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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-K
(Mark One)

|X|   Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
      Act of 1934 For the fiscal year ended December 31, 1999

                                       OR

|_|   Transition report pursuant to Section 13 or 15(d) of the Securities
      Exchange Act of 1934 For the transition period from __________ to
      _____________

                         Commission File Number: 1-14979
                                                 -------

                        CABOT INDUSTRIAL PROPERTIES, L.P.
             (Exact name of registrant as specified in its charter)

        Delaware                                         04-3397874
-------------------------------             ------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

            Two Center Plaza, Suite 200, Boston, Massachusetts 02108
            --------------------------------------------------------
               (Address of principal executive offices) (Zip code)

      Registrant's telephone number, including area code: (617) 723-0900

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

   Title of each class                Name of each exchange on which registered
   -------------------                -----------------------------------------

   7.125% Redeemable Notes due 2004   New York Stock Exchange
       (Issue Price:  99.724%)

      Securities registered pursuant to Section 12(g) of the Act: None

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

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

      State the aggregate market value of the voting stock held by
non-affiliates of the registrant: Not applicable. No market for the registrant's
partnership units exists and therefore, a market value for such units cannot be
determined.

                      DOCUMENTS INCORPORATED BY REFERENCE

      Part III incorporates certain information by reference from the definitive
proxy statement of Cabot Industrial Trust filed with respect to its 2000 Annual
Meeting of Shareholders.

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                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
             Description                                                            Page
<S>          <C>                                                                     <C>
PART I

Item 1.      Business................................................................ 1
Item 2.      Properties..............................................................11
Item 3.      Legal Proceedings.......................................................22
Item 4.      Submission of Matters to a Vote of Security Holders.....................22
Item 4A.     Executive Officers of Registrant........................................22

PART II

Item 5.      Market for Registrant's Common Equity and Related Stockholder
             Matters.................................................................23
Item 6.      Selected Financial Data.................................................24
Item 7.      Management's Discussion and Analysis of Financial Condition
             and Results of Operations...............................................25
Item 7A.     Quantitative and Qualitative Disclosures About Market Risk..............30
Item 8.      Financial Statements and Supplementary Data.............................32
Item 9.      Changes in and Disagreements with Accountants on Accounting
             and Financial Disclosure................................................73

PART III

Item 10.     Directors and Executive Officers of the Registrant......................73
Item 11.     Executive Compensation  ................................................73
Item 12.     Principal and Management Shareholders...................................73
Item 13.     Certain Relationships and Related Transactions..........................73

PART IV

Item 14.     Exhibits, Financial Statement Schedules, and Reports on Form 8-K........75

SIGNATURES...........................................................................74
</TABLE>
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                                     PART I

Item 1. Business

Cabot Industrial Properties, L.P.

Cabot Industrial Properties, L.P. ("Cabot L.P.") was organized on October 10,
1997 as a Delaware limited partnership to continue and expand the national
industrial real estate business of Cabot Partners Limited Partnership ("Cabot
Partners"). The sole general partner of Cabot L.P. is Cabot Industrial Trust
(Cabot Trust), a Maryland real estate investment trust. Cabot L.P. and Cabot
Trust are organized in what is commonly referred to as an umbrella partnership,
or "UPREIT" structure, meaning that all of Cabot Trust's properties are held and
its business is conducted primarily through Cabot L.P. At December 31, 1999,
Cabot Trust held a 93% partnership interest in Cabot L.P. The balance of the
partnership interests in Cabot L.P. at that date was primarily held by investors
who had contributed properties or assets to Cabot L.P. in connection with the
commencement of the business of Cabot Trust and Cabot L.P. in their current
form, or in subsequent transactions. See "Formation Transactions; Organizational
Structure".

Cabot Trust is an internally managed, fully integrated real estate company
which, through Cabot L.P., acquires or develops, leases, manages and holds for
investment industrial real estate properties in principal markets throughout the
United States. At December 31, 1999, Cabot L.P. owned a geographically
diversified portfolio of 320 industrial properties having an aggregate of
approximately 38 million rentable square feet, approximately 97% of which space
was leased to 638 tenants. The properties are located in 22 states in each of
the five principal regions (West, Midwest, Northeast, Southeast and Southwest)
of the United States. As of December 31, 1999, no single tenant accounted for
more than 2.6% of Cabot L.P.'s total annualized base rent. Between December 31,
1999 and February 29, 2000, Cabot L.P. acquired 14 industrial properties
containing approximately 1,366,000 square feet and contracted to purchase seven
additional industrial properties containing approximately 770,000 square feet.

Cabot L.P.'s goal is to be the preeminent national real estate company focused
on serving a variety of industrial space users. As of December 31, 1999, Cabot
L.P. has a significant market presence across the United States, with properties
in a total of 22 markets (19 of which Cabot L.P. has identified as principal
targeted markets), including 11 markets in which Cabot L.P. owns properties with
more than one million rentable square feet. Its tenant base ranges from large
national distributors using bulk warehouse and other types of industrial space
in multiple locations to small companies located in single workspace properties.
Cabot L.P. believes that its geographic diversification and substantial presence
in multiple markets is a strategic advantage that allows it to serve industrial
space users with multiple site and industrial property type requirements, to
compete more effectively in its individual markets, and to respond quickly to
acquisition opportunities as they arise.

Cabot L.P. offers a broad spectrum of industrial property types to meet the
diverse needs of its tenants. Its properties are of three general types: bulk
distribution properties, multitenant distribution properties and workspace
properties (light industrial, R&D and similar facilities).

In addition to acquiring existing industrial properties, Cabot L.P. is engaged
in the development and construction of new properties. Its development
activities are conducted through relationships with local builders selected by
Cabot L.P. As of December 31, 1999, Cabot L.P. had approved 17 development
projects with total projected development costs of approximately $172.0 million.
The


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projects are located in 12 of Cabot L.P.'s existing submarkets and involve
construction of each of Cabot L.P.'s principal property types. Sixty-five
percent of the square footage in development projects which have reached shell
completion, with estimated total project costs of $66.8 million, have been
leased.

Cabot L.P. is taxed as a partnership under the Internal Revenue Code of 1986
(the "Code"), as amended. As a partnership, Cabot L.P. will not be subject to
federal and state income taxes as the partners report their respective shares of
net taxable income on their individual returns.

Cabot L.P.'s principal executive offices are located at Two Center Plaza, Suite
200, Boston, Massachusetts 02108, and its telephone number is (617) 723-0900.
Cabot L.P. has regional offices in the Atlanta, Baltimore, Chicago, Cincinnati,
Dallas, Los Angeles, Orlando and Phoenix markets.

Formation Transactions; Organizational Structure

In February 1998, Cabot Trust completed an initial public offering of 8,625,000
common shares of beneficial interest ("Common Shares") and a private placement
of 1,000,000 Common Shares, in each case at an offering price of $20.00 per
Common Share (collectively, the "Offerings"). The Offerings resulted in net
proceeds to Cabot Trust of approximately $176.3 million, which were contributed
to Cabot L.P. in exchange for a corresponding number of units of partnership
interest. Concurrently with the completion of the Offerings, Cabot Trust also
completed a series of business combinations (the "Formation Transactions")
involving Cabot Partners and a number of property-owning entities, including
both entities organized by Cabot Partners and its institutional advisory
clients, and institutional investors that had no prior relationship with Cabot
Partners (collectively, the "Contributing Investors"). The Formation
Transactions resulted, among other things, in the transfer of ownership of 122
industrial properties to Cabot L.P.

Cabot Trust's interest in Cabot L.P. entitles it to share in cash distributions
from, and in the profits and losses of, Cabot L.P. in proportion to Cabot
Trust's percentage ownership (apart from tax allocations of profits and losses
to take into account pre-contribution property appreciation). Limited
partnership interests in Cabot L.P. ("Units") are convertible into Common Shares
of Cabot Trust on a one-for-one basis subject to Cabot Trust's right to redeem
such interests for cash in lieu of issuing Common Shares.

As the general partner of Cabot L.P., Cabot Trust has the exclusive power under
the agreement of limited partnership to manage and conduct the business of Cabot
L.P. Cabot Trust holds one Unit in Cabot L.P. for each Common Share that it has
issued. The net proceeds of the issuance of Common Shares of Cabot Trust are
required to be contributed to Cabot L.P. in exchange for a corresponding number
of Units of partnership interest.

Business Strategies

Cabot L.P.'s fundamental business objective is to maximize the total return to
its unitholders through growth in its cash available for distribution per
partnership Unit and in the value of its portfolio of industrial properties and
operations. Cabot L.P. believes that it is well positioned to take advantage of
the opportunities presented by today's changing industrial real estate markets
through the business strategies and operations described below.


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Leveraging Substantial National Market Presence

Cabot L.P. believes that maintaining and expanding its market presence in its 19
principal targeted markets across the country is an important factor in
achieving future growth and its targeted returns on investment.

Cabot L.P. believes that its substantial presence in its principal markets
provides significant strategic advantages. Foremost among these advantages is
that, through a national tenant marketing program, Cabot L.P. is well positioned
to market its industrial space to national companies and third-party logistics
companies who have space requirements in multiple markets. The national tenant
marketing program emphasizes the advantages of dealing with a single source for
a company's industrial space needs in addition to the quality and attractive
locations of Cabot L.P.'s properties. These advantages include greater
efficiency of lease negotiations and day-to-day property management, as well as
better understanding of the tenants' current needs and prospective space
requirements. Cabot L.P. serves 55 tenants in multiple properties. These tenants
accounted for approximately 28% of Cabot L.P.'s annualized net rents as of
December 31, 1999.

Cabot L.P. believes that having a substantial inventory of properties and
significant leasing activities within each local market increases its visibility
to prospective tenants and enables it to establish strong relationships with
leasing brokers and other local market participants. These brokers and market
participants serve as sources of information and potential tenant referrals. In
addition, larger inventories increase Cabot L.P.'s opportunities to relocate
tenants to one or more of its other properties as their needs change. Increased
size of operations in a market also enables Cabot L.P. to bear the costs of the
management personnel and facilities needed to build long-term tenant
relationships in that market.

Serving a Variety of Tenants By Offering a Broad Spectrum of Industrial Property
Types

Cabot L.P. believes that its strategy of offering a variety of industrial
property types provides complementary benefits in meeting Cabot L.P.'s growth
objectives. Offering a broad spectrum of industrial property types and Cabot
L.P.'s size and professional management capability enable Cabot L.P. to provide
better service, on a more cost-efficient basis, to national customers who need
various types of workspace properties, in addition to distribution space, for
their local operations. At the same time, offering a variety of industrial
property types suitable for smaller companies enables Cabot L.P. to capture a
larger share of the growth in its chosen industrial property markets. Cabot
L.P.'s strategy of offering diverse industrial property types also enables Cabot
L.P. to pursue opportunities as they arise within its tenant base by responding
to shifts in demand at different stages of the economic cycle.

Growth Strategies

Cabot L.P. intends to achieve its growth objectives through a combination of
property acquisitions, development and internal growth.

Acquisitions

Cabot L.P. seeks to capitalize on its competitive advantages primarily by
acquiring additional modern, high-quality properties in attractive submarkets
within the industrial markets that it currently serves. During 1999, Cabot L.P.
acquired 113 properties, consisting of 10 million rentable square feet in 14
targeted markets, totaling $448.3 million in 42 separate transactions. Through
February 29, 2000, Cabot L.P. acquired 14 additional properties in the Atlanta,
Harrisburg and Phoenix markets, consisting of approximately 1,366,000 rentable
square feet. In addition, Cabot L.P. entered into


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contracts to acquire properties consisting of approximately 770,000 rentable
square feet in the Atlanta, Charlotte, Dallas, San Diego and San Francisco
markets. In the near term, Cabot L.P. expects to moderate the pace of its
acquisition program, compared to prior years.

      Investment Criteria

Cabot L.P. follows a disciplined, value-oriented strategy in its property
acquisitions. Cabot L.P. seeks to acquire modern, cost-efficient buildings
located in key national and regional distribution centers. Cabot L.P.'s
investment considerations include (i) capitalization rates, (ii) economic
fundamentals in the market, (iii) replacement costs, (iv) rent levels and
trends, (v) construction quality and property condition, (vi) historical
occupancy rates, (vii) access to transportation, (viii) proximity to housing,
(ix) operating costs, (x) location in modern industrial parks and (xi) local
crime rates.

      Emphasis on Market Research

Cabot L.P.'s property acquisitions are based on extensive research in each
targeted market regarding (i) economic and demographic trends, (ii) the supply
of and demand for industrial space in targeted submarkets, (iii) existing and
potential tenant space requirements, (iv) rent levels and trends and (v) the
physical characteristics of buildings within the market. Cabot L.P.'s research
includes extensive in-market activity by its employees, including physical site
inspections and continuing contacts with leasing brokers and other local market
participants in the local markets.

      Diversification of Industrial Property Types

As of December 31, 1999, 69% of Cabot L.P.'s properties, based on annualized net
rents, have been bulk distribution and multitenant distribution facilities
because of the opportunities for superior returns such properties have provided.
While Cabot L.P. expects that both types of properties will continue to be part
of its future acquisition program, Cabot L.P. believes that workspace properties
(light industrial, R&D and similar facilities) are also attractive in selected
markets where they are in limited supply and strong demand exists. Cabot L.P.
continues to increase its acquisitions of workspace properties, which
represented approximately 31% of its properties at December 31, 1999 based on
annualized net rents. During 1999, Cabot L.P.'s acquisitions as defined by cost
were 22% bulk distribution, 40% multitenant distribution and 38% workspace
properties.

      Relationships with Institutional Real Estate Investors

Prior to the formation of Cabot L.P., management operated Cabot Partners, which
was focused on serving public and private pension funds and other institutional
real estate investors in connection with investments in and management of
industrial real estate. This has provided Cabot L.P.'s management with an
extensive knowledge of and, Cabot L.P. believes, a favorable reputation with
such investors. Cabot L.P. believes that it will benefit from its relationships
with these investors through further acquisitions as they increasingly seek to
securitize their direct real estate investments.

      Capital Resources and UPREIT Structure

As of December 31, 1999, Cabot L.P. had a debt-to-total market capitalization
ratio of approximately 35%. Cabot L.P. has used its relatively unleveraged
capital structure and substantial equity base in its acquisition and development
activities. Cabot L.P. believes that its ability to borrow using its $325
million revolving credit acquisition facility has enhanced its credibility with
potential property sellers. Cabot L.P.'s UPREIT structure, which enables it to
acquire industrial properties on a non-cash basis by exchanging Units in Cabot
L.P. for properties in a tax-deferred manner, also provides an alternative,
depending on market conditions, to a taxable cash sale for tax-paying property
owners.


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Development

Cabot L.P.'s senior management has extensive real estate development experience,
including experience derived from the industrial park development activities of
Cabot, Cabot and Forbes, a nationwide real estate development, investment,
construction and management firm that pioneered the development of large-scale,
planned industrial parks. Cabot L.P. believes that in select targeted markets
there are attractive opportunities for new development with potentially greater
returns than those available from the purchase of existing stabilized
properties, and Cabot L.P. pursues a development program where such
opportunities exist. Cabot L.P. is also engaging its existing tenants in
discussions about future space needs and, based on such discussions, believes
that financially attractive build-to-suit opportunities from its tenant base may
be available over time. In order to limit overhead expenses, Cabot L.P. executes
its development activities by engaging local or regional builders with whom it
has established strong relationships. Currently, Cabot L.P. is working with nine
local builders. Cabot L.P. intends to expand its in-house development staff as
Cabot L.P.'s development activities increase.

Internal Growth

Cabot L.P.'s primary internal growth strategy is to increase the cash flow
generated by its properties, and from properties that it proposes to acquire by
renewing or replacing expiring leases with new leases at higher rental rates and
through rent increase provisions in its leases. In addition, Cabot L.P. works
actively to (i) maintain its historically high occupancy levels by retaining
existing tenants, thereby minimizing "down time" and re-leasing costs, (ii)
improve the occupancy levels of newly acquired properties that have lower
occupancy levels than Cabot L.P. targets for its existing properties, (iii)
capitalize on economies of scale arising from the size of its portfolio of
properties and (iv) control costs. Cabot L.P. also seeks internal growth by
converting its properties to more intensive, higher-margin uses, if and to the
extent that suitable opportunities to do so arise. Leases covering approximately
13.7% and 16.4% of the total rentable space of Cabot L.P.'s properties will
expire in 2000 and 2001, respectively.

Leases

Cabot L.P.'s properties typically are leased on a triple net basis, meaning that
the tenants pay their proportionate share of real estate taxes and operating
costs. However, some of the properties are leased at higher gross rents with
Cabot L.P. being responsible for paying a stated amount of real estate taxes and
operating costs and tenants being responsible for any and all increases in such
taxes and costs above that stated amount. Excluding lease renewal options, lease
terms typically range from three to five years or, for leases that are renewed,
a shorter period of generally two to three years. Approximately 48% (based on
annualized net rent) of these leases contain provisions for automatic increases
of a specified amount or percentage at a certain point or points during the term
of the lease.

Policies

The following is a description of policies that have been adopted by the Cabot
Trust Board of Trustees for the conduct of the business of Cabot Trust and Cabot
L.P. These policies may be amended or revised from time to time without Cabot
Trust shareholder approval, except that shareholder approval would be required
for Cabot Trust to change its policy of holding its assets and conducting its
business only through Cabot L.P. and its subsidiaries and other affiliates,
including Cabot Advisors, Inc. ("Cabot


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Advisors") and joint ventures in which Cabot L.P. or a subsidiary may be a
partner. In addition, changes in policies with respect to conflicts of interest
must be consistent with legal requirements.

Investment Policies

Cabot Trust conducts all of its investment activities through Cabot L.P. and its
subsidiaries and other affiliates, including Cabot Advisors, and may in the
future conduct activities through joint ventures in which Cabot L.P. or a
subsidiary may be a partner. Cabot L.P.'s investment policy is to purchase
income-producing industrial properties primarily for long-term capital
appreciation and rental growth, and to expand and improve its properties or to
sell them, in whole or in part, when the circumstances warrant.

Cabot L.P.'s property investments may be subject to existing mortgage and other
indebtedness or to indebtedness that may be incurred in connection with
acquiring or refinancing such investments. Debt service with respect to such
indebtedness will have a priority over any distributions with respect to the
Units. Investments are also subject to Cabot L.P.'s policy not to be
treated as an investment company under the Investment Company Act of 1940.

Cabot L.P. currently invests primarily in existing improved properties, but also
invests in development projects. It does not limit its investment or development
activities to any geographic area or product type or to a specified percentage
of assets. While Cabot L.P. intends to maintain diversity in its investments in
terms of property location, size and market, Cabot L.P. does not have any limit
on the amount or percentage of its assets that may be invested in any one
property or any one geographic area. Cabot Trust intends to conduct the
investment and development activities of Cabot L.P. in a manner that is
consistent with the maintenance of Cabot Trust's status as a REIT for federal
income tax purposes.

Cabot L.P.'s current portfolio consists of, and its business objectives
emphasize, equity investments in industrial real estate. Cabot L.P. may also
make or invest in loans secured by mortgages or deeds of trust that are
consistent with Cabot Trust's continued qualification as a REIT for federal
income tax purposes, although it has no current plans to do so. These may
include participating or convertible mortgage loans if Cabot L.P. concludes
that it may benefit from the cash flow or any appreciation in value of the
property secured by such mortgages. Investments in real estate mortgage loans
entail the risk that one or more borrowers may default under such loans and that
the collateral securing such loans may not be sufficient to enable Cabot L.P.
to recoup its full investment.

Subject to the limitations on ownership of certain types of assets and the gross
income tests imposed by the Code, Cabot L.P. also may invest in the securities
of other REITs, other entities engaged in real estate activities or other
issuers, including investments made for the purpose of exercising control over
such entities. Cabot L.P. may enter into joint ventures or partnerships for the
purpose of obtaining an equity interest in a particular property in accordance
with its investment policies. Such investments may permit Cabot L.P. to own
interests in larger assets without unduly restricting diversification and,
therefore, add flexibility in structuring its portfolio. Cabot Trust does not
intend to enter into joint ventures or partnerships to make investments that
would not meet its own investment policies.

Financing Policies

As a general policy, Cabot Trust intends to limit its total consolidated
indebtedness incurred by directing the activities of Cabot L.P. so that at the
time any debt is incurred, Cabot L.P.'s debt-to-total market capitalization
ratio does not exceed 40%. Cabot Trust's Declaration of Trust and Bylaws and
Cabot L.P.'s Partnership Agreement do not, however, limit the amount or
percentage of indebtedness that it may incur. Moreover, due to fluctuations in
the value of Cabot L.P.'s portfolio of properties over time, and since any
determination


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of its debt-to-total market capitalization ratio is made only at the time debt
is incurred, the debt-to-total market capitalization ratio could exceed the 40%
level. In addition, Cabot L.P. may modify its debt policy from time to time in
light of changes in economic conditions, relative costs of debt and equity
capital, the market values of its properties, general conditions in the market
for debt and equity securities, fluctuations in the market price of its Units,
growth and acquisition opportunities and other factors. If its debt policy were
changed, Cabot L.P. could become more highly leveraged, resulting in an
increased risk of default on its obligations and a related increase in debt
service requirements that could adversely affect the financial condition and
results of operations of Cabot L.P. and its ability to make distributions to
unitholders.

Cabot L.P. has not established any limit on the number or amount of mortgages
that it may place on any single property or on its portfolio as a whole.

The Board of Trustees of Cabot Trust may decide to obtain additional capital,
from time to time through offerings of Cabot Trust's Common or Preferred Shares
or of Cabot L.P.'s partnership units, including preferred units, debt financings
or retention of cash available for distribution (subject to provisions in the
Code concerning the taxability of undistributed REIT income), or a combination
of these methods. As long as Cabot L.P. is in existence, the net proceeds of the
sale of Common Shares or Preferred Shares by Cabot Trust will be transferred to
Cabot L.P. in exchange for that number of Units or Preferred Units that equals
the number of Common Shares or Preferred Shares sold by Cabot Trust.

Cabot Trust presently anticipates that any borrowings would be made through
Cabot L.P., although Cabot Trust may incur indebtedness directly and loan the
proceeds to Cabot L.P. Borrowings may be unsecured or may be secured by any or
all of the assets of Cabot L.P. (to the extent not prohibited by existing debt
arrangements), or any existing or new property-owning partnership and may have
full or limited recourse to all or any portion of the assets of Cabot L.P., or
any existing or new property-owning partnership. Indebtedness incurred may be in
the form of bank borrowings, purchase money obligations to sellers of
properties, publicly or privately placed debt instruments or financing from
institutional investors or other lenders. The proceeds from borrowings may be
used for working capital, to refinance existing indebtedness or to finance
acquisitions, expansions or the development of new properties, and for the
payment of distributions.

Neither Cabot Trust nor Cabot L.P. has any present policy or intention to
repurchase or otherwise acquire any shares, units or other securities issued by
either of them.

Conflict of Interest Policies

Cabot L.P. has adopted policies that are intended to minimize potential
conflicts of interest. However, there can be no assurance that these policies
will be successful in eliminating the influence of such conflicts and, if they
are not successful, decisions could be made that do not fully reflect the
interests of all unitholders.

Policies with Respect to Other Activities

Cabot L.P. may, but does not presently intend to, make investments that are
different from those described herein. Cabot Trust has authority to offer its
Common Shares, other shares of beneficial interest or other securities for cash
or in exchange for property and to repurchase or otherwise reacquire its shares
or any other securities and may engage in such activities in the future. Cabot
L.P. and Cabot Trust have no outstanding loans to other entities or persons,
including officers and Trustees of Cabot Trust, except Cabot Advisors. Cabot
L.P. has not engaged in trading, underwriting or agency distribution or sales of


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securities of other issuers and does not currently intend to do so. Cabot L.P.
and Cabot Trust make and intend to continue to make investments in such a way
that neither of them will be treated as an investment company under the
Investment Company Act of 1940. Their policies with respect to such activities
may be reviewed and modified or amended from time to time by the Board of
Trustees of Cabot Trust without approval of Cabot Trust's shareholders or Cabot
L.P.'s limited partners.

Cabot L.P. intends to make investments in a manner consistent with the
requirements of the Code for Cabot Trust to qualify as a REIT unless, because of
changing circumstances or changes in the Code or applicable Treasury
regulations, the Board of Trustees of Cabot Trust determines that it is no
longer in the best interests of Cabot Trust to qualify as a REIT.

Working Capital Reserves

Cabot L.P. intends to maintain working capital reserves in amounts that the
Board of Trustees of Cabot Trust determines to be adequate to meet normal
contingencies in connection with the operation of Cabot L.P.'s business and
investments.

Declaration of Trust and Bylaw Provisions

Cabot Trust's Declaration of Trust requires, with limited exceptions, that a
majority of Cabot Trust's Board of Trustees be comprised of individuals who are
not officers or employees of Cabot Trust ("Independent Trustees"). This
requirement may not be amended, altered, changed or repealed without the
affirmative vote of a majority of all of the outstanding shares of Cabot Trust
entitled to vote on the matter. The Declaration of Trust also includes a
provision generally permitting Cabot Trust to enter into any agreement or
transaction with any person, including any Trustee, officer, employee or agent
of Cabot Trust.

Cabot Trust's Bylaws provide that Section 2-419 of the Maryland General
Corporation Law, relating to transactions by interested directors, will be
available for and apply to contracts and other transactions between Cabot Trust
and any of its Trustees or between Cabot Trust and any other trust, corporation
or other entity of or in which any of Cabot Trust's Trustees is a trustee or
director or has a material financial interest. Under Section 2-419, a contract
or other transaction between a corporation and any of its directors and any
other corporation, firm or other entity in which any of its directors is a
director or has a material financial interest is not void or voidable solely
because of (a) the common directorship or interest, (b) the presence of the
director at the meeting of the board or a committee of the board that
authorizes, approves or ratifies the contract or transaction, (c) the counting
of the vote of the director for the authorization, approval or ratification of
the contract or transaction if either (i) after disclosure of the interest, the
transaction is authorized, approved or ratified by the affirmative vote of a
majority of the disinterested directors, or by the affirmative vote of a
majority of the votes cast by shareholders entitled to vote other than the votes
of shares owned of record or beneficially by the interested director or such
corporation, firm or other entity, or (ii) the transaction is fair and
reasonable to the corporation.

Cabot L.P. Partnership Agreement

The Cabot L. P. Partnership Agreement gives Cabot Trust, in its capacity as
general partner, full and exclusive discretion in managing and controlling the
business of Cabot L.P. and in making all


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<PAGE>

decisions affecting the business and assets of Cabot L.P., with limited
exceptions. In the Partnership Agreement, the limited partners have acknowledged
and agreed that Cabot Trust is acting on behalf of both Cabot L.P. and Cabot
Trust's shareholders generally and that, in its capacity as general partner of
Cabot L.P., Cabot Trust is under no obligation to consider separate interests of
the Cabot L.P. limited partners in deciding whether to cause Cabot L.P. to take
or to decline to take, any actions which Cabot Trust, in its capacity as general
partner, has undertaken in good faith on behalf of Cabot L.P. In addition, Cabot
Trust in its capacity as general partner is not responsible for any misconduct
or negligence on the part of its agents, provided that such agents were
appointed in good faith. The Cabot L.P. Partnership Agreement also provides that
neither Cabot Trust nor any of its affiliates (including its officers and
Trustees) may sell, transfer or convey any property to, or purchase any property
from, Cabot L.P., except on terms that are fair and reasonable and no less
favorable than would be obtained from an unaffiliated party.

Security Holder Reports

Cabot Trust makes annual reports to its shareholders regarding the business of
Cabot Trust and Cabot L.P. that include audited consolidated financial
statements. Cabot L.P. does not currently provide separate annual or other
reports to security holders of Cabot L.P. and does not expect to do so, except
to the extent it may specifically undertake to do so in connection with future
issuances of debt or other securities.

Competition

Numerous industrial properties compete with Cabot L.P.'s properties in
attracting tenants to lease space and additional properties can be expected to
be built in the markets in which the properties are located. The number and
quality of competitive industrial properties in a particular area has a material
effect on Cabot L.P.'s ability to lease space at the properties or at newly
acquired properties and on the rents charged. Some of these competing properties
may be newer or better located than Cabot L.P.'s properties.

In addition, the industrial real estate acquisition market has become highly
competitive. There are a significant number of buyers of industrial property,
including other publicly traded industrial REITs, many of which have significant
financial resources. Accordingly, it is possible that Cabot L.P. may not be able
to meet its targeted level of property acquisitions and developments due to such
competition or other factors that may have an adverse effect on Cabot L.P.'s
expected growth in Funds from Operations ("FFO").

Insurance

Cabot L.P. carries commercial general liability insurance, standard "all-risk"
property insurance, flood, earthquake and rental loss insurance with respect to
its properties with policy terms and conditions customarily carried for similar
properties. However, the insurance is subject to normal limitations on the
amounts of coverage and certain types of losses (such as from wars or from
earthquakes for properties located in California) may be either uninsurable or
not economically insurable. Should an uninsured loss or a loss in excess of the
amount of the insurance coverage occur, Cabot L.P. could lose the capital
invested in a property, as well as the anticipated future revenue from that
property, and


                                       9
<PAGE>

Cabot L.P. would continue to be obligated on any mortgage indebtedness or other
obligations related to the property.

In light of the California earthquake risk, California building codes have since
the early 1970's established minimum construction standards for all new
buildings and also contain guidelines for seismic upgrading of existing
buildings that are intended to reduce the possibility and severity of loss from
earthquakes. The construction standards and upgrading, however, do not eliminate
the possibility of earthquake loss. Cabot L.P.'s current policy is to obtain
earthquake insurance if available at acceptable cost. As of December 31, 1999,
all of its 74 properties located in California are covered by earthquake
insurance in amounts believed by management to be reasonable. At December 31,
1999, seismic upgrading had been completed on 19 of the California properties
and seismic upgrading is expected to be completed on nine additional California
properties by December 31, 2000. Cabot L.P. currently maintains blanket
earthquake insurance coverage for all properties located outside California in
amounts Cabot L.P. believes to be reasonable.

Environmental Matters

Under various federal, state and local environmental laws, ordinances and
regulations, a current or previous owner or operator of real property may be
liable for the costs of removal or remediation of hazardous or toxic substances
on, under or in such property. Such laws often impose liability whether or not
the owner or operator knew of, or was responsible for, the presence of such
hazardous or toxic substances.

In addition, the presence of hazardous or toxic substances, or the failure to
remediate such property properly, may adversely affect the owner's ability to
borrow using such real property as collateral. Persons who arrange for the
disposal or treatment of hazardous or toxic substances may also be liable for
the costs of removal or remediation of hazardous substances at the disposal or
treatment facility, whether or not such facility is or ever was owned or
operated by such person.

Certain environmental laws and common law principles could be used to impose
liability for release of and exposure to hazardous substances and third parties
may seek recovery from owners or operators of real properties for personal
injury or property damage associated with exposure to released hazardous
substances. As the owner of real properties, Cabot L.P. may be potentially
liable for any such costs.

Phase I environmental site assessment reports ("Phase I ESAs") were obtained by
our original Contributing Investors in connection with their initial
acquisitions of the properties, or were obtained by Cabot Trust in connection
with the transactions resulting in Cabot Trust's formation as a publicly traded
company. In accordance with Cabot Trust's acquisition policies, Cabot Trust has
also obtained Phase I ESAs for all of the properties acquired since the
completion of the Formation Transactions. The purpose of Phase I ESAs is to
identify potential sources of contamination for which Cabot L.P. may be
responsible and to assess the status of environmental regulatory compliance. The
earliest of the Phase I ESAs for Cabot L.P.'s properties were obtained in 1988
and Phase I ESAs on approximately 14% of the properties owned as of December 31,
1999 were obtained prior to 1995. Commonly accepted standards and practices for
Phase I ESAs have evolved to encompass higher standards and more extensive
procedures over the period of 1988 to the present.

The Phase I ESAs obtained for Cabot L.P.'s properties have not revealed any
environmental liability that Cabot L.P. believes would have a material adverse
effect on its business, assets or results of


                                       10
<PAGE>

operations, nor is Cabot L.P. aware of any such material environmental
liability. It is possible, even if prepared in accordance with professional
standards, that Phase I ESAs relating to the subject properties do not reveal
all environmental liabilities. Moreover, future laws, ordinances or regulations
may impose material environmental liability or the properties' current
environmental condition may be affected by tenants, by the condition of land or
operations in the vicinity of the properties (such as the presence of
underground storage tanks) or by third parties unrelated to Cabot L.P.

Cabot Advisors

Cabot Advisors provides investment advisory and asset management services to the
former clients of Cabot Partners that elected not to contribute some or all of
their industrial properties to Cabot Trust. In addition, Cabot Advisors provides
property management services to Cabot L.P. and to the properties of some clients
that are not associated with Cabot Trust. Cabot L.P. intends to explore
opportunities for co-investment, however, Cabot Advisors will not provide
services relating to any industrial real estate acquisition or development
activities that would conflict with Cabot L.P.'s own acquisition and development
activities. Cabot L.P. believes that its investment in Cabot Advisors will help
it achieve economies of scale with its property management systems, increase
market penetration and provide access to further acquisition opportunities.

To permit Cabot Trust to share in the income of Cabot Advisors while maintaining
its status as a REIT under the law as currently in effect, Cabot L.P. owns all
of Cabot Advisors' non-voting preferred stock (representing 95% of its economic
interest in Cabot Advisors) and Ferdinand Colloredo-Mansfeld, Cabot Trust's
Chief Executive Officer, owns all of Cabot Advisors' voting common stock
(representing 5% of its economic interest therein). Although Cabot Trust
receives substantially all of the economic benefit of Cabot Advisors' business
through distributions from Cabot L.P., Cabot Trust is not able to vote on the
election of Cabot Advisors' directors or officers and, as a result, does not
have the ability to control Cabot Advisors' operations or require its board of
directors to declare and pay cash dividends.

In late 1999, the REIT Modernization Act (RMA) was signed into law, to take
effect on January 1, 2001. The RMA will permit Cabot Trust and any corporation
in which it invests to elect to treat such corporation as a taxable REIT
subsidiary, which will be subject to corporate taxation on its earnings, but
which will be permitted to engage in certain activities that REITs and their
controlled subsidiaries cannot currently perform without jeopardizing REIT
status. Cabot Trust is currently assessing the impact of the RMA on its
operations and the operations of Cabot Advisors.

Employees

At December 31, 1999, Cabot L.P. and Cabot Advisors employed 95 persons, none of
who are represented by any collective bargaining organization. Cabot L.P.
believes it has good relations with its employees.

Item 2. Properties

For descriptive purposes, Cabot L.P.'s properties may generally be grouped into
three property types: bulk distribution properties, multitenant distribution
properties and workspace properties.


                                       11
<PAGE>

Bulk distribution properties are oriented primarily to large national and
regional distribution tenants. These properties generally have at least 100,000
square feet of rentable space, building depths of at least 240 feet, clear
heights of 24 feet or more, truck courts in excess of 100 feet in depth to
accommodate larger modern trucks, a ratio of loading docks to rentable space of
one or more per 10,000 square feet and a location with good access to interstate
highways.

Multitenant distribution properties are oriented primarily to smaller regional
and local distribution tenants, and are generally designed to be subdivided to
suit tenants whose space requirements generally range from 10,000 square feet to
100,000 square feet. These properties generally have clear heights of 20 feet or
more, building depths of less than 240 feet (unless configured with loading
docks on two sides) and a location with good access to regional and interstate
highways. Both types of distribution property are used predominantly for the
storage and distribution of goods.

Workspace properties are designed to serve a variety of industrial tenants with
workspace-related requirements, including light manufacturing and assembly,
research, testing, re-packaging and sorting, back office and sales office
functions. Workspace tenants include smaller companies whose space requirements
generally range from 3,000 square feet to 70,000 square feet. Workspace
properties generally have clear heights of 14 to 24 feet, attractive building
exteriors, office finish of up to 30% or more, parking ratios of one to four
spaces per 1,000 rentable square feet and locations with good access to
executive residential areas and local highways, labor supply and dining and
shopping amenities.

The table set forth below summarizes information regarding Cabot L.P.'s
properties and markets as of December 31, 1999. All of the properties listed are
owned, directly or through title holding entities, by Cabot L.P.

                         Properties by Region and Market
                             As of December 31, 1999

<TABLE>
<CAPTION>
                                                                                Rentable Sq. Ft.         Annualized Net Rent(1)
                                                                                ----------------         ----------------------
                                                                      Number                                                    Per
                                                               Year    of                                           Percent   Leased
                                                              Built/  Proper-             Percent                     of        Sq.
Property Type and Location                                  Renovated  ties      Number    Leased      Amount        Total      Ft.
--------------------------                                  ---------  ----      ------    ------      ------        -----      ---
<S>                                                             <C>      <C>   <C>           <C>    <C>                <C>    <C>
 BULK DISTRIBUTION PROPERTIES:

 WEST REGION

 Los Angeles Market
  Vintage Avenue, Ontario, CA                                   1988      1      284,559     100%   $    973,200       0.6%   $ 3.42
  Dahlia Street, Fontana, CA                                    1989      1      278,560     100%        973,632       0.7%     3.50
  South Vintage Avenue, Building 1, Ontario, CA                 1986      1      272,448     100%        834,548       0.5%     3.06
  Deforest Circle, Mira Loma, CA                                1992      1      250,584     100%        872,032       0.6%     3.48
  South Vintage Avenue, Building 2, Ontario, CA                 1986      1      248,064     100%        796,644       0.5%     3.21
  East Easy Street, Simi Valley, CA                             1990      1      235,080     100%      1,297,641       0.9%     5.52
  Santa Anita Avenue, Rancho Cucamonga, CA                      1988      1      212,300     100%        792,864       0.5%     3.73
  San Fernando Road, Sun Valley, CA                             1980      1      181,670     100%      1,015,537       0.7%     5.61
  Rowland Street, City of Industry, CA                          1998      1      181,635     100%        824,374       0.5%     4.54
  South Rockefeller Avenue, Ontario, CA                         1986      1      164,140     100%        551,510       0.4%     3.36
  East Jurupa Street, Ontario, CA                               1986      1      142,404     100%        461,388       0.3%     3.24
                                                                       ----   ----------    ----    ------------    ------    ------

                                         Market Subtotal                 11    2,451,444     100%   $  9,393,370       6.2%   $ 3.83
</TABLE>


                                       12
<PAGE>

<TABLE>
<CAPTION>
                                                                                Rentable Sq. Ft.         Annualized Net Rent(1)
                                                                                ----------------         ----------------------
                                                                      Number                                                    Per
                                                               Year    of                                           Percent   Leased
                                                              Built/  Proper-             Percent                     of        Sq.
Property Type and Location                                  Renovated  ties      Number    Leased      Amount        Total      Ft.
--------------------------                                  ---------  ----      ------    ------      ------        -----      ---
<S>                                                             <C>      <C>   <C>           <C>    <C>               <C>     <C>
 Phoenix Market
  North 104th Avenue, Tolleson, AZ                              1995      1      279,279     100%   $    805,634       0.5%   $ 2.88
  North 103rd Street, Phoenix, AZ                               1999      1      279,186     100%        942,524       0.6%     3.38
  West Van Buren, Tolleson, AZ                                  1997      1      278,142     100%        868,470       0.6%     3.12
  South 84th Avenue, Tolleson, AZ                               1989      1      236,007     100%        802,488       0.5%     3.40
  South 41st Avenue, Building 2, Phoenix, AZ                    1985      1      223,740     100%        696,009       0.5%     3.11
  South 63rd Avenue, Phoenix, AZ                                1990      1      168,165     100%        395,514       0.3%     2.35
  North 47th Avenue, Phoenix, AZ                                1986      1      163,200     100%        473,451       0.3%     2.90
  South 49th Avenue, Phoenix, AZ                                1989      1      114,871     100%        358,397       0.2%     3.12
  South 55th Avenue, Phoenix, AZ                                1986      1      100,000     100%        243,000       0.2%     2.43
                                                                       ----   ----------    ----    ------------    ------    ------

                                         Market Subtotal                  9    1,842,590     100%   $  5,585,487       3.7%   $ 3.03
 San Diego Market
  Dornoch Court, San Diego, CA                                  1988      1      220,000     100%   $  1,077,292       0.7%   $ 4.90
  Newton Drive, Carlsbad, CA                                    1999      1      179,721     100%      1,189,716       0.8%     6.62
                                                                       ----   ----------    ----    ------------    ------    ------

                                         Market Subtotal                  2      399,721     100%   $  2,267,008       1.5%   $ 5.67
                                                                       ----   ----------    ----    ------------    ------    ------

                                    WEST REGION SUBTOTAL                 22    4,693,755     100%   $ 17,245,865      11.4%   $ 3.67

 SOUTHWEST REGION

 Dallas Market
  DFW Trade Center, Building 1, Grapevine, TX                   1996      1      540,000     100%   $  1,705,803       1.1%   $ 3.16
  Patriot Drive, Building 2, Coppell, TX                        1997      1      503,074      76%      1,296,812       0.9%     3.40
  DFW Trade Center, Building 2, Grapevine, TX                   1997      1      440,000     100%      1,278,000       0.8%     2.90
  Luna Road, Carrollton, TX                                     1996      1      205,400     100%        679,992       0.5%     3.31
  Patriot Drive, Building 1, Coppell, TX                        1997      1      142,748     100%        470,289       0.3%     3.29
  Airline Drive, Building 2, Coppell, TX                        1990      1      140,800     100%        492,804       0.3%     3.50
                                                                       ----   ----------    ----    ------------    ------    ------

                        SOUTHWEST REGION/MARKET SUBTOTAL                  6    1,972,022      94%   $  5,923,700       3.9%   $ 3.20

 MIDWEST REGION

 Chicago Market
  West 73rd Street, Building 2, Bedford Park, IL                1986      1      380,269       0%   $         --       0.0%   $   --
  Crossroads Parkway, Bolingbrook, IL                           1995      1      299,520     100%      1,080,800       0.7%     3.61
  Mark Street, Wood Dale, IL                                    1985      1      234,000     100%        833,040       0.5%     3.56
  West 73rd Street, Building 1, Bedford Park, IL                1982      1      233,282     100%        735,279       0.5%     3.15
  West 73rd Street, Building 3, Bedford Park, IL                1979      1      232,000     100%        735,862       0.5%     3.17
  Arthur Avenue, Elk Grove, IL                                  1978      1      230,768     100%        699,228       0.5%     3.03
  Harvester Drive, Chicago, IL                                  1974      1      212,922       0%             --       0.0%       --
  Remington Street, Bolingbrook, IL                             1996      1      212,333     100%        796,926       0.5%     3.75
  Ambassador Road, Naperville  IL                               1996      1      203,500     100%        737,633       0.5%     3.62
  South Frontenac, Naperville, IL                               1975      1      200,117     100%        623,080       0.4%     3.11
  North Raddant Road, Batavia, IL                               1991      1      170,462     100%        711,954       0.5%     4.18
                                                                       ----   ----------    ----    ------------    ------    ------

                                         Market Subtotal                 11    2,609,173      77%   $  6,953,802       4.6%   $ 3.45
 Cincinnati/Northern Kentucky Market
  Holton Drive, Independence, KY                                1996      1      352,000     100%   $    991,951       0.7%   $ 2.82
  Kingsley Drive, Building 2, Cincinnati, OH                    1981      1      249,402     100%        726,085       0.5%     2.91
  International Road, Building 2, Cincinnati, OH                1990      1      204,800     100%        721,520       0.5%     3.52
  International Road, Building 1, Cincinnati, OH                1990      1      192,000     100%        547,200       0.4%     2.85
  International Way, Hebron, KY                                 1990      1      192,000     100%        528,000       0.3%     2.75
  Kingsley Drive, Building 1, Cincinnati, OH                    1981      1      154,004     100%        484,275       0.3%     3.14
                                                                       ----   ----------    ----    ------------    ------    ------

                                         Market Subtotal                  6    1,344,206     100%   $  3,999,031       2.7%   $ 2.98
 Columbus Market
  Westbelt Drive, Building 2, Columbus, OH                      1980      1      229,200     100%   $    594,807       0.4%   $ 2.60
  Equity Drive, Building 1, Columbus, OH                        1980      1      227,480     100%        516,595       0.3%     2.27
                                                                       ----   ----------    ----    ------------    ------    ------
                                         Market Subtotal                  2      456,680     100%   $  1,111,402       0.7%   $ 2.43
</TABLE>


                                       13
<PAGE>

<TABLE>
<CAPTION>
                                                                                Rentable Sq. Ft.         Annualized Net Rent(1)
                                                                                ----------------         ----------------------
                                                                      Number                                                    Per
                                                               Year    of                                           Percent   Leased
                                                              Built/  Proper-             Percent                     of        Sq.
Property Type and Location                                  Renovated  ties      Number    Leased      Amount        Total      Ft.
--------------------------                                  ---------  ----      ------    ------      ------        -----      ---
<S>                                                        <C>           <C>  <C>            <C>    <C>               <C>     <C>
 Other Market
  North State Road #9, Howe, IN                                 1988      1      346,515     100%   $    748,472       0.5%   $ 2.16
                                                                       ----   ----------    ----    ------------    ------    ------

                                 MIDWEST REGION SUBTOTAL                 20    4,756,574      88%   $ 12,812,707       8.5%   $ 3.08

 SOUTHEAST REGION

 Atlanta Market
  Highway 316, Dacula, GA                                       1989      1      326,019     100%   $  1,085,223       0.7%   $ 3.33
  Westgate Parkway, Fulton County, GA                           1988      1      231,835     100%        695,505       0.5%     3.00
                                                                       ----   ----------    ----    ------------    ------    ------

                                         Market Subtotal                  2      557,854     100%   $  1,780,728       1.2%   $ 3.19
 Charlotte Market
  Marine Drive, Rock Hill, SC                                   1997      1      471,744     100%   $  1,369,236       0.9%   $ 2.90
  Westinghouse Blvd., Building 3, Charlotte, NC                 1994      1      183,551     100%        593,924       0.4%     3.24
  Reames Road, Charlotte, NC                                    1994      1      105,600     100%        334,153       0.2%     3.16
                                                                       ----   ----------    ----    ------------    ------    ------

                                         Market Subtotal                  3      760,895     100%   $  2,297,313       1.5%   $ 3.02
 Memphis Market
  Pilot Drive, Memphis, TN                                      1987      1      336,080     100%   $    812,130       0.5%   $ 2.42
                                                                       ----   ----------    ----    ------------    ------    ------
 Orlando Market
  Landstreet Road, Building 1, Orlando, FL                      1997      1      355,732     100%   $  1,639,782       1.1%   $ 4.61
                                                                       ----   ----------    ----    ------------    ------    ------

                               SOUTHEAST REGION SUBTOTAL                  7    2,010,561     100%   $  6,529,953       4.3%   $ 3.25

 NORTHEAST REGION

 Baltimore/Washington Market
  Oceano Avenue, Jessup, MD                                     1987      1      243,895     100%   $    834,121       0.6%   $ 3.42
  Tar Bay Drive, Jessup, MD                                     1990      1      210,000     100%        800,527       0.5%     3.81
                                                                       ----   ----------    ----    ------------    ------    ------

                                         Market Subtotal                  2      453,895     100%   $  1,634,648       1.1%   $ 3.60
 Harrisburg Market
  Cumberland Parkway, Mechanicsburg, PA                         1992      1      340,000     100%   $  1,144,967       0.8%   $ 3.37
  Brackbill Boulevard, Building 1, Mechanicsburg, PA            1984      1      259,200     100%        913,069       0.6%     3.52
  Brackbill Boulevard, Building 2, Mechanicsburg, PA            1994      1      235,200     100%        828,432       0.5%     3.52
                                                                       ----   ----------    ----    ------------    ------    ------

                                         Market Subtotal                  3      834,400     100%   $  2,886,468       1.9%   $ 3.46
 New York/New Jersey Market
  Herrod Boulevard, South Brunswick, NJ                         1989      1      400,000     100%   $  1,719,547       1.1%   $ 4.30
  South Middlesex Avenue, Building 1, Cranbury, NJ              1989      1      204,369     100%        735,728       0.5%     3.60
  Birch Creek Road, Bridgeport, NJ                         1991/1997      1      203,229     100%        792,463       0.5%     3.90
  Pepes Farm Road, Milford, CT                                  1980      1      200,000     100%        930,000       0.6%     4.65
  Pierce Street, Franklin Township, NJ                          1984      1      182,764     100%        776,748       0.5%     4.25
                                                                       ----   ----------    ----    ------------    ------    ------

                                         Market Subtotal                  5    1,190,362     100%   $  4,954,486       3.2%   $ 4.16
                                                                       ----   ----------    ----    ------------    ------    ------

                               NORTHEAST REGION SUBTOTAL                 10    2,478,657     100%   $  9,475,602       6.2%   $ 3.82
                                                                       ----   ----------    ----    ------------    ------    ------

 BULK DISTRIBUTION PROPERTIES TOTAL                                      65   15,911,569      95%   $ 51,987,827      34.3%   $ 3.42
</TABLE>


                                       14
<PAGE>

<TABLE>
<CAPTION>
                                                                                Rentable Sq. Ft.         Annualized Net Rent(1)
                                                                                ----------------         ----------------------
                                                                      Number                                                    Per
                                                               Year    of                                           Percent   Leased
                                                              Built/  Proper-             Percent                     of        Sq.
Property Type and Location                                  Renovated  ties      Number    Leased      Amount        Total      Ft.
--------------------------                                  ---------  ----      ------    ------      ------        -----      ---
<S>                                                        <C>           <C>   <C>           <C>    <C>                <C>    <C>
 MULTITENANT DISTRIBUTION PROPERTIES:

 WEST REGION

 Los Angeles Market
  East Dyer Road, Santa Ana, CA                            1954/1965      1      372,096     100%   $  1,480,660       1.0%   $ 3.98
  Alondra Blvd., La Mirada, CA                             1969/1975      1      237,089     100%        910,421       0.6%     3.84
  West Rincon Street, Corona, CA                                1986      1      162,900     100%        740,400       0.5%     4.55
  Industry Circle, La Mirada, CA                                1966      1      112,946     100%        474,373       0.3%     4.20
  12th Street, Chino, CA                                        1990      1      104,600     100%        402,000       0.3%     3.84
  N. San Fernando Road, Building 1, Los Angeles, CA             1965      1      102,800     100%        627,118       0.4%     6.10
  E. Vista Bella Way, Rancho Dominguez, CA                      1973      1      100,000     100%        444,000       0.3%     4.44
  W. Manville Street, Rancho Dominguez, CA                      1980      1      100,000     100%        438,000       0.3%     4.38
  East Santa Anna Street, Building 1, Ontario, CA               1990      1       98,782     100%        355,615       0.2%     3.60
  Jersey Court, Rancho Cucamonga, CA                            1989      1       88,134     100%        291,000       0.2%     3.30
  Tyburn Street, Los Angeles, CA                                1965      1       85,142     100%        559,572       0.4%     6.57
  N. San Fernando Road, Building 2, Los Angeles, CA             1965      1       80,500     100%        590,274       0.4%     7.33
  Parco Street, Ontario, CA                                     1999      1       72,000     100%        302,400       0.2%     4.20
  East Santa Anna Street, Building 2, Ontario, CA               1990      1       62,398     100%        224,632       0.1%     3.60
  N. San Fernando Road, Building 3, Los Angeles, CA             1965      1       58,860     100%        444,981       0.3%     7.56
                                                                       ----   ----------    ----    ------------    ------    ------

                                         Market Subtotal                 15    1,838,247     100%   $  8,285,446       5.5%   $ 4.51
 Phoenix Market
  South 40th Avenue, Building 3, Phoenix, AZ                    1987      1      201,600     100%   $    635,040       0.4%   $ 3.15
  South 41st Avenue, Building 1, Phoenix, AZ                    1989      1      161,230     100%        440,157       0.3%     2.73
  South 39th Avenue, Phoenix, AZ                                1989      1      159,450     100%        658,368       0.4%     4.13
  44th Avenue, Phoenix, AZ                                      1997      1      144,592      78%        405,333       0.3%     3.61
  South 53rd Avenue, Phoenix, AZ                                1987      1      127,680     100%        360,057       0.2%     2.82
  South 40th Avenue, Building 2, Phoenix, AZ                    1989      1      127,042     100%        384,872       0.3%     3.03
  South 40th Avenue, Building 1, Phoenix, AZ                    1990      1      126,360     100%        348,525       0.2%     2.76
  South 9th Street, Phoenix, AZ                                 1983      1       89,423     100%        464,729       0.3%     5.20
                                                                       ----   ----------    ----    ------------    ------    ------

                                         Market Subtotal                  8    1,137,377      97%   $  3,697,081       2.4%   $ 3.35
 San Francisco Market
  McLaughlin Avenue, San Jose, CA                               1975      1      134,483     100%   $    713,640       0.5%   $ 5.31
  Reed Avenue, Building 2, West Sacramento, CA                  1988      1      105,600     100%        461,460       0.3%     4.37
  Reed Avenue, Building 1, West Sacramento, CA                  1988      1      103,110     100%        466,765       0.3%     4.53
                                                                       ----   ----------    ----    ------------    ------    ------

                                         Market Subtotal                  3      343,193     100%   $  1,641,865       1.1%   $ 4.78
 Seattle Market
  Kent West Corporate Park, II, Kent, WA                        1989      1      250,820     100%   $    966,492       0.6%   $ 3.85
                                                                       ----   ----------    ----    ------------    ------    ------

                                    WEST REGION SUBTOTAL                 27    3,569,637      99%   $ 14,590,884       9.6%   $ 4.12

 SOUTHWEST REGION

 Dallas Market
  North Lake Drive, Coppell, TX                                 1982      1      230,400     100%   $    690,343       0.4%   $ 3.00
  East Plano Parkway, Plano, TX                                 1998      1      210,560     100%        989,640       0.6%     4.70
  Hillguard Road, Building 3, Dallas, TX                        1980      1      122,798     100%        423,990       0.3%     3.45
  10th Street, Building 2, Plano, TX                            1997      1      107,260     100%        423,086       0.3%     3.94
  10th Street, Building 1, Plano, TX                            1997      1       99,679     100%        439,824       0.3%     4.41
  Diplomat Drive, Building 2, Farmers Branch, TX                1984      1       82,756     100%        325,697       0.2%     3.94
  113th Street, Arlington, TX                                   1979      1       79,735     100%        291,032       0.2%     3.65
  Airline Drive, Building 1, Coppell, TX                        1991      1       75,000     100%        262,500       0.2%     3.50
  Hillguard Road, Building 2, Dallas, TX                        1980      1       71,565     100%        228,671       0.2%     3.20
  Hillguard Road, Building 1, Dallas, TX                        1980      1       53,647     100%        180,666       0.1%     3.37
                                                                       ----   ----------    ----    ------------    ------    ------

                           SOUTHWEST REGION/MARKET TOTAL                 10    1,133,400     100%   $  4,255,449       2.8%   $ 3.75
</TABLE>


                                       15
<PAGE>

<TABLE>
<CAPTION>
                                                                                Rentable Sq. Ft.         Annualized Net Rent(1)
                                                                                ----------------         ----------------------
                                                                      Number                                                    Per
                                                               Year    of                                           Percent   Leased
                                                              Built/  Proper-             Percent                     of        Sq.
Property Type and Location                                  Renovated  ties      Number    Leased      Amount        Total      Ft.
--------------------------                                  ---------  ----      ------    ------      ------        -----      ---
<S>                                                        <C>           <C>   <C>           <C>    <C>                <C>    <C>
 MIDWEST REGION

 Chicago Market
  Medinah Road, Building 1, Chicago, IL                         1986      1      319,459     100%   $  1,741,840       1.1%   $ 5.45
  Medinah Road, Building 2, Chicago, IL                         1986      1      160,799     100%        876,751       0.6%     5.45
  Greenleaf Avenue, Elk Grove Village, IL                  1968/1995      1      150,000     100%        652,308       0.4%     4.35
  High Grove Lane, Naperville, IL                               1994      1       95,000     100%        392,549       0.3%     4.13
  South 78th Avenue, Hickory Hills, IL                          1981      1       83,170     100%        394,210       0.3%     4.74
  Swenson Avenue, St. Charles, IL                               1988      1       81,110     100%        307,538       0.2%     3.79
  Western Avenue, Lisle, IL                                1979/1985      1       67,996     100%        383,143       0.2%     5.63
                                                                       ----   ----------    ----    ------------    ------    ------

                                         Market Subtotal                  7      957,534     100%   $  4,748,339       3.1%   $ 4.96
 Cincinnati/Northern Kentucky Market
  Lake Forest Drive, Building 1, Blue Ash, OH                   1978      1      239,891     100%   $    660,789       0.4%   $ 2.75
  Lake Forest Drive, Building 2, Blue Ash, OH                   1979      1      176,956     100%        486,866       0.3%     2.75
  Kenwood Road, Building 2, Blue Ash, OH                        1963      1      144,843     100%        325,897       0.2%     2.25
  Kenwood Road, Building 1, Blue Ash, OH                        1965      1      121,284     100%        277,740       0.2%     2.29
  Kenwood Road, Building 3, Blue Ash, OH                        1964      1      103,415     100%        232,684       0.2%     2.25
  Kenwood Road, Building 4, Blue Ash, OH                        1969      1      102,100     100%        256,271       0.2%     2.51
  Kenwood Road, Building 7, Blue Ash, OH                        1973      1      100,320      62%        187,500       0.1%     3.00
  Kenwood Road, Building 5, Blue Ash, OH                        1970      1      100,000     100%        315,000       0.2%     3.15
  Kenwood Road, Building 6, Blue Ash, OH                        1971      1       98,093     100%        296,107       0.2%     3.02
                                                                       ----   ----------    ----    ------------    ------    ------

                                         Market Subtotal                  9    1,186,902      97%   $  3,038,854       2.0%   $ 2.64
 Columbus Market
  Port Road, Building 1, Franklin County, OH                    1995      1      205,109     100%   $    677,903       0.4%   $ 3.31
  Westbelt Drive, Building 1, Columbus, OH                      1980      1      202,000     100%      1,070,600       0.7%     5.30
  Twin Creek Drive, Columbus, OH                                1989      1      176,000      59%        310,848       0.2%     3.01
  Port Road, Building 2, Franklin County, OH                    1995      1      156,000     100%        425,899       0.3%     2.73
  International Street, Columbus, OH                            1988      1      152,800     100%        435,479       0.3%     2.85
  Dividend Drive, Columbus, OH                                  1980      1      144,850     100%        443,241       0.3%     3.06
                                                                       ----   ----------    ----    ------------    ------    ------

                                         Market Subtotal                  6    1,036,759      93%   $  3,363,970       2.2%   $ 3.49
 Minneapolis Market
  Lexington Avenue, Eagan, MN                              1979/1984      1      184,429      62%   $    385,890       0.2%   $ 3.38
  Trenton Lane, Plymouth, MN                                    1994      1      122,032     100%        617,930       0.4%     5.06
  Woodale Drive, Building 1, Mounds View, MN                    1992      1       78,016      74%        278,797       0.2%     4.80
                                                                       ----   ----------    ----    ------------    ------    ------

                                         Market Subtotal                  3      384,477      77%   $  1,282,617       0.8%   $ 4.36
 Other Market
  Sysco Court, Grand Rapids, MI                                 1985      1       62,700     100%   $    372,957       0.3%   $ 5.95
                                                                       ----   ----------    ----    ------------    ------    ------

                                 MIDWEST REGION SUBTOTAL                 26    3,628,372      94%   $ 12,806,737       8.4%   $ 3.74

 SOUTHEAST REGION

 Atlanta Market
  Westpark, Building 1, Atlanta, GA                             1981      1      216,074     100%   $    539,189       0.3%   $ 2.50
  Atlanta Industrial Drive, Atlanta, GA                         1986      1      161,965     100%        422,922       0.3%     2.61
  Westpark Drive, Building 2, Atlanta, GA                       1981      1      130,722     100%        281,699       0.2%     2.15
  Williams Drive, Building 1, Marietta, GA                      1987      1       84,124     100%        329,992       0.2%     3.92
  Williams Drive, Building 2, Marietta, GA                      1987      1       70,164     100%        248,412       0.2%     3.54
  Williams Drive, Building 3, Marietta, GA                      1987      1       54,032      65%        144,054       0.1%     4.10
                                                                       ----   ----------    ----    ------------    ------    ------

                                         Market Subtotal                  6      717,081      97%   $  1,966,268       1.3%   $ 2.82
 Charlotte Market
  Westinghouse Blvd., Building 4, Charlotte, NC                 1988      1      159,085     100%   $    548,844       0.4%   $ 3.45
  Westinghouse Blvd., Building 1, Charlotte, NC                 1994      1      121,900     100%        406,272       0.3%     3.33
  Cordage Street, Charlotte, NC                                 1981      1      112,000     100%        348,598       0.2%     3.11
  Westinghouse Blvd., Building 2, Charlotte, NC                 1992      1      104,000     100%        340,930       0.2%     3.28
                                                                       ----   ----------    ----    ------------    ------    ------

                                         Market Subtotal                  4      496,985     100%   $  1,644,644       1.1%   $ 3.31
</TABLE>


                                       16
<PAGE>

<TABLE>
<CAPTION>
                                                                                Rentable Sq. Ft.         Annualized Net Rent(1)
                                                                                ----------------         ----------------------
                                                                      Number                                                    Per
                                                               Year    of                                           Percent   Leased
                                                              Built/  Proper-             Percent                     of        Sq.
Property Type and Location                                  Renovated  ties      Number    Leased      Amount        Total      Ft.
--------------------------                                  ---------  ----      ------    ------      ------        -----      ---
<S>                                                        <C>           <C>  <C>            <C>    <C>               <C>     <C>
 Orlando Market
  Orlando Central Park, Building 3, Orlando, FL                 1991      1      356,583      90%   $  1,419,806       1.0%   $ 4.42
  Orlando Central Park, Building 1, Orlando, FL                 1988      1      267,432     100%        901,986       0.6%     3.37
  Orlando Central Park, Building 2, Orlando, FL                 1983      1      156,660     100%        493,476       0.3%     3.15
  Orlando Central Park, Building 5, Orlando, FL                 1985      1      139,800     100%        494,187       0.3%     3.53
  Orlando Central Park, Building 4, Orlando, FL                 1984      1      133,424     100%        475,533       0.3%     3.56
  Orlando Central Park, Building 6, Orlando, FL                 1986      1      119,000     100%        497,635       0.4%     4.18
  Exchange Drive, Orlando, FL                                   1979      1      115,728      87%        310,897       0.2%     3.09
  Kingspointe Parkway, Orlando, FL                              1991      1      101,903     100%        337,926       0.2%     3.32
                                                                       ----   ----------    ----    ------------    ------    ------

                                         Market Subtotal                  8    1,390,530      96%   $  4,931,446       3.3%   $ 3.68
 South Florida Market
  N.W. 70th Avenue, Miami, FL                                   1977      1      215,019     100%   $  1,100,292       0.7%   $ 5.12
                                                                       ----   ----------    ----    ------------    ------    ------

                               SOUTHEAST REGION SUBTOTAL                 19    2,819,615      98%   $  9,642,650       6.4%   $ 3.51

 NORTHEAST REGION

 Baltimore/Washington Market
  Stayton Drive, Jessup, MD                                     1985      1      125,800     100%   $    514,688       0.4%   $ 4.09
  Bollman Place, Savage, MD                                     1985      1      104,409     100%        498,485       0.3%     4.77
  Port Capital Drive, Jessup, MD                                1974      1       94,381     100%        460,962       0.3%     4.88
  Greenwood Place, Savage, MD                                   1985      1       77,424     100%        309,067       0.2%     3.99
                                                                       ----   ----------    ----    ------------    ------    ------

                                         Market Subtotal                  4      402,014     100%   $  1,783,202       1.2%   $ 4.44
 Boston Market
  Sunnyslope Avenue, Tewksbury, MA                              1987      1      153,641     100%   $    718,446       0.4%   $ 4.68
  Kenwood Circle, Franklin, MA                                  1987      1      153,369     100%        571,298       0.4%     3.72
  South Street, Hopkinton, MA                                  1987      1       70,600     100%        291,325       0.2%     4.13
  Progress Road, Building 2, Billerica, MA                      1988      1       69,500     100%        329,975       0.2%     4.75
  Progress Road, Building 1, Billerica, MA                      1988      1       57,600     100%        298,800       0.2%     5.19
                                                                       ----   ----------    ----    ------------    ------    ------

                                         Market Subtotal                  5      504,710     100%   $  2,209,844       1.4%   $ 4.38
 Harrisburg Market
  Ritter Road, Mechanicsburg, PA                                1986      1       37,800     100%   $    248,970       0.2%   $ 6.59
                                                                       ----   ----------    ----    ------------    ------    ------
 New York/New Jersey Market
  Port Jersey Boulevard, Building 1, Port Jersey, NJ       1974/1982      1      425,121     100%   $  1,780,062       1.2%   $ 4.19
  Industrial Drive, Building 1, Port Jersey, NJ                 1976      1      263,717     100%      1,015,310       0.7%     3.85
  Colony Road, Building 1, Jersey City, NJ                      1976      1      262,453     100%        918,438       0.6%     3.50
  Port Jersey Boulevard, Building 2, Port Jersey, NJ       1974/1982      1      204,564     100%        754,841       0.5%     3.69
  South Middlesex Avenue, Building 2, Cranbury, NJ              1982      1      203,404     100%        864,467       0.6%     4.25
  Industrial Drive, Building 2, Port Jersey, NJ                 1976      1      154,000     100%        615,996       0.4%     4.00
  Colony Road, Building 2, Jersey City, NJ                      1974      1      124,933     100%        499,731       0.3%     4.00
  Industrial Drive, Building 3, Port Jersey, NJ                 1972      1       45,274     100%        181,095       0.1%     4.00
                                                                       ----   ----------    ----    ------------    ------    ------

                                         Market Subtotal                  8    1,683,466     100%   $  6,629,940       4.4%   $ 3.94
                                                                       ----   ----------    ----    ------------    ------    ------

                               NORTHEAST REGION SUBTOTAL                 18    2,627,990     100%   $ 10,871,956       7.2%   $ 4.14
                                                                       ----   ----------    ----    ------------    ------    ------

MULTITENANT DISTRIBUTION
PROPERTIES TOTAL                                                        100   13,779,014      98%   $ 52,167,676      34.4%   $ 3.87
</TABLE>


                                       17
<PAGE>

<TABLE>
<CAPTION>
                                                                                Rentable Sq. Ft.         Annualized Net Rent(1)
                                                                                ----------------         ----------------------
                                                                      Number                                                    Per
                                                               Year    of                                           Percent   Leased
                                                              Built/  Proper-             Percent                     of        Sq.
Property Type and Location                                  Renovated  ties      Number    Leased      Amount        Total      Ft.
--------------------------                                  ---------  ----      ------    ------      ------        -----      ---
<S>                                                             <C>      <C>     <C>         <C>    <C>                <C>    <C>
 WORKSPACE PROPERTIES:

 WEST REGION

 Los Angeles Market
  Kovacs Lane, Huntington Beach, CA                             1988      1      125,000     100%   $    951,060       0.6%   $ 7.61
  Lassen Street, Chatsworth, CA                                 1968      1      124,518     100%        732,165       0.5%     5.88
  East Howell Avenue, Building 1, Anaheim, CA                   1968      1       81,475     100%        347,385       0.2%     4.26
  N. San Fernando Road, Building 4, Los Angeles, CA             1992      1       66,410     100%        620,008       0.4%     9.34
  Commonwealth Avenue, Fullerton, CA                            1965      1       64,292     100%        250,047       0.2%     3.89
  Artesia Avenue, Building 2, Fullerton, CA                     1991      1       60,502     100%        283,149       0.2%     4.68
  Artesia Avenue, Building 1, Fullerton, CA                     1991      1       55,498     100%        227,671       0.2%     4.10
  N. San Fernando Road, Building 5, Los Angeles, CA             1992      1       41,894     100%        359,753       0.2%     8.59
  Union Place, Building 2, Simi Valley, CA                      1987      1       36,538     100%        330,847       0.2%     9.05
  Shoemaker Avenue, Building 1, Santa Fe Springs, CA            1989      1       36,485     100%        199,189       0.1%     5.46
  Shoemaker Avenue, Building 3, Santa Fe Springs, CA            1989      1       27,550     100%        133,762       0.1%     4.86
  E. 166th Street, Cerritos, CA                                 1978      1       27,072       0%             --       0.0%       --
  Royal Avenue, Simi Valley, CA                                 1988      1       26,120     100%        157,380       0.1%     6.03
  East Howell Avenue, Building 2, Anaheim, CA                   1991      1       25,962     100%        109,040       0.1%     4.20
  Union Place, Building 1, Simi Valley, CA                      1985      1       22,710     100%        148,476       0.1%     6.54
  Shoemaker Avenue, Building 2, Santa Fe Springs, CA            1989      1       17,800     100%         89,890       0.1%     5.05
  N. San Fernando Road, Building 6, Los Angeles, CA             1993      1       17,000     100%        233,750       0.2%    13.75
  Shoemaker Avenue, Building 4, Santa Fe Springs, CA            1989      1       10,784     100%         55,538       0.1%     5.15
  Anza Drive, Building 1, Valencia, CA                          1990      1       10,296     100%         65,121       0.0%     6.32
  Anza Drive, Building 3, Valencia, CA                          1990      1        8,663     100%         63,648       0.0%     7.35
  Anza Drive, Building 2, Valencia, CA                          1990      1        7,944     100%         58,187       0.0%     7.32
                                                                       ----   ----------    ----    ------------    ------    ------

                                         Market Subtotal                 21      894,513      97%   $  5,416,066       3.6%   $ 6.24
 Phoenix Market
  East Watkins Street, Phoenix, AZ                              1998      1      101,932     100%   $    953,228       0.6%   $ 9.35
  South 16th Street, Phoenix, AZ                                1998      1       85,259     100%        763,024       0.5%     8.95
  East Encanto Drive, Tempe, AZ                                 1990      1       81,817     100%        352,336       0.2%     4.31
  South Priest Drive, Tempe, AZ                                 1998      1       54,900     100%        394,200       0.3%     7.18
  West Alameda Drive, Building 1, Tempe, AZ                     1984      1       30,606     100%        147,470       0.1%     4.82
  West Alameda Drive, Building 2, Tempe, AZ                     1984      1       30,606     100%        153,029       0.1%     5.00
  West Alameda Drive, Building 3, Tempe, AZ                     1984      1       30,606     100%        138,976       0.1%     4.54
  West Alameda Drive, Building 4, Tempe, AZ                     1984      1       30,606     100%        153,640       0.1%     5.02
                                                                       ----   ----------    ----    ------------    ------    ------

                                         Market Subtotal                  8      446,332     100%   $  3,055,903       2.0%   $ 6.85
 San Diego Market
  Avenida Encinas, Building 2, Carlsbad, CA                     1993      1      126,008     100%   $    752,689       0.5%   $ 5.97
  Avenida Encinas, Building 1, Carlsbad, CA                     1972      1       80,000     100%        663,200       0.4%     8.29
  Airway Road, Building. 2, Otay Mesa, CA                       1996      1       78,296     100%        465,479       0.3%     5.95
  Goldentop Road, San Diego, CA                                 1997      1       66,448     100%        622,736       0.4%     9.37
  Oak Ridge Way, Vista, CA                                      1999      1       53,239     100%        403,428       0.3%     7.58
  Airway Road, Building 1, Otay Mesa, CA                        1996      1       44,840      80%        239,049       0.2%     6.71
  Kellogg Avenue, Carlsbad, CA                                  1991      1       39,900     100%        301,644       0.2%     7.56
                                                                       ----   ----------    ----    ------------    ------    ------

                                         Market Subtotal                  7      488,731      98%   $  3,448,225       2.3%   $ 7.19
</TABLE>


                                       18
<PAGE>

<TABLE>
<CAPTION>
                                                                                Rentable Sq. Ft.         Annualized Net Rent(1)
                                                                                ----------------         ----------------------
                                                                      Number                                                    Per
                                                               Year    of                                           Percent   Leased
                                                              Built/  Proper-             Percent                     of        Sq.
Property Type and Location                                  Renovated  ties      Number    Leased      Amount        Total      Ft.
--------------------------                                  ---------  ----      ------    ------      ------        -----      ---
<S>                                                             <C>      <C>   <C>           <C>    <C>                <C>    <C>
 San Francisco Market
  Brisbane Industrial Park, Building 10, Brisbane, CA           1961      1      116,400     100%   $     89,773       0.1%   $ 0.77
  Huntwood Avenue, Hayward, CA                                  1982      1       62,031     100%        477,445       0.3%     7.70
  Brisbane Industrial Park, Building 13, Brisbane, CA           1962      1       58,000     100%        368,880       0.3%     6.36
  Brisbane Industrial Park, Building 9, Brisbane, CA            1966      1       43,500     100%        325,685       0.2%     7.49
  Brisbane Industrial Park, Building 4, Brisbane, CA            1968      1       40,680     100%        256,194       0.2%     6.30
  Brisbane Industrial Park, Building 1, Brisbane, CA            1961      1       39,800     100%        225,800       0.1%     5.67
  Brisbane Industrial Park, Building 5, Brisbane, CA            1966      1       37,040     100%        216,227       0.2%     5.84
  Brisbane Industrial Park, Building 11, Brisbane, CA           1968      1       35,744     100%        220,897       0.1%     6.18
  Brisbane Industrial Park, Building 7, Brisbane, CA            1967      1       32,211     100%        208,728       0.1%     6.48
  Brisbane Industrial Park, Building 6, Brisbane, CA            1963      1       31,745     100%        211,982       0.1%     6.68
  Brisbane Industrial Park, Building 12, Brisbane, CA           1968      1       24,786     100%        142,903       0.1%     5.77
  Brisbane Industrial Park, Building 3, Brisbane, CA            1969      1       23,586     100%        173,862       0.1%     7.37
  Brisbane Industrial Park, Building 2, Brisbane, CA            1960      1       21,186     100%        148,501       0.1%     7.01
  Brisbane Industrial Park, Building 14, Brisbane, CA           1969      1       19,100     100%        102,204       0.1%     5.35
  Brisbane Industrial Park, Building 8, Brisbane, CA            1961      1       18,600     100%        140,616       0.1%     7.56
                                                                       ----   ----------    ----    ------------    ------    ------

                                         Market Subtotal                 15      604,409     100%   $  3,309,697       2.2%   $ 5.48
 Seattle Market
  Kent West Corporate Park I, Building 4, Kent, WA              1989      1       57,990     100%   $    225,216       0.1%   $ 3.88
  Kent West Corporate Park I, Building 1, Kent, WA              1989      1       41,700     100%        501,984       0.3%    12.04
  Kent West Corporate Park I, Building 3, Kent, WA              1989      1       36,250     100%        144,768       0.1%     3.99
  Kent West Corporate Park I, Building 2, Kent, WA              1989      1       16,000     100%        114,348       0.1%     7.15
                                                                       ----   ----------    ----    ------------    ------    ------

                                         Market Subtotal                  4      151,940     100%   $    986,316       0.6%   $ 6.49
                                                                       ----   ----------    ----    ------------    ------    ------

                                    WEST REGION SUBTOTAL                 55    2,585,925      99%   $ 16,216,207      10.7%   $ 6.36

 SOUTHWEST REGION

 Dallas Market
  DFW Trade Center, Building 3, Grapevine, TX                   1997      1      202,361     100%   $  1,723,670       1.2%   $ 8.52
  Shiloh Road, Plano, TX                                        1998      1       76,320      75%        299,604       0.2%     5.23
  Avenue F, Plano, TX                                           1984      1       73,086      87%        516,089       0.3%     8.10
  Bradley Lane, Carrollton, TX                                  1984      1       56,531     100%        215,892       0.1%     3.82
  Diplomat Drive, Building 1, Farmers Branch, TX                1997      1       53,375     100%        325,044       0.2%     6.09
                                                                       ----   ----------    ----    ------------    ------    ------

                        SOUTHWEST REGION/MARKET SUBTOTAL                  5      461,673      94%   $  3,080,299       2.0%   $ 7.11

 MIDWEST REGION

 Chicago Market
  Beeline Drive/Meyer Road, Bensenville, IL                     1968      1       96,550     100%   $    446,867       0.3%   $ 4.63
  Business Center, Building 2, Mount Prospect, IL               1989      1       79,900     100%        754,927       0.5%     9.45
  Tower Lane, Bensenville, IL                                   1977      1       76,737     100%        459,097       0.3%     5.98
  Territorial Drive, Building 2, Bolingbrook, IL                1998      1       58,283     100%        304,818       0.2%     5.25
  Feehanville Drive, Mount Prospect, IL                         1987      1       57,150     100%        454,342       0.3%     7.95
  Kingsland Drive, Batavia, IL                                  1990      1       54,522     100%        314,468       0.2%     5.77
  Territorial Drive, Building 1, Bolingbrook, IL                1998      1       51,874     100%        279,739       0.2%     5.39
  Remington Boulevard, Bolingbrook, IL                          1996      1       45,220     100%        226,100       0.1%     5.00
  Business Center, Building 1, Mount Prospect, IL               1985      1       43,250     100%        367,191       0.2%     8.49
  Northpoint Court, Bolingbrook, IL                             1998      1       32,100     100%        160,884       0.1%     5.01
  Penny Lane, Building 1, Schaumburg, IL                        1988      1       27,742     100%        124,434       0.1%     4.49
  Penny Lane, Building 2, Schaumburg, IL                        1988      1       20,722     100%         94,053       0.1%     4.54
                                                                       ----   ----------    ----    ------------    ------    ------

                                         Market Subtotal                 12      644,050     100%   $  3,986,920       2.6%   $ 6.19
</TABLE>


                                       19
<PAGE>

<TABLE>
<CAPTION>
                                                                                Rentable Sq. Ft.         Annualized Net Rent(1)
                                                                                ----------------         ----------------------
                                                                      Number                                                    Per
                                                               Year    of                                           Percent   Leased
                                                              Built/  Proper-             Percent                     of        Sq.
Property Type and Location                                  Renovated  ties      Number    Leased      Amount        Total      Ft.
--------------------------                                  ---------  ----      ------    ------      ------        -----      ---
<S>                                                             <C>      <C>   <C>           <C>    <C>                <C>    <C>
 Cincinnati/Northern Kentucky Market
  Kentucky Drive, Florence, KY                                  1991      1      128,077     100%   $    367,515       0.2%   $ 2.87
  Empire Drive, Building 3, Florence, KY                        1991      1      101,250     100%        318,999       0.2%     3.15
  Airport Exchange Drive, Erlanger, KY                          1997      1       67,749     100%        464,433       0.3%     6.86
  Creek Road, Blue Ash, OH                                      1983      1       66,210      94%        467,963       0.3%     7.56
  Foundation Drive, Building 2, Elsmere, KY                     1983      1       62,560     100%        319,910       0.2%     5.11
  Empire Drive, Building 2, Florence, KY                        1990      1       47,842     100%        198,272       0.1%     4.14
  Empire Drive, Building 1, Florence, KY                        1990      1       47,840     100%        164,453       0.1%     3.44
  Jamike Drive, Building 4, Erlanger, KY                        1988      1       42,606      85%        127,251       0.1%     3.52
  Turfway Road, Building 3, Erlanger, KY                        1996      1       41,839     100%        150,300       0.1%     3.59
  Turfway Road, Building 2, Erlanger, KY                        1990      1       39,396     100%        185,480       0.1%     4.71
  Jamike Drive, Building 3, Erlanger, KY                        1986      1       38,900     100%        182,299       0.1%     4.69
  Spiral Drive, Building 2, Florence, KY                        1989      1       34,999     100%        296,101       0.2%     8.46
  Commerce Boulevard, Loveland, OH                              1989      1       34,600     100%        171,000       0.1%     4.94
  Foundation Drive, Building 1, Elsmere, KY                     1983      1       33,000     100%        110,220       0.1%     3.34
  Jamike Drive, Building 7, Erlanger, KY                        1985      1       31,540      78%         86,434       0.1%     3.54
  Turfway Road, Building 1, Erlanger, KY                        1990      1       30,711     100%        154,281       0.1%     5.02
  Jamike Drive, Building 2, Erlanger, KY                        1986      1       26,949     100%        125,076       0.1%     4.64
  Jamike Drive, Building 6, Erlanger, KY                        1985      1       26,560     100%        101,003       0.1%     3.80
  Spiral Drive, Building 1, Florence, KY                        1988      1       26,556     100%        240,144       0.2%     9.04
  Jamike Drive, Building 5, Erlanger, KY                        1985      1       24,640     100%        118,418       0.1%     4.81
  Foundation Drive, Building 6, Elsmere, KY                     1984      1       17,500     100%         57,203       0.0%     3.27
  Jamike Drive, Building 1, Erlanger, KY                        1986      1       15,000     100%         62,499       0.0%     4.17
  Foundation Drive, Building 4, Elsmere, KY                     1983      1       12,000     100%         48,199       0.0%     4.02
  Foundation Drive, Building 5, Elsmere, KY                     1983      1       12,000     100%         48,101       0.0%     4.01
  Foundation Drive, Building 7, Elsmere, KY                     1984      1       12,000     100%         36,160       0.0%     3.01
  Foundation Drive, Building 8, Elsmere, KY                     1984      1       10,000     100%         66,000       0.1%     6.60
  Foundation Drive, Building 3, Elsmere, KY                     1990      1        7,000     100%         90,000       0.1%    12.86
  Power Line Drive, Elsmere, KY                                 1994      1        6,000     100%         38,588       0.0%     6.43
                                                                       ----   ----------    ----    ------------    ------    ------

                                         Market Subtotal                 28    1,045,324      98%   $  4,796,302       3.1%   $ 4.67
 Columbus Market
  Equity Drive, Building 2, Columbus, OH                        1980      1      116,160     100%   $    708,654       0.5%   $ 6.10
  Alum Creek Road, Columbus, OH                                 1988      1       34,600     100%        175,076       0.1%     5.06
                                                                       ----   ----------    ----    ------------    ------    ------

                                         Market Subtotal                  2      150,760     100%   $    883,730       0.6%   $ 5.86
 Minneapolis Market
  Woodale Drive, Building 3, Mounds View, MN                    1990      1      144,019     100%   $    844,751       0.6%   $ 5.87
  West 82nd Street, Bloomington, MN                             1967      1      101,465     100%        481,130       0.3%     4.74
  Woodale Drive, Building 2, Mounds View, MN                    1989      1       55,742     100%        480,948       0.3%     8.63
  Cahill Road, Edina, MN                                        1979      1       45,800     100%        251,157       0.2%     5.48
  Woodale Drive, Building 4, Mounds View, MN                    1992      1       42,551     100%        208,107       0.1%     4.89
  Monticello Lane, Maple Grove, MN                              1986      1       40,437     100%        157,704       0.1%     3.90
                                                                       ----   ----------    ----    ------------    ------    ------

                                         Market Subtotal                  6      430,014     100%   $  2,423,797       1.6%   $ 5.64
 Other Market
  Rudolph Way, Greendale, IN                                    1990      1       50,000     100%   $    121,776       0.1%   $ 2.44
                                                                       ----   ----------    ----    ------------    ------    ------

                                 MIDWEST REGION SUBTOTAL                 49    2,320,148      99%   $ 12,212,525       8.0%   $ 5.30

 SOUTHEAST REGION

 Atlanta Market
  Highlands Parkway, Smyrna, GA                                 1997      1      150,000     100%   $    994,500       0.7%   $ 6.63
  Cobb International Place, Building 2, Kennesaw, GA            1996      1       68,000     100%        276,171       0.2%     4.06
  Town Park Drive, Building 1, Kennesaw, GA                     1995      1       65,830     100%        327,966       0.2%     4.98
  Cobb International Place, Building 1, Kennesaw, GA            1996      1       60,000      80%        206,790       0.1%     4.31
  Town Park Drive, Building 2, Kennesaw, GA                     1995      1       55,554     100%        258,490       0.2%     4.65
  South Royal Drive, Building 1, Tucker, GA                     1987      1       53,402      87%        224,436       0.1%     4.83
  South Royal Drive, Building 2, Tucker, GA                     1987      1       43,720     100%        183,035       0.1%     4.19
  South Royal Drive, Building 3, Tucker, GA                     1989      1       37,041     100%        154,707       0.1%     4.18
                                                                       ----   ----------    ----    ------------    ------    ------

                                         Market Subtotal                  8      533,547      96%   $  2,626,095       1.7%   $ 5.10
</TABLE>


                                       20
<PAGE>

<TABLE>
<CAPTION>
                                                                                Rentable Sq. Ft.         Annualized Net Rent(1)
                                                                                ----------------         ----------------------
                                                                      Number                                                    Per
                                                               Year    of                                           Percent   Leased
                                                              Built/  Proper-             Percent                     of        Sq.
Property Type and Location                                  Renovated  ties      Number    Leased      Amount        Total      Ft.
--------------------------                                  ---------  ----      ------    ------      ------        -----      ---
<S>                                                        <C>           <C>   <C>           <C>    <C>                <C>    <C>
 Charlotte Market
  Old Charlotte Highway, Monroe, NC                        1957/1972      1      135,000     100%   $    394,400       0.3%   $ 2.92
  Airport Road, Monroe, NC                                 1957/1972      1      118,930     100%        591,600       0.4%     4.97
  Commerce Blvd., Charlotte, NC                                 1988      1       80,640      75%        214,963       0.1%     3.55
  Woodpark Blvd., Bldg. 3, Charlotte, NC                        1987      1       65,850     100%        186,356       0.1%     2.83
  Woodpark Blvd., Bldg. 1, Charlotte, NC                        1985      1       56,000     100%        177,368       0.1%     3.17
  Woodpark Blvd., Bldg. 2, Charlotte, NC                        1986      1       48,600     100%        160,185       0.1%     3.30
  N. I-85 Service Road, Charlotte, NC                           1988      1       44,150     100%        227,550       0.2%     5.15
                                                                       ----   ----------    ----    ------------    ------    ------

                                         Market Subtotal                  7      549,170      96%   $  1,952,422       1.3%   $ 3.69
 Orlando Market
  Boggy Creek Road, Building 2, Orlando, FL                     1996      1       55,456     100%   $    321,388       0.2%   $ 5.80
  Landstreet Road, Building 2, Orlando, FL                      1997      1       55,456     100%        320,871       0.2%     5.79
  Boggy Creek Road, Building 3, Orlando, FL                     1998      1       55,456     100%        298,841       0.2%     5.39
  Boggy Creek Road, Building 1, Orlando, FL                     1992      1       52,500      99%        269,116       0.2%     5.17
  Boggy Creek Road, Building 4, Orlando, FL                     1999      1       50,108     100%        250,539       0.2%     5.00
  Landstreet Road, Building 3, Orlando, FL                      1996      1       50,018     100%        247,589       0.1%     4.95
                                                                       ----   ----------    ----    ------------    ------    ------

                                         Market Subtotal                  6      318,994     100%   $  1,708,344       1.1%   $ 5.36
 Other Market
  Industrial Drive South, Gluckstadt, MS                        1988      1      160,000     100%   $    873,490       0.6%   $ 5.46
                                                                       ----   ----------    ----    ------------    ------    ------

                               SOUTHEAST REGION SUBTOTAL                 22    1,561,711      97%   $  7,160,351       4.7%   $ 4.70

 NORTHEAST REGION

 Baltimore/Washington Market
  Guilford Road, Annapolis Junction, MD                         1989      1       96,686     100%   $    592,392       0.4%   $ 6.13
  Nokes Boulevard, Building 1, Sterling, VA                     1998      1       88,489     100%        726,495       0.5%     8.21
  Nokes Boulevard, Building 2, Sterling, VA                     1999      1       78,671     100%        567,432       0.4%     7.21
  Beaumeade Circle, Ashburn, VA                                 1990      1       78,274      89%        468,929       0.3%     6.77
  Oakville Industrial Park, Building 3, Alexandria, VA          1947      1       76,089     100%        551,399       0.4%     7.25
  The Crysen Center, Building 2, Jessup, MD                     1985      1       76,043      92%        354,335       0.2%     5.07
  The Crysen Center, Building 1, Jessup, MD                     1985      1       75,820      87%        348,196       0.2%     5.30
  Bristol Court, Building 1, Jessup, MD                         1988      1       73,071      91%        353,526       0.2%     5.32
  Oakville Industrial Park, Building 1, Alexandria, VA          1949      1       67,225     100%        380,613       0.2%     5.66
  Fontana Lane, Building 2, Baltimore, MD                       1988      1       61,320      83%        391,389       0.3%     7.71
  Bristol Court, Building 2, Jessup, MD                         1986      1       60,000     100%        267,646       0.2%     4.46
  Oakville Industrial Park, Building 5, Alexandria, VA          1955      1       56,134      98%        240,766       0.2%     4.36
  Oakville Industrial Park, Building 6, Alexandria, VA          1946      1       50,876     100%        527,691       0.3%    10.37
  Guilford Road, Building 2, Ashburn, VA                        1988      1       50,355     100%        342,046       0.2%     6.79
  West Nursery Road, Building 1, Linthicum, MD                  1989      1       49,100     100%        343,700       0.2%     7.00
  Guilford Road, Building 1, Ashburn, VA                        1987      1       48,635     100%        280,498       0.2%     5.77
  Fontana Lane, Building 1, Baltimore, MD                       1988      1       47,434     100%        253,967       0.2%     5.35
  West Nursery Road, Building 2, Linthicum, MD                  1989      1       39,041     100%        380,720       0.3%     9.75
  Oakville Industrial Park, Building 2, Alexandria, VA          1940      1       23,683     100%        122,567       0.1%     5.18
  Oakville Industrial Park, Building 4, Alexandria, VA          1952      1        2,800     100%         21,127       0.0%     7.55
                                                                       ----   ----------    ----    ------------    ------    ------

                                         Market Subtotal                 20    1,199,746      96%   $  7,515,434       5.0%   $ 6.50
 Boston Market
  Technology Drive, Auburn, MA                                  1973      1       54,400     100%   $    191,199       0.1%   $ 3.51
  John Hancock Road, Taunton, MA                                1986      1       34,224     100%        206,147       0.1%     6.02
                                                                       ----   ----------    ----    ------------    ------    ------

                                         Market Subtotal                  2       88,624     100%   $    397,346       0.2%   $ 4.48
</TABLE>


                                       21
<PAGE>

<TABLE>
<CAPTION>
                                                                                Rentable Sq. Ft.         Annualized Net Rent(1)
                                                                                ----------------         ----------------------
                                                                      Number                                                    Per
                                                               Year    of                                           Percent   Leased
                                                              Built/  Proper-             Percent                     of        Sq.
Property Type and Location                                  Renovated  ties      Number    Leased      Amount        Total      Ft.
--------------------------                                  ---------  ----      ------    ------      ------        -----      ---
<S>                                                        <C>          <C>   <C>            <C>    <C>              <C>    <C>
 New York/New Jersey Market
  Memorial Drive, Franklin Township, NJ                         1988      1      148,598      94%   $    624,617       0.4%   $ 4.48
  New England Avenue, Piscataway, NJ                       1975/1995      1      101,553     100%        405,196       0.3%     3.99
                                                                       ----   ----------    ----    ------------    ------    ------

                                         Market Subtotal                  2      250,151      96%   $  1,029,813       0.7%   $ 4.27
                                                                       ----   ----------    ----    ------------    ------    ------

                               NORTHEAST REGION SUBTOTAL                 24    1,538,521      97%   $  8,942,593       5.9%   $ 6.02
                                                                       ----   ----------    ----    ------------    ------    ------

 WORKSPACE PROPERTIES TOTAL                                             155    8,467,978      98%   $ 47,611,975      31.3%   $ 5.74
                                                                       ----   ----------    ----    ------------    ------    ------

 GRAND TOTAL                                                            320   38,158,561      97%   $151,767,478     100.0%   $ 4.11
                                                                       ====   ==========    ====    ============    ======    ======
</TABLE>

(1)   "Annualized Net Rent" means annualized monthly net rent from leases in
      effect as of December 31, 1999. "Net Rent" means contractual rent,
      excluding any reimbursements for real estate taxes or operating expenses.

Item 3. Legal Proceedings

Cabot L.P. is not a party to any material litigation nor, to Cabot L.P.'s
knowledge, is any litigation threatened against Cabot L.P., other than routine
actions arising in the ordinary course of business, substantially all of which
are expected to be covered by liability insurance and which, in the aggregate,
are not expected to have a material adverse effect on the business, results of
operations or financial condition of Cabot L.P.

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

None.

Item 4A. Executive Officers of the Registrant

Not applicable.


                                       22
<PAGE>

                                     PART II

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

This is no established public trading market for Cabot L.P.'s units. As of
December 31, 1999, Cabot L.P. had outstanding 43,667,920 common equity limited
partnership units and Cumulative Redeemable Perpetual Preferred Units (Preferred
Units) as follows: 1,300,000 Series B Preferred Units, 2,600,000 Series C
Preferred Units, 200,000 Series D Preferred Units, 200,000 Series E Preferred
Units, and 1,800,000 Series F Preferred Units. Subject to certain terms and
conditions, the limited partnership units are redeemable by the holders or, at
Cabot L.P.'s option, exchangeable on a one-for-one basis for shares of Cabot
Trust common stock. As of December 31, 1999 there were 43 holders of common
partnership units of Cabot L.P. (including Cabot Trust's general partner
interest). As of the same date, there were six holders of the Preferred Units.

The following table sets forth the distributions paid on the Units with respect
to the periods indicated:

      1998:                                                  Distributions(1)
      -----                                                  ----------------

          First Quarter (from January 30, 1998)                  $.202
          Second Quarter                                          .325
          Third Quarter                                           .325
          Fourth Quarter                                          .325

      1999:                                                  Distributions(1)
      -----                                                  ----------------

          First Quarter                                          $.340
          Second Quarter                                          .340
          Third Quarter                                           .340
          Fourth Quarter                                          .340

      2000:                                                  Distributions(1)
      -----                                                  ----------------

          First Quarter (through February 29, 2000)              $ --

      (1)   Cabot L.P. paid a distribution with respect to these quarters in the
            quarter immediately following the quarter in which the cash flow was
            generated and the distribution was deemed.

The operating cash flow realized by Cabot L.P. and the amount available for
distributions to unitholders is affected by a number of factors, including the
property revenues of Cabot L.P., the operating expenses of Cabot L.P., the
distributions to Preferred Unitholders of Cabot L.P., the interest expense on
borrowings and capital expenditures. Future distributions by Cabot L.P. and
Cabot Trust will be at the discretion of the Board of Trustees of Cabot Trust
and will depend on the actual FFO of Cabot L.P., its financial condition and
capital requirements, the annual income distribution requirements under the REIT
provisions of the Code and such other factors as Cabot Trust's Board of Trustees
deem relevant.


                                       23

<PAGE>

Recent Sales of Unregistered Securities

Cumulative Redeemable Perpetual Preferred Equity

During 1999, Cabot L.P. completed private sales of the following Cumulative
Redeemable Perpetual Preferred Units:

<TABLE>
<CAPTION>
    Sale Date                 Series       Unit Price   Liquidation Value    Net Proceeds
------------------       ---------------   ----------   -----------------    ------------
<S>                      <C>                  <C>         <C>                <C>
April 29, 1999           8.625% Series B      $50         $ 65,000,000       $ 63,175,000
September 3, 1999        8.625% Series C       25           65,000,000         63,175,000
September 27, 1999       8.375% Series D       50           10,000,000          9,715,000
December 9, 1999         8.375% Series E       50           10,000,000          9,715,000
December 22, 1999        8.500% Series F       25           45,000,000         44,025,000
                                                          ------------       ------------
                                                          $195,000,000       $189,805,000
                                                          ============       ============
</TABLE>

Net proceeds from the offerings were used to repay borrowings under Cabot L.P.'s
Acquisition Facility. The Preferred Units, which may be called by Cabot L.P. at
par on or after the fifth anniversary of issuance in each case, have no stated
maturity or mandatory redemption and are not convertible into any other
securities of Cabot L.P. The Preferred Units are exchangeable after ten years
from issuance, or earlier upon the occurrence of certain events, for perpetual
preferred shares of Cabot Trust. All Preferred Units were sold to institutional
investment funds in reliance upon the exemption from registration in Section
4(2) of the Securities Act.

Issuances of Units in Cabot L.P.

On April 7, 1998, Cabot L.P. issued 101,149 Units in Cabot L.P., at a
then-current value of $2.3 million, in exchange for industrial properties. The
Units were issued solely to "accredited investors" within the meaning of Rule
501 of Regulation D, and the Units were issued in reliance upon the exemption
from registration set forth in Regulation D.

On March 11, 1999 and December 15, 1999, Cabot L.P. issued 143,087 and 34,361
Units in Cabot L.P., respectively, at then current values totaling $3.4 million,
in exchange for industrial properties. The Units were issued solely to
"accredited investors" and in reliance upon the exemption set forth in
Regulation D.

Private Placement of 1,000,000 Common Shares of Beneficial Interest of Cabot
Trust.

On February 4, 1998, Cabot Trust completed a private placement of 1,000,000
Common Shares to a group of investors represented by Morgan Stanley Asset
Management, Inc. ("Morgan Stanley"). Morgan Stanley acted as advisor to six
institutional investors in connection with the private placement. The aggregate
and sales offering price of such shares was $20,000,000. Cabot Trust relied on
Regulation D to effectuate the private placement. All of the investors who
purchased common stock in the private placement were qualified institutional
buyers within the meaning of Rule 144A, except for one institutional "accredited
investor" within the meaning of Rule 501 of Regulation D.

Item 6. Selected Financial Data

Cabot L.P. commenced operations in its current form on February 4, 1998, the
completion date of the Formation Transactions and the Offerings described
elsewhere herein. Set forth below are selected historical financial and other
data for the real estate advisory business of Cabot Partners, and for Cabot


                                       24
<PAGE>

L.P. The selected financial data presented below as of December 31, 1997 and
1996 and for the two years in the period ended December 31, 1997 have been
derived from the Cabot Partners financial statements that have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
reports included in this report on Form 10-K. This information should be read in
conjunction with such financial statements and the notes thereto. The selected
financial data presented below as of and for the year ended December 31, 1995
for Cabot Partners is derived from Cabot Partners financial statements and the
notes thereto not included in this report on Form 10-K which have been audited
by Arthur Andersen LLP.

The selected financial data presented below as of and for the years ended
December 31, 1999 and 1998, have been derived from the financial statements of
Cabot L.P. that have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their report included in this report on Form 10-K.
This information should be read in conjunction with the financial statements and
notes thereto included elsewhere within this filing.

<TABLE>
<CAPTION>
                                                     Cabot L.P.                         Cabot Partners
                                            --------------------------    -----------------------------------------
                                                 As of and for the                    As of and for the
                                             Years Ended December 31,              Years Ended December 31,
                                            --------------------------    -----------------------------------------

In thousands, except per unit data              1999         1998(1)         1997           1996           1995
----------------------------------------    -----------    -----------    -----------    -----------    -----------
<S>                                         <C>            <C>            <C>            <C>            <C>
Operating Data
Revenues                                    $   157,471    $   102,425    $     9,080    $     7,908    $     6,516
General and administrative expenses               8,902          6,815          7,045          5,888          5,069
Depreciation and amortization expense            31,169         20,913            977            419            453
Net income                                       63,687         50,958          1,058          1,594          1,057
Net income allocable to partnership units        57,678         50,958            N/A            N/A            N/A
Net income per unit                                1.32           1.17             --             --             --
Distributions per unit                             1.36          1.177             --             --             --

Balance Sheet Data
Total assets                                $ 1,593,484    $ 1,110,570    $     5,339    $     6,075    $     5,628
Total liabilities                               584,768        293,272            760            485            563
Total partners' capital                       1,008,716        817,298          4,579          5,590          5,065

Other Data
Cash flows provided by (used in):
  Operating activities                      $   101,293    $    78,726    $     1,062    $     1,283    $     1,351
  Investing activities                         (454,195)      (398,795)          (193)           113             (6)
  Financing activities                          372,608        322,369         (2,069)        (1,069)            --
Assets under management (unaudited)(2)              N/A            N/A        861,000        979,000        778,000
</TABLE>

(1)   Represents activity for the period from the commencement of operations on
      February 4, 1998 through December 31, 1998.
(2)   Based on the estimated fair market value of the managed assets as of the
      dates indicated.

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

The statements regarding Cabot L.P. contained in this discussion and elsewhere
in this report that are not historical facts are forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. These forward-looking


                                       25
<PAGE>

statements are based on current expectations, estimates and projections about
the industry and markets in which Cabot L.P. operates, management's beliefs and
assumptions made by management. Words such as "expects", "anticipates",
"intends", "plans", "believes", "seeks", "estimates" and variations of such
words and similar expressions are intended to identify such forward-looking
statements. Such forward-looking statements are not guarantees of future
performance and involve risks and uncertainties. Therefore, actual outcomes and
results may differ materially from what is expressed or suggested by such
forward-looking statements and readers of this document should not rely on them.
Cabot L.P.'s operating results depend primarily on income from industrial
properties, which may be affected by various factors, including changes in
national and local economic conditions, competitive market conditions,
uncertainties and costs related to and the imposition of conditions on receipt
of governmental approvals and costs of material and labor, all of which may
cause actual results to differ materially from what is expressed herein. Capital
and credit market conditions that affect Cabot L.P.'s cost of capital also
influence operating results.

INTRODUCTION

Cabot L.P.

Cabot L.P. owns and operates a diversified portfolio of bulk distribution,
multitenant distribution and "workspace" (light industrial, R&D and similar
facilities) properties throughout the United States. Cabot L.P. was formed on
October 10, 1997, but did not begin operations as a fully integrated real estate
company until the completion of the Formation Transactions and Offerings on
February 4, 1998, the closing date of Cabot Trust's initial public offering.
Cabot L.P. had no operations prior to February 4, 1998. At December 31, 1999,
Cabot L.P. owned 320 industrial properties, 119 of which properties were
acquired in connection with the Formation Transactions described in Notes 1 and
3 to the consolidated financial statements herein, 84 of which properties were
acquired during 1998 and 113 of which properties were acquired during the year
ended December 31, 1999. In addition, four properties from the development
program were placed into service in 1999 and 1998. In the near term, Cabot L.P.
expects to moderate the pace of its acquisition program, compared to prior
years, and Cabot L.P. expects development projects will provide an increasing
component of growth due to the higher potential returns on capital.

Cabot Partners

Cabot Partners was the real estate advisory and management entity that was the
sponsor and organizer of Cabot Trust. Its revenues consisted primarily of asset
management and acquisition fees earned under advisory contracts with large
institutional investors.

RESULTS OF OPERATIONS

Cabot L.P.

Since Cabot L.P. was formed in October 1997 and did not begin operations until
February 4, 1998, the results for the year ended December 31, 1998 represent
activity for 331 days (approximately 11 months) only, and no comparison of
results to prior periods is available.


                                       26
<PAGE>

Year Ended December 31, 1999 Compared with Year Ended December 31, 1998

Net income allocable to partnership unitholders for the year ended December 31,
1999, totaled $57.7 million or $1.32 per unit, compared to $51.0 million or
$1.17 per unit for the year ended December 31, 1998. The increase is the result
of having a full year of operations in 1999 compared to 331 days in 1998 and
increased earnings from additional investments in real estate.

Rental revenues were $157.5 million, including tenant reimbursements of $21.6
million, for the year ended December 31, 1999, compared to $102.4 million,
including tenant reimbursements of $13.4 million, for the year ended December
31, 1998. Total rental revenue of $82.7 million and $72.9 million was generated
in 1999 and 1998, respectively, by the 119 properties owned as of February 4,
1998 as a result of the Formation Transactions and still owned at December 31,
1999 (the "Baseline Properties") and total rental revenue of $73.9 million and
$27.2 million in 1999 and 1998, respectively, was generated by the 201
properties acquired or developed after February 4, 1998. The remainder of total
rental revenue relates to properties sold.

Cabot L.P.'s operating margin (the ratio of total rental revenues minus property
operating and property tax expenses to total rental revenues) decreased slightly
to approximately 81% for the year ended December 31, 1999 compared with 82% for
the year ended December 31, 1998. The decrease is primarily due to a change in
the composition of leases, primarily as a result of acquisition of multitenant
and workspace properties, to more leases where Cabot L.P. pays property and
operating expenses and is reimbursed by the tenants compared to leases where the
tenant pays these expenses directly.

Depreciation and amortization related to real estate investments totaled $31.1
million and $20.9 million for the years ended December 31, 1999 and 1998,
respectively. The increase reflects the acquisition of approximately $448
million of real estate assets in 1999, as well as a full year of expense related
to 1998 acquisitions, and 365 days of operations in 1999 compared to 331 days in
1998.

General and administrative expense increased by $2.1 million, to $8.9 million
for the year ended December 31, 1999. The increase is primarily due to a full
year of operations in 1999 and it also reflects an increase in personnel to
manage the acquisition, development, asset management and financing activity,
from the increase in the number of Cabot L.P.'s properties during the two-year
period. As a percentage of rental revenues, general and administrative expense
decreased to 5.7% in 1999 from 6.7% in 1998.

Interest expense of $25.4 million for the year ended December 31, 1999
represents interest incurred on an additional $115.7 million of secured debt
incurred during 1999, $200.0 million of unsecured debt issued in May 1999, and
additional borrowings under Cabot L.P.'s Acquisition Facility, net of $3.2
million of interest capitalized to development projects. Interest expense of
$7.0 million for 1998, net of $959,000 of interest capitalized to development
projects, was incurred for only 331 days on average indebtedness of $116.2
million for 1998.

During 1998 Cabot L.P. entered into an interest rate hedge transaction (referred
to as the "Treasury Lock") involving the future sale of $100 million of Treasury
securities based on an interest rate of approximately 5.54% for such securities
in anticipation of a future debt issuance of at least $100 million with a
maturity of 10 years. At the March 31, 1999 contractual settlement date for this
transaction, Cabot L.P. paid $2.5 million to its counter party in the
transaction, reflecting the decrease in Treasury security yields since the July
1998 commencement of the transaction. Because an offering of the size and
maturity contemplated when the interest rate hedge transaction was executed was
not


                                       27
<PAGE>

completed by the time of, or shortly after, the March 31, 1999 settlement date
of the transaction, Cabot L.P. recorded a loss related to the settlement of the
treasury lock of approximately $2.5 million during the year ended December 31,
1999.

During 1999, Cabot L.P. sold two properties, which resulted in a net gain of
$2.8 million. On June 22, 1999, Cabot L.P. sold a 120,000 square foot property
located in Massachusetts for a gross sales price of $10.5 million, which
resulted in a gain of $3.4 million, and on August 3, 1999, Cabot L.P. sold a
225,000 square foot property located in New Jersey for a gross sales price of
$6.6 million, which resulted in a loss of $653,000.

Interest and other income, which consists primarily of interest earned on Cabot
L.P.'s invested cash balances and earnings of Cabot Advisors, decreased by
$124,000, from $1.1 million for the year ended December 31, 1998 to $1.0 million
for the year ended December 31, 1999. The decrease is primarily due to a
decrease in Cabot L.P.'s share of earnings of Cabot Advisors for the year ended
December 31, 1999 compared with 1998.

Dividends accruable to Preferred Unitholders, which totaled $6.0 million in
1999, are deducted from Net Income to arrive at Net Income Allocable to
Partnership Units.

Cabot Partners

Year Ended December 31, 1997 Compared with Year Ended December 31, 1996

Revenues, primarily consisting of asset management fees and acquisition fees,
increased by $1.2 million for the year ended December 31, 1997, or 14.8%, to
$9.1 million as compared to $7.9 million for the year ended December 31, 1996.
The increase was due to a $191 million increase in average assets under
management for the year ended December 31, 1997, as compared to the year ended
December 31, 1996, which resulted in an $850,000 increase in asset management
fees. In addition, acquisition fees increased by $262,000 in 1997 as compared to
1996, due to an increase in fee-earning acquisitions of $37 million.

General and administrative expenses increased by $1.2 million for the year ended
December 31, 1997, or 19.7%, to $7.0 million as compared to $5.9 million for the
year ended December 31, 1996. Compensation expense increases accounted for
$798,000, or 69.0%, of the increase. The remainder of the increase was primarily
due to higher professional services fees. General and administrative expenses as
a percentage of revenues for 1997 and 1996 was 77.6% and 74.5%, respectively.

Depreciation and amortization expense increased by $558,000 for the year ended
December 31, 1997, to $977,000, due to increased amortization of two advisory
contracts terminated during 1997.

CAPITAL RESOURCES AND LIQUIDITY

Cabot L.P. intends to rely on cash provided by operations, unsecured and secured
borrowings from institutional sources, and public debt as its primary sources of
funding for acquisition, development, expansion and renovation of properties.
Cabot L.P. may also consider preferred and common equity financing when such
financing is available on attractive terms.

As a result of the completion of the Offerings in February 1998, Cabot Trust
issued 8,625,000 Common Shares to the public and 1,000,000 Common Shares in a
private placement. All of the Common Shares were sold at a price of $20.00 per
share. The proceeds from the Offerings, net of


                                       28
<PAGE>

offering costs, were $176.3 million and were contributed to Cabot L.P. in
exchange for an equal number of Partnership Units.

As discussed in Note 1 to the financial statements, Cabot L.P. issued an
aggregate of $195 million of Cumulative Redeemable Perpetual Preferred Units in
five separate transactions in 1999. The net proceeds from these transactions
were $189.8 million which was used to pay down outstanding balances under the
Acquisition Facility. These Cumulative Redeemable Perpetual Preferred Units are
callable by Cabot L.P. at par on or after the fifth anniversary of issuance.

In March 1998, Cabot L.P. established a $325 million unsecured revolving line of
credit (the "Acquisition Facility"), with Morgan Guaranty Trust Company of New
York as lead agent for a syndicate of banks. The Acquisition Facility is used to
fund property acquisitions, development activities, building expansions, tenant
leasing costs and other general corporate purposes. The Acquisition Facility
contains certain restrictions and requirements such as total debt-to-assets,
debt service coverage and unencumbered assets to unsecured debt ratios, and
other limitations. Cabot L.P. believes cash flow from operations not distributed
to unitholders will be sufficient to cover tenant improvements and other costs
associated with renewal or replacement of current tenants as their leases expire
and recurring non-incremental revenue-generating capital expenditures.

As of December 31, 1999, Cabot L.P. had $163.9 million of fixed rate debt
secured by properties, $163.0 million of unsecured borrowings under its
Acquisition Facility, $200.0 million of unsecured debt and a 35% debt-to-total
market capitalization ratio. The debt-to-total market capitalization ratio is
calculated based on Cabot L.P.'s total consolidated debt as a percentage of the
sum of the market value of its outstanding Partnership Units, plus the
liquidation value of Cumulative Redeemable Perpetual Preferred Units plus debt.

In the normal course of its 2000 operations, through February 29, 2000, Cabot
L.P. purchased approximately $58 million of real estate assets in the current
year and has committed to purchase $41 million of additional real estate assets.
The completed real estate asset acquisitions were primarily funded through
Acquisition Facility borrowings and $6.1 million of assumed debt.

Cabot L.P. entered into an interest rate cap arrangement relating to its
LIBOR-based Acquisition Facility for a notional amount of $100 million for the
period October 1, 1999 through April 1, 2000. This arrangement is intended to
limit the LIBOR component of Cabot L.P.'s interest rate on an equivalent amount
of borrowings to 6.5% per annum.

Cash and cash equivalents totaled $22.0 million at December 31, 1999,
representing an increase of $19.7 million. This was the result of $101.3 million
of cash generated from operating activities and $372.6 million provided by
financing activities, reduced by $454.2 million used in investing activities.

YEAR 2000

During 1999, Cabot L.P. completed its program of determining whether its
business operations would be affected by date sensitive calculation errors that
might result from computers whose programs do not properly recognize the year
2000 (commonly referred to as the "Year 2000 Issue"). Cabot L.P. has not to date
experienced any effects on its results of operations or financial position from
the Year 2000


                                       29
<PAGE>

Issue, nor have any of Cabot L.P.'s vendors communicated to Cabot L.P. that they
have experienced any such effects.

INFLATION

Substantially all of the leases of Cabot L.P.'s properties require the tenant to
pay, as additional rent, either all real estate taxes and operating expenses or
all increases in real estate taxes and operating expenses over a base amount. In
addition, many of such leases provide for fixed or indexed increases (based on
the consumer price index or other measures) in base rent. Management believes
that inflationary increases in operating expenses will be offset, in part, by
these expense reimbursements and contractual rent increases.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

In addition to using equity capital and retained earnings, Cabot L.P. finances
its acquisition and development programs and its ongoing operating cash needs
through the use of debt financing. Cabot L.P. uses short-term revolving debt,
primarily in the form of its Acquisition Facility, and long-term secured and
unsecured debt with original maturities of five years or more. Cabot L.P.
attempts to manage its debt maturities to reduce its exposure to the refinancing
risk that would arise from having significant maturities of principal at a time
when debt capital may not be available or may be available only at unfavorable
interest rates.

Cabot L.P. is exposed to market risk in the form of the effects of changes in
market interest rates on its existing and proposed debt financing. Its
Acquisition Facility bears interest at a variable rate, LIBOR plus 1%, while the
interest rates on proposed fixed-rate unsecured and secured debt instruments
will usually be based on Treasury securities yields plus a market-based spread.
Cabot L.P. has entered into various forms of interest rate protection agreements
with investment-grade financial institutions from time to time for the purpose
of managing a portion of its interest rate risk. For variable rate LIBOR-based
borrowings, these agreements include interest rate collar and interest rate cap
agreements that are intended to limit Cabot L.P.'s effective cost on variable
rate borrowings, either within an agreed range or below an agreed maximum level.
For proposed long-term instruments, Cabot L.P. has also entered into "Treasury
Lock transactions" that are intended to set the Treasury securities component of
the interest cost in advance through agreements for the sale of Treasury
securities having notional amounts and maturities comparable to Cabot L.P.'s
intended debt issuance. Cabot L.P. does not enter into interest rate protection
agreements or any other form of derivative financial instruments for speculative
trading purposes.

As of December 31, 1999, Cabot L.P. was a party to an interest rate cap
agreement that was intended to limit its exposure to changes in LIBOR through
April 1, 2000 on $100 million of borrowings on its Acquisition Facility. Under
the agreement, Cabot L.P.'s counter party is required to pay an amount equal to
interest on that notional principal amount of borrowings to the extent that the
relevant LIBOR exceeds 6.5%.

As of December 31, 1998, Cabot L.P. also had a Treasury Lock agreement in place
for the purpose of setting the Treasury securities component of the interest
rate on an intended future issuance of fixed rate debt. This agreement provided
for the sale of $100 million of 10-year Treasury securities at a yield of 5.54%
on March 31, 1999. Cabot L.P. paid its counter party $2.5 million upon the
maturity of


                                       30
<PAGE>

this agreement, reflecting the decrease in Treasury yields and consequent
increase in cost of the notional amount of Treasury securities to be sold since
the July 1998 commencement date of the transaction.

Taking into account $163.0 million of variable rate borrowings that Cabot L.P.
had outstanding under its Acquisition Facility at December 31, 1999, and the
above-described interest rate cap agreement that was in effect at that date, an
instantaneous increase of 100 basis points in LIBOR at that date would, if LIBOR
remained at the increased levels thereafter, result in an estimated $1.4 million
reduction in Cabot L.P.'s net income in 2000. This estimate is provided for the
purpose of illustrating the possible effects on Cabot L.P.'s results of
operations of changing interest rates and Cabot L.P.'s interest rate protection
agreements. It does not take into account any other effects that changes in
interest rates might have on Cabot L.P.'s operations, such as higher interest
rates on new fixed rate borrowings, nor does it consider any additional interest
rate protection agreements that Cabot L.P. might enter into in reaction to or in
anticipation of changes in interest rates. While an increase in LIBOR of 100
basis points over a relatively short time period is possible, it is unlikely
that interest rates would increase instantaneously or stay at the same rate for
a sustained period as assumed for purposes of the illustration.

As of December 31, 1999, Cabot L.P. also had $163.9 million of fixed rate debt
at stated rates ranging from 7.25% to 9.67% secured by certain properties and
$200.0 million of fixed rate unsecured debt at a stated rate of 7.125%. The
current and future use of fixed rate debt is advantageous to Cabot L.P., as
compared with variable rate debt, in times of rising interest rates. However, in
an environment of falling interest rates, fixed rate debt would place Cabot L.P.
at a disadvantage as compared with competitors having larger components of
variable rate debt.


                                       31
<PAGE>

Item 8. Financial Statements and Supplementary Data

                          INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                                          Page
                                                                                          ----
CABOT INDUSTRIAL PROPERTIES, L.P.
<S>                                                                                        <C>
Report of Independent Public Accountants...................................................33
Consolidated Balance Sheets as of December 31, 1999 and 1998...............................34
Consolidated Statements of Operations for the Years Ended December 31, 1999 and 1998.......35
Consolidated Statements of Partners' Equity for the Years Ended December 31, 1999
and 1998...................................................................................36
Consolidated Statements of Cash Flows for the Years Ended December 31, 1999 and 1998.......37
Notes to Consolidated Financial Statements.................................................39
Schedule III - Real Estate and Accumulated Depreciation....................................55

CABOT PARTNERS LIMITED PARTNERSHIP
Report of Independent Public Accountants...................................................64
Balance Sheets as of December 31, 1997 and 1996............................................65
Statements of Operations for the Years Ended December 31, 1997 and 1996....................66
Statements of Partners' Capital for the Years Ended December 31, 1997 and 1996.............67
Statements of Cash Flows for the Years Ended December 31, 1997 and 1996....................68
Notes to Financial Statements..............................................................69
</TABLE>


                                       32
<PAGE>

                    Report of Independent Public Accountants

To the Partners of Cabot Industrial Properties, L.P.:

We have audited the accompanying consolidated balance sheets of Cabot Industrial
Properties, L.P. and subsidiaries (Cabot L.P.), a Delaware Partnership, as of
December 31, 1999 and 1998, and the related consolidated statements of
operations, partners' equity and cash flows for the years then ended (Note 1).
These financial statements are the responsibility of Cabot 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 Cabot Industrial
Properties, L.P. and subsidiaries as of December 31, 1999 and 1998 and the
results of their operations and their cash flows for the years then ended, in
conformity with generally accepted accounting principles.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed in the index to the
financial statements is presented for purposes of complying with the Securities
and Exchange Commission's rules and is not a required part of the basic
financial statements. This schedule has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, fairly states, in all material respects, the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.


                                                             ARTHUR ANDERSEN LLP
Boston, Massachusetts
February 14, 2000 (except with
respect to matters discussed in
Note 13, as to which the date is
February 29, 2000)


                                       33
<PAGE>

                       CABOT INDUSTRIAL PROPERTIES, L.P.

                          CONSOLIDATED BALANCE SHEETS
                                (in thousands)

<TABLE>
<CAPTION>
                                                                       As of December 31,
                                                                  --------------------------
                                                                      1999           1998
                                                                  -----------    -----------
<S>                                                               <C>            <C>
ASSETS:

INVESTMENT IN REAL ESTATE:
Land                                                              $   296,619    $   199,145
Buildings                                                           1,211,215        873,530
Less: Accumulated Depreciation                                        (42,543)       (17,290)
                                                                  -----------    -----------
    Net Rental Properties                                         $ 1,465,291    $ 1,055,385
Properties under Development                                           63,938         23,108
                                                                  -----------    -----------
                                                                  $ 1,529,229    $ 1,078,493
                                                                  -----------    -----------

OTHER ASSETS:
Cash and Cash Equivalents                                         $    22,007    $     2,301
Rents and Other Receivables, net of allowance for uncollectible
    accounts of $574 and $312, in 1999 and 1998, respectively           3,828          2,872
Deferred Rent Receivable                                                6,079          2,638
Deferred Lease Acquisition Costs, net                                  23,913         17,362
Deferred Financing Costs, net                                           3,369          1,255
Investment in and Advances to Related Party                             1,105            582
Other Assets                                                            3,954          5,067
                                                                  -----------    -----------

TOTAL ASSETS                                                      $ 1,593,484    $ 1,110,570
                                                                  ===========    ===========

LIABILITIES AND PARTNERS' EQUITY:

LIABILITIES:
Mortgage Debt                                                     $   163,866    $    48,206
Unsecured Debt                                                        200,000             --
Line of Credit Borrowings                                             163,000        200,000
Accounts Payable                                                          889            511
Accrued Real Estate Taxes                                              10,254          7,309
Distributions Payable                                                  15,437         14,134
Tenant Security Deposits and Prepaid Rents                             11,205          4,956
Other Liabilities                                                      20,117         18,156
                                                                  -----------    -----------
                                                                  $   584,768    $   293,272
                                                                  -----------    -----------

Commitments and Contingencies (Note 11)

PARTNERS' EQUITY:
General Partner's  Equity                                         $   761,742    $   348,987
Limited Partners' Equity                                               57,169        468,311
Preferred Unitholders' Equity                                         189,805             --
                                                                  -----------    -----------

TOTAL PARTNERS' EQUITY                                            $ 1,008,716    $   817,298
                                                                  -----------    -----------

TOTAL LIABILITIES AND PARTNERS' EQUITY                            $ 1,593,484    $ 1,110,570
                                                                  ===========    ===========
</TABLE>
                  The accompanying notes are an integral part
                  of these consolidated financial statements.


                                       34
<PAGE>

                        CABOT INDUSTRIAL PROPERTIES, L.P.

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                  (in thousands, except unit and per unit data)

<TABLE>
<CAPTION>
                                                              For the Years Ended
                                                     ---------------------------------------
                                                     December 31, 1999     December 31, 1998
                                                     -----------------     -----------------
                                                                                (Note 1)
<S>                                                     <C>                   <C>
REVENUES:
Rental Income                                           $    135,859          $     89,044
Tenant Reimbursements                                         21,612                13,381
                                                        ------------          ------------
                                                        $    157,471          $    102,425
EXPENSES:
Property Operating                                      $     11,821          $      6,579
Property Taxes                                                17,787                11,843
Depreciation and Amortization                                 31,169                20,913
General and Administrative                                     8,902                 6,815
Interest                                                      25,360                 7,009
Settlement of Treasury Lock                                    2,492                    --
                                                        ------------          ------------
                Total Expenses                          $     97,531          $     53,159

OTHER INCOME:
Net Gain on Sales of Real Estate                        $      2,751          $        572
Interest and Other Income                                        996                 1,120
                                                        ------------          ------------

Net Income                                              $     63,687          $     50,958

Preferred Unitholders Distributions                           (6,009)                   --
                                                        ------------          ------------

Net Income Allocable to Partnership Units               $     57,678          $     50,958
                                                        ============          ============

Earnings per Partnership Unit:
    Basic                                               $       1.32          $       1.17
                                                        ============          ============

    Diluted                                             $       1.32          $       1.17
                                                        ============          ============

Weighted Average Partnership Units:
    Basic                                                 43,608,110            43,493,198
                                                        ============          ============

    Diluted                                               43,631,869            43,586,876
                                                        ============          ============
</TABLE>

                  The accompanying notes are an integral part
                  of these consolidated financial statements.


                                       35
<PAGE>

                        CABOT INDUSTRIAL PROPERTIES, L.P.

                   CONSOLIDATED STATEMENTS OF PARTNERS' EQUITY
                  (in thousands, except unit and per unit data)

<TABLE>
<CAPTION>
                                                               Common                              Preferred
                                              -----------------------------------------    -------------------------
                                                               General        Limited                                       Total
                                              Partnership     Partner's      Partners'     Partnership   Unitholders'     Partners'
                                                 Units         Equity         Equity          Units         Equity         Equity
                                              -----------    -----------    -----------    -----------   -----------    -----------
<S>                                            <C>           <C>            <C>              <C>         <C>            <C>
Balance, December 31, 1997                             50    $         1    $        --             --   $        --    $         1

    Issuance of Units                          43,576,149        349,302        469,965             --            --        819,267
    Repurchase of Units                           (85,727)          (205)        (1,513)            --            --         (1,718)
    Net Income                                         --         21,766         29,192             --            --         50,958
    Distributions ($1.177 per Unit)                    --        (21,877)       (29,333)            --            --        (51,210)
                                              -----------    -----------    -----------    -----------   -----------    -----------

Balance, December 31, 1998                     43,490,472    $   348,987    $   468,311             --   $        --    $   817,298
                                              -----------    -----------    -----------    -----------   -----------    -----------

    Issuance of Units                             177,448    $        --    $     3,413      6,100,000   $   189,805    $   193,218
    Conversion of Units                                --        419,082       (419,082)            --            --             --
    Net Income                                         --         49,048          8,630             --         6,009         63,687
    Distributions ($1.36 per Unit)                     --        (55,375)        (4,103)            --        (6,009)       (65,487)
                                              -----------    -----------    -----------    -----------   -----------    -----------

Balance, December 31, 1999                     43,667,920    $   761,742    $    57,169      6,100,000   $   189,805    $ 1,008,716
                                              ===========    ===========    ===========    ===========   ===========    ===========
</TABLE>
                  The accompanying notes are an integral part
                  of these consolidated financial statements.


                                       36
<PAGE>

                        CABOT INDUSTRIAL PROPERTIES, L.P.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                        (in thousands, except unit data)

<TABLE>
<CAPTION>
                                                                                                       For the Years Ended
                                                                                              --------------------------------------
                                                                                              December 31, 1999    December 31, 1998
                                                                                              -----------------    -----------------
                                                                                                                        (Note 1)
<S>                                                                                               <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
          Net Income                                                                              $  63,687            $  50,958
          Adjustments to Reconcile Net Income to Cash Provided by Operating Activities:
             Depreciation and Amortization                                                           31,169               20,913
             Amortization of Deferred Financing Costs                                                 1,003                  466
             Straight Line Rent                                                                      (3,470)              (2,638)
             Cabot L.P.'s Share of Net Income of Cabot Advisors                                          --                 (231)
             Net Gain on Sales of Real Estate                                                        (2,751)                (572)
             Increase in Rents and Other Receivables                                                   (956)              (2,872)
             Increase in Accounts Payable                                                               419                  406
             Decrease (Increase) in Other Assets                                                        531               (2,877)
             Increase in Accrued Real Estate Taxes                                                    2,945                7,309
             Increase in Tenant Security Deposits and Prepaid Rents                                   6,249                4,956
             Increase in Other Liabilities                                                            2,467                2,908
                                                                                                  ---------            ---------
                Net Cash Provided by Operating Activities                                         $ 101,293            $  78,726
                                                                                                  ---------            ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
          Purchases of Investments in Real Estate                                                 $(402,150)           $(376,816)
          Properties Under Development                                                              (52,996)             (19,532)
          Proceeds from Sales of Real Estate                                                         16,079                6,874
          Purchases of and Increases in Lease Acquisition Costs                                     (12,369)              (6,857)
          Improvements to Real Estate                                                                (1,938)                (458)
          Acquisition Deposits, net                                                                    (844)              (1,579)
          Advances to Cabot Advisors                                                                   (523)                (351)
          Purchases of Furniture, Fixtures and Equipment                                                (83)                 (76)
          Other                                                                                         629                   --
                                                                                                  ---------            ---------
                Net Cash Used in Investing Activities                                             $(454,195)           $(398,795)
                                                                                                  ---------            ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
          Proceeds from Issuance of Unsecured Debt                                                $ 200,000            $      --
          Net Proceeds from Issuance of Preferred Units                                             191,383                   --
          Proceeds from Issuance of Mortgage Debt                                                    93,215                   --
          Distributions Paid to Common Unitholders                                                  (58,641)             (37,076)
          Line of Credit Borrowings (Repayments), net                                               (37,000)             200,000
          Distributions Paid to Preferred Unitholders                                                (5,419)                  --
          Mortgage Debt Principal Repayments                                                         (5,737)             (14,232)
          Increase in Deferred Financing Costs                                                       (2,627)              (1,721)
          Proceeds from the Issuance of Common Units, net                                            (1,412)             177,606
          Other                                                                                      (1,154)                (490)
          Repurchase of Partnership Units                                                                --               (1,718)
                                                                                                  ---------            ---------
                Net Cash Provided by Financing Activities                                         $ 372,608            $ 322,369
                                                                                                  ---------            ---------
                     Net Increase in Cash and Cash Equivalents                                    $  19,706            $   2,300

CASH AND CASH EQUIVALENTS-BEGINNING OF YEAR                                                           2,301                    1
                                                                                                  ---------            ---------

CASH AND CASH EQUIVALENTS-END OF YEAR                                                             $  22,007            $   2,301
                                                                                                  =========            =========

Cash paid for interest, net of amounts capitalized                                                $  23,224            $   5,771
                                                                                                  =========            =========
</TABLE>
                  The accompanying notes are an integral part
                  of these consolidated financial statements.


                                       37
<PAGE>

                        CABOT INDUSTRIAL PROPERTIES, L.P.

                CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
                        (in thousands, except unit data)

DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:

      In conjunction with the Offering and Formation Transactions, Cabot L.P.
assumed $18,413 of indebtedness and issued 33,850,000 Partnership Units in
exchange for real estate assets and the advisory business of Cabot Partners,
recorded at $659,021 and $77, respectively.

      In conjunction with a sale of real estate in 1999, Cabot L.P. received a
promissory note in the amount of $627 as a component of total consideration due
from seller. This note was repaid in full during 1999.

      In conjunction with the acquisitions of certain real estate, Cabot L.P.
assumed $44,025 of indebtedness and issued Units valued at $2,268 in 1998 and
assumed $28,182 of indebtedness and issued Units valued at $3,413 in 1999.

      At December 31, 1999 and 1998, accrued capital expenditures (including
amounts included in accounts payable) totaled $6,520 and $7,243, development
costs totaled $3,610 and $3,576, preferred equity offering costs totaled $1,578
and $0, and common equity offering costs totaled $0 and $1,290, respectively.

                  The accompanying notes are an integral part
                  of these consolidated financial statements.


                                       38
<PAGE>

                        CABOT INDUSTRIAL PROPERTIES, L.P.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 1999

1. GENERAL

Organization

Cabot Industrial Properties, L.P. (Cabot L.P.), a Delaware limited
partnership, was formed on October 10, 1997. The general partner of Cabot L.P.
is Cabot Industrial Trust (Cabot Trust), a Maryland real estate investment
trust which was also formed on October 10, 1997. As the general partner of Cabot
L.P., Cabot Trust has the exclusive power under the agreement of limited
partnership to manage and conduct the business of Cabot L.P. Cabot Trust is a
fully-integrated, internally-managed real estate company formed to continue and
expand the national real estate business of Cabot Partners Limited Partnership
(Cabot Partners). Cabot Trust qualifies as a real estate investment
trust (a REIT) for federal income tax purposes. Since Cabot L.P. was formed on
October 10, 1997, and did not begin operations until February 4, 1998 (see The
Formation Transactions below), the results for the year ended December 31, 1998,
represent activity for 331 days, or approximately 11 months.

The Formation Transactions

On February 4, 1998, under a Contribution Agreement executed by Cabot Trust,
Cabot L.P., Cabot Partners, and various other contributors, 122 industrial real
estate properties, certain real estate advisory contracts and other assets were
(i) contributed to Cabot L.P. in exchange for general partnership units in Cabot
L.P. (Units) that may, subject to certain restrictions, be exchanged for Common
Shares of Cabot Trust (Common Shares) or (ii) contributed to Cabot Trust in
exchange for Common Shares. The properties contributed to Cabot Trust were
concurrently contributed by it to Cabot L.P. in exchange for the number of Units
equal to the number of Common Shares exchanged for the property.

Cabot L.P. contributed the real estate advisory contracts to Cabot Advisors,
Inc. (Cabot Advisors) and received 100% of the non-voting preferred stock of
Cabot Advisors, which entitles it to 95% of Cabot Advisors' net operating cash
flow. All of the common stock of Cabot Advisors is owned by an officer of Cabot
Trust.

At December 31, 1999, Cabot Trust owned 93.0% of Cabot L.P. Cabot Trust owned
42.7% of Cabot L.P. at December 31, 1998.

During the year ended December 31, 1999, Cabot L.P. issued 177,448 Units in
conjunction with acquisitions.

The Offerings

On February 4, 1998, Cabot Trust completed the offering of 8,625,000 Common
Shares at an offering price of $20.00 per share. In addition, Cabot Trust issued
1,000,000 Common Shares in a private offering at $20.00 per share (collectively,
the Offerings). Cabot Trust contributed the net proceeds of the Offerings to
Cabot L.P. in exchange for the number of general partnership interests in Cabot
L.P. equal to the number of Common Shares sold in the Offerings.


                                       39
<PAGE>

                        CABOT INDUSTRIAL PROPERTIES, L.P.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                December 31, 1999

1. GENERAL (CONTINUED)

Cumulative Redeemable Perpetual Preferred Equity

During 1999, Cabot L.P. completed private sales of the following Cumulative
Redeemable Perpetual Preferred Units (the "Preferred Units"):

<TABLE>
<CAPTION>
          Sale Date                       Series                 Unit Price            Liquidation Value             Net Proceeds
----------------------------      -----------------------      ---------------      -------------------------     ------------------
<S>                                  <C>                             <C>                   <C>                        <C>
April 29, 1999                       8.625% Series B                 $50                   $ 65,000,000               $ 63,175,000
September 3, 1999                    8.625% Series C                  25                     65,000,000                 63,175,000
September 27, 1999                   8.375% Series D                  50                     10,000,000                  9,715,000
December 9, 1999                     8.375% Series E                  50                     10,000,000                  9,715,000
December 22, 1999                    8.500% Series F                  25                     45,000,000                 44,025,000
                                                                                           ------------               ------------
                                                                                           $195,000,000               $189,805,000
                                                                                           ============               ============
</TABLE>

The Preferred Units, which may be called by Cabot L.P. at par on or after the
fifth anniversary of issuance in each case, have no stated maturity or mandatory
redemption provisions and are not convertible into any other securities of Cabot
L.P.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Cabot
L.P. and its subsidiaries over which it exercises control. All significant
intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

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

Investment in Real Estate

Investments in real estate are carried at cost, less accumulated depreciation.
It is Cabot L.P.'s policy to review the carrying value of long-lived assets for
impairment whenever events or changes in circumstances indicate that the
carrying value of such assets may not be recoverable. Measurement of the
impairment loss is based on the fair value of the asset. Generally, fair value
is determined using valuation techniques such as the present value of expected
future cash flows. No impairment adjustments have been made as a result of this
review process during 1999 or 1998.


                                       40
<PAGE>

                        CABOT INDUSTRIAL PROPERTIES, L.P.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                December 31, 1999

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Investments in real estate are primarily depreciated over 40 years using the
straight-line method. Expenditures for ordinary maintenance and repairs are
charged to operations as incurred. Significant building renovations and
improvements that extend the useful life of or improve the assets are
capitalized.

Cash Equivalents

Cabot L.P. considers all short-term investments with a maturity of three months
or less to be cash equivalents.

Capitalization of Costs

Cabot L.P. has capitalized as deferred costs certain expenditures related to the
financing and leasing of its properties. Capitalized loan fees are amortized
over the term of the related loans and lease acquisition costs are amortized
over the term of the related leases, or the estimated useful life of the
improvement, if shorter. Deferred Lease Acquisition Costs and Deferred Financing
Costs included in the accompanying consolidated balance sheets are presented net
of accumulated amortization totaling $8,620,000 and $1,413,000, respectively, as
of December 31, 1999 and $3,487,000 and $466,000, respectively, as of December
31, 1998.

Investment in Cabot Advisors

Cabot L.P.'s investment in Cabot Advisors is accounted for using the equity
method. Under the equity method of accounting, Cabot L.P.'s pro rata share of
Cabot Advisors' income (loss) is recorded as an increase (decrease) in the
carrying value of its investment and any distributions received are recorded as
decreases in the carrying value.

Rental Income

All leases are classified as operating leases. Certain leases provide for tenant
occupancy during periods for which no rent is due and minimum rent payments that
increase during the term of the lease. Cabot L.P. records rental income for the
full term of each lease on a straight-line basis. The resulting Deferred Rent
Receivable represents the amount due from tenants, net of reserves, which Cabot
L.P. expects to collect over the remaining life of the leases rather than
currently. Deferred rental revenue is not recognized for income tax purposes
until received. Cabot L.P. recorded a provision for uncollectible rental income
of $352,000 and $312,000 in 1999 and 1998, respectively, and wrote off $90,000
against its Allowance for Uncollectible Accounts in 1999.

Interest Rate Protection Agreements

Cabot L.P. uses various types of interest rate protection agreements from time
to time to manage its exposures to interest rate risk. During 1999 and 1998,
Cabot L.P. used interest rate collar agreements and interest rate cap agreements
to manage a portion of the interest rate risk arising from its LIBOR-based
acquisition facility and may, in the future, use other types of agreements. The
collar agreements effectively limited the LIBOR interest cost of a portion of
the outstanding balance on the acquisition facility to a specified interest rate
range by requiring Cabot L.P.'s counter party to pay amounts to Cabot L.P. to
the extent LIBOR increased above the ceiling of


                                       41
<PAGE>

                        CABOT INDUSTRIAL PROPERTIES, L.P.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                December 31, 1999

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

the specified range and requiring Cabot L.P. to make payments to the counter
party to the extent LIBOR declined below the floor of the range. The interest
rate cap agreements limited the LIBOR interest cost of a portion of the
outstanding balance on the acquisition facility to a maximum interest rate by
requiring Cabot L.P.'s counter party to pay amounts to Cabot L.P. to the extent
LIBOR increased above the ceiling as specified. Cabot L.P. accounts for such
agreements on the accrual method. Amounts to be received from or paid to the
counter parties of the agreements are accrued during the period to which the
amounts relate and are reflected as increases or decreases in interest expense.
The related amounts payable to the counter parties are included in accounts
payable in the accompanying balance sheets.

During 1998, Cabot L.P. entered into an interest rate hedge transaction
(referred to as a Treasury Lock) involving the future sale of $100.0 million of
Treasury securities based on a rate of approximately 5.54% for such securities
in anticipation of a future debt issuance of at least $100.0 million with a
maturity of 10 years. At the March 31, 1999 contractual settlement date for this
transaction, Cabot L.P. paid $2.5 million to its counter party in the
transaction, reflecting the decrease in Treasury security yields since the July
1998 commencement of the transaction. Because an offering of the size and
maturity contemplated when the interest rate hedge transaction was executed was
not completed by the time of, or shortly after, the March 31, 1999 settlement
date of the transaction, Cabot L.P. recorded a loss of $2.5 million in the year
ended December 31, 1999.

Recent Accounting Pronouncements

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 133, Accounting for Derivative
Instruments and Hedging Activities. In June 1999, the FASB issued SFAS No. 137
which deferred the effective date of SFAS No. 133. The statement is now
effective for fiscal years beginning after June 15, 2000; earlier adoption is
allowed. This statement requires companies to record derivatives on the balance
sheet as assets or liabilities, measured at fair value. Gains or losses
resulting from changes in the values of those derivatives would be accounted for
depending on the use of the derivative and whether it qualifies for hedge
accounting. Cabot L.P. is currently evaluating the impact of this statement and
does not anticipate a material effect on its results of operations or financial
position resulting from the adoption of SFAS No. 133, as amended by SFAS No.
137, due to its relatively limited use of derivative instruments.

3. ACQUISITIONS OF REAL ESTATE INVESTMENTS

In accordance with generally accepted accounting principles, Cabot L.P. has
accounted for the Formation Transactions using the purchase method of
accounting. As such, the assets acquired and liabilities assumed in connection
with the Formation Transactions are recorded at the fair value of the
consideration surrendered and liabilities assumed, except for the net assets
contributed by Cabot Partners, the sponsor and organizer, which were recorded at
their historical


                                       42
<PAGE>

                        CABOT INDUSTRIAL PROPERTIES, L.P.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                December 31, 1999

3. ACQUISITIONS OF REAL ESTATE INVESTMENTS (CONTINUED)

cost basis. The acquisition cost was then allocated to all identifiable assets
based upon their individual estimated fair market values.

The following is a summary of the acquisition costs recorded in connection with
the Formation Transactions:

                                                                  (in thousands)
                                                                  --------------
Fair value of Cabot L.P.'s Units, based on the
     February 4, 1998 value of $20 per Unit, issued
     to the contributing investors (except Cabot Partners)           $640,608
Value of Partnership Units issued to Cabot Partners,
     recorded at carryover historical cost basis                           77
Mortgage debt assumed                                                  18,413
Other acquisition costs and liabilities assumed                         8,713
                                                                     --------
          Total acquisition cost basis                               $667,811
                                                                     ========

                                                                  (in thousands)
                                                                  --------------
Acquisition cost basis allocated to:
   Land                                                              $129,877
   Buildings                                                          525,471
   Lease acquisition costs                                             12,412
                                                                     --------
   Acquisition cost basis allocated to real estate
      as a result of the Formation Transactions                      $667,760
   Acquisition cost basis allocated to other net assets                    51
                                                                     --------
          Total cost basis allocated                                 $667,811
                                                                     ========

Subsequent to the Formation Transactions, Cabot L.P. acquired 84 properties
during 1998 with an aggregate of approximately 9.6 million net rentable square
feet. The aggregate purchase price for the 84 properties was $426.2 million,
including $44.0 million of debt assumed and issuance of $2.3 million in Units of
Cabot L.P.

During 1999, Cabot L.P. acquired 113 properties with an aggregate of
approximately 10.0 million net rentable square feet. The aggregate purchase
price for the 113 properties was $448.3 million, including $28.2 million of debt
assumed and issuance of $3.4 million in Units in Cabot L.P.

4. DEBT FACILITIES

The Acquisition Facility

On March 16, 1998, Cabot L.P. obtained a $325 million unsecured revolving line
of credit facility (the Acquisition Facility). The Acquisition Facility matures
on March 16, 2001 and the


                                       43
<PAGE>

                        CABOT INDUSTRIAL PROPERTIES, L.P.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                December 31, 1999

4. DEBT FACILITIES (CONTINUED)

interest rate for 1999 was LIBOR plus 100 basis points. At December 31, 1999 and
1998, outstanding borrowings under the Acquisition Facility were $163 million
and $200 million, respectively, and the interest rate was 7.50% and 6.60%,
respectively. The weighted average coupon interest rate for the years ended
December 31, 1999 and 1998 was 6.37% and 6.58%, respectively, including the
effect of the interest rate collar and cap arrangements described below. The
Acquisition Facility is used to acquire and develop properties and for working
capital purposes.

Cabot L.P. has entered into an interest rate cap arrangement relating to the
Acquisition Facility for a notional amount of $100 million for the period from
October 1, 1999 through April 1, 2000. This arrangement is intended to result in
limiting the variable nature of the LIBOR component of Cabot L.P.'s interest
rate on an equivalent amount of borrowings to 6.50% per annum. Cabot L.P. also
entered into similar arrangements during 1999 and 1998, which resulted in
interest expense of $86,000 and $47,000, respectively.

Unsecured Debt

On May 4, 1999, Cabot L.P. issued $200 million of senior unsecured redeemable
notes, due May 1, 2004. The notes have a 7.125% coupon interest rate and were
priced at 99.724%, resulting in a discount of $552,000.

Mortgage Debt

Cabot L.P. assumed certain loans in connection with the Formation Transactions,
entered into loan agreements during 1999, and assumed certain loans in
conjunction with several real estate acquisitions, all secured by certain
existing real estate assets (collectively, the Mortgage Loans). The Mortgage
Loans, totaling $163.9 million, bear coupon rates ranging from 7.25% - 9.67% and
are secured by properties with a net book value of $272.6 million. Certain of
the debt assumed in conjunction with the acquisition of properties bears a
coupon interest rate that differed from the fair market value interest rate at
the date of acquisition. In accordance with generally accepted accounting
principles, such debt was recorded at fair market value and interest expense
recorded in the accompanying consolidated statements of operations was adjusted
based on the fair market interest rate at the date of acquisition.

Aggregate principal payments on mortgage notes payable at December 31, 1999 for
the five years ending December 31 and thereafter are as follows:

                                                               (in thousands)
                                                               --------------

      2000...................................................... $   6,039
      2001......................................................     6,268
      2002......................................................     8,983
      2003......................................................    11,293
      2004......................................................     6,134
      Thereafter................................................   125,149


                                       44
<PAGE>

                        CABOT INDUSTRIAL PROPERTIES, L.P.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                December 31, 1999

5. FUTURE MINIMUM RENTS

Future minimum rental receipts due Cabot L.P. on noncancelable operating leases
for the 320 industrial properties as of December 31, 1999 were as follows:

                                                               (in thousands)
                                                               --------------

      2000.......................................................$ 149,117
      2001.......................................................  128,853
      2002.......................................................  101,959
      2003.......................................................   76,090
      2004.......................................................   51,355
      Thereafter.................................................  143,520

Cabot L.P. is subject to the usual business risks associated with the collection
of the above-scheduled rents. The above amounts do not include additional rental
receipts that will become due as a result of the expense reimbursement and
escalation provisions in the leases. In addition, Cabot L.P.'s minimum future
rental receipts related to nonindustrial properties total $5.9 million.

6. INCOME TAXES

No provision for federal and state income taxes has been recorded relating to
Cabot L.P. as the partners report their respective share of net taxable income
on their individual tax returns.

7. EMPLOYEE BENEFIT PLANS

Cabot Trust has adopted the Cabot Industrial Trust Long-Term Incentive Plan (the
LTIP) and the Cabot Industrial Trust 1999 Long-Term Incentive Plan (the 1999
LTIP) (collectively referred to as the Plans), for the purpose of attracting and
retaining highly qualified executive officers, Trustees and employees. The 1999
LTIP is maintained as a broad-based plan within the meaning of the New York
Stock Exchange rules.

The Plans are administered by the Executive Compensation Committee of the Board
of Trustees of Cabot Trust, (the Administrator). Officers and other employees of
Cabot Trust, Cabot L.P. and designated subsidiaries and members of the Board of
Trustees of Cabot Trust who are not employees of Cabot Trust are eligible to
participate.

Options are awarded to Trustees or employees of Cabot Trust in the form of
Common Shares and to employees of Cabot L.P. or Cabot Advisors in the form of
Units. The LTIP, at December 31, 1999, authorizes the issuance of up to
4,366,792 Common Shares and Units and the 1999 LTIP authorizes the issuance of
up to 2,000,000 Common Shares and Units. The number of Common Shares and Units
available under the LTIP may increase to an amount equal to 10% of the aggregate
number of outstanding Common Shares and Units. The Plans provide


                                       45
<PAGE>

                        CABOT INDUSTRIAL PROPERTIES, L.P.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                December 31, 1999

7. EMPLOYEE BENEFIT PLANS (CONTINUED)

for the grant of (i) Common Share options intended to qualify as incentive
options under Section 422 of the Code (the LTIP only), (ii) Common Share options
and Unit options not intended to qualify as incentive options under Section 422
of the Code and (iii) dividend equivalent rights and distribution equivalent
rights (collectively, "DEUs") which entitle a Participant to be credited with
additional Common Share or Unit rights.

In connection with the grant of options under the Plans, other than options to
nonemployee Trustees, the Administrator determines the terms of the option,
including the option exercise price, any vesting requirements and whether a DEU
shall be awarded. The Administrator has authority to award options at less than
fair market value but at this time has no intention of doing so. The options
granted under the Plans during 1999 and 1998 have 10-year terms and become
exercisable in four equal annual installments commencing on the first
anniversary of the date of grant, subject to acceleration of vesting upon a
change in control of Cabot Trust (as defined in the Plans). DEUs entitle an
option holder to an award of additional shares or units at year end with a
positive intrinsic value calculated using a formula that is based on the
difference, if any, between the annual distribution rate on the Units and Common
Shares versus the average dividend rate on stocks included in the S&P 500 index.
DEUs vest on a vesting schedule as determined by the Administrator and once
vested entitle the holder to a Common Share or Unit at the earlier of the year
of exercise, or the year of expiration, of the underlying option or, in some
cases, only upon a change in control. The options granted in 1998 were generally
awarded with DEUs, which resulted in compensation expense in 1999 of
approximately $475,000.

To the extent an option has not become exercisable at the time of the holder's
termination of employment, it will be forfeited unless the Administrator has
previously exercised its reasonable discretion to make such option exercisable
and all vested options which are not exercised by the expiration date described
in the Plans will be forfeited. Any Common Shares or Units subject to an option
which are forfeited (or which expire without exercise) will again be available
for grant under the Plans.


                                       46
<PAGE>

                        CABOT INDUSTRIAL PROPERTIES, L.P.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                December 31, 1999

7. EMPLOYEE BENEFIT PLANS (CONTINUED)

A summary of Cabot Trust's option activity is as follows:

<TABLE>
<CAPTION>
                                                             1999                                       1998
                                            ----------------------------------------   ----------------------------------------

                                                Number of       Weighted Average           Number of       Weighted Average
                                              Shares/Units       Exercise Price          Shares/Units       Exercise Price
------------------------------------------------------------------------------------   ----------------------------------------
<S>                                             <C>                  <C>                   <C>                 <C>
Options outstanding, beginning of year          3,126,615            $20.04                   --               $  0.00
     Granted                                      878,300             19.29                3,195,015             20.04
     Exercised                                     --                  0.00                   --                  0.00
     Forfeited                                    (22,325)            19.97                  (68,400)            20.00
                                            ----------------------------------------   ----------------------------------------

Options outstanding, end of year                3,982,590            $19.88                3,126,615            $20.04
                                            ========================================   ========================================
Options exercisable, end of year                  814,079            $20.04                   --                $ 0.00
                                            ========================================   ========================================

DEUs outstanding, beginning of year                89,384            $ 0.00                   --                $ 0.00
     Credited                                     194,967              0.00                   89,384              0.00
     Exercised                                     --                  0.00                   --                  0.00
     Forfeited                                       (646)             0.00                   --                  0.00
                                            ----------------------------------------   ----------------------------------------
DEUs outstanding, end of year                     283,705            $ 0.00                   89,384            $ 0.00
                                            ========================================   ========================================
DEUs exercisable, end of year                      23,733            $ 0.00                   --                $ 0.00
                                            ========================================   ========================================

Options available for grant                     2,100,497              --                  1,131,501              --
                                            ========================================   ========================================
</TABLE>

For the DEUs outstanding as of December 31, 1999, 152,797 vest over the shorter
of a four-year period or upon a change of control and 130,908 vest only upon a
change of control.

A summary of the status of Cabot Trust's options outstanding at December 31,
1999, is as follows:

<TABLE>
<CAPTION>
                                                                    Options Outstanding
                                    -------------------------------------------------------------------------------------
                                                                  Weighted Average Remaining       Weighted Average
Range of Exercise Prices              Number of Shares/Units           Contractual Life             Exercise Price
-------------------------------------------------------------------------------------------------------------------------
<S>        <C>                               <C>                          <C>                           <C>
$17.00  -  $19.99                            1,758,915                    9.37 years                    $19.49

$20.00                                       2,015,500                    8.09 years                    $20.00

$20.01  -  $24.16                              208,175                    8.77 years                    $22.00
</TABLE>


                                       47
<PAGE>

                        CABOT INDUSTRIAL PROPERTIES, L.P.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                December 31, 1999

7. EMPLOYEE BENEFIT PLANS (CONTINUED)

Pro Forma Stock-based Compensation Expense

In October 1995, the Financial Accounting Standards Board issued SFAS No. 123,
Accounting for Stock-based Compensation, which sets forth a fair-value based
method of recognizing stock-based compensation expense. As permitted by SFAS No.
123, Cabot L.P. has elected to apply APB Opinion No. 25 to account for its
stock-based compensation plans. Accordingly, except for the DEUs as described
above, no compensation cost has been recognized for Cabot Trust's Plans as the
option prices at the date of grant were equal to market prices. Had
compensation cost for awards in 1999 and 1998 under Cabot Trust's Plans been
determined based on the fair value at the grant dates consistent with the
method set forth under SFAS No. 123, the effect on Cabot L.P.'s net income
allocable to partnership units and earnings per unit would have been as
follows:

                                                 1999           1998
                                      ---------------------------------------
                                      (in thousands, except per unit amounts)
Net income allocable to
 partnership units:
     As reported                             $   57,678     $   50,958
     Pro forma                                   55,873         49,761
Basic earnings per unit:
     As reported                             $     1.32     $     1.17
     Pro forma                                     1.28           1.14
Diluted earnings per unit:
     As reported                             $     1.32     $     1.17
     Pro forma                                     1.28           1.14

Pro forma compensation expense for options granted is reflected over the vesting
period; therefore, future pro forma compensation expense may be greater as
additional options are granted.

The weighted average fair value per share/unit of options granted was $2.23 in
1999 and $2.58 in 1998. The fair value of each option grant was estimated on the
grant date using the Black-Scholes option pricing model with the following
weighted-average assumptions:

                                              1999                     1998
--------------------------------------------------------------------------------
Expected volatility                          19.21%                   20.66%
Risk-free interest rate                   4.82 - 6.60%             4.52 - 5.60%
Expected life of options                     7 years                  7 years
Expected dividend yield                        6.9%                     6.2%


                                       48
<PAGE>

                        CABOT INDUSTRIAL PROPERTIES, L.P.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                December 31, 1999

7. EMPLOYEE BENEFIT PLANS (CONTINUED)

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

401(k) Savings Plan

The Cabot Savings Plan 401(k) covers eligible full-time employees of Cabot
Trust, Cabot L.P. and their affiliates. Contributions to the plan are made by
both the employee and the employer. Employer contributions are based on the
level of employee contributions. For this plan, Cabot L.P. contributed and
charged to expense $58,000 in 1999 and $44,000 in 1998.

8. EARNINGS PER UNIT

In accordance with SFAS No. 128, Earnings per Share, basic earnings per unit
have been computed by dividing net income allocable to partnership unitholders
by the weighted average number of units outstanding during the period
subsequent to Cabot L.P.'s commencement of operations (see Note 1).

Diluted earnings per unit have been computed considering the potentially
dilutive effect of the exercise of Unit options granted by Cabot L.P. Basic and
diluted earnings per Unit were calculated as follows:

<TABLE>
<CAPTION>
                                                                              Period Ended
                                                           Year Ended       December 31, 1998
                                                       December 31, 1999      (see Note 1)
                                                       -----------------      ------------
                                                      (in thousands, except per unit amounts)
<S>                                                          <C>                 <C>
Basic:
Net Income Allocable to Partnership Unitholders              $57,678             $50,958
                                                             -------             -------
Weighted Average Partnership Units                            43,608              43,493
                                                             -------             -------
Basic Earnings per Partnership Unit                          $  1.32             $  1.17
                                                             =======             =======

Diluted:
Net Income Allocable to Partnership Unitholders              $57,678             $50,958
                                                             -------             -------
Weighted Average Partnership Units                            43,608              43,493
Effect of Unit Options                                            24                  94
                                                             -------             -------
Weighted Average Partnership Units, as adjusted               43,632              43,587
                                                             =======             =======
Diluted Earnings per Partnership Unit                        $  1.32             $  1.17
                                                             =======             =======
</TABLE>


                                       49
<PAGE>

                        CABOT INDUSTRIAL PROPERTIES, L.P.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                December 31, 1999

9. FAIR VALUE OF FINANCIAL INSTRUMENTS

Statement of Financial Accounting Standards No. 107, Disclosures about Fair
Value of Financial Instruments, requires Cabot L.P. to disclose fair value
information for all financial instruments, for which it is practicable to
estimate fair value, whether or not recognized in the balance sheets. Cabot
L.P.'s financial instruments, other than debt and interest rate protection
agreements are generally short-term in nature and contain minimal credit risk.
These instruments consist of cash and cash equivalents, rents and other
receivables and accounts payable. The carrying amount of these assets and
liabilities in the consolidated balance sheets approximate fair value.

The carrying amount and fair value of Cabot L.P.'s long-term obligations and
off-balance-sheet financial instruments as of December 31, 1999 and 1998 are as
follows:

<TABLE>
<CAPTION>
                                                                1999                      1998
                                                       -------------------------------------------------
                                                        Carrying      Fair        Carrying      Fair
                                                         Amount       Value        Amount       Value
--------------------------------------------------------------------------------------------------------
<S>                                                    <C>          <C>          <C>          <C>
                                                                        (in thousands)
Long-term obligations:
     Mortgage loans payable                            $(163,866)   $(167,493)   $ (48,206)   $ (51,450)
     Unsecured debt                                    $(200,000)   $(192,480)   $      --    $      --

Off-balance-sheet financial instruments:
     Interest rate protection agreements (liability)   $      --    $       1    $      --    $  (6,734)
</TABLE>

Cabot L.P.'s mortgage loans and unsecured debt are at fixed rates, which in
certain cases differ from borrowing rates currently available to Cabot L.P. with
similar terms and average maturities. The fair market values of mortgage loans
payable were estimated using a valuation technique which discounts expected
future cash flows to net present value. The fair market value of Cabot L.P.'s
unsecured debt was estimated based on publicly quoted market prices, which
represents the amount Cabot L.P. would have to pay to repurchase such borrowings
at year end. Cabot L.P.'s Acquisition Facility is at a variable rate, which
results in a carrying value that approximates its fair value. The fair value of
Cabot L.P.'s interest rate protection agreements is the estimated amount that
Cabot L.P. would receive or pay if it had terminated the contract as of December
31, 1999 or 1998, taking into account the change in interest rates and the
creditworthiness of the counter parties.


                                       50
<PAGE>

                        CABOT INDUSTRIAL PROPERTIES, L.P.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                December 31, 1999

10. CABOT ADVISORS

Cabot Advisors is responsible for various activities including management of
Cabot L.P.'s properties and properties on behalf of third parties, as well as
providing other real estate related services for third parties. Total management
fees earned by Cabot Advisors related to Cabot L.P.'s properties are included in
Property Operating Expenses in the accompanying consolidated statements of
operations and amounted to $2,684,000 and $1,037,000 in 1999 and 1998,
respectively.

Summarized unaudited financial information for Cabot Advisors as of December 31,
1999 and 1998 and for the years then ended is as follows:

                                           As of and for the Years Ended
                                     ------------------------------------------
                                     December 31, 1999        December 31, 1998
-------------------------------------------------------------------------------
                                              (unaudited, in thousands)

Total assets ............................  $ 1,426                 $ 1,104
Total revenue ...........................  $ 5,344                 $ 3,281
Net income (loss) .......................  $   (20)                $   244
Company's share of net income (loss) ....  $   (19)                $   231

Cabot Advisors commenced operations on February 4, 1998. Its results for the
year ended December 31, 1998 therefore represent activity for 331 days, or
approximately 11 months. Cabot L.P.'s share of Cabot Advisors' net income (loss)
is included in Interest and Other Income in the accompanying consolidated
statements of operations.

11. COMMITMENTS AND CONTINGENCIES

Concentration of Credit Risk

Cabot L.P. maintains its cash and cash equivalents at financial institutions.
The combined account balances at each institution periodically exceed FDIC
insurance coverage and, as a result, there is a concentration of credit risk
related to amounts on deposit in excess of FDIC insurance coverage. Management
of Cabot L.P. believes the risk is not significant.

Environmental

Cabot L.P., as an owner of real estate, is subject to various environmental laws
of federal and local governments. All of Cabot L.P.'s properties were subject to
Phase I Environmental Assessments, which consist of, among other things, a
visual inspection of the property and its neighborhood and a review of pertinent
public records. Compliance by Cabot L.P. with existing laws has not had a
material adverse effect on Cabot L.P.'s consolidated financial condition or
results of operations and management does not believe it will have such a
material adverse effect in the future.


                                       51
<PAGE>

                        CABOT INDUSTRIAL PROPERTIES, L.P.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                December 31, 1999

11. COMMITMENTS AND CONTINGENCIES (CONTINUED)

Litigation

Management of Cabot L.P. does not believe there is any litigation threatened
against it other than routine litigation arising out of the ordinary course of
business, some of which is expected to be covered by liability insurance and
none of which is expected to have a material adverse effect on the consolidated
operating results or financial position of Cabot L.P.

Minimum Future Lease Obligations

Minimum future lease obligations of Cabot L.P. under noncancelable operating
leases for each of the next five years ending December 31 and thereafter are as
follows:

                                                     (in thousands)
                                                     --------------

           2000 .....................................    $  712
           2001 .....................................       698
           2002 .....................................        50
           2003 .....................................        22
           2004 .....................................        13
           Thereafter ...............................        --
                                                         ------
                                                         $1,495
                                                         ======

Cabot L.P. incurred rental expense of $389,000 and $192,000 for the years ended
December 31, 1999 and 1998, respectively. In addition, Cabot Advisors incurred
rental expense of $374,000 and $181,000 for the years ended December 31, 1999
and 1998, respectively. Cabot L.P.'s only significant leases are for its office
space. The leases provide for the payment of base rent and reimbursement of
operating expenses and real estate taxes over stated base amounts.

Employment Agreements

Senior executives have entered into employment agreements with Cabot L.P.
Agreements with three of the senior executives are for an initial term of three
years, and each year the term automatically extends an additional year unless
terminated in advance. Agreements with four other senior executives are for an
initial term of two years and each year the term automatically extends an
additional year unless terminated in advance. Each agreement provides for annual
base compensation in amounts ranging from $182,000 to $300,000 ($1,473,000 in
the aggregate in 1999) and an annual cash bonus to be determined by the
Executive Compensation Committee of Cabot Trust's Board of Trustees. The base
annual compensation may be increased in subsequent years by action of the
Executive Compensation Committee. Each of the employment agreements provides for
severance payments in the event of a change in control of Cabot Trust equal to
three times the sum of the current base salary and the annual bonus paid for the
preceding year and also provides for tax reimbursements in certain
circumstances.


                                       52
<PAGE>

                        CABOT INDUSTRIAL PROPERTIES, L.P.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                December 31, 1999

11. COMMITMENTS AND CONTINGENCIES (CONTINUED)

Severance Agreements

On December 17, 1998, Cabot Trust's Board of Trustees approved a retention and
severance plan covering all full-time employees of Cabot L.P. and their
affiliates not covered by employment agreements which will provide for six to 21
months of compensation to be paid, under certain circumstances, in the event of
a change in control.

As of December 31, 1999, total costs payable under the employment and severance
arrangements covering senior executives and other employees in the event of a
change in control approximated $17.2 million.

12. SUPPLEMENTARY QUARTERLY DATA

<TABLE>
<CAPTION>
                                                        March 31, 1999    June 30, 1999   September 30, 1999  December 31, 1999
-------------------------------------------------------------------------------------------------------------------------------
                                                                  (unaudited, in thousands, except per unit amounts)
<S>                                                        <C>               <C>               <C>                <C>
Rental revenue                                             $ 34,138          $ 37,182          $ 40,840           $ 45,311
Net gain (loss) on sales of real estate                          --             3,404              (653)                --
Net income                                                   12,013            18,705            15,422             17,547
Net Income Allocable to Partnership Units                    12,013            17,724            13,588             14,353
Earnings per unit, basic                                        .28               .41               .31                .33
Earnings per unit, diluted                                      .28               .41               .31                .33

<CAPTION>
                                                       March 31, 1998(1)  June 30, 1998   September 30, 1998  December 31, 1998
-------------------------------------------------------------------------------------------------------------------------------
                                                                  (unaudited, in thousands, except per unit amounts)
<S>                                                        <C>               <C>               <C>                <C>
Rental revenue                                             $ 14,733          $ 26,159          $ 28,417           $ 33,116
Net gain on sale of real estate                                  --                --                --                572
Net income                                                    8,126            14,242            14,055             14,535
Net Income Allocable to Partnership Units                     8,126            14,242            14,055             14,535
Earnings per unit, basic                                        .19               .33               .32                .33
Earnings per unit, diluted                                      .19               .33               .32                .33
</TABLE>

(1)   Since Cabot L.P. did not begin operations until February 4, 1998, the
      results for the quarter ended March 31, 1998, represent activity for 56
      days.


                                       53
<PAGE>

                        CABOT INDUSTRIAL PROPERTIES, L.P.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                December 31, 1999

13. SUBSEQUENT EVENTS

Subsequent to December 31, 1999, Cabot L.P. acquired the following industrial
properties, which acquisitions were funded primarily through proceeds from the
Acquisition Facility:

<TABLE>
<CAPTION>
Property Location     Number and Type of Building        Square Feet     Acquisition Cost
-----------------     ---------------------------        -----------     ----------------
                                                                          (in thousands)
<S>                   <C>                                  <C>               <C>

Phoenix, AZ           Five Workspace                       109,568           $ 9,000

Harrisburg, PA        One Bulk Distribution                186,000           $ 7,300

Atlanta, GA           One Bulk Distribution                180,000           $21,000
                      Two Multitenant Distribution         213,537
                      One Workspace                         40,000

Atlanta, GA           Four Multitenant Distribution        636,442           $20,300
</TABLE>

In addition, as of February 29, 2000, Cabot L.P. entered into separate
agreements to acquire seven additional industrial properties with an estimated
acquisition cost of $41 million.


                                       54
<PAGE>

                        CABOT INDUSTRIAL PROPERTIES, L.P.
             Schedule III - Real Estate and Accumulated Depreciation
                                December 31, 1999
                          (dollar amounts in thousands)

<TABLE>
<CAPTION>
                                                                                                                Costs Capitalized
                                                                                                                  Subsequent to
                                                                                         Initial Cost              Acquisition
                                    Number                                        ------------------------- ------------------------
                                      of                                                      Buildings and            Buildings and
Property Name(s)                  Buildings  Location               Encumbrances     Land     Improvements     Land     Improvements
----------------                  ---------  --------               ------------     ----     ------------     ----     ------------
<S>                                  <C>     <C>                      <C>         <C>          <C>          <C>          <C>
North 104th Avenue                     1     Tolleson, AZ             $      --   $      651   $    6,476   $       --   $        5
North 47th Avenue                      1     Phoenix, AZ                     --          471        3,675           --            1
South 55th Avenue                      1     Phoenix, AZ                     --          334        1,953          149          222
South 63rd Avenue                      1     Phoenix, AZ                     --          528        4,471           --            0
South 84th Avenue                      1     Tolleson, AZ                    --          553        6,067           --            0
West Van Buren                         1     Tolleson, AZ                 4,834          475        6,224           --            3
South 41st Avenue                      2     Phoenix, AZ                  8,338        1,261       10,988           --           32
South 49th Avenue                      1     Phoenix, AZ                     --          787        3,069           --            2
North 103rd Street                     1     Phoenix, AZ                     --          773        6,415           --            0
44th Avenue                            1     Phoenix, AZ                  2,962          575        3,629           --          106
South 9th Street                       1     Phoenix, AZ                  2,943        1,394        5,709           --            1
South 39th Avenue                      1     Phoenix, AZ                  4,597          550        7,606           --            2
South 40th Avenue                      2     Phoenix, AZ                  3,608        1,036        7,010           --            2
South 53rd Avenue                      1     Phoenix, AZ                  2,358          226        3,667           --            2
South 40th Avenue, Building 3          1     Phoenix, AZ                     --        1,131        5,680           --            1
East Encanto Drive                     1     Tempe, AZ                      850          460        2,906           --            0
South Priest Drive                     1     Tempe, AZ                    2,729          813        3,140           --          148
West Alameda Drive                     4     Tempe, AZ                    4,351        1,000        4,572           --           12
East Watkins Street                    1     Phoenix, AZ                     --        3,707        5,574           --            0
South 16th Street                      1     Phoenix, AZ                     --            0        7,598           --            0
Deforest Circle                        1     Mira Loma, CA                   --        1,870        7,794           --          150
Santa Anita Avenue                     1     Rancho Cucamonga, CA            --        1,641        6,093           --            0
East Jurupa Street                     1     Ontario, CA                     --        1,256        2,702           --          169
South Rockefeller Avenue               1     Ontario, CA                     --        1,259        4,249           --            1
South Vintage Avenue                   2     Ontario, CA                     --        4,026       12,031           --           23
Vintage Avenue                         1     Ontario, CA                     --        2,139        7,224           --            0

<CAPTION>
                                   Gross Amount Carried
                                  as of December 31, 1999                               Date
                                 ------------------------                            Constructed             Depreciable
                                            Buildings and              Accumulated       or         Date        Lives
Property Name(s)                    Land     Improvements   Total(1)   Depreciation   Renovated   Acquired    in Years
----------------                    ----     ------------   --------   ------------   ---------   --------    --------
<S>                              <C>          <C>          <C>          <C>           <C>         <C>         <C>
North 104th Avenue               $      651   $    6,481   $    7,132   $     (308)        1995   02/04/98    10 - 40
North 47th Avenue                       471        3,676        4,147         (187)        1986   02/04/98    10 - 40
South 55th Avenue                       483        2,175        2,658          (96)        1986   02/04/98    10 - 40
South 63rd Avenue                       528        4,471        4,999         (214)        1990   02/04/98    10 - 40
South 84th Avenue                       553        6,067        6,620         (292)        1989   02/04/98    10 - 40
West Van Buren                          475        6,227        6,702         (279)        1997   03/16/98    10 - 40
South 41st Avenue                     1,261       11,020       12,281         (349)   1985/1989   09/22/98    10 - 40
South 49th Avenue                       787        3,071        3,858          (99)        1989   09/22/98    10 - 40
North 103rd Street                      773        6,415        7,188         (141)        1999   02/15/99    10 - 40
44th Avenue                             575        3,735        4,310         (170)        1997   03/16/98    10 - 40
South 9th Street                      1,394        5,710        7,104         (196)        1983   06/30/98    10 - 40
South 39th Avenue                       550        7,608        8,158         (241)        1989   09/22/98    10 - 40
South 40th Avenue                     1,036        7,012        8,048         (233)   1989/1990   09/22/98    10 - 40
South 53rd Avenue                       226        3,669        3,895         (125)        1987   09/22/98    10 - 40
South 40th Avenue, Building 3         1,131        5,681        6,812         (153)        1987   12/29/98    10 - 40
East Encanto Drive                      460        2,906        3,366         (129)        1990   03/17/98    10 - 40
South Priest Drive                      813        3,288        4,101         (105)        1998   09/21/98    10 - 40
West Alameda Drive                    1,000        4,584        5,584         (137)        1984   09/21/98    10 - 40
East Watkins Street                   3,707        5,574        9,281            0         1998   12/23/99    10 - 40
South 16th Street                         0        7,598        7,598            0         1998   12/22/99    10 - 40
Deforest Circle                       1,870        7,944        9,814         (365)        1992   02/06/98    10 - 40
Santa Anita Avenue                    1,641        6,093        7,734         (301)        1988   02/04/98    10 - 40
East Jurupa Street                    1,256        2,871        4,127         (156)        1986   02/04/98    10 - 40
South Rockefeller Avenue              1,259        4,250        5,509         (215)        1986   02/04/98    10 - 40
South Vintage Avenue                  4,026       12,054       16,080         (641)        1986   02/04/98    10 - 40
Vintage Avenue                        2,139        7,224        9,363         (350)        1988   02/04/98    10 - 40
</TABLE>


                                       55
<PAGE>

                        CABOT INDUSTRIAL PROPERTIES, L.P.
       Schedule III - Real Estate and Accumulated Depreciation (continued)
                                December 31, 1999
                          (dollar amounts in thousands)

<TABLE>
<CAPTION>
                                                                                                                Costs Capitalized
                                                                                                                  Subsequent to
                                                                                         Initial Cost              Acquisition
                                    Number                                        ------------------------- ------------------------
                                      of                                                      Buildings and            Buildings and
Property Name(s)                  Buildings  Location               Encumbrances     Land     Improvements     Land     Improvements
----------------                  ---------  --------               ------------     ----     ------------     ----     ------------
<S>                                  <C>     <C>                      <C>         <C>          <C>          <C>          <C>
San Fernando Road                      1     Sun Valley, CA               6,486        2,612        7,118           --           29
Rowland Street                         1     City of Industry, CA            --        2,000        6,102           --          764
Dahlia Street                          1     Fontana, CA                     --        2,318        7,604           --            0
East Easy Street                       1     Simi Valley, CA                 --        4,751        8,251           --            0
East Dyer Road                         1     Santa Ana, CA                   --        8,160        6,172           --          (53)
Parco Street                           1     Ontario, CA                     --          658        2,224           --            0
Industry Circle                        1     La Mirada, CA                2,986        1,802        3,325           --           10
East Santa Ana Street                  2     Ontario, CA                  3,793        1,230        5,190           --            7
Jersey Court                           1     Rancho Cucamonga, CA         2,063          736        2,420           --            8
12th Street                            1     Chino, CA                    2,778          889        3,170           --           11
West Rincon Street                     1     Corona, CA                      --        1,955        6,318           --            2
Tyburn Street                          1     Los Angeles, CA                 --        2,628        3,239           --            0
E. Vista Bella Way                     1     Rancho Dominguez, CA            --        1,183        3,297           --            0
W. Manville Street                     1     Rancho Dominguez, CA            --        1,347        3,187           --            0
Alondra Blvd                           1     La Mirada, CA                   --        2,002        7,712           --            0
Artesia Avenue                         2     Fullerton, CA                   --        1,186        3,208           --            0
Commonwealth Avenue                    1     Fullerton, CA                   --          640        1,333           --            0
East Howell Avenue                     2     Anaheim, CA                     --        1,382        3,242           --            0
Kovacs Lane                            1     Huntington Beach, CA         5,488        1,750        6,243           --            8
Anza Drive                             3     Valencia, CA                    --          588        1,460           --            0
Royal Avenue                           1     Simi Valley, CA                 --          443        1,320           --            2
Union Place                            2     Simi Valley, CA                 --          915        4,032           --            7
North San Fernando Road                6     Los Angeles, CA                 --       11,796       14,622           --            7
Lassen Street                          1     Chatsworth, CA                  --        2,429        4,370           --            2
E. 166th Street                        1     Cerritos, CA                    --          780        1,404           --            0
Shoemaker Avenue                       4     Santa Fe Springs, CA            --        1,339        3,488           --            0
Dornoch Court                          1     San Diego, CA                   --        1,870        9,030           --            1

<CAPTION>
                                   Gross Amount Carried
                                  as of December 31, 1999                               Date
                                 ------------------------                            Constructed             Depreciable
                                            Buildings and              Accumulated       or         Date        Lives
Property Name(s)                    Land     Improvements   Total(1)   Depreciation   Renovated   Acquired    in Years
----------------                    ----     ------------   --------   ------------   ---------   --------    --------
<S>                              <C>          <C>          <C>          <C>           <C>         <C>         <C>
San Fernando Road                     2,612        7,147        9,759         (315)        1980   04/07/98    10 - 40
Rowland Street                        2,000        6,866        8,866         (212)        1998   09/01/98    10 - 40
Dahlia Street                         2,318        7,604        9,922          (62)        1989   08/27/99    10 - 40
East Easy Street                      4,751        8,251       13,002          (78)        1990   08/27/99    10 - 40
East Dyer Road                        8,160        6,119       14,279         (299)   1954/1965   02/04/98    10 - 40
Parco Street                            658        2,224        2,882          (36)        1999   08/01/99    10 - 40
Industry Circle                       1,802        3,335        5,137         (101)        1966   10/21/98    10 - 40
East Santa Ana Street                 1,230        5,197        6,427         (209)        1990   05/20/98    10 - 40
Jersey Court                            736        2,428        3,164          (85)        1989   09/30/98    10 - 40
12th Street                             889        3,181        4,070         (105)        1990   09/30/98    10 - 40
West Rincon Street                    1,955        6,320        8,275         (205)        1986   09/30/98    10 - 40
Tyburn Street                         2,628        3,239        5,867          (54)        1965   04/22/99    10 - 40
E. Vista Bella Way                    1,183        3,297        4,480          (42)        1973   07/16/99    10 - 40
W. Manville Street                    1,347        3,187        4,534          (41)        1980   07/16/99    10 - 40
Alondra Blvd                          2,002        7,712        9,714          (61)   1969/1975   08/09/99    10 - 40
Artesia Avenue                        1,186        3,208        4,394         (153)        1991   02/04/98    10 - 40
Commonwealth Avenue                     640        1,333        1,973          (64)        1965   02/04/98    10 - 40
East Howell Avenue                    1,382        3,242        4,624         (155)   1968/1991   02/04/98    10 - 40
Kovacs Lane                           1,750        6,251        8,001         (241)        1988   06/17/98    10 - 40
Anza Drive                              588        1,460        2,048          (62)        1990   06/29/98    10 - 40
Royal Avenue                            443        1,322        1,765          (51)        1988   06/29/98    10 - 40
Union Place                             915        4,039        4,954         (158)   1985/1987   06/29/98    10 - 40
North San Fernando Road              11,796       14,629       26,425         (230)   1965-1993   04/22/99    10 - 40
Lassen Street                         2,429        4,372        6,801          (46)        1968   08/30/99    10 - 40
E. 166th Street                         780        1,404        2,184           (7)        1978   10/19/99    10 - 40
Shoemaker Avenue                      1,339        3,488        4,827            0         1989   12/28/99    10 - 40
Dornoch Court                         1,870        9,031       10,901         (423)        1988   02/06/98    10 - 40
</TABLE>


                                       56
<PAGE>

                        CABOT INDUSTRIAL PROPERTIES, L.P.
       Schedule III - Real Estate and Accumulated Depreciation (continued)
                                December 31, 1999
                          (dollar amounts in thousands)

<TABLE>
<CAPTION>
                                                                                                                Costs Capitalized
                                                                                                                  Subsequent to
                                                                                         Initial Cost              Acquisition
                                    Number                                        ------------------------- ------------------------
                                      of                                                      Buildings and            Buildings and
Property Name(s)                  Buildings  Location               Encumbrances     Land     Improvements     Land     Improvements
----------------                  ---------  --------               ------------     ----     ------------     ----     ------------
<S>                                  <C>     <C>                      <C>         <C>          <C>          <C>          <C>
Newton Drive                           1     Carlsbad, CA                    --        4,416        8,560           --            0
Avenida Encinas                        2     Carlsbad, CA                    --        3,675        9,900           --            0
Airway Road                            2     Otay Mesa, CA                5,128        1,301        6,460           --            5
Kellogg Avenue                         1     Carlsbad, CA                    --          954        2,008           --            0
Oak Ridge Way                          1     Vista, CA                       --        1,167        2,914           --            0
Goldentop Road                         1     San Diego, CA                   --        2,108        3,341           --            0
Reed Avenue                            2     West Sacramento, CA             --        1,837        5,843           --            0
McLaughlin Avenue                      1     San Jose, CA                    --        2,709        5,381           --            0
Huntwood Avenue                        1     Hayward, CA                     --          880        3,587           --           10
Brisbane Industrial Park              14     Brisbane, CA                    --       10,007       15,220           --          660
Pepes Farm Road                        1     Milford, CT                     --        1,637        6,533           --          139
Landstreet Road, Building 1            1     Orlando, FL                     --        1,340       13,221           --           35
Kingspointe Parkway                    1     Orlando, FL                     --          600        2,791           --           55
Orlando Central Park                   6     Orlando, FL                     --        7,083       31,176           --          360
Exchange Drive                         1     Orlando, FL                  2,563          400        3,270           --          128
N.W. 70th Avenue                       1     Miami, FL                       --        3,529        7,671           --            0
Boggy Creek Road                       2     Orlando, FL                     --          649        4,939           --            0
Landstreet Road                        2     Orlando, FL                     --          649        4,817           --            3
Boggy Creek Road, Building 3           1     Orlando, FL                     --          345        1,802           56          103
Boggy Creek                            1     Orlando, FL                     --          320        1,705           --            0
Highway 316                            1     Dacula, GA                      --        1,279       10,424           --           13
Westgate Parkway                       1     Fulton County, GA               --        1,619        4,782           --          232
Atlanta Industrial Drive               1     Atlanta, GA                  2,927        1,032        2,999           --           79
Westpark Drive                         2     Fulton County, GA               --        1,404        7,065           --           52
Williams Drive                         3     Marietta, GA                 4,583        1,223        6,030           --           20
Cobb International Place               2     Kennesaw, GA                    --          750        4,605           --           10
South Royal Drive                      3     Tucker, GA                      --        1,125        4,426           --           12

<CAPTION>
                                   Gross Amount Carried
                                  as of December 31, 1999                               Date
                                 ------------------------                            Constructed             Depreciable
                                            Buildings and              Accumulated       or         Date        Lives
Property Name(s)                    Land     Improvements   Total(1)   Depreciation   Renovated   Acquired    in Years
----------------                    ----     ------------   --------   ------------   ---------   --------    --------
<S>                              <C>          <C>          <C>          <C>           <C>         <C>         <C>
Newton Drive                          4,416        8,560       12,976          (61)        1999   09/29/99    10 - 40
Avenida Encinas                       3,675        9,900       13,575         (472)   1972/1993   02/04/98    10 - 40
Airway Road                           1,301        6,465        7,766         (262)        1996   05/08/98    10 - 40
Kellogg Avenue                          954        2,008        2,962          (26)        1991   06/01/99    10 - 40
Oak Ridge Way                         1,167        2,914        4,081          (39)        1999   06/01/99    10 - 40
Goldentop Road                        2,108        3,341        5,449          (26)        1997   09/30/99    10 - 40
Reed Avenue                           1,837        5,843        7,680         (279)        1988   02/04/98    10 - 40
McLaughlin Avenue                     2,709        5,381        8,090          (46)        1975   08/27/99    10 - 40
Huntwood Avenue                         880        3,597        4,477         (176)        1982   02/04/98    10 - 40
Brisbane Industrial Park             10,007       15,880       25,887         (770)   1960-1969   02/04/98    10 - 40
Pepes Farm Road                       1,637        6,672        8,309         (314)        1980   02/04/98    10 - 40
Landstreet Road, Building 1           1,340       13,256       14,596         (631)        1997   02/04/98    10 - 40
Kingspointe Parkway                     600        2,846        3,446         (134)        1991   02/04/98    10 - 40
Orlando Central Park                  7,083       31,536       38,619       (1,545)   1983-1991   02/04/98    10 - 40
Exchange Drive                          400        3,398        3,798         (121)        1979   07/30/98    10 - 40
N.W. 70th Avenue                      3,529        7,671       11,200          (55)        1977   08/09/99    10 - 40
Boggy Creek Road                        649        4,939        5,588         (235)   1992/1996   02/13/98    10 - 40
Landstreet Road                         649        4,820        5,469         (223)   1996/1997   02/13/98    10 - 40
Boggy Creek Road, Building 3            401        1,905        2,306          (45)        1998   12/31/98    10 - 40
Boggy Creek                             320        1,705        2,025          (35)        1999   03/01/99    10 - 40
Highway 316                           1,279       10,437       11,716         (489)        1989   02/06/98    10 - 40
Westgate Parkway                      1,619        5,014        6,633         (235)        1988   02/04/98    10 - 40
Atlanta Industrial Drive              1,032        3,078        4,110         (119)        1986   09/11/98    10 - 40
Westpark Drive                        1,404        7,117        8,521         (296)        1981   09/08/98    10 - 40
Williams Drive                        1,223        6,050        7,273          (82)        1987   06/29/99    10 - 40
Cobb International Place                750        4,615        5,365         (206)        1996   03/13/98    10 - 40
South Royal Drive                     1,125        4,438        5,563         (176)   1987-1989   02/27/98    10 - 40
</TABLE>


                                       57
<PAGE>

                        CABOT INDUSTRIAL PROPERTIES, L.P.
       Schedule III - Real Estate and Accumulated Depreciation (continued)
                                December 31, 1999
                          (dollar amounts in thousands)

<TABLE>
<CAPTION>
                                                                                                                Costs Capitalized
                                                                                                                  Subsequent to
                                                                                         Initial Cost              Acquisition
                                    Number                                        ------------------------- ------------------------
                                      of                                                      Buildings and            Buildings and
Property Name(s)                  Buildings  Location               Encumbrances     Land     Improvements     Land     Improvements
----------------                  ---------  --------               ------------     ----     ------------     ----     ------------
<S>                                  <C>     <C>                      <C>         <C>          <C>          <C>          <C>
Town Park Drive                        2     Kennesaw, GA                 4,341        1,089        4,716           --            3
Highlands Parkway                      1     Smyrna, GA                      --        2,584        7,787           --            0
Ambassador Road                        1     Naperville, IL                  --        1,060        6,725           --            0
Arthur Avenue                          1     Elk Grove, IL                   --          747        5,877           --            0
Harvester Drive                        1     Chicago, IL                     --          763        6,358           --            0
Mark Street                            1     Wood Dale, IL                   --        1,570        7,541           --            0
Remington Street                       1     Bolingbrook, IL                 --          980        7,542           --            0
West 73rd Street                       3     Bedford Park, IL                --        2,540       20,809           --           29
North Raddant Road                     1     Batavia, IL                     --          931        5,977           --          (43)
Crossroads Parkway                     1     Bolingbrook, IL                 --        2,048        8,839           --            2
South Frontenac                        1     Naperville, IL                  --          890        5,350           --            0
High Grove Lane                        1     Naperville, IL                  --          800        3,156           --            0
Medinah Road                           2     Chicago, IL                     --        2,936       17,471           --            0
Western Avenue                         1     Lisle, IL                       --          700        2,241           --            0
Swenson Avenue                         1     St. Charles, IL                 --          650        2,479           --            0
South 78th Avenue                      1     Hickory Hills, IL               --          470        2,709           --            0
Greenleaf Avenue                       1     Elk Grove Village, IL           --        1,409        4,960           --            0
Feehanville Drive                      1     Mount Prospect, IL           3,256        1,043        3,819           --            0
Business Center, Building 1            1     Mount Prospect, IL           2,460          757        2,867           --            0
Tower Lane                             1     Bensenville, IL              3,280          740        4,040           --            7
Business Center, Building 2            1     Mount Prospect, IL              --        1,456        5,250           --           20
Penny Lane                             2     Schaumburg, IL                  --          579        1,629           --            0
Remington Boulevard                    1     Bolingbrook, IL                 --          505        2,053           --            0
Territorial Drive, Building 2          1     Bolingbrook, IL                 --          567        2,844           --            0
Northpoint Court                       1     Bolingbrook, IL                 --          289        1,449           --            0
Territorial Drive, Building 1          1     Bolingbrook, IL                 --          569        2,605           --            0
Beeline Drive & Meyer Road             1     Bensenville, IL                 --        1,046        2,833           --            0

<CAPTION>
                                   Gross Amount Carried
                                  as of December 31, 1999                               Date
                                 ------------------------                            Constructed             Depreciable
                                            Buildings and              Accumulated       or         Date        Lives
Property Name(s)                    Land     Improvements   Total(1)   Depreciation   Renovated   Acquired    in Years
----------------                    ----     ------------   --------   ------------   ---------   --------    --------
<S>                              <C>          <C>          <C>          <C>           <C>         <C>         <C>
Town Park Drive                       1,089        4,719        5,808         (192)        1995   03/31/98    10 - 40
Highlands Parkway                     2,584        7,787       10,371            0         1997   11/09/99    10 - 40
Ambassador Road                       1,060        6,725        7,785         (321)        1996   02/04/98    10 - 40
Arthur Avenue                           747        5,877        6,624         (253)        1978   02/04/98    10 - 40
Harvester Drive                         763        6,358        7,121         (304)        1974   02/04/98    10 - 40
Mark Street                           1,570        7,541        9,111         (335)        1985   02/04/98    10 - 40
Remington Street                        980        7,542        8,522         (359)        1996   02/04/98    10 - 40
West 73rd Street                      2,540       20,838       23,378         (956)   1979-1986   02/04/98    10 - 40
North Raddant Road                      931        5,934        6,865         (206)        1991   08/31/98    10 - 40
Crossroads Parkway                    2,048        8,841       10,889          (65)        1995   09/23/99    10 - 40
South Frontenac                         890        5,350        6,240          (27)        1975   10/22/99    10 - 40
High Grove Lane                         800        3,156        3,956         (150)        1994   02/04/98    10 - 40
Medinah Road                          2,936       17,471       20,407         (834)        1986   02/04/98    10 - 40
Western Avenue                          700        2,241        2,941         (107)   1979/1985   02/04/98    10 - 40
Swenson Avenue                          650        2,479        3,129          (80)        1988   09/24/98    10 - 40
South 78th Avenue                       470        2,709        3,179          (27)        1981   08/25/99    10 - 40
Greenleaf Avenue                      1,409        4,960        6,369          (38)   1968/1995   09/30/99    10 - 40
Feehanville Drive                     1,043        3,819        4,862         (169)        1987   03/31/98    10 - 40
Business Center, Building 1             757        2,867        3,624         (115)        1985   05/26/98    10 - 40
Tower Lane                              740        4,047        4,787         (156)        1977   07/14/98    10 - 40
Business Center, Building 2           1,456        5,270        6,726         (159)        1989   10/16/98    10 - 40
Penny Lane                              579        1,629        2,208          (22)        1988   05/25/99    10 - 40
Remington Boulevard                     505        2,053        2,558          (11)        1996   10/12/99    10 - 40
Territorial Drive, Building 2           567        2,844        3,411          (14)        1998   10/12/99    10 - 40
Northpoint Court                        289        1,449        1,738           (7)        1998   10/12/99    10 - 40
Territorial Drive, Building 1           569        2,605        3,174          (13)        1998   10/12/99    10 - 40
Beeline Drive & Meyer Road            1,046        2,833        3,879          (11)        1968   11/08/99    10 - 40
</TABLE>


                                       58
<PAGE>

                        CABOT INDUSTRIAL PROPERTIES, L.P.
       Schedule III - Real Estate and Accumulated Depreciation (continued)
                                December 31, 1999
                          (dollar amounts in thousands)

<TABLE>
<CAPTION>
                                                                                                                Costs Capitalized
                                                                                                                  Subsequent to
                                                                                         Initial Cost              Acquisition
                                    Number                                        ------------------------- ------------------------
                                      of                                                      Buildings and            Buildings and
Property Name(s)                  Buildings  Location               Encumbrances     Land     Improvements     Land     Improvements
----------------                  ---------  --------               ------------     ----     ------------     ----     ------------
<S>                                  <C>     <C>                      <C>         <C>          <C>          <C>          <C>
Kingsland Drive                        1     Batavia, IL                     --          291        1,775           --            0
North State Road #9                    1     Howe, IN                        --          239        6,583           --            0
Rudolph Way                            1     Greendale, IN                   --          210          803           --            0
Holton Drive                           1     Independence, KY                --        2,100        8,244           --           25
International Way                      1     Hebron, KY                      --          663        4,897           --           72
Empire Drive, Building 3               1     Florence, KY                    --          403        2,563           --            0
Spiral Drive                           2     Florence, KY                    --          317        3,734           --            2
Airport Exchange Drive                 1     Erlanger, KY                 3,015          744        3,769           --            1
Foundation Drive                       8     Elsmere, KY                     --        1,407        5,763           --           22
Kentucky Drive                         1     Florence, KY                 2,246          848        4,542           --            1
Power Line Drive                       1     Elsmere, KY                     --           69          267           --            0
Empire Drive                           2     Florence, KY                    --          938        2,786           --            0
Jamike Drive                           7     Erlanger, KY                    --        1,656        6,055           --            8
Turfway Road                           3     Erlanger, KY                 2,607        1,083        3,870           --            0
Kenwood Circle                         1     Franklin, MA                    --          920        5,020           --            2
Progress Road                          2     Billerica, MA                   --        1,147        4,522           --            4
Sunnyslope Avenue                      1     Tewksbury, MA                   --          705        5,535           --            2
South Street                           1     Hopkinton, MA                   --          636        2,015           --            2
John Hancock Road                      1     Taunton, MA                  1,455          257        1,872           --            2
Technology Drive                       1     Auburn, MA                      --          663        1,269           --           17
Oceano Avenue                          1     Jessup, MD                      --        1,629        7,862           --            1
Tar Bay Drive                          1     Jessup, MD                      --        1,415        6,475           --            1
Port Capital Drive                     1     Jessup, MD                   1,066          900        4,106           --           36
Greenwood Place                        1     Savage, MD                      --          533        2,453           --            2
Bollman Place                          1     Savage, MD                      --        1,079        3,916           --            2
Stayton Drive                          1     Jessup, MD                      --        1,149        4,123           --            2
The Crysen Center                      2     Jessup, MD                      --        1,365        5,454           --           27

<CAPTION>
                                   Gross Amount Carried
                                  as of December 31, 1999                               Date
                                 ------------------------                            Constructed             Depreciable
                                            Buildings and              Accumulated       or         Date        Lives
Property Name(s)                    Land     Improvements   Total(1)   Depreciation   Renovated   Acquired    in Years
----------------                    ----     ------------   --------   ------------   ---------   --------    --------
<S>                              <C>          <C>          <C>          <C>           <C>         <C>         <C>
Kingsland Drive                         291        1,775        2,066           (5)        1990   11/08/99    10 - 40
North State Road #9                     239        6,583        6,822         (316)        1988   02/04/98    10 - 40
Rudolph Way                             210          803        1,013          (18)        1990   03/11/99    10 - 40
Holton Drive                          2,100        8,269       10,369         (394)        1996   02/04/98    10 - 40
International Way                       663        4,969        5,632         (234)        1990   02/04/98    10 - 40
Empire Drive, Building 3                403        2,563        2,966         (126)        1991   02/04/98    10 - 40
Spiral Drive                            317        3,736        4,053         (160)   1988/1989   03/19/98    10 - 40
Airport Exchange Drive                  744        3,770        4,514         (122)        1997   09/18/98    10 - 40
Foundation Drive                      1,407        5,785        7,192          (96)   1983-1990   03/11/99    10 - 40
Kentucky Drive                          848        4,543        5,391          (86)        1991   03/11/99    10 - 40
Power Line Drive                         69          267          336           (5)        1994   03/11/99    10 - 40
Empire Drive                            938        2,786        3,724          (51)        1990   03/11/99    10 - 40
Jamike Drive                          1,656        6,063        7,719         (126)   1985-1988   03/11/99    10 - 40
Turfway Road                          1,083        3,870        4,953          (73)   1990-1996   03/11/99    10 - 40
Kenwood Circle                          920        5,022        5,942          (74)        1987   05/25/99    10 - 40
Progress Road                         1,147        4,526        5,673          (74)        1988   05/07/99    10 - 40
Sunnyslope Avenue                       705        5,537        6,242          (78)        1987   05/07/99    10 - 40
South Street                            636        2,017        2,653          (33)        1987   05/07/99    10 - 40
John Hancock Road                       257        1,874        2,131          (89)        1986   02/04/98    10 - 40
Technology Drive                        663        1,286        1,949          (61)        1973   02/04/98    10 - 40
Oceano Avenue                         1,629        7,863        9,492         (375)        1987   02/04/98    10 - 40
Tar Bay Drive                         1,415        6,476        7,891         (309)        1990   02/04/98    10 - 40
Port Capital Drive                      900        4,142        5,042         (145)        1974   08/06/98    10 - 40
Greenwood Place                         533        2,455        2,988          (53)        1985   03/11/99    10 - 40
Bollman Place                         1,079        3,918        4,997          (72)        1985   03/11/99    10 - 40
Stayton Drive                         1,149        4,125        5,274          (86)        1985   03/11/99    10 - 40
The Crysen Center                     1,365        5,481        6,846         (252)        1985   02/04/98    10 - 40
</TABLE>


                                       59
<PAGE>

                        CABOT INDUSTRIAL PROPERTIES, L.P.
       Schedule III - Real Estate and Accumulated Depreciation (continued)
                                December 31, 1999
                          (dollar amounts in thousands)

<TABLE>
<CAPTION>
                                                                                                                Costs Capitalized
                                                                                                                  Subsequent to
                                                                                         Initial Cost              Acquisition
                                    Number                                        ------------------------- ------------------------
                                      of                                                      Buildings and            Buildings and
Property Name(s)                  Buildings  Location               Encumbrances     Land     Improvements     Land     Improvements
----------------                  ---------  --------               ------------     ----     ------------     ----     ------------
<S>                                  <C>     <C>                      <C>         <C>          <C>          <C>          <C>
Guilford Road                          1     Annapolis Junction, MD          --        1,123        4,718           --           20
Bristol Court, Building 1              1     Jessup, MD                      --          785        3,132           --           24
West Nursery Road                      2     Linthicum, MD                3,348        1,019        6,749           --           41
Fontana Lane                           2     Baltimore, MD                4,496          915        5,771           --           45
Bristol Court, Building 2              1     Jessup, MD                      --          561        2,194           --            1
Sysco Court                            1     Grand Rapids, MI             1,877          354        1,788           --            0
Woodale Drive                          4     Mounds View, MN             11,797        2,835       17,455           --            4
Trenton Lane                           1     Plymouth, MN                 3,412        1,440        4,497           --            0
Lexington Avenue                       1     Eagan, MN                    3,678        1,207        4,454           --            0
Cahill Road                            1     Edina, MN                    1,248          665        2,000           --            0
Monticello Lane                        1     Maple Grove, MN                994          278        1,416           --            0
West 82nd Street                       1     Bloomington, MN                 --        1,215        3,340           --            0
Industrial Drive South                 1     Gluckstadt, MS                  --          320        5,697           --            0
Reames Road                            1     Charlotte, NC                   --          365        2,922           --           53
Cordage Street                         1     Charlotte, NC                   --          562        2,223           --            1
Old Charlotte Highway                  1     Monroe, NC                      --          833        4,196           --            0
Airport Road                           1     Monroe, NC                      --          555        2,793           --            0
Woodpark Blvd                          3     Charlotte, NC                   --          803        4,503           --           26
Commerce Blvd                          1     Charlotte, NC                   --          416        2,181           --            3
N. I-85 Service Road                   1     Charlotte, NC                   --          351        1,998           --            3
Westinghouse Blvd                      4     Charlotte, NC                2,186        2,606       17,592           --            0
Birch Creek Road                       1     Bridgeport, NJ                  --          862        6,900           --            2
Herrod Boulevard                       1     South Brunswick, NJ             --        2,600       15,289           --            2
Pierce Street                          1     Franklin Township, NJ           --        1,400        6,716           --            3
Colony Road                            2     Jersey City, NJ                 --        2,816       10,266           --           14
Industrial Drive                       3     Port Jersey, NJ                 --        3,024       13,298           --            5
Port Jersey Boulevard                  2     Port Jersey, NJ                 --        5,493       18,974           --          162

<CAPTION>
                                   Gross Amount Carried
                                  as of December 31, 1999                               Date
                                 ------------------------                            Constructed             Depreciable
                                            Buildings and              Accumulated       or         Date        Lives
Property Name(s)                    Land     Improvements   Total(1)   Depreciation   Renovated   Acquired    in Years
----------------                    ----     ------------   --------   ------------   ---------   --------    --------
<S>                              <C>          <C>          <C>          <C>           <C>         <C>         <C>
Guilford Road                         1,123        4,738        5,861         (169)        1989   08/03/98    10 - 40
Bristol Court, Building 1               785        3,156        3,941         (115)        1988   08/03/98    10 - 40
West Nursery Road                     1,019        6,790        7,809         (220)        1989   08/03/98    10 - 40
Fontana Lane                            915        5,816        6,731         (202)        1988   08/03/98    10 - 40
Bristol Court, Building 2               561        2,195        2,756          (30)        1986   06/01/99    10 - 40
Sysco Court                             354        1,788        2,142          (85)        1985   02/04/98    10 - 40
Woodale Drive                         2,835       17,459       20,294         (783)   1989-1992   03/31/98    10 - 40
Trenton Lane                          1,440        4,497        5,937         (100)        1994   03/30/99    10 - 40
Lexington Avenue                      1,207        4,454        5,661          (96)   1979/1994   03/30/99    10 - 40
Cahill Road                             665        2,000        2,665          (47)        1979   03/30/99    10 - 40
Monticello Lane                         278        1,416        1,694          (30)        1986   03/30/99    10 - 40
West 82nd Street                      1,215        3,340        4,555            0         1967   09/10/99    10 - 40
Industrial Drive South                  320        5,697        6,017         (273)        1988   02/04/98    10 - 40
Reames Road                             365        2,975        3,340         (140)        1994   02/04/98    10 - 40
Cordage Street                          562        2,224        2,786          (15)        1981   09/24/99    10 - 40
Old Charlotte Highway                   833        4,196        5,029         (201)   1957/1972   02/04/98    10 - 40
Airport Road                            555        2,793        3,348         (134)   1957/1972   02/04/98    10 - 40
Woodpark Blvd                           803        4,529        5,332          (73)   1985-1987   06/23/99    10 - 40
Commerce Blvd                           416        2,184        2,600          (36)        1988   06/23/99    10 - 40
N. I-85 Service Road                    351        2,001        2,352          (32)        1988   06/23/99    10 - 40
Westinghouse Blvd                     2,606       17,592       20,198         (222)   1988-1994   08/17/99    10 - 40
Birch Creek Road                        862        6,902        7,764         (348)   1991/1997   02/04/98    10 - 40
Herrod Boulevard                      2,600       15,291       17,891         (731)        1989   02/04/98    10 - 40
Pierce Street                         1,400        6,719        8,119         (323)        1984   02/04/98    10 - 40
Colony Road                           2,816       10,280       13,096         (497)   1974/1976   02/04/98    10 - 40
Industrial Drive                      3,024       13,303       16,327         (642)   1972-1976   02/04/98    10 - 40
Port Jersey Boulevard                 5,493       19,136       24,629         (983)   1974/1982   02/04/98    10 - 40
</TABLE>


                                       60
<PAGE>

                        CABOT INDUSTRIAL PROPERTIES, L.P.
       Schedule III - Real Estate and Accumulated Depreciation (continued)
                                December 31, 1999
                          (dollar amounts in thousands)

<TABLE>
<CAPTION>
                                                                                                                Costs Capitalized
                                                                                                                  Subsequent to
                                                                                         Initial Cost              Acquisition
                                    Number                                        ------------------------- ------------------------
                                      of                                                      Buildings and            Buildings and
Property Name(s)                  Buildings  Location               Encumbrances     Land     Improvements     Land     Improvements
----------------                  ---------  --------               ------------     ----     ------------     ----     ------------
<S>                                  <C>     <C>                      <C>         <C>          <C>          <C>          <C>
South Middlesex Avenue                 2     Cranbury, NJ                    --        2,700       12,532           --           22
Memorial Drive                         1     Franklin Township, NJ           --        1,859        4,844           --          115
New England Avenue                     1     Piscataway, NJ               2,621        1,350        2,423           --           76
Westbelt Drive                         2     Columbus, OH                    --        1,849       12,301           --           43
Dividend Drive                         1     Columbus, OH                    --          449        3,712           --            6
International Street                   1     Columbus, OH                    --          517        2,657           --            1
Port Road                              2     Franklin County, OH             --        1,402       10,085           --          191
Twin Creek Drive                       1     Columbus, OH                    --          702        3,416           --           41
Equity Drive                           2     Columbus, OH                    --        1,854        7,301           --          281
Alum Creek Road                        1     Columbus, OH                    --          331        1,278           --            1
International Road                     2     Cincinnati, OH                  --        2,041        9,833           --            0
Kingsley Drive                         2     Cincinnati, OH               7,944        2,766        9,519            1           31
Lake Forest Drive                      2     Blue Ash, OH                    --        2,320        9,482           --          196
Kenwood Road                           7     Blue Ash, OH                    --        2,978       11,712           --            0
Creek Road                             1     Blue Ash, OH                    --          902        2,790           --           74
Commerce Boulevard                     1     Loveland, OH                    --          393        1,215           --            0
Brackbill Blvd                         2     Mechanicsburg, PA            6,456        3,722       14,226           --            1
Cumberland Parkway                     1     Harrisburg, PA                  --        1,851       11,317           --           15
Ritter Road                            1     Mechanicsburg, PA            1,368          332        1,934           --            1
Marine Drive                           1     Rock Hill, SC                   --        1,290       12,866           --            0
Pilot Drive                            1     Memphis, TN                     --        1,364        6,231           --          112
DFW Trade Center                       3     Grapevine, TX                   --        5,273       45,755           --          127
Luna Road                              1     Carrollton, TX                  --        1,020        6,097           --            0
Patriot Drive                          2     Coppell, TX                     --        2,264       15,207           --            0
113th Street                           1     Arlington, TX                   --          506        2,055           --            0
Airline Drive                          2     Coppell, TX                     --        1,012        5,999           --            0
North Lake Drive                       1     Coppell, TX                     --        1,165        4,914           --            0

<CAPTION>
                                   Gross Amount Carried
                                  as of December 31, 1999                               Date
                                 ------------------------                            Constructed             Depreciable
                                            Buildings and              Accumulated       or         Date        Lives
Property Name(s)                    Land     Improvements   Total(1)   Depreciation   Renovated   Acquired    in Years
----------------                    ----     ------------   --------   ------------   ---------   --------    --------
<S>                              <C>          <C>          <C>          <C>           <C>         <C>         <C>
South Middlesex Avenue                2,700       12,554       15,254         (607)   1982/1989   02/04/98    10 - 40
Memorial Drive                        1,859        4,959        6,818         (247)        1988   02/04/98    10 - 40
New England Avenue                    1,350        2,499        3,849          (99)   1975/1995   06/26/98    10 - 40
Westbelt Drive                        1,849       12,344       14,193         (592)   1979/1980   02/04/98    10 - 40
Dividend Drive                          449        3,718        4,167         (190)        1980   02/04/98    10 - 40
International Street                    517        2,658        3,175         (127)        1988   02/04/98    10 - 40
Port Road                             1,402       10,276       11,678         (493)        1995   02/04/98    10 - 40
Twin Creek Drive                        702        3,457        4,159         (163)        1989   02/04/98    10 - 40
Equity Drive                          1,854        7,582        9,436         (389)        1980   02/04/98    10 - 40
Alum Creek Road                         331        1,279        1,610          (21)        1988   03/11/99    10 - 40
International Road                    2,041        9,833       11,874         (490)        1990   02/04/98    10 - 40
Kingsley Drive                        2,767        9,550       12,317         (378)        1981   06/09/98    10 - 40
Lake Forest Drive                     2,320        9,678       11,998         (489)   1978/1979   02/04/98    10 - 40
Kenwood Road                          2,978       11,712       14,690            0    1963-1973   12/15/99    10 - 40
Creek Road                              902        2,864        3,766         (137)        1983   02/04/98    10 - 40
Commerce Boulevard                      393        1,215        1,608          (21)        1989   03/11/99    10 - 40
Brackbill Blvd                        3,722       14,227       17,949         (706)   1984/1994   02/17/98    10 - 40
Cumberland Parkway                    1,851       11,332       13,183         (531)        1992   02/06/98    10 - 40
Ritter Road                             332        1,935        2,267          (91)        1986   02/04/98    10 - 40
Marine Drive                          1,290       12,866       14,156         (192)        1997   06/30/99    10 - 40
Pilot Drive                           1,364        6,343        7,707         (298)        1987   02/04/98    10 - 40
DFW Trade Center                      5,273       45,882       51,155       (2,110)   1996-1997   02/04/98    10 - 40
Luna Road                             1,020        6,097        7,117         (291)        1996   02/04/98    10 - 40
Patriot Drive                         2,264       15,207       17,471            0         1997   12/28/99    10 - 40
113th Street                            506        2,055        2,561          (98)        1979   02/04/98    10 - 40
Airline Drive                         1,012        5,999        7,011         (286)   1990/1991   02/04/98    10 - 40
North Lake Drive                      1,165        4,914        6,079         (244)        1982   02/04/98    10 - 40
</TABLE>


                                       61
<PAGE>

                        CABOT INDUSTRIAL PROPERTIES, L.P.
       Schedule III - Real Estate and Accumulated Depreciation (continued)
                                December 31, 1999
                          (dollar amounts in thousands)

<TABLE>
<CAPTION>
                                                                                                                Costs Capitalized
                                                                                                                  Subsequent to
                                                                                         Initial Cost              Acquisition
                                    Number                                        ------------------------- ------------------------
                                      of                                                      Buildings and            Buildings and
Property Name(s)                  Buildings  Location               Encumbrances     Land     Improvements     Land     Improvements
----------------                  ---------  --------               ------------     ----     ------------     ----     ------------
<S>                                  <C>     <C>                      <C>         <C>          <C>          <C>          <C>
10th Street                            2     Plano, TX                    5,543        1,677        6,532           --            1
Diplomat Drive, Building 2             1     Farmers Branch, TX              --          437        2,840           --            0
Hillguard Road                         3     Dallas, TX                      --        1,448        6,011           --            1
East Plano Parkway                     1     Plano, TX                       --        1,163        7,903           --            0
Diplomat Drive, Building 1             1     Farmers Branch, TX              --          110        2,456           --            0
Bradley Lane                           1     Carrollton, TX                  --          262        1,941           --            0
Avenue F                               1     Plano, TX                       --          653        4,161           --            0
Shiloh Road                            1     Plano, TX                       --          594        3,489           --            0
Oakville Industrial Park               6     Alexandria, VA                  --        5,720       13,736            1          393
Nokes Boulevard, Building 1            1     Sterling, VA                    --        1,344        4,799           --           25
Nokes Boulevard, Building 2            1     Sterling, VA                    --        1,115        4,886           --            0
Guilford Road                          2     Ashburn, VA                  3,736        1,562        5,113           --            0
Beaumeade Circle                       1     Ashburn, VA                  3,071        1,208        4,267           --            0
Kent West Corporate Park II            1     Kent, WA                        --        2,528        9,256           --           58
Kent West Corporate Park I             4     Kent, WA                        --        1,549        5,691           --           26
                                     ---                              ---------   ----------   ----------   ----------   ----------
                                     320                              $ 163,866   $  296,412   $1,205,116   $      207   $    6,099
                                     ===                              =========   ==========   ==========   ==========   ==========

<CAPTION>
                                   Gross Amount Carried
                                  as of December 31, 1999                               Date
                                 ------------------------                            Constructed             Depreciable
                                            Buildings and              Accumulated       or         Date        Lives
Property Name(s)                    Land     Improvements   Total(1)   Depreciation   Renovated   Acquired    in Years
----------------                    ----     ------------   --------   ------------   ---------   --------    --------
<S>                              <C>          <C>          <C>          <C>           <C>         <C>         <C>
10th Street                           1,677        6,533        8,210         (254)        1997   06/10/98    10 - 40
Diplomat Drive, Building 2              437        2,840        3,277          (68)        1984   01/28/99    10 - 40
Hillguard Road                        1,448        6,012        7,460          (63)        1980   09/30/99    10 - 40
East Plano Parkway                    1,163        7,903        9,066            0         1998   12/09/99    10 - 40
Diplomat Drive, Building 1              110        2,456        2,566         (117)        1997   02/04/98    10 - 40
Bradley Lane                            262        1,941        2,203          (43)        1984   02/25/99    10 - 40
Avenue F                                653        4,161        4,814          (46)        1984   07/30/99    10 - 40
Shiloh Road                             594        3,489        4,083            0         1998   12/09/99    10 - 40
Oakville Industrial Park              5,721       14,129       19,850         (683)   1940-1955   02/04/98    10 - 40
Nokes Boulevard, Building 1           1,344        4,824        6,168         (120)        1998   12/15/98    10 - 40
Nokes Boulevard, Building 2           1,115        4,886        6,001          (44)        1999   08/27/99    10 - 40
Guilford Road                         1,562        5,113        6,675          (28)   1987/1988   10/15/99    10 - 40
Beaumeade Circle                      1,208        4,267        5,475          (24)        1990   10/15/99    10 - 40
Kent West Corporate Park II           2,528        9,314       11,842         (444)        1989   02/04/98    10 - 40
Kent West Corporate Park I            1,549        5,717        7,266         (273)        1989   02/04/98    10 - 40
                                 ----------   ----------   ----------   ----------
                                 $  296,619   $1,211,215   $1,507,834   $  (42,543)
                                 ==========   ==========   ==========   ==========
</TABLE>


                                       62
<PAGE>

                        CABOT INDUSTRIAL PROPERTIES, L.P.
       Schedule III - Real Estate and Accumulated Depreciation (continued)
                                December 31, 1999

                          Reconciliation of Real Estate

The changes in total investment in real estate assets for the years ended
December 31, 1999 and 1998 are as follows:

                                          December 31, 1999    December 31, 1998
                                          -----------------    -----------------
                                            (in thousands)       (in thousands)

Balance, Beginning of Year                    $ 1,072,675         $        --
Acquisitions                                      443,951           1,077,863
Improvements                                        5,086               1,220
Dispositions                                      (13,878)             (6,408)
                                              -----------         -----------
Balance, End of Year                          $ 1,507,834         $ 1,072,675
                                              ===========         ===========

                   Reconciliation of Accumulated Depreciation

The changes in accumulated depreciation for the years ended December 31, 1999
and 1998 are as follows:

                                          December 31, 1999    December 31, 1998
                                          -----------------    -----------------
                                            (in thousands)       (in thousands)

Balance, Beginning of Year                     $ 17,290             $     --
Depreciation Expense                             25,677               17,396
Dispositions                                       (424)                (106)
                                               --------             --------
Balance, End of Year                           $ 42,543             $ 17,290
                                               ========             ========


                                       63
<PAGE>

                    Report of Independent Public Accountants

To the Partners of
   Cabot Partners Limited Partnership:

We have audited the accompanying balance sheets of Cabot Partners Limited
Partnership as of December 31, 1997 and 1996, and the related statements of
operations, partners' capital and cash flows for the years then ended. These
financial statements are the responsibility of the management of the
Partnership. Our responsibility is to express an opinion on these 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 financial statements referred to above present fairly, in
all material respects, the financial position of Cabot Partners Limited
Partnership as of December 31, 1997 and 1996, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.


Boston, Massachusetts                                        ARTHUR ANDERSEN LLP
March 27, 1998


                                       64
<PAGE>

                       CABOT PARTNERS LIMITED PARTNERSHIP

                                 BALANCE SHEETS
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                    As of December 31,
                                                                    ------------------
                                                                      1997     1996
                                                                     ------   ------
<S>                                                                  <C>      <C>
ASSETS:
Cash and cash equivalents                                            $  509   $1,709
Accounts receivable                                                   2,689    1,637
Accounts receivable from related party                                1,225       --
Investments                                                              39      836
Cost of investment advisory contracts acquired, net of accumulated
  amortization of $824 and $2,425, respectively                         780    1,729

OTHER ASSETS                                                             97      164
                                                                     ------   ------

TOTAL ASSETS                                                         $5,339   $6,075
                                                                     ======   ======

LIABILITIES AND PARTNERS' CAPITAL:
Accrued compensation                                                 $  373   $  385
Accounts payable and accrued liabilities                                387      100
                                                                     ------   ------
                                                                        760      485
                                                                     ------   ------

COMMITMENTS (NOTE 4)

PARTNERS' CAPITAL:                                                    4,579    5,590
                                                                     ------   ------

TOTAL LIABILITIES AND PARTNERS' CAPITAL                              $5,339   $6,075
                                                                     ======   ======
</TABLE>

   The accompanying notes are an integral part of these financial statements.


                                       65
<PAGE>

                       CABOT PARTNERS LIMITED PARTNERSHIP

                            STATEMENTS OF OPERATIONS
                                 (in thousands)

<TABLE>
<CAPTION>
                                                       For the Years Ended
                                               -------------------------------------
                                               December 31, 1997   December 31, 1996
                                               -----------------   -----------------
<S>                                                 <C>                 <C>
REVENUES:
      Advisory fees                                 $ 9,010             $ 7,871
      Other income                                       70                  37
                                                    -------             -------
                                                      9,080               7,908
                                                    -------             -------

EXPENSES:
      Compensation                                    4,685               3,887
      Other general and administrative                2,360               2,001
      Depreciation and amortization                     977                 419
                                                    -------             -------
            Total Expenses                            8,022               6,307
                                                    -------             -------
Income before income (loss) from
   unconsolidated subsidiary                          1,058               1,601

Equity in income (loss) from unconsolidated
   subsidiary                                            --                  (7)
                                                    -------             -------

Net income                                          $ 1,058             $ 1,594
                                                    =======             =======
</TABLE>

   The accompanying notes are an integral part of these financial statements.


                                       66
<PAGE>

                       CABOT PARTNERS LIMITED PARTNERSHIP

                         STATEMENTS OF PARTNERS' CAPITAL
                 For the Years Ended December 31, 1997 and 1996
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                                          Total
                                                        General     Limited Partners    Partners'
                                                        Partner    Class A    Class B    Capital
                                                        -------    -------    -------    -------
<S>                                                     <C>        <C>        <C>        <C>
Partners' Capital, December 31, 1995                    $    --    $ 5,065    $    --    $ 5,065

      Net income for the year ended December 31, 1996        10      1,194        390      1,594
      Distributions                                          --     (1,069)        --     (1,069)
                                                        -------    -------    -------    -------

Partners' Capital, December 31, 1996                         10      5,190        390      5,590

      Net income for the year ended December 31, 1997        --      1,058         --      1,058
      Distributions                                         (10)    (1,669)      (390)    (2,069)
                                                        -------    -------    -------    -------

Partners' Capital, December 31, 1997                    $    --    $ 4,579    $    --    $ 4,579
                                                        =======    =======    =======    =======
</TABLE>

   The accompanying notes are an integral part of these financial statements.


                                       67
<PAGE>

                       CABOT PARTNERS LIMITED PARTNERSHIP

                            STATEMENTS OF CASH FLOWS
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                          For the Years Ended
                                                                  -------------------------------------
                                                                  December 31, 1997   December 31, 1996
                                                                  -----------------   -----------------
<S>                                                                    <C>                 <C>
OPERATING ACTIVITIES:
Net income                                                             $ 1,058             $ 1,594
Adjustments to reconcile net income to net cash provided by
   operating activities:
   Depreciation and amortization                                           977                 419
   Unrealized equity in loss of investment                                  --                   7
   (Increase) in accounts receivable                                    (1,052)               (695)
   Increase (Decrease) in accrued liabilities                               37                 (70)
   Decrease in accounts payable                                             (5)                 (9)
   Decrease in other assets                                                 47                  37
                                                                       -------             -------
   Net cash provided by operating activities                             1,062               1,283
                                                                       -------             -------

INVESTING ACTIVITIES:
   Increase in accounts receivable from related party                     (984)                 --
   Dividends received                                                      797                 183
   Purchase of furniture, fixtures and equipment                            (6)                (50)
   Additional cost-basis investments                                        --                 (20)
                                                                       -------             -------
   Net cash provided (used in) by investing activities                    (193)                113
                                                                       -------             -------

FINANCING ACTIVITIES:
   Distributions to partners                                            (2,069)             (1,069)
                                                                       -------             -------

   Net (decrease) increase in cash and cash equivalents                 (1,200)                327
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR                            1,709               1,382
                                                                       -------             -------
CASH AND CASH EQUIVALENTS - END OF YEAR                                $   509             $ 1,709
                                                                       =======             =======
</TABLE>

   The accompanying notes are an integral part of these financial statements.


                                       68
<PAGE>

                       CABOT PARTNERS LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS
                             (dollars in thousands)

1. ORGANIZATION

Cabot Partners Limited Partnership (the Partnership), a Massachusetts limited
partnership, was formed as of July 11, 1990 to provide a variety of real estate
investment advisory and management services, primarily to a small number of
pension and profit-sharing plans and other institutional investors. Eight
investors represented 70% of fee revenues for 1997 and nine investors
represented 77% of fee revenues for 1996.

The Partnership has two classes of limited partners. The Class A limited
partners contributed cash on a disproportionate basis to their ownership
interest and are entitled to a cumulative guaranteed return on their Adjusted
Capital Contributions, as defined, of 10% through December 31, 1995 and 5%
thereafter, payable only out of available cash. In addition, the Class A limited
partners are entitled to a 5% return of their Adjusted Capital Contributions
prior to distributions of available cash to all the partners in accordance with
their ownership interest. As of December 31, 1997, the cumulative unpaid and
unrecognized return was $2,795.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Income Taxes

No provision for federal and state income taxes has been recorded relating to
the Partnership, as the partners report their respective shares of the net
taxable income on their individual tax returns. The tax basis of assets and
liabilities does not significantly differ from their historical cost basis.

Furniture, Fixtures and Equipment

Furniture and equipment additions are recorded at cost and are depreciated over
an estimated useful life of five years. Fixtures include leasehold improvements
that are recorded at cost and amortized over the shorter of their useful life or
the remaining lease term.

Cost of Investment Advisory Contracts Acquired

The investment advisory contracts acquired are recorded at their fair market
value at the date of acquisition, based on independent appraisals, and are being
amortized over their estimated lives, which range from eight to 16 years.

Allocation of Profits and Losses

Income and losses have been allocated to the partners in accordance with the
provisions of the partnership agreement.

Cash Equivalents

At December 31, 1997, the Partnership had invested excess funds in money market
mutual funds, which have an original maturity of less than three months. For
purposes of the statement of cash flows, this investment has been considered a
cash equivalent.


                                       69
<PAGE>

                       CABOT PARTNERS LIMITED PARTNERSHIP

                    NOTES TO FINANCIAL STATEMENTS (continued)
                             (dollars in thousands)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Pervasiveness of Estimates

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

Fair Value of Financial Instruments

The carrying amounts reported on the accompanying balance sheets for cash and
cash equivalents, receivables, accounts payable and accrued expenses approximate
fair value, due to the short-term nature of these investments.

3. INVESTMENTS

The Partnership owns a 1% managing general partnership interest in a real estate
operating company, CP Private Partners, L.P.-I (Private Partners), and accounts
for this investment under the equity method. Under this method of accounting,
the Partnership's pro rata share of Private Partners' income (loss) is recorded
each year as an increase (decrease) in the carrying value of its investment and
any distributions received are recorded as decreases in the carrying value.

The condensed unaudited historical cost balance sheets of Private Partners at
December 31, 1997 and 1996 is as follows:

                                                             As of December 31,
                                                           ---------------------
                                                             1997          1996
                                                           -------       -------

Assets
Cash and cash equivalents                                  $   576       $   186
Real estate assets, net                                      3,140        58,776
Other assets                                                   179        18,203
                                                           -------       -------
  Total Assets                                             $ 3,895       $77,165
                                                           =======       =======
Liabilities and Partners' Capital
Accounts payable and accrued liabilities                   $    29       $   453
Partners' Capital
The Partnership                                                 39           767
Other Partners                                               3,827        75,945
                                                           -------       -------
  Total Partners' Capital                                    3,866        76,712
                                                           -------       -------
  Total Liabilities and Partners' Capital                  $ 3,895       $77,165
                                                           =======       =======


                                       70
<PAGE>

                       CABOT PARTNERS LIMITED PARTNERSHIP

                    NOTES TO FINANCIAL STATEMENTS (continued)
                             (dollars in thousands)

3. INVESTMENTS (CONTINUED)

The condensed unaudited historical cost income statements of Private Partners
for the years ended December 31, 1997 and 1996 are as follows:

                                                               Years ended
                                                               December 31,
                                                            1997         1996
                                                          --------     --------

Sale of real estate assets                                $ 60,268     $ 20,817
Rental revenues                                              6,448       11,726
Cost of real estate sold                                   (51,728)     (20,411)
Note receivable reduction                                   (2,078)      (7,688)
Operating expenses                                          (1,213)      (5,163)
Write down of real estate to net realizable value           (4,860)          --
                                                          --------     --------
Net income                                                $  6,837     $   (719)
                                                          ========     ========
Dividends paid                                            $ 79,683     $ 18,292
                                                          ========     ========
The Partnership's share of:
Net income                                                $     68     $     (7)
                                                          ========     ========
Dividends paid                                            $    797     $    183
                                                          ========     ========

Private Partners' remaining real estate is vacant land that is held for sale. As
of December 31, 1997, its carrying cost has been reduced to its estimated net
realizable value.

4. MINIMUM FUTURE LEASE OBLIGATIONS

Minimum future lease obligations under noncancelable operating leases for each
of the next five years ending December 31 and thereafter are as follows:

        1998......................................................... $   298
        1999.........................................................     313
        2000.........................................................     325
        2001.........................................................     310
        Thereafter...................................................      --
                                                                      -------
                                                                      $ 1,246
                                                                      =======

The Partnership incurred rental expense of $332 and $304 for the years ended
December 31, 1997 and 1996, respectively. The Partnership's only significant
lease is for its office space. The lease provides for the payment of base rent
and operating expenses and real estate taxes over stated base amounts.


                                       71
<PAGE>

                       CABOT PARTNERS LIMITED PARTNERSHIP

                    NOTES TO FINANCIAL STATEMENTS (continued)
                             (dollars in thousands)

5. RELATED PARTY TRANSACTIONS

Under two separate agreements, the Partnership provides acquisition, asset
management and property management services to a partnership and a company
separately controlled by two Class A limited partners. The agreements are
cancelable by either party with 30 days notice. After a recent amendment, one
agreement provides for annual fixed fees of $158. The other agreement provides
for an acquisition fee of .25% of acquisition cost and an asset management fee
of 5% of net operating income. The Partnership received acquisition fees from
related parties of $345 for the year ended December 31, 1997, and other related
party fees of $287 and $164 for the years ended December 31, 1997 and 1996,
respectively.

As of December 31, 1997, the Partnership had incurred costs related to the
Formation Transactions described below of $1,225, of which $241 is unpaid and
included in accounts payable and accrued expenses. These costs are to be
reimbursed by Cabot Industrial L.P. subsequent to the Formation Transactions.

6. SUBSEQUENT EVENTS

Formation Transactions

Under the provisions of an agreement executed by the Partnership and several
other investors, Cabot Partners contributed its Advisory Contracts and certain
of its other net assets to Cabot Industrial Properties, L.P. (Cabot L.P.), a
subsidiary partnership of Cabot Industrial Trust (Cabot Trust) and received
1,819,587 Units from Cabot L.P. The units are convertible into common shares of
Cabot Trust on a one-to-one basis subject to certain limitations. As of February
4, 1998, the common shares had a fair market value of $20 per share. The
remainder of the Partnership's net assets will be distributed to its partners.
The impact of these proposed transactions is not reflected in the accompanying
financial statements.

The cumulative unpaid and unrecognized return discussed in Note 1 was settled
through these distribution of Units received in conjunction with these
transactions.

Sales of Assets Under Management

Under the terms of the investment advisory agreements, investors have the right
to terminate the Partnership as advisor with 30 days notice. In addition, a
significant portion of the Partnership's assets under management may be
transferred to other advisors or sold as a part of the investor's investment
strategy.

During 1997, all the properties of three portfolios have been sold. These
portfolios accounted for advisory and property management fees of $2,985 and
$3,249 for the years ended December 31, 1997 and 1996, respectively.


                                       72
<PAGE>

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

None.

                                    PART III

Certain information required by Part III is omitted from this Report and is
incorporated herein by reference to parts of the definitive proxy statement of
Cabot Industrial Trust to be filed pursuant to Regulation 14A (the "Proxy
Statement"). Only those sections of the Proxy Statement which specifically
address the Items set forth herein are incorporated by reference.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Cabot L.P. does not have any directors or officers. The information concerning
Cabot Trust's trustees required by this Item is incorporated by reference to the
Proxy Statement under the headings captioned "Election of Trustees" and
"Principal and Management Shareholders".

Cabot L.P. does not have any executive officers. The executive officers of Cabot
Trust and their respective positions, business experience and ages at February
29, 2000, are set forth below. The executive officers serve at the discretion of
the Board of Trustees of Cabot Trust.

  Name                              Age    Position
  -------------------------------------------------------------------------
  Ferdinand Colloredo-Mansfeld(1)    60    Chairman of the Board and Chief
                                             Executive Officer, Trustee
  Robert E. Patterson                54    President, Trustee
  Franz Colloredo-Mansfeld(1)        37    Senior Vice President and Chief
                                             Financial Officer
  Andrew D. Ebbott                   44    Senior Vice President - Director
                                             of Acquisitions
  Howard B. Hodgson, Jr.             44    Senior Vice President - Director
                                             of Real Estate Operations
  Neil E. Waisnor                    45    Senior Vice President - Finance,
                                             Treasurer and Secretary
  Eugene F. Reilly                   38    Senior Vice President - Director
                                             of Development

(1) Messrs. Ferdinand and Franz Colloredo-Mansfeld are father and son.

                               Business Experience
                               -------------------
Ferdinand Colloredo-Mansfeld.. Ferdinand Colloredo-Mansfeld has served as our
                               Chairman of the Board of Trustees and Chief
                               Executive Officer since our formation in October
                               1997. Mr. Colloredo-Mansfeld also serves as the
                               Chairman and Chief Executive Officer of Cabot
                               Advisors. Mr. Colloredo-Mansfeld served as
                               Chairman, Chief Executive Officer and Chief
                               Investment Officer of Cabot Partners Limited
                               Partnership from 1990 to 1997, having previously
                               served in the same positions with Cabot, Cabot &
                               Forbes Realty Advisors, Inc., an affiliate of
                               Cabot, Cabot & Forbes, since its formation in
                               1986. Mr. Colloredo-Mansfeld began his real
                               estate career in 1970 when he joined Cabot, Cabot
                               & Forbes, a national real estate development,
                               management and construction firm, becoming its
                               Chief Financial Officer in 1973, Chief Operating
                               Officer in 1974 and Chief Executive Officer in
                               1976, a position he held until his retirement
                               from that company in 1989. As Chief Executive
                               Officer, Mr. Colloredo-Mansfeld oversaw the
                               development and management of approximately $4
                               billion of commercial properties in twenty
                               states, including 35 master-planned suburban
                               business and industrial parks. Mr. Colloredo-
                               Mansfeld is a graduate of Harvard College and
                               Harvard Business School. He is a limited partner
                               in Brown Brothers Harriman & Co. and is a
                               Director of Raytheon Company and former Director
                               of Shawmut National Corp. and Data General Corp.
                               He is a Trustee (former Chairman of the Board of
                               Trustees) of the Massachusetts General Hospital
                               and a member of the Board of Directors, Boston
                               Private Industry Council. Mr. Colloredo-Mansfeld
                               is the father of Franz Colloredo-Mansfeld, our
                               Chief Financial Officer.

Robert E. Patterson........... Mr. Patterson has served as our President and a
                               Trustee since our formation in October 1997. Mr.
                               Patterson served as Executive Vice President,
                               Director of Acquisitions and a member of the
                               Investment Committee of Cabot, Cabot & Forbes
                               Realty Advisors, Inc. and subsequently, Cabot
                               Partners Limited Partnership from 1987 to 1997.
                               Mr. Patterson began his real estate career in
                               1972 as a lawyer with the firm of Gaston, Snow &
                               Ely Bartlett. In 1978, he became the first
                               Executive Director of the Massachusetts
                               Industrial Finance Agency and remained in that
                               position until 1983 when he joined the Beal
                               Companies, a Boston-based real estate
                               development, management and investment firm as
                               Senior Vice President. He joined Cabot, Cabot &
                               Forbes Realty Advisors, Inc. in 1987 to head its
                               acquisitions group and was a founding partner of
                               Cabot Partners Limited Partnership upon its
                               formation as an independent entity in 1990. Mr.
                               Patterson is a graduate of Harvard College and
                               Harvard Law School. He is a Trustee of The Putnam
                               Group of Mutual Funds, a Trustee of the Sea
                               Education Association, Chairman of the Board of
                               Trustees of the Joslin Diabetes Center, and a
                               Director of the Brandywine Trust Company. He is a
                               member of numerous industry associations,
                               including the National Association of Real Estate
                               Investment Trusts and the Urban Land Institute.

Franz Colloredo-Mansfeld...... Franz Colloredo-Mansfeld has been our Chief
                               Financial Officer since October 1997 and served
                               as a Senior Vice President of Cabot Partners
                               Limited Partnership since 1996. He was a Senior
                               Engagement Manager of McKinsey & Company, Inc.
                               from 1992 through 1996. He previously worked for
                               the Deutsche Bank real estate investment group in
                               1992 and was a Robert Bosch Fellow at the German
                               Central Bank (Bundesbank) in Frankfurt, Germany
                               in 1991. He was also an investment banker with
                               Merrill Lynch & Co. from 1986 through 1989, where
                               he specialized in mergers and acquisitions. Mr.
                               Colloredo-Mansfeld is a graduate of Harvard
                               College and Harvard Business School. He is a
                               director or trustee of numerous corporate,
                               professional, and charitable organizations. Mr.
                               Colloredo-Mansfeld is the son of Ferdinand
                               Colloredo-Mansfeld, our Chief Executive Officer.

Andrew D. Ebbott.............. Mr. Ebbott has served as our Senior Vice
                               President, Director of Acquisitions since October
                               1997. Mr. Ebbott joined Cabot, Cabot & Forbes
                               Realty Advisors, Inc. in 1988 as Director of
                               Research and a member of its acquisition
                               department, becoming a Vice President in 1991 and
                               a Senior Vice President in 1995 of Cabot Partners
                               Limited Partnership. Mr. Ebbott is a graduate of
                               Dartmouth College and the University of Chicago
                               Business School. He has over 14 years experience
                               in real estate finance, investment and research
                               and is a member of the American Institute of
                               Certified Public Accountants and the National
                               Association of Real Estate Investment Trusts.

Howard B. Hodgson, Jr......... Mr. Hodgson has been our Senior Vice President,
                               Director of Real Estate Operations since October
                               1997 and has served as a Senior Vice President,
                               Director of Asset Management and Member of the
                               Investment Committee of Cabot Partners Limited
                               Partnership from 1992 to October 1997. Mr.
                               Hodgson began his real estate career in 1979 with
                               the Boston-based real estate firm of R.M. Bradley
                               & Co., Inc., becoming the head of its
                               institutional property management group prior to
                               joining Cabot, Cabot & Forbes Asset Management
                               Company in 1991 as a Senior Vice President and
                               head of its property management group. Mr.
                               Hodgson is a graduate of Northeastern University.
                               He is a Trustee and member of the Executive
                               Committee of the Cambridge Savings Bank and is a
                               Trustee of Cambridge Financial Group, Inc. He is
                               a member of the Building Owners and Managers
                               Association and is a corporate Trustee of the
                               Trustees of Reservations.

Neil E. Waisnor............... Mr. Waisnor has served as our Senior Vice
                               President-Finance, Treasurer and Secretary since
                               October 1997. Mr. Waisnor was a founding partner
                               of Cabot Partners Limited Partnership, joining as
                               Vice President and Treasurer in 1990 and becoming
                               a Senior Vice President and Chief Financial
                               Officer in 1995. Prior to joining Cabot Partners
                               Limited Partnership, he was Vice President and
                               Controller of Cabot, Cabot & Forbes, where he
                               served in a variety of financial capacities since
                               1985. He worked for Arthur Andersen & Co. from
                               1977 until 1985, where he was a senior audit
                               manager serving real estate and high technology
                               companies. Mr. Waisnor is a graduate of the
                               University of Massachuetts at Amherst and is a
                               member of the American Institute of Certified
                               Public Accountants and the Massachusetts Society
                               of Certified Public Accountants.

Eugene F. Reilly.............. Mr. Reilly has been our Senior Vice President-
                               Director of Development since October 1997. Mr.
                               Reilly served as Director of Leasing and
                               Marketing of Cabot Partners Limited Partnership
                               from 1992 to October 1997, becoming Senior Vice
                               President in 1996. Mr. Reilly began his real
                               estate career with the Boston commercial real
                               estate brokerage firm of Leggat McCall and Werner
                               in 1983 and subsequently became a leasing broker
                               with Julien J. Studley, Inc. In 1985, he joined
                               National Development Corporation where he became
                               a Senior Vice President prior to joining Cabot
                               Partners Limited Partnership as a Vice President
                               in 1992. Mr. Reilly is a graduate of Harvard
                               College. He is a member of the National
                               Association of Industrial and Office Parks.

ITEM 11. Executive Compensation

The information required by this Item is incorporated by reference to Cabot
Trust's Proxy Statement under the heading captioned "Executive Compensation."

ITEM 12. Security Ownership of Certain Beneficial Owners and Management

The information required by this Item is incorporated by reference to Cabot
Trust's Proxy Statement under the heading captioned "Principal and Management
Shareholders."

ITEM 13. Certain Relationships and Related Transactions

The information required by this Item is incorporated by reference to Cabot
Trust's Proxy Statement under the heading captioned "Certain Transactions."



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<PAGE>

SIGNATURES

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

                                     CABOT INDUSTRIAL PROPERTIES, L.P.
                                     ---------------------------------
                                            Registrant
                                     By CABOT INDUSTRIAL TRUST
                                            Its general partner

                                     By     /s/ Robert E. Patterson
                                            ----------------------------
                                     Title:     President
                                            ----------------------------

                                     Date:  March 23, 2000

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

<TABLE>
<CAPTION>
                                                   Title                             Date
                                                   -----                             ----
<S>                                      <C>                                     <C>
/s/Ferdinand Colloredo-Mansfeld          Chairman of the Board and               March 23, 2000
----------------------------------       Chief Executive Officer
Ferdinand Colloredo-Mansfeld

/s/Robert E. Patterson                   President and Trustee                   March 23, 2000
----------------------------------
Robert E. Patterson

/s/Franz Colloredo-Mansfeld              Senior Vice President and               March 23, 2000
----------------------------------       Chief Financial Officer
Franz Colloredo-Mansfeld

/s/Neil E. Waisnor                       Senior Vice President - Finance,        March 23, 2000
----------------------------------       Treasurer and Secretary
Neil E. Waisnor                          Chief Accounting Officer

/s/George M. Lovejoy, Jr.                Trustee                                 March 23, 2000
----------------------------------
George M. Lovejoy, Jr.

/s/Christopher C. Milliken               Trustee                                 March 23, 2000
----------------------------------
Christopher C. Milliken

/s/Maurice Segall                        Trustee                                 March 23, 2000
----------------------------------
Maurice Segall

/s/W. Nicholas Thorndike                 Trustee                                 March 23, 2000
----------------------------------
W. Nicholas Thorndike

/s/Ronald L. Skates                      Trustee                                 March 23, 2000
----------------------------------
Ronald L. Skates
</TABLE>


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<PAGE>

                                     PART IV

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

(a) The following documents are filed as part of this report:

                   INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
                           Included in Item 8 hereof.

                                INDEX TO EXHIBITS

Exhibit
Number         Document Description
------         --------------------

3.1            Amended and Restated Cabot Trust Declaration of Trust, dated
               January 26, 1998. Incorporated by reference to Exhibit 3.1 to
               Cabot Trust's Form S-11 Registration Statement (File No.
               333-38383); the "Form S-11").

3.2            Amended and Restated Bylaws of Cabot Trust. Incorporated by
               reference to Exhibit 2 to Cabot Trust's Current Report on Form
               8-K filed on September 16, 1998.

3.3            Second Amended and Restated Agreement of Limited Partnership
               Agreement of Cabot L.P., dated February 4, 1998. Incorporated by
               reference to Exhibit 3.5 to the Form S-11.

4.1            Contribution Agreement relating to the Capitalization of Cabot
               Trust, dated as of October 10, 1997, among Cabot Trust, Cabot
               L.P., Cabot Partners and Various Contributors and Title Holding
               Entities Identified Therein. Incorporated by reference to Exhibit
               4.1 to the Form S-11.

4.2            Form of Indenture by and among Cabot L.P., Cabot Trust and Bank
               of New York as trustee. Incorporated by reference to Exhibit 4.11
               to Cabot Trust's and Cabot L.P.'s Form S-3 Registration Statement
               (File No. 333-71585).

4.3            Form of Mortgage, Assignment of Leases and Rents, Security
               Agreement and Fixture Filing Statement of Cabot L.P., as
               borrower, for the benefit of Teachers Insurance and Annuity
               Association of America, as lender, used in connection with
               mortgage loans. Incorporated by reference to Exhibit 4.3 to Cabot
               Trust's Annual Report on Form 10-K for the year ended December
               31, 1998.

4.4            Form of Promissory Note of Cabot L.P., as borrower, in favor of
               Teachers Insurance and Annuity Association of America, as lender,
               used in connection with mortgage loans. Incorporated by reference
               to Exhibit 4.4 to Cabot Trust's Annual Report on Form 10-K for
               the year ended December 31, 1998.

4.5            First Amendment to Second Amended and Restated Agreement of
               Limited Partnership of Cabot Industrial Properties, L.P., dated
               April 29, 1999.

4.6            Articles Supplementary, 1,300,000 Shares of 8.625% Series B
               Cumulative Redeemable Preferred Shares, dated April 29, 1999.

4.7            Second Amendment to Second Amended and Restated Agreement of
               Limited Partnership of Cabot Industrial Properties, L.P., dated
               September 3, 1999.

4.8            Articles Supplementary, 2,600,000 Shares of 8.625% Series C
               Cumulative Redeemable Preferred Shares, dated September 3, 1999.


                                       75
<PAGE>

4.9            Third Amendment to Second Amended and Restated Agreement of
               Limited Partnership of Cabot Industrial Properties, L.P., dated
               September 27, 1999.

4.10           Articles Supplementary, 200,000 Shares of 8.375% Series D
               Cumulative Redeemable Preferred Shares, dated September 27, 1999.

4.11           Fourth Amendment to Second Amended and Restated Agreement of
               Limited Partnership of Cabot Industrial Properties, L.P., dated
               December 9, 1999.

4.12           Articles Supplementary, 200,000 Shares of 8.375% Series E
               Cumulative Redeemable Preferred Shares, dated December 9, 1999.

4.13           Fifth Amendment to Second Amended and Restated Agreement of
               Limited Partnership of Cabot Industrial Properties, L.P., dated
               December 22, 1999.

4.14           Articles Supplementary, 1,800,000 Shares of 8.5% Series F
               Cumulative Redeemable Preferred Shares, dated December 22, 1999.

10.1           Form of Indemnification Agreement between Cabot Trust and the
               Trustees. Incorporated by reference to Exhibit 10.1 to the Form
               S-11.

10.2           Form of Indemnification Agreement entered into between Cabot
               Trust and the officers of Cabot Trust. Incorporated by reference
               to Cabot Trust's Form S-11 Registration Statement (File No.
               333-61543).

10.3           Form of Registration Rights and Lock-Up Agreement, dated as of
               February 4, 1998, between Cabot Trust, the Contributing Investors
               and various other persons identified therein (included as Exhibit
               B to Exhibit 4.1).

10.4           Form of Registration Rights and Lock-Up Agreement, between Cabot
               Trust and Morgan Stanley Asset Management Inc., on behalf of
               certain of its institutional investors. Incorporated by reference
               to Exhibit 10.3 to the Form S-11.

10.5           Cabot Trust Long-Term Incentive Plan (as Amended and Restated
               Effective as of January 26, 1998).

10.6           Amended Employment Agreement between Cabot L.P. and Ferdinand
               Colloredo-Mansfeld. Incorporated by reference to Exhibit 10.6 to
               Cabot Trust's Annual Report on Form 10-K for the year ended
               December 31, 1998.

10.7           Amended Employment Agreement between Cabot L.P. and Robert E.
               Patterson. Incorporated by reference to Exhibit 10.7 to Cabot
               Trust's Annual Report on Form 10-K for the year ended December
               31, 1998.

10.8           Amended Employment Agreement between Cabot L.P. and Franz
               Colloredo-Mansfeld. Incorporated by reference to Exhibit 10.8 to
               Cabot Trust's Annual Report on Form 10-K for the year ended
               December 31, 1998.

10.9           Amended Employment Agreement between Cabot L.P. and Andrew D.
               Ebbott. Incorporated by reference to Exhibit 10.9 to Cabot
               Trust's Annual Report on Form 10-K for the year ended December
               31, 1998.

10.10          Amended Employment Agreement between Cabot L.P. and Howard B.
               Hodgson, Jr. Incorporated by reference to Exhibit 10.10 to Cabot
               Trust's Annual Report on Form 10-K for the year ended December
               31, 1998.

10.11          Amended Employment Agreement between Cabot L.P. and Neil
               E.Waisnor. Incorporated by reference to Exhibit 10.11 to Cabot
               Trust's Annual Report on Form 10-K for the year ended December
               31, 1998.

10.12          Amended Employment Agreement between Cabot L.P. and Eugene F.
               Reilly. Incorporated by reference to Exhibit 10.12 to Cabot
               Trust's Annual Report on Form 10-K for the year ended December
               31, 1998.


                                       76
<PAGE>

10.13          Revolving Credit Agreement between Cabot L.P. and Morgan Guaranty
               Trust Company of New York, dated March 27, 1998. Incorporated by
               reference to Exhibit 10.9 to Cabot Trust's Annual Report on Form
               10-K for the year ended December 31, 1997.

10.14          Rights Agreement, dated as of June 11, 1998, as amended, between
               Cabot Trust and BankBoston, N.A., as Rights Agent, including
               Exhibit A thereto (Form of Articles Supplementary relating to
               Series A Junior Participating Preferred Shares) and Exhibit B
               thereto (Form of Right Certificate). Incorporated by reference to
               Exhibit 1 to Cabot Trust's Current Report on Form 8-K dated
               September 10, 1998.

10.15          Cabot Trust 1999 Long-Term Incentive Plan.

23.1           Consent of Arthur Andersen LLP.

27             Financial Data Schedule.

                               REPORTS ON FORM 8-K

No reports on Form 8-K were filed during the fourth quarter of 1999.


                                       77