<PAGE>

                                                                     Exhibit 2.3

                                  PARTNERSHIP

                               MERGER AGREEMENT

                           dated as of May 10, 2001

                                 by and among

                            G & L ACQUISITION, LLC,

                            G & L PARTNERSHIP, LLC,

                              G & L REALTY CORP.

                                      and

                        G & L REALTY PARTNERSHIP, L.P.
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
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                                                                                                                Page
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ARTICLE I. THE PARTNERSHIP MERGER...............................................................................   1

         1.1   The Partnership Merger...........................................................................   1
         1.2   Closing..........................................................................................   2
         1.3   Effective Time...................................................................................   2
         1.4   Effect of the Partnership Merger.................................................................   2
         1.5   Conversion of Securities.........................................................................   2
         1.6   Further Assurances...............................................................................   3

ARTICLE II. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND GENERAL PARTNER...................................   3

         2.1   Organization, Standing and Power.................................................................   3
         2.2   Authorization; Binding Agreement.................................................................   3
         2.3   Capitalization...................................................................................   4
         2.4   Governmental Consents and Approvals..............................................................   4
         2.5   No Violation.....................................................................................   4

ARTICLE III. REPRESENTATIONS AND WARRANTIES OF ACQUIROR AND ACQUIROR SUB........................................   5

         3.1   Formation and Good Standing......................................................................   5
         3.2   Authorization; Binding Agreement.................................................................   5
         3.3   Capital Structure................................................................................   5
         3.4   No Violation.....................................................................................   6
         3.5   Governmental Consents and Approvals..............................................................   6
         3.6   No Prior Activities..............................................................................   6

ARTICLE IV. COVENANTS...........................................................................................   6

         4.1   Additional Actions...............................................................................   6
         4.2   Notification of Certain Matters..................................................................   7

ARTICLE V. CONDITIONS...........................................................................................   7

         5.1   Conditions to Each Party's Obligation to Effect the Partnership Merger...........................   7
         5.2   Conditions to Obligations of the Company and G & L Operating Partnership to Effect the
               Partnership Merger...............................................................................   7
</TABLE>

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<TABLE>
<S>                                                                                                                <C>
         5.3   Conditions to Obligations of Acquiror and Acquiror Sub to Effect the Partnership Merger..........   8

ARTICLE VI. TERMINATION.........................................................................................   8

         6.1   Termination......................................................................................   8
         6.2   Effect of Termination............................................................................   8

ARTICLE VII. MISCELLANEOUS......................................................................................   9

         7.1   Non-Survival of Representations and Warranties...................................................   9
         7.2   Amendment........................................................................................   9
         7.3   Waiver...........................................................................................   9
         7.4   Notices..........................................................................................   9
         7.5   Entire Agreement.................................................................................  10
         7.6   Parties in Interest..............................................................................  10
         7.7   Material Events..................................................................................  10
         7.8   Headings.........................................................................................  10
         7.9   Interpretation...................................................................................  10
         7.10  Assignment.......................................................................................  11
         7.11  Governing Law....................................................................................  11
         7.12  Costs and Expenses...............................................................................  11
         7.13  Counterparts.....................................................................................  11
         7.14  Severability.....................................................................................  11
</TABLE>

                                      ii
<PAGE>

                         PARTNERSHIP MERGER AGREEMENT
                         ----------------------------


     THIS PARTNERSHIP MERGER AGREEMENT (this "Agreement"), dated as of May 10,
2001, is by and among G & L ACQUISITION, LLC, a Maryland limited liability
company ("Acquiror"), G & L PARTNERSHIP, LLC, a Delaware limited liability
company ("Acquiror Sub"), G & L REALTY CORP., a Maryland corporation (the
"Company"), and G & L REALTY PARTNERSHIP, L.P., a Delaware limited partnership
("G & L Operating Partnership").

                                   RECITALS

     A.   Acquiror and the Company have entered into an Agreement and Plan of
Merger dated of even date herewith (the "Merger Agreement"), whereby upon the
terms and subject to the conditions set forth in the Merger Agreement, and in
accordance with the Maryland General Corporation Law and the Maryland Limited
Liability Company Act, Acquiror will merge with and into the Company (the
"Merger"). Capitalized terms used herein and not otherwise defined shall have
the respective meanings assigned to them in the Merger Agreement.

     B.   Acquiror is the sole member of Acquiror Sub, and the Company is the
general partner of G&L Operating Partnership and is sometimes referred to as the
"General Partner."

     C.   Simultaneously with the Merger, Acquiror Sub will merge with and into
G & L Operating Partnership (the "Partnership Merger") upon the terms and
subject to the conditions of this Agreement and in accordance with the Delaware
Revised Uniform Limited Partnership Act (the "DRULPA") and the Delaware Limited
Liability Company Act (the "DLLCA").

     D.   The Board of Directors of the Company, the members of Acquiror and
Acquiror Sub and the requisite holders of partnership units ("Partnership
Units") in G & L Operating Partnership, as defined in the Agreement of Limited
Partnership of G & L Operating Partnership, dated November 13, 1993, as amended
("G & L Partnership Agreement"), in light of and subject to the terms and
conditions set forth herein, have approved this Agreement and the Partnership
Merger.

     NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained herein, and for the purpose of setting
forth certain terms and conditions of the Partnership Merger, and the manner of
carrying the same into effect, the parties hereto agree as follows:

                                  ARTICLE I.
                            THE PARTNERSHIP MERGER

     1.1  The Partnership Merger. Upon the terms and subject to the conditions
of this Agreement, Acquiror Sub shall be merged with and into G & L Operating
Partnership, with G & L Operating Partnership as the surviving entity (the
surviving entity in the Partnership Merger is sometimes referred to as the
"Surviving Partnership").

                                       1
<PAGE>

     1.2  Closing. On the terms and subject to the conditions of this Agreement
and provided that this Agreement has not been terminated pursuant to Article VI,
the closing of the transactions contemplated by this Agreement (the "Closing")
will take place simultaneously with and at the same location as the Closing of
the Merger, as set forth in Section 1.2 of the Merger Agreement, unless another
time, date or place is agreed to in writing by the parties.

     1.3  Effective Time. At the Closing, the parties hereto shall cause a
certificate of merger (the "Certificate of Merger") to be executed and filed
with the Secretary of State of the State of Delaware in accordance with the
DRULPA and the DLLCA. The Partnership Merger shall become effective as of the
date and time of such filing, or such other time within 24 hours after such
filing as the parties hereto shall agree to be set forth in the Certificate of
Merger (the "Effective Time"), which, in either case, shall be immediately
following the effective time of the Merger.

     1.4  Effect of the Partnership Merger. The parties agree to the following
provisions with respect to the Partnership Merger:

          (a)  Name of Surviving Partnership. The name of the Surviving
Partnership shall from and after the Effective Time be and continue to be "G & L
Realty Partnership, L.P." until changed in accordance with applicable law.

          (b)  Certificate of Limited Partnership. The certificate of limited
partnership of G & L Operating Partnership, as in effect immediately prior to
the Effective Time, shall from and after the Effective Time be and continue to
be the certificate of limited partnership of the Surviving Partnership until
changed or amended in accordance therewith and applicable law.

          (c)  Agreement of Limited Partnership. The G & L Partnership
Agreement, as in effect immediately prior to the Effective Time, shall from and
after the Effective Time be and continue to be the partnership agreement of the
Surviving Partnership until changed or amended in accordance therewith and
applicable law.

          (d)  Organization. At the Effective Time, the separate existence of
Acquiror Sub shall cease, and G & L Operating Partnership as the Surviving
Partnership and successor shall succeed to Acquiror Sub in the manner of and as
more fully set forth in Section 17-211 of the DRULPA and Section 18-209 of the
DLLCA.

     1.5  Conversion of Securities. At the Effective Time, pursuant to this
Agreement and by virtue of the Partnership Merger:

          (a)  The Partnership Units issued and outstanding immediately prior to
the Effective Time shall not be converted, exchanged, cancelled or otherwise
affected by the Partnership Merger and shall remain issued and outstanding
through and after the Partnership Merger.

          (b)  The limited liability company member interest of Acquiror Sub
under the limited liability company agreement of the Acquiror Sub, owned by
Acquiror immediately prior to the Effective Time, shall be converted into the
right to receive $500 in cash.

                                       2
<PAGE>

     1.6  Further Assurances. If, at any time after the Effective Time, the
Surviving Partnership shall determine or be advised that any assignments,
assurances or any other actions or things are necessary or desirable to vest,
perfect or confirm of record or otherwise in the Surviving Partnership the
right, title or interest in, to or under any of the rights, properties or assets
of Acquiror Sub or G & L Operating Partnership acquired or to be acquired by the
Surviving Partnership as a result of, or in connection with the Partnership
Merger or otherwise to carry out this Agreement, the Surviving Partnership shall
be authorized to execute and deliver, in the name and on behalf of each of
Acquiror Sub and G & L Operating Partnership, all such assignments and
assurances and to take and do, in the name and on behalf of each of Acquiror Sub
and G & L Operating Partnership or otherwise, all such other actions and things
as may be necessary or desirable to vest, perfect or confirm any and all right,
title and interest in, to and under such rights, properties or assets in the
Surviving Partnership or otherwise to carry out this Agreement.


                                  ARTICLE II.
                        REPRESENTATIONS AND WARRANTIES
                      OF THE COMPANY AND GENERAL PARTNER

     The Company, for itself and as General Partner of G & L Operating
Partnership, represents and warrants to Acquiror and Acquiror Sub, except as set
forth in the Disclosure Letter to the Merger Agreement, as follows:

     2.1  Organization, Standing and Power. G & L Operating Partnership is duly
organized and validly existing in good standing under the laws of the State of
Delaware, with all requisite limited partnership power and authority to own,
lease and operate its properties and conduct its business, and is duly qualified
or registered and in good standing as a foreign limited partnership authorized
to do business in each of the jurisdictions in which the character of the
properties owned or held under lease by it or nature of the business transacted
by it makes such qualification or registration necessary, except where the
failure to be so qualified or registered would not have a G & L Material Adverse
Effect (as defined below).

     2.2  Authorization; Binding Agreement. G & L Operating Partnership and the
Company have all requisite limited partnership or corporate, as applicable,
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby, subject to Stockholder Approval (as defined in
the Merger Agreement). The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by the Company, except for Stockholder Approval, and no other
proceedings on the part of G & L Operating Partnership or the Company are
necessary to authorize this Agreement, the Partnership Merger or the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by G & L Operating Partnership and the Company, and
constitutes the legal, valid and binding agreement of G & L Operating
Partnership and the Company, enforceable against them in accordance with its
terms, except as such enforceability may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium or other laws, now or hereafter in
effect, relating to or limiting creditors' rights generally, and (ii) general
principles of equity (whether considered in an action in equity or at law) which
provide, among other things, that the remedies of specific performance and
injunctive and other forms of

                                       3
<PAGE>

equitable relief are subject to equitable defenses and to the discretion of the
court before which any proceedings therefor may be brought.

     2.3  Capitalization. As of the date hereof, 2,959,072 Partnership Units are
validly issued and outstanding, fully paid and nonassessable, except to the
extent provided by applicable law or the G & L Partnership Agreement, of which
2,333,800 are owned by the Company. Part 2.4(d) of the Disclosure Letter to the
Merger Agreement sets forth the name of each holder of Partnership Units and the
number of Partnership Units owned by each such holder. The Partnership Units are
not subject to any restriction established by the Company or G & L Operating
Partnership or under applicable law (other than restrictions on sale imposed by
applicable securities laws) except as set forth in the G & L Partnership
Agreement. Except as set forth in Part 2.4(d) of the Disclosure Letter to the
Merger Agreement, G & L Operating Partnership has not issued or granted and is
not a party to any outstanding commitments of any kind relating to, or any
presently effective agreements or understanding with respect to, issuing
interests in or securities convertible into or exercisable for interests in G &
L Operating Partnership.

     2.4  Governmental Consents and Approvals. No consent, waiver, approval,
license or authorization of or designation, declaration or filing with, any
governmental agency or authority or other public persons or entities is required
in connection with the execution or delivery by G & L Operating Partnership and
the Company of this Agreement, or the consummation by G & L Operating
Partnership or the Company of the Partnership Merger or the transactions
contemplated hereby, other than (a) filings in the State of Delaware in
accordance with the DRULPA and DLLCA, (b) such other consents, waivers,
approvals or authorizations as are set forth in the Merger Agreement, and (c)
such other consents, waivers, approvals or authorizations, the failure of which
to be obtained will not have a G & L Material Adverse Effect.

     2.5  No Violation. The execution and delivery of this Agreement, the filing
by the parties of the Certificate of Merger in the State of Delaware in
accordance with the DRULPA and DLLCA, and the consummation by G & L Operating
Partnership and the Company of the transactions contemplated hereby, will not:

          (i)   violate any provision of the G & L Partnership Agreement;

          (ii)  cause G & L Operating Partnership or the Company to violate in
     any material respect (A) any statute or law or any judgment, decree, order,
     regulation or rule of any court or governmental authority applicable to G &
     L Operating Partnership or the Company or any of their respective
     properties or (B) the award of any arbitrator or panel of arbitrators;

          (iii) cause the acceleration of the maturity of any material debt or
     obligation of G & L Operating Partnership; or

          (iv)  violate, or be in conflict with, or constitute a default under,
     or permit the termination of, or, except as contemplated by this Agreement,
     require the consent of any person under, or result in the creation of any
     lien upon any property of G & L Operating Partnership under, any agreement,
     indenture, lease or instrument to which the G & L

                                       4
<PAGE>

     Operating Partnership is a party or by which G & L Operating Partnership
     may be bound, which, individually or in the aggregate, would have a G & L
     Material Adverse Effect.

As used in this Agreement, "G & L Material Adverse Effect" shall mean (i) any
material adverse change in the business, properties, assets, condition
(financial or otherwise) or results of operations of G & L Operating
Partnership, or (ii) any other change that would adversely affect, prevent or
delay the ability of G & L Operating Partnership to consummate the Partnership
Merger or any of the transactions contemplated hereby, but excluding in either
case those that arise out of a change or development in (i) general economic or
market conditions, (ii) the real estate development industry generally or (iii)
any applicable law or GAAP.


                                 ARTICLE III.
                        REPRESENTATIONS AND WARRANTIES
                         OF ACQUIROR AND ACQUIROR SUB

     Acquiror and Acquiror Sub, jointly and severally, represent and warrant to
the Company and G & L Operating Partnership as follows:

     3.1  Formation and Good Standing. Acquiror Sub is a duly formed limited
liability company and is existing in good standing under the laws of the State
of Delaware. Acquiror Sub has heretofore delivered to the Company accurate and
complete copies of its articles of organization and limited liability company
agreement as currently in effect. Acquiror Sub does not own or have any
subsidiary or own or hold any capital stock, security or investment in any other
person or entity, other than bank accounts, certificates of deposit, money
market or similar short-term investments.

     3.2  Authorization; Binding Agreement. Acquiror and Acquiror Sub have all
requisite limited liability company power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by all
necessary action on the part of Acquiror and Acquiror Sub, and no other limited
liability company proceedings on the part of Acquiror or Acquiror Sub are
necessary to authorize this Agreement, the Partnership Merger or the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Acquiror and Acquiror Sub and constitutes the legal,
valid and binding agreement of Acquiror and Acquiror Sub, enforceable against
Acquiror and Acquiror Sub in accordance with its terms, except as such
enforceability may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium or other laws, now or hereafter in effect, relating to or limiting
creditors' rights generally, and (ii) general principles of equity (whether
considered in an action in equity or at law) which provide, among other things,
that the remedies of specific performance and injunctive and other forms of
equitable relief are subject to equitable defenses and to the discretion of the
court before which any proceedings therefor may be brought.

     3.3  Capital Structure. The capital structure of Acquiror Sub consists of a
single class of Acquiror Sub member interests, all of which will be outstanding
immediately prior to the Effective Time. Acquiror is the sole member of Acquiror
Sub and owns all the outstanding

                                       5
<PAGE>

Acquiror Sub interests. Acquiror Sub has not granted any rights, or entered into
any agreement or commitment which obligates Acquiror Sub to issue, sell,
repurchase or transfer any Acquiror Sub interests.

     3.4  No Violation. The execution and delivery of this Agreement, the filing
by the parties of the Certificate of Merger in the State of Delaware in
accordance with the DRULPA and the DLLCA and the consummation by Acquiror and
Acquiror Sub of the transactions contemplated hereby, will not:

          (i)  violate any provision of the articles of organization,
     certificate of formation, limited liability company agreement or operating
     agreement (as applicable) of Acquiror or Acquiror Sub; or

          (ii) violate any statute or law or any judgment, decree, order,
     regulation or rule of any court or governmental authority applicable to
     Acquiror and Acquiror Sub or any of their respective properties or (ii) the
     award of any arbitrator or panel of arbitrators.

     3.5  Governmental Consents and Approvals. No consent, waiver, approval,
license or authorization of or designation, declaration or filing with any
governmental agency or authority or other public persons or entities is required
in connection with the execution or delivery by Acquiror or Acquiror Sub of this
Agreement, or the consummation by Acquiror or Acquiror Sub of the Partnership
Merger or the transactions contemplated hereby, other than (i) filings in the
State of Delaware in accordance with the DRULPA and the DLLCA, (ii) such other
consents, waivers, approvals, licenses or authorizations as are set forth in the
Merger Agreement, and (iii) such other consents, waivers, approvals, licenses or
authorizations, the failure of which to be obtained will not have a material
adverse effect on Acquiror or Acquiror Sub, or the ability of Acquiror or
Acquiror Sub to consummate the transactions contemplated hereby.

     3.6  Prior Activities. Acquiror Sub is newly formed and has not incurred,
and will not incur, any liabilities or obligations, except those incurred in
connection with its organization or with the negotiation of this Agreement, the
Merger Agreement and the Financing (as defined in the Merger Agreement). Except
as contemplated by this Agreement, the Merger Agreement and the Financing
Commitment (as defined in the Merger Agreement), Acquiror Sub has not engaged in
any business activities of any type or kind whatsoever, or entered into any
agreements or arrangements with any person or entity, or become subject to or
bound by any obligation or undertaking.


                                  ARTICLE IV.
                                   COVENANTS

     4.1  Additional Actions. Upon the terms and subject to the conditions of
this Agreement, and subject to the Merger Agreement, each of the parties hereto
shall use all reasonable efforts to take, or cause to be taken, all other
action, and do or cause to be done, all things necessary, proper or appropriate
to consummate and make effective the transactions contemplated by this
Agreement.

                                       6
<PAGE>

     4.2  Notification of Certain Matters.

          (a)  G & L Operating Partnership shall give prompt written notice to
Acquiror and Acquiror Sub (i) if any representation or warranty made by G & L
Operating Partnership contained in this Agreement that is qualified as to G & L
Material Adverse Effect becomes untrue or incorrect in any respect, or any such
representation or warranty that is not so qualified becomes untrue or incorrect
in any material respect, or (ii) of the failure by G & L Operating Partnership
to comply with or satisfy in any material respect any covenant, condition or
agreement to be complied with or satisfied by G & L Operating Partnership under
this Agreement; provided, however, that no such notification shall affect the
representations, warranties, covenants or agreements of the parties or the
conditions to the obligations of the parties under this Agreement.

          (b)  Acquiror Sub shall give prompt written notice to the Company and
G & L Operating Partnership (i) if any representation or warranty made by
Acquiror Sub contained in this Agreement becomes untrue or incorrect in any
material respect, or (ii) of the failure by Acquiror Sub to comply with or
satisfy in any material respect any covenant, condition or agreement to be
complied with or satisfied by Acquiror under this Agreement; provided, however,
that no such notification shall affect the representations, warranties,
covenants or agreements of the parties or the conditions to the obligations of
the parties under this Agreement.

                                  ARTICLE V.
                                  CONDITIONS

     5.1  Conditions to Each Party's Obligation to Effect the Partnership
Merger. The respective obligations of each party to effect the Partnership
Merger shall be subject to the satisfaction, at or prior to the Effective Time,
of each of the following conditions:

          (a)  The Merger. All of the conditions to the closing of the Merger
shall have been satisfied or waived in accordance with the terms of the Merger
Agreement and the Merger shall have occurred concurrently with the Partnership
Merger.

          (b)  No Injunctions or Restraints. No temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Partnership Merger, the Merger or any of the other
transactions contemplated hereby or thereby shall be in effect.

     5.2  Conditions to Obligations of the Company and G & L Operating
Partnership to Effect the Partnership Merger. The obligations of the Company and
G & L Operating Partnership to effect the Partnership Merger shall be subject to
the satisfaction, at or prior to the Effective Time, of each of the following
additional conditions, unless waived by both the Company and G & L Operating
Partnership in writing:

          (a)  Representations and Warranties. The representations and
warranties of each of Acquiror and Acquiror Sub set forth in Article III shall
be true and correct in all material respects as of the date of this Agreement
and, except as contemplated by the

                                       7
<PAGE>

Partnership Merger or as otherwise contemplated by this Agreement, as of the
Effective Time as though made on and as of the Effective Time, and the Company
and G & L Operating Partnership shall have received a certificate from Acquiror
and Acquiror Sub signed by their members to that effect.

          (b)  Performance of Obligations. Acquiror Sub shall have performed in
all material respects all obligations required to be performed by it under this
Agreement prior to the Effective Time, and the Company and G & L Operating
Partnership shall have received a certificate from Acquiror and Acquiror Sub
signed by their members to that effect.

     5.3  Conditions to Obligations of Acquiror and Acquiror Sub to Effect the
Partnership Merger. The obligations of Acquiror and Acquiror Sub to effect the
Partnership Merger shall be subject to the satisfaction, at or prior to the
Effective Time, of each of the following conditions, unless waived by either
Acquiror or Acquiror Sub in writing:

          (a)  Representations and Warranties. The representations and
warranties of each of the Company and G & L Operating Partnership set forth in
this Agreement (i) that are qualified as to G & L Material Adverse Effect shall
be true and correct and (ii) that are not so qualified shall be true and correct
in all material respects, as of the date of this Agreement and as of the
Effective Time, in each case as though made at and as of the Effective Time, and
Acquiror and Acquiror Sub shall have received a certificate from the Company and
General Partner (on behalf of G & L Operating Partnership) signed by an
executive officer to that effect.

          (b)  Performance of Obligations. The Company and G & L Operating
Partnership shall have performed in all material respects all obligations
required to be performed by them under this Agreement prior to the Effective
Time, and Acquiror and Acquiror Sub shall have received a certificate from the
Company and General Partner (on behalf of G & L Operating Partnership) signed by
an executive officer to that effect.

                                  ARTICLE VI.
                                  TERMINATION

     6.1  Termination. This Agreement shall terminate, without any further
action on the part of the parties hereto, upon the termination of, and
satisfaction of the conditions with respect to termination set forth in, the
Merger Agreement in accordance with its terms. This Agreement may be terminated
and the transactions contemplated hereby may be abandoned at any time prior to
the Effective Time by the mutual written consent of each of the parties hereto.

     6.2  Effect of Termination. If this Agreement is terminated as provided
herein, this Agreement shall thereafter become void and have no effect, and no
party hereto shall have any liability or further obligation to any other party
hereto or its stockholders, members, directors or officers in respect thereof.

                                       8
<PAGE>

                                 ARTICLE VII.
                                 MISCELLANEOUS

     7.1  Non-Survival of Representations and Warranties. The respective
representations and warranties of the parties hereto contained herein or in any
certificate delivered pursuant hereto shall expire with, and be terminated and
extinguished upon, consummation of the Partnership Merger, and thereafter none
of the parties hereto or any officer, director or member thereof shall be under
any liability whatsoever with respect to any such representation or warranty.
This Section 7.1 shall have no effect upon any other obligation of the parties
hereto, whether to be performed before or after consummation of the Partnership
Merger.

     7.2  Amendment. This Agreement may not be amended except by an instrument
in writing signed on behalf of each of the parties hereto.

     7.3  Waiver. At any time prior to the Effective Time, any party hereto may
(i) extend the time for the performance of any of the obligations or other acts
of any other party hereto or (ii) waive compliance with any of the agreements
hereunder of any other party or with any conditions to its own obligations.

     7.4  Notices. All notices, requests and other communications required or
permitted under this Agreement shall be in writing and shall be delivered
personally or by courier guaranteeing delivery within the next day, or by
facsimile, addressed as follows or such other address as the party to be
notified has furnished in writing by notice in accordance with this Section 7.4:

          (a)  if to the Company or G & L Operating Partnership, to:

               G & L Realty Corp.
               439 North Bedford Drive
               Beverly Hills, CA 90210
               Attention: David Hamer
               Facsimile: (310) 248-2222

               with copies (which shall not constitute notice), to:

               O'Melveny & Myers LLP
               400 Hope Street
               Los Angeles, CA 90071-2899
               Attention: Frederick B. McLane, Esq.
               Facsimile: (213) 430-6407

               Ballard, Spahr, Andrews & Ingersoll, LLP
               300 East Lombard Street, 19th Floor
               Baltimore, MD 21202-3266
               Attention: James J. Hanks, Jr., Esq.
               Facsimile: (410) 528-5650

                                       9
<PAGE>

          (b)  if to Acquiror or Acquiror Sub, to:

               G & L Acquisition, LLC
               c/o Daniel M. Gottlieb
               439 North Bedford Drive
               Beverly Hills, CA 90210
               Facsimile: (310) 248-2222

               with a copy (which shall not constitute notice), to:

               Heller Ehrman White & McAuliffe LLP
               601 South Figueroa Street, 40th Floor
               Los Angeles, CA 90017
               Attention: Neal H. Brockmeyer, Esq.
               Facsimile: (213) 614-1868

Any such notice, request or other communication shall be deemed to have been
given and received on the day on which it is delivered, if delivered personally,
on the day after the sending thereof, if by courier, or when transmission is
acknowledged, if by facsimile (or, if such day is not a business day in
California or if the notice, request or other communication is not sent by
facsimile during business hours at the place of receipt, on the next following
business day); provided that if any such notice, request or other communication
is given by facsimile, a copy shall also be sent by certified mail or by
overnight courier addressed as indicated above.

     7.5  Entire Agreement. This Agreement (including the documents and
instruments referred to herein) constitutes the entire agreement, and supersedes
all other prior agreements and understandings, both written and oral, with
respect to the subject matter hereof.

     7.6  Parties in Interest. This Agreement shall be binding upon and inure
solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to confer upon any other person any rights or
remedies of any nature whatsoever under or by reason of this Agreement.

     7.7  Material Events. At all times prior to the Effective Time, each party
shall promptly notify the other party or parties in writing of the occurrence of
any event of which it obtains knowledge which will or may reasonably be expected
to result in a failure to satisfy any of the conditions specified in Article V
hereof.

     7.8  Headings. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.

     7.9  Interpretation. As used herein, "person" means an individual,
corporation, partnership, limited liability company, joint venture, association,
trust, unincorporated organization or other entity. When a reference is made in
this Agreement to an Article, Section or subsection such reference shall be to
an Article, Section or subsection of this Agreement unless otherwise indicated.
Whenever the words "include," "includes" or "including" are used in

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<PAGE>

this Agreement, they shall be deemed to be followed by the words "without
limitation." "Or" is used in its inclusive sense. The parties have participated
jointly in the negotiation and drafting of this Agreement. In the event of any
ambiguity or any question of intent or interpretation arises, this Agreement
shall be construed as if drafted jointly by the parties and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any of the provisions of this Agreement.

     7.10 Assignment. Neither this Agreement nor any of the rights, interests or
obligations under this Agreement shall be assigned or deleted, in whole or in
part, by operation of law or otherwise by any of the parties without the prior
written consent of the other parties.

     7.11 Governing Law. Except to the extent that the DRULPA and the DLLCA
shall govern the Partnership Merger, this Agreement shall be governed in all
respects, including validity, interpretation and effect, by the internal laws of
the State of California, without giving effect to the principles of conflict of
laws thereof.

     7.12 Costs and Expenses. The parties hereto shall bear expenses in
connection with the negotiation and performance of this Agreement, and the
consummation of the Partnership Merger and the transactions contemplated hereby
and thereby, in accordance with and as provided under the Merger Agreement.

     7.13 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same agreement.

     7.14 If any term or provision of this Agreement is invalid or unenforceable
in any jurisdiction by reason of any law or public policy, all other terms and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic and legal substance of the transactions contemplated
hereby are not affected in any manner materially adverse to any party. Upon such
determination that any term is invalid or unenforceable, the parties shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.

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          IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.


                                        G & L ACQUISITION, LLC


                                        By:  /s/ Daniel M. Gottlieb
                                           -----------------------------
                                             Daniel M. Gottlieb
                                             Member

                                        By:  /s/ Steven D. Lebowitz
                                           -----------------------------
                                             Steven D. Lebowitz
                                             Member


                                        G & L PARTNERSHIP, LLC

                                        By G & L Acquisition, LLC
                                            as its Sole Member

                                        By:  /s/ Daniel M. Gottlieb
                                           -----------------------------
                                             Daniel M. Gottlieb
                                             Member

                                        By:  /s/ Steven D. Lebowitz
                                           -----------------------------
                                             Steven D. Lebowitz
                                             Member


                                        G & L REALTY CORP.


                                        By:  /s/ John Rauch
                                           -----------------------------
                                             John Rauch
                                             Senior Vice President


                                        G & L REALTY PARTNERSHIP, L.P.

                                        By G & L Realty Corp.
                                            as its General Partner


                                        By:  /s/ John Rauch
                                           -----------------------------
                                             John Rauch
                                             Senior Vice President

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