         THROUGH
                                                                            1998         1997       DECEMBER 31, 1996
                                                                          ---------    ---------    -----------------
<S>                                                                       <C>          <C>          <C>
Cash flows from operating activities:
  Net income...........................................................   $  32,869       16,693            1,556
  Adjustments to reconcile net income to net cash provided by operating
    activities:
    Depreciation and amortization......................................      23,877       13,146            3,148
    Loss on write-off of assets........................................         465          148               --
  Changes in assets and liabilities:
    Decrease (increase) in receivables.................................       1,221       (9,869)          (1,816)
    Increase in accrued straight-line rents............................      (5,269)      (2,584)            (805)
    Additions to tenant leasing costs..................................      (2,531)      (3,981)            (916)
    Decrease (increase) in prepaid expenses and other assets...........         533       (1,991)            (277)
    Increase in accounts payable and accrued expenses..................       1,329        8,150            4,441
    Increase (decrease) in due to affiliates...........................      (1,386)      (1,388)           2,774
    Increase in rent received in advance and security deposits.........       2,143        1,919            1,325
                                                                          ---------    ---------    -----------------
      Total adjustments................................................      20,382        3,550            7,874
                                                                          ---------    ---------    -----------------
      Net cash provided by operating activities........................      53,251       20,243            9,430
                                                                          ---------    ---------    -----------------
Cash flows from investing activities:
  Additions to rental property.........................................     (19,284)      (9,892)             (98)
  Acquisitions of rental property......................................     (33,864)    (196,295)        (178,239)
  Additions to land held for future development........................     (22,193)     (10,049)         (13,254)
  Additions to construction in progress................................    (127,162)     (56,761)          (8,485)
  Investments in unconsolidated partnerships...........................      (8,621)          --               --
  Decrease (increase) in restricted cash and cash equivalents..........         264       (1,500)              --
  Proceeds from disposition of rental property and land held for
    development........................................................      74,652       58,978               --
                                                                          ---------    ---------    -----------------
      Net cash used by investing activities............................    (136,208)    (215,519)        (200,076)
                                                                          ---------    ---------    -----------------
Cash flows from financing activities:
  Capital contributions................................................      18,583      155,162          163,433
  Net borrowings on unsecured line of credit...........................      85,250       53,500            2,000
  Borrowings on notes payable to affiliates............................          --           --           30,000
  Repayments on notes and mortgages payable............................     (18,565)      (1,647)            (259)
  Disposition of mortgage payable from sale of rental property.........          --       (9,508)              --
  Additions to deferred financing costs................................        (351)          --               --
  Capital distributions................................................      (2,277)      (1,124)          (2,050)
                                                                          ---------    ---------    -----------------
      Net cash provided by financing activities........................      82,640      196,383          193,124
                                                                          ---------    ---------    -----------------
      Increase (decrease) in cash and cash equivalents.................        (317)       1,107            2,478
Cash and cash equivalents, beginning of the period.....................       3,585        2,478               --
                                                                          ---------    ---------    -----------------
Cash and cash equivalents, end of the period...........................   $   3,268        3,585            2,478
                                                                          ---------    ---------    -----------------
                                                                          ---------    ---------    -----------------
Supplemental disclosure of cash flow information:
  Cash paid for interest (net of capitalized interest of $4,894 in
    1998, $2,909 in 1997 and $431 for the period March 6, 1996 to
    December 31, 1996).................................................   $  17,003        6,210            1,619
                                                                          ---------    ---------    -----------------
                                                                          ---------    ---------    -----------------
</TABLE>
 
Supplemental disclosure of noncash investing and financing activities:
 
    (a) During 1998, the Partnership funded a portion of the aggregate purchase
        price of its property acquisitions by assuming $20.5 million of debt and
        liabilities.
 
    (b) During 1997, the Partnership funded a portion of the aggregate purchase
        price of its property acquisitions by assuming $147.6 million of debt
        and liabilities and by issuing $26.0 million of minority units in the
        Partnership.
 
    (c) For the period from March 6, 1996 to December 31, 1996, the Partnership
        funded a portion of the aggregate purchase price of its property
        acquisitions by assuming $20.0 million of debt and liabilities and $18.0
        million of minority units in the Partnership.
 
          See accompanying notes to consolidated financial statements
 
                                      F-5
<PAGE>
                    CARRAMERICA REALTY, L.P. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
  (a) Business
 
     CarrAmerica Realty, L.P. (the 'Partnership') is a Delaware limited
partnership formed on March 6, 1996 to own, acquire, develop, and operate office
buildings across the United States. At December 31, 1998, the Partnership owned
59 operating properties and twelve properties under development. The properties
are located in Austin, Chicago, Dallas, Denver, Orange County/Los Angeles,
Phoenix, San Francisco Bay area, Salt Lake City, San Diego and Seattle.
 
     The Partnership's general partner is CarrAmerica Realty GP Holdings, Inc.
(the 'General Partner'), a wholly-owned subsidiary of CarrAmerica Realty
Corporation ('CarrAmerica'), a self-administered and self-managed real estate
investment trust. The General Partner owned a 1% interest in the Partnership at
December 31, 1998. The Partnership's limited partners are CarrAmerica Realty LP
Holdings, Inc., a wholly-owned subsidiary of CarrAmerica, which owned an
approximate 87% interest in the Partnership at December 31, 1998, and various
other individuals and entities which collectively owned an approximate 12%
interest in the Partnership at December 31, 1998.
 
  (b) Basis of Presentation
 
     The accounts of the Partnership and its wholly-owned subsidiary are
consolidated in the accompanying financial statements. The Partnership uses the
equity method of accounting for its investments in unconsolidated partnerships
not controlled by the Partnership. Management of the Partnership has made a
number of estimates and assumptions relating to the reporting of assets and
liabilities, revenues and expenses, and the disclosure of contingent assets and
liabilities to prepare these financial statements in conformity with generally
accepted accounting principles. Actual results could differ from those
estimates.
 
  (c) Rental Property
 
     Rental property is recorded at cost less accumulated depreciation (which is
less than the net realizable value of the rental property). Depreciation is
computed on the straight-line basis over the estimated useful lives of the
assets, as follows:
 
<TABLE>
<S>                                                       <C>
Base Building...........................................  30 to 50 years
Building components.....................................  7 to 20 years
Tenant improvements.....................................  Terms of the leases or useful lives, whichever is
                                                            shorter
Furniture, fixtures and equipment.......................  5 to 15 years
</TABLE>
 
     Expenditures for maintenance and repairs are charged to operations as
incurred. Significant renovations are capitalized.
 
     The Partnership reviews its long-lived assets for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. Recoverability of assets to be held and used is measured
by a comparison of the carrying amount of an asset to future net cash flows
expected to be generated by the asset. If such assets are considered to be
impaired, the impairment to be recognized is measured by the amount by which the
carrying amount of the assets exceed the fair value of the assets.
 
     The Partnership reviews its rental property to determine the point at which
the asset is under contract for sale, with contingencies waived and
nonrefundable earnest money posted. If an asset is subject to these conditions,
the asset is reclassified to 'Assets Available for Sale' and depreciation is
discontinued.
 
                                      F-6
<PAGE>
                    CARRAMERICA REALTY, L.P. AND SUBSIDIARY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES--(CONTINUED)
  (d) Development Property
 
     Land held for development and construction in progress are carried at cost.
Specifically identifiable direct and indirect, development, construction and
external acquisition costs are capitalized including, where applicable, salaries
and related costs, real estate taxes, interest and certain pre-construction
costs essential to the development of a property.
 
  (e) Tenant Leasing Costs
 
     Fees and costs incurred in the successful negotiation of leases have been
deferred and are being amortized on a straight-line basis over the terms of the
respective leases.
 
  (f) Deferred Financing Costs
 
     Deferred financing costs include fees and costs incurred to obtain
financing and are being amortized over the terms of the respective loans on a
basis which approximates the interest method.
 
  (g) Fair Value of Financial Instruments
 
     The carrying amount of the following financial instruments approximates
fair value because of their short-term maturity: cash and cash equivalents;
accounts and notes receivable; accounts payable and accrued expenses.
 
  (h) Revenue Recognition
 
     The Partnership reports base rental revenue for financial statement
purposes straight-line over the terms of the respective leases. Accrued
straight-line rents represent the amount that straight-line rental revenue
exceeds rents collected in accordance with the lease agreements. Management,
considering current information and events regarding the tenants' ability to
fulfill their lease obligations, considers accrued straight-line rents to be
impaired if it is probable that the Partnership will be unable to collect all
rents due according to the contractual lease terms. If accrued straight-line
rents associated with a tenant are considered to be impaired, the amount of the
impairment is measured based on the present value of expected future cash flows.
Impairment losses, if any, are recorded through a loss on the write-off of
assets. Cash receipts on impaired accrued straight-line rents are applied to
reduce the remaining outstanding balance and as rental revenue, thereafter.
 
  (i) New Accounting Pronouncements
 
     In June 1998, the Financial Accounting Standards Board (FASB) issued SFAS
No. 133, 'Accounting for Derivative Instruments and Hedging Activities', which
requires that an entity recognize all derivatives as either assets or
liabilities in the statement of financial position and measure those instruments
at fair value. This statement is effective for all fiscal quarters of fiscal
years beginning after June 15, 1999. The Partnership has not yet determined the
impact of this pronouncement, if any.
 
  (j) Income and Other Taxes
 
     No provision has been made for federal and state income taxes because each
partner reports his or her share of the Partnership's taxable income or loss and
any available tax credits on his or her income tax return.
 
  (k) Cash Equivalents
 
     For the purposes of reporting cash flows, the Partnership considers all
highly liquid investments with a maturity of three months or less at the time of
purchase to be cash equivalents.
 
  (l) Stock Option Plan
 
     The Partnership is a participant in the CarrAmerica 1997 Stock Option and
Incentive Plan. Carr America and the Partnership accounted for their option
plans in accordance with the provisions of Accounting Principles Board ('APB')
Opinion No. 25, Accounting for Stock Issued to Employees, and related
interpretations. Compensation expenses would be recorded only if the current
market price of the underlying unit or stock on the date of grant exceeded the
exercise price.
 
                                      F-7
<PAGE>
                    CARRAMERICA REALTY, L.P. AND SUBSIDIARY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES--(CONTINUED)
  (m) Segment Operations
 
     In June 1997, the Financial Accounting Standards Board ('FASB') issued SFAS
No. 131, 'Disclosures about Segments of an Enterprise and Related Information,'
which requires a public entity to report selected information about operating
segments in financial reports issued to shareholders. It also establishes
standards for related disclosures about product and services, geographic areas
and major customers.
 
     The Partnership has segmented its operations into real estate property
operations, development operations and other operations. Other operations
consist of other business activities and operating segments that are not
reportable.
 
  (n) Reclassifications
 
     Certain reclassifications of the prior years' amounts have been made to
conform to the current period's presentation.
 
(2) MORTGAGES PAYABLE AND NOTES PAYABLE
 
     The Partnership's mortgages payable and credit facility are summarized as
follows (in thousands):
 
<TABLE>
<CAPTION>
                                                                                        DECEMBER 31,    DECEMBER 31,
                                                                                            1998            1997
                                                                                        ------------    ------------
<S>                                                                                     <C>             <C>
Fixed rate mortgages.................................................................     $159,199         156,804
Fixed rate note payable to affiliate.................................................       28,996          29,411
Unsecured credit facility............................................................      140,750          55,500
                                                                                        ------------    ------------
                                                                                          $328,945         241,715
                                                                                        ------------    ------------
                                                                                        ------------    ------------
</TABLE>
 
     Mortgages payable are collateralized by certain rental properties and
generally require monthly principal and/or interest payments. Mortgages payable
mature at various dates from May 1999 through May 2017. The weighted average
interest rate of mortgages payable was 8.2% and 8.1% at December 31, 1998 and
1997, respectively.
 
     CarrAmerica and the Partnership also have a $450.0 million unsecured credit
facility with Morgan Guaranty Trust Company of New York, as lead agent for a
group of banks. At December 31, 1998, the credit facility bore interest, as
selected by CarrAmerica, at either (i) the higher of the prime rate or the
Federal Funds Rate for such day or (ii) an interest rate equal to 90 basis
points above the 30 day London Interbank Offered Rate (LIBOR). CarrAmerica has
predominately selected interest rates equal to 90 basis points above the 30 day
LIBOR. The credit facility matures in August 2001. The weighted average
effective interest rate for 1998 was 6.3%. At December 31, 1998, CarrAmerica and
the Partnership had $61 million available for draw under the credit facility.
 
     The unsecured credit facility contains a number of financial and other
covenants with which the Partnership must comply including, but not limited to,
covenants relating to ratios of annual EBITDA (earnings before interest, taxes,
depreciation and amortization) to interest expense, annual EBITDA to debt
service, and total debt to tangible fair market value of CarrAmerica and the
Partnership's assets, and restrictions on the ability of CarrAmerica to make
dividend distributions in excess of 90% of funds from operations. Availability
under the unsecured credit facility is also limited to a specified percentage of
the Partnership's unsecured properties.
 
     On May 24, 1996, the Partnership entered into a $30 million loan agreement
with CarrAmerica. The note payable bears interest at 8.5% and requires monthly
principal and interest payments of $242 thousand. The loan matures on May 31,
2011. The note is secured by certain office properties and other assets of the
Partnership. The outstanding balance of the note payable to affiliate was $29.0
million and $29.4 million, at December 31, 1998 and December 31, 1997,
respectively.
 
                                      F-8
<PAGE>
                    CARRAMERICA REALTY, L.P. AND SUBSIDIARY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
(2) MORTGAGES PAYABLE AND NOTES PAYABLE--(CONTINUED)
     The annual maturities of debt as of December 31, 1998 are summarized as
follows (in thousands):
 
<TABLE>
<S>                                                              <C>
1999..........................................................   $ 17,843
2000..........................................................     16,229
2001..........................................................    173,285(1)
2002..........................................................      9,660
2003..........................................................     20,468
2004 & thereafter.............................................     91,460(2)
                                                                 --------
                                                                 $328,945
                                                                 --------
                                                                 --------
</TABLE>
 
------------------
(1) Includes $140.8 million outstanding as of December 31, 1998 under
    CarrAmerica's $450.0 million unsecured line of credit.
 
(2) Includes approximately $26.9 million outstanding on the Partnership's loan
    agreement with CarrAmerica.
 
     Restricted and unrestricted cash and cash equivalents includes $1.2 million
of restricted cash at December 31, 1998, consisting primarily of escrow deposits
required by lenders to be used for future building renovations, tenant
improvements or as collateral for letters of credit.
 
     Based on the borrowing rates available to the Partnership for fixed rate
mortgages and note payable with similar terms and average maturities, the
estimated fair value of the Partnership's mortgages at December 31, 1998 and
1997 was approximately $195.4 million and $194.4 million, respectively.
 
(3) PARTNERS' CAPITAL CONTRIBUTIONS, DISTRIBUTIONS, AND PARTICIPATION
PERCENTAGES
 
     The Second Amended and Restated Agreement of Limited Partnership of the
Partnership, as amended (the 'Partnership Agreement'), details the rights of
ownership in the Partnership. Ownership in the Partnership is expressed in
partnership units ('Units'). Units currently are designated as Class A, B, C, D
or E Units. Class D Units have first preference, Class A and Class E Units
together have second preference and Class B Units have third preference as to
the allocation of Available Cash, as defined in the Partnership Agreement. Class
C units do not share in the allocation of Available Cash. Upon the third
anniversary of the date of issuance of Class C Units, they may be converted to
Class A Units based on a conversion factor described in the Partnership
Agreement. Class E Units have a special allocation of Partnership losses.
 
     Upon the first anniversary of the date of issuance (or two years from the
date of issuance, in the case of Class D Units), each holder of Class A Units,
Class D Units or Class E Units may, subject to certain limitations, require that
the Partnership redeem his or her Units. Upon redemption, such holder will
receive, at the option of the Partnership, with respect to each Unit tendered,
either (i) cash in an amount equal to the market value of one share of
CarrAmerica common stock (subject to certain anti-dilution adjustments) or (ii)
one share of CarrAmerica common stock. In lieu of the Partnership redeeming
Class A, Class D or Class E Units for cash, CarrAmerica has the right to assume
directly and satisfy the redemption right of a Unit holder. Holders of Class B
Units and Class C Units are not entitled to exercise this redemption right.
 
     The following Units were outstanding:
 
<TABLE>
<CAPTION>
                                                               DECEMBER 31,    DECEMBER 31,    DECEMBER 31,
                                                                   1998            1997            1996
                                                               ------------    ------------    ------------
<S>                                                            <C>             <C>             <C>
Class A Units...............................................       950,111         950,111         361,677
Class B Units...............................................    12,584,630      11,916,673       6,619,131
Class C Units...............................................       539,593         539,593         539,593
Class D Units...............................................       271,363         271,363              --
Class E Units...............................................        16,520          16,520              --
                                                               ------------    ------------    ------------
                                                                14,362,217      13,694,260       7,520,401
                                                               ------------    ------------    ------------
                                                               ------------    ------------    ------------
</TABLE>
 
                                      F-9
<PAGE>
                    CARRAMERICA REALTY, L.P. AND SUBSIDIARY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
(4) LEASE AGREEMENTS
 
     The following table summarizes future minimum base rent to be received
under noncancelable tenant leases and the percentage of total rentable space
under leases expiring each year, as of December 31, 1998 (in thousands):
 
<TABLE>
<CAPTION>
                                                                             FUTURE       PERCENTAGE OF
                                                                            MINIMUM     TOTAL SPACE UNDER
                                                                              RENT       LEASES EXPIRING
                                                                            --------    -----------------
<S>                                                                         <C>         <C>
1999.....................................................................   $ 86,402           13.8%
2000.....................................................................     79,156            8.8
2001.....................................................................     69,882           16.6
2002.....................................................................     60,211           11.8
2003.....................................................................     45,565           12.5
2004 & thereafter........................................................    115,813           36.5
                                                                            --------
                                                                            $457,029
                                                                            --------
                                                                            --------
</TABLE>
 
     The leases also provide for additional rent based on increases in the
Consumer Price Index (CPI) and increases in operating expenses. These increases
are generally payable in equal installments throughout the year, based on
estimated increases, with any differences being adjusted in the succeeding year.
 
(5) STOCK OPTION PLANS
 
     As of December 31, 1998, the Partnership participated in the CarrAmerica
1997 Stock Option and Incentive Plan for the purpose of attracting and retaining
executive officers and other key employees.
 
     The 1997 Stock Option and Incentive Plan ('Stock Option Plan') allows for
the grant of options to purchase CarrAmerica's common stock at an exercise price
which is equal to the fair market value of the common stock at the date of
grant. The Stock Option Plan was approved by CarrAmerica's stockholders at its
Annual Meeting of Stockholders on May 8, 1997. At December 31, 1998, CarrAmerica
had options to purchase 7,200,000 shares of common stock authorized for grant
under the Stock Option Plan, of which 5,362,214 were reserved for issuance or
outstanding. All of the outstanding options have a 10-year term from the date of
grant. The majority of the outstanding options vest over a five-year period, 20%
per year, with the exception of 1,492,500 options which vest over a four-year
period, 25% per year, and 450,000 options which vest at the end of five years.
 
     In November 1998 CarrAmerica granted to key executives 417,754 restricted
stock units under the 1997 Stock Option Plan, of which 31,332 restricted stock
units were granted to Partnership employees. The restricted stock units are
subject to a 5 year vesting schedule, at 20% per year. On each vesting, each
executive will receive, at CarrAmerica's option, stock, cash or a combination of
stock and cash equal to the value of the vested restricted stock unit on the
vesting date, plus an amount equal to the dividends that would have been paid
with respect to such shares since the date of grant had the shares been issued
on such date. The closing price of a share of common stock of CarrAmerica on the
grant date was $23.9375.
 
                                      F-10
<PAGE>
                    CARRAMERICA REALTY, L.P. AND SUBSIDIARY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
(5) STOCK OPTION PLANS--(CONTINUED)
     Stock option activity for the Partnership during 1998 and 1997 is as
follows:
 
<TABLE>
<CAPTION>
                                                                            NUMBER OF    WEIGHTED AVERAGE
                                                                             SHARES       EXERCISE PRICE
                                                                            ---------    ----------------
<S>                                                                         <C>          <C>
Balance at December 31, 1996.............................................         --              --
Granted..................................................................     50,517          $28.45
Exercised................................................................         --              --
Forfeited................................................................        312           28.56
Expired..................................................................         --              --
                                                                            ---------        -------
Balance at December 31, 1997.............................................     50,205          $28.45
Granted..................................................................    270,000           25.90
Exercised................................................................         --              --
Forfeited................................................................         --              --
Expired..................................................................         --              --
                                                                            ---------        -------
Balance at December 31, 1998.............................................    320,205          $26.30
                                                                            ---------        -------
                                                                            ---------        -------
</TABLE>
 
     At December 31, 1998, the range of exercise prices for options issued to
employees of the Partnership was between $23.25 and $29.75 per share and the
weighted average remaining contractual life of outstanding options was 9.35
years.
 
     At December 31, 1998, the number of options exercisable was 10,041 and the
weighted average exercise price of those options was $28.45 per share. At
December 31, 1997, none of the options were exercisable.
 
     The following table summarizes certain information with regards to options
exercisable at December 31, 1998:
 
<TABLE>
<CAPTION>
                                             WEIGHTED AVERAGE
                                                REMAINING
   RANGE OF              NUMBER OF           CONTRACTUAL LIFE      WEIGHTED AVERAGE
EXERCISE PRICES      SHARES EXERCISABLE         (IN YEARS)          EXERCISE PRICE
---------------      ------------------      ----------------      ----------------
<S>                  <C>                     <C>                   <C>
 $26.38--$29.25            10,041                  8.27                 $28.45
</TABLE>
 
(6) TRANSACTIONS WITH AFFILIATES
 
     CarrAmerica Realty Services, Inc. ('CARSI'), a wholly-owned subsidiary of
CarrAmerica, provides management and leasing services to all of the office
properties owned by the Partnership. During 1998, 1997 and 1996, the Partnership
incurred management fees of $3.0 million, $1.9 million and $.4 million,
respectively, for services performed by CARSI. Additionally, CARSI reimburses
the Partnership for certain services the Partnership personnel provide to CARSI.
These reimbursements amounted to $2.9 million and $2.0 million in 1998 and 1997,
respectively. In addition, CarrAmerica Development, Inc. ('CADI'), also
reimbursed the Partnership for certain services the Partnership personnel
provided to CADI. These reimbursements amounted to $.3 million and $.7 million
in 1998 and 1997, respectively.
 
     CarrAmerica pays on behalf of the Partnership certain administrative costs
and certain costs related to the acquisitions of properties which are billed to
the Partnership, and makes working capital advances to the Partnership. Amounts
due to CarrAmerica and its subsidiaries were $1.4 million at December 31, 1997
and $2.8 million at December 31, 1996.
 
     During 1997, the Partnership sold land to CADI that will support the future
development of approximately four office properties for $5.9 million, which is
payable by a note between the Partnership and CADI.
 
                                      F-11
<PAGE>
                    CARRAMERICA REALTY, L.P. AND SUBSIDIARY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
(7) GAIN ON SALE OF ASSETS
 
     The Partnership has disposed of assets that are inconsistent with its
long-term strategic or return objectives or where market conditions for sale are
favorable. The proceeds of the sales were primarily redeployed into other office
properties (utilizing tax-deferred exchanges where possible). During 1998, the
Partnership disposed of three operating office properties. The Partnership
recognized gains totaling $8.2 million on these dispositions.
 
(8) COMMITMENTS AND CONTINGENCIES
 
     At December 31, 1998, the Partnership is contingently liable on letters of
credit amounting to approximately $1.4 million for various completion escrows.
 
     The Partnership participates in CarrAmerica's 401(k) plan for employees.
The Plan will match 50% of employee contributions up to the first 4% of an
employee's pay and will make a base contribution of 3% of pay for participants
who remain employed on December 31 (the end of the plan year). Partnership
contributions to the plan are subject to a five-year graduated vesting schedule.
Partnership contributions to the plan amounted to $73 thousand in 1998 and $41
thousand in 1997.
 
     In the course of the Partnership's normal business activities, various
lawsuits, claims and proceedings have been or may be instituted or asserted
against the Partnership. Based on currently available facts, management believes
that the disposition of matters that are pending or asserted will not have a
material adverse effect on the consolidated financial position, results of
operations or liquidity of the Partnership.
 
     During 1998 and 1997, the Partnership has unconditionally guaranteed
unsecured notes sold by CarrAmerica to institutional investors. The aggregate
principal amount of the unsecured notes is $625.0 million of long-term debt as
of December 31, 1998. These notes are in the form of $150 million of 6.625%
notes due in 2000, $150 million of 7.20% notes due in 2004, $100 million of
6.625% notes due in 2005, $125 million of 7.375% notes due in 2007 and $100
million of 6.875% notes due in 2008. The notes due in 2000, 2005 and 2008 were
issued in 1998. The notes due in 2004 and 2007 were issued in 1997.
CarrAmerica's senior unsecured notes contain various covenants with which
CarrAmerica must comply, including but not limited to: limits on the aggregate
amount of indebtedness CarrAmerica may have outstanding on a consolidated basis;
limits on the aggregate amount of secured indebtedness CarrAmerica may have
outstanding on a consolidated basis; and, limits on CarrAmerica's required debt
service payments.
 
(9) ACQUISITION AND DEVELOPMENT ACTIVITIES
 
     During 1998, the Partnership acquired three operating office properties for
an aggregate purchase price of $54.3 million. Costs incurred during 1998 for
properties under construction were $127.2 million. As of December 31, 1998, the
Partnership had twelve office properties under construction.
 
     During 1997, the Partnership acquired 30 operating office properties for an
aggregate purchase price of $343.2 million. Costs incurred during 1997 for
properties under construction were $56.8 million. In addition, CarrAmerica
contributed to the Partnership three operating office properties, one office
property under construction and options to acquire land which will support the
future development of approximately four office properties.
 
     All acquisitions have been accounted for as purchases. Operations of
acquired properties have been included in the accompanying financial statements
from their respective dates of acquisition.
 
     The following unaudited pro forma summary presents information as if the
Partnership's acquisitions and sales of properties through December 31, 1998 had
occurred at the beginning of 1997. The pro forma information is provided for
informational purposes only. It is based on historical information and does not
necessarily reflect the actual results that would have occurred nor is it
necessarily indicative of future results of operations of the Partnership.
 
                                      F-12
<PAGE>
                    CARRAMERICA REALTY, L.P. AND SUBSIDIARY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
(9) ACQUISITION AND DEVELOPMENT ACTIVITIES--(CONTINUED)
 
<TABLE>
<CAPTION>
PRO FORMA INFORMATION (UNAUDITED):                                                    1998       1997
---------------------------------------------------------------------------------   --------    -------
                                                                                      (IN THOUSANDS)
<S>                                                                                 <C>         <C>
Total revenue....................................................................   $106,289    $96,150
Net income.......................................................................   $ 32,955    $18,082
</TABLE>
 
(10) QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
 
     The following is a summary of quarterly results of operations for 1998,
1997 and 1996 (in thousands):
<TABLE>
<CAPTION>
                                                                          FIRST     SECOND      THIRD     FOURTH
1998                                                                     QUARTER    QUARTER    QUARTER    QUARTER
----------------------------------------------------------------------   -------    -------    -------    -------
<S>                                                                      <C>        <C>        <C>        <C>
Real estate operating revenue.........................................   $24,300    $26,473    $25,918    $27,923
                                                                         -------    -------    -------    -------
                                                                         -------    -------    -------    -------
Real estate operating income..........................................   $ 7,120    $ 6,669    $ 5,564    $ 4,344
                                                                         -------    -------    -------    -------
                                                                         -------    -------    -------    -------
Net income............................................................   $ 6,951    $ 6,819    $11,362    $ 7,737
                                                                         -------    -------    -------    -------
                                                                         -------    -------    -------    -------
 
<CAPTION>
 
                                                                          FIRST     SECOND      THIRD     FOURTH
1997                                                                     QUARTER    QUARTER    QUARTER    QUARTER
----------------------------------------------------------------------   -------    -------    -------    -------
<S>                                                                      <C>        <C>        <C>        <C>
Real estate operating revenue.........................................   $ 9,479    $13,540    $17,138    $20,312
                                                                         -------    -------    -------    -------
                                                                         -------    -------    -------    -------
Real estate operating income..........................................   $ 1,749    $ 2,690    $ 3,908    $ 2,907
                                                                         -------    -------    -------    -------
                                                                         -------    -------    -------    -------
Net income............................................................   $ 1,757    $ 2,738    $ 3,924    $ 8,274
                                                                         -------    -------    -------    -------
                                                                         -------    -------    -------    -------
<CAPTION>
 
                                                                          FIRST     SECOND      THIRD     FOURTH
1996                                                                     QUARTER    QUARTER    QUARTER    QUARTER
----------------------------------------------------------------------   -------    -------    -------    -------
<S>                                                                      <C>        <C>        <C>        <C>
Real estate operating revenue.........................................   $    --    $   959    $ 6,216    $ 6,201
                                                                         -------    -------    -------    -------
                                                                         -------    -------    -------    -------
Real estate operating income..........................................   $    --    $   (19)   $   236    $ 1,310
                                                                         -------    -------    -------    -------
                                                                         -------    -------    -------    -------
Net income............................................................   $    --    $   (18)   $   241    $ 1,333
                                                                         -------    -------    -------    -------
                                                                         -------    -------    -------    -------
</TABLE>
 
(11) INVESTMENT IN UNCONSOLIDATED PARTNERSHIP
 
     The Partnership owns a 35% interest in a development operation through an
unconsolidated partnership. This investment commenced in 1998. The condensed
financial information for the unconsolidated partnership is as follows:
 
DEVELOPMENT OPERATIONS
 
     (in thousands)
 
<TABLE>
<CAPTION>
                                                                          DECEMBER 31,
                                                                      --------------------
BALANCE SHEETS                                                          1998        1997
-------------------------------------------------------------------   --------    --------
<S>                                                                   <C>         <C>         <C>
                              ASSETS                                                    --
Rental property, net...............................................   $ 22,213          --
Cash and cash equivalents..........................................     18,456          --
Other assets.......................................................      1,667          --
                                                                      --------    --------
                                                                      $ 42,336          --
                                                                      --------    --------
                                                                      --------    --------
</TABLE>
 
                                      F-13
<PAGE>
                    CARRAMERICA REALTY, L.P. AND SUBSIDIARY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
(11) INVESTMENT IN UNCONSOLIDATED PARTNERSHIP--(CONTINUED)
<TABLE>
<S>                                                                   <C>         <C>         <C>
                 LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
  Notes payable....................................................   $ 18,350          --
  Other liabilities................................................        313          --
                                                                      --------    --------
     Total liabilities.............................................     18,663          --
Partners' Capital..................................................     23,673          --
                                                                      --------    --------
                                                                      $ 42,336          --
                                                                      --------    --------
                                                                      --------    --------

     STATEMENTS OF OPERATIONS       1998    1997   1996
     ------------------------       ----    ----   ----
Revenue........................... $  --      --     --
Other expenses....................   197      --     --
                                   -----    ----   ----
     Net loss..................... $(197)     --     --
                                   =====    ====   ====
</TABLE>
 
(12) SEGMENT INFORMATION
 
     The Partnership's reportable operating segments are real estate properly
operations and develpment operations. Other business activities and operating
segments that are not reportable are included in other operations.
 
     The Partnership's operating segments performance is measured using funds
from operations. Funds from operations represents net income excluding
depreciation and amortization on real estate assets and gain on sale of assets.
 
     (In millions)
 
<TABLE>
<CAPTION>
                                                                               AS OF AND FOR THE YEAR ENDED
                                                                                    DECEMBER 31, 1998
                                                                    --------------------------------------------------
                                                                    REAL ESTATE
                                                                     PROPERTY      DEVELOPMENT      OTHER
                                                                    OPERATIONS     OPERATIONS     OPERATIONS    TOTAL
                                                                    -----------    -----------    ----------    ------
<S>                                                                 <C>            <C>            <C>           <C>
Operating revenue................................................     $ 101.0             --           3.6       104.6
Segment expense..................................................     $  34.2             --           6.4        40.6
                                                                    -----------    -----------    ----------    ------
     Net segment revenue.........................................     $  66.8             --          (2.8)       64.0
Interest expense.................................................     $  15.9           (4.9)          5.5        16.5
Other income.....................................................     $   0.2             --           0.8         1.0
                                                                    -----------    -----------    ----------    ------
     Funds from operations.......................................     $  51.1            4.9          (7.5)       48.5
                                                                    -----------    -----------    ----------    ------
                                                                    -----------    -----------    ----------    ------
Adjustments to net income:
     Depreciation and amortization...............................                                               $(23.7)
     Gain on sale of assets......................................                                               $  8.2
                                                                                                                ------
Net income                                                                                                      $ 32.9
                                                                                                                ------
                                                                                                                ------
     Total assets................................................     $ 667.2           90.0          17.9       775.1
     Expenditures for long-lived assets..........................     $  84.8          149.4            --       234.2
</TABLE>
 
                                      F-14
<PAGE>
                    CARRAMERICA REALTY, L.P. AND SUBSIDIARY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
(12) SEGMENT INFORMATION--(CONTINUED)
 
<TABLE>
<CAPTION>
                                                                               AS OF AND FOR THE YEAR ENDED
                                                                                    DECEMBER 31, 1997
                                                                    --------------------------------------------------
                                                                    REAL ESTATE
                                                                     PROPERTY      DEVELOPMENT      OTHER
                                                                    OPERATIONS     OPERATIONS     OPERATIONS    TOTAL
                                                                    -----------    -----------    ----------    ------
<S>                                                                 <C>            <C>            <C>           <C>
Operating revenue................................................     $  57.8             --           2.7        60.5
Segment expense..................................................     $  25.8             --           3.5        29.3
                                                                    -----------    -----------    ----------    ------
     Net segment revenue.........................................     $  32.0             --          (0.8)       31.2
Interest expense.................................................     $   8.8           (2.9)          0.9         6.8
Other income.....................................................     $   0.1             --           0.2         0.3
                                                                    -----------    -----------    ----------    ------
     Funds from operations.......................................     $  23.3            2.9          (1.5)       24.7
                                                                    -----------    -----------    ----------    ------
                                                                    -----------    -----------    ----------    ------
Adjustments to net income:
     Depreciation and amortization...............................                                               $(13.1)
     Gain on sale of assets......................................                                               $  5.1
                                                                                                                ------
Net income                                                                                                      $ 16.7
                                                                                                                ------
                                                                                                                ------
     Total assets................................................     $ 592.2           35.6           8.8       636.6
     Expenditures for long-lived assets..........................     $ 383.8           66.8            --       450.6
</TABLE>
 
<TABLE>
<CAPTION>
                                                                             AS OF DECEMBER 31, 1996 AND FOR
                                                                              THE PERIOD FROM MARCH 6, 1996
                                                                                  (DATE OF INCEPTION) TO
                                                                                    DECEMBER 31, 1996
                                                                    --------------------------------------------------
                                                                    REAL ESTATE
                                                                     PROPERTY      DEVELOPMENT      OTHER
                                                                    OPERATIONS     OPERATIONS     OPERATIONS    TOTAL
                                                                    -----------    -----------    ----------    ------
<S>                                                                 <C>            <C>            <C>           <C>
Operating revenue................................................     $  13.4             --            --        13.4
Segment expense..................................................     $   6.5             --           0.7         7.2
                                                                    -----------    -----------    ----------    ------
     Net segment revenue.........................................     $   6.9             --          (0.7)        6.2
Interest expense.................................................     $   1.9           (0.4)           --         1.5
                                                                    -----------    -----------    ----------    ------
     Funds from operations.......................................     $   5.0            0.4          (0.7)        4.7
                                                                    -----------    -----------    ----------    ------
                                                                    -----------    -----------    ----------    ------
Adjustments to net income:
     Depreciation and amortization...............................                                               $ (3.1)
                                                                                                                ------
Net income                                                                                                      $  1.6
                                                                                                                ------
                                                                                                                ------
     Total assets................................................     $ 217.7           21.7           1.8       241.2
     Expenditures for long-lived assets..........................     $ 217.1           21.8            --       238.9
</TABLE>
 
                                      F-15
<PAGE>
                          INDEPENDENT AUDITORS' REPORT
                    CARRAMERICA REALTY, L.P. AND SUBSIDIARY
 
The Partners CarrAmerica Realty, L.P.:
 
     We have audited the accompanying consolidated balance sheets of CarrAmerica
Realty, L.P. and subsidiary as of December 31, 1998 and 1997 the related
consolidated statements of operations, partners' capital, and cash flows for the
years ended December 31, 1998 and 1997 and the period from March 6, 1996 (date
of inception) to December 31, 1996. These consolidated financial statements are
the responsibility of CarrAmerica Realty, L.P.'s management. Our responsibility
is to express an opinion on these consolidated financial statements based on our
audits.
 
     We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
 
     In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of CarrAmerica
Realty, L.P. and subsidiary as of December 31, 1998 and 1997, and the results of
their operations and their cash flows for the years ended December 31, 1998 and
1997 and the period from March 6, 1996 (date of inception) to December 31, 1996,
in conformity with generally accepted accounting principles.
 
                                          KPMG LLP
 
Washington, D.C.
  February 6, 1999
 
                                      F-16
<PAGE>
                          INDEPENDENT AUDITORS' REPORT
                    CARRAMERICA REALTY, L.P. AND SUBSIDIARY
 
The Partners CarrAmerica Realty, L.P.:
 
     Under date of February 6, 1999, we reported on the consolidated balance
sheets of CarrAmerica Realty, L.P. and subsidiary as of December 31, 1998 and
1997, and the related consolidated statements of operations, partners' capital,
and cash flows for the years ended December 31, 1998 and 1997 and the period
from March 6, 1996 (date of inception) to December 31, 1996, which are included
in this Form 10-K. In connection with our audits of the aforementioned
consolidated financial statements, we also audited the related consolidated
financial statement schedule in this Form 10-K. This financial statement
schedule is the responsibility of CarrAmerica Realty, L.P.'s management. Our
responsibility is to express an opinion on this financial statement schedule
based on our audits.
 
     In our opinion, this financial statement schedule, when considered in
relation to the basic consolidated financial statements taken as a whole,
presents fairly, in all material respects, the information set forth therein.
 
                                                                            KPMG
LLP
 
Washington, D.C.
  February 6, 1999
 
                                      S-1
<PAGE>
<TABLE>
<CAPTION>
                                            CARRAMERCA REALTY, L.P. AND SUBSIDIARY
                        CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION AS OF DECEMBER 31, 1998
<S>                                          <C>            <C>       <C>            <C>                <C>       <C>
                                                                                                        GROSS AMOUNT AT WHICH
                                                                                                         CARRIED AT CLOSE OF
                                                                INITIAL COSTS                                   PERIOD
                                                            ----------------------                      ----------------------
                                                                       BUILDINGS     COST CAPITALIZED              BUILDINGS
(In thousands)                                                            AND         SUBSEQUENT TO                   AND
PROPERTIES                                   ENCUMBRANCES    LAND     IMPROVEMENTS    ACQUISITION(1)     LAND     IMPROVEMENTS
-------------------------------------------  ------------   -------   ------------   ----------------   -------   ------------
ORANGE COUNTY/LOS ANGELES:
  South Coast Executive Center.............    $ 10,127       3,324       17,212              811         3,388       17,959
  2600 W. Olive............................      19,152       3,855       25,054            2,709         3,904       27,714
  Bay Technology Center....................          --       2,442       11,164              128         2,462       11,272
SAN DIEGO:
  Jaycor...................................      12,781       5,123       11,754               --         5,123       11,754
SAN FRANCISCO BAY AREA:
  San Mateo II and III.....................          --       9,723       15,556              659         9,817       16,121
  San Mateo I..............................          --       5,703        9,126               47         5,710        9,166
DENVER:
  Quebec Center............................          --       1,423        5,659              613         1,423        6,272
  Greenwood Center.........................          --         289        6,619              505           289        7,124
  Quebec Court I and II....................      28,996(2)    2,368       19,819            9,142         2,371       28,958
  Harlequin Plaza..........................          --(2)    4,746       21,344            4,562         4,748       25,904
  Panorama Corporate Center I..............          --       1,325        6,486            3,494         1,326        9,979
  Panorama Corporate Center II.............          --       1,844           --            9,043         1,939        8,948
SEATTLE:
  Canyon Park Commons 1 and 2..............       5,615       2,375        9,958               29         2,380        9,982
SALT LAKE CITY, UTAH:
  Sorenson Research Park XI................          --       1,490           --              481         1,971           --
  Sorenson Research Park...................       4,263       4,389       25,304              407         4,423       25,677
  Sorenson Research Park X(3)..............          --         772           --            2,439            --        3,211
  Wasatch Corporate Center.................      12,654       3,318       15,495              320         3,578       15,555
  Wasatch Corporate Center 17 and 18(3)....          --       2,378           --            6,072            --        8,450
  Wasatch Corporate Center 18..............          --         258           --              813           236          835
CHICAGO:
  Bannockburn IV...........................          --       1,914       12,729              325         1,924       13,044
  Bannockburn I and II.....................      19,554       3,448       22,928            1,082         3,472       23,986
AUSTIN, TEXAS:
  Balcones Center..........................          --         949        7,649              438           949        8,087
  Great Hills Plaza........................          --       1,680       13,545              207         1,680       13,752
  Park North...............................          --       1,671       13,471              706         1,671       14,177
  City View Centre.........................          --       1,718       13,854            1,060         1,720       14,912
  Tower of the Hills.......................          --       1,633       13,625              273         1,634       13,897
 
<CAPTION>
 
                        CONSOLIDATED REAL E
<S>                                          <C>       <C>            <C>                <C>
 
(In thousands)                                          ACCUMULATED       DATE OF          YEAR OF
PROPERTIES                                    TOTAL    DEPRECIATION     CONSTRUCTION     ACQUISITION
-------------------------------------------  -------   -------------  ----------------   -----------
ORANGE COUNTY/LOS ANGELES:
  South Coast Executive Center.............   21,347         1,337          1987             1996
  2600 W. Olive............................   31,618         1,420          1986             1997
  Bay Technology Center....................   13,734           391          1985             1997
SAN DIEGO:
  Jaycor...................................   16,877            82          1989             1998
SAN FRANCISCO BAY AREA:
  San Mateo II and III.....................   25,938           794          1985             1997
  San Mateo I..............................   14,876           369          1986             1997
DENVER:
  Quebec Center............................    7,695           769          1985             1996
  Greenwood Center.........................    7,413           663          1982             1996
  Quebec Court I and II....................   31,329         2,556       1979/1980           1996
  Harlequin Plaza..........................   30,654         2,647          1981             1996
  Panorama Corporate Center I..............   11,305         1,182          N/A              1997
  Panorama Corporate Center II.............   10,887           837          N/A              1997
SEATTLE:
  Canyon Park Commons 1 and 2..............   12,362           561          1988             1997
SALT LAKE CITY, UTAH:
  Sorenson Research Park XI................    1,971            --          N/A              1997
  Sorenson Research Park...................   30,100         1,470    1988,1989,1993,
                                                                         1995,1997           1997
  Sorenson Research Park X(3)..............    3,211            --          N/A              1997
  Wasatch Corporate Center.................   19,133           800          1996             1997
  Wasatch Corporate Center 17 and 18(3)....    8,450            --          N/A              1997
  Wasatch Corporate Center 18..............    1,071            22          1998             1997
CHICAGO:
  Bannockburn IV...........................   14,968           685          1988             1997
  Bannockburn I and II.....................   27,458         1,628          1980             1997
AUSTIN, TEXAS:
  Balcones Center..........................    9,036           793          1985             1996
  Great Hills Plaza........................   15,432         1,110          1985             1996
  Park North...............................   15,848         1,318          1981             1996
  City View Centre.........................   16,632         1,552          1985             1996
  Tower of the Hills.......................   15,531           499          1986             1997
</TABLE>
 
                                      S-2
<PAGE>
<TABLE>
<CAPTION>
                                            CARRAMERCA REALTY, L.P. AND SUBSIDIARY
                        CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION AS OF DECEMBER 31, 1998
                                                                                                        GROSS AMOUNT AT WHICH
                                                                                                         CARRIED AT CLOSE OF
                                                                INITIAL COSTS                                   PERIOD
                                                            ----------------------                      ----------------------
                                                                       BUILDINGS     COST CAPITALIZED              BUILDINGS
(In thousands)                                                            AND         SUBSEQUENT TO                   AND
PROPERTIES                                   ENCUMBRANCES    LAND     IMPROVEMENTS    ACQUISITION(1)     LAND     IMPROVEMENTS
-------------------------------------------  ------------   -------   ------------   ----------------   -------   ------------
<S>                                          <C>            <C>       <C>            <C>                <C>       <C>
  Riata Buildings 4, 5, 8, 9...............          --     $ 4,490           --           31,348         4,856       30,982
  Riata Buildings 2, 3, 9(3)...............          --       2,245           --           11,146            --       13,391
  Riata Buildings 1, 6, 7..................          --       3,386           --            1,703         5,089           --
  City View Centre.........................          --       1,890           --           13,693         2,107       13,476
  Riata Crossing 4-6.......................          --       1,940           --               83         2,023           --
  Riata Crossing 1-3(3)....................          --       2,993           --            7,356            --       10,349
 
DALLAS, TEXAS:
  Quorum North.............................       6,566       1,357        9,078              780         1,365        9,850
  Quorum Place.............................       7,578       1,941       14,234            1,082         1,954       15,303
  Tollhill East and West...................          --       2,603       19,086            1,604         2,612       20,681
  Two Mission Park.........................          --         823        4,320              652           831        4,964
  Cedar Maple Plaza........................          --       1,220       10,982              411         1,225       11,388
  Cedar Maple Plaza -- Land................          --         520           --               93           613           --
  Royal Ridge A and B......................          --       2,601           --           15,747         2,718       15,630
  Royal Ridge B(3).........................          --         558           --            2,024            --        2,582
  5000 Quorum..............................          --       1,774       15,616              484         1,782       16,092
  The Commons at Las Colinas 2.............          --       3,189           --              377         3,566           --
  The Commons at Las Colinas 1 and 3(3)....          --       6,801           --           26,154            --       32,955
  Royal Ridge Phase II.....................          --       5,221           --              561         5,782           --
 
PHOENIX, ARIZONA:
  U.S. West................................      53,263      18,517       74,069              786        18,642       74,730
  Concord Place............................       7,646       3,337       16,675              156         3,337       16,831
                                             ------------   -------   ------------        -------       -------   ------------
  Total....................................    $188,195     137,564      462,411          162,605       126,640      635,940
                                             ------------
                                             ------------   -------
                                                            -------   ------------
                                                                      ------------        -------
                                                                                          -------       -------
                                                                                                        -------   ------------
                                                                                                                  ------------
 
<CAPTION>
 
                        CONSOLIDATED REAL E
 
(In thousands)                                          ACCUMULATED       DATE OF          YEAR OF
PROPERTIES                                    TOTAL    DEPRECIATION     CONSTRUCTION     ACQUISITION
-------------------------------------------  -------   -------------  ----------------   -----------
<S>                                          <C>       <C>            <C>                <C>
  Riata Buildings 4, 5, 8, 9...............   35,838           986          1998             1996
  Riata Buildings 2, 3, 9(3)...............   13,391            --          N/A              1996
  Riata Buildings 1, 6, 7..................    5,089            --          N/A              1996
  City View Centre.........................   15,583           702          1998             1996
  Riata Crossing 4-6.......................    2,023            --          N/A              1998
  Riata Crossing 1-3(3)....................   10,349            --          N/A              1998
DALLAS, TEXAS:
  Quorum North.............................   11,215           657          1983             1997
  Quorum Place.............................   17,257         1,021          1981             1997
  Tollhill East and West...................   23,293         1,315          1974             1997
  Two Mission Park.........................    5,795           253          1983             1997
  Cedar Maple Plaza........................   12,613           782          1985             1997
  Cedar Maple Plaza -- Land................      613            --          N/A              1997
  Royal Ridge A and B......................   18,348           179          1998             1997
  Royal Ridge B(3).........................    2,582            --          N/A              1997
  5000 Quorum..............................   17,874           441          1984             1998
  The Commons at Las Colinas 2.............    3,566            --          N/A              1998
  The Commons at Las Colinas 1 and 3(3)....   32,955            --          N/A              1998
  Royal Ridge Phase II.....................    5,782            --          N/A              1998
PHOENIX, ARIZONA:
  U.S. West................................   93,372         2,595          1988             1997
  Concord Place............................   20,168           130          1989             1998
                                             -------        ------
  Total....................................  762,580        32,546
 
                                             -------
                                             -------        ------
                                                            ------
</TABLE>
 
     Depreciation and amortization of the investment in building and
improvements reflected in the statements of operations are calculated over the
estimated lives of the assets as follows:
 
<TABLE>
<S>                                 <C>
Base Building                       30 to 50 years
Building components                 7 to 20 years
Tenant improvements                 Terms of leases or useful lives, whichever is shorter
Furniture, fixtures and equipment   5 to 15 years
</TABLE>
 
     The aggregate cost for federal income tax purposes was approximately
$584,823 at December 31, 1998.
 
                                      S-3
<PAGE>
     The changes in total real estate assets and accumulated depreciation and
amortization for 1998, 1997 and 1996 are as follows:
<TABLE>
<CAPTION>
                                                                                                           ACCUMULATED
                                       TOTAL REAL ESTATE ASSET                                             DEPRECIATION
                                   -------------------------------                                     --------------------
                                     1998       1997       1996                                          1998       1997
                                   ---------  ---------  ---------                                     ---------  ---------
<S>                                <C>        <C>        <C>        <C>                                <C>        <C>
Balance, beginning of period       $ 624,085    238,073         --  Balance, beginning of period       $  13,360      3,104
  Acquisitions                        94,153    393,275    232,092
  Improvements                       122,086     53,640      5,981    Depreciation for the period         22,331     12,961
  Sales, Retirements and                                              Sales, Retirements and
    write-offs                       (77,744)   (60,903)        --      write-offs                        (3,145)    (2,705)
                                   ---------  ---------  ---------                                     ---------  ---------
                                   $ 762,580    624,085    238,073                                     $  32,546     13,360
                                   ---------  ---------  ---------                                     ---------  ---------
                                   ---------  ---------  ---------                                     ---------  ---------
 
<CAPTION>
 
                                     1996
                                   ---------
<S>                                <C>
Balance, beginning of period              --
  Acquisitions
  Improvements                         3,104
  Sales, Retirements and
    write-offs
                                   ---------
                                       3,104
                                   ---------
                                   ---------
</TABLE>
 
------------------
Notes:
(1) Costs capitalized are offset by retirements and write-offs.
(2) Secured by Quebec Court I & II and Harlequin Plaza.
(3) Under construction as of December 31, 1998. Construction costs are shown
    under buildings and improvements until completion. At that time, costs will
    be allocated between land and buildings and improvements.
 
                                      S-4