<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549
                                    FORM 10-Q

(Mark One)

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

      FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998

                                              OR

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


                         COMMISSION FILE NUMBER 1-12528


                            SPIEKER PROPERTIES, INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


                  MARYLAND                                       94-3185802
------------------------------------------------             ------------------
       (State or other jurisdiction of                          (IRS Employer
       incorporation or organization)                        Identification No.)


        2180 SAND HILL ROAD, MENLO PARK, CA                         94025
------------------------------------------------             ------------------
     (Address of principal executive offices)                     (Zip code)


                                 (650) 854-5600
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

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

Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date:

58,752,847 shares of Common Stock, $0.0001 par value as of May 8, 1998.
2,000,000 shares of Class B Common Stock, $0.0001 par value as of May 8, 1998.
1,176,470 shares of Class C Common Stock, $0.0001 par value as of May 8, 1998.


Page 1 of 22
Exhibit Index is located on Page 23.


<PAGE>   2

                            SPIEKER PROPERTIES, INC.

              QUARTERLY REPORT FOR THE PERIOD ENDED MARCH 31, 1998

                                TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                                                                      Page No.
                                                                                      --------
<S>                                                                                       <C>
PART I.    FINANCIAL INFORMATION
   Item 1. Financial Statements.........................................................   3

           Consolidated Balance Sheets as of March 31, 1998, and December 31, 1997......   4
           Consolidated Statements of Operations for the Three Months
             Ended March 31, 1998 and 1997..............................................   6
           Consolidated Statement of Stockholders' Equity for the Three Months
             Ended March 31, 1998.......................................................   7
           Consolidated Statements of Cash Flows for the Three Months
             Ended March 31, 1998 and 1997..............................................   8
           Notes to Consolidated Financial Statements...................................   9

   Item 2. Management's Discussion and Analysis of Financial Condition and 
           Results of Operations .......................................................  16   

PART II.   OTHER INFORMATION

   Item 6. Exhibits and Reports on Form 8-K.............................................  21
   Signatures...........................................................................  22
</TABLE>



                                       2
<PAGE>   3


PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS


Attached are the following unaudited financial statements of Spieker Properties,
Inc. (the "Company"):

 (i)   Consolidated Balance Sheets as of March 31, 1998, and December 31, 1997

 (ii)  Consolidated Statements of Operations for the Three Months Ended March
       31, 1998 and 1997
 
 (iii) Consolidated Statement of Stockholders' Equity for the Three Months
       Ended March 31, 1998

 (iv)  Consolidated Statements of Cash Flows for the Three Months Ended March
       31, 1998 and 1997

 (v)   Notes to Consolidated Financial Statements

The financial statements referred to above should be read in conjunction with
the Company's Annual Report on the Form 10-K for the year ended December 31,
1997.



                                       3
<PAGE>   4

                                   SPIEKER PROPERTIES, INC.
                                 CONSOLIDATED BALANCE SHEETS
                         AS OF MARCH 31, 1998, AND DECEMBER 31, 1997
                                    (dollars in thousands)

                                            ASSETS


<TABLE>
<CAPTION>
                                                         March 31, 1998   December 31, 1997
                                                         --------------   -----------------
                                                          (unaudited)
<S>                                                        <C>               <C>        
INVESTMENTS IN REAL ESTATE
  Land, land improvements and leasehold interests          $   861,659       $   694,621
  Buildings and improvements                                 2,576,066         2,159,581
  Construction in progress                                     117,321            89,509
                                                           -----------       -----------
                                                             3,555,046         2,943,711
  Less - Accumulated depreciation                             (183,639)         (169,051)
                                                           -----------       -----------
                                                             3,371,407         2,774,660
  Investments in mortgages                                     256,823           271,675
  Property held for disposition, net                            15,776            37,186
                                                           -----------       -----------
     Net investments in real estate                          3,644,006         3,083,521

CASH AND CASH EQUIVALENTS                                       21,042            22,628

ACCOUNTS RECEIVABLE, net of allowance for
  doubtful accounts of $301 and $260 as of
  March 31, 1998, and December 31, 1997, respectively            9,158             8,661

DEFERRED RENT RECEIVABLE                                         6,898             5,276

RECEIVABLE FROM AFFILIATES                                         643               294

DEFERRED FINANCING AND LEASING COSTS, net
  of accumulated amortization of $10,918
  and $10,036 as of March 31, 1998, and December
  31, 1997,  respectively                                       35,426            30,983

FURNITURE, FIXTURES AND EQUIPMENT, net                           3,628             3,375

PREPAID EXPENSES AND OTHER ASSETS                               27,200            50,892

INVESTMENT IN AFFILIATE                                         32,130            37,304
                                                           -----------       -----------
                                                           $ 3,780,131       $ 3,242,934
                                                           ===========       ===========
</TABLE>


               The accompanying notes are an integral part of these statements.

                                              4

<PAGE>   5



                            SPIEKER PROPERTIES, INC.
                          CONSOLIDATED BALANCE SHEETS
                  AS OF MARCH 31, 1998, AND DECEMBER 31, 1997
                   (dollars in thousands, except share data)
                                        
                      LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>

                                                                      March 31, 1998   December 31, 1997
                                                                      --------------   -----------------
                                                                       (unaudited)
<S>                                                                     <C>               <C>        
DEBT
  Unsecured notes                                                       $ 1,411,500       $ 1,135,000
  Unsecured short-term borrowings                                           321,000           200,000
  Mortgage loans                                                            115,354            96,502
                                                                        -----------       -----------
     Total debt                                                           1,847,854         1,431,502
                                                                        -----------       -----------

ASSESSMENT BONDS PAYABLE                                                     12,698            12,672
ACCOUNTS PAYABLE                                                             15,456             9,519
ACCRUED REAL ESTATE TAXES                                                     7,327             1,003
ACCRUED INTEREST                                                             31,503            21,541
UNEARNED RENTAL INCOME                                                       16,121            13,712
DIVIDENDS AND DISTRIBUTIONS PAYABLE                                          43,124            41,110
OTHER ACCRUED EXPENSES AND LIABILITIES                                       42,065            32,034
                                                                        -----------       -----------
  Total liabilities                                                       2,016,148         1,563,093
                                                                        -----------       -----------

MINORITY INTERESTS                                                          202,482           186,013
                                                                        -----------       -----------

COMMITMENTS AND CONTINGENCIES                                                    --                --

STOCKHOLDERS' EQUITY
  Series A Preferred Stock: convertible, cumulative, $.0001 par
   value, 1,000,000 shares authorized, issued and outstanding,
   $25,000 liquidation preference                                            23,949            23,949

  Series B Preferred Stock: cumulative, redeemable, $.0001 par
   value, 5,000,000 shares authorized, 4,250,000 issued and
   outstanding, $106,250 liquidation preference                             102,064           102,064

  Series C Preferred Stock: cumulative, redeemable, $.0001 par
   value, 6,000,000 shares authorized, issued and outstanding,
   $150,000 liquidation preference                                          145,959           145,959

  Common Stock: $.0001 par value, 660,500,000 shares authorized,
   57,467,853 and 55,772,632 shares issued and outstanding as of
   March 31, 1998, and December 31, 1997, respectively                            6                 5

  Class B Common Stock: $.0001  par  value, 2,000,000 shares
   authorized, issued and outstanding                                            --                --

  Class C Common  Stock: $.0001  par  value, 1,500,000 shares
   authorized, 1,176,470 issued and outstanding                                  --                --

  Excess Stock: $.0001  par value per share, 330,000,000 shares
   authorized, no shares issued or outstanding                                   --                --

  Additional paid-in capital                                              1,290,648         1,223,229
  Deferred compensation                                                      (1,357)           (1,378)
  Retained earnings                                                             232                --
                                                                        -----------       -----------
     Total stockholders' equity                                           1,561,501         1,493,828
                                                                        -----------       -----------
                                                                        $ 3,780,131       $ 3,242,934
                                                                        ===========       ===========
</TABLE>


               The accompanying notes are an integral part of these statements.

                                              5
<PAGE>   6

                            SPIEKER PROPERTIES, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
               FOR THE THREE MONTHS ENDED MARCH 31, 1998 and 1997
                  (dollars in thousands, except share amounts)
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                           Three Months Ended
                                                                March 31
                                                        ------------------------
                                                           1998           1997
                                                        ---------       --------
<S>                                                     <C>             <C>     
REVENUES
  Rental income                                         $ 117,637       $ 64,461
  Interest and other income                                 7,670          1,956
                                                        ---------       --------
                                                          125,307         66,417
                                                        ---------       --------
OPERATING EXPENSES
  Rental expenses                                          24,389         11,672
  Real estate taxes                                         9,300          5,254
  Interest expense, including amortization of
   finance costs                                           29,267         12,013
  Depreciation and amortization                            19,586         10,599
  General and administrative and other expenses             4,822          3,067
                                                        ---------       --------
                                                           87,364         42,605
                                                        ---------       --------
  Income from operations before disposition of
   property and minority interests                         37,943         23,812
                                                        ---------       --------

GAIN ON DISPOSITION OF PROPERTY                             9,026          1,489
                                                        ---------       --------

  Income from operations before minority interests         46,969         25,301
                                                        ---------       --------

MINORITY INTERESTS' SHARE IN NET INCOME                    (5,742)        (3,097)
                                                        ---------       --------

  Net income                                               41,227         22,204
                                                        ---------       --------

PREFERRED DIVIDENDS
  Series A Preferred Stock                                   (695)          (572)
  Series B Preferred Stock                                 (2,510)        (2,510)
  Series C Preferred Stock                                 (2,953)            --
                                                        ---------       --------
  Net income available to Common Stockholders           $  35,069       $ 19,122
                                                        =========       ========

INCOME PER SHARE OF COMMON STOCK
     Net income - basic                                 $     .58       $    .44
                                                        =========       ========
     Net income - diluted                               $     .58       $    .43
                                                        =========       ========

DIVIDENDS PER SHARE
  Series A Preferred Stock                              $     .70       $    .57
                                                        =========       ========
  Series B Preferred Stock                              $     .59       $    .59
                                                        =========       ========
  Series C Preferred Stock                              $     .49       $     --
                                                        =========       ========
  Common Stock, including Class B and Class C           $     .58       $    .51
                                                        =========       ========
</TABLE>


        The accompanying notes are an integral part of these statements.

                                        6

<PAGE>   7


                            SPIEKER PROPETIES, INC.
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                    FOR THE THREE MONTHS ENDED MARCH 31, 1998
                             (dollars in thousands)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                           Series A,                                                                         
                           Series B       Common     Class B    Class C                      
                         and Series C     Stock       Common     Common   Common    Additional                Retained
                            Preferred     Shares      Stock      Stock   Stock Par   Paid-in     Deferred     Earnings
                             Stock                    Shares     Shares    Value     Capital   Compensation  (Deficit)      Total
                          ----------- ----------  ----------   --------- --------- ----------- ------------  ---------  -----------
<S>                        <C>        <C>          <C>         <C>          <C>     <C>          <C>         <C>        <C>        
BALANCE AT DECEMBER 31, 
  1997                     $271,972   55,772,632   2,000,000   1,176,470    $5     $1,223,229    $(1,378)    $     --   $ 1,493,828
 Common Stock Offering           --    1,319,660          --          --     1         52,182         --           --        52,183
 Common Stock Issued
   for Property                  --      165,985          --          --     -          6,900         --           --         6,900
 Conversion of Operating
   Partnership Units to
   Common Stock                  --        7,500          --          --     -             --         --           --            --
 Stock Options Exercised         --      115,675          --          --     -          2,465         --           --         2,465
 Restricted Stock Grant          --       86,401          --          --     -             --         --           --            --
 Amortization of Deferred
  Compensation                   --           --          --          --     -             --         21           --            21
 Allocation from minority
   interests                     --           --          --          --     -          5,872         --           --         5,872
 Dividends Declared              --           --          --          --     -             --         --      (40,995)      (40,995)
 Net Income                      --           --          --          --     -             --         --       41,227        41,227
                           --------   ----------   ---------   ---------    --     ----------    -------     --------   -----------

BALANCE AT MARCH 31, 1998  $271,972   57,467,853   2,000,000   1,176,470    $6     $1,290,648    $(1,357)    $    232   $ 1,561,501
                           ========   ==========   =========   =========    ==     ==========    =======     ========   ===========
</TABLE>



        The accompanying notes are an integral part of these statements.

                                        7

<PAGE>   8

                            SPIEKER PROPERTIES, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
               FOR THE THREE MONTHS ENDED MARCH 31, 1998 and 1997
                             (dollars in thousands)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                            Three Months
                                                                            Ended March 31
                                                                     -------------------------
                                                                        1998           1997
                                                                     ---------       ---------
<S>                                                                  <C>             <C>      
CASH FLOWS FROM OPERATING ACTIVITIES
  Net Income                                                         $  41,227       $  22,204
  Adjustments to reconcile net income to net cash provided by
   operating activities-
  Depreciation and amortization                                         19,586          10,599
  Amortization of prepaid interest and deferred financing costs            519             268
  Non-cash compensation                                                     21             199
  Minority share of net income                                           5,742           3,097
  Gain on disposition of property                                       (9,026)         (1,489)
  (Increase) decrease in deferred rent receivable                       (1,622)             35
  Increase in accounts receivable                                         (497)         (1,287)
  Increase in receivable from affiliates                                  (349)         (3,533)
  Decrease in prepaid expenses and other assets                            172           8,633
  Decrease in assessment bonds payable                                    (236)           (235)
  Increase in accounts payable                                           5,937           3,693
  Increase in accrued real estate taxes                                  6,324           4,984
  Increase in accrued interest                                           9,962           2,180
  Increase in other accrued expenses and liabilities                     6,067           3,346
  Increase in unearned rental income                                     2,409           3,424
                                                                     ---------       ---------
     Net cash provided by operating activities                          86,236          56,118
                                                                     ---------       ---------
CASH FLOWS FROM INVESTING ACTIVITIES
  Additions to properties                                             (572,021)       (347,009)
  Additions to deposits on properties, net                              23,029              --
  Additions to investment in mortgages                                 (11,610)             --
  Additions to leasing costs                                            (3,476)         (1,829)
  Proceeds from investment in mortgages                                 26,462              --
  Proceeds from investment in affiliate                                  5,174              --
  Proceeds from disposition of property                                 40,257           3,969
                                                                     ---------       ---------
     Net cash used for investing activities                           (492,185)       (344,869)
                                                                     ---------       ---------
CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from debt                                                   765,500              --
  Payments on debt                                                    (368,483)        (41,666)
  Payments of financing fees                                            (2,690)           (146)
  Payment of dividends/distributions                                   (44,612)        (21,188)
  Proceeds from sale of Common Stock, net of issuance costs             52,183         374,835
  Proceeds from stock options exercised                                  2,465             405
                                                                     ---------       ---------
     Net cash provided by financing activities                         404,363         312,240
                                                                     ---------       ---------
     Net (decrease) increase in cash and cash equivalents               (1,586)         23,489
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                        22,628          29,336
                                                                     ---------       ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                           $  21,042       $  52,825
                                                                     =========       =========
SUPPLEMENTAL CASH FLOW DISCLOSURE
  Cash paid for interest                                                21,759          10,800
SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS
Liabilities assumed in relation to property acquisitions                23,514          46,648
Minority interest capital recorded in relation to property              22,230          26,072
acquisitions
Write-off of fully depreciated property                                  1,988           1,596
Write-off of fully amortized deferred financing and leasing              1,337             839
costs
Conversion of operating partnership units into Common Stock
  with resulting reduction in minority interest and increase in             --             524
  additional paid-in-capital
Restricted Stock Grants                                                     --             491
</TABLE>


        The accompanying notes are an integral part of these statements.

                                        8
<PAGE>   9


                            SPIEKER PROPERTIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             MARCH 31, 1998 and 1997
                        (in thousands, except share data)
                                   (UNAUDITED)


1.       ORGANIZATION AND BASIS OF PRESENTATION

Spieker Properties, Inc.

Spieker Properties, Inc. (the "Company") was organized in the state of Maryland
on August 20, 1993, and commenced operations effective with the completion of
its initial public offering ("IPO") on November 18, 1993. The Company qualifies
as a real estate investment trust ("REIT") under the Internal Revenue Code of
1986 (the "Code"), as amended. As of March 31, 1998, the Company owned an
approximate 88.8 percent general and limited partnership interest in Spieker
Properties, L.P. (the "Operating Partnership"). The Company and the Operating
Partnership are collectively referred to as the "Company."


2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Consolidation

The Company's consolidated financial statements include the consolidated
financial position of the Operating Partnership and its subsidiaries as of March
31, 1998, and December 31, 1997, and its consolidated results of operations for
the three months ended March 31, 1998 and 1997 and its consolidated cash flows
for the three months ended March 31, 1998 and 1997. The Company's investment in
Spieker Northwest, Inc. (an unconsolidated Preferred Stock subsidiary of the
Company) is accounted for under the equity method. All significant intercompany
balances and transactions have been eliminated in the consolidated financial
statements.

Interim Financial Information

The consolidated financial statements have been prepared pursuant to the rules
and regulations of the Securities and Exchange Commission ("SEC") and, in
management's opinion, include all adjustments necessary for a fair presentation
of results for such interim periods. Certain information and note disclosures
normally included in annual financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted pursuant
to SEC rules or regulations; however, the Company believes that adequate
disclosures have been made.

The interim results for the three months ended March 31, 1998 and 1997, are not
necessarily indicative of results for the full year. It is suggested that these
financial statements be read in conjunction with the consolidated financial
statements and notes thereto included in the Company's Annual Report on Form
10-K for the year ended December 31, 1997.

Properties

Properties are recorded at cost and are depreciated using the straight-line
method over the estimated useful lives of the properties. The estimated lives
are as follows:

        Land improvements and leasehold interests     18 to 40 years
        Buildings and improvements                    10 to 40 years
        Tenant improvements                           Term of the related lease



                                       9
<PAGE>   10

The cost of buildings and improvements includes the purchase price of the
property or interests in property, legal fees, acquisition costs and interest,
property taxes and other costs incurred during the period of construction.

Expenditures for maintenance and repairs are charged to operations as incurred.
Significant renovations or betterments which extend the economic useful life of
assets are capitalized.

Investments in real estate are stated at the lower of depreciated cost or
estimated fair value. Fair value for financial reporting purposes is evaluated
periodically by the Company on a property by property basis using undiscounted
cash flow. If a potential impairment is identified, it is measured by the
property's fair value based on either sales comparables or the net cash expected
to be generated by the property, less estimated carrying costs (including
interest) throughout the anticipated holding period, plus the estimated cash
proceeds from the ultimate disposition of the property. To the extent that the
carrying value exceeds the estimated fair value, a provision for decrease in net
realizable value is recorded. Estimated fair value is not necessarily an
indication of a property's current value or the amount that will be realized
upon the ultimate disposition of the property. As of March 31, 1998, and
December 31, 1997, none of the carrying values of the properties exceeded their
estimated fair values. As of March 31, 1998, and December 31, 1997, the
properties are located primarily in California, Oregon and Washington. As a
result of this geographic concentration, the operations of these properties
could be adversely affected by a recession or general economic downturn in the
areas where these properties are located.

The Company owns mortgage loans that are secured by real estate. Certain of the
loans are with an affiliate of the Company (see note 4). The Company assesses
possible impairment of these loans by reviewing the fair value of the underlying
real estate. As of March 31, 1998, the estimated fair value of the underlying
real estate was in excess of the Company's book value of the mortgage loans.

Construction in Progress

Project costs clearly associated with the development and construction of a real
estate project are capitalized as construction in progress. In addition,
interest, real estate taxes and other costs are capitalized during the period in
which activities necessary to get the property ready for its intended use are in
progress.

Cash and Cash Equivalents

Highly liquid investments with an original maturity of three months or less when
purchased are classified as cash equivalents.

Deferred Financing and Leasing Costs

Costs incurred in connection with financing or leasing are capitalized and
amortized on a straight-line basis over the term of the related loan or lease.
Unamortized financing and leasing costs are charged to expense upon the early
termination of the lease or upon the early payment of financing.

Fair Value of Financial Instruments

Based on the borrowing rates currently available to the Company, the carrying
amount of debt approximates fair value. Cash and cash equivalents consist of
demand deposits, certificates of deposit, and overnight repurchase agreements,
with financial institutions. The carrying amount of cash and cash equivalents
approximates fair value.

Minority Interest

Minority interest in the Company consists of the limited partners' interest in
the Operating Partnership of approximately 11.2 percent and 12.9 percent at
March 31, 1998 and December 31, 1997, respectively.



                                       10
<PAGE>   11

The Company has issued limited partner's interest of 2,007,495 Preferred
Operating Partnership Units. Preferred Operating Partnership Units are
convertible into 1,824,994 Operating Partnership Units at the discretion of the
holder subsequent to May 3, 1998, or they may be redeemable for cash subsequent
to December 3, 2002. Preferred Operating Partnership Units are paid
distributions quarterly in the amount of $1,266.

Revenues

All leases are classified as operating leases. Rental income is recognized on
the straight-line basis over the terms of the leases. Deferred rent receivable
represents the excess of rental revenue recognized on a straight-line basis over
cash received under the applicable lease provisions.

Interest and Other Income

Interest and other income includes interest income on cash, cash equivalents,
investments in mortgages, and management fee income.

Net Income Per Share of Common Stock

Per share amounts for the Company are computed using the weighted average common
shares outstanding (including Class B Common Stock and Class C Common Stock)
during the period. The diluted weighted average common shares outstanding
include the dilutive effect of stock options. The basic and diluted weighted
average common shares outstanding for the three months ended March 31, 1998 and
1997, are as follows:

<TABLE>
<CAPTION>
                          Basic Weighted Average     Diluted Weighted Average
                        Common Shares Outstanding   Common Shares Outstanding
                        -------------------------   -------------------------
<S>                             <C>                         <C>       
Three months ended:
  March 31, 1998                60,002,677                  60,931,677
  March 31, 1997                43,592,322                  44,301,170
</TABLE>


Earnings used in the calculation are reduced by dividends owed to preferred
stockholders.

Reclassifications

Certain items in the 1997 financial statements have been reclassified to conform
to the 1998 presentation.

Use of Estimates

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




                                       11
<PAGE>   12

3.       ACQUISITIONS AND DISPOSITIONS

The Company acquired the following properties (the "1998 Acquisitions") during
the three months ended March 31, 1998:

<TABLE>
<CAPTION>
                                                     Property   Total Rentable
Project Name                     Location             Type (1)    Square Feet  Initial Cost(2)
------------                     --------             --------    -----------  ---------------
<S>                              <C>                     <C>       <C>           <C>     
The Concourse                    San Jose, CA             O        540,224       $172,421 (4)
Koll Bellefield Center           Bellefield, WA           O         65,946         10,324
Santa Monica Business Park (3)   Santa Monica, CA         O        960,081        105,649
Marina Business Center (3)       Marina Del Rey, CA       O        261,966         21,613
The City Tower                   Orange, CA               O        409,492         97,306 (5)
Skyport Plaza                    San Jose, CA             O        359,600         56,873 (6)
Hayward Business Park            Hayward, CA              I        630,944         33,610
Enterprise Business Park II      Sacramento, CA           I        579,945         26,202
Brea Park Center - Building C    Brea, CA                 O         26,856          2,297
Allegiance Center                Ontario, CA              O         73,778          5,191
Ontario Corporate Center         Ontario, CA              O         97,703         10,479
</TABLE>

(1)  "O" indicates office property; "I" indicates industrial property.
(2)  Represents the initial acquisition costs of the properties excluding any
     additional repositioning costs.
(3)  Previously identified as a part of the TDC Portfolio.
(4)  Includes approximately $14.6 million allocated to 6.6 acres of land held
     for future development.
(5)  Includes approximately $3.5 million allocated to 10.5 acres of land held
     for future development and $35.6 million allocated to a property currently
     under redevelopment.
(6)  Includes approximately $21.5 million allocated to 20.0 acres of land held
     for future development.



The Company disposed of the following properties (the "1998 Dispositions")
during the three months ended March 31, 1998:

<TABLE>
<CAPTION>
                                              Property   Total Rentable
Project Name              Location               Type      Square Feet  Sales Price
------------              --------               ----      -----------  -----------
<S>                       <C>                   <C>         <C>            <C>
Rose Pavilion            Pleasanton, CA        Retail      292,902        $40,928
</TABLE>

During the three months ended March 31, 1998, the Company acquired eight parcels
of land for development. The total initial cost of these eight parcels was
$32,866.

4.       TRANSACTIONS WITH AFFILIATES

Revenues and Expenses

The Company received $724 and $165 for three months ended March 31, 1998, and
1997, respectively, for management services provided to certain properties that
are controlled and operating by either Spieker Northwest, Inc. or Spieker
Partners related entities (collectively, "Spieker Partners"). Certain officers
of Spieker Properties, Inc. are partners in Spieker Partners.

Receivable From Affiliates

The receivable from affiliates at March 31, 1998, and December 31, 1997,
represents management fees and reimbursements due from Spieker Northwest, Inc.
and Spieker Partners.

Investments in Mortgages

Included in Investments in Mortgages are $242,442 of loans to Spieker Northwest,
Inc. The loans are secured by deeds of trust on real property, bear interest at
8.5%, and mature in 2012. Interest income of $5,433 is included in interest and
other income for the three months ended March 31, 1998.




                                       12
<PAGE>   13

Investment in Affiliate

The investment in affiliate represents an investment in Spieker Northwest, Inc.
("SNI"). The Company owns 95% of the Preferred Stock of SNI. Certain Senior
Officers of the Company own 100% of the voting stock of SNI. SNI owns 2.5
million square feet of office, industrial and retail property located in various
states. In addition, SNI owns seven parcels of land totaling 86.6 acres. The
entire portfolio of property is held for sale at March 31, 1998. In addition to
property ownership, SNI provides property management services to certain
properties owned by Spieker Partners.

5.       PROPERTY HELD FOR DISPOSITION

The Company has determined to focus exclusively on properties that meet its
long-term strategic objectives. The Company has therefore decided to divest
itself of certain properties. Included in property held for disposition of
$15,776 at March 31, 1998, is one office property located in Southern
California, one industrial property located in Southern California and three
industrial properties located in Central California. The divestiture of these
properties is subject to identification of a purchaser, negotiation of
acceptable terms and other customary conditions.

6.       DEBT

Unsecured Notes

As of March 31, 1998, the Company has outstanding $1,411,500 in investment grade
rated unsecured debt securities with interest rates ranging from 6.65% to 8.00%
payable semi-annually. The debt securities mature on various dates from 2000 to
2027.

On January 27, 1998, the Company sold $150,000 of unsecured investment grade
rated notes bearing interest at 6.75% and due January 15, 2008. Net proceeds of
$148,500 were used principally to repay borrowings on the unsecured line of
credit and to fund the ongoing acquisition and development of property.

On February 2, 1998, the Company sold $125,000 and $1,500 of unsecured
investment grade rated notes bearing interest at 6.875% and 7.00% and due
February 1, 2005 and February 1, 2007, respectively. Net proceeds of $125,602
were used primarily to repay borrowings on the unsecured line of credit and to
fund the ongoing acquisition and development of property.

Unsecured Short Term Borrowings

The Company has an Unsecured Line of Credit facility. The maximum amount
available under the facility is $250,000. The facility carries interest at LIBOR
(London Interbank Offered Rates) plus 0.80%, matures in August 2001, includes an
annual administrative fee of $50 and an annual facility fee of .20%. As of March
31, 1998, the amount drawn on the facility was $121,000. In addition, the
Company has a $200,000 short-term bank facility. This short-term facility
carries interest at LIBOR plus .65% and matures November 1998 with an option to
extend for one more year.

Mortgage Loans

Mortgage loans of $115,354 as of March 31, 1998, are secured by deeds of trust
on related properties. The mortgage loans carry interest rates ranging from
7.37% to 9.88%, require monthly principal and interest payments, and mature on
various dates from 1998 to 2013.



                                       13
<PAGE>   14

7.       DIVIDENDS AND DISTRIBUTIONS PAYABLE

The dividends and distributions payable at March 31, 1998, and December 31,
1997, represent amounts payable to stockholders of record and distributions
payable to minority interest holders as of the same dates. The stockholders of
record and minority interests holders as of March 31, 1998, and December 31,
1997, are as follows:

<TABLE>
<CAPTION>
                                 March 31, 1998    December 31, 1997
                                 --------------    -----------------
<S>                               <C>                <C>       
Shares of:
     Common Stock                 57,467,853         55,772,632
     Class B Common Stock          2,000,000          2,000,000
     Class C Common Stock          1,176,470          1,176,470
     Series A Preferred Stock      1,000,000          1,000,000
     Series B Preferred Stock      4,250,000          4,250,000
     Series C Preferred Stock      6,000,000          6,000,000
Units of:
     Minority Interest Holders     7,848,858          7,322,126
     Minority Interest Holders -   2,007,495          2,007,495
       Preferred
</TABLE>


8.       STOCKHOLDERS' EQUITY

Equity Offerings

The Company placed 710,832 shares of Common Stock at $42.25 per share on
February 18, 1998 and placed 608,828 shares of Common Stock at $41.06 per share
on March 31, 1998 in Registered Unit Investment Trusts. Combined net proceeds of
$52,200 were used to repay borrowings on the Unsecured Line of Credit and to
fund the ongoing acquisition and development of properties.

9.       COMMITMENTS AND CONTINGENCIES

The land on which three of the Company's properties are located is owned by
Stanford University and is subject to ground leases. The ground leases expire in
2039 or 2040 and, unless the leases are extended, the use of the land, together
with all improvements, will revert back to Stanford University. The former
owners of the three properties prepaid the ground leases through 2011, 2012 and
2017; thereafter, the Company will be responsible for the ground lease payments,
as defined under the terms of the leases. These ground lease payments have been
segregated from the total purchase price of the properties, capitalized as
leasehold interests in the accompanying consolidated balance sheet, and are
being amortized ratably over the terms of the related original prepayment
periods (18 to 24 years).

In addition, the Company has entered into operating ground leases on certain
land parcels with periods ranging from 16 to 53 years, certain of the operating
ground leases contain purchase options.

10.      GAIN ON DISPOSITION OF PROPERTY

Gain on disposition of property for the three months ended March 31, 1998,
represents the gain on disposition of one retail property located in Northern
California.



                                       14
<PAGE>   15


11.      SUBSEQUENT EVENTS


On April 6, 1998, the Company obtained a 12.5% interest in Spieker Griffin/W9
Associates, LLC, for a capital contribution of $18,000. Spieker Griffin/W9
Associates, LLC, purchased a 535,000 square foot office complex located in
Orange County, California for a total initial cost of $100,000. The office
complex will be managed by the Company.

On April 20, 1998, the Company issued 1,500,000 Preferred Operating Partnership
Units (Series D Preference Units) at $50.00 per unit in a private placement.
Dividends on the Series D Preference Units are payable at an annual rate of
7.6875%. Net proceeds of approximately $73,100 were used to repay borrowings on
the Unsecured Line of Credit.

On April 29, 1998, the Company issued $25,000 of investment grade rated
unsecured notes with an interest rate of 6.88%, due April 30, 2007. Net proceeds
of $23,400 were used to fund acquisitions of property. Additionally, the Company
placed 1,166,144 shares of Common Stock at $39.875 per share in a Registered
Unit Investment Trust. Net proceeds of approximately $44,000 were contributed to
the Operating Partnership and were used to fund acquisitions of property.

On various dates subsequent to March 31, 1998, through May 1, 1998, the Company
acquired properties totaling 1.6 million square feet at a total initial
acquisition cost of $280,000. The acquisitions were funded by proceeds from
Common Stock offerings, borrowings from short-term unsecured bank facilities,
and issuances of debt and Operating Partnership Units.




                                       15
<PAGE>   16

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
RESULTS OF OPERATIONS

Statements contained in this Item 2, "Management's Discussion and Analysis of
Financial Conditions and Results of Operations," and elsewhere in this Quarterly
Report on Form 10-Q which are not historical facts may be forward-looking
statements. Such statements are subject to certain risks and uncertainties which
could cause actual results to differ materially from those projected, including,
but not limited to, those risks and special considerations set forth in the
Company's other SEC filings. Readers are cautioned not to place undue reliance
on these forward-looking statements which speak only as of the date hereof. The
Company undertakes no obligation to publicly release any revisions to these
forward-looking statements to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events.

RESULTS OF OPERATIONS

The following comparison is of the Company's consolidated operations for the
three month period ended March 31, 1998, as compared to the corresponding
period ended March 31, 1997.

Rental revenues for the first quarter of 1998 increased by $53.1 million or
82.3% to $117.6 million, as compared with $64.5 million for the quarter ended
March 31, 1997. Of this increase, $9.5 million was generated by properties
acquired during the first three months of 1998 (the "1998 Acquisitions"). In the
first quarter of 1998 the Company acquired properties totaling 4.0 million
square feet for a total investment of $500.0 million. As used herein, the terms
"invested" and "total investment" represent the initial purchase price of
acquisitions, plus projected cost of certain repositioning and rehab capital
expenditures anticipated at the time of purchase. The properties acquired in the
first quarter were acquired on various dates throughout the quarter and, as
such, a full quarter's revenue and expenses was not recognized during the
quarter.

$42.6 million of the rental revenue increase in the first quarter of 1998 was
generated by properties acquired during 1997. During 1997, the Company invested
$1.5 billion to acquire properties totaling 12.5 million square feet (the "1997
Acquisitions").

$2.7 million of the increase in rental revenues is attributable to revenue
increases in properties owned at January 1, 1997, and still owned at March 31,
1998 (the "Core Portfolio"). This increase in the Core Portfolio is due to
increased rental rates realized on the renewal and re-leasing of
second-generation space and contractual rent increases in existing leases.
During the quarter ended March 31, 1998, the Company completed 313 lease
transactions for the renewal or re-leasing of 2.7 million square feet of
second-generation space. On average for the quarter, the new effective rates
were 21.7% higher than the expiring coupon rent.

$3.0 million of the rental revenue increase in the first quarter of 1998 was
generated by properties developed by the Company (the "Developments"). The
Developments include both properties completed and added to the Company's
portfolio of stabilized properties during 1997 and 1998, as well as properties
currently under development. During the three months ended March 31, 1998, one
property totaling 125,190 square feet was completed for an estimated final cost
of $17.6 million and was added to the Company's portfolio of stabilized
properties. The Company also has a current development pipeline of 3.1 million
square feet representing a total projected cost of $305.3 million. Certain of
the properties in the development pipeline are shell complete and partially
occupied.

The increases in rental revenue are partially offset by a decrease of $4.7
million attributable to the disposition of properties which were owned by the
Company during the quarter ended March 31, 1997 and sold subsequent to the end
of given quarter (the "Property Dispositions").

As a result of the 1998 Acquisitions, the 1997 Acquisitions, and the
Developments, the Company's rentable square footage, not including retail
properties, increased by 15.0 million square feet or 64.0% to 38.4 million
square feet on March 31, 1998, from 23.4 million on March 31, 1997. At March 31,
1998, the portfolio of stabilized properties was 93.8% occupied. By property
type, the office portfolio was 94.8% occupied and the industrial portfolio was
93.0% occupied.



                                       16
<PAGE>   17

Interest and other income increased by $5.7 million or 285.0% for the quarter
ended March 31, 1998, as compared to the quarter ended March 31, 1997. The net
increase in interest and other income is due to interest income from mortgage
loans made to Spieker Northwest, Inc. (SNI), an affiliate of Spieker Properties,
Inc., in relation to SNI's acquisition of non-core assets in the WCB Portfolio.
Refer to Transactions with Affiliates - "Investment in Affiliate" (footnote 4).

Rental expenses increased by $12.7 million or 108.5% for the quarter ended March
31, 1998, as compared with the same period in 1997. Real estate taxes increased
by $4.0 million or 75.5% in 1998, as compared to $5.3 million in 1997. The
overall increase in rental expenses and real estate taxes (collectively referred
to as "property operating expenses") is primarily a result of the growth in the
total square footage of the Company's portfolio of properties. Of the total
$16.7 million increase in property operating expenses, $12.8 million is
attributable to the 1997 Acquisitions, $4.0 million is attributable to the 1998
Acquisitions, $0.6 million is attributable to the Developments, and $0.4 million
is attributable to the Core Portfolio offset by a $1.1 million decrease
attributable to the Property Dispositions. On a percentage basis, property
operating expenses were 28.7% and 26.4% of rental revenues for the quarter ended
March 31, 1998, and March 31, 1997, respectively. The increase in property
operating expenses as a percentage of rental revenues is attributable to the
increased percentage of office properties in the Company's portfolio. For the
quarter ended March 31, 1998, 65.1% of the Company's net operating income
(rental revenues less property operating expenses) was generated by office
properties as compared with 58.8% during 1997.

In relation to the Company's decision to divest itself of certain properties,
the following analysis is presented: Rental revenues net of property operating
expenses (referred to as "net operating income") increased by $40.0 million or
92.2% to $83.4 million, as compared to $43.4 million for the quarter ended March
31, 1997. Of this increase, $29.8 million and $5.5 million relates to the 1997
and 1998 Acquisitions, $2.3 million is attributable to the Core Portfolio, and
$2.4 million is attributable to the Developments.

Interest expense increased by $17.3 million or 144.2% to $29.3 million for the
quarter ended March 31, 1998, from $12.0 million for the same period in 1997.
The increase in interest expense is due to increases in the total average
outstanding debt balances. The average outstanding debt for the quarter ended
March 31, 1998, and 1997 was $1.7 billion and $700.0 million, respectively. The
increase in the average outstanding debt balance is consistent with the increase
in the size of the Company's portfolio of properties.

Depreciation and amortization expenses increased by $9.0 million or 84.9% for
the quarter ended March 31, 1998, as compared with the same quarter in 1997, due
to the 1998 and 1997 Acquisitions and the completed Developments.

General and administrative expenses and other expenses increased by $1.7 million
for the quarter ended March 31, 1998 as compared with the same period in 1997,
primarily as a result of the increased number of employees. On a percentage
basis, general and administrative expenses were 4.1% of rental revenues for the
quarter, as compared with 4.8% for the same period in 1997.

During the first quarter of 1998, the Company disposed of one retail property
resulting in a gain on disposition of $9.0 million.

Net income before minority interests and disposition of property increased by
$14.1 million or 59.2% to $37.9 million for the quarter ended March 31, 1998,
from $23.8 million for the three months ended March 31, 1997. The increase in
net income is principally due to increased rents in the Company's Core Portfolio
and the 1997 Acquisitions.

LIQUIDITY AND CAPITAL RESOURCES

For the quarter ended March 31, 1998, cash provided by operating activities
increased by $30.1 million, or 53.7%, to $86.2 million, as compared to $56.1
million for 1997. The increase is primarily due to the increase in net income
resulting from the 1997 and 1998 Acquisitions, the Developments, increased
property operating income generated by the Core Portfolio and is partially
offset by an increase in interest expense. Cash used for investing activities
increased by $147.3 million, or 42.7%, to $492.2 million for the first three
months of 1998, as compared to $344.9 million for the first three months of
1997. The increase is attributable to the Company's 



                                       17
<PAGE>   18

ongoing acquisition and development of office and industrial properties offset
by proceeds from dispositions. Cash provided by financing activities increased
by $92.2 million, or 29.5%, to $404.4 million for the first three months of
1998, as compared to $312.2 million for the same period in 1997. During the
first three months of 1998, cash provided by financing activities consisted
primarily of $61.5 million in net proceeds from the sale of Common Stock, $276.5
million in proceeds from the issuance of unsecured notes (see below), net
borrowings of $121.0 million on the Facility (as defined below) and an $18.9
million increase in mortgage loans due to loans assumed in conjunction with
property acquisitions. Additionally, payments of distributions increased by
$23.4 million to $44.6 million for the first three months of 1998, as compared
with $21.2 million for the same period in 1997. The distribution payment
increase is due to the greater number of shares outstanding and a 21.3% increase
in the distribution rate of $.57 per share for the first three months of 1998
from $.47 per share in 1997.

The principal sources of funding for acquisitions, development, expansion and
renovation of the properties are unsecured short-term borrowings, public and
privately placed equity financing, public unsecured debt financing, the issuance
of partnership units in the Operating Partnership, the assumption of secured
debt on properties acquired and cash flow provided by operations. The Company
believes that its liquidity and its ability to access capital are adequate to
continue to meet liquidity requirements for the foreseeable future.

At March 31, 1998, the Company had no material commitments for capital
expenditures related to the renewal or re-leasing of space. The Company believes
that the cash provided by operations and its line of credit provide sufficient
sources of liquidity to fund capital expenditure costs associated with the
renewal or re-leasing of space.

In January 1997, the Company sold 11,500,000 shares of Common Stock (including
1,500,000 shares sold to the underwriters in the exercise of their
over-allotment option in February 1997) through an underwritten public offering
at $34.50 per share. The net proceeds of $374.8 million were used to purchase
properties during the first quarter of 1997, many of which were under contract
or letter of intent at the time of the offering, and to repay indebtedness.
Also, in January 1997, the Company and the Operating Partnership filed a shelf
registration statement with the SEC which registered $500.0 million of equity
securities of the Company and $500.0 million of debt securities of the Operating
Partnership and became effective in January 1997.

In September 1997, the Company and the Operating Partnership filed a shelf
registration statement (the "September 1997 Shelf Registration Statement") with
the SEC which registered $500.0 million of equity securities of the Company and
$500.0 million of debt securities of the Operating Partnership which became
effective in October 1997.

On October 10, 1997, the Company sold 6,000,000 shares of Series C Cumulative
Redeemable Preferred Stock for $25.00 per share. Dividends are payable at an
annual rate of 7.875% of the liquidation preference of $150.0 million. Net
proceeds of $146.0 million were used principally to repay borrowings on the
unsecured line of credit and to fund the ongoing acquisition and development of
property.

In November 1997, the Company sold 11,500,000 shares of Common Stock (including
1,500,000 shares sold to the underwriters in the exercise of their
over-allotment option) through an underwritten public offering at $38.875 per
share. The net proceeds of $425.0 million were used to repay indebtedness and to
purchase properties which were under contract at the time of the offering.

In December 1997, the Company placed 573,134 shares of Common Stock in a
Registered Unit Investment Trust at $41.875 per share together with other
publicly traded REITs. The net proceeds of $22.8 million were used to repay
borrowings on the unsecured line of credit and to fund the ongoing acquisition
and development of properties.

In February and March 1998, the Company placed 710,832 shares and 608,828 shares
of Common Stock at prices of $42.25 and $41.06 in Registered Unit Investment
Trusts along with other publicly traded REITs. The net proceeds of $52.5 million
were used to paydown borrowings on the line of credit and to fund the ongoing
acquisition and development of properties.



                                       18
<PAGE>   19


In 1997 the Operating Partnership issued $500.0 million of investment grade
rated debt in three tranches as follows: On July 14, 1997, the Operating
Partnership issued $150.0 million of investment grade rated unsecured notes. The
notes carry an interest rate of 7.125%, were priced to yield 7.183%, and mature
on July 1, 2009. On September 29, 1997, the Operating Partnership issued $150.0
million of investment grade rated unsecured debentures. The debentures carry an
interest rate of 7.5%, were priced to yield 7.57% and mature on October 1, 2027.
On December 8, 1997, the Operating Partnership issued $200.0 million of 7.35%
debentures, priced to yield 7.37%, and mature on December 1, 2017. Net proceeds
from the July 1997, September 1997 and December 1997 unsecured debt securities
of $489.0 million were used to repay borrowings on the unsecured line of credit
and to fund the ongoing acquisition and development of properties.

During the first quarter of 1998 the Operating Partnership issued $276.5 million
of investment grade rated unsecured notes in three tranches as follows: $150.0
million of 6.75% notes due January 15, 2008, priced to yield 6.79%; $125.0
million of 6.875% notes due February 1, 2005; and $1.5 million of 7.0% notes due
February 2, 2007.

As of March 31, 1998, the Operating Partnership had in total $1.4 billion of
investment grade rated unsecured debt securities outstanding. The debt
securities have interest rates which vary from 6.65% to 8.00%, and maturity
dates which range from 2000 to 2027. Through its issuance of debt, the Company
has extended the average maturity for its unsecured debt from 7.2 years at March
31, 1997, to 9.8 years at March 31, 1998.

The Operating Partnership has a $250.0 million unsecured line of credit facility
(the "Facility") with interest at London Interbank Offered Rates ("LIBOR") plus
 .80%. The Facility matures in August 2001. This facility has a competitive bid
option that allows the Operating Partnership to request bids from the Lenders
for advances up to $150.0 million. At March 31, 1998, the Operating Partnership
had $121.0 million outstanding under the Facility. In addition, the Operating
Partnership had $200.0 million outstanding under a separate short-term bank
facility at December 31, 1997. This short-term facility carries interest at
LIBOR plus 0.65% and matures in November 1998 with an option to extend for one
more year.

In addition to the unsecured debt securities and the Facility, the Operating
Partnership has $115.4 million of secured indebtedness (the "Mortgages") at
March 31, 1998. The Mortgages have interest rates varying from 7.37% to 10.0%
and maturity dates from 1998 to 2013. The Mortgages are secured by a first or
second deed of trust on the related properties and generally require monthly
principal and interest payments. The Company also has $12.7 million of
assessment bonds outstanding as of March 31, 1998.

Subsequent to the quarter end in April 1998, the Company placed 1,166,144 shares
of Common Stock at $39.88 per share in a Registered Unit Investment Trust. The
Operating Partnership also issued $25.0 million of investment grade rated
unsecured notes with an interest rate of 6.875%, due April 30, 2007. The net
proceeds of $23.4 million were used to fund acquisitions property. Finally, the
Company sold 1,500,000 Series D Cumulative Redeemable Preferred Units to an
institutional investor for $50.00 per unit. Dividends are payable at an annual
rate of 7.6875%. These Preferred Units may be called at par on or after April
20, 2003, and have no stated maturity or mandatory redemption. These Preferred
Units are not convertible into Common Stock of the Company. The net proceeds of
$44.1 million for the Common Shares and $73.1 million for the Series D Preferred
Units were used to paydown the line of credit and fund future growth of the
Company.

In addition, the Company and the Operating Partnership filed a shelf
registration statement (the "May 1998 Shelf Registration Statement") with the
SEC which registered $500.0 million in equity securities of the Company and
$500.0 million of debt securities of the Operating Partnership, which became
effective in May 1998.

After completion of the equity and debt offerings, the Company has the capacity
pursuant to the September 1997 Registration Statement and the May 1998
Registration Statement to issue up to approximately $770.5 million in equity
securities and the Operating Partnership has the capacity pursuant to the
September 1997 Registration Statement and the May 1998 Registration Statement to
issue up to $813.5 million in debt securities.

FUNDS FROM OPERATIONS

The Company considers Funds from Operations to be a useful financial measure of
the operating performance of an equity REIT because, together with net income
and cash flows, Funds from Operations provides investors with an additional
basis to evaluate the ability of a REIT to incur and service debt and to fund
acquisitions, developments, and other capital expenditures. Funds from
Operations does not represent net income or cash flows from operations as
defined by generally accepted accounting principles ("GAAP") and Funds from
Operations should not be considered as an alternative to net income as an
indicator of the Company's operating performance or as an alternative to cash
flows as a measure of liquidity. Funds from Operations does not measure whether
cash flow is sufficient to fund all of the Company's cash needs including
principal 




                                       19
<PAGE>   20

amortization, capital improvements, and distributions to stockholders.
Funds from Operations does not represent cash flows from operating, investing,
or financing activities as defined by GAAP. Further, Funds from Operations as
disclosed by other REITs may not be comparable to the Company's calculation of
Funds from Operations, as described below.

Pursuant to the National Association of Real Estate Investment Trusts ("NAREIT")
revised definition of Funds from Operations, the Company calculates Funds from
Operations by adjusting net income before minority interest, calculated in
accordance with GAAP, for certain non-cash items, principally the amortization
and depreciation of real property and for dividends on shares and other equity
interests that are not convertible into shares of Common Stock. The Company does
not add back the depreciation of corporate items, such as computers or furniture
and fixtures, or the amortization of deferred financing costs or debt discount.
However, the Company eliminates the effect of straight-lined rents, as defined
under GAAP, in its FFO calculation, as management believes this presents a more
meaningful picture of rental income over the reporting period.

Funds from Operations per share is calculated based on weighted average share
equivalents outstanding, assuming the conversion of all shares of Series A
Preferred Stock, Class B and, Class C Common Stock and all partnership units in
the Operating Partnership into shares of Common Stock and including the dilutive
effect of stock options.


                       STATEMENT OF FUNDS FROM OPERATIONS
                             (dollars in thousands)


<TABLE>
<CAPTION>
                                                       Three Months Ended
                                                  -------------------------------
                                                  March 31, 1998   March 31, 1997
                                                  --------------   --------------
<S>                                                   <C>            <C>
Net income before disposition of property and         $ 37,943       $ 23,812
  minority interest
Adjustments:
Dividends on Series B Preferred Stock                   (2,510)        (2,510)
Dividends on Series C Preferred Stock                   (2,953)            --
Distributions on Preferred Operating Partnership
  Units                                                 (1,266)            --
Depreciation and Amortization                           19,366         10,478
Other, net                                                 (14)           187
Straight-lined rent                                     (1,640)             3
                                                      --------       --------
    Funds from Operations                             $ 48,926       $ 31,970
                                                      ========       ========
</TABLE>




                                       20
<PAGE>   21

    PART II. OTHER INFORMATION

    Item 6.    Exhibits and Reports on Form 8-K

    (A) Exhibits

      The exhibits listed below are filed as part of this quarterly report on
Form 10-Q.

        Exhibit
        Number
        ------

        12.1  Statement of Computation of Ratio of Earnings to Combined Fixed
              Charges and Preferred Dividends

        27.1  Article 5 Financial Data Schedule (EDGAR Filing Only)

    (B)         Reports on Form 8-K

    (i)  The Company filed a current report on Form 8-K dated January 20, 1998,
         which included the statements of revenues and certain expenses of the
         San Jose Concourse and the TDC Portfolio.

    (ii) The Company filed a current report on Form 8-K/A dated February 9,
         1998, which included the statements of revenues and certain expenses of
         the City Office Portfolio.



                                       21
<PAGE>   22

                                   SIGNATURES


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


                                                   Spieker Properties, Inc.
                                                   (Registrant)


Dated:                                               /s/  Elke Strunka
      ------------------                           -------------------------
                                                   Elke Strunka
                                                   Vice President and
                                                   Principal Accounting Officer


                                       22


<PAGE>   23
<TABLE>
<CAPTION>
        Exhibit
        Number                     Description
        ------                     -----------
        <S>   <C>
        12.1  Statement of Computation of Ratio of Earnings to Combined Fixed
              Charges and Preferred Dividends

        27.1  Article 5 Financial Data Schedule
      
        27.2  Article 5 Financial Data Schedule


</TABLE>




                                       23