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

                                 AMENDMENT NO. 1
                                   FORM 10-Q/A

             [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                For the Quarterly period ended September 30, 1997

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

                        Commission file number 001-12286


                            MID-ATLANTIC REALTY TRUST

             (Exact name of registrant as specified in its charter)

Maryland                                                    52-1832411
(State or other jurisdiction of                             (I.R.S. Employer
incorporation or organization                               Identification No.)

170 West Ridgely Road, Ste. 300
Lutherville, Maryland                                       21093
(Address of principal executive offices)                    (Zip Code)

Registrant's telephone number, including area code: (410) 684-2000

                                  Inapplicable
         (Former name, former address and former fiscal year if changed
                               from last report.)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 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

At November 14 1997 the number of shares outstanding of the registrant's  common
stock was 13,800,687.


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The  Registrant  hereby  amends  the  following  items,   financial  statements,
exhibits, or other portions of its Quarterly Report on Form 10-Q for the quarter
ended  September  30, 1997 which was filed with the  Commission  on November 14,
1997 as set forth below:

         Part II, Item 6(a) of the  Quarterly  Report on Form 10-Q is amended to
         reflect the filing, via EDGAR, of Exhibit 1 (Underwriting Agreement).


                                   SIGNATURES


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


                                             MID-ATLANTIC REALTY TRUST



Date:  November 26, 1997                     By:      /s/   Paul G. Bollinger
                                                -------------------------------
                                                      Paul G. Bollinger
                                                      Vice President




<PAGE>



                                3,500,000 Shares

                            MID-ATLANTIC REALTY TRUST

                      Common Shares of Beneficial Interest

                             UNDERWRITING AGREEMENT

                                October 13, 1997

LEGG MASON WOOD WALKER,  INCORPORATED  SALOMON  BROTHERS INC WHEAT FIRST BUTCHER
SINGER As  Representatives  of the  several  Underwriters  c/o Legg  Mason  Wood
Walker, Incorporated 111 South Calvert Street, 20th Floor Baltimore, MD 21202

Ladies and Gentlemen:

         Mid-Atlantic  Realty Trust, a real estate  investment  trust  organized
under the laws of the State of  Maryland  (the  "Company")  proposes  to sell an
aggregate of  3,500,000  shares of the  Company's  common  shares of  beneficial
interest,  $.01 par value per share (the "Firm Shares"), to you and to the other
underwriters   named  in   Schedule  I,   acting   severally   and  not  jointly
(collectively,  the "Underwriters"),  for whom you are acting as representatives
(the  "Representatives").  The  Company  has also agreed to grant to you and the
other  Underwriters  an option (the  "Option")  to purchase up to an  additional
525,000 common shares of beneficial  interest (the "Option Shares") as set forth
below.  The Firm  Shares and the  Option  Shares  are  hereinafter  collectively
referred to as the "Shares."

         The Company is the beneficial owner of seventy-two percent (72%) of the
units of partnership  interest (the "Units") in, and is the sole general partner
of,   MART   Limited   Partnership,   a  Maryland   Limited   Partnership   (the
"Partnership").  The  Company and the  Partnership  currently  own,  directly or
through their  Subsidiaries (as hereafter  defined) 26 neighborhood or community
shopping  centers,  one  enclosed  regional  mall,  five  additional  retail and
commercial  properties and seven parcels of undeveloped land (collectively,  the
"Properties"), as described in the prospectus (as hereafter defined).

         In consideration of the mutual  agreements  contained herein and of the
interests of the parties in the transactions  contemplated  hereby,  the parties
hereto agree as follows:

         1. Agreement to Sell and Purchase.

             (a) On the basis of the respective representations,  warranties and
agreements of the Company and the  Partnership  herein  contained and subject to
all the terms and conditions of this  Agreement,  (i) the Company agrees to sell
to the several Underwriters and (ii) each of the Underwriters, severally and not
jointly, agrees to purchase from the Company, at


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the  purchase  price of $13.00  per share,  the number of Firm  Shares set forth
opposite the name of such Underwriter in Schedule I, plus such additional number
of Firm Shares which such Underwriter may become obligated to purchase  pursuant
to Section 9 hereof.

             (b) Subject to all the terms and conditions of this Agreement,  the
Company grants the Option to the several Underwriters to purchase, severally and
not jointly,  up to 525,000 Option Shares from the Company at the same price per
share as the  Underwriters  shall pay for the Firm  Shares.  The  Option  may be
exercised  only to cover  over-allotments  in the sale of the Firm Shares by the
Underwriters  and may be exercised in whole or in part at any time (but not more
than  once) on or before  the 30th day after the date  hereof,  upon  written or
telegraphic  notice (the "Option Shares Notice") by the  Representatives  to the
Company no later than 12:00 noon,  New York City time,  at least two and no more
than five  business  days  before the date  specified  for closing in the Option
Shares Notice (the "Option Closing Date") setting forth the aggregate  number of
Option  Shares to be purchased and the time and date for such  purchase.  On the
Option  Closing Date,  the Company will issue and sell to the  Underwriters  the
number  of  Option  Shares  set  forth in the  Option  Shares  Notice,  and each
Underwriter  will purchase  such  percentage of the Option Shares as is equal to
the percentage of Firm Shares that such  Underwriter is purchasing,  as adjusted
by the Representatives in such manner as they deem advisable to avoid fractional
shares.

         2.  Delivery and Payment.  Delivery of the Firm Shares shall be made to
the  Representatives  for the accounts of the Underwriters at the office of Legg
Mason  Wood  Walker,  Incorporated,   111  South  Calvert  Street,  20th  Floor,
Baltimore,  Maryland  21202,  against  payment of the purchase price therefor by
wire transfer of Federal Funds or similar same day funds to an account which has
been   designated  in  writing  by  the  Company  to  Legg  Mason  Wood  Walker,
Incorporated at least one business day prior to the Closing Date (as hereinafter
defined).  Such payment shall be made at 10:00 A.M.,  New York City time, on the
third  business day after the date on which the first bona fide  offering of the
Shares to the public is made by the  Underwriters  or at such time on such other
date, not later than ten business days after such date, as may be agreed upon by
the Company and the Representatives (such date is hereinafter referred to as the
"Closing Date").  The place of closing for the Firm Shares may also be varied by
agreement between you and the Company.

             To the  extent  the  Option is  exercised,  delivery  of the Option
Shares against payment by the  Underwriters (in the manner specified above) will
take place at the offices  specified  above for the  Closing  Date on the Option
Closing Date.

             Certificates  evidencing the Shares shall be in definitive form and
shall  be   registered  in  such  names  and  in  such   denominations   as  the
Representatives  shall  request at least two business  days prior to the Closing
Date or the Option  Closing Date,  as the case may be, by written  notice to the
Company.   For  the  purpose  of  expediting   the  checking  and  packaging  of
certificates  for the  Shares,  the  Company  agrees to make  such  certificates
available for  inspection  and packaging not later than 9:30 A.M., New York City
Time, at least 24 hours prior to the Closing Date or the Option Closing Date, as
the case may be.


                                      - 4 -

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             The cost of original issue tax stamps,  if any, in connection  with
the issuance and delivery of the Firm Shares and Option Shares by the Company to
the respective Underwriters shall be borne by the Company. The Company shall pay
and save each Underwriter and any subsequent  holder of the Shares harmless from
any and all  liabilities  with respect to or resulting from any failure or delay
in paying Federal and state stamp and other transfer taxes, if any, which may be
payable or determined to be payable in connection with the original  issuance or
sale to such Underwriter of the Firm Shares and Option Shares.

         3.  Representations  and Warranties of the Company and the Partnership.
The Company and the Partnership,  jointly and severally,  represent, warrant and
covenant to each Underwriter that:

             (a) A registration  statement  (Registration No. 333-20813) on Form
S-3 relating to the Shares,  including a prospectus  subject to  completion  and
such amendments to such registration  statement as may have been required to the
date of this  Agreement,  have been prepared by the Company under the provisions
of the Securities Act of 1933, as amended (the "Act"),  and the published  rules
and regulations (collectively referred to as the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission")  thereunder,  and has been
filed with the Commission.  The Company has complied with the conditions for the
use of Form S-3. Such registration  statement and any  post-effective  amendment
thereto have become  effective  under the Act.  The Company  also has filed,  or
proposes to file,  with the Commission  pursuant to Rule 424(b) under the Act, a
prospectus  supplement  specifically  relating  to the Shares  (the  "prospectus
supplement").

                 The  term  "registration  statement" as used in this  Agreement
means the registration statement (including all financial statements,  schedules
and exhibits),  as amended at the time it became  effective,  as supplemented or
amended prior to the execution of the Agreement,  including all  information (if
any) deemed to be a part of such  registration  statement  at the time it became
effective  pursuant to Rule 430A or Rule 424 of the Rules and Regulations  under
the Act. If it is contemplated,  at the time this Agreement is executed,  that a
post-effective amendment to the registration statement will be filed and must be
declared  effective  before the  offering of the Shares may  commence,  the term
"registration  statement"  means the  registration  statement as amended by said
post-effective  amendment.  The term  "prospectus"  as used herein  means a base
prospectus as contemplated by Rule 430 or Rule 430A of the Rules and Regulations
included at any time as part of the registration statement at the time it became
effective  (the "base  prospectus")  under the Act together with the  prospectus
supplement dated October 14, 1997 in the form first filed with the Commission on
or after  October 14, 1997  pursuant to Rule  424(b)(2)  under the Act. The term
"pre-pricing  prospectus  supplement"  as used herein means the base  prospectus
together with any prospectus  supplement  subject to completion  included in the
registration  statement  as filed with the  Commission  pursuant  to Rule 424(b)
under the Act, and as such  pre-pricing  prospectus  supplement  shall have been
amended or  supplemented  from time to time prior to the date of the prospectus.
Copies of such registration  statement and amendments,  each related prospectus,
and each prospectus supplement, including the pre-pricing prospectus supplement,
have been delivered to the Representatives.  If the Company files a registration
statement to register a portion of the Shares and relies on Rule

                                      - 5 -

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462(b) of the Rules and  Regulations for such  registration  statement to become
effective  upon  filing  with  the  Commission   (the  "Rule  462   Registration
Statement"),  then any reference to the "registration statement" shall be deemed
to include the Rule 462  registration  statement,  as amended from time to time.
Any  reference  herein  to  any  "registration  statement,"  "base  prospectus,"
"prospectus,"  "prospectus  supplement" or "pre-pricing  prospectus  supplement"
shall be deemed to refer to, describe and include the documents  incorporated by
reference  therein pursuant to Item 12 of Form S-3 under the Act, as of the date
of the registration statement,  prospectus or pre-pricing prospectus supplement,
as the case may be, and any  reference  to any  amendment or  supplement  to the
registration statement,  the prospectus or any pre-pricing prospectus supplement
shall be deemed to refer to, describe and include any documents filed after such
date under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
which,  upon  filing,  are  incorporated  by reference  therein,  as required by
paragraph (b) of Item 12 of Form S-3.

             (b) No order  preventing or suspending  the use of any  pre-pricing
prospectus  supplement or prospectus  has been issued and no proceeding for that
purpose has been  instituted or threatened by the  Commission or the  securities
authority  of any state or other  jurisdiction.  No stop  order  suspending  the
effectiveness of the registration  statement or any part thereof has been issued
and no  proceeding  for that purpose has been  instituted  or  threatened by the
Commission or the securities authority of any state or other jurisdiction.

             (c) The Company and the transactions contemplated by this Agreement
meet the requirements and conditions for using a registration  statement on Form
S-3 under the Act, set forth in the General  Instructions  to Form S-3. When any
pre-pricing prospectus supplement was filed with the Commission it (i) contained
all statements required to be stated therein in accordance with, and complied in
all  material  respects  with the  requirements  of,  the Act and the  rules and
regulations  of the  Commission  thereunder  and (ii) did not include any untrue
statement  of a material  fact or omit to state any material  fact  necessary in
order to make the  statements  therein,  the in the  light of the  circumstances
under which they were made, not misleading.  When the registration  statement or
any amendment  thereto was declared  effective,  and on the Closing Date (or the
Option  Closing Date, as the case may be) it (i) contained or will comply in all
material  respects  with  the  requirements  of,  the  Act  and  the  rules  and
regulations  of the  Commission  thereunder and (ii) did not or will not include
any untrue  statement  of a  material  fact or omit to state any  material  fact
necessary to make the statements therein not misleading.  When the prospectus or
any amendment or  supplement  thereto is filed with the  Commission  pursuant to
Rule 424(b) and at the Closing Date (or the Option Closing Date, as the case may
be), the prospectus,  as amended or supplemented at any such time, (i) contained
or will contain all statements required to be stated therein in accordance with,
and complied or will comply in all material  respects with the  requirements of,
the Act and the rules and regulations of the Commission  thereunder and (ii) did
not or will not include any untrue statement of a material fact or omit to state
any material  fact  necessary in order to make the  statements  therein,  in the
light of the  circumstances  under  which they were made,  not  misleading.  The
representation  and warranty in this  paragraph (c) does not apply to statements
in  or  omissions  from  the  registration  statement,   pre-pricing  prospectus
supplement  or the  prospectus  made in  reliance  upon and in  conformity  with
information furnished to the Company

                                      - 6 -

<PAGE>



in writing by or on behalf of any  Underwriter  through  you  expressly  for use
therein. For all purposes of this Agreement,  the list of Underwriters and their
respective  allotments  appearing  under  the  caption   "Underwriting"  in  the
prospectus  and the  statements  in the  first and  third  paragraphs  under the
caption  "Underwriting"  in  the  prospectus  constitute  the  only  information
relating  to  any  Underwriter  furnished  in  writing  to  the  Company  by the
Representatives   specifically  for  inclusion  in  the  pre-pricing  prospectus
supplement,  the registration  statement or the prospectus.  The Company has not
distributed any offering material in connection with the offering or sale of the
Shares  other  than  the  registration  statement,  the  pre-pricing  prospectus
supplement, the prospectus or any other materials, if any, permitted by the Act.

             (d) The documents  incorporated by reference heretofore filed, when
they were filed (or, if any  amendment  with  respect to any such  document  was
filed,  when such amendment was filed),  conformed in all material respects with
the  requirements of the Exchange Act and the rules and regulations  thereunder,
no such document when it was filed (or, if an amendment with respect to any such
document  was  filed,  when  such  amendment  was  filed),  contained  an untrue
statement of a material  fact or omitted to state a material fact required to be
stated  therein  or  necessary  in  order  to make the  statements  therein  not
misleading;  and no such  further  document,  when it is filed,  will contain an
untrue  statement  of a  material  fact or will  omit to state a  material  fact
required  to be stated  therein  or  necessary  in order to make the  statements
therein not misleading.

             (e) The Company has been duly organized and is validly  existing as
a real estate investment trust ("REIT") of unlimited  duration with transferable
common  shares of  beneficial  interest in good  standing  under the laws of the
State of Maryland with full power and authority to own and lease its  properties
and to conduct its business as now conducted.  The only direct  subsidiaries (as
defined in the Rules and Regulations) of the Company are the subsidiaries listed
on Exhibit A hereto (the "REIT Subsidiaries"). Each of the REIT Subsidiaries is,
and at the Closing  Date will be, duly  organized  and validly  existing in good
standing under the laws of its  jurisdiction  of  organization.  The Company and
each of the REIT Subsidiaries has, and at the Closing Date will have, full power
and authority to conduct all the activities conducted by it, to own or lease all
the assets and properties,  including the Properties,  owned or leased by it and
to conduct its  business as  described  in the  registration  statement  and the
prospectus. Each of the Company and the REIT Subsidiaries is, and at the Closing
Date will be, duly licensed or qualified to do business and in good standing (i)
in the  jurisdiction in which it has its principal place of business and (ii) in
all other jurisdictions in which the nature of the activities conducted by it or
the  character  of the  assets  owned or leased by it makes  such  licensing  or
qualification necessary except where the failure to so license or qualify in any
such other jurisdiction will not have a material adverse effect on the business,
properties,  condition  (financial  or  otherwise),  or results of operations (a
"Material Adverse Effect") of the Company and the REIT  Subsidiaries  taken as a
whole.  All of the  outstanding  shares of capital  stock,  general  and limited
partnership  interests,  or  limited  liability  company  interests  of the REIT
Subsidiaries,  as the case may be, have been duly authorized and validly issued,
and are fully paid and  non-assessable and are, except as set forth in Exhibit A
or as  disclosed  in the  registration  statement  or  prospectus,  owned by the
Company  or a REIT  Subsidiary,  free and clear of all liens,  encumbrances  and
claims whatsoever and, except as set forth in Exhibit A or

                                      - 7 -

<PAGE>



as disclosed in the registration statement or prospectus,  no options,  warrants
or other rights to purchase,  agreements or other  obligations to issue or other
rights to convert any obligations into any shares of capital stock,  partnership
interests or limited liability company interests of any REIT Subsidiary,  as the
case may be, are  outstanding.  Except for the stock,  partnership  interests or
limited liability company interests, as the case may be, of the Partnership, the
REIT  Subsidiaries or the  Partnership  Subsidiaries  (as hereafter  defined) or
except as disclosed in Exhibit A or as disclosed in the  registration  statement
or  prospectus,  the Company does not own, and at the Closing Date will not own,
directly or  indirectly,  any shares of stock or any other  equity or  long-term
debt  securities  of any  corporation  or have any equity  interest in any firm,
partnership,  joint venture,  limited  liability  company,  association or other
entity that are  required  to be  described  in the  registration  statement  or
prospectus.  Complete  and  correct  copies of the  Declaration  of Trust of the
Company and the  certificate of  incorporation  and the by-laws,  certificate of
partnership and partnership agreement or certificate of organization and limited
liability company agreement, as the case may be, of each REIT Subsidiary and all
amendments or supplements  thereto have been  delivered to the  Representatives,
and no changes  therein will be made  subsequent to the date hereof and prior to
the Closing Date or, if later, the Option Closing Date.

             (f) The Partnership has been duly formed and is validly existing as
a limited  partnership  in good  standing  under the  Maryland  Revised  Uniform
Limited  Partnership  Act (the "Maryland  Act") with all requisite  partnership
power and  authority to own and lease its assets and  properties,  including the
Properties,  owned by it, and to conduct its business as now conducted. The only
direct subsidiaries (as defined in the Rules and Regulations) of the Partnership
are  the   subsidiaries   listed   on   Exhibit  B  hereto   (the   "Partnership
Subsidiaries"). Each of the Partnership Subsidiaries is, and at the Closing Date
will be, duly organized and validly  existing in good standing under the laws of
its  jurisdiction of  organization.  The Partnership and each of the Partnership
Subsidiaries has, and at the Closing Date will have, full power and authority to
conduct all the  activities  conducted by it, to own or lease all the assets and
properties,  including the Properties,  owned or leased by it and to conduct its
business as described in the registration statement and the prospectus.  Each of
the  Partnership and the  Partnership  Subsidiaries  is, and at the Closing Date
will be, duly  licensed or qualified to do business and in good  standing (i) in
the jurisdiction in which it has its principal place of business and (ii) in all
other jurisdictions in which the nature of the activities conducted by it or the
character  of  the  assets  owned  or  leased  by it  makes  such  licensing  or
qualification necessary except where the failure to so license or qualify in any
such  other  jurisdiction  will  not  have  a  Material  Adverse  Effect  on the
Partnership  and the  Partnership  Subsidiaries  taken  as a  whole.  All of the
outstanding shares of capital stock, general and limited partnership  interests,
or limited liability company interests of the Partnership  Subsidiaries,  as the
case may be, have been duly  authorized and validly  issued,  and are fully paid
and non-assessable and are, except as set forth in Exhibit B or the registration
statement or prospectus,  owned by the  Partnership or a Partnership  Subsidiary
free and clear of all liens,  encumbrances and claims  whatsoever and, except as
set forth in Exhibit B or the registration statement or prospectus,  no options,
warrants or other rights to purchase,  agreements or other  obligations to issue
or other  rights to convert any  obligations  into any shares of capital  stock,
partnership  interests or limited liability company interests of any Partnership
Subsidiary, as the case may be, are outstanding. Except for the

                                      - 8 -

<PAGE>



stock, partnership interests or limited liability company interests, as the case
may be, of the  Partnership  Subsidiaries or as disclosed in Exhibit B or in the
registration  statement or prospectus,  the Partnership does not own, and at the
Closing Date will not own,  directly or  indirectly,  any shares of stock or any
other equity or long-term debt  securities of any corporation or have any equity
interest in any firm,  partnership,  joint venture,  limited liability  company,
association  or  other  entity  required  to be  described  in the  registration
statement or  prospectus.  Complete  and correct  copies of the  Certificate  of
Limited  Partnership  and  Partnership  Agreement  of the  Partnership  and  the
certificate of  incorporation  and the by-laws,  certificate of partnership  and
partnership  agreement or  certificate  of  organization  and limited  liability
company  agreement,  as the case may be, of each Partnership  Subsidiary and all
amendments or supplements  thereto have been  delivered to the  Representatives,
and no changes  therein will be made  subsequent to the date hereof and prior to
the Closing Date or, if later, the Option Closing Date. The "REIT  Subsidiaries"
and the "Partnership  Subsidiaries"  are collectively  referred to herein as the
"Subsidiaries."  The Company is the sole general  partner of the Partnership and
holds  approximately  seventy-two  percent (72%) of the outstanding Units of the
Partnership. At the Closing Date, following the contribution of the net proceeds
of the Offering to the Partnership, the Company will be the sole general partner
of the Partnership and will be the holder of  approximately  80% of the Units in
the  Partnership  (assuming  no exercise  of the option to  purchase  the Option
Shares).

             (g) The Company has full  corporate  right,  power and authority to
enter into this  Agreement,  to issue,  sell and  deliver the Shares as provided
herein and to consummate the transactions  contemplated  herein.  This Agreement
has been duly authorized,  executed and delivered by the Company and constitutes
a valid and binding agreement of the Company, enforceable in accordance with its
terms,  except to the extent that  enforceability  may be limited by bankruptcy,
insolvency, reorganization or other laws of general applicability relating to or
affecting  creditors'  rights, or by general equity principles and except to the
extent the indemnification and contribution provisions set forth in Section 7 of
this Agreement may be limited by federal or state  securities laws or the public
policy underlying such laws.

             (h) The Partnership has full partnership right, power and authority
to enter into this  Agreement and to consummate  the  transactions  contemplated
herein.  This  Agreement  has been duly  authorized,  executed and  delivered on
behalf of the  Partnership  by the Company,  as the sole general  partner of the
Partnership,  and  constitutes a valid and binding  agreement of the Partnership
enforceable   in  accordance   with  its  terms,   except  to  the  extent  that
enforceability may be limited by bankruptcy, insolvency, reorganization or other
laws of general applicability  relating to or affecting creditors' rights, or by
general  equity  principles  and except to the extent  the  indemnification  and
contribution  provisions set forth in Section 7 of this Agreement may be limited
by federal or state securities laws or the public policy underlying such laws.

             (i)  Each  consent,   approval,   authorization,   order,  license,
certificate,  permit,  registration,  designation  or  filing  by  or  with  any
governmental  agency or body  necessary for the valid  authorization,  issuance,
sale and delivery of the Shares, the execution, delivery and

                                      - 9 -

<PAGE>



performance  of this  Agreement  and the  consummation  by the  Company  and the
Partnership of the  transactions  contemplated  hereby has been made or obtained
and is in full force and effect.

             (j) Neither the  issuance,  sale and delivery by the Company of the
Shares,  nor the execution,  delivery and  performance of this Agreement nor the
consummation  of the  transactions  contemplated  hereby by the  Company  or the
Partnership, will conflict with or result in a breach or violation of any of the
terms and provisions of, or (with or without the giving of notice or the passage
of time or both) constitute a default under, the charter,  by-laws,  Declaration
of Trust,  certificate of limited  partnership  or partnership  agreement of the
Company,  the Partnership or any Subsidiary,  as the case may be; any indenture,
mortgage,  deed of trust,  loan  agreement,  note,  lease or other  agreement or
instrument to which the Company, the Partnership or any Subsidiary is a party or
to which it, they, any of them, or any of their  respective  properties or other
assets are subject; or any applicable statute,  judgment, decree, order, rule or
regulation  of any  court  or  governmental  agency  or body  applicable  to any
business of the foregoing or any of their  respective  properties;  or result in
the creation or imposition of any lien,  charge,  claim or encumbrance  upon any
property or assets of any of the foregoing.

             (k) The Shares to be issued and sold to the Underwriters  hereunder
have been validly  authorized by the Company.  When issued and delivered against
payment  therefor  as provided  in this  Agreement,  the Shares will be duly and
validly issued,  fully paid and nonassessable.  No statutory or other preemptive
rights of  shareholders  exist with  respect to any of the Shares.  No person or
entity holds a right to require or participate in the registration under the Act
of the Shares pursuant to the registration  statement;  and, except as set forth
in the registration statement or prospectus,  no person holds a right to require
registration  under the Act of any shares of beneficial  interest of the Company
at any other  time.  No person or entity has a right of  participation  or first
refusal  with  respect  to the sale of the  Shares by the  Company.  The form of
certificates  evidencing the Shares complies with all applicable requirements of
Maryland law.

             (l) The  Company's  authorized,  issued and  outstanding  shares of
beneficial interest are as disclosed in the prospectus. All of the issued shares
of  beneficial  interest of the Company  have been duly  authorized  and validly
issued,  are  fully  paid  and  nonassessable.  None  of the  issued  shares  of
beneficial  interest  of the  Company  has  been  issued  or is owned or held in
violation of any statutory or other preemptive rights of shareholders. Except as
disclosed in the prospectus,  there is no outstanding  option,  warrant or other
right calling for the issuance of, and no  commitment,  plan or  arrangement  to
issue,  any  shares  of  beneficial  interest  of the  Company  or any  security
convertible  into or  exchangeable  for  shares of  beneficial  interest  of the
Company.

             (m) All offers and sales of the  Company's  capital  stock prior to
the date  hereof were at all  relevant  times duly  registered  under the Act or
exempt from the registration requirements of the Act by reason of Sections 3(b),
4(2) or 4(6)  thereof and were duly  registered  or were  issued  pursuant to an
available  exemption from the registration  requirements of the applicable state
securities or blue sky laws.


                                     - 10 -

<PAGE>



             (n) All of the issued Units of the  Partnership  have been duly and
validly authorized and issued and are fully paid and nonassessable.  None of the
issued  Units  have  been  issued  or are  owned  or  held in  violation  of any
preemptive  right.  All of the outstanding  Units have been issued,  offered and
sold in compliance  with all applicable  laws  (including,  without  limitation,
federal and state securities laws).

             (o) The  consolidated  financial  statements  of the  Company,  the
Partnership  and the  Subsidiaries  (together  with related notes and schedules)
included  in the  registration  statement  and  prospectus  present  fairly  the
financial  position of the Company as of the dates  indicated and the results of
operations  and cash flows for the  Company for the  periods  specified,  all in
conformity with generally accepted accounting principles applied on a consistent
basis. The various financial statements of certain of the Properties included in
the  registration  statement  and the  prospectus  present  fairly the financial
position  for such  properties  as of the dates  indicated  and the  results  of
operations and cash flows for such properties for the periods specified,  all in
conformity with generally accepted accounting principles applied on a consistent
basis. The financial statement schedules included in the registration  statement
and in the prospectus under the captions "Prospectus Supplement Summary--Summary
Consolidated  Financial Data" and "Selected  Consolidated Financial Date" fairly
present  the  information  shown  therein  and  have  been  compiled  on a basis
consistent with the financial statements included in the registration  statement
and the prospectus.  All other financial,  operating,  statistical and pro forma
information  (including  the related  notes)  included in the  prospectus or any
pre-pricing  prospectus  supplement complies as to form in all material respects
to the  applicable  accounting  requirements  of  the  Act  and  the  Rules  and
Regulations  thereunder,  and  management  of  the  Company  believes  that  the
assumptions underlying the pro forma adjustments are reasonable.  Such pro forma
adjustments  have  been  properly  applied  to  the  historical  amounts  in the
compilation of the information and such information fairly presents with respect
to the Company,  the Partnership and the Subsidiaries,  on a consolidated basis,
the financial position, results of operations and other information purported to
be  shown  therein  at the  respective  dates  and  for the  respective  periods
specified.

             (p) KPMG Peat Marwick LLP, who have examined and are reporting upon
certain audited financial  statements and schedules included in the registration
statement, are, and were during the periods covered by their reports included in
the registration  statement and the prospectus,  independent  public accountants
within the meaning of the Act,  the Exchange  Act and the  respective  rules and
regulations of the Commission thereunder.

             (q) Scheiner,  Mister & Grandizio,  P.A., who have examined and are
reporting upon certain audited  financial  statements and schedules  included in
the  registration  statement,  are, and were during the periods covered by their
reports included in the registration  statement and the prospectus,  independent
public  accountants  within the  meaning of the Act,  the  Exchange  Act and the
respective rules and regulations of the Commission thereunder.

             (r) None of the Company,  the  Partnership or any  Subsidiary,  has
sustained,  since December 31, 1996, any material loss or interference  with its
business from fire,  explosion,  flood,  hurricane,  accident or other calamity,
whether or not covered by

                                     - 11 -

<PAGE>



insurance,  or from any labor dispute or  arbitrators'  or court or governmental
action, order or decree; and, since the respective dates as of which information
is given  in the  registration  statement  and the  prospectus,  and  except  as
otherwise  stated in the  registration  statement and prospectus,  there has not
been  (i) any  material  change  in the  capital  stock,  shares  of  beneficial
interests or partnership interests,  as applicable,  long-term debt, obligations
under capital leases or short-term borrowings of the Company, the Partnership or
any Subsidiary,  (ii) any change,  or any development  which could reasonably be
seen as  involving  a  prospective  change,  that could have a Material  Adverse
Effect on the Company, the Partnership or any Subsidiary, (iii) any liability or
obligation,  direct or  contingent,  incurred or undertaken by the Company,  the
Partnership or any Subsidiary that could have a Material  Adverse Effect on such
entity, except for liabilities or obligations incurred in the ordinary course of
business, (iv) ,except as described in the registration statement or prospectus,
any  declaration  or payment of any dividend or  distribution  of any kind on or
with respect to the shares of beneficial interest or partnership  interests,  as
applicable,  of the  Company,  the  Partnership  or any  Subsidiary,  or (v) any
transaction  that could  have a  Material  Adverse  Effect on the  Company,  the
Partnership or any  Subsidiary,  except  transactions  in the ordinary course of
business  or as  otherwise  disclosed  in the  registration  statement  and  the
prospectus.

             (s) The Company,  the Partnership and each Subsidiary,  as the case
may be, has good and marketable title in fee simple to all real property and the
improvements  located  thereon  owned  by it,  free  and  clear  of  all  liens,
encumbrances, claims, security interest, restrictions and defects except such as
are described in the registration statement or prospectus or the title insurance
policies  relating  to such  Properties.  The leases to which the  Company,  the
Partnership or any Subsidiary is a party, as the case may be (the "Leases"), are
valid,  subsisting and  enforceable  leases.  The Leases conform in all material
respects  to the  description  thereof,  if any,  set forth in the  registration
statement  and  prospectus;  and no  notice  has been  given or  material  claim
asserted by anyone  adverse to the rights of the lessor  under any of the Leases
or affecting the right to the continued  possession of the leased Property.  The
Company,  the  Partnership  and each  Subsidiary,  as the case may be, have good
title to all  personal  property  owned by them,  free and  clear of all  liens,
security  interests,  pledges,  charges,  encumbrances,  mortgages  and defects,
except such as are  disclosed in the  registration  statement or  prospectus  or
could have a Material  Adverse  Effect on the value of such  property and do not
interfere  with  the use made or  proposed  to be made of such  property  by the
Company,  the  Partnership  or any  Subsidiary,  as the case may be.  Except  as
disclosed in the registration  statement or prospectus,  no person has an option
or  right  of first  refusal  to  purchase  all or part of any  Property  or any
interest  therein.  Each Property  complies with all applicable  codes, laws and
regulations (including, without limitation,  building and zoning codes, laws and
regulations and laws relating to access to the Properties), except if and to the
extent disclosed in the registration statement or prospectus and except for such
failures  to comply  that  would not  individually  or in the  aggregate  have a
Material  Adverse Effect on the Company,  the Partnership  and the  Subsidiaries
taken as a whole.  None the  Company,  the  Partnership  or any  Subsidiary  has
knowledge of any pending or threatened condemnation proceedings,  zoning change,
or other  proceeding  or action that will in any manner  affect the size of, use
of,  improvements on,  construction on or access to the Properties,  except such
proceedings  or actions  that would not have a  Material  Adverse  Effect on the
Company, the Partnership and the Subsidiaries taken as a whole.

                                     - 12 -

<PAGE>




             (t) None of the Company,  the  Partnership  or any Subsidiary is in
violation of its respective charter,  bylaws,  declaration of trust, certificate
of limited partnership,  partnership  agreement,  certificate of organization or
limited liability company agreement,  as the case may be, and no default exists,
and no event has  occurred,  nor state of facts  exists  (which,  with notice or
after  the lapse of time to cure or both)  would  constitute  a  default  by the
Company,  the  Partnership or any  Subsidiary,  and to the best knowledge of the
Company,  no other party thereto is in default,  and no event has occurred,  nor
state of fact exists  (which,  with notice or after the lapse of time to cure or
both), would constitute a default,  in the due performance and observance of any
obligation,  agreement, term, covenant,  consideration or condition contained in
any indenture,  mortgage,  deed of trust,  loan agreement,  note, lease or other
agreement or instrument to which any such entity is a party or to which any such
entity or any of its properties is subject,  except as may be properly described
in the  registration  statement or prospectus or such as in the aggregate do not
now have or will not in the future have a Material  Adverse  Effect on each such
entity, respectively.  None of the Company, the Partnership or any Subsidiary is
in violation of, or in default with respect to, any statute,  rule,  regulation,
order, judgment or decree, except as may be properly described in the prospectus
or such as in the  aggregate  do not now have and will not in the future  have a
Material Adverse Effect on any such entity.

             (u) There is not pending or, to the best  knowledge of the Company,
Partnership or any Subsidiary, threatened, any action, suit, proceeding, inquiry
or investigation  against the Company,  the Partnership or any Subsidiary or any
of their  respective  officers  and  directors,  trustees,  general  partners or
members  or to which the  properties,  assets or rights of any such  entity  are
subject,  before or brought by any court or governmental agency or body or board
of  arbitrators,  which could result in any Material  Adverse Effect on any such
entity or which could  adversely  affect the  consummation  of the  transactions
contemplated by this Agreement.

             (v) The descriptions included in the registration statement and the
prospectus of the contracts,  leases and other legal documents therein described
present fairly the information required to be shown, and there are no contracts,
leases,  or other  documents  of a  character  required to be  described  in the
registration  statement or the prospectus or document  incorporated by reference
therein,  or to be  filed  as  exhibits  to the  registration  statement  or any
document incorporated by reference therein,  which are not described or filed as
required.  To the  best  knowledge  of the  Company,  the  Partnership  and  the
Subsidiaries,  there are no statutes or  regulations  applicable to the Company,
the   Partnership   or  any  Subsidiary  or   certificates,   permits  or  other
authorizations from governmental  regulatory  officials or bodies required to be
obtained or maintained by the Company,  the  Partnership  or any Subsidiary of a
character  required  to be  disclosed  in  the  registration  statement  or  the
prospectus which have not been so disclosed and properly described therein.  All
agreements,  if any, between the Company,  the Partnership and the Subsidiaries,
respectively,  on the one hand, and third parties, on the other hand,  expressly
referenced in the  prospectus  are legal,  valid and binding  obligations of the
Company,  the  Partnership or a Subsidiary,  as the case may be,  enforceable in
accordance with their respective terms, except to the extent  enforceability may
be limited by bankruptcy,

                                     - 13 -

<PAGE>



insolvency, reorganization or other laws of general applicability relating to or
affecting creditors' rights and by general equitable principles.

             (w) Each of the Company,  the Partnership and the Subsidiaries owns
or  possesses  or has  obtained  all  material  permits,  licenses,  franchises,
certificates,   consents,   orders,   approvals  and  other   authorizations  of
governmental or regulatory authorities or other entities as are necessary to own
or  lease,  as the  case  may be,  and to  operate  its  respective  assets  and
properties,  including the Properties, and to carry on its business as presently
conducted, or as contemplated in the prospectus to be conducted, and none of the
Company,   the  Partnership  or  any  Subsidiary  has  received  any  notice  of
proceedings  relating  to  revocation  or  modification  of any  such  licenses,
permits, franchises, certificates, consents, orders, approvals or authorizations
that could have a Material Adverse Effect.

             (x) Each of the Company, the Partnership, and the Subsidiaries owns
or possesses  adequate  license or other rights to use all  trademarks,  service
marks,  trade names,  copyrights,  software and design licenses,  trade secrets,
other  intangible  property  rights and  know-how  (collectively  "Intangibles")
necessary to entitle the Company, the Partnership or the Subsidiary, as the case
may be, to conduct its respective  business now, and as proposed to be conducted
or  operated  as  described  in  the  prospectus,  and  none  the  Company,  the
Partnership or any Subsidiary has received notice of infringement or of conflict
with (and knows of no such  infringement of or conflict with) asserted rights of
others with  respect to any  Intangibles  which  could have an Material  Adverse
Effect on the Company, the Partnership and the Subsidiaries taken as a whole.

             (y) To the best knowledge of the Company,  the  Partnership and the
Subsidiaries,  the Company's,  the Partnership's and the Subsidiaries' system of
internal  accounting  controls  taken as a whole is sufficient to meet the broad
objectives of internal accounting control insofar as those objectives pertain to
the prevention or detection of errors or irregularities in amounts that would be
material in relation to the Company's,  the Partnership's or the  Subsidiaries',
financial statements; and, to the best knowledge of the Company, the Partnership
and the Subsidiaries, none of the Company, the Partnership, the Subsidiaries, or
any employee or agent thereof, has made any payment of funds of the Company, the
Partnership or the Subsidiaries, as the case may be, or received or retained any
funds and no funds of the Company,  the Partnership or the Subsidiaries,  as the
case may be,  have  been set aside to be used for any  payment,  in each case in
violation of any law, rule or regulation.

             (z)  Each  of the  Company,  the  Partnership  (to the  extent  not
consolidated   with  the  Company)  and  any   Subsidiary  (to  the  extent  not
consolidated  with the  Company),  have  filed on a timely  basis all  necessary
federal,  state,  local and foreign income,  personal property tax and franchise
tax returns required to be filed through the date hereof and have paid all taxes
shown as due thereon,  and no tax deficiency has been asserted  against any such
entity,  nor does any such entity know of any tax deficiency  which is likely to
be asserted  against any such entity which if  determined  adversely to any such
entity, could materially adversely affect the business,  prospects,  properties,
assets, results of operations or condition

                                     - 14 -

<PAGE>



(financial or otherwise) of any such entity,  respectively.  All tax liabilities
are adequately provided for on the respective books of such entities.

             (aa) The Company,  the  Partnership and the  Subsidiaries  maintain
insurance  (issued by insurers of recognized  financial  responsibility)  of the
types  and in  the  amounts  generally  deemed  adequate  for  their  respective
businesses and properties,  including the Properties, and, to the best knowledge
of the Company, the Partnership and the Subsidiaries,  consistent with insurance
coverage maintained by similar companies in similar businesses,  including,  but
not limited to,  insurance  covering real and personal  property,  including the
Properties, owned or leased by the Company, the Partnership and the Subsidiaries
against  theft,  damage,  destruction,  acts of  vandalism  and all other  risks
customarily insured against all of which insurance is in full force and effect.

             (bb) The  Company,  the  Partnership  and the  Subsidiaries  are in
compliance in all material respects with all federal, state and local employment
and  labor   laws,   including,   but  not   limited   to,   laws   relating  to
non-discrimination in hiring,  promotion and pay of employees;  no labor dispute
with the employees of the Company,  the Partnership or any Subsidiary exists or,
to the knowledge of the Company, the Partnership or any Subsidiary,  is imminent
or threatened;  and none of the Company,  Partnership or any Subsidiary is aware
of any existing,  imminent or threatened  labor  disturbance by the employees of
any of its  principal  vendors or  contractors  that could  result in a Material
Adverse Effect.

             (cc) With  respect  to each  employee  benefit  plan,  program  and
arrangement  (including,  without  limitation,  any  "employee  benefit plan" as
defined in Section 3(3) of the Employee  Retirement Income Security Act of 1974,
as  amended  ("ERISA"))  maintained  or  contributed  to  by  the  Company,  the
Partnership  or any  Subsidiary,  or with  respect  to which  the  Company,  the
Partnership   or  any   Subsidiary   could  incur  any  liability   under  ERISA
(collectively,  the "Benefit  Plans"),  no event has  occurred  and, to the best
knowledge of the Company,  the  Partnership or any  Subsidiary,  there exists no
condition or set of  circumstances,  in connection  with which the Company,  the
Partnership or any Subsidiary  could be subject to any liability under the terms
of such Benefit Plan, applicable law (including,  without limitation,  ERISA and
the Internal  Revenue Code of 1986, as amended (the  "Code")) or any  applicable
agreement that could have a Material Adverse Effect.

             (dd) None of the Company,  the Partnership or the Subsidiaries,  or
their officers,  directors or affiliates has taken, directly or indirectly,  any
action designed to, or that might  reasonably be expected to, cause or result in
or constitute the  stabilization  or manipulation of any security of the Company
or to facilitate the sale or resale of the Shares.

             (ee) The common  shares of  beneficial  interest of the Company are
registered  pursuant to Section  12(b) of the Exchange Act and are listed on the
New York Stock Exchange.

             (ff) None of the Company, the Partnership and the Subsidiaries have
incurred any liability for a fee, commission or other compensation on account of
the employment

                                     - 15 -

<PAGE>



of a broker or finder in connection with the  transactions  contemplated by this
Agreement other than as contemplated  hereby or as described in the registration
statement or prospectus.

             (gg)  Except  as  disclosed  in  the   registration   statement  or
prospectus,   none  of  the  Company  or  as   specifically   disclosed  in  the
environmental   assessment  reports  regarding  the  Properties   acquired  from
affiliates  of, or  investors  with,  Jack H Pechter  (copies of which have been
provided to the Representatives)  (collectively,  the "Environmental  Reports"),
the Partnership or any Subsidiary (or, to the best knowledge of the Company,  or
the Partnership or any Subsidiary,  any entity ("Selling Entity") from which the
Company,  the  Partnership  or any  Subsidiary,  as the case may be,  acquired a
Property)  has  authorized  or  conducted or has  knowledge  of the  generation,
transportation,  storage, presence, use, treatment,  disposal, release, or other
handling  of any  hazardous  substance,  hazardous  waste,  hazardous  material,
hazardous constituent, toxic substance, pollutant, contaminant, asbestos, radon,
polychlorinated biphenyls ("PCBs"),  petroleum product or waste (including crude
oil or any fraction thereof), natural gas, liquefied gas, synthetic gas or other
material  defined,   regulated,   controlled  or  potentially   subject  to  any
remediation  requirement under any environmental law  (collectively,  "Hazardous
Materials"),  on,  in,  under  or  affecting  any  Properties  or real  property
currently  leased or owned (or real property  proposed to be leased or owned) or
by any means  controlled  by the Company,  the  Partnership  or any  Subsidiary,
except as in material  compliance  with  applicable  laws;  except as  otherwise
disclosed in the  registration  statement,  the  prospectus  or as  specifically
disclosed in the  Environmental  Reports,  to the best knowledge of the Company,
the  Partnership  and the  Subsidiaries,  the Properties and the Company's,  the
Partnership's, the Subsidiaries operations with respect to the Properties are in
compliance  with  all  federal,  state  and  local  laws,   ordinances,   rules,
regulations and other governmental  requirements relating to pollution,  control
of chemicals, management of waste, discharges of materials into the environment,
health,   safety,   natural  resources,   and  the  environment   (collectively,
"Environmental  Laws"),  and the Company,  the Partnership and the  Subsidiaries
have,  and are in compliance  with,  all licenses,  permits,  registrations  and
government   authorizations   necessary   to   operate   under  all   applicable
Environmental Laws. Except as otherwise disclosed in the registration statement,
the prospectus or as specifically  disclosed in the Environmental  Reports, none
of the Company,  the  Partnership  or any Subsidiary has received any written or
oral notice  from any  governmental  entity or any other  person and there is no
pending  or,  to the best  knowledge  of the  Company,  the  Partnership  or any
Subsidiary,   threatened,   claim,   litigation  or  any  administrative  agency
proceeding  that:  (i)  alleges  a  violation  of any  Environmental  Law by the
Company,  the Partnership or any Subsidiary;  (ii) alleges that the Company, the
Partnership  or any  Subsidiary is a liable party or a  potentially  responsible
party under the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C.  ss.9601,  et al., or any state superfund law; (iii) has resulted
in or could result in the attachment of an  environmental  lien on any Property;
or (iv) alleges that the Company,  the  Partnership  or any Subsidiary is liable
for any contamination of the environment,  contamination of any Property, damage
to  natural  resources,  property  damage,  or  personal  injury  based on their
activities or the activities of their  predecessors or third parties (whether at
any Property or elsewhere) involving Hazardous Materials,  whether arising under
the Environmental Laws, common law principles, or other legal standards.


                                     - 16 -

<PAGE>



             (hh) The Company is organized in conformity  with the  requirements
for  qualification  as a REIT  under  the  Code,  and the  Company's  method  of
operation  enables it to meet the  requirements for taxation as a REIT under the
Code. The  Partnership is treated as a partnership  for federal income  purposes
and not as a corporation or an association taxable as a corporation.

             (ii) None of the Company,  the  Partnership or any Subsidiary  will
become as a result of the  transactions  contemplated  hereby,  or will  conduct
their  respective  businesses  in a manner in which any such entity would become
"an investment company," or a company  "controlled" by an "investment  company,"
within the meaning of the Investment Company Act of 1940, as amended.

             (jj) Neither the  Partnership  nor any  Partnership  Subsidiary  is
currently prohibited,  directly or indirectly,  from making distributions to the
Company,  from  repaying  to the  Company  or any REIT  Subsidiary  any loans or
advances to the Partnership or Partnership  Subsidiary or from  transferring any
of the Partnership's or any Partnership  Subsidiary's  property or assets to the
Company or any REIT  Subsidiary,  except as described in the  prospectus  or the
partnership agreement of the Partnership.

             (kk) The statements set forth in the prospectus  under the captions
"Prospectus Supplement Summary-Recent  Developments," "Price Range of Shares and
Distribution   Policy-Dividend   Reinvestment   Plan,"  "Recent   Developments,"
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations-Liquidity  and Capital Resources," "The Properties,"  "Description of
the Debt  Securities,"  "Description of Capital Stock,"  "Certain  Provisions of
Maryland Law and of the  Company's  Declaration  of Trust and ByLaws,"  "Federal
Income Tax  Considerations"  and  "Certain  Federal  Income Tax  Considerations"
insofar as they purport to describe  the  provisions  of the laws and  documents
referred to therein, are accurate and complete.

             (ll) The  Company has  complied,  and until the  completion  of the
distribution  of  the  Shares,  will  comply  with  all  of  the  provisions  of
(including, without limitation, filing all forms required by) Section 517.075 of
the Florida  Securities and Investor  Protection  Act and Regulation  3E-900.001
issued thereunder with respect to the offering and sale of the Shares.

             (mm) None of the officers,  trustees or 5% or greater  shareholders
of the Company have any affiliation with the National  Association of Securities
Dealers, Inc. (the "NASD"), except as disclosed in the registration statement.

                  Any certificate signed by any officer of the Company on behalf
of the Company,  the  Partnership  or any  Subsidiary and delivered to you or to
counsel for the Underwriters  shall be deemed a  representation  and warranty by
such entity to each Underwriter as to the matters covered thereby.


                                     - 17 -

<PAGE>



         4.  Agreements  of the  Company.  The  Company  agrees with the several
Underwriters as follows:

             (a) If, at the time this Agreement is executed and delivered, it is
necessary for a  post-effective  amendment to the  registration  statement to be
declared  effective before the offering of the Shares may commence,  the Company
will endeavor to cause such post-effective amendment to become effective as soon
as possible and will advise you promptly  and, if requested by you, will confirm
such advice in writing, when such post-effective amendment has become effective.

             (b) The Company will advise you promptly  and, if requested by you,
will confirm such advice in writing:  (i) of any request by the  Commission  for
amendment of or a supplement  to the  registration  statement,  any  pre-pricing
prospectus supplement or the prospectus or for additional  information;  (ii) of
the issuance by the Commission of any stop order suspending the effectiveness of
the  registration  statement or of the suspension of qualification of the Shares
for offering or sale in any jurisdiction or the initiation of any proceeding for
such  purpose;  and (iii) within the period of time referred to in paragraph (f)
below, of any change in the Company's,  the  Partnership's  and the Subsidiaries
condition (financial or other), business,  prospects,  properties,  net worth or
results  of  operations,  or of the  happening  of any  event,  which  makes any
statement  of a  material  fact  made  in  the  registration  statement  or  the
prospectus (as then amended or supplemented) untrue or which requires the making
of any additions to or changes in the  registration  statement or the prospectus
(as then amended or  supplemented) in order to state a material fact required by
the Act or the regulations thereunder to be stated therein or necessary in order
to make the statements  therein not misleading,  or of the necessity to amend or
supplement the prospectus (as then amended or  supplemented)  to comply with the
Act or any other law. If at any time the  Commission  shall issue any stop order
suspending the  effectiveness  of the registration  statement,  the Company will
make  every  reasonable  effort to obtain  the  withdrawal  of such order at the
earliest possible time.

             (c) The Company will furnish to you,  without charge,  (i) one copy
of the  registration  statement as originally  filed with the  Commission and of
each amendment thereto, including financial statements and all exhibits thereto,
(ii) such number of conformed copies of the registration statement as originally
filed and of each amendment thereto, but without exhibits, as you may reasonably
request, (iii) such number of copies of the documents incorporated by reference,
without  exhibits,  as you may reasonably  request,  and (iv) five copies of the
exhibits to the documents incorporated by reference.

             (d) The Company  will not file any  amendment  to the  registration
statement or make any amendment or supplement to the prospectus or, prior to the
end of the period of time referred to in the first  sentence in  subsection  (f)
below, file any document which upon filing,  becomes a document  incorporated by
reference  therein,  of which you shall not  previously  have been advised or to
which,  after you shall have  received  a copy of the  document  proposed  to be
filed, you shall reasonably object.


                                     - 18 -

<PAGE>



             (e) Prior to the  execution  and  delivery of this  Agreement,  the
Company has delivered to you,  without  charge,  in such  quantities as you have
requested, copies of the pre-pricing prospectus supplement. The Company consents
to the use, in accordance with the provisions of the Act and with the securities
or Blue Sky laws of the  jurisdictions  in which the Shares  are  offered by the
several  Underwriters  and by dealers,  prior to the date of the prospectus,  of
each pre-pricing prospectus supplement so furnished by the Company.

             (f) As soon after the execution  and delivery of this  Agreement as
possible and  thereafter  from time to time for such period as in the opinion of
counsel for the Underwriters a prospectus is required by the Act to be delivered
in  connection  with  sales by any  Underwriter  or  dealer,  the  Company  will
expeditiously  deliver to each Underwriter and each dealer,  without charge,  as
many copies of the  prospectus  (and of any amendment or supplement  thereto) as
you may reasonably  request.  Subject to the provisions of subsection (g) below,
the  Company  consents to the use of the  prospectus  (and of any  amendment  or
supplement  thereto) in accordance  with the  provisions of the Act and with the
securities or Blue Sky laws or real estate syndication laws of the jurisdictions
in which the Shares are offered by the several  Underwriters  and by all dealers
to whom Shares may be sold, both in connection with the offering and sale of the
Shares and for such period of time  thereafter as the  prospectus is required by
the Act to be delivered in connection  with sales by any  Underwriter or dealer.
If during such period of time any event shall occur that in the  judgment of the
Company or in the opinion of counsel for the  Underwriters is required to be set
forth in the prospectus (as then amended or supplemented) or should be set forth
therein  in  order  to  make  the  statements  therein,  in  the  light  of  the
circumstances under which they were made, not misleading,  or if it is necessary
to  supplement  or amend the  prospectus  (or to file under the Exchange Act any
document  which,  upon  filing,  becomes a document  incorporated  by  reference
therein)  in order to comply  with the Act or any other law,  the  Company  will
forthwith  prepare and,  subject to the provisions of paragraph (d) above,  file
with the Commission an appropriate  supplement or amendment  thereto (or to such
document),  and will  expeditiously  furnish to the  Underwriters  and dealers a
reasonable  number of copies  thereof In the event that the  Company and you, as
Representatives of the several Underwriters, agree that the prospectus should be
amended or supplemented, the Company, if requested by you, will promptly issue a
press release announcing or disclosing the matters to be covered by the proposed
amendment or supplement.

             (g) The Company  will  cooperate  with you and with counsel for the
Underwriters in connection with the  registration or qualification of the Shares
for  offering  and sale by the  several  Underwriters  and by dealers  under the
securities  or  Blue  Sky  laws  or  real  estate   syndication   laws  of  such
jurisdictions  as you may  designate  and will file such  consents to service of
process or other  documents  necessary  or  appropriate  in order to effect such
registration or qualification and continue such  qualification in effect so long
as required for distribution of the Shares;  provided that in no event shall the
Company be obligated to qualify to do business in any  jurisdiction  where it is
not now so qualified or to take any action which would  subject it to service of
process in suits or  taxation,  other than those  arising out of the offering or
sale of the Shares, in any jurisdiction where it is not now so subject.


                                     - 19 -

<PAGE>



             (h) The Company will make generally available to its shareholders a
consolidated  earnings  statement,   which  need  not  be  audited,  covering  a
twelve-month  period  commencing  after the effective  date of the  registration
statement and ending not later than 15 months thereafter, as soon as practicable
after  the end of such  period,  which  consolidated  earnings  statement  shall
satisfy the provisions of Section 11 (a) of the Act.

             (i)  The  Company  will  furnish  to its  shareholders,  as soon as
practicable after the end of each respective  period,  annual reports (including
financial  statements audited by independent  public  accountants) and unaudited
quarterly  reports of  operations  for each of the first  three  quarters of the
fiscal year,  and during the period of three years  hereafter,  the Company will
furnish to you (i) concurrently with mailing or filing, a copy of each report of
the Company mailed to shareholders  or filed with the Commission,  and (ii) from
time to time such other information concerning the Company as you may reasonably
request.

             (j) Whether or not the transactions  contemplated by this Agreement
are  consummated  or this  Agreement  is  terminated,  the Company  will pay, or
reimburse if paid by the Representatives, all costs and expenses incident to the
performance of the  obligations of the Company under this  Agreement,  including
but not limited to costs and  expenses  of or  relating to (1) the  preparation,
printing and filing of the pre-pricing  prospectus supplements and any amendment
or  supplement  to  the  registration  statement  or  the  prospectus,  (2)  the
preparation and delivery of certificates  representing the Shares,  (3) the word
processing,  printing and  reproduction of this  Agreement,  the Agreement Among
Underwriters,   any   Selected   Dealer   Agreements   and   any   Underwriters'
Questionnaire, (4) furnishing (including costs of shipping, mailing and courier)
such copies of the  registration  statement,  the prospectus and any pre-pricing
prospectus  supplement,  and all amendments and supplements  thereto,  as may be
requested for use in connection  with the offering and sale of the Shares by the
Underwriters  or by dealers to whom  Shares may be sold,  (5) the listing of the
Shares on the New York Stock  Exchange,  (6) any filings  required to be made by
the Underwriters with the NASD, and the fees, disbursements and other charges of
counsel for the  Underwriters in connection  therewith,  (7) the registration or
qualification  of the  Shares,  if  required,  and the  filing  of  notices  and
materials,  for offer and sale  under  the  securities  or Blue Sky laws of such
jurisdictions   designated  pursuant  to  Section  5(f),   including  the  fees,
disbursements  and other  charges of counsel to the  Underwriters  in connection
therewith,  and the preparation and printing of  preliminary,  supplemental  and
final Blue Sky memoranda,  if any, (8) the Company's  counsel,  (9) the transfer
agent for the Shares and (10) the Company's accountants.

             (k) If this Agreement shall terminate or shall be terminated  after
execution  pursuant to any provisions hereof (otherwise than pursuant to Section
10 hereof or by notice  given by you  terminating  this  Agreement  pursuant  to
Section 9 or Section 10 hereof) or if this Agreement  shall be terminated by the
Underwriters  because of any  failure  or refusal on the part of the  Company to
comply with the terms or fulfill any of the  conditions of this  Agreement to be
complied with or fulfilled by the Company,  the Company  agrees to reimburse the
Representatives  for all reasonable  out-of-pocket  expenses (including fees and
expenses  of  counsel  for  the  Underwriters)  incurred  by you  in  connection
herewith.


                                     - 20 -

<PAGE>



             (l) The Company  will apply the net  proceeds  from the sale of the
Shares  substantially  in accordance  with the  description  set forth under the
caption "Use of Proceeds" in the prospectus.

             (m) The Company  will timely file the  prospectus  pursuant to Rule
424(b) under the Act and will advise you of the time and manner of such filing.

             (n) Except as provided  in this  Agreement,  the  Company  will not
sell, offer to sell, solicit an offer to buy, contract to sell, grant any option
to purchase (other than options granted pursuant to the Company's  Omnibus Share
Plan and 1995 Stock Option Plan), or otherwise transfer or dispose of any shares
of beneficial interest or any other securities  convertible into, or exercisable
or exchangeable for shares of beneficial  interest for a period of 90 days after
the date of the Prospectus, without the prior written consent of Legg Mason Wood
Walker,  Incorporated;  provided, however, that the foregoing shall not prohibit
the Company or the  Partnership  from issuing  shares of beneficial  interest or
Units or other  convertible  securities in connection  with the  acquisition  of
properties  or issue  shares  of  beneficial  interest  upon  conversion  of the
Company's   7.625%   convertible   subordinated   debentures   due   2003   (the
"Debentures").

             (o) The  Company has  furnished  or will  furnish to you  "lock-up"
letters in form and substance satisfactory to you, signed by each of its current
executive officers and trustees named in the prospectus.

             (p)  Except  as  stated in this  Agreement  and in any  pre-pricing
prospectus supplement and prospectus,  the Company has not taken, nor will take,
directly  or  indirectly,  any action  designed to or that might  reasonably  be
expected to cause or result in stabilization or manipulation of the price of the
common  shares of beneficial  interest of the Company to facilitate  the sale or
resale of the Shares.

         5. Conditions of Underwriters' Obligations.  The several obligations of
the  Underwriters  to  purchase  the Firm  Shares  hereunder  are subject to the
following conditions:

             (a) If, at the time this Agreement is executed and delivered, it is
necessary for a  post-effective  amendment to the  registration  statement to be
declared  effective  before  the  offering  of the  Shares  may  commence,  such
post-effective  amendment shall have become  effective not later than 5:30 P.M.,
New York City time, on the date hereof,  or at such later date and time as shall
be consented to in writing by you, and all filings, if any, required by Rule 424
under  the Act  shall  have been  timely  made;  no stop  order  suspending  the
effectiveness  of the  registration  statement  shall  have been  issued  and no
proceeding  for that purpose shall have been  instituted or, to the knowledge of
the Company or any Underwriter, threatened by the Commission, and any request of
the Commission for additional  information  (to be included in the  registration
statement or the prospectus or otherwise)  shall have been complied with to your
satisfaction.


                                     - 21 -

<PAGE>



             (b) Subsequent to the effective date of this Agreement, there shall
not have  occurred (i) any change,  or any  development  involving a prospective
change,  in  or  affecting  the  condition   (financial  or  other),   business,
properties,  net worth, or results of operations of the Company, the Partnership
and the Subsidiaries taken as a whole not contemplated by the prospectus,  which
in your reasonable  opinion,  as  Representatives  of the several  Underwriters,
would materially,  adversely affect the market for the Shares, (ii) any event or
development  relating  to or  involving  the  Company,  the  Partnership  or any
Subsidiary  or any officer or director of the Company  which makes any statement
made in the prospectus untrue or which, in the reasonable opinion of the Company
and its counsel or the  Underwriters  and their counsel,  requires the making of
any  addition to or change in the  prospectus  in order to state  material  fact
required by the Act or any other law to be stated  therein or necessary in order
to make the statements therein not misleading,  if amending or supplementing the
prospectus  to  reflect  such event or  development  would,  in your  reasonable
opinion, as Representatives of the several  Underwriters,  materially  adversely
affect the market for the Shares,  or (iii) any  suspension of trading in any of
the equity securities of the Company by the Commission, the NASD or the New York
Stock Exchange.

             (c) You shall have  received  on the  Closing  Date,  an opinion of
Gordon, Feinblatt,  Rothman, Hoffberger & Hollander, counsel for the Company and
the Partnership, dated the Closing Date and addressed to you, as Representatives
of the several Underwriters, to the effect that:

                 (i) The Company has been duly organized and is validly existing
as a REIT in good  standing  under the laws of the State of  Maryland  with full
power and  authority to own and lease its assets and  properties,  including the
Properties  owned  by it,  and to  conduct  its  business  as now  conducted  as
described in the prospectus; and each of the REIT Subsidiaries is duly organized
and is validly  existing and in good standing under the laws of the jurisdiction
of its  organization,  with power and  authority  to own or lease its assets and
properties,  including the  Properties  owned by it, and conduct its business as
described  in  the  prospectus.   The  outstanding   shares  of  capital  stock,
partnership  interests  or  limited  liability  company  interests  of each REIT
Subsidiary  have been duly  authorized and validly issued and are fully paid and
nonassessable  and, to the extent  described  in the  registration  statement or
prospectus,  are owned by the Company or a REIT Subsidiary;  and, to the best of
such counsel's  knowledge,  are owned free and clear of all liens,  encumbrances
and claims, and no options, warrants or other rights to purchase,  agreements or
other  obligations  to issue or other  rights to convert  any  obligations  into
shares of capital  stock,  partnership  interests or limited  liability  company
interests,  as the case may be, in the REIT  Subsidiaries are  outstanding.  The
Company and each REIT  Subsidiary are qualified to transact  business and are in
good standing (i) in the  jurisdiction  in which it has its  principal  place of
business  and  (ii) in all  other  jurisdictions  in  which  the  nature  of the
activities  conducted  by it or the  character  of the  assets  and  properties,
including  the  Properties,  owned or  leased  by it  makes  such  licensing  or
qualification necessary except where the failure to so license or qualify in any
such other  jurisdiction  will not have a Material Adverse Effect on the Company
or such REIT Subsidiary.


                                     - 22 -

<PAGE>



                 (ii) The Partnership is a limited  partnership  duly formed and
validly existing under the Maryland Act with the partnership power and authority
to own and lease its  properties and to conduct its business as now conducted as
described in the prospectus;  and each of the  Partnership  Subsidiaries is duly
organized  and is validly  existing and in good  standing  under the laws of the
jurisdiction of its  organization,  with power and authority to own or lease its
assets and  properties,  including the  Properties  owned by it, and conduct its
business as  described  in the  prospectus.  The  outstanding  shares of capital
stock,  partnership  interests or limited  liability  company  interests of each
Partnership  Subsidiary  have been duly  authorized  and validly  issued and are
fully paid and  nonassessable  and, to the extent  described in the registration
statement  or  prospectus,  are  owned  by  the  Partnership  or  a  Partnership
Subsidiary;  and, to the best of such  counsel's  knowledge,  are owned free and
clear of all liens,  encumbrances and claims, and no options,  warrants or other
rights to purchase,  agreements or other obligations to issue or other rights to
convert any obligations into shares of capital stock,  partnership  interests or
limited  liability  company  interests,  as the case may be, in the  Partnership
Subsidiaries  are outstanding.  The Partnership and each Partnership  Subsidiary
are  qualified  to  transact  business  and  are  in  good  standing  (i) in the
jurisdiction  in which it has its  principal  place of business  and (ii) in all
other jurisdictions in which the nature of the activities conducted by it or the
character  of the assets and  properties,  including  the  Properties,  owned or
leased by it makes such licensing or  qualification  necessary  except where the
failure to so license or qualify in any such other  jurisdiction will not have a
Material Adverse Effect on the Partnership or such Partnership  Subsidiary.  The
Company is the sole general partner of the Partnership.

                 (iii) The  Company has full power and  authority  to enter into
this Agreement,  to issue, sell and deliver the Shares as provided herein and to
consummate the transactions  contemplated  herein.  This Agreement has been duly
authorized  by all  necessary  action and has been executed and delivered by the
Company  and,  assuming  due  authorization,   execution  and  delivery  by  the
Underwriters,  constitutes  a  valid  and  binding  agreement  of  the  Company,
enforceable in accordance  with its terms,  except to the extent  enforceability
may be limited by bankruptcy,  insolvency,  moratorium,  reorganization or other
laws  affecting  the rights of creditors  generally and by principles of equity,
whether  considered  at  law  or in  equity,  and  except  to  the  extent  that
enforcement  of the  indemnification  and  contribution  provisions set forth in
Section 8 of this Agreement may be limited by federal or state  securities  laws
or the public policy underlying such laws.

                 (iv) The Partnership has the partnership power and authority to
enter  into this  Agreement  and to  consummate  the  transactions  contemplated
herein.  This  Agreement has been duly  authorized by all necessary  partnership
action and has been  executed and  delivered on behalf of the  Partnership  and,
assuming  due  authorization,   execution  and  delivery  by  the  Underwriters,
constitutes  a valid and binding  agreement of the  Partnership  enforceable  in
accordance with its terms, except to the extent enforceability may be limited by
bankruptcy, insolvency,  moratorium,  reorganization or other laws affecting the
rights of creditors generally and by principles of equity, whether considered at
law  or  in  equity,   and  except  to  the  extent  that   enforcement  of  the
indemnification  and  contribution  provisions  set  forth in  Section 8 of this
Agreement  may be  limited by  federal  or state  securities  laws or the public
policy underlying such laws.

                                     - 23 -

<PAGE>




                 (v) Each  consent,  approval,  authorization,  order,  license,
certificate,  permit,  registration,  designation  or  filing  by  or  with  any
governmental  agency or body  necessary for the valid  authorization,  issuance,
sale and delivery of the Shares, the execution, delivery and performance of this
Agreement  and  the  consummation  by the  Company  and the  Partnership  of the
transactions  contemplated hereby to which either the Company or the Partnership
is a party,  has been made or obtained  and is in full force and effect,  except
such as may be necessary under state securities or real estate  syndication laws
or required by the NASD in connection with the purchase and  distribution of the
Shares by the Underwriters, as to which such counsel need express no opinion.

                 (vi) Neither the issuance,  sale and delivery by the Company of
the Shares,  nor the execution,  delivery and  performance of this Agreement nor
the consummation of the transactions  contemplated  hereby, will (a) violate the
declaration  of  trust,   certificate  of  limited  partnership  or  partnership
agreement, as the case may be, or any such entity, as applicable; (b) constitute
a default under any contract or agreement  filed or incorporated by reference as
an exhibit  to the  registration  statement;  (c) to such  counsel's  knowledge,
violate any applicable statute,  judgment,  decree, order, rule or regulation of
any court or  governmental  agency or body; or (d) to such counsel's  knowledge,
result in the creation or imposition of any lien,  charge,  claim or encumbrance
upon any property or asset of any of the Company or the Partnership.

                 (vii)  The  Shares to be  issued  and sold to the  Underwriters
hereunder have been validly authorized by the Company. When issued and delivered
against  payment  therefor as provided  in this  Agreement,  such Shares will be
validly  issued,   fully  paid  and  nonassessable.   No  preemptive  rights  of
shareholders  exist  with  respect  to any  of the  Shares.  To  such  counsel's
knowledge,  no person or entity holds a right to require or  participate  in the
registration under the Act of the Shares pursuant to the registration statement;
and,  to such  counsel's  knowledge,  except  as set  forth in the  registration
statement  or  prospectus,  no  person  or  entity  holds  a  right  to  require
registration  under the Act of any shares of beneficial  interest of the Company
at any other time. To such counsel's knowledge,  no person or entity has a right
of  participation or first refusal with respect to the sale of the Shares by the
Company.  The form of  certificates  evidencing  the  Shares  complies  with all
application requirements of Maryland law.

                 (viii) The Company has  authorized  capital  securities  as set
forth in the prospectus  under the caption  "Capitalization."  All of the issued
shares of  beneficial  interest of the  Company  have been duly  authorized  and
validly issued, are fully paid and  nonassessable.  None of the issued shares of
beneficial  interest  of the  Company  has  been  issued  or is owned or held in
violation of any preemptive  rights of shareholders.  All sales of the Company's
capital  securities  prior to the date  hereof were at all  relevant  times duly
registered  under the Act or were exempt from the  registration  requirements of
the Act by  reason  of  Sections  3(b),  4(2)  or 4(6)  thereof  and  were  duly
registered  or  were  issued  pursuant  to  an  available   exemption  from  the
registration  requirements of the applicable  state securities or blue sky laws,
provided,  however,  that such counsel need not express any opinion with respect
to the  registration  or availability  of an exemption  under  applicable  state
securities or blue sky laws for shares of beneficial interest issued pursuant to
an underwritten public offering. To the

                                     - 24 -

<PAGE>



knowledge of such  counsel,  except as included in the  prospectus,  there is no
outstanding  option,  warrant or other right calling for the issuance of, and no
commitment,  plan or arrangement to issue, any shares of beneficial  interest of
the Company or any security convertible or exchangeable for shares of beneficial
interest of the Company other than the Debentures, the issuance of common shares
of beneficial  interest of the Company in exchange for Units of the Partnership,
at the option of the Company,  pursuant to the partnership agreement, as amended
and  restated,  of the  Partnership,  and  the  issuance  of  common  shares  of
beneficial  interest of the Company upon  exercise of options  granted under the
Omnibus Share Plan and 1995 Stock Option Plan of the Company.

                 (ix) All of the issued Units of the Partnership  have been duly
authorized  and  validly  issued and are fully paid and  nonassessable.  To such
counsel's  knowledge,  none of the issued  Units has been  issued or is owned or
held in  violation of any  preemptive  rights.  The issuance of the  outstanding
Units  were  exempt  from  the  registration  requirements  of the  Act  and any
applicable state securities laws.

                 (x) To such  counsel's  knowledge,  except  as set forth in the
registration  statement or prospectus,  none of the Company,  the Partnership or
any Subsidiary owns or leases any real property.

                 (xi) To such counsel's knowledge and except as described in the
registration  statement or prospectus,  there is not pending or threatened,  any
action,  suit,  proceeding,  inquiry or investigation  against the Company,  the
Partnership or any Subsidiary or any of their  respective  officers,  directors,
trustees or general partners or to which the properties, assets or rights of any
such entity are  subject,  which,  if  determined  adversely to any such entity,
would  individually  or in the aggregate  have a Material  Adverse Effect on any
such entity, respectively.

                 (xii) The  descriptions in the  registration  statement and the
prospectus  of the leases and each other  document  filed as an exhibit with the
Commission present fairly the information  required to be shown or described and
there are no  contracts,  leases or other  documents  known to such counsel of a
character  required  to be  described  in  the  registration  statement  or  the
prospectus  or to be  filed  as  exhibits  with the  Commission,  which  are not
described or filed as required.  There are no statutes or regulations applicable
to the Company,  the Partnership or any Subsidiary or  certificates,  permits or
other  authorizations from governmental  regulatory officials or bodies required
to be obtained or  maintained by any such entity,  known to such  counsel,  of a
character  required  to be  disclosed  in  the  registration  statement  or  the
prospectus which have not been so disclosed and properly described therein.

                 (xiii)  The  Company  is  organized  in  conformity   with  the
requirements for qualification as a REIT pursuant to Sections 856 through 860 of
the  Code,  and the  Company's  method  of  operation  enables  it to  meet  the
requirements  for  qualification  and  taxation  as a REIT  under the Code.  The
Partnership is treated as a partnership for federal income purposes and not as a
corporation or an association taxable as a corporation.


                                     - 25 -

<PAGE>



                 (xiv) The registration statement has become effective under the
Act  and,  to the  knowledge  of such  counsel,  no stop  order  suspending  the
effectiveness  of the  registration  statement has been issued and no proceeding
for that purpose has been  instituted  or is pending or  contemplated  under the
Act.  Other than  financial  statements  and other  financial  and  operating or
statistical  data and  schedules  contained  therein,  as to which  counsel need
express no opinion,  the  registration  statement,  all  pre-pricing  prospectus
supplement,  the  prospectus and any amendment or supplement  thereto,  and each
document  incorporated by reference therein,  appear on their face to conform as
to  form  in all  material  respects  with  the  requirements  of the Act or the
Exchange  Act,  as the case may be,  and the  respective  Rules and  Regulations
thereunder promulgated by the Commission.

                 (xv)  Such   counsel   has  no  reason  to  believe   that  the
registration statement, the prospectus or any document incorporated by reference
therein,  or any further amendment thereto made on or prior to the Closing Date,
on its  effective  date and as of the Closing  Date,  contained  or contains any
untrue  statement  of a material  fact or omitted or omits to state any material
fact required to be stated therein or necessary to make the  statements  therein
not misleading,  or that the pre-pricing prospectus supplement,  prospectus,  or
any  amendment or  supplement  thereto,  or document  incorporated  by reference
therein  on or prior to the  Closing  Date,  as of its issue  date and as of the
Closing Date,  contained or contains any untrue  statement of a material fact or
omitted or omits to state any  material  fact  required to be stated  therein or
necessary to make the statements  therein,  in light of the circumstances  under
which they were made, not misleading (provided that such counsel need express no
belief  regarding  the  financial  statements  and  operating  and  statistical,
operating or pro forma data and related schedules  contained in the registration
statement,  any  document  incorporated  by  reference  therein,  any  amendment
thereto, or the prospectus, or any amendment or supplement thereto).

                 (xvi)  The   documents   incorporated   by   reference  in  the
registration statement, any pre-pricing prospectus supplement and the prospectus
(other than the financial statements and statistical, operating or pro form data
and related schedules therein, as to which such counsel need express no opinion)
when they were filed with the  Commission  complied  on their face as to form in
all material  respects with the  requirements  of the Act, the Exchange Act, and
the Rules and Regulations of the Commission thereunder;  and nothing has come to
such counsel's attention which causes them to believe that any of such documents
incorporated by reference (other than the financial  statements and statistical,
operating  or pro forma data and  related  schedules  therein,  as to which such
counsel  need  express no belief),  when such  documents  were so filed with the
Commission, contained an untrue statement of material factor or omitted to state
a material fact necessary in order to make the statements  therein,  in light of
the circumstances  under which they were made when such documents were so filed,
not misleading.

                 (xvii)  None  of  the   Company,   the   Partnership   and  the
Subsidiaries  are, or solely as a result of the consummation of the transactions
contemplated  hereby  will  become,  an  "investment   company,"  or  a  company
"controlled" by an "investment  company,  " within the meaning of the Investment
Company Act of 1940, as amended.


                                     - 26 -

<PAGE>



                 (xviii) The  descriptions  of statutes,  regulations,  legal or
governmental  proceedings included in the registration statement and prospectus,
are  accurate  and present  fairly a summary of the  information  required to be
disclosed  under  the Act and  the  Rules  and  Regulations  promulgated  by the
Commission.  The  information in the prospectus  under the captions  "Prospectus
Supplement Summary-Recent Developments," "Price Range of Shares and Distribution
Policy-Dividend   Reinvestment  Plan,"  "Recent   Developments,"   "Management's
Discussion    and   Analysis   of   Financial    Condition    and   Results   of
Operations-Liquidity  and Capital Resources," "The Properties,"  "Description of
the Debt  Securities,"  "Description of Capital Stock,"  "Certain  Provisions of
Maryland Law and of the  Company's  Declaration  of Trust and ByLaws,"  "Federal
Income Tax  Considerations"  and "Certain Federal Income Tax  Considerations" to
the  extent  that  it  constitutes  matters  of law  or  legal  conclusions,  or
descriptions  of documents,  has been  reviewed by such counsel,  is correct and
presents fairly the information  required to be disclosed  therein under the Act
and the Rules and Regulations promulgated by the Commission.

                 (xix) To such counsel's knowledge,  the conditions for use of a
registration statement on Form S-3 set forth in the General Instructions to Form
S-3 have  been  satisfied  with  respect  to the  Company  and the  transactions
contemplated by this Agreement and the registration statement.

                 (xx) Such counsel has been  advised  that the common  shares of
beneficial  interest of the Company are listed for trading on the New York Stock
Exchange.

                  In rendering their opinion as aforesaid, counsel may rely upon
an opinion or opinions,  each dated the Closing Date, of other counsel  retained
by them or the  Company  as to laws of any  jurisdiction  other  than the United
States and jurisdictions in which they are admitted, provided that (1) each such
local  counsel  is  acceptable  to the  Representatives,  (2) such  reliance  is
expressly  authorized  by each  opinion  so relied  upon and a copy of each such
opinion  is  delivered  to the  Representatives  and is,  in form and  substance
satisfactory  to them and their  counsel,  and (3) counsel  shall state in their
opinion  that they  believe  that they and the  Underwriters  are  justified  in
relying thereon.

                  In addition to the above opinions,  Gordon, Feinblatt Rothman,
Hoffberger  & Hollander  shall  deliver to the  Underwriters  at the Closing and
Option Closing Dates,  as the case may be, a tax opinion,  in form and substance
acceptable to the Underwriters, with respect to the qualification of the Company
as a REIT under the provisions of the Code and the other matters set forth under
the captions "Federal Income Tax Considerations" and "Certain Federal Income Tax
Considerations" in the prospectus.

             (d) You shall  have  received  on the  Closing  Date an  opinion of
Wilmer, Cutler & Pickering, counsel for the Underwriters, dated the Closing Date
and  addressed  to you, as  Representatives  of the several  Underwriters,  with
respect to the matters  referred to in clauses (iii),  (vii),  (xiv) and (xv) of
the foregoing paragraph (c) and such other related matters as you may request.


                                     - 27 -

<PAGE>



             (e)  You  shall  have  received   letters   addressed  to  you,  as
Representatives of the several  Underwriters,  and dated the date hereof and the
Closing  Date  from  KPMG  Peat  Marwick  LLP,   independent   certified  public
accountants,  and  Scheiner,  Mister & Grandizio,  P.A.,  independent  certified
public accountants, substantially in the forms heretofore approved by you.

             (f)(i)  No  stop  order   suspending  the   effectiveness   of  the
registration  statement  shall  have been  issued  and no  proceedings  for that
purpose  shall have been taken or, to the  knowledge  of the  Company,  shall be
contemplated by the Commission at or prior to the Closing Date; (ii) there shall
not have been any  material  change in the capital  stock of the Company nor any
material  increase  in the  consolidated  short-term  or  long-term  debt of the
Company  (other than in the ordinary  course of business) from that set forth or
contemplated in the  registration  statement or the prospectus (or any amendment
or supplement  thereto);  (iii) there shall not have been,  since the respective
dates as of which  information  is given in the  registration  statement and the
prospectus (or any amendment or supplement thereto),  except as may otherwise be
stated  in the  registration  statement  and  prospectus  (or any  amendment  or
supplement thereto),  any material adverse change in the condition (financial or
other), business,  prospects,  properties, net worth or results of operations of
the  Company  or the  Partnership  taken as a whole;  (iv) the  Company  and the
Partnership, shall not have any liabilities or obligations, direct or contingent
(whether or not in the ordinary  course of  business),  that are material to the
Company and the Partnership, taken as a whole, other than those reflected in the
registration  statement  or the  prospectus  (or  any  amendment  or  supplement
thereto); (v) no litigation has been instituted, or to our knowledge, threatened
against the Company of a character  required to be disclosed in the registration
statement which is not so disclosed; (vi) no material contract is required to be
filed as an exhibit to the  registration  statement that has not been filed; and
(vii) all the  representations and warranties of the Company and the Partnership
contained  in this  Agreement  shall be true and  correct  on and as of the date
hereof and on and as of the Closing Date or the Option Closing Date, as the case
may be, as if made on and as of the Closing Date or Option Closing Date, and you
shall have received a certificate,  dated the Closing Date or the Option Closing
Date,  as the case may be, and  signed by the chief  executive  officer  and the
chief  financial  officer of the Company and similar  officers of the Company as
general  partner of the Partnership (or such other officers as are acceptable to
you), to the effect set forth in this Sections 5(f), 5(g) and 5(h) hereof.

             (g) The  Company  shall not have  failed at or prior to the Closing
Date to have performed or complied with any of its agreements  herein  contained
and required to be performed or complied with by it hereunder at or prior to the
Closing Date.

             (h)  The  officers  of the  Company  have  carefully  examined  the
registration statement, the pre-pricing prospectus supplement and the prospectus
and, in such officers'  opinions,  as of the effective date of the  registration
statement, the statements contained in the registration statement, including any
document  incorporated  by reference  therein,  were true and correct,  and such
registration  statement  and any  prospectus  or any  document  incorporated  by
reference  therein did not omit to state a material  fact  required to be stated
therein not  misleading  and, in his opinion,  since the  effective  date of the
registration statement,

                                     - 28 -

<PAGE>



no event has occurred  which should have been set forth in a supplement to or an
amendment of the prospectus  which has not been so set forth in such  supplement
or amendment or incorporated by reference in the prospectus.

             (i) The Shares  shall have been  listed for trading on the New York
Stock Exchange.

             (j) The NASD,  upon a review of the terms of the public offering of
the Shares, if required, shall not have objected to such offering, such terms or
the Underwriters' participation in the same.

             (k) The Company  shall have  furnished or caused to be furnished to
you such  further  certificates  and  documents  as you  shall  have  reasonably
requested.

             All such opinions,  certificates,  letters and other documents will
be in compliance  with the provisions  hereof only if they are  satisfactory  in
form and substance to you and your counsel in your reasonable discretion.

             The several  obligations  of the  Underwriters  to purchase  Option
Shares hereunder are subject to the satisfaction on and as of any Option Closing
Date of the  conditions  set forth in this Section 6, except that, if any Option
Closing  Date is other than the Closing  Date,  the  certificates,  opinions and
letters  referred  to in  paragraphs  (c)  through (h) shall be dated the Option
Closing Date in question and the opinions  called for by paragraphs  (c) and (d)
shall be revised to reflect the sale of Option Shares.

         6. Conditions of the Obligations of the Company. The obligations of the
Company to sell and deliver the Shares as and when  specified in this  Agreement
are subject to the  conditions  that at the Closing  Date or the Option  Closing
Date,  as the case may be, no stop order  suspending  the  effectiveness  of the
registration  statement  shall  have been  issued  and in effect or  proceedings
therefor initiated or threatened.

         7. Expenses. The Company agrees to pay the following costs and expenses
and all other  costs  and  expenses  incident  to the  performance  by it of its
obligations hereunder: (i) the preparation, printing or reproduction, and filing
with  the  Commission  of  the  registration   statement   (including  financial
statements and exhibits thereto),  each pre-pricing prospectus  supplement,  the
prospectus,  and each amendment or supplement to any of them;  (ii) the printing
(or  reproduction)  and delivery  (including  postage,  air freight  charges and
charges  for  counting  and  packaging)  of  such  copies  of  the  registration
statement,  each  pre-pricing  prospectus  supplement,  the prospectus,  and all
amendment or supplements  to any of them as may be reasonably  requested for use
in connection with the offering and sale of the Shares;  (iii) the  preparation,
printing, authentication,  issuance and delivery of certificates for the Shares,
including any stamp taxes in connection  with the original  issuance and sale of
the  Shares;  (iv)  the  reproduction  and  delivery  of  this  Agreement,   the
preliminary  and  supplemental  Blue  Sky  Memoranda,  if  any,  and  all  other
agreements or documents reproduced and delivered in connection with the offering
of the Shares; (v) the listing of the Shares on the New York Stock

                                     - 29 -

<PAGE>



Exchange; (vi) the registration or qualification of the Shares, if required, and
the  filing  of other  notices  or  materials,  for  offer  and sale  under  the
securities  or Blue  Sky laws or real  estate  syndication  laws of the  several
states as  provided in Section  4(g)  hereof  (including  the  reasonable  fees,
expenses  and  disbursements  of counsel  for the  Underwriters  relating to the
preparation, reproduction, and delivery of the preliminary and supplemental Blue
Sky Memoranda and such  registration and  qualification);  (vii) the filing fees
and the fees and expenses of counsel for the underwriters in connection with any
filings required to be made with the NASD; (viii) the  transportation  and other
expenses incurred by or on behalf of Company  representatives in connection with
presentations  to  prospective  purchasers  of the  Shares;  (ix)  the  fees and
expenses  of the  Company's  accountants  and the fees and  expenses  of counsel
(including local and special counsel) for the Company.

         8. Indemnification.

             (a)  The  Company  and  the  Partnership,  jointly  and  severally,
indemnify and hold harmless each Underwriter, the directors, officers, employees
and agents of each  Underwriter  and each  person,  if any,  who  controls  each
Underwriter  within  the  meaning  of Section 15 of the Act or Section 20 of the
Exchange Act, from and against any and all losses, claims, liabilities, expenses
and damages (including, without limitation, any and all investigative, legal and
other expenses  reasonably  incurred in connection with, and any and all amounts
paid in  settlement  of,  any  action,  suit or  proceeding  between  any of the
indemnified  parties and any  indemnifying  parties or between  any  indemnified
party and any third party, or otherwise, or any claim asserted, which settlement
has been approved by the indemnifying party), as and when incurred, to which any
Underwriter,  or any such person, may become subject under the Act, the Exchange
Act or other  Federal or state  statutory  law or  regulation,  at common law or
otherwise,  insofar as such  losses,  claims,  liabilities,  expenses or damages
arise  out of or are  based  on (i)  any  untrue  statement  or  alleged  untrue
statement of a material fact contained in any pre-pricing prospectus supplement,
the  registration  statement or the prospectus or any amendment or supplement to
the  registration  statement or the  prospectus,  or in any application or other
document executed by or on behalf of the Company or based on written information
furnished by or on behalf of the Company filed in any  jurisdiction  in order to
qualify  the  Shares  under  the  securities  laws  thereof  or  filed  with the
Commission,  (ii) the omission or alleged  omission to state in such  document a
material fact required to be stated in it or necessary to make the statements in
it not  misleading,  or (iii) any act or  failure to act by any  Underwriter  in
connection  with,  or  relating  in any manner  to,  the Shares or the  offering
contemplated  hereby,  and which is  included  as part of or  referred to in any
loss, claim,  liability,  expense or damage arising out of or based upon matters
covered by clause  (i) or (ii) above  (provided  that the  Company  shall not be
liable under this clause (iii) to the extent it is finally judicially determined
by a court of competent jurisdiction that such loss, claim,  liability,  expense
or damage resulted  directly from any such acts or failures to act undertaken or
omitted  to be taken by such  underwriter  through  its  negligence  or  willful
misconduct), provided that the Company and the Partnership will not be liable to
the extent that such loss, claim,  liability,  expense or damage arises from the
sale of the Shares in the public offering to any person by an Underwriter and is
based on an untrue statement or omission or alleged untrue statement or omission
made  in  reliance  on  and  in  conformity  with  information  relating  to any
Underwriter furnished in writing to the Company

                                     - 30 -

<PAGE>



by the  Representatives on behalf of any Underwriter  expressly for inclusion in
the  registration  statement,  any  pre-pricing  prospectus  supplement  or  the
prospectus.  This indemnity  agreement will be in addition to any liability that
the  Company  or  Partnership  might  otherwise  have  to any  person  who is an
indemnified party hereunder.

             (b) Each  Underwriter will indemnify and hold harmless the Company,
the  Partnership,  each  person,  if  any,  who  controls  the  Company  or  the
Partnership  within  the  meaning  of Section 15 of the Act or Section 20 of the
Exchange  Act,  each director of the Company and each officer of the Company who
signs the registration  statement to the same extent as the foregoing  indemnity
from the Company and the  Partnership to each  Underwriter,  but only insofar as
losses,  claims,  liabilities,  expenses or damages arise out of or are based on
any untrue statement or omission or alleged untrue statement or omission made in
reliance on and in  conformity  with  information  relating  to any  Underwriter
furnished  in writing to the  Company by the  Representatives  on behalf of such
Underwriter  expressly  for  use  in  the  registration  statement,  pre-pricing
prospectus  supplement or the prospectus.  This indemnity will be in addition to
any liability that each  Underwriter  might otherwise have;  provided,  however,
that in no case shall any Underwriter be liable or responsible for any amount in
excess  of  the  underwriting   discounts  and  commissions   received  by  such
Underwriter.

             (c) Any party that  proposes to assert the right to be  indemnified
under this Section 8 will,  promptly after receipt of notice of  commencement of
any action  against such party in respect of which a claim is to be made against
an  indemnifying  party or  parties  under  this  Section  8,  notify  each such
indemnifying  party of the commencement of such action,  enclosing a copy of all
papers served,  but the omission so to notify such  indemnifying  party will not
relieve it from any liability  that it may have to any  indemnified  party under
the foregoing  provisions of this Section 8 unless, and only to the extent that,
such omission results in the forfeiture of substantive rights or defenses by the
indemnifying  party. If any such action is brought against any indemnified party
and it notifies the  indemnifying  party of its  commencement,  the indemnifying
party will be  entitled to  participate  in and, to the extent that it elects by
delivering  written notice to the  indemnified  party  promptly after  receiving
notice of the  commencement  of the action from the indemnified  party,  jointly
with any other indemnifying party similarly  notified,  to assume the defense of
the action,  with counsel reasonably  satisfactory to the indemnified party, and
after  notice  from  the  indemnifying  party  to the  indemnified  party of its
election to assume the defense, the indemnifying party will not be liable to the
indemnified  party for any legal or other expenses  except as provided below and
except for the reasonable  costs of investigation  subsequently  incurred by the
indemnified  party in connection with the defense.  The  indemnified  party will
have the right to  employ  its own  counsel  in any such  action,  but the fees,
expenses  and other  charges  of such  counsel  will be at the  expense  of such
indemnified  party unless (1) the employment of counsel by the indemnified party
has been authorized in writing by the  indemnifying  party,  (2) the indemnified
party has  reasonably  concluded  (based on advice of counsel) that there may be
legal defenses  available to it or other indemnified  parties that are different
from or in addition to those available to the indemnifying party, (3) a conflict
or  potential  conflict  exists  (based on advice of counsel to the  indemnified
party) between the indemnified  party and the indemnifying  party (in which case
the  indemnifying  party will not have the right to direct  the  defense of such
action on behalf of the indemnified

                                     - 31 -

<PAGE>



party) or (4) the indemnifying  party has not in fact employed counsel to assume
the defense of such action within a reasonable  time after  receiving  notice of
the  commencement  of the action,  in each of which cases the  reasonable  fees,
disbursements  and  other  charges  of  counsel  will be at the  expense  of the
indemnifying  party or parties.  It is understood that the indemnifying party or
parties shall not, in connection  with any proceeding or related  proceedings in
the same  jurisdiction,  be liable for the reasonable  fees,  disbursements  and
other  charges of more than one  separate  firm  admitted  to  practice  in such
jurisdiction at any one time for all such indemnified party or parties. All such
fees,  disbursements  and other charges will be  reimbursed by the  indemnifying
party promptly as they are incurred.  An  indemnifying  party will not be liable
for any settlement of any action or claim effected  without its written  consent
(which consent will not be unreasonably  withheld). No indemnifying party shall,
without  the  prior  written  consent  of  each  indemnified  party,  settle  or
compromise  or consent to the entry of any judgment in any pending or threatened
claim, action or proceeding relating to the matters contemplated by this Section
8  (whether  or not any  indemnified  party  is a party  thereto),  unless  such
settlement,  compromise  or consent  includes an  unconditional  release of each
indemnified  party  from all  liability  arising  or that may  arise out of such
claim, action or proceeding. Notwithstanding any other provision of this Section
8(c), if at any time an indemnified  party shall have requested an  indemnifying
party to  reimburse  the  indemnified  party for fees and expenses of counsel as
required under this Section 8(c), such  indemnifying  party agrees that it shall
be liable for any settlement  effected  without its written  consent if (i) such
settlement is entered into more than 45 days after receipt by such  indemnifying
party of the aforesaid request, (ii) such indemnifying party shall have received
notice of the terms of such settlement at least 30 days prior to such settlement
being entered into and (iii) such  indemnifying  party shall not have reimbursed
such  indemnified  party in  accordance  with  this  Section  8(c) or  otherwise
provided for such reimbursement prior to the date of such settlement.

             (d) In order to  provide  for just and  equitable  contribution  in
circumstances  in  which  the  indemnification  provided  for in  the  foregoing
paragraphs of this Section 7 is applicable in accordance  with its terms but for
any reason is held to be unavailable  from the Company,  the  Partnership or the
Underwriters,  the Company, the Partnership and the Underwriters will contribute
to the total losses,  claims,  liabilities,  expenses and damages (including any
investigative,  legal and other expenses reasonably incurred in connection with,
and any amount paid  consistent with the Agreement in settlement of, any action,
suit or proceeding or any claim asserted,  but after deducting any  contribution
received  by  the  Company  or the  Partnership  from  persons  other  than  the
Underwriters,  such as persons who control the Company or the Partnership within
the meaning of the Act,  officers  of the  Company  who signed the  Registration
Statement and directors of the Company, who also may be liable for contribution)
to which the Company or the Partnership and any one or more of the  Underwriters
may be  subject  in such  proportion  as shall be  appropriate  to  reflect  the
relative  benefits  received by the Company and  Partnership on the one hand and
the Underwriters on the other. The relative benefits received by the Company and
the  Partnership  on the one hand and the  Underwriters  on the  other  shall be
deemed to be in the same  proportion as the total net proceeds from the offering
(before deducting  expenses) received by the Company and the Partnership bear to
the total underwriting  discounts and commissions  received by the Underwriters,
in each case as set forth in the table on the cover page of the Prospectus.  If,
but only if, the allocation

                                     - 32 -

<PAGE>



provided by the  foregoing  sentence is not  permitted  by  applicable  law, the
allocation of contribution shall be made in such proportion as is appropriate to
reflect not only the relative benefits referred to in the foregoing sentence but
also the relative fault of the Company and the Partnership, on the one hand, and
the  Underwriters,  on the other,  with respect to the  statements  or omissions
which resulted in such loss, claim,  liability,  expense or damage, or action in
respect thereof,  as well as any other relevant  equitable  considerations  with
respect to such  offering.  Such relative fault shall be determined by reference
to whether the untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact relates to information  supplied by
the Company or the Representatives on behalf of the Underwriters,  the intent of
the parties and their relative knowledge,  access to information and opportunity
to correct or prevent such statement or omission.  The Company,  the Partnership
and  the  Underwriters  agree  that  it  would  not be  just  and  equitable  if
contributions  pursuant to this Section 8(d) were to be  determined  by pro rata
allocation  (even  if the  Underwriters  were  treated  as one  entity  for such
purpose) or by any other method of  allocation  which does not take into account
the equitable  considerations  referred to herein. The amount paid or payable by
an  indemnified  party as a result of the loss,  claim,  liability,  expense  or
damage,  or action in respect  thereof,  referred to above in this  Section 8(d)
shall be deemed to include, for purpose of this Section 8(d), any legal or other
expenses  reasonably  incurred  by such  indemnified  party in  connection  with
investigating  or  defending  any such  action  or  claim.  Notwithstanding  the
provisions of this Section 8(d), no Underwriter  shall be required to contribute
any amount in excess of the underwriting  discounts and commissions  received by
it, and no person  found  guilty of  fraudulent  misrepresentation  (within  the
meaning of Section 11 (f) of the Act) will be entitled to contribution  from any
person  who  was  not   guilty  of  such   fraudulent   misrepresentation.   The
Underwriters'  obligations  to  contribute  as provided in this Section 8(d) are
several in  proportion  to their  respective  underwriting  obligations  and not
joint.  For  purposes of this Section  8(d),  any person who controls a party to
this  Agreement  within  the  meaning  of the Act will  have the same  rights to
contribution  as that  party,  and each  officer of the  Company  who signed the
registration statement will have the same rights to contribution as the Company,
subject  in  each  case  to  the  provisions   hereof.  Any  party  entitled  to
contribution,  promptly  after receipt of notice of  commencement  of any action
against  such  party in respect  of which a claim for  contribution  may be made
under this  Section  8(d),  will  notify  any such  party or  parties  from whom
contribution  may be sought,  but the omission so to notify will not relieve the
party or parties from whom  contribution may be sought from any other obligation
it or they may have under this Section  8(d).  Except for a  settlement  entered
into  pursuant to the last  sentence of Section  8(c)  hereof,  no party will be
liable for contribution  with respect to any action or claim settled without its
written consent (which consent will not be unreasonably withheld).

             (e) The indemnity  and  contribution  agreements  contained in this
Section  8 and  the  representations  and  warranties  of the  Company  and  the
Partnership contained in this Agreement shall remain operative and in full force
and  effect  regardless  of (i) any  investigation  made by or on  behalf of the
Underwriters, (ii) acceptance of any of the Shares and payment therefor or (iii)
any termination of this Agreement.

         9. Termination.  The obligations of the several Underwriters under this
Agreement  may be  terminated  at any time prior to the Closing  Date (or,  with
respect to the

                                     - 33 -

<PAGE>



Option Shares, on or prior to the Option Closing Date), by notice to the Company
from Legg Mason Wood Walker, Incorporated,  without liability on the part of any
Underwriter to the Company, if, prior to delivery and payment for the Shares (or
the  Option  Shares,  as  the  case  may  be),  in  the  sole  judgment  of  the
Representatives,  (i)  trading  in  securities  generally  on the New York Stock
Exchange shall have been suspended or limited or minimum or maximum prices shall
have been generally  established on such exchange or on The Nasdaq Stock Market,
or additional material  governmental  restrictions,  not in force on the date of
this Agreement,  shall have been imposed upon trading in securities generally by
such  exchange or by order of the  Commission  or the NASD or any court or other
governmental  authority,  (ii) a  general  banking  moratorium  shall  have been
declared by either  Federal or New York State  authorities or (iii) any material
adverse change in the financial or securities markets in the United States or in
political, financial or economic conditions in the United States or any outbreak
or escalation of  hostilities  or declaration by the United States of a national
emergency or war or other calamity or crisis shall have occurred,  the effect of
any of which is such as to make it, in the sole judgment of the Representatives,
impracticable or inadvisable to market the Shares on the terms and in the manner
contemplated by the prospectus.

         10.   Substitution  of  Underwriters.   If  any  one  or  more  of  the
Underwriters shall fail or refuse to purchase any of the Firm Shares which it or
they have agreed to purchase hereunder,  and the aggregate number of Firm Shares
which such defaulting  Underwriter or Underwriters  agreed but failed or refused
to purchase is not more than  one-tenth of the aggregate  number of Firm Shares,
the other  Underwriters  shall be  obligated,  severally,  to purchase  the Firm
Shares which such defaulting  Underwriter or  Underwriters  agreed but failed or
refused to purchase,  in the  proportions  which the number of Firm Shares which
they have  respectively  agreed to  purchase  pursuant to Section 1 bears to the
aggregate number of Firm Shares which all such non-defaulting  Underwriters have
so agreed to purchase,  or in such other proportions as the  Representatives may
specify; provided that in no event shall the maximum number of Firm Shares which
any  Underwriter  has become  obligated  to  purchase  pursuant  to Section 1 be
increased  pursuant to this  Section 10 by more than  one-ninth of the number of
Firm Shares agreed to be purchased by such Underwriter without the prior written
consent of such  Underwriter.  If any Underwriter or Underwriters  shall fail or
refuse to purchase any Firm Shares and the aggregate number of Firm Shares which
such  defaulting  Underwriter  or  Underwriters  agreed but failed or refused to
purchase  exceeds  one-tenth  of the  aggregate  number of the Firm  Shares  and
arrangements satisfactory to the Representatives,  the Company and the Committee
for the  purchase  of such Firm  Shares are not made  within 48 hours after such
default,  this  Agreement will  terminate  without  liability on the part of any
non-defaulting  Underwriter,  or the Company or any Selling  Shareholder for the
purchase or sale of any Shares under this Agreement. In any such case either the
Representatives  or the  Company  and the  Committee  shall  have  the  right to
postpone the Closing Date,  but in no event for longer than seven days, in order
that the required  changes,  if any, in the  Registration  Statement  and in the
Prospectus or in any other documents or arrangements may be effected. Any action
taken pursuant to this Section 10 shall not relieve any  defaulting  Underwriter
from  liability  in  respect  of any  default  of such  Underwriter  under  this
Agreement.


                                     - 34 -

<PAGE>



         11.  Miscellaneous.  Notice given  pursuant to any of the provisions of
this Agreement shall be in writing and,  unless  otherwise  specified,  shall be
mailed or  delivered  (a) if to the Company,  at the office of the Company,  170
West Ridgely  Road,  Suite 300,  Lutherville,  Maryland,  Attention:  F. Patrick
Hughes, President, with a copy to Abba David Poliakoff, Esq., Gordon, Feinblatt,
Rothman, Hoffberger & Hollander, LLC, Garrett Building, 233 East Redwood Street,
Baltimore,  Maryland  21202, or (b) if to the  Underwriters,  to Legg Mason Wood
Walker, Incorporated at the offices of Legg Mason Wood Walker, Incorporated, 111
South Calvert Street,  20th Floor,  Baltimore,  MD 21202,  Attention:  Corporate
Finance  Department.  Any such notice shall be effective only upon receipt.  Any
notice  hereunder  may be made by telex or  telephone,  but if so made  shall be
subsequently confirmed in writing.

              This  Agreement has been and is made solely for the benefit of the
several  Underwriters,  the Company and the  Partnership  and of the controlling
persons,  directors and officers  referred to in Section 8, and their respective
successors  and assigns,  and no other  person  shall  acquire or have any right
under or by virtue of this Agreement.  The term "successors and assigns" as used
in this Agreement shall not include a purchaser,  as such  purchaser,  of Shares
from any of the several Underwriters.

              All representations,  warranties and agreements of the Company and
the  Partnership  contained  herein  or in  certificates  or  other  instruments
delivered  pursuant hereto,  shall remain operative and in full force and effect
regardless of any  investigation  made by or on behalf of any Underwriter or any
of their  controlling  persons and shall survive delivery of and payment for the
Shares hereunder.

              Any   action   required   or   permitted   to  be   taken  by  the
Representatives  under this  Agreement  may be taken by them  jointly or by Legg
Mason Wood Walker, Incorporated.

              THIS  AGREEMENT  SHALL BE GOVERNED BY AND  CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF MARYLAND  WITHOUT  REGARD TO THE  CONFLICT OF LAWS
PRINCIPLES OF SUCH STATE.

              This Agreement may be signed in two or more  counterparts with the
same  effect  as if the  signatures  thereto  and  hereto  were  upon  the  same
instrument.

              In case any provision in this Agreement shall be invalid,  illegal
or  unenforceable,  the validity,  legality and  enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

              The Company,  the  Partnership  and the  Underwriters  each hereby
irrevocably  waive any right  they may have to a trial by jury in respect of any
claim  based  upon  or  arising  out  of  this  Agreement  or  the  transactions
contemplated hereby.

              This  Agreement  may not be amended or  otherwise  modified or any
provision  hereof waived except by an instrument in writing signed by Legg Mason
Wood Walker, Incorporated and the Company.

                                     - 35 -

<PAGE>



                      UNDERWRITING AGREEMENT SIGNATURE PAGE

         Please  confirm that the foregoing  correctly  sets forth the agreement
among the Company and the several Underwriters.

                                           Very truly yours,

                                           MID-ATLANTIC REALTY TRUST


                                           By:      /s/ F. Patrick Huges
                                           Name:    F. Patrick Hughes
                                           Title:   President


                                          MART LIMITED PARTNERSHIP
                                          as General Partner


                                          By:       /s/ F. Patrick Hughes
                                          Name:     F. Patrick Hughes
                                          Title:    President



Confirmed as of the date first above mentioned:

LEGG MASON WOOD WALKER,  INCORPORATED  SALOMON  BROTHERS INC WHEAT FIRST BUTCHER
SINGER Acting on behalf of themselves and as the  Representatives of the several
Underwriters named in Schedule I hereof.

By: LEGG MASON WOOD WALKER, INCORPORATED

By:
   Authorized Officer

                                     - 36 -

<PAGE>



                                   SCHEDULE I

                                  UNDERWRITERS

Name of Underwriters                             Number of Firm Shares Purchased

Legg Mason Wood Walker, Incorporated.....................................760,000
Salomon Brothers Inc.....................................................760,000
Wheat First Butcher Singer...............................................760,000
BT Alex Brown Incorporated................................................60,000
Credit Lyonnais Securities (USA), Inc.....................................60,000
A.G. Edwards & Sons, Inc..................................................60,000
Goldman, Sachs & Co.......................................................60,000
Lehman Brothers Inc.......................................................60,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated........................60,000
Morgan Stanley & Co. Incorporated.........................................60,000
NatWest Securities Corporation............................................60,000
Oppenheimer & Co., Inc....................................................60,000
PaineWebber Incorporated..................................................60,000
Smith Barney Inc..........................................................60,000
Advest, Inc...............................................................40,000
J.C. Bradford & Co........................................................40,000
Branch, Cabell & Company..................................................40,000
EVEREN Securities, Inc....................................................40,000
Ferris, Baker Watts, Inc..................................................40,000
Interstate/Johnson Lane Corporation.......................................40,000
Janney Montgomery Scott Inc...............................................40,000
Johnston, Lemon & Co. Incorporated........................................40,000
McDonald & Company Securities, Inc........................................40,000
Morgan Keegan & Company, Inc..............................................40,000
Piper Jaffrey Inc.........................................................40,000
Raymond James & Associates, Inc...........................................40,000
The Robinson-Humphrey Company, LLC........................................40,000
Scott & Stringfellow, Inc.................................................40,000
                  Total................................................3,500,000

                                     - 37 -

<PAGE>



                                    EXHIBIT A

                                REIT SUBSIDIARIES

























                                     - 38 -

<PAGE>



EXHIBIT 21. PARENT AND SUBSIDIARIES OF REGISTRANT

         The  subsidiaries  of MART are  listed  below.  All are  engaged in the
ownership and/or development of commercial real estate in the United States. All
are  included in the  consolidated  financial  statements  filed as part of this
Annual Report.

<TABLE>
<CAPTION>
                                    State of                                                    State of 
                                 Incorporation                                               Incorporation
Name                              or Formation    Interest    Name                            or Formation    Interest
----------------------------------------------------------    --------------------------------------------------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>
CORPORATIONS:
BTR Arkor, Inc.                     Maryland        100%      New Town Village, Inc.            Maryland        100%
BTR Atlanta Daycare, Inc.           Maryland        100%      North East Station, Inc.          Maryland        100%
BTR Business Center, Inc.           Maryland        100%      Orchard Landing Apartment, Inc.   Maryland        100%
BTR Chandler, Inc.                  Maryland        100%      Orchard Landing Limited, Inc.     Maryland        100%
BTR East Greenbush, Inc.            Maryland        100%      Page Plaza Associates, Inc.       Maryland        100%
BTR Fallston Corner, Inc.           Maryland        100%      Park Sedona, Inc.                 Maryland        100%
BTR Free State Bowls, Inc.          Maryland        100%      Rolling Road Plaza, Inc.          Maryland        100%
BTR Gateway, Inc.                   Maryland        100%      Rosedale Partners, Inc.           Maryland        100%
  (Formerly Diamond Alley, Inc.)    Maryland        100%      Rosedale Plaza, Inc.              Maryland        100%
BTR Manassas, Inc.                  Maryland        100%      Route 642 Properties, Inc.        Maryland        100%
BTR Marigot, Inc.                   Maryland        100%      Sedona Sewer, Inc.                Maryland        100%
BTR Marina, Inc.                    Maryland        100%      Southdale Mortgage, Inc.          Maryland        100%
BTR McClintock, Inc.                Maryland        100%      Southwest Development
BTR New Ridge, Inc.                 Maryland        100%        Properties, Inc.                Maryland        100%
BTR Northwood Properties, Inc.      Maryland        100%      Timonium Shopping Center, Inc.    Maryland        100%
BTR Odenton Properties, Inc.        Maryland        100%      Wake Plaza, Inc.                  Maryland        100%
BTR Ray Road, Inc.                  Maryland        100%      Wyaness, Inc.                     Maryland        100%
BTR Real Estate Enterprises, Inc.   Maryland        100%
BTR Salisbury, Inc.                 Maryland        100%
BTR Southdale, Inc.                 Maryland        100%         The following are partnerships in which Mid-Atlantic
BTR Union Hills, Inc.               Maryland        100%      Realty Trust, BTR Realty, Inc. or Financial Associates of
BTR Waldorf Development                                       Maryland have partnership interests:
  Corporation                       Maryland        100%
BTR Waldorf Tire, Inc.              Maryland        100%      Name                            or Formation    Interest
BTR Yuma, Inc.                      Maryland        100%      --------------------------------------------------------
Burke Town Plaza, Inc.              Maryland        100%      Arizona & Warner Limited
Brandywine Commons, Inc.            Maryland        100%        Partnership                     Maryland         50%
Clinton Development                                           BBG Joint Venture                 Maryland         93%
  Company, Inc.                     Maryland        100%      BBG Properties Limited
Colonie Plaza, Inc.                 Maryland        100%        Partnership                     Maryland         93%
Columbia Plaza, Inc.                Maryland        100%      Fredericksburg Plaza Limited
Commonwealth Plaza, Inc.            Maryland        100%        Partnership                     Maryland         93%
Concourse Realty Management,                                  Gateway International Limited
  Inc.                              Maryland        100%        Partnership                     Maryland        100%
Davis Ford Properties, Inc.         Maryland        100%      Harbour Island Associates         Maryland        100%
Essanwy, Inc.                       Maryland        100%      Kensington Associates             Maryland         93%
Easton Shoppes, Inc.                Maryland        100%      Northwood Limited Partnership     Maryland         67%
Fredericksburg Plaza, Inc.          Maryland        100%      Rosedale Plaza Limited
Greenbush Residential, Inc.         Maryland        100%       Partnership                      Maryland        100%
Harrisonburg Plaza, Inc.            Maryland        100%      Route 642 Limited Partnership     Maryland         93%
Kingston Crossing, Inc.             Maryland        100%      Scotia Associates Limited
MART Acquisition, Inc.              Maryland        100%        Partnership                     Maryland         50%
                                                              Southdale Limited Partnership     Maryland         50%
                                                              Union Hills Limited Partnership   Maryland         50%
                                                              Wyaness Associates                Maryland        100%
</TABLE>



                                     - 39 -

<PAGE>



                                    EXHIBIT B

                            PARTNERSHIP SUBSIDIARIES


























                                     - 40 -

<PAGE>


Timonium Shopping Center Associates, LLC
Stonehenge, LLC
Roundhollow, LLC
Yorkway Associates, LLC
Talton, LLC
Radcliffe, LLC
Perry Hall Square, LLC

















                                     - 41 -

<PAGE>